1 ATTACHMENT 5

Corrections of Inadvertent Errors in CPP RTC

Chapter 1A
Page 9

Comment 6: Commenters stated that the industry interpretation of Section 111(d) is textually and logically flawed, and must be rejected. Comment ers explained that the structure and context of the 1990 Amendments signal the opposite concern: that EPA was not proceeding diligently enough to limit harmful air pollution, and in rejec ting an interpretation put forth by some industry advocates that would prevent EPA from regu lating under section 111(d) all "HAP or non-HAP emitted from a source category regulated un der section 112," EPA has affirmed that [s]uch a reading would be inconsistent with the gen eral thrust of the 1990 amendments, which, on balance, reflects Congress' desire to require EP A to regulate more substances, not to eliminate EPA's ability to regulate large categories of pollu tants like non-HAP. Furthermore, commenters added, EPA has historically regulated non-HAP undersection 111(d), even where those nonHAP were emitted from a source category actually re gulated under section 112. See, e.g., 40
Description of the correction:
Inserted a space after the comment block heading fo r Comment 6, correcting a typographical

error.

Page 55

Comment 22: Commenters stated that according to a study by NERA Economic Consulting (NERA), nineteen states have passed or are consider ing laws or resolutions expressing opposition to the EPA's Clean Power Plan. Commenter s explained that attorneys general from twenty states are on record opposing EPA's proposal , and fifteen governors, including the Governor of North Carolina, have sent letters to th e President stating that the EPA does not have the legal authority to regulate CO2 emissions from coal-fired plants, and it is reported that thirteen states have joined in litigation to challe nge the EPA's proposal. Commenters, which represented and protected the energy interests of s cores of manufacturers with plants throughout North Carolina, shared NC DENR's and Duke's views, as well as the opposition expressed by the aforementioned attorneys general and governors. Com menters remarked that due to the legal flaws of the EPA's plan, court challenges are antic ipated, and commenters explained that states shouldn't be forced to act until all court challeng es are over.
Response 22: For the reasons explained in the preamble, the dead lines established by the Agency are reasonable

. Description of the correction:2

Added a period to the end of Response 22, correctin g a typographical error.

Page 60
Response 28: We disagree. For the reasons discussed in section V.A. and V.B. of the preamble and in the Legal Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s authority in light of the statutory text, statutory context, statutory purpose, and legislative history. Moreover, t o the extent this comment objects to the portfolio approach, the EPA is not finalizing the proposed “portfolio” appr oach and will not accept state plans that attempt to impose emission standards or other CAA c ompliance obligations on entities other than affected EGUs. The state measures approach provides a path for a state to achieve the emission performance level as expressed as a state goal in a way that avoids placing enforceable emission standards on affected EGUs (unless and until the ba ckstop is triggered). States will have a wide range of flexibility in choosing how to demonstrate their affected EGUs are meeting a state goal. Lastly, this rule does not establish any emissions standards for

Description of the correction:
Deleted the phrase “Lastly, this rule does not esta blish any emissions standards for” which was not needed and inadvertently not removed from the f inal document. The comment is addressed by the remaining text.

Page 61

Comment 31: Commenters stated EPA should be aware that any pla n developed by LDEQ or the state of Louisiana must be consistent with and will be constrained by Act 726 of the 2014 Regular Legislative Session.

Response 31: We appreciate this information. Under the CAA, Loui siana and all other states and other affected jurisdictions are subject to the req uirements of this rule notwithstanding any state laws that may limit a state’s ability to comply wit h this rule

. Description of the correction:
Added a “.” to the end of Response 31, correcting a typographical error.

Page 62
Response 33: We disagree with commenters. CAA section 111(d)(1) requires the EPA to promulgate regulations under which states submit st ate plans regulating “any existing source” of certain pollutants “to which a standard of performa nce would apply if such existing source were a new source” and “provides for the implementation and enforcement of such standards of performance.” Affected EGUs, including municipaliti es and electric cooperatives, are subject to3

air quality requirements, including meeting such st andards of performance that a state may establish to meet emissions performance levels that the EPA determines are achievable under CAA 111(d). We give states and affected EGUs flexib ility in determining how they meet these requirements. No state or affected EGU must impleme nt the precise measures included in the building blocks in order to do so. The agency recog nizes that states must have legal authority to implement approvable state plans. In the event that states lack the necessary state-law authority to implement a plan, the EPA will implement a feder al plan for that state under section 111(d)(2). Further, we note that we are not includi ng building block 4, demand-side energy efficiency in the final rule. Finally, for reasons that we fully explain in preamble section V.B. and the legal memo, we are within our legal authori ty and the final rule is consistent with past EPA practice and interpretation in setting standard s of performance.

Description of the correction:
Inserted the word “in” that was inadvertently omitt ed from the final document text.

Page 66

Comment 3: EPA prohibited from setting ESPS for sources regul ated under section 112

Several commenters stated that 111(d) prohibits EPA from promulgating existing source performance standards for source categories that ha ve already been regulated under Section 112.

Commenters stated that despite the clarity provided in a liter al reading of 111(d), EPA argues that the statute's prohibition is ambiguous due to a clerical mistake in the 1990 CAA Amendments. The commenters stated that although bot h the House and Senate versions were included in the 1990 Amendments, the Senate's versi on contained the error and it was the House

... Description of the correction:
Deleted extra space after “Commenters”, correcting a typographical error.

Page 70

Comment 7: Commenters stated that while section 111(d) gives s tates broad flexibility in implementing standards applicable to existing sourc es, the EPA is ultimately responsible for ensuring that state programs will achieve the stand ards of performance specified in the section 111(d) emission guideline document. Commenters said Section 111(a) of the CAA defines the term "standard of performance" as: "[A] standard fo r emissions of air pollutants which reflects

... Description of the correction:4

Added a space after “Comment 7”, correcting a typog raphical error.

Page 78
The touchstone of the cooperative-federalism concep t outlined in the Train-Virginia line of cases is that, under the authority of section 110, the EP A may not legally or functionally require a state to adopt a “specific” control measure in its SIP. 9 The cases do not stand for the broader proposition that 110 imposes no limits on state dis cretion, or that EPA is prohibited from interpreting basic requirements of the Act or revie wing SIP submissions for compliance with those requirements.

Description of the correction:
Inserted for clarity the words “line of cases” to t he sentence, “The touchstone of the cooperativefederalism concept outlined in the Train-Virginia l ine of cases is that, under the authority of section 110, the EPA may not legally or functionall y require a state to adopt a “specific” control measure in its SIP”, in Response 11.

Page 88

Response 18: We disagree that we are expanding our authority to include wholesale energy market regulation or state retail regulation. Our e mission guidelines simply reflect an achievable emissions limit through the application of the BSER and do not in themselves require states or sources to implement the BSER. Moreover, these emis sion guidelines provide states with the flexibility to establish, implement, and enforce st andards of performance and do not intrude on the regulatory domain of FERC or the states. It can not be said that because environmental requirements may have an effect on the wholesale en ergy or retail markets that the EPA is therefore intruding into energy regulation. Certain ly, in the legislative history of the 1970 CAA Amendments, Congress expressly identified power pla nts as a priority source category for regulation under CAA section 111. Further, we note that the EPA is not including building block 4, demand-side energy efficiency, as a component of BSER in the final rule. Additionally, this rule does not regulate renewable energy sources. It identifies the BSER for affected sources, which entails substitute generation to zero-emittin g generators, but it does not impose emissions requirements on such sources. Finally, we note that the EPA has considered reliability issues in developing this final rule. For a more comprehensiv e discussion of reliability issues, as well as the EPA’s coordination with both FERC and DOE, plea se see preamble section VIII.G.2.

Description of the correction:
Deleted extra space in between words “energy” and “ or” in Response 18.

Pages 94-955

Comment 22: Commenters stated that by going "outside the fence line" in setting standards, EPA developed standards for existing units that are more stringent than new source performance standards (NSPS) for new generating units, and this approach establishes a policy with no basis in the statute or regulatory guidance.

Response 22: We disagree with this comment. In section V. of th e preamble for this rule we discuss the relative stringency of the section 111( b) and (d) rules. Further, EPA’s views on the argument presented by the commenters, including com menters’ discussion of the AEP opinion and of the Senate amendment, are also With respect to commenters discussion of the AEP opinion, EPA disagrees with the commenters reading of this opinion, as discussed in EPA’s briefs in the consolidated Murray Energy and West V irginia cases, No. 14-1112, No. 14-1146, and No. 14-1151 (and consolidated cases) (D.C. Cir. ).[SJJ]

Description of the correction:
Deleted the words “Further, EPA’s views on the argu ment presented by the commenters, including commenters’ discussion of the AEP opinion and of the Senate amendment, are also With respect to commenters discussion of the AEP op inion, EPA disagrees with the commenters reading of this opinion, as discussed in EPA’s brie fs in the consolidated Murray Energy and West Virginia cases, No. 14-1112, No. 14-1146, and No. 14-1151 (and consolidated cases) (D.C. Cir.).[SJJ]” which were inadvertently not removed f rom the final response. The comment excerpt does not address the AEP opinion or the dif fering amendments, rendering this text extraneous. The response to the comment is provide d by the remaining sentence.

Page 139
Response 48: The EPA disagrees with this comment. The commenters assert in a conclusory fashion that the proposed rule violates each one of the standards of review in the APA. Not only does the APA not apply to t his action, but the EPA’s final rule is reasonable, thorough, wellexplained and well within the EPA’s statutory autho rity. The final rule provides ample guidance to states on ways to comply with the emission guide lines, including application of the BSER, other systems of emission reduction, trading, and t he state measures approach. The commenters’ assertion that the EPA did not identify specific ty pes of facilities that endanger public health is absurd. The final rule applies to existing steam el ectric generators and stationary combustion turbines, the largest sources of CO 2 emissions in the U.S. The final rule’s applicabili ty provisions further describe which facilities are affected sour ces subject to the rule’s requirements.

Description of the correction:
Added “t” to the word “this” in “Not only does the APA not apply to (t)his action,” , correcting a typographical error.6

Page 149
Response 53: The EPA is not finalizing the proposed on c e-in-always-in approach, so these comments are moot. Also see Section XXII of the legal Legal memo Memorandum regarding UARG.
Description of the correction:
Corrected typographical errors, adding “c” to the w ord “once” in “on(c)e-in-always-in approach,” capitalized “l” in “legal” and changed the word “memo” to “Memorandum”.

Page 180
Response 3: For the reasons explained in the preamble, inclusio n of building block 3 is consistent with EPA’s statutory authority. EPA has included neither EE n or nuclear in the final BSER.
Description of the correction:
Corrected a typographical error by adding “n” to th e word “nor” in “EPA has included neither EE (n)or nuclear in the final BSER” .

Page 181
Response 4: For the reasons discussed in section V.A. and V.B. of the preamble and in the Legal Memorandum, our interpretation of the BSER is reaso nable and within the scope of EPA’s authority in light of the statutory text, statutory context, statutory purpose, and legislative histor y. We also explain in section V.B. of the preamble why the BSER does not includ eing demand-side energy efficiency measures, accordingly, comments r elating to building block 4 are moot.

Description of the correction:
Corrected verb tense error in response, changing “i ncluding” to “include”.

Page 184
Response 8: For the reasons discussed in section V.A. and V.B. of the preamble and in the Legal Memorandum, our interpretation of the BSER is reaso nable and within the scope of EPA’s authority in light of the statutory text, statutory context, statutory purpose, and legislative histor y. EPA has not include d nuclear in the final BSER.
Description of the correction:7

Corrected verb tense error, changing “include” to “ included”.

Page 221
Response 23: We disagree that we are expanding our authority to include wholesale energy market regulation or state retail regulation. The E PA is not interfering with the FERC’s exclusive authority under Federal Power Act sections 205 and 206 to regulate interstate transmission and wholesale sales of electric energy. Our emission gu idelines simply reflect an achievable emissions limit through the application of the BSER and do not in themselves require states or sources to implement the BSER. Moreover, these emis sion guidelines provide states with the flexibility to establish, implement, and enforce st andards of performance and do not intrude on the regulatory domain of FERC or the states. It can not be said that because environmental requirements may have an effect on the wholesale en ergy or retail energy markets that the EPA is therefore intruding into energy regulation. Cert ainly, in the legislative history of the 1970 ...
Description of the correction:
Insert the word “sections” which was inadvertently omitted.

Page 223

... to more efficient implementation with lower compl iance costs for affected EGUs and lower impacts on electricity ratepayer, the final rule does not require multi-state plans. We view the ability of a state to implement an individual plan or a multi-state plan as a significant flexibility that allows a state to tailor implementation of its state policy objectives and circumstances. In fact, the final rule makes clear that participation on multi-state plans is voluntary. States have flexibility to determine how they will design their state plans – whether that be on an individual state basis or participating in a regional effort. We do not agree with commenters that the rule, as a practical matter, effectively requires multi-stat e coordination nor do we agree that the final rule expands the scope of existing RTO dispatch. The fin al rule sets emission limits by apply the BSER. It is up to state and affected EGUs to determ ine how to meet the rule’s requirements. There isare no requirements that they utilize the building blo cks to do so. There is no requirement that they change their market structure s or expand RTOs to do so. For a comprehensive discussion of how affected EGUs can i mplement the building blocks see the preamble section V and the Legal Memorandum. We dis cuss the multi-state plan issue in greater detail in preamble section VIII.C.5.

Description of the correction:
Corrected grammar changing “is” to “are” to agree w ith the plural “requirements”.

Page 2338

Response 2: The EPA agrees that the CAA and applicable case la w support the Agency’s discretion to categorize and subcategorize (or not to ) and that this discretion applies when EPA exercises its authority under section 111(d).
Description of the correction:
Added the word “to” which was inadvertently omitted from the response.

Page 235

Response 6: As discussed above [assuming that we include the “do we also want to say” text on pp. 1-2] , the text in section 111(b)(1)(B) provides that EP A will establish standards for “new sources within such category” but does not mandate that the standards have to be set for the source category. EPA concludes that this phrasing focusing on the sources rather than the source categories provides EPA with the flexibility to est ablish standards for new sources within groups that consolidate or reorganize the listed source ca tegories where that is appropriate. ]

Description of the correction:
Removed text “[assuming that we include the “do we also want to say” text on pp. 1-2]” from Response 6, which is an editorial note inadvertentl y left in the document, and “]”, a typographical error.

Page 260
Response 6: We disagree that we are illegally seeking to regula te the electric power transmission system as a whole. Our emission guidelines simply r eflect an achievable emissions limit through the application of the BSER and do es not require states or sources to implement the BSE R. Moreover, these emission guidelines provide states with the flexibility to establish, implement, and enforce standards of performance and do not int rude on the regulatory domain of FERC. It cannot be said that because environmental requireme nts may have an effect on the wholesale energy market that the EPA is therefore intruding i nto energy regulation. Certainly, in the legislative history of the 1970 CAA Amendments, Con gress expressly identified power plants as a priority source category for regulation under CAA section 111.
Description of the correction:
Corrected grammar, changing “does” to “do”.

Page 296
Response 14: The EPA is not finalizing a building block 4 as part of the BSER . Further, as we explain in sections V.A. and V.B. of the preamble, our emission guidelines simply reflect an9

achievable emissions limit through the application of the BSER and do not in themselves require states or sources to implement the BSER. That is, E PA is responsible for determining the level of emission limitation from the source category, while states have the responsibility of assigning emission requirements to their sources that will en sure their achievement of that level of emission limitation. States may fulfil their respon sibility by establishing emission standards or creating plans consistent with the guidelines. In d oing so, states will be able to choose from a wide range of emission reduction measures, includin g measures that are not part of the BSER. For the reasons discussed in section V.A. and V.B. of the preamble and in the Legal Memorandum, our interpretation of the BSER is reaso nable and within the scope of EPA’s authority in light of the statutory text, statutory context, statutory purpose, and legislative histor y.
Description of the correction:
Deleted “a” and inserted “as part of the BSER” to c larity the response.

Page 297
Response 15: The EPA is not finalizing building block 4 as part of the BSER . Further, as we explain in sections V.A. and V.B. of the preamble, our emission guidelines simply reflect an achievable emissions limit through the application of the BSER and do not in themselves require states or sources to implement the BSER. That is, E PA is responsible for determining the level of emission limitation from the source category, while states have the responsibility of assigning emission requirements to their sources that will en sure their achievement of that level of emission limitation. States may fulfil their respon sibility by establishing emission standards or creating plans consistent with the guidelines. In d oing so, states will be able to choose from a wide range of emission reduction measures, includin g measures that are not part of the BSER. For the reasons discussed in section V.A. and V.B. of the preamble and in the Legal Memorandum, our interpretation of the BSER is reaso nable and within the scope of EPA’s authority in light of the statutory text, statutory context, statutory purpose, and legislative histor y.
Description of the correction:
Inserted “as part of the BSER” to clarity the respo nse.

Page 298
Response 18: The EPA is not finalizing a building block 4 as part of the BSER . Further, as we explain in sections V.A. and V.B. of the preamble, our emission guidelines simply reflect an achievable emissions limit through the application of the BSER and do not in themselves require states or sources to implement the BSER. That is, E PA is responsible for determining the level of emission limitation from the source category, while states have the responsibility of assigning emission requirements to their sources that will en sure their achievement of that level of emission10

Description of the correction:
Inserted “as part of the BSER” to clarity the respo nse.

Page 329

Response 3: For the Reasons explained in Section V of the Prea mble and the legal memo, EPA has concluded that its determination of BSER is wel l within the authority delegated to it under section 111 of the Clean Air Act. Contrary to the assertion in the comments EPA is not mandating that any state establish an RPS. Rather EPA has provided states with significant flexibility in designing their state plans. Renewab le energy is one potential measure that may be employed, consistent with the state flexibility pri nciple that is central to this program. This rule does not regulate renewable energy sources. It iden tifies the BSER for affected sources, which entails substitute generation to zero-emitting gene rators, but it does not impose emissions requirements on such zero-emitting generatorssources

.
Description of the correction:
Replaced “sources” with “zero-emitting generators” to clarity the response.

Page 330
Response 4: We disagree with commenters. As an initial matter, we note that the final rule does not include demand-side energy efficiency – buildin g block 4 – as a component of BSER. For the rR easons explained in Section V of the Preamble and t he legal memo, EPA has concluded that its determination of BSER is well within the a uthority delegated to it under section 111 of the Clean Air Act. Contrary to the assertion in th e comments EPA is not mandating that any state establish an RPS. Rather EPA has provided st ates with significant flexibility in designing their state plans. Renewable energy is one potentia l measure that may be employed, consistent with the state flexibility principle that is centra l to this program. This rule does not regulate renewable energy sources. It identifies the BSER fo r affected sources, which entails substitute generation to zero-emitting generators, but it does not impose emissions requirements on such zero-emitting generatorssources

. Description of the correction:
Changed capital “R” to small “r” in the word “reaso ns” to correct a typographical error and replaced “sources” with “zero-emitting generators” to clarity the response.

Pages 330-33111

Response 5: The EPA does not agree with commenters that the fi nal rule will cause reliability issues. The rule does not impede current dispatch p rotocols about how these units are operated, and provides many flexible options for compliance, such as emission rate credits, so that these entities can work with their respective states duri ng state plan development. So the commenter is incorrect to maintain that reliable operation of th eir units is restrict in conflict with their mandates. Moreover, the rule addresses reliability in both planning and potential unanticipated emergencies (See Section VII.G.2)

. Description of the correction:
Deleted the word “restrict” which was inadvertently not deleted from the response and inserted a period at the end of the response to correct a typo graphical error.

Page 334

Comment 2: Commenters stated regardless of the EE savings le vels proposed by EPA, no EE savings will be achieved unless current state- and administrator-run EE programs are both continued and expanded. Commenters explained that t he regulatory environment in each state determines the size of the budget for customer-fund ed EE programs; the budget determines the scope and breadth of the EE programs, and regulator y frameworks that support utility investments in EE programs (through cost recovery m echanisms or performance incentives), therefore, are the key to achieving actual EE savin gs. Commenters remarked that EPA's analysis does not make any mention of this relationship betw een supportive regulatory policies and EE savings, and refers to KDHE and KCC comments, which explain that KDHE does not have authority for the energy efficiency programs in Kan sas that authority resides with the KCC. In addition, commenters remarked, both the KDHE and KC C state that authority does not reside at EPA.

Commenters stated that under Building Block 4, EPA established demand-side energy efficiency requirements for the states; and these are modeled on the current Energy Efficiency Portfolio Standards in the 26 states that have them. Commente rs believed that EPA does not have the authority to require any actions outside those impo sed on existing sources; setting aside this legal argument, the methodology the EPA uses to set these state efficiency standards is arbitrary and highly flawed.

Commenters stated that while they strongly support voluntary demand-side energy efficiency improvements, thethey believe significant portions of the proposed rule are unlawful because the EPA lacks the authority to fundamentally restructur e the energy sector under CAA Section 111(d). Commenters agreed the EPA is authorized to regulate existing sources within a specific source category (here fossil fuel-fired EGUs), and for this reason, commenters believed that the ESPS will not withstand judicial scrutiny. Commente rs cited Utility Air Regulatory Group v. ...
Description of the correction:12

Replace the word “the” with “they” to correct a typ ographical error and clarify the comment
summary.

Page 335
Response 2: As explained in Section V.B. of the preamble, we ar e not including demand-side energy efficiency – building block 4

- as a component of the BSER.
Description of the correction:
Deleted “-” and added “the” to clarity the response

.

Page 336
Response 3: As explained in Section V.B. of the preamble, we a re not including demand-side energy efficiency – building block 4

- as a component of the BSER. In the preamble and the legal Legal memo Memorandum we describe why the remaining building blocks 1,2, and 3 constitute the BSER.

Comment 4: Commenters stated EPA's reliance on demand respons e as part of the source of BB No. 4 reductions is especially untimely since the D .C. Court of Appeals has recently found that the Federal Power Act does not grant the FERC autho rity over demand response, and for EPA to establish an enforceable goal, based on the expecte d exercise of authority that Congress has reserved exclusively for states, raises significant legal questions.
Response 4: As explained in Section V.B. of the preamble, we ar e not including demand-side energy efficiency – building block 4

- as a component of the BSER. Building block 4 does however remain an important compliance options that states will be able to evaluate in developing their state plans. We note that the Sup reme Court has granted cert. in the reference d matter and oral argument is expected this fall.
Description of corrections:
Deleted “-”, added “the”, replaced “legal memo” wit h “Legal Memorandum”, and changed “building blocks constitute BSER” to “building bloc ks 1, 2, and 3 constitute the BSER” to clarity the Response 3.
Deleted “-”, added “the”, deleted extra space and c hanged the tense of “reference” to “referenced” to clarify Response 4.

Chapter 1B13

Page 7
Response 7: The commenters question the EPA’s decision to incl ude RE in building block three. The EPA is not requiring Guam or Puerto Rico to sub mit compliance plans because the emission guidelines do not apply to these territories. Accor dingly, comments relating to building block 3 are moot with respect to these territories. The EPA (add in response from other comments regarding RE) . In addition, the commenters state that the applic ation of Building Block 4 yields very little emission reductions. As noted, in the s ection V of the preamble for this final rulemaking, the EPA is not including Building Block 4 in the determination of BSER.
Description of the correction:
Deleted “The EPA (add in response from other commen ts regarding RE)” and added “The EPA is not requiring Guam or Puerto Rico to submit comp liance plans because the emission guidelines do not apply to these territories. Accor dingly, comments relating to building block 3 are moot with respect to these territories.”, for c larity in Response 7.

Page 12
Response 11: The EPA disagrees with the commenters’ interpretat ion of 40 CFR §49.11. A necessary first step to EPA having an obligation to promulgate a federal implementation plan is a finding by the Agency that such a plan is “necessar y or appropriate” to protect air quality. Only after making such a finding is EPA required to prom ulgate a plan “without unreasonable delay”. See. 40 CFR §49.11(a). The United States District Court of the Northern Di strict of California specifically endorsed this interpretation in dismis sing an unreasonable delay claim regarding the establishment of Regional Haze requirements for the Navajo Generating Station. See, In the final rule, the EPA is establishing emission perfor mance rates for each of the four EGU located in Indian country and mass- and rate-based performa nce goals for each of the three affected areas of Indian country. It is not establishing emission goals for the Navajo Nation or the other two tribes with EGU located in their areas of Indian co untry. For a discussion of the potential for entities other than the owner/operator of EGU to ge nerate ERC, see section VIII.K of the
Description of the correction:

Deleted “See. 40 CFR §49.11(a).” as it was inadvert ently left in Response 11.

Page 23
Response 24: In the final rule the EPA has finalized a number a dditional options fostering state cooperation without requiring a single multi-state plan or joint goal. Sec. VIII of the preamble discusses the obligations of states that do not hav e affected EGUs. Sec. VIII also discusses how affected EGUs may use, and under what co n ditions, use ERCs and allowances from other states.
Description of the correction:14

Added an “n” to the word “conditions” in Response 2 4 for clarity.

Page 36
Response 38: As to the comment regarding the achievability of t he assumed HRI

, *** Tt he comment is otherwise outside the scope of the final rule as it addresses the implementation of the final Emission Guidelines. The final rule establis hes emission performance rates for individual EGU and mass- and rate-based performance goals for relevant geographic areas and establishes requirements for state, tribal and federal implemen tation plans, but does not address the specific mechanism for implementing the Emission Guidelines in a particular area. The EPA notes, however, that many of the concerns expressed by the commenters can be addressed through participation in a multi-jurisdictional plan. See section VIII.L of the preamble to the final rule for a full discussion of multi-jurisdictional plans

. Description of the correction:
Deleted “***”, an editorial mark was inadvertently left in Response 38 and, immediately following, inserted a comma, and changed “T” to “t” to correct the sentence to read: “As to the comment regarding the achievability of the assumed HRI, the comment is otherwise outside the scope the final rule as it addresses the implementa tion of the final Emission Guidelines.”, to clarify the text.

Page 36
Response 39: The final rule constitutes final action on both th e June 18, 2012 2014 proposed rule and the November 4, 2014 supplemental proposed rule (79 FR 65489; November 4, 2014) and the final Emission Guidelines present a consist ent approach.
Description of the correction:
The date for the Proposed Rule is corrected from “2 012” to “2014” in Response 39.

Page 37
Response 40: See section VIII.L of the preamble to the final ru le for a discussion of interstate effects and leakage. RE-use response from other comments. As noted above the EPA is not including building block 4 (EE) in the definition o f BSER in this final rulemaking. See section V of the preamble to the final rule for a discussio n of BSER as defined and applied in the final rule.
Description of the correction:15

Deleted “RE-use response from other comments” Comme nt 40 is adequately addressed by the remaining language in Response 40. The sentence was inadvertently not deleted from the final document.

Page 38

Comment 43: T&TTribes and Territories --Unique Circumstances
Commenters noted that EPA did not consider the uniq ue circumstances of the Navajo Nation. According to commenters, EPA's fundamental error in its application of Building Block 4 to the Navajo Nation was its reliance, in crafting Buildin g Block 4, on data from energy efficiency programs in states and regions of the country that have vastly different circumstances from those of the Navajo Nation. According to commenters, EPA proposed a program for the Navajo Nation based upon what it learned from examination of the state programs but noted that circumstances for the Navajo Nation more closely resemble the poo rer nations in the world, such as Bangladesh or Ghana, than the Navajo Nation's neighboring stat es or any other state, for that matter. Commenters noted that a program that works well for a state may not work for the Navajo Nation and is unlikely to do so. In fact, according to commenters, if there is a problem with electricity demand on the Navajo Nation, it is that it is too low, not that electricity use is inefficient.
Description of the correction:
Replaced “T&T” with “Tribes and Territories”. Repla cing the shorthand notation with the correct wording in Comment 43.

Page 62
Response 14: For the reasons discussed in Section V.A.7 EPA dis agrees that the building blocks are not severable and that additional review would be needed. We also disagree that if a building block were invalidated state flexibility would decr ease as the available reductions would remain as a compliance option. As described in the preamb le and elsewhere in this RTC the factors noted above have been appropriately accounted for. Additionally, commenters’ concerns about load-following are address ed in section V.C of the final rule preamble of the C PP and Chapter 2 of the GHG Mitigation Measures TSD supporting the f inal CPP.
Description of the correction:
Changed “address” to “addressed" in Response 14 to read as “... addressed in section V.C of the final rule preamble ...”, to correct a grammatical er ror and clarify.

Page 8116

Response 20: : For the reasons discussed in section V.A. and V.B. of the preamble and in the Legal Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s authority in light of the statutory text, statutory context, statutory purpose, and legislative histor y. The commenter has not provided a sufficient basis f or us to conclude that ittheir alternative would be appropriate under 111 or constitute BSER.

Description of the correction:
Deleted second “:” and extra space in the response label and rR eplaced the word “it” with “their” for clarity in the last sentence of Response 20.

Page 149
Response 3: We agree with th isese comment, although as discussed in section V.B. of the final rule preamble of the CPP, we are not including buil ding block 4 as part of the BSER.

Description of the correction:
Replaced the word “these” with “this” for clarity i n Response 3.

Pages 160-161
Response 8: We appreciate these comments and agree with some, although not all, of the comment. The BSER must be something that the affect ed sources can implement BSER

, although the state may, through the state measures approach, adopt additional measures that may result in emission reductions from the affected EGU s ., In the preamble and the Legal Memorandum, we discuss and compare the types of BSE R that we determine under the section 111(b) rule and this rule. We agree that the uniqu e characteristics of the electric power sector support our determination that building blocks 2 an d 3 are part of the BSER, but those types of building blocks may not be the BSER for other sourc e categories
Description of the correction:

Deleted second occurrence of the word “BSER” in sec ond sentence of Response 8 for clarity.

Chapter 1C

Page 4
Response 4: The EPA is not requiring or authorizing state plan s to impose federally enforceable requirements on non-affected EGUs

. Also, as explained in section V.B of the final rul e preamble17

to the CPP, the EPA is not finalizing the proposed portfolio approach and any comments on that proposed approach to 111(d) state plan design are t herefore moot.

Description of the correction:
Added period omitted between “EGUs” and “Also” in R esponse 4, to correct a typographical error and clarify the response.

Pages 20-21

Response 16: In the proposed regulatory text describing the enforcing enforcement measures that states must include in state plans, the EPA in advertently excluded a required demonstration that states and other third parties can enforce aga inst violations of an emission standard included in a state plan via civil action pursuant to CAA se ction 304. Commenters noted the EPA’s intent to require this demonstration based on statements i n both the proposal preamble text and “State Plan Considerations” TSD 1 and based on the requirements of CAA section 304. We are finalizing a requirement for a demonstration that s tates and other third parties can enforce against violations of an emission standard included in a st ate plan via civil action as part of the required plan component demonstrating enforceability. We are finalizing this requirement as a logical outgrowth of proposal preamble text, the proposal p reamble citation to existing enforceability guidance documents that discuss this requirement, c omments received, and the clear statutory foundation.

As explained in section V.B and VIII of the preambl e, the EPA is not finalizing the proposed portfolio approach and any comments on that propose d approach to 111(d) state plan design are therefore moot. Instead, the EPA is finalizing an o ption to submit either an “emission standard” plan type, which imposes requirements solely on aff ected EGUs in the form of federally enforceable emission standards, and a “state measur es” plan type, under which a mass CO 2 emission goal may be partially or entirely achieved through state measures that impose requirements on entities other than affected EGUs t hat are not included in the federally enforceable 111(d) state plan, provided the state s ubmits standards of performance for CO 2 emissions from affected EGUs in the form of a feder ally enforceable “backstop” that would be triggered if the state measures fail to achieve the required CO 2 emission performance level. Under a state measures plan, the backstop emission standards constitute the standards of performance required by section 111(d), and the sta te plan provides for the implementation and enforcement of such standards of performance by spe cifying the trigger mechanism and conditions under which the backstop emission standa rds apply to affected EGUs. Upon EPA approval of a state measures plan under section 111 (d), the backstop emission standards become federally enforceable requirements, which EPA and c itizens may enforce against affected EGUs under section 113 and section 304

. The final emission guidelines require that all 111( d) state plans, including state measures plans, specify CO 2 emission monitoring, reporting and recordkeeping requirements for affected EGUs, demon strate that plan measures are enforceable, and contain the process, content and schedule for s tate reporting to the EPA on plan implementation and progress toward meeting the requ ired CO 2 emission performance level. For18

state measures plans in particular, the final emiss ion guidelines also require states to submit annual reports to the EPA that address periodic pro grammatic milestones to show progress in program implementation; s ee section VIII. The EPA intends to review each submi tted state plan on a case-by-case basis to determine whether it sat isfactorily addresses the Act’s enforceability requirements. Final EPA action on any submitted 11 1(d) state plan, including a state measures plan, is subject to judicial review under section 3 07(b) of the Act.

Description of the correction:
Changed “enforcing” to “enforcement” and added a mi ssing period and space between “304” and “The” in Response 16, to correct grammar and clarif y the response.

Page 22

Finally, we note that a requirement in a state plan is not federally enforceable until EPA has approved it as part of the federally enforceable pl an. In other words, measures in a state plan are not “in effect under this chapter” for the purposes of section 304 until EPA has made them part of the federally enforceable plan. As a result, un der the emission standards plan type, the emission standards and associated monitoring, recor dkeeping, and reporting that EPA has approved into the federally enforceable plan are “r equirements under section 111 which are in effect under this chapter,” and are thus enforceabl e under section 304. Under the state measures plan type, the trigger and backstop are approved in to the federally enforceable plan and are therefore “requirements under section 111 which are in effect under this chapter” and are thus enforceable under section 304.

Description of the correction:
Added “plan” between “federally enforceable” and “a re therefore” to clarify Response 16.

Page 124, (Footnote 5)

____________________________
5 Regulatory Assistance Project, Incorporating Environmental Costs in Electric Rates Working to Ensure Affordable Compliance with Public Health and Environmental Regulations , at 17 (2011) (citing Ohio Revised Code, Section 4928.143( B)(2)(a)and (b)), available at raponlin e .org.
Description of the correction:
Inserted missing “e” in web address citation.

Pages 142-14319

Response 5: Commenters stated that the multi-state approach wo uld require state legislative approval and suggested that this type of state plan ning would infer a singular plan covering the participating states, who would be reliant upon one another to enforce a previously agreed upon model rule, enacted through each state’s regulatory process. According to the commenters, enforcement of a multi-state plan would be extremel y challenging, if not impossible, to achieve. The EPA is finalizing that states can choose to pro vide to the EPA one multi-state plan submittal, on behalf of all participating states, or one singl e submittal for each participating state. If one multi-state submittal is the option selected, it mu st be signed by authorized officials for each state participating, and it would have the same leg al effect as a single-state submittal for each
state.
The commenters provided the example of the Regional Greenhouse Gas Initiative and stated that it took 6 years after the concept was discussed for the first compliance period for this trading program to begin. The commenters argued that the EP A’s overall timeframe would severely handicap this approach for states to even consider as a potential path forward due to the planning and administrative procedures required to be follow ed for legislative approval. The EPA is finalizing that state plan submittals or initial submittals/extension requests are due o n September 6, 2016. Final complete state plans must be submitt ed no later than September 6, 2018. are due on August 31, 2016, which is 13 months after finali zation of the emission guidelines. In order to address the concern that 13 months is not sufficien t time for states to prepare and submit a complete plan submittal and to allow consistent tim elines for both a single state and multi-state approach to state plan submittals, the EPA is also finalizing a plan submittal process which provides additional time to submit a complete plan submittal after August 31, 2016. This approach involves the option that we refer to as an initial submittal, followed by submittal of a complete state plan submittal no later than August 31, 2018, for both single state and multi-state plan submittals.
Description of the correction:
Deleted “are due on August 31, 2016, which is 13 mo nths after finalization of the emission guidelines. In order to address the concern that 13 months is not sufficient time for states to prepare and submit a complete plan submittal and to allow consistent timelines for both a single state and multi-state approach to state plan submit tals, the EPA is also finalizing a plan submittal process which provides additional time to submit a complete plan submittal after August 31, 2016. This approach involves the option that we ref er to as an initial submittal, followed by submittal of a complete state plan submittal no lat er than August 31, 2018, for both single state and multi-state plan submittals.”, and replaced wit h “ or initial submittals/extension requests are due on September 6, 2016. Final complete state plan s must be submitted no later than September 6, 2018.”, to remove language inadvertently not rem oved from Response 5 and provide text aligned with the final rule language.

Page 15820

Response 15: We are not finalizing building block 4 as part of the BSER. In section V.E of the final rule preamble of the CPP and in the Legal Mem orandum we explain how affected EGUs can implement building block 3, which means that Pe nnsylvania need not change it s renewable energy requirements. In addition, the Commonwealth has the state measures approach as an option, which could allow it to achieve its section 111(d) obligations based at least in part on the effects of its state law requirements for renewable energy.
Description of the correction:
Corrected “it” to “its” to make possessive in the f ollowing sentence in Response 15, “which means that Pennsylvania need not change its renewab le energy requirements.”, for clarity.

Page 160

Response 17: We disagree with this comment. We are not finalizi ng building block 4 as part of the BSER. In section V.E of the final rule preamble of the CPP and in the Legal Memorandum we explain how affected EGUs can implement building block 3, which means that Pennsylvania need not change it s renewable energy requirements. In addition, the Co mmonwealth has the state measures approach as an option, which could allow i t to achieve its section 111(d) obligations based at least in part on the effects of its state law requirements for renewable energy.

Description of the correction:
Corrected “it” to “its” to make possessive in the f ollowing sentence Response 17, “which means that Pennsylvania need not change its renewable ene rgy requirements.”, for clarity.

Page 182

... the computer modeling they performed to support i ts proposed rule available for public comment. Commenters said, critical modeling runs th at bear upon the economic, consumer, and energy impacts on both Indiana and Ohio remain unav ailable. Commenters said, as a result, commenters believe that preparing informed comments on this important issue is not possible.

Commenters 24110 stated, EPA's analysis of the effects the proposed rule consists primarily of IPM model runs. Commenters said, these runs form th e basis for EPA's RIA, and they are a key component of EPA's conclusion that EPA's "best syst em" and the standards it is imposing as a result of that system are achievable. Commenters sa id, yet despite the centrality of these model runs to EPA's analysis, and despite the fact that t he Agency conducted 25 different model runs, EPA (a) failed to include the complete model run in formation for any years it modeled, (b) included in the record the parsed files for only 4 out of the 25 model runs, and (c) did not include any information for model runs simulating 2030, the key compliance date for the rule. Commenters said, EPA's failure to include this info rmation in the docket for the Proposed Rule21

does not comply with CAA section 317 nor with EPA's obligation under CAA section 307(d)(5) to create an adequate record and provide the public with an opportunity for notice and comment.
Response 6: The EPA’s response to this comment is addressed in the response to Comment 1 in this section 1.13.
Description of the correction:

Deleted the commenter number “24110” which is an ed itorial reference number not removed from the final Due to the unprecedented number of c omments, lists of document control numbers (DCNs) were not included with each comment summary. For purposes of this document, the text within the comment summaries was provided by the co mmenter(s) and represents their opinion(s), regardless of whether the summary speci fically indicates that the statement is from a commenter(s) (e.g., “The commenter states” or “The commenters assert”).

Page 186

Comment 9: Commenters requested on behalf of the Commonwealth of Kentucky and in support of requests made by the key stakeholders an d fellow state Attorneys General that the EPA make available all data, information, and d ocuments upon which it relied when drafting the proposed rule "Carbon Pollution Emission Guidel ines for Existing Stationary Sources: Electric Utility Generating Unites." 79 Fed. Reg. 3 4,830 (June 18, 2014) (hereinafter "111(d) Rule"). Commenters said, all data, information, an d documents that the EPA analyzed and upon which the EPA relied when drafting the 111(d) Rule must be made publicly available in order to ensure opportunity for meaningful analysis and comp rehensive public comment. Commenters requested that the EPA immediat ely promulgate and publish a Notice of Data Availability ("NODA") that contains the techni cal documents and data requested. Commenters said, further, along with the NODA, they request that the EPA extend the comment period regarding the 111(d) Rule to allow a reasona ble period for potentially affected entities to analyze the data and to permit meaningful public co mment.
Response 9: NO RESONSE HAS BEEN ADDEDThe EPA’s response to this comment is addressed in the response to Comment 1 in this sect ion 1.13.

Description of the correction:

Changed the response to be “Response 9” rather than “Comment 9”. Struck the words, “NO RES(P)ONSE HAS BEEN ADDED”, which is an editorial n ote inadvertently left in the document and inserts the correct response text that was omitted noting the comment is addressed in section 1.13 CAA 307(D), beginning on page 169 o f this chapter of the RTC. The EPA discusses the release of the NODA or November Suppl emental Proposal and the time given to respond. Please see response to Comment 1, beginnin g on page 173. The corrected response is:
The EPA’s response to this comment is addressed in the response to Comment 1 in this section 1.13.22

Page 204
Response 1: As noted above, the EPA believes its standards of p erformance reflect achievable, cost-effective measures that can be undertaken by i ndividual affected sources to reduce their emissions. However, the EPA but does not agree that the standards of performance establi shed in the emission guidelines must be determined by consi dering each individual source’s capabilities divorced from the electrical system in which the af fected sources operate. The “remaining useful life” provisions in 111(d) do not affect this concl usion (we discuss our interpretation of the ...
Description of the correction:
Changed the word “but” to “does” for clarity in Res ponse 1.

Page 259
Response 14 : The EPA is confident that the final rule provide s clear criteria for states to follow in developing state plans that achieve the emission performance rates or equivalent, and that will be enforceable. States following the state measures approach will be required to have a backstop in place to ensure they are meeting their goals. Ot her forms of state plan will be based on federally enforceable emission standards. EPA is ta king additional steps for rate-based emission standard plans to ensure that ERCs are permanent, n on-duplicative, and reflect real and verifiable quantities of clean generation. EPA is proposing a federal plan this summer that it will implement in the event states do not submit approva ble state plans. This federal plan will also set enforceable emission standards on the affected EGUs . The federal plan will also serve as a model rule, satisifyingsatisfying this, and many other commenter’s concerns, that th e agency should provide additional support for states on the design of approvable plans. EPA’s action goes beyond a BAU scenario and will achieve real and add itional reductions in carbon pollution.
Description of the correction:
Changed the word “satisifying” to “satisfying” for clarity in Response 14, correcting typographical error.

Page 286
1.15.7 State-specific issues

Comment 1 : Comment 14: Commenters expressed concern that the Notice of Dat a Availability ("NODA'') published on October 28, 2014 did not com ply with the requirements to comply with the Administrative Procedures Act (APA), because th e information presented in the NODA implied a change in the stringency of the proposed BSER, and did not provide an adequate state of basis for the proposed changes.23

The commenters noted that the NODA seeks comment on a variety of proposed changes to the states "goal" setting without providing a revised r ule or the associated time to fully comment on the proposed changes. In the case of Wyoming, the c ommenters argued that these potential "changes" may result in a significant further incre ase in the stringency of any final Wyoming compliance obligation with incremental and unavoida ble costs of compliance.
Description of the correction:
Deleted “Comment 14:” which is a duplicated and inc orrect comment number and was inadvertently not deleted. The correct comment num ber was included in the bold text at the beginning of the comment summary.

Page 296
Response 10 : EPA thanks these commenters for the information they have provided on the laws and regulations of these States. Ultimately, state plans will be subject to the agency’s substantive review for approvability, on the basis of meeting t he requirements of the federal Clean Air Act, including the requirements of the emission guidelin es. If a state does not submit plans that are approvable, the EPA will promulgate a federal plan for the affected EGUs in that state. We note the Act provides that States have reserved authorit y to set standards more stringent than federal guidelines under section 116. We also note that 60. 24(f) clearly provides that an applicable subpart (i.e., emission guidelines for a particular pollutant from a particular source category) may supercedesupersede its general provisions. States may in some cases s et emission standards under 111(d), including in these guidelines, for a particular unit that are less stringent than the subcategorized emission performance rates for the t wo subcategories of sources covered by these guidelines. However, in these guidelines, this is s ubject to conditions such as that the affected EGUs in the state continue to meet the overall stat e goal. (As the agency explains elsewhere, this is possible through the availability of trading and other mechanisms that provide flexibility in these guidelines.).
Description of the correction:
Changed the word “supercede” to “supersede” for cla rity in Response 10, correcting typographical error

Chapter 2

Page 61

Response 3: The EPA does not agree. Reduction in emissions f rom small power plants not covered by the rule and not connected to the grid d o not result in emission reduction at affected24

EGUs and therefore cannot be used to meet the emiss ion reduction requirements for affect ed EGUs.

Description of the correction:
Changed the word “affect” to “affected” for clarity in Response 3, correcting grammar.

Chapter 3B

Page 65
Response 18: The EPA disagrees. EPA is fully aware of transmis sion constraints for imports and exports to FRCC. We assume this is what the co mmenters mean, since FRCC is only the peninsular part of Florida, and transmission into c oastal Florida is served by other transmission lines and not subject to this constraint. EPA uses 3600MW for this limit, not 3800MW; please see the IPM model documentation at http://epa.gov/powersectormodeling. http://www.epa.gov/airmarkets/powersectormodeling.h tml. In response to ...
Description of the correction:
Corrected web address, for clarity

Page 194

Comment 40: Under Construction Unit (Deer Creek Station, SD)

Response 40: The EPA has decided not to finalize the relevant pr ovision of the rule. and no response to this comment is provided.
Description of the correction:
Deleted “, and no response to this comment is provi ded.” This text is extraneous and inadvertently not deleted from the final response. The response is provided by the preceding phrase, “The EPA has decided not to finalize the re levant provision of the rule.”

Page 234
Response 6: The EPA disagrees. This comment is not correct abou t the IPM model. The natural gas component of the model includes all natural gas consumption, not just the power sector. See http:epa.gov/powersectormodeling http://www.epa.go v/airmarkets/powersectormodeling.html for documentation.25

Description of the correction:
Corrected web address, for clarity

Page 242

Comment 2: Commenters stated that, if additional pipeline capa city is needed to support compliance with the Clean Power Plan, INGAA is conf ident that the industry will be able to respond to this demand, although the ability to res pond in a timely manner depends on several factors including making improvements in the permit ting process.

Commenters referenced a 2014 NYISO reliability stud y and stated that, because of this constraint, it is not possible to access all the in stalled NGCC capability that is located in UPNY (NYISO's 2014 Reliability Needs Assessment at pp. 2 4 and 28, available at http://www.nyiso.com/public/webdocs/markets_operati ons/services/planning/Planning_Studies/ Reliability_Planning_Studies/Reliability_Assessment _Documents/2014%20RNA_final_091620 14.pdf.)
Response 2: The EPA agrees to the extent that the industry has demonstrated the ability to add needed infrastructure. For EPA's response to this c omment see section V.D of the final rule preamble of the CCP and Chapter 3 of the GHG Mitiga tion Measures TSD for the CPP Final Rule supporting the final CPP. Pipeline permitting is not addressed here as this is outside of the scope of the CPP.”
Description of the correction:
Insert “Response 2:” at the beginning of the third paragraph of Comment 2. The response label was inadvertently deleted from the final document.

Page 245

Commenters described a number of benefits related t o using natural gas for electric generation, including low-cost technology, reliable baseload, p eaking or intermediate power, ability to ramp up quickly, increased grid diversity, reduced air p ollution, and ability to accommodate intermittent electricity sources such as wind and s olar generation. Commenters stated the capacity of natural gas to meet growing energy dema nds is particularly significant in light of the resurgence in U.S. manufacturing and noted natural gas facilities are scalable and require only minimal lead time as compared with other traditiona l power sources. Commenters referenced EIA data and stated that, in light of the continued positive outlook for natural gas supply and availability, the electricity sector's use of natur al gas as fuel will not hinder manufacturing and commercial growth and, more specifically, will not impede the availability of natural gas as a feedstock for other industrial uses. Commenters sta ted that NGCCs can effectively and efficiently supply baseload power to the electric p ower system. Commenters noted that, in 2013, natural gas-fired power plants accounted for over 5 0 percent of new utility-scale generating capacity 7 with about half of that capacity in the form of NG CC power plants that provide26

intermediate and baseload power. Commenters stated that, over the first six months of 2014, natural gas-fired power plants again made up more t han half of the utility-scale capacity additions in the United States and almost all of th ese plants were NGCC, the majority of which are designed to serve baseload power in the regions in which they operate. Commenters stated there is a recognition in the industry that current price and regulatory dynamics have created an opportunity for existing NGCCs to increase utilizat ion and act as a baseload resource.
Description of the correction:

Deleted “7” which is a commenter’s footnote inadver tently not deleted from the comment
summary.

Page 319

Comment 20: Commenters suggested additional analysis is needed, such as consideration of sustainability and maintenance.

Response 20: The EPA disagrees that we inadequately considered system issues in development of the 111(d) final rule. Additional analysis may b e considered by implementing authorities. In response to additional analysis and many comments, we have modified the proposal and RIA; the establishment of CO2 emission reduction standar ds is regionally based. The 111(d) final rule requires that states develop plans that establish e mission 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 s tart of the interim performance period (postponed from 2020 until 2022), and the ability t o shift emission rate achievement between performance periods. Neither the Building Blocks no r the IPM analyses are prescriptive, and states may consider local circumstances as they dev elop their plans, including system reliability, fuel diversity, other regulatory requirements and i nfrastructure. See sections V.A, V.B, V.D, VIII.A, VIII.C and VIII.G of the final rule preambl e of the CPP and Chapter 3 of the GHG Mitigation Measures TSD for the CPP Final Rule supp orting the final CPP.
Description of the correction:
Add bold highlighting to “Response 20:”

Page 361
Response 37: The EPA disagrees that we have inadequately analyze d this issue. Our analysis and modeling uses current data on NGCC availability , which reflects historical differences in failure rates. See model documentation as http://epa.gov/powersectormodeling. http://www.epa.gov/airmarkets/powersectormodeling.h tml.
Description of the correction:
Corrected web address, for clarity Formatted: Font: (Default) Times New Roman, Bold27

Page 403

3.2.6 Natural Gas Price Impacts

This section addresses comments on the natural gas price impacts that would be caused by the CPP. The issues include potential price increases a nd volatility.

Commenters have raised a number of issues related t o this subsection which are organized by topics (comments) below. Responses are provided for these topics.

Comment 1: Commenters described why price volatility in natura l gas due to the increase in demand by the power sector is not a concern.

Response 1: The EPA agrees to the extent that natural gas supp lies are sufficient and increasing. The EPA believes that the 111(d) final rule provide s states with the flexibility to develop plans that consider reliability and local circumstances. The Building Blocks are not prescriptive, but rather were used to calculate CO2 emission performa nce rates. The flexibility that states have includes, for example, the choice of approaches, tr ading, time to develop plans, additional time before the start of the interim performance period, and the ability to shift emission rate achievement between performance periods. See sectio ns V.D, VIII.A, VIII.C and VIII.G of the final rule preamble of the CPP and Chapter 3 of the GHG Mitigation Measures TSD for the CPP Final Rule supporting the final CPP.
Description of the correction:
Add bold highlighting to “Response 1:”

Page 438

3.2.8 New NGCC

This section discusses issues related to shifting g eneration from existing units to newly constructed NGCC plants as part of Building Block 2

.

Commenters have raised a number of issues related t o this subsection which are organized by topics (comments) below. Responses are provided for these topics.

Comment 15 : Commenters opposed the two new proposed approaches for calculating building block 2 of imposing a minimum level of natural gas dispatch and calculating Building Block 2 on a regional basis. Formatted: Font: (Default) Times New Roman, Bold28

Response 15 : The EPA has not adopted the minimum floor approach for the final rule and believes the approach to developing state goals is not arbitrary (See Preamble Section V).

Description of the correction:
Corrected comment number for first comment, replaci ng “5” with “1” in both the comment and response blocks.

Pages 466-477
Description all of the multiple corrections on thes e pages and presented below:
Corrected minor typographical errors and incorrectl y-numbered comment summaries and
responses.
Page 466

Comment 42 : Commenters stated that they do not believe that the EPA should establish a minimum value as a floor for the amount of generati on shift that can be achieved via Building Block 2.

Response 42 : In the final rule, the EPA does not use the floor a pproach to Building Block 2. See Preamble Section V.D for Building Block 2 and Secti ons VI and VII for determination of performance rates and state goals.

Pages 471-472

Comment 23 : Commenters agreed with NODA approach for minimum f loor of 12% on a regional basis.
Response 23 : See section V.D 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 the block 2 & 3 goals are inequit able and require more of states that have already heavily invested in NGCC and RE, such as Te xas, while requiring relatively less from those states that have not, such as Kentucky. The c ommenters believed that due to the interconnected nature of electricity markets, EPA s hould reapportion the emissions reduction obligation, increasing the stringency of the goal f or states like Kentucky while reducing the stringency of the goal for states like Texas, which has significant under-utilized NGCC capacity. The commenters agreed with the approach in the NODA , establishing a minimum floor value for each state to achieve through Block 2 - regardless of a state's existing NGCC capacity - and29

reducing the burden by an equivalent amount for tho se states with higher amounts of NGCC capacity. The commenters believed that the minimum value of 12% suggested by EPA in the NODA appears reasonable and should be established o n a regional basis. The commenters stated that by basing the minimum floor on a regional basi s, states that have invested heavily in NGCC capacity can export power to states that have no or little NGCC capacity, an approach reflecting the interconnected nature of the electric grid.

Comment 34 : Commenters expressed opposition to setting a floor for the Navajo Nation.

Response 34 : See section V.D of the final rule preamble of the C PP for the EPA’s response to this comment.
The following are summaries of the specific public comments under this comment:

In comments on the Tribes and Territories supplemen tal proposal, commenters stated that the Navajo Nation opposes requiring a target or minimum level of transition to natural gas from coal even for jurisdictions with little or no NGCC capac ity because trying to apply a minimum transition to natural gas in an effort to achieve m ore of a "one size fits all" approach to BB2 ignores the costs and availability of fuels in a gi ven state and the necessary infrastructure to deliver it. For example, the commenters asserted Na vajo Nation coal is local to the mine and, at roughly $5/ton, costs only about $0.28/MMBtu. The c ommenters believed the suggested "one size fits all" approach ignores the recent investme nts that have been made in coal generation and would push more coal generation (and the associated investments) toward an uneconomic state with stranded assets. The commenters added that the "one size fits all" approach ignores recent investments made in coal generation and would push more coal generation and associated investments, toward an uneconomic state with strand ed assets.

Comment 45 : Commenters stated that the EPA should not adopt the "minimum level of generation shift" concept.

Response 45 : See section V.D of the final rule preamble of the C PP for the EPA’s response to this comment.

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

Commenters stated that because the Tribes and Terri tories Supplemental Proposal incorporates concepts introduced in the CPP, including its NODA, it is important to address the concept of "generation shift" within these comments in the con text of the EPA's acknowledgment that there are no NGCCs on the Navajo Nation. The commenters o pposed the use of a minimum level of NGCC generation, whether that is in the form of exi sting or new NGCC units as part of BB2. The commenters also opposed inclusion of co-firing natural gas as part of BB2 because of the technical obstacles and cost considerations that co -firing would present for the FCPP. The commenters stated these units can combust a small a mount of natural gas for startup operations30

and early flame stabilization, but the amount of he at input from natural gas combustion is limited to a small fraction of the total heat input to the units. The commenters asserted that achieving a material reduction in carbon emissions from co-firi ng would require an enormous capital investment to modify the boilers and increase the n atural gas supply infrastructure. The commenters believed this effort not cost justified, especially considering the extremely small load demand in the Navajo Nation. The commenters st ated that the EPA should not expand the types of natural gas facilities in its determinatio n of BSER to include co-firing natural gas.

Comment 56 : Commenters expressed opposition to setting a floor based on national averages, suggest establishing a floor on a state-by-state ba sis.

Response 56 : See section V.D of the final rule preamble of the C PP for the EPA’s response to this comment.

Pages 473-477

Comment 67 : Commenters stated infrastructure concerns and quest ioned the definition of "region".

Response 67 : See section V.D of the final rule preamble of the C PP for the EPA’s response to this comment.

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

Commenters believed adopting a floor will increase pressure to add new generation in states that currently have no NGCCs and that if the EPA does ad opt a floor that it not be initiated until necessary infrastructure to interconnect and delive r new generation resources is in place. If the EPA decides to consider regional availability in th e establishment of BB2 targets, the commenters believed the definition of "region" shou ld be based on the boundaries of organized markets since this best matches how generation is d ispatched and how enabling transmission infrastructure is planned.

Comment 78 : Commenters stated the starting point for the EPA's revised analysis of the CO2 effects of redispatch in 2020 should be no lower th an the historical maximum capacity factor for NGCC.
Response 78 : See section V.D 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:31

Commenters stated that if the EPA finalizes target rates based on the phase in of BB2 redispatch over a number of years, as discussed in the NODA, t he Agency will need to determine the amount of NGCC capacity achievable by 2020. Comment ers recommended that the EPA select a maximum utilization/capacity factor that is no lowe r than the level that each state or region has achieved historically. Commenters specifically reco mmended that the EPA use the average of the highest monthly utilization/capacity factors ac hieved during the winter and summer seasons during the years 2011 through 2013 in calculating t he portion of the CO 2 emissions reductions targets achievable through BB2 redispatch. Commente rs stated this would reflect the times of greatest NGCC production during the multi-year peri od for which the EPA has real information, and would also take into account the differing avai lability of pipeline capacity during the winter and summer seasons.

Comment 89 : Commenters stated questions regarding goal recalcul ation.

Response 89 : See section V.D 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 asked if the EPA will recalculate the ma ss goal for each state and communicate the result before the state plan deadline, if an NGCC f loor is established in the final rule. Commenters also asked if the number goal will be le ss than that included in the original proposal if the RE/EE fossil offset is established in the fi nal rule.

Comment 910 : Set natural gas ramp rate at 5% per year.

Response 910 : See section V.D 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 urged the EPA to consider natural gas ge neration increases (i.e., ramp rate) of 5% per year, the historical average over the last 10 y ears, when considering gas and electricity prices in the evaluation of the total costs of the BSER ta rgets. Additionally, commenters stated that the ramp rate should reflect the needs for additional i nfrastructure to support increased gas use through the three respective pathways, which may be different for the different pathways. Commenters added that it had assessed a more conser vative 2% per year ramp rate, and the modeling results indicated that a coal-to-gas shift at this level was highly cost effective, but the commenters did not have time to complete additional modeling at higher ramp rates. Nonetheless, commenters urged the EPA to consider h igher shift rates, up to and including a continuation of 5%, the 10-year historic rate.32

Comment 1011 : Commenters suggested adoption of a minimum 2% annua l conversion rate for Tribal Nations and U.S. Territories.

Response 1011 : See section V.D of the final rule preamble of the C PP for the EPA’s response to this comment.
The following are summaries of the specific public comments under this comment:

Regarding the Tribal and Territories Supplementary Rule, commenters urged that the EPA, in setting the targets for power plants in Indian Coun try and U.S. territories, apply the 2% annual conversion. This approach or some other approach th at incorporates the opportunity for switching to lower-emitting fuels and achieves equi valent or greater reductions is particularly important, according to the commenters, given that BB2 would not otherwise apply to these facilities given the lack of existing NGCC plants i n these jurisdictions. The commenters asserted lack of existing facilities within the jurisdiction does not reflect a reduced opportunity to switch to lower-emitting fuel sources.

Comment 1112 : Commenters expressed support and opposition to redi spatch approaches in the NODA.

Response 1112 : See section V.D 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 there is significant opportu nity to reduce emissions from affected sources by shifting to natural gas generation in al l three ways noted by the EPA - shifting generation to existing NGCC units with additional c apacity, shifting generation to new NGCC units or by co-firing, and by repowering existing c oal-fired EGUs with natural gas. The commenters stated that incorporating the potential to improve emission performance from all three of these methods into the BSER is in keeping with the EPA's overall approach and would better reflect the actual system that states have u sed to achieve emission reductions.

Commenters opposed the redispatch approaches in the NODA. Commenters opposed the redispatch approaches as well as the proposed alter native approach and co-firing as a consideration in lieu of, or addition to shifting f rom coal to natural gas. The commenters believed the approaches could make the goals less a chievable. The commenters asserted new resources are developed based on demand, cost and c urrent conditions, thus it is not possible for EPA to develop realistic assumptions regarding deve lopment of natural gas resources through 2030. Even if it were possible, the commenters stat ed it would be infeasible to apply on a uniform basis across states. The commenters appreci ated EPA attempting to create greater equity between states in terms of goals but believed intro ducing inherently arbitrary assumptions will create different inequities between states.33

Commenters stated the BB2 alternative approaches in the NODA should not be applied in the final guidelines because these need to be better ju stified, details clarified, and outcomes analyzed and issued for public comment. In particular, the c ommenters believed requiring a minimum level of natural gas dispatch may not be technicall y supportable as the BSER.

Comment 1213 : Commenters noted negative impacts of co-firing.

Response 1213 : See section V.D of the final rule preamble of the C PP for the EPA’s response to this comment.
The following are summaries of the specific public comments under this comment:

Commenters stated that co-firing natural gas with c oal, as discussed in the NODA, would require significant investment, leading to higher cost of e lectricity. The commenters stated that contrary to the assumption used in the EPA's analysis that c oal-fired units run at full load and could benefit from co-firing, most units do not run at fu ll load. The commenters also stated that moving coal-fired or co-fired units away from baseload ope rations into more of an intermediate or load following mode will decrease any gains in power pla nt efficiency envisioned in Building Block 1. The commenters stated that ramping co-fired unit s up and down, in effect running them as peaking units, would most likely increase criteria pollutant emissions as well as CO 2 emissions.

Comment 1314 : Projected emission rates for gas-fired EGUs should be based on combined cycle turbines.

Response 1314 : See section V.D of the final rule preamble of the C PP for the EPA’s response to this comment.
The following are summaries of the specific public comments under this comment:

Commenters supported the Agency's decision not to i nclude simple cycle units in calculating goals, as these are typically much smaller, operate for short periods to meet peak demand, and are unlikely to have much impact on industry-wide e mission rates from gas-fired EGUs. The commenters stated their own analysis found that onl y 18 of 583 gas-fired EGUs had heat rates that exceeded 250 MMBtu/hr and a 5-year average gro ss generation greater than 240,000 MWhr, which are the criteria EPA used to identify gas -fired units included in its proposal.

Comment 1415 : Any generation shifts in states with little or no N GCC capacity should be used to reduce the amount of re-dispatch required from s tates with higher amounts of NGCC capacity

Response 1415 : See section V.D of the final rule preamble of the C PP for the EPA’s response to this comment.34

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

Commenters stated that if the EPA expands BB2 to in clude some minimum level of generation shift from higher-emitting to lower emitting source s for all states containing some fossil steam generation, then it should take the path in which t he minimum generation shifts in states with little or no NGCC capacity should be used to reduce the amount of re-dispatch required from states with higher amounts of NGCC capacity. The co mmenters stated that the EPA's existing proposal already raises substantial concerns about infrastructure adequacy, reliability and stranded investments; therefore the commenters woul d not be in favor of an expansion of the total amount of re-dispatch required.

Comment 316 : Commenters were concerned about the interplay betw een BB2 and the CPP's objective of encouraging re-dispatch from higher-em itting generating units to lower emitting generating units.
Response 316 : The EPA has revised the approach to implementing BB 2 for the final rule and believes these changes respond to this comment. See Section V.D of the preamble, Chapter 3 of the GHG Mitigations Measures TSD, and the Goal Sett ing TSD for further details.
The following are summaries of the specific public comments under this comment:

Under the CPP 111(d) proposal, commenters said, the amount of re-dispatch expected of states is limited by the makeup of the existing generating fl eet. Commenters said that although it would be feasible to construct new NGCC plants for commis sioning on or near the start of the compliance period, building block two only consider s re-dispatch to NGCC plants already in operation. Commenters noted that early acting state s that have already made substantial progress in phasing out oil and coal generation are faced wi th the potential economic burden of redispatching existing NGCC fleet investments, while states that have yet to make these investments may utilize the unconstrained dispatch to newly constructed NGCC units that are economic to build without any regulation. To addres s this inequity, where the re-dispatch is limited only by the lack of in-state NGCC capacity, commenters said that a minimum floor of redispatch should be attributed to the states to reco gnize likely cross state transfers of NGCC generated electricity to even out the compliance bu rden and more accurately and equitably set the goals as among regions and states.

Page 528

Comment 5: Commenters noted that West Virginia's energy produc ing infrastructure depends on both natural gas and coal, which will affect com pliance with the state’s CCP goal.

Response 5: The EPA thanks the commenters. Coal, as well as nat ural gas, will continue to be an important part of the fuel mix under the rule (S ee the RIA for the impact of generation mix.) The 111(d) final rule requires that states develop plans that establish emission standards for affected EGUs. We are providing states with substan tial flexibility as to how they structure those35

plans to achieve the 111(d) requirements. States ma y consider local circumstances as they develop their plans, including other regulatory req uirements, fuel diversity and the infrastructure. See sections V.D, VIII.A, VIII.C and VIII.G. of the final rule preamble of the CPP and Chapter 3 of the GHG Mitigation Measures TSD for the CPP Fina l Rule supporting the final CPP

. : Description of the correction:
Replace “:” at end of response 5 with a period.

Chapter 3C
Pages 15-127 and Pages 235-238.
Description all of the multiple corrections on thes e pages and presented below:
Corrected minor typographical errors and incorrectl y-numbered comment summaries and responses. Comment 11 of Section 3.3.1 was moved d uring drafting from Chapter 3 to Chapter 1 and is responded to on page 201 of Chapter 1A, Re sponse 17 (See similar comment summary text at end of Comment 17).

Page 15

Comment 1 12 : Commenters took issue with the assumption that RPSs are a reasonable proxy for quantifying renewable generation potential.

Response 1 12 : State RPS requirements are not a factor in quantify ing the amount of costeffective RE that is part of the BSER in the final rule. The methodology that produces target generation levels under building block 3 is describ ed in detail in section V.E of the final rule preamble of the CPP and in chapter 4 of the GHG Mit igation Measures TSD supporting the final CPP.

Page 16

Comment 1 23 : Commenters suggested that RPS policies need to be i ncreased and broadened.

Response 1 23 : State RPS requirements are not a factor in quantify ing the amount of costeffective 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 detai l in section V.E of the final rule preamble of the CPP and in chapter 4 of the GHG Mitigation Meas ures TSD supporting the final CPP.

Page 1736

Comment 1 34 : Commenters asserted that the EPA should adopt the UCS Demonstrated Growth Approach.

Response 1 34 : The resources and data provided in this comment w ere valuable in finalizing the building block 3 methodology. The final methodolog y to establish building block 3 generation levels is consistent with several of the recommenda tions provided in the UCS Demonstrated Growth Approach – the final methodology relies on t he 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 lev els equal to the EPA IPM Base Case through 2021. The final methodology for building block 3 i s described in section V.E of the final rule preamble of the CPP and in chapter 4 of the GHG Mit igation Measures TSD supporting the final CPP.

Page 20

Comment 1 45 : Commenters stated the NREL technical potential rep ort was inaccurate in its estimates.

Response 1 45 : The final methodology for building block 3 does no t rely on a benchmark development rate quantified through NREL technical potential estimates, as proposed under the Alternative RE approach. The EPA believes the RE re source estimates and cost steps that underlie IPM projections appropriately represent re levant land use restrictions. Further, building

... Pages 21-22

Comment 1 56 : Commenters recommended using NREL estimates of tech nical potential for specific RE generation technologies.

Response 1 56 : 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 su pporting the final CPP.

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

Commenters recommended that EPA should utilize a de termination of technically potential renewables in a similar manner to the National Rene wable Energy Laboratory (NREL) estimates of the technical potential of specific renewable el ectricity generation technologies.

Comment 1 67 : Commenters stated EPA overestimated the amount of additional renewable energy potential.

Response 1 67 : The EPA addresses considerations related to the te chnical feasibility and associated grid integration costs of significant RE penetration in both section V.E of the final37

rule preamble of the CPP and chapter 4 of the GHG M itigation 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 sinc e 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 t hreaten both grid reliability and an affordable energy supply for this country. Commenters stated t he MISO study of the impact of the GHG Rule found through modeling that renewable energy c ould not be expected to replace the fossilfuel retirements already planned due to MATS, nor t hose expected to retire due to the GHG Rule.

Comment 1 78 : Commenters noted factors limiting the inclusion of new RE in Alaska.

Response 1 78 : 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 i ncluding new renewable energy resources in the generation mix in Alaska. Commenters stated geo graphic and economic constraints limit the availability of utility grade renewable energy reso urces. Commenters stated utility grade wind and geothermal generation resources are generally l ocated 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

Pages 23-24

Comment 1 89 : Commenters stated that additional increases in ren ewable capacity in Montana are limited.

Response 1 89 : The final methodology for building block 3 has bee n 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 suppor ting the final CPP.

Pages 24-2538

Comment 1920 : In comments on the tribal and territories SNPR, co mmenters stated that the Proposed Rule's approach to Block 3 yields no new R E in these jurisdictions.

Response 1920 : In the final rule, the EPA applies building block 3 generation at the interconnect-level. This methodology does not disti nguish 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 o n the building block 3 target generation methodology and where it is applied, refer to secti on V of the final rule preamble of the CPP and chapter 4 of the GHG Mitigation Measures TSD suppor ting the final CPP.

Page 27

Comment 2 10 : Commenters suggested there will be increased inter est in tribal opportunities in meeting targets.

Response 2 10 : In the final rule, the EPA applies building block 3 generation at the interconnectlevel. This methodology does not distinguish betwee n affected EGUs or opportunities for RE development within an interconnection. For more det ail 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 CP P.

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 e nergy and investor owned utilities cooperative utilities, public power agencies and in dependent power producers would now look at native lands serious for additional opportunities t o 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 invest ing more into fossil fuel energy while everyone else is looking to solar and wind and other avenues

.

Comment 2 21 : Commenters suggested the EPA could achieve more re ductions from renewable
energy.
Response 2 21 : The resources and data provided in this comment w ere 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.

Page 3539

Comment 2 23 : Commenters stated that the EPA's CPP also underest imates the emissions reductions that can be achieved in Kentucky through distributed renewable energy.

Response 2 23 : As non-BSER measures, the technologies described i n this comment are an important flexibility for affected sources to achie ve the standards of performance; however, the EPA has maintained utility-scale RE as the basis fo r 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 St rategies, a West Virginia based research organization, which found that Kentucky could gener ate 34% of their electrical demand from distributed renewable energy by 2025. Commenters sa id that for the purpose of that report, distributed energy was defined as "the generation o f 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 2 34 : Commenters generally supported the Proposal, but s aid more reductions are possible in North Carolina.

Response 2 34 : State RPS requirements are not a factor in quantifying the amount of costeffective RE that is part of the BSER in the final rule. The methodology that produces target generation levels under building block 3 is describ ed in detail in section V.E. of the final rule preamble of the CPP and in chapter 4 of the GHG Mit igation Measures TSD supporting the final CPP.

Page 37

Comment 2 45 : Commenters supported renewable generation.

Response 2 45 : The resources and data provided in this comment w ere 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.

Page 40

Comment 2 56 : Commenters expressed general support for renewable energy.
Response 2 56 : The resources and data provided in this comment we re 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.

Page 44 Formatted: Font: Bold40

Comment 2 67 : Commenters identified some renewable projects that help make the state target achievable.

Response 2 67 : The resources and data provided in this comment we re 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.

. Page 46

Comment 2 78 : Commenters stated that renewable energy and energy efficiency provide states with reasonable options for reaching its target.

Response 2 78 : The resources and data provided in this comment we re 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.

Page 47

Comment 2 89 : Commenters expressed support for including Buildin g Block 3, including that renewable energy is feasible, cost-effective, and h as been demonstrated to achieve significant carbon pollution reductions.

Response 2 89 : The resources and data provided in this comment we re 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.

Page 49

Comment 2930 : Commenters expressed support for RPS programs.

Response 2930 : The resources and data provided in this comment we re valuable in finalizing the building block 3 methodology. State RPS requirement s are not a factor in quantifying the amount of cost-effective RE that is part of the BSER in th e 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 GH G Mitigation Measures TSD supporting the final CPP.

Page 51

Comment 3 01 : 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 3 01 : State RPS requirements are not a factor in quantifying the amount of costeffective RE that is part of the BSER in the final rule. The methodology that produces target generation levels under building block 3 is describ ed in detail in section V.E. of the final rule41

preamble of the CPP and in chapter 4 of the GHG Mit igation Measures TSD supporting the final CPP.

Page 52

Comment 3 12 : Commenters did not support an RPS approach.

Response 3 12 : State RPS requirements are not a factor in quantifying the amount of costeffective RE that is part of the BSER in the final rule. The methodology that produces target generation levels under building block 3 is describ ed in detail in section V.E. of the final rule preamble of the CPP and in chapter 4 of the GHG Mit igation Measures TSD supporting the final CPP.

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

Pages 54-55

Comment 3 23 : Commenters indicated the EPA ignored the variabili ty in states' RPS programs and therefore overestimated the national potential for RE growth in Building Block 3.

Response 3 23 : State RPS requirements are not a factor in quantifying the amount of costeffective RE that is part of the BSER in the final rule. The methodology that produces target generation levels under building block 3 is describ ed in detail in section V.E. of the final rule preamble of the CPP and in chapter 4 of the GHG Mit igation Measures TSD supporting the final CPP.

Biomass is not considered part of the best system o f emission reduction in this rule and therefore it is not included in goal-setting or compliance ev aluations. However, similar to other technologies outside of BSER, biomass may be consid ered as a part of a state’s plan to meet the emission guidelines.

A discussion regarding the use of some biomass feed stocks 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, re fer to section V.E of the final rule preamble of the CPP.

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

Page 59

Comment 3 34 : Commenters addressed concerns regarding the proces s to estimate renewable energy baseline and goals and if and how renewable energy sources not recognized by the proposed rule are accounted for. Formatted: Font: Bold

Formatted: Font: Bold42

Response 3 34 : The final methodology for quantifying target gener ation levels under building block 3 does not rely on the establishment of basel ine generation. Instead, the final methodology establishes a level of RE incremental from 2012 tha t is both feasible and cost-effective. There are no RE resources used in setting the target generati on that are not fully creditable under compliance.

Biomass is not considered part of the best system o f emission reduction in this rule and therefore it is not included in goal-setting or compliance ev aluations. However, similar to other technologies outside of BSER, biomass may be consid ered as a part of a state’s plan to meet the emission guidelines.

For more information regarding Building Block 3, re fer to section V.E of the of the final rule preamble of the CPP.

A discussion regarding the use of some biomass feed stocks 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 quantify ing the amount of cost-effective RE that is part of the BSER in the final rule. The methodolog y 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 suppor ting the final CPP.

Page 54

Comment 3 45 : Commenters stated actual RPS in NV does not match the rate the EPA used.

Response 3 45 : State RPS requirements are not a factor in quantifying the amount of costeffective RE that is part of the BSER in the final rule. The methodology that produces target generation levels under building block 3 is describ ed in detail in section V.E. of the final rule preamble of the CPP and in chapter 4 of the GHG Mit igation Measures TSD supporting the final CPP.

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

Page 65

Comment 3 56 : A number of commenters asserted that state-specific analyses are needed.

Response 3 56 : State RPS requirements are not a factor in quantifying the amount of costeffective RE that is part of the BSER in the final rule.

The methodology that produces target generation lev els under building block 3 is described in detail in section V.E. of the final rule preamble o f the CPP and in chapter 4 of the GHG Mitigation Measures TSD supporting the final CPP.

Page 68 Formatted: Font: Bold43

Comment 3 67 : Commenters stated the EPA must account for state-s pecific factors in Georgia.

Response 3 67 : State RPS requirements are not a factor in quantifying the amount of costeffective 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, ra ther than at the state-level. The methodology that produces target generation levels under buildi ng block 3 is described in detail in section V.E. of the final rule preamble of the CPP and in chapte r 4 of the GHG Mitigation Measures TSD supporting the final CPP.

Biomass is not considered part of the best system o f emission reduction in this rule and therefore it is not included in goal-setting or compliance ev aluations. However, similar to other technologies outside of BSER, biomass may be consid ered as a part of a state’s plan to meet the emission guidelines.

For more information regarding Building Block 3, re fer to section V.E of the final rule preamble of the CPP.

A discussion regarding the use of some biomass feed stocks for compliance purposes can be found in sections VIII.I and VIII.K of the final ru le preamble of the CPP.

A discussion regarding the current status of the de velopment of the revised Framework and how information from the revised Framework and the rela ted peer review processes could be used to inform how states and EPA assess biogenic CO2 can b e found in sections VIII.I and VIII.K of the final rule preamble of the CPP. For more inform ation regarding the Framework, see: http://epa.gov/climatechange/ghgemissions/biogenic- emissions.html.

Page 70

Comment 3 78 : Commenters stated the EPA's reliance on IPM leads to an overestimate of the amount of RE that can be achieved.

Response 3 78 : The final methodology is based on observed histori cal patterns of deployment and expected levels of future performance. IPM proj ections are used to validate the technical feasibility and cost-effectiveness of the final met hodology. The EPA updated IPM from proposal to reflect the latest data on the cost and performa nce 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 lev els under building block 3 is described in detail in section V.E. of the final rule preamble o f the CPP and in chapter 4 of the GHG Mitigation Measures TSD supporting the final CPP.

Pages 72-73

Comment 3 89 : Commenters expressed concern regarding the interst ate nature of much renewable energy.44

Response 3 89 : The resources and data provided in this comment we re valuable in finalizing the building block 3 methodology, particularly in adopt ing a regional approach to RE and quantifying target generation in terms of increment al, 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 suppor ting the final CPP.

Page 75

Comment 3940 : Commenters expressed concerns regarding offset cre diting.

Response 3940 : The BSER is premised, in part, on affected sources procuring incremental RE to replace their own generation. A successful demonstr ation 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 d ouble-counting of a single megawatt-hour of output. Refer to section VIII.G of the final rule p reamble of the CPP for further detail on actions taken to adjust the CO2 emission rate of an affecte d EGU.

Page 76

Comment 4 01 : Commenters stated that the proposal would not allo w sufficient time for the design, approval, and implementation of state and/o r regional compliance strategies needed to achieve the proposed renewable energy goals.

Response 4 01 : The EPA addresses considerations related to the te chnical 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 Mi tigation 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 adop tion of a phase-in period from 2022 through 2023 that would enable appropriate time for investm ents and planning to accommodate an increase in RE.

Page 77

Comment 4 12 : Commenters stated the EPA failed to account for th e transmission that must be built to accommodate the amount of renewable resour ces it projects.

Response 4 12 : The EPA addresses considerations related to the te chnical 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 GH G 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 adop tion of a phase-in period from 2022 through 2023 that would enable appropriate time for investm ents and planning to accommodate an increase in RE.

Page 7945

Comment 4 23 : 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 4 23 : The EPA addresses considerations related to the te chnical 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 Mi tigation 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 adop tion of a phase-in period from 2022 through 2023 that would enable appropriate time for investm ents and planning to accommodate an increase in RE.

Page 80

Comment 4 34 : Commenters expressed concerned regarding grid reli ability due to RE increases.

Response 4 34 : The EPA addresses considerations related to the te chnical 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 Mi tigation 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 adop tion of a phase-in period from 2022 through 2023 that would enable appropriate time for investm ents and planning to accommodate an increase in RE.

Page 82

Comment 4 45 : Some commenters did not support a regional approac h for renewable energy based on state RPS requirements.

Response 4 45 : State RPS requirements are not a factor in quantifying the amount of costeffective RE that is part of the BSER in the final rule. The methodology that produces target generation levels under building block 3 is describ ed in detail in section V.E. of the final rule preamble of the CPP and in chapter 4 of the GHG Mit igation Measures TSD supporting the final CPP.

Page 87

Comment 4 56 : Tribal and Territorial – Commenters opposed mandat ory regional application of RE goals.

Response 4 56 : In the final rule, the EPA applies building block 3 generation at the interconnectlevel. This methodology does not distinguish betwe en 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, ref er to section V.E of the final rule preamble of the CPP and chapter 4 of the GHG Mitigation Measure s TSD supporting the final CPP.46

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

In comments on the tribal and territories SNPR, com menters 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 F R 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 th e problem: RE developed in one jurisdiction should be permitted to count toward another jurisdi ction'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 prog rams. Commenters stated it would not be necessary for EPA to establish regional RE goals.

Comment 4 67 : Commenters suggested use of a weighted average in the regional calculation based on state RPS requirements.

Response 4 67 : State RPS requirements are not a factor in quantifying the amount of costeffective RE that is part of the BSER in the final rule. The methodology that produces target generation levels under building block 3 is describ ed in detail in section V.E. of the final rule preamble of the CPP and in chapter 4 of the GHG Mit igation Measures TSD supporting the final CPP.

Page 88

Comment 4 78 : Commenters objected to the EPA's method for determ ining the average RPS requirements.

Response 4 78 : State RPS requirements are not a factor in quantifying the amount of costeffective RE that is part of the BSER in the final rule. The methodology that produces target generation levels under building block 3 is describ ed in detail in section V.E. of the final rule preamble of the CPP and in chapter 4 of the GHG Mit igation Measures TSD supporting the final CPP.

Page 89

Comment 4 89 : Commenters suggested the EPA apply regional renewa ble targets to retail electric sales.

Response 4 89 : State RPS requirements are not a factor in quantifying the amount of costeffective RE that is part of the BSER in the final rule. The methodology that produces target generation levels under building block 3 is describ ed in detail in section V.E. of the final rule preamble of the CPP and in chapter 4 of the GHG Mit igation Measures TSD supporting the final CPP. Formatted: Font: Bold47

Page 90

Comment 4950 : Commenters stated the EPA’s approach is flawed bec ause it does not include states with no RPS in its calculations.

Response 4950 : State RPS requirements are not a factor in quantifying the amount of costeffective RE that is part of the BSER in the final rule. The methodology that produces target generation levels under building block 3 is describ ed in detail in section V.E. of the final rule preamble of the CPP and in chapter 4 of the GHG Mit igation 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 R PS programs; states with no RPS (zero values) are excluded from the calculation. Commente rs stated this approach is defective and leads to illogical and discriminatory results impos ing greatly different and unjust requirements on the individual states

Comment 5 01 : Commenters objected to the use of a single state's RPS for all states in a region.

Response 5 01 : State RPS requirements are not a factor in quantifying the amount of costeffective RE that is part of the BSER in the final rule.

The methodology that produces target generation lev els under building block 3 is described in detail in section V.E. of the final rule preamble o f the CPP and in chapter 4 of the GHG Mitigation Measures TSD supporting the final CPP.

Page 95

Comment 5 12 : Commenters stated that the most troubling aspect o f applying the Kansas RPS to Texas is that Texas has an RPS that has already bee n fully implemented.

Response 5 12 : State RPS requirements are not a factor in quantifying the amount of costeffective RE that is part of the BSER in the final rule. The methodology that produces target generation levels under building block 3 is describ ed in detail in section V.E. of the final rule preamble of the CPP and in chapter 4 of the GHG Mit igation Measures TSD supporting the final CPP.

Page 96

Comment 5 23 : Commenters did not support the alternative approac hes.

Response 5 23 : IPM projections are not the basis for building blo ck 3 target generation levels expressed in the final methodology. Specific to sev eral comments, the IPM projections supporting the technical feasibility and cost-effec tiveness of building block 3 are no longer Formatted: Font: Bold48

constrained by the application of the benchmark dev elopment limiter described under the Alternative RE approach at proposal. The final met hodology is described in detail in section . . .

Page 97

Comment 5 34 : Commenters objected to the EPA's use of capacity-b ased RPS.

Response 5 34 : State RPS requirements are not a factor in quantifying the amount of costeffective RE that is part of the BSER in the final rule. The methodology that produces target generation levels under building block 3 is describ ed in detail in section V.E. of the final rule preamble of the CPP and in chapter 4 of the GHG Mit igation Measures TSD supporting the final CPP.

Page 99

Comment 5 45 : Commenters generally supported the alternative app roach.

Response 5 45 : The resources and data provided in this comment we re valuable in finalizing the building block 3 methodology, particularly in the r emoval of the technical potential limiter. The final methodology is described in section V.E of th e final rule preamble of the CPP and in chapter 4 of the GHG Mitigation Measures TSD suppor ting the final CPP.

Page 99-100

Comment 5 56 : Commenters supported a cap on in-state RE generati on.

Response 5 56 : The EPA has adopted a regional approach to buildin g 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 3486 8) to cap the amount of new renewable electricity generation assumed in in each state's b uilding 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 s tate. Commenters stated that placing a cap on new renewable energy generation in a state will hel p ensure that EPA does not set renewable energy targets for states that cannot be supported by the state's electricity grid.

Comment 5 67 : Commenters stated it is imperative for building bl ock #3 that the EPA rely upon renewable electricity generation for reporting comp liance with the interim and final emission targets rather than renewable electricity consumpti on.

Response 5 67 : Building block 3 is quantified and expressed in te rms of renewable generation, not consumption.

Page 101 Formatted: Font: Bold49

Comment 5 78 : Commenters expressed concern regarding what RE gen eration qualifies for compliance purposes.

Response 5 78 : Incremental generation from each of the RE technol ogies under building block 3

• utility-scale solar PV, concentrating solar power, onshore wind, geothermal, and hydropower ...

Page 104

Comment 5 89 : Commenters agreed that existing measures should be allowed to count during the compliance period.

Response 5 89 : In the final methodology, building block 3 is quan tified as RE incremental to the BSER data year of 2012. The standards of performanc e reflect this adjustment to incremental RE from total RE, which is more consistent with the co ncept of replacing affected source generation.

Page 105

Comment 5960 : Commenters asked for guidance regarding non-ratepa yer compliance options.

Response 5960 : The use of non-BSER measures, such as energy effic iency and distributed generation, to achieve standards of performance is described in detail in section V.A of the final rule preamble of the CPP.

Page 105-106

Comment 6 01 : Commenters expressed concern that a state's renewa ble potential is calculated using widely-recognized renewable generation source s such as biomass and hydropower, but EPA does not allow these and other sources to be us ed for compliance.

Response 6 01 : The resources and data provided in this comment we re 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 me asures to achieve standards of performance, such as biomass, is described in secti on V.A of the final rule preamble of the CPP.

Page 107

Comment 6 12 : Commenters indicated that CPP should be revised to take into account that municipal utilities have limited RE options.

Response 6 12 : The EPA believes all affected sources have the opp ortunity to participate in building block 3, as described in section V.E of th e final rule preamble of the CPP.50

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

Commenters said that while many municipal utilitie s are committed to investing in renewable electricity generation resources, they have experie nced challenges because of their small size and tax exempt status. Commenters stated municipal uti lities do not receive the production tax credit for wind energy or the investment tax credit for so lar energy. Commenters added that another barrier to investing in renewable energy for munici pal 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 renewabl e 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 rene wable 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 st ated that municipal utilities cannot take advantage of Federal incentives for wind developmen t, like the production tax credit, which makes wind projects more costly for utilities like theirs.

Comment 6 23 : Commenters supported the potential for additional wind energy.

Response 6 23 : The resources and data provided in this comment we re valuable in finalizing the building block 3 methodology, particularly in the r eevaluation 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.

Page 109

Comment 6 34 : Commenters indicated that, while wind resources ar e 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 wi nd from the west and south.

Response 6 34 : The resources and data provided in this comment we re valuable in finalizing the building block 3 methodology, particularly in the r eevaluation 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.

Page 111

Comment 6 45 : Commenters expressed concerns regarding technical performance of wind turbines.

Response 6 45 : The resources and data provided in this comment we re valuable in finalizing the building block 3 methodology, particularly in the r eevaluation 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.51

Page 112

Comment 6 56 : Commenters expressed concern that the Proposal ove restimates the potential for RE in WV.

Response 6 56 : The final building block 3 methodology does not re ly on RPS requirements or state-specific deployment estimates, but rather cos t-effective RE at an interconnection level. The EPA addresses considerations related to the technic al 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 sup porting the final CPP.

Page 114

Comment 6 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 6 67 : The EPA addresses considerations related to the te chnical 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 M itigation Measures TSD supporting the final CPP.

T he following are summaries of the specific public c omments under this comment:

Commenters stated Texas generates more electricity from wind than any other state and is already utilizing the most productive wind sites fo r 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 o ver existing renewable capacity). Commenters stated the EPA fails to recognize that s ites 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 accou nt 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 buildi ng block 3.

Comment 6 78 : Commenters expressed support for solar energy.

Response 6 78 : The resources and data provided in this comment we re valuable in finalizing the building block 3 methodology, particularly in the r eevaluation of solar cost and performance assumptions. The EPA has maintained distributed gen eration technologies as non-BSER measures that affected sources may rely upon to ach ieve standards of performance for a number of reasons, including data limitations, the heterog eneity of distributed generation opportunities, and the desire to maintain balance between program flexibility and stringency. The final building block 3 methodology is described in sectio n V.E of the final rule preamble of the CPP and in chapter 4 of the GHG Mitigation Measures TSD supporting the final CPP. Formatted: Font: Bold52

Page 116

Comment 6 89 : Commenters expressed concerns regarding solar capa city and growth potential.

Response 6 89 : The final building block 3 methodology does not re ly on RPS requirements or state-specific deployment estimates, but rather cos t-effective RE at an interconnection level. The EPA addresses considerations related to the technic al 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 sup porting the final CPP.

Page 117

Comment 6970 : Commenters recommended the EPA include distributed generation in building block 3.

Response 6970 : The resources and data provided in this comment we re valuable in finalizing the building block 3 methodology, particularly in the r eevaluation of solar cost and performance assumptions. The EPA has maintained distributed gen eration technologies as non-BSER measures that affected sources may rely upon to ach ieve standards of performance for a number of reasons, including data limitations and EM&V con cerns. The final building block 3 methodology is described in section V.E of the fina l rule preamble of the CPP and in chapter 4 of the GHG Mitigation Measures TSD supporting the fina l CPP.

Page 118

Comment 7 01 : Commenters stated distributed generation (DG) inst allations are inherently situational and need to be modeled at the local dis tribution system level.

Response 7 01 : The resources and data provided in this comment w ere valuable in finalizing the building block 3 methodology, particularly in the r eevaluation of solar cost and performance assumptions. The EPA has maintained distributed gen eration technologies as non-BSER measures that affected sources may rely upon to ach ieve standards of performance for a number of reasons, including data limitations and EM&V con cerns. The final building block 3 methodology is described in section V.E of the fina l rule preamble of the CPP and in chapter 4 of the GHG Mitigation Measures TSD supporting the fina l CPP.

Page 119

Comment 7 12 : Commenters stated renewable baseload or dispatchab le generation, such as biopower, is needed to reinforce the variable gener ation resources, wind power and solar photovoltaics.

Response 7 12 : Maintaining sufficient baseload and ramping capaci ty to reinforce variable generation resources is a critical aspect to the IP M 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.53

Specifically in regards to biopower resources, biom ass 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 feed stocks for compliance purposes can be found in sections VIII.I and VIII.K of the final ru le preamble of the CPP.

Page 120

Comment 7 23 : Biomass and BSER. Many commenters commented on the perceived role of biomass in the baseline, goal setting and complianc e, 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 shou ld 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 ch oose whether or not to include biomass as part of state compliance measures. Commenters wante d inclusion of dedicated biomass plants in compliance assessments.

Response 7 23 : Biomass is not considered part of the best system of emission reduction in this rule and therefore it is not included in goal-setti ng 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, re fer to section V.E of the final rule preamble of the CPP.

For more information regarding biomass in the IPM b aseline projection, refer to EPA v5.13 Base Case Documentation Supplement to Support EPA’s Prop osed Carbon Pollution Guidelines for Existing Electric Generating Units in the docket.

A discussion regarding the use of some biomass feed stocks for compliance purposes can be found in sections VIII.I and VIII.K of the final ru le preamble of the CPP.

In November 2014, the agency released a second dra ft of the technical report, Framework for Assessing Biogenic Carbon Dioxide for Stationary So urces. The revised Framework, and the EPA’s Science Advisory Board (SAB) peer review of t he 2011 Draft Framework, finds that it is not scientifically valid to assume that all biogeni c feedstocks are “carbon neutral” and that the net biogenic CO2 atmospheric contribution of differ ent biogenic feedstocks generally depends on various factors related to feedstock characteris tics, 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.54

A discussion of the use of biomass feedstocks and a ssociated biogenic CO2 assessment can be found in in sections VIII.I and VIII.K of the final rule preamble of the CPP.

Pages 126-127

Comment 7 34 : Commenters stated it is critical that the EPA util ize up-to-date data in the development of the Clean Power Plan in order to ena ble more accurate compliance planning.

Response 7 34 : The resources and data provided in this comment we re valuable in finalizing the building block 3 methodology, particularly in the r eevaluation 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 a nd 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 wr itten, out-of-date data is sometimes used when more current information is available. Commenters s tated, for example, in terms of solar, the data used does not reflect current solar capacity o r market projections; today's solar capacity is already exceeding the estimates the EPA has used. C ommenters 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 st ated that, based on the new wind turbine technology, it is clear that Louisiana's coastal ar ea has some of the country's best wind resources. Commenters stated that, while the National Renewabl e 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 appl y 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 b aseload energy opportunity.

Commenters stated the agency should use the most re cent cost and performance data for renewable energy technologies, such as wind and sol ar. Commenters stated that, by the time the rule is finalized, the EPA should have access to fi nal 2014 data and the agency should use that information in establishing state targets and build ing from the most recent data on renewable generation is critical, given the rapid growth in d eployment of these resources in recent years. Commenters stated the EPA's assumptions should be u pdated 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 7 45 : Commenters stated there are errors that need to be corrected under the proposed approach.

Response 7 45 : The errors cited by the commenter relate to RPS re quirements, 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 rule55

preamble of the CPP and in chapter 4 of the GHG Mit igation Measures TSD supporting the final CPP.

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

Commenters stated that, in reviewing the spreadshee t and the inherent calculations EPA relied on to establish the state goals for North Carolina, NC DENR discovered a number of errors or incorrect assumptions in the calculations. Commente rs provided an Appendix C which details these concerns. Commenters trusted that the EPA wil l 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 St andard.

Comment 7 56 : Commenters asserted that EPA has no Section 111 au thority over RE technologies.

Response 7 56 : 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 affec ted 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 po ssibly for renewable generation technologies such as biomass, EPA has no Section 11 1 authority over these generation technologies (nuclear, renewable) at all. Commenter s said that first, they do not release any air pollution, preventing the EPA from making an endang erment finding involving these units under Section 111. Commenters said that further, the defi nition of stationary source requires that the source "emits or may emit any air pollutant." Comme nters 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 techno logies.

Comment 7 67 : Commenters stated the utilization of imported low- and non-emitting generation from Canada as a CO2 emission reduction measure sho uld be provided in the final rule as a compliance option for affected EGUs to adjust their CO2 emission rates.

Response 7 67 : The EPA will work with states using the rate-base d 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.

Page 235

Comment 8623 : Commenters expressed concern that meeting renewabl e energy goals by an individual state, only perhaps or to a large extent through outside activities, for example through Formatted: Font: Bold56

interstate trading of renewable energy certificates (herein "RECs"), could hurt DW inadvertently, and impede EPA's broad mandate to protect the envir onment.

Response 8623 : Distributed technologies, as a demand-side resourc e, present unique data and technical challenges (such as the role of evaluatio n, measurement and verification (EM&V) procedures in verifying their production, the diver se economic incentives of different parties involved in their deployment, and the variety of gr id integration policies and conditions across potential deployment sites) that complicate identif ying a technically feasible and cost-effective level of generation. Consequently, the EPA is, at t his time, choosing not to include distributed technologies as part of the BSER (although, as expl ained 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 streng thened by restricting the significant compliance flexibility afforded to affected EGUs to achieve the BSER.

Page 236

Comment 87X : Commenters cited a case in point is the CPP's renew able energy goal computation for Virginia where the CPP assumes Virg inia can obtain 16% of its generation from renewable sources by 2030.

Response 87- X: The EPA has revised its block three quantification based on comment. See Section V.A. and V.C. of the final rule preamble fo r more information.

Page 237

Comment 8811 : Commenters argued that the EPA's process for deter mining renewable energy (RE) "best practice" targets is arbitrary because i t did not conform with section 111 requirements to consider feasibility and cost factors in setting the target.

Response 8811 : The EPA has revised its block three quantification based on comment. See Section V.A. and V.C. of the final rule preamble fo r more information.

Page 238

Comment 8920 : The following commenters suggest an alternative ap proach for the Building Block 3 proposal.

Response 8920 : 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. Commenter s said its approach sets a national benchmark for the renewable energy growth rate base d on demonstrated state growth between Formatted: Font: Bold57

2009 and 2013, assuming states will meet the requir ements of any state-level renewable energy standards in place. Commenters said under the UCS a pproach, the amount of U.S. electricity generated from renewable energy sources in 2020 wou ld reach 14 percent of electricity sales in 2020, twice the level achieved by the Clean Power P lan. Commenters said by 2030, renewable energy would comprise a 23 percent share of electri city sales under the UCS approach, compared with only 12 percent under the Clean Power Plan. Co mmenters 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 per cent reduction envisioned by the Clean Power Plan. Commenters said this assumes that the n ew renewable energy generation displaces mostly natural gas-fired generation.

Comment 9017 : Commenters stated that in Building Block 3, EPA in cludes expanded "zeroemission" renewable energy generation, and to do so , EPA applies a regional approach which averages existing State RPS targets in a given regi on 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 9017 : The final methodology for quantifying building blo ck 3 generation levels does not rely on state RPS requirements. The final meth odology is described in section V.E. of the preamble.

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

Commenters said EPA also applies a growth factor th at is based on the State's current renewable energy generation to ramp up renewable energy gener ation until the target generation level is achieved, and central to EPA's analysis is the assu mption that State RPS targets are an accurate reflection of the renewable energy potential for th e State and, by extension, for each State in the region. Commenters posited that EPA does not adequa tely consider the seven following factors

Page 257

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 indi cation 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-looki ng in identifying cost-effective opportunities for emission reductions from 2012; however, the cos t and availability of these emission reduction opportunities is the result of many facto rs, including previous actions. The EPA addresses considerations related to the technical f easibility and associated grid integration costs58

of significant RE penetration in both the preamble (section V.E) and GHG Mitigation Measures TSD.”
Description of the correction:
Deleted “Response 10: The EPA is not finalizing an approach that relies on state RPS requirements to set a regional target for RE. The f inal building block 3 methodology is described in detail in V.E of the preamble and in the GHG Mit igation Measures TSD”, which is a duplicative response block not removed from the fin al document. The correct response appears immediately after the deleted text.

Page 325

Comment 4 46 : RE status in Virginia, including utility plans reg arding RE resources and the possibility of Virginia's estimated renewable gener ation rate.

Response 4 46 : The resources and data provided in this comment we re valuable in finalizing the building block 3 methodology. The final building bl ock 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 considerat ions related to the technical feasibility and availability of regional RE resources in both the p reamble (section V.E) and GHG Mitigation Measures TSD.

Description of the correction:
Corrected incorrectly-numbered comment summaries an d responses, replacing “46” with “44”.

Pages 368-369

“Comment 24 : Commenters provided considerations for analyzing RE cost-effectiveness in the RGGI states.

Response 24:”

Description of the correction:

Deleted Comment and Response block for Comment 24, which was not deleted from the final document as the issue is addressed in Chapter 8.

Pages 369-372

Description of multiple corrections that follow bel ow:59

Corrected incorrectly-numbered comment summaries an d responses.

Page 369

Comment 2 45 : Commenters provided cost-effectiveness considerati ons specific to the Southeast
states.

Response 2 45 : The EPA does not rely on the data sources listed b elow for the final rule. The EPA addresses considerations related to the technic al feasibility and associated grid integration costs of significant RE penetration in both the pre amble (section V.E) and GHG Mitigation Measures TSD.

Page 370

Comment 2 5 6: Commenters provided cost effectiveness considerati ons specific to GA.

Response 2 56 : The resources and data provided in this comment we re 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 a lternative approaches, EPA's assumptions regarding the amount of renewable generation that c an be feasibly and at reasonable cost added to Georgia's grid are overly conservative. As UCS n otes in its report, EPA significantly underestimates the potential role of renewable ener gy in setting state targets. Several of the issues UCS identifies are evident in EPA's treatmen t of Georgia's renewables potential: EPA fails to account for both (1) the continued growth and fa lling costs of renewables projected by market experts and (2) the renewable energy deployment rat es that states are already achieving. SELC agrees with UCS that EPA should revise and update s everal of its underlying assumptions. Doing so will show not only that EPA's current assumption s 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 2 67 : Commenters described clean energy financing altern atives, which may have an impact in the cost-effectiveness of RE energy.

Response 2 67 : The EPA addresses considerations related to the te chnical feasibility and costeffectiveness of significant RE penetration in both the preamble (section V.E) and GHG Mitigation Measures TSD.

Page 37160

Comment 2 78 : Commenters called for a more comprehensive analysi s, going beyond cost effectiveness, and described considerations for sta tes to evaluate cost benefit from the proposed rule.

Response 2 78 : The EPA has phased in the building block 3 generat ion levels to provide an appropriate planning horizon for RE investments. C ost-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.

Page 372

Comment 2 89 : Commenters said in order to fully assess the feasi bility and potential costs of implementing the types of renewable goals envisione d in the proposed rule, more information is needed regarding the final level of renewable energ y to be considered in establishing the state goal; the mechanisms available to resolve interstat e 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 de monstrating 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 thos e facilities and to assess whether additional generation resources are needed during periods when the renewable resources are not available.

Response 2 89 : The resources and data provided in this comment we re 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 o n interstate issues and the crediting of incremental RE is presented in section VIII of the preamble.

Chapter 3D

3.4 DEMAND-SIDE ENERGY EFFICIENCY (EE)

Pages 2-3

This section discusses comments related to demand-s ide energy efficiency (EE), including opportunities for demand-side EE, annual incrementa l savings target rate, demand-side EE programs as they relate to CHP/cogeneration, and an alytical concerns. We have organized the comments in this section under six subsections, 3.4 .1 to 3.4.6. Responses to the comment topics of these subsections are discussed below along with summaries of the specific public comments.

At proposal, we included demand-side EE in the BSER as building block 4. Consequently, many commenters referred to demand-side EE as building b lock 4 in their comments on the proposed61

rule. Although we have decided to eliminate buildin g block 4 from the BSER in the final rule, we have retained the commenters original phrasing i n the summaries included in this section.

3.4.1 Energy efficiency opportunity

This section includes comments that are both suppor tive and unsupportive for of the inclusion offor demand-side EE as a part of BSER. While we are not including demand-side EE as a component of the BSER, we are allowing demand-side EE to be used for compliance.

Commenters have raised a number of issues related t o the subsection which are organized by topics (comments) below. Responses are provided for these topics. A summary of comments in this section are listed below

.

• We support EE as a part of BSER

- You should include additional EE programs in the ta rgets, including - building codes, appliance standards, other innovative progra ms, etc.

- Need clarity of

the role between BSER and compliance in state plan s

• We do not support EE as a part of BSER

- It’s not adequately demonstrated because a) it’s ou tside the fence line, b) affected EGUs don’t have control of customer’s voluntary act ions, c) key state and local factors weren’t considered in goals

- However, we do support EE as a compliance option

• It’s too difficult to achieve the savings the EPA s et in the targets for a variety of

reasons

- There are many barriers to implementing EE

- Building codes and appliance standards reduce the a bility to achieve future savings

- Best Practices methodology doesn’t take into accoun t unique state circumstances

Comment 1: Support for DSM/EE and support for expanded EE

Response 1: Many commenters discuss the wide variety of EE pro grams available that they have implemented for many years, achieved significant en ergy savings and the opportunity exists to achieve large amounts of energy savings in the futu re. However the EPA is excluding BB4 from BSER. See sections V.A and V.B of the final rule pr eamble of the CPP for the EPA’s response to this comment. Even though DS-EE is not used in calc ulating emission performance rates, the62

final rule gives states the flexibility to use DS-E E to achieve their emissions performance rates during compliance. See multiple subsections of sect ion VIII of the final rule preamble of the CPP and the Demand-side Energy Efficiency TSD for CPP F inal Rule for details.

Description of the corrections:
Added “of” to last sentence of first paragraph in s ection 3.4 for clarity. Replaced “for” with “of” in two locations in first sentence of section 3.4.1 for clarity. Inserted missing period from last sentence in the second paragraph of section 3.4.1. Inserted “of” into the first bulleted phrase in section 3.4.1 for clarity. Added the word “the” to the Response 1 for clarity.

Page 38-39
Commenters noted that building block four wrongly a ssumes that selective and unsustained demand site energy efficiency results from only thr ee states can be achieved continuously in every state in the nation. According to commenters, demand si dt e energy efficiency programs have historically been very difficult to i mplement, enforce, monitor and verify. According to commenters, efforts to reach the assum ed levels are sure to raise costs for our customers, almost half of which have household inco mes of less than 40,000 a year.

Description of the correction:
Changed “site” to “side”, correcting a typo graphic al error.

Page 232

Comment 31: T&TTribes and Territories --Support EE
Response 31: The EPA is excluding BB4 from BSER. See sections V .A and V.B of the final rule preamble of the CPP for the EPA’s response to this comment. Even though DS-EE is not used in calculating emission performance rates, the final rule gives states, tribes and territories the flexibility to use DS-EE to achieve their emiss ions performance rates during compliance. See multiple subsections of section VIII of the final r ule preamble of the CPP for details.

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

Commenters support the implementation of Building B lock 4.

Comment 32: T&TTribes and Territories --Unique Circumstances

Response 32: The EPA decided not to include DS-EE in BSER for th e final rule. A response is not provided here as this comment is now outside th e scope of the CPP. See sections V.A and V.B of the final rule preamble of the CPP for detai ls. DS-EE remains generally available for63

compliance, with flexibility provided for tribal go vernments. See multiple subsections of section VIII of the final rule preamble of the CPP for deta ils.

Description of the correction:
Replaced “T&T” with “Tribes and Territories”, for c larity. The replaced text is not a commonly recognized acronym and was inadvertently not writte n out in the document.

Page 235
Response 34: The EPA has not included demand-side EE (building b lock four) in the BSER of this final rule. However, tT he Demand-side Energy Efficiency TSD for CPP Final Rule discusses utility regulatory models for supporting utility EE investments including shareholder incentive mechanisms and other strategies for leveling the im pact on utilities and their shareholders relative to non-EE capital investments. The EPA rec ognizes the ongoing progress made by states across the country in adopting regulatory models th at support utility EE investment and believes that effective state models exist and have demonstr ated their effectiveness in practice as discussed in the TSD. Adoption of these models will better support the use of DS-EE in state strategies in response to the final rule.

Description of the correction:

Added the sentence “The EPA has not included demand -side EE (building block four) in the BSER of this final rule.” to Response 34 for clarit y.

Page 236
Response 1: One of the major approaches available for achievin g CO2 emission reductions from the utility power sector is demand-side energy effi ciency. The EPA continues to believe that significant emission reductions can be achieved thr ough use of such measures at reasonable costs and that demand-side energy efficiency will represe nt an important component of state plans. The EPA has not included demand-side EE (building b lock four) in the BSER of this final rule. However, the EPA is excluding DS-EE from BSER. See sections V.A and V.B of the final rule preamble of the CPP for the EPA’s response to this comment. DS-EE remains generally available for compliance. Demand-side EE that are t ied to a state plan and achieve quantified and verified MWh savings may be used to achieve the emi ssion guidelines specified in the CPP Final rule, provided they meet the eligibility requiremen ts for resources described in Section VIII. of the final rule preamble of the CPP. Even though Dem and Side EE is not in the final rule under BSER, the EPA is using a DS-EE target level of 1.0% for the illustrative demand-side energy efficiency plan scenario. See the Demand-side Energ y Efficiency TSD for CPP Final Rule for support and details.

Description of the correction:64

Added sentence “The EPA has not included demand-sid e EE (building block four) in the BSER of this final rule to Response 1 for clarity.

Page 330
Response 21: The EPA has determined not to include demand-side energy efficiency (building block four) in the BSER of this final rule and this determination is discussed in sections V.A and V.B of the final rule preamble of the CPP. Although the EPA has determined to not include demand side-energy efficiency in the BSER in this f inal rule we are using 1.0% in our illustrative demand-side energy efficiency plan scenario. See th e RIA Chapter 3 and the Demand-side Energy Efficiency TSD for CPP Final Rule for detail s on the illustrative demand-side energy efficiency plan scenario. This illustrative plan s cenario reflects a reasonable and feasibl ye level of DS-EE, supported by the information and analysis provided in the TSD.

Description of the correction:
Changed the word “feasibly” to “feasible” to correc t grammar in Response 21.

Page 353
Response 30: The EPA disagrees with the commenters’ remarks tha t energy efficiency doesn’t reduce emissions from EGUs. Lowering energy demand on the grid avoids the need to generate electricity and therefore reduced hence the emissions that would have been produced by associated with the operation of the avoided generat orion reduces the amount of emissions that would have been put into the air . The EPA has determined not to include demand-side energy efficiency (building block four) in the BSER of thi s final rule and therefore we do not need to address this comment. This determination is discuss ed in sections V.A and V.B of the final rule preamble of the CPP.

Description of the correction:
Edited second sentence for clarity in Response 30 t o read, “Lowering energy demand on the grid avoids the need to generate electricity and therefo re reduces the emissions that would have been produced by the operation of the avoided generator. ”

Page 374
Response 1: For the EPA’s response to this comment, see the De mand-side Energy Efficiency TSD for CPP Final Rule and the RIA, Chapter 3, supp orting the final CPP. The topics raised by these commenters are addressed in those supporting materials including step-by-step description of the estimation of DS-EE costs, the integration o f DS-EE savings into the power sector modeling, the conservativeness of DS-EE savings lev el and costs as represented by the illustrative demand-side energy efficiency plan sce nario, the start date for DS-EE efforts, the assumed load shape of DS-EE savings, the cost escal ation approach, and the estimation of65

participant costs. The EPA agrees with the commente rs that the DS-EE driven energy savings lead to emission reductions at affected sources; fo r the RIA, such impacts are captured through power sector modeling as discussed in Chapter 3. Th is illustrative plan scenario reflects a reasonable and feasibl ey level of DS-EE, supported by the information and a nalysis provide in the TSD.
Description of the correction:
Changed the word “feasibly” to “feasible” to correc t grammar in Response 1.

Pages 407-408
Response 9: The EPA has determined not to include demand-side energy efficiency (building block four) in the BSER of this final rule and ther efore we do not need to address further comments supporting the removal or levels of DS-EE from BSER. This determination is discussed in sections V.A and V.B of the final rule preamble of the CPP. Even though demandside energy efficiency is not being included in the BSER in this final rule and, thus, not included in the determination of emission performance rates, the final rule provides states the flexibility to use demand-side energy efficiency measures in their state plans for compliance to meet the emission guidelines set forth in the final CPP, pro vided they meet the applicable requirements established in section VIII of the preamble for the CPP. Accordingly, the EPA is including a level of DS-EE as a component of our illustrative E E plan scenario that is the basis for the analysis discussed in Chapter 3 of the RIA that sup ports the final CPP. The EPA is reducing the level of DS-EE in the illustrative EE scenario rela tive to the level represented in the proposed CPP, from 1.5% annual incremental savings down to 1 .0% annual incremental savings. The EPA finds that these levels are achievable and a reason able basis for the illustrative EE plan scenario in all states even considering the unique character istics that affect achievable EE potential in each state. This is addressed in the Demand-side En ergy Efficiency TSD for CPP Final Rule and is the basis for DS-EE illustrative plan scenario r epresented in the RIA for the final CPP. This illustrative plan scenario reflects a reasonable an d feasibl ey level of DS-EE, supported by the information and analysis provide in the TSD.

Description of the correction:
Changed the word “feasibly” to “feasible” to correc t grammar in Response 9

.

Page 426
Response 2: The final rule provides states the flexibility to use demand-side energy efficiency measures and CHP in their state plans for complianc e to meet the emission guidelines set forth in the final CPP, provided they meet the applicable re quirements established in section VIII

, including section VIII.K.1.a., and in section V.A.6 .b.(1). of the preamble for the CPP. The EPA recognizes that one of the major approaches availab le for achieving CO2 emission reductions from the electric power sector is demand-side energ y efficiency and CHP. The EPA continues to66

believe that significant emission reductions can be achieved by affected EGUs by the use of such measures cost effectively and that such measures ar e likely to represent an important component of state plans. The final rule also has provisions that will maintain reliability in the system, such as reliability safety valve provisions and requiring states to demonstrate that they considere d reliability issues in developing state plans such a s through consultation coordination with the Regional Transmission Organization, Independent Service Organization System Operator or other planning authoritiesGrid operator

. Description of the correction:
Inserted “, including section VIII.K.1.a., and in s ection V.A.6.b.(1)” and deleted an extra period to clarify the cross reference to requirements in t he CPP preamble in Response 2. The last sentence of Response 2 was changed from “The final rule also has provisions that will maintain reliability in the system, such as reliability safe ty valve provisions and coordination with the Regional Transmission Organization, Independent Ser vice Organization or Grid operator” to “The final rule also has provisions that will maint ain reliability in the system, such as reliability safety valve provisions and requiring states to dem onstrate that they considered reliability issues in developing state plans such as through consultat ion with the Regional Transmission Organization, Independent System Operator or other planning authorities”, for clarity.

Chapter 3E
Page 16
Response 15: The final building block 3 methodology does not re ly on state-specific deployment estimates, but rather cost-effective RE at an inter connection level. The basis for building block 3 target generation levels is the observed pattern of historical development for each of the BSER RE technologies. Modeling projections remain an imp ortant aspect of the overall methodology in validating the technical feasibility and cost-effec tiveness of the target generation level. The data, assumptions, methodology, and outputs associated wi th relevant IPM projections are available on the EPA’s power sector modeling website, www.epa.gov/powersectormodeling www.epa.gov/airmarkets/powersectormodeling.html . The EPA addresses considerations related to the technical feasibility and associated grid in tegration costs of significant RE penetration in both the preamble (section V.E) and GHG Mitigation Measures TSD

Description of the correction
Corrected web address, for clarity

Page 38
Response 39: The resources and data provided in this comment wer e valuable in finalizing the building block 3 methodology. The EPA updated its s hort-term capital cost adder framework to reflect updated capital cost assumptions and histor ical deployment levels. Refer to the IPM documentation available at www.epa.gov/powersectormodeling Formatted: Not Highlight67

www.epa.gov/airmarkets/powersectormodeling.html for additional detail. For the EPA’s response to this comment, see section V.E of the fi nal rule preamble of the CPP and chapter 4 of the GHG Mitigation Measures TSD for CPP Final Rule.

Description of the correction:
Corrected web address, for clarity

Page 95

Comment 14: Commenters renewable resource in reason able proximity to the PJM footprint should be counted towards the economic resource ava ilable to PJM states.

Response 14: The building block 3 regions are the i nterconnections; consequently, all Eastern Interconnection resources are grouped with all East ern Interconnection affected EGUs. See sections V.A and V.E of the final rule preamble of the CPP for additional information.

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

Description of the correction:
Deleted Comment/Response 14 because it was a word f or word repeat of Comment/Response 13.

Pages 95-100
Description of multiple corrections that follow bel ow:
Renumbered comment summaries and responses numbers due to duplicate Comment and Response 14.

Comment 1 45 : Commenters stated Kentucky's load/generation and r enewable resources should be grouped with EPA's North Central region.

Response 1 45 : The building block 3 regions are the interconnecti ons; consequently, all Eastern Interconnection resources are grouped with all East ern Interconnection affected EGUs. See sections V.A and V.E of the final rule preamble of the CPP for additional information.

Commenters stated Kentucky's load/generation and re newable resources should be grouped with MISO (EPA's North Central region). Commenters state d, in the alternative, Kentucky's load/generation could be pro-rata apportioned, with the load/generation for the portion of Kentucky in the MISO footprint allocated to the Nor th Central region and the load/generation in the PJM footprint allocated to the East Central reg ion. Commenters stated it should be relatively easy to adjust, on a load- or generation-weighted b asis, the share of a state's load or generation that falls in each region for purposes of setting t he renewable energy component of the building block 3 targets. Formatted: Not Highlight

Formatted: Font: Not Bold, Not Highlight

Formatted: Not Highlight68

Comment 1 56 : Commenters stated wind energy generation from MISO and SPP should be accounted for in the regional or state calculations of economically available RE.

Response 1 56 : The building block 3 methodology relies on the abi lity of affected EGUs to procure incremental RE within the interconnection. Refer to sections V.A and V.E of the final rule preamble of the CPP for additional information

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

Commenters stated the adequately demonstrated abili ty of Southeastern utilities to import wind energy generation from MISO and SPP should be accou nted for in the regional or state calculations of economically available renewable en ergy resources. Commenters stated this could be accomplished by grouping at least some Sou theastern states in with MISO (North Central) or SPP (South Central), or making some sha re of the economically viable renewable energy resources in MISO and SPP available for meet ing the Section 111(d) compliance needs of the Southeast. Commenters stated this would accurat ely reflect the fact that Southern Company and TVA are purchasing large amounts of wind energy , with physical delivery, from SPP and MISO. Commenters suggested EPA should look at exist ing and new transmission into the Southeast and give at least some of those states a target that incorporates transmission-delivered renewable energy.

Commenters stated it is also important for EPA's mo deling to include the opportunity for new high-voltage direct current (HVDC) transmission lin es, which have different cost and performance characteristics than AC transmission. C ommenters stated this includes the capabilities of DC transmission voltage source conv erters to provide a variety of ancillary services, including rapid adjustments to real power output, allowing variability to be exported to the receiving region.

Commenters also stated the ability to use HVDC to p rovide capacity and reserve sharing should also be accounted for. Commenters stated a number o f studies have identified how HVDC transmission lines can play an important role in ac hieving cost-effective reductions of carbon emissions by allowing delivery of low-cost renewabl e energy. Commenters provided information on a DOE funded Eastern Interconnection Planning Co llaborative (EIPC), noting the results show that some economic potential for inter-regiona l transfer using new HVDC lines should be accounted for in setting state targets under buildi ng block 3. Commenters also stated that several new inter-regional HVDC transmission lines, similar in capacity and rationale to those found in EIPC results, are well under development and expect ed to be in service by 2018. Commenters stated EPA should include these new HVDC projects i n its IPM modeling by adding the expected incremental transmission capacity between the US Model Regions in EPA Base Case v.5.13. Commenters stated because IPM uses wheeling charges to represent a real-time cost in order to determine the optimal path for energy tran sfer, the wheeling charge would be zero for these lines as the wind generation would be directl y connected to these lines and would not have another path for delivery.69

Comment 1 67 : Commenters stated the ERCOT IPM region does not in clude wind resources in the Texas Panhandle.

Response 1 67 : The RE resource potential in IPM is described in t erms of geographic location, rather than ultimate availability.

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

Commenters stated the ERCOT IPM region incorrectly does not appear to include wind resources in the Texas Panhandle. Commenters sugges ted EPA should ensure that a large share if not all of the Texas Panhandle wind resources are a vailable to the ERCOT IPM zone, in addition to being available to SPP West, to properly reflect that both RTOs have transmission facilities that allow significant deliverability of wind gener ation from the Texas Panhandle. Commenters stated if EPA is absolutely unable to model both re gions having access to those wind resources, EPA should either split the Texas Panhandle wind re sources between the two regions or allocate them all to ERCOT, reflecting that with the complet ion of the CREZ lines ERCOT now has larger deliverability of those wind resources than SPP.

Comment 1 78 : Commenters stated there are inaccuracies in the IP M assumptions table.

Response 1 78 : The EPA is constantly reevaluating interregional t ransmission assumptions for inclusion in IPM; however, no change was made at th is time to the modeling that supports the final CPP.

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

Commenters stated that EPA should check the regiona l transfer limits listed in Table 3.4 on pages 6-12 of Chapter 3 of the IPM documentation to verify that the MW transfer limits are an accurate reflection of current reality, as well as the increased transfer limits that will be enabled by new transmission, as many appear to be lower tha n indicated in documentation provided by regional reliability entities. Commenters noted tha t for many of the ties in the Western Interconnection, documentation of current transfer limits can be obtained from the WECC Path Rating Catalog which indicates that most ties in th e Western Interconnection have a significantly higher transfer capability than is assumed in the I PM modeling. Commenters noted that they were unable to find access to a similar comprehensi ve listing of current transfer limits for the Eastern Interconnection and ERCOT, though based on the number and magnitude of concerns identified in WECC. Commenters suspected that there are similar inaccuracies in those lists as well. Commenters provided a list of 19 discrepancie s they found between the WECC Path Rating Catalog and the IPM assumptions table.

Comment 1 89 : Commenters suggested the EPA base RE targets on te chnical potential.70

Response 1 89 : The final building block 3 methodology is premised on historical deployment of RE capacity rather than modeling projections. Refer to sections V.A and V.E of the final rule preamble of the CPP for additional information.

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

Commenters stated the regional approach to renewabl es may still group states together that have widely varying renewable resources potentials, and suggested that EPA base renewable targets on technical potential throttled by an avoided cost threshold, consistent with utility planning.

Comment 1920 : Commenters expressed concern that the alternative approach would result in unrealistic rate targets.

Response 1920 : The final building block 3 methodology is premised on historical deployment of RE capacity rather than modeling projections. Refer to sections V.A and V.E of the final rule preamble of the CPP for additional information.

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

Commenters stated that the NODA describes comments EPA has received that propose calculating building blocks three and four by assum ing incremental renewable energy and energy efficiency would displace existing levels of fossil generation rather than growth in demand for fossil generation. Commenters stated they do not su pport this approach, stating that this alternative method would result in rate targets wit h unrealistic compliance expectations. Commenters provided the example that a state could have a zero or even a negative rate-based target, and yet serve load with a substantial amoun t of fossil-fuel generation. Thus, commenters stated, the approach to calculating building blocks three and four in EPA's June 2, 2014 proposal of the Clean Power Plan appropriately accounts for incremental RE and energy efficiency.

Comment 2 01 : Commenters stated that they support the use of a r egional approach if EPA cannot fix and implement an approach based on the t echnical and economic potential for each
state.
Response 2 01 : The EPA adopted a regional approach to building bl ock 3 as it was most consistent with the BSER. See sections VA and V.E o f 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 if EPA is unable to address the i ssues with the current technical and economic potential approach, use the regional appro ach proposed in the NODA in which the existing targets from the Alternative RE Approach T SD are aggregated by region and reassigned based on retail sales. Commenters stated concerns a bout the methodology used to assign renewable energy targets to states that are dominat ed by hydropower in the technical and71

economic potential approach, and provided suggestio ns for strategies to either fix or compensate for those issues. Commenters stated, however, in re cognition of the fact that EPA may simply not have the time or resources to address those iss ues and provide solutions in a timely fashion, the commenters would recommend using the "regional potential" approach outlined in the NODA. Specifically, commenters recommended using th e same regional grouping as with the RPS-based regional approach (i.e., the WECC footpri nt) and assigning the total renewable energy potential based on the proportion of baselin e retail sales for each state. Commenters noted that the IPM modeling done for the technical and ec onomic potential approach is regional in nature already and based on WECC classifications fo r the west. Therefore, commenters stated, this approach is more consistent in terms of using the data that provides the foundation for the assigned targets. Also, commenters noted that the r enewable energy target would be bounded by the requirement above that no state is assumed in t he target setting process to be required to generate more than 100 percent of its baseline gene ration from zero emission sources.

Commenters stated that to the extent that EPA estab lishes a federally-enforced RE target for Connecticut, compliance with which requires Connect icut to develop resources in other states, commenters are concerned about the feasibility of c omplying with such a mandate. Commenters noted that Connecticut has an ambitious RPS target, established under state authority, with expectations of significant development of out-of-s tate RE. Commenters also noted that Connecticut has very limited RE generation potentia l in-state and does not have control over the permitting, siting, and regulation of facilities lo cated outside its borders. Commenters therefore stated, notwithstanding the inherent ability to ove rcompensate in some building blocks to make up for deficiencies in others, given state sovereig nty issues, a mandated requirement to build outof-state renewables is not appropriate. Commenters stated that they prefer a method that sets instate RE goals based on in-state technical and econ omic potential; however, should EPA determine that such a method cannot be implemented, then the commenters strongly prefer an approach based on regionalized technical and econom ic potential over the proposed RPS approach.

Comment 2 12 : Commenters stated the EPA should credit excess RE based on the regional steam fossil emissions rate.

Response 2 12 : The final building block 3 produces incremental RE generation levels at the interconnection-level rather than the state-level. All qualifying RE is credited, under rate-based compliance, against the standard applied to the aff ected EGU that procured the incremental RE. For additional information regarding how affected E GUs demonstrate compliance, refer to section VIII of the preamble that supports the fina l CPP.

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

Commenters stated that in the case where a states' incremental RE and EE exceeds historical fossil steam generation levels, EPA should credit t his excess renewable energy based on the regional steam fossil emissions rate. Commenters st ated that the regional average fossil steam generator emissions rate will accurately reflect th e amount of emissions savings that would be produced by adding renewable energy, given how rene wable resources displace fossil generation72

resources throughout the region due to the intercon nected nature of the power system. Commenters stated that if all regional steam fossil generation is exhausted, renewable generation should be credited at the region's natural gas comb ined cycle (NGCC) emissions rate.

Comment 2 23 : Commenters stated the EPA should adopt a regional version of the Alternative RE Approach and recommended the same approach for p ower plants in Indian Country.

Response 2 23 : The EPA agrees with this comment. Affected EGUs in Indian Country are subject to the same interconnection-level requireme nts as other affected EGUs. See sections V.A and V.E of the final rule preamble of the CPP for E PA’s response to this comment.

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

Commenters recommended that EPA adopt a regional ve rsion of the Alternative RE Approach as described in the NODA, and also recommended that EP A follow the same approach for power plants in Indian Country by increasing the size of the target to reflect the appropriate emissionsweighted share of the renewable energy available in the transmission or market region. Commenters stated that there is no justification fo r adopting a unique Alternative RE Approach which assigns a lower renewable generation target t o these facilities. Commenters stated that for the power plants in U.S. territories, the targets s hould reflect the potential renewable energy resources that can be developed at reasonable cost (based on updated cost data) in those territories.

Page 107
Response 2 : EPA agrees with the commenters that point out the c urrent deployment of R E is already at high levels and state that there are syn ergies among the building blocks that can increase their effectiveness. EPA disagrees with co mmenters suggesting that the building blocks do not work effectively together. See response at t he beginning of the section for EPA’s response to these comments.

. Description of the corrections:

Added “E” to “R” to read “RE” in the first sentence in Response 2 and made other minor typographical error corrections, for clarity.

Page 130
Response 12: EPA disagrees. EPA has adequately treated considered the interactions, and additional modeling with IPM is not needed. See res ponse at the beginning of the section for EPA’s response to these comments.

Description of the correction:73

Changed the word “treated” to “considered” to impro ve clarity of sentence in Response 12, for clarity.

Page 142
Response 27: EPA thanks the commenter for the comment. EPA agre es that solar power is an important RE source, however, EPA als o believes there are multiple cost effective pathway s to compliance with the rule.

Description of the correction:
Added an “o” to the end of “als” in Response 27, co rrecting a typographical error.

Chapter 4A

Page 291
Response 49: The EPA’s power sector modeling represents transmission infrastructure constraints. See the EPA power sector modeling bas e case documentation at http://www.epa.gov/airmarkets/powersectormodeling.h tml www.epa.gov/airmarkets/powersectormodeling.html

. Description of the correction:
Corrected web address, for clarity.

Chapter 4B

Page 3
Response 3: See Section VI of the Preamble for the EPA’s discu ssion why it relied on 2012 data as the starting point for forming its baseline. The EPA believes starting with 2012 data and only making limited adjustments uses the best available historical data and most accurately reflects an appropriate baseline from which to evaluate BSER po tential

. See the Chapter 2 of the GHG Aa batement TSD for the EPA’s discussion about use of regional interconnections to assess potential heat rate impr ovements and the potential impact of new air pollution control devices to comply with other Fede ral pollution control requirements, including the Mercury and Air Toxics Standards

. Description of the correction:74

Changed “abatement TSD” to “Abatement Measures TSD” in Response 3, correcting the reference to the responsive document.

Page 4
Bayfront was not included as a likely affected unit because of data on its capacity and its fuel use. However, this does not constitute a final app licability determination. See section VII.E of the preamble regarding and state goal adjustments.

Description of the correction:

Deleted the word “and” and added the word “state” f or clarity in Response 4.

Page 6
Response 5: As explained in the CO2 Emission Performance Rate and Goal Computation TSD for final Final CPP, the EPA did not adjust the baseline based on s cheduled or planned retirements

. Description of the correction:
Added the word “Final” for clarity in Response 5.

Page 7

... EPA notes that there are both NGCC and coal units that retired in 2012, but that are still in EPA 2012 baseline reflecting their reported generat ion and emission from that year. EPA discussed in the CO2 Emission Performance Rate and Goal Computation T S D for CPP Final Rule why it was not removing scheduled retirements from its baseline. It appreciates the comment on 55 MW Hansel as one of the unique NGCC untisunits that retired in 2012. EPA notes there were many more fossil steam units that retired in 2012. More units of each technology will retire before the first year of com pliance in 2022. Consistent with its approach to remain with a historical baseline and not begin projecting the impact of retirements in its baseline, EPA leaves these units in its baseline. Commenters suggest that 55 MW of capacity from Hansel therefore overstates BB2. However, EPA believes its decision on retirement treatment has the opposite impact. It is conservat ive to leave the units in the baseline. If it removed Hansel, to be consistent it would also need to remove the fossil steam generation already scheduled for retirement (and therefore no longer around to absorb incremental NGCC generation). As stated above, EPA steers clear of attempting to adjust for retirmentsretirements

,. If the EPA but if it chose to go the route expressed by commenters - th e effect would likely be one of a more stringent impact, not less stringent, as the amount of incremental generation potential removed from the baseline would be drasti cally smaller (one 55 MW plant in the east) relative to the amount of fossil steam.

Description of the corrections:75

Added an “S” to the acronym “TSD” in the third sent ence and deleted “unit i s” and added the word “units” to the fourth sentence, correcting typ ographical errors. Also, changed “As stated above, EPA steers clear of attempting to adjust for retirements, but if it chose to go the route expressed by commenters – the effect would be” to “ As stated above, EPA steers clear of attempting to adjust retirements. If the EPA chose to go the route expressed by commenters, the effect would be” in last sentences of Response 6, a ll for clarity.

Page 14
Cheyenne Prairie Generating Station capacity assume d in building block two has been adjusted down to the reported net summer capacity value whic h h is most more closely aligned with the commenters’ value

.
The Moselle units 1 and 2 constitute the 150 MW of identified under construction NGCC capacity in Mississippi.

The EPA has categorized Cane Run e facility as a likely affected unit that is under c onstruction based on the under construction status reported in the 2013 EIA-860 form and based on Louisville Gas and Electric public statements (and comment) regarding the construction start of the facility such as those available at https://lge-ku.com/our-company/power-plants-andcompressor-stations/cane-run-generating-station/can e-run-updates

In regards to the applicability status of the Orlan do Cogeneration unit

,. EPA has left them the unit in the baseline inventory as a likely affected unit s upon review of its status in other EPA air programs, the size of the unit, and the amount of n et electricity generation of the unit. However, EPA notes that this does not constitute a final app licability determination. See section VII of the preamble for further discussion.

Description of corrections:
Deleted the word “most” for clarity in the fourth s entence, corrected the spelling of “Cane Run” in the next to last paragraph, and revised the last paragraph of Response 11, changing “In regards to the applicability status of the Orlando Cogenera tion unit. EPA has left them in the baseline inventory as a likely affected units upon review of its status in other EPA air programs, the size of the unit, and the amount of net electricity gene ration of the unit. However, EPA notes that this does not constitute a final applicability dete rmination. See section VII of the preamble for further discussion.”, to “In regards to the applica bility status of the Orlando Cogeneration unit, EPA left the unit in the baseline inventory as a li kely affected unit upon review of its status in other EPA air programs, the size of the unit, and t he amount of net electricity generation of the unit. However, EPA notes that this does not consti tute a final applicability determination. See section VII of the preamble for further discussion. ”

Page 1876

Response 16: The EPA has made adjustments to the baseline based on this comment and your attachment. This revised unit-level data is availa ble in Appendix 1 of the CO2 Emission Performance Rate and Goal Computation TSD for CPP F inal Rule. As discussed in Sections IV and VI of the preamble, the EPA does view some of o il gas steam boilers as being likely affected sources based on the unit characteristics. As note d in Section VI of the final rule preamble, no simple cycle units are viewed as being likely affec ted sources and none are included in the baseline in this final rule

. Description of the correction:
Deleted the word “your” from Response 16 for clarit y.

Page 35
Response 33: The EPA does not agree with the commenters that th e baseline will generate false credit for emission reductions. Moreover, it has ch ange ds the way it applies building block three (as described in preamble section VI that address t he commenters concern. Please see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP for more information about the goals and sectio n VIII of the final rule preamble of the CPP for more information about state plans and complian ce.
Description of the correction:
Changed the word “changes” to “changed” in the seco nd sentence of Response 33.

Page 49
Response 3: The EPA has given careful consideration to all of t he comments above in designing the methodology to calculate the mass-based goal fo r the final rule. The EPA provides the calculation of a mass-based goal directly in the ru le in response to comments that includes the following considerations . See section VII of the preamble for further discu ssion.

Description of the correction:

Deleted the word “above” from the first sentence in Response 3 for clarity.

Page 107

Comment 25: Commenters asked if the mass-based goal coldcould be taken as the CO2 emissions remaining after implementation of BSER Bl ocks 1 and 2.

Description of the correction:
Changed the word “cold” to “could” in Comment 25 fo r clarity.77

Page 133
Response 47: The EPA has provided a mass-based goal in the final rule and allows states to consider new sources in demonstrating compliance in the following manner described by
commenters

. Description of the correction:
Added the words “described by commenters” to the en d of Response 47 for clarity.

Page 161
Response 28: The EPA is final i zing mass goals as explained in section VII of the preamble.

Description of the correction:
Added “i” to the word “finalizing” for clarity in R esponse 28.

Chapter 5B

Page 131
Response 11: The EPA disagrees. IPM is an interregional dispatch and planning model (See model documentation at http://epa.gov/powersectormodeling http://www.epa.gov/airmarkets/powersectormodeling.h tml ). IPM imposes interregional transmission limits on the dispatch solution, and h as increased the number of regions in recent versions to better capture transmission flows. For this rule, IPM is not used for state level projections or for setting state goals, but rather is used for broad, national assessments of program costs and impacts. Contrary to the comments , EPA believes the model is sufficiently granular for this purpose.
Description of the correction:
Corrected web address, for clarity

Page 132
Response 13: The IPM assumptions are available at http://epa.gov/powersectormodeling http://www.epa.gov/airmarkets/powersectormodeling.h tml . IPM imposes interregional transmission limits on the dispatch solution, and h as increased the number of regions in recent versions to better capture transmission flows; in p articular, the number of regions covering Louisiana has been increased. For this rule, IPM is not used for state level projections or for78

setting state goals, but rather is used for broad, national assessments of program costs and impacts. EPA believes the model is sufficiently gra nular for this purpose.
Description of the correction:
Corrected web address, for clarity

Page 241

Comment 10: Comments suggesting source-specific remaining usef ul life determinations from governing boards should be considered.
Response 10: NO RESPONSE HAS BEEN DEVELOPED AT THIS TIME These c omments are addressed in final rule preamble section VIII.G.1 a nd the legal memorandum.
The EPA adds that, contrary to commenters’ assertio ns, the EPA did not propose to bar states from considering remaining useful life on grounds t hat BSER already allows for its consideration. The EPA has revised the goals since proposal and believes that they are achievable.
Description of the correction:

EPA strikes the words, “NO RESPONSE HAS BEEN DEVELO PED AT THIS TIME”, which is an editorial note inadvertently left in the documen t and inserts the correct response text that was omitted. Comment 10 should be the same response pro vided for Comment 4 of this section, page 238. The corrected response is:
These comments are addressed in final rule preamble section VIII.G.1 and the legal memorandum.
The EPA adds that, contrary to commenters’ assertio ns, the EPA did not propose to bar states from considering remaining useful life on grounds t hat BSER already allows for its consideration. The EPA has revised the goals since proposal and believes that they are achievable.

Chapter 6B

Page 110
Response 28: EPA disagrees with commenters that it has overstepp ed the Agency’s legal authority. Section III of the final rule preamble s ummarizes the rule requirements and the legal basis. EPA has considered comments on timing of sta te plan submittals and has adjusted requirements and compliance in the final rule. Sect ion VIII.E of the final rule preamble addresses state plan submittals and timing. Section VIII.D of the final rule preamble addresses state plan79

components and approvability criteria, while sectio n VIII.F addresses state plan performance demonstrations and compliance. Note that EPA has mo ved the start date from 2020 to 2022.
Description of the correction:
Corrected font for Response 28.

Pages 149-150
Response 62: The EPA agrees that states should have more time t o develop plans. In response to this and similar comments regarding timing and plan ning concerns such as the commenters mention, the EPA has extended by an additional year the time allowed for states to finalize their plans and extended by two years the time to meet t he first interim goal. The final rule includes this additional time and flexibility to manage comp lexities such as reliability, permitting, planning cycles, infrastructure addition and modifi cations, legislative changes, etc. South Dakota’s state goals may be found in section VII of the CPP final rule preamble. The source category-specific CO2 emission performance rates ar e described in section VI of the CPP final rule preamble. See section VIII.E of the CPP final rule preamble on state plan submittal, EPA’s approval process, and timing.

Description of the correction:
Corrected font for one sentence for Response 62, “ See section VIII.E of the CPP final rule preamble on state plan submittal, EPA’s approval pr ocess, and timing.”

Page 244

Comment 8: States must have the ability and a formal process to appeal decisions by the EPA that initial plans do not meet the EPA’s minimum re quirements and that extension requests have been denied.

Response 8: See section VIII.E of the final rule preamble of th e CPP for EPA’s response to this comment. THIS RESPONE IS NOT ADEQUATE As described in section VIII of the final rule preamble, if an extension request based on an initi al submittal cannot be granted, the EPA will notify the state that such extension is denied and that the state has failed to submit a final state plan required by September 6, 2016. The EPA will pu blish such notification in the Federal Register. This finding of failure to submit is fina l agency action that is judicially reviewable.

Description of the correction:

The EPA strikes the words, “See section VIII.E of t he final rule preamble of the CPP for EPA’s response to this comment.” This is an inadvertently incorrect response as the final rule preamble does not contain EPA’s response to this comment. Th e EPA also strikes the words, “THIS RESPON(S)E IS NOT ADEQUATE”, which is an editorial note inadvertently left in the document. The corrected response is: “As described in section VIII of the final rule preamble, if80

an extension request based on an initial submittal cannot be granted, the EPA will notify the state that such extension is denied and that the state ha s failed to submit a final state plan required by September 6, 2016. The EPA will publish such notifi cation in the Federal Register. This finding of failure to submit is final agency action that is judicially reviewable.”

Page 296
[NEED RESPONSE FOR LAST TWO PARAGRAPHS]

Description of the correction:

The EPA strikes the words, “[NEED RESPONSE FOR LAST TWO PARAGRAPHS]”, which is an editorial note inadvertently left in the documen t. The response provided that appears before these words on the preceding page is the intended r esponse to the cC omment 8

.

Chapter 7

Page 2

CHAPTER 7 INTERACTIONS WITH OTHER EPA PROGRAMS AND RULES

This chapter addresses comments received on interac tions of the EGU GHG Emission Guidelines with other EPA programs and rules. Comme nts received on the following topics are covered by this chapter: EGU NSPS - new (Section 7. 1), EGU NSPS - Modified and Reconstructed (Section 7.2), New Source Review (NSR ) (Section 7.3), Title V Program (Section 7.4), 40 CFR Part 75 (Section 7.5), Greenhouse Gas Reporting Program (Section 7.6), Other EPA Rules (Section 7.7), and comments received on o ther topics relevant to this chapter (Section 7.8). Comment topics are identified first and are follow ed by our response. Specific comments relating to the comment topics are summarized after our response.
Description of the correction:
For clarity, added two sentences to the end of the first paragraph of the chapter, “Comment topics are identified first and are followed by our response. Specific comments relating to the comment topics are summarized after our response.”

Page 3 Formatted: Font: Bold81

Response 2: Commenters asserted that the New Source Standard u nder section 111(b) of the Clean Air Act creates a negative disincentive or pe nalizes cycling to accommodate variable renewable generation even though the CO2 reductions would be sizable. This is really a comment on a different regulation rather than a com ment on the proposed 111(d) emissions guidelines. None

- the

- less EPA would like to point the commenters to the recent study from the National Renewable Energy Lab that found that the t here is only a negligible increase in CO2 emissions from ramping and load-following to accomm odate renewables. See: http://www.nrel.gov/electricity/transmission/wester n-wind-2.html
Description of the correction:
Removed hyphens from the word “nonetheless” from Re sponse 2.

Page 8
Response 3: If an EGU undergoes a change to decrease its hourl y reductions that EGU would not become a modified EGU and would therefor e get credit for the decrease in its emissions in complying with an emission standard or state measur e. Additionally, that decrease in emissions would be reflected in the State ’ s overall average or cumulative sum of emissions.
Description of the correction:

Added an “e” to the word “therefore” and added an a postrophe to the word “State’s” to correct misspellings in Response 3.

Pages 10
... required, actions such as installing pollution co ntrols, only to have these exemptions rejected by reviewing courts. The United States Court of App eals in State of New York, et al., v. U.S. Environmental Protection Agency (NY I) was clear th at we lack the authority to create such exemptions from the NSR rules. In addition, comment ers’ suggestion that EPA define an

“ increase ” in emissions under the NSR program to only include

... Description of the correction:
Added space in Response 1 to the phrase “suggestion that EPA define an “ increase ” in emissions under the NSR program", correcting a typographical error.

Page 72

Response 3 The final rule does not require any adjustment fact ors to be applied to the volumetric flow rate reference method data obtained during a RATA, when the reference method is different from the method used in the previous R ATA(s). Based on the possible changes to Formatted: Font: (Default) Times New Roman82

volumetric flow data from year to year and recogniz ing that these changes are not necessarily on a calendar year basis but rather multiple methods c ould impact a single calendar year, EPA in the GHG Mitigation Measures TSD (Chapter 2, Section 2.6 .6) addresses the issue of flow monitoring changes and their impact on the heat rat e analysis used to determine the CO2 reductions attributable to potential heat rate impr ovements at coal-fired EGUs. Also, the final rule places no restrictions on the reference method that may be used for the flow RATAs.

Description of the correction:
Corrected font in Response 3 for the text “Based on the possible changes to volumetric flow data from year to year and recognizing that these c hanges are not necessarily on a calendar year basis but rather multiple methods could impact a si ngle calendar year, EPA in the GHG Mitigation Measures TSD (Chapter 2, Section 2.6.6)”

.

Chapter 8A

Page 11 (Footnote 2)

Detailed information and documentation of EPA’s Bas e Case using IPM (v5.15), including all the underlying assumptions, data sources, and archi tecture parameters can be found on EPA’s website at: http://www.epa.gov/airmarkets/powersectormodeling.h tml
Description of the correction:
Corrected web address, for clarity.
http://www.epa.gov/powersectormodeling
Page 20
Response 11: The EPA disagrees with the commenters. IPM model r un and parsed files for the proposal and final rulemaking are available in dock et EPA-HQ-OAR-2013-0602. Detailed information and documentation of EPA’s Base Case us ing IPM (v5.15), including all the underlying assumptions, data sources, and architect ure parameters can be found on EPA’s website at: http://www.epa.gov/airmarkets/powersectormodeling.h tmlhttp://www.epa.gov/powersectormode ling

. Description of the correction:
Corrected web address, for clarity.
Page 137 Field Code Changed83

For more information, see the IPM Documentation, av ailable in the docket and also at: http://www.epa.gov/airmarkets/powersectormodeling.h tmlhttp://www.epa.gov/powersectormode ling
Description of the correction:
Corrected web address, for clarity in the last sent ence of Response 48.

Pages 143-180
Description of multiple corrections that follow bel ow: Inserted and corrected sub heading labels on sub he adings and responses omitted or erroneously entered for Comment 1 comment summaries and respons es. Additionally, corrected hyperlink from http://www.epa.gov/powersectormodeling to http://www.epa.gov/airmarkets/powersectormodeling.h tml

Page 143

“Comment 1: Comments asserted that the energy markets, includin g gas, coal, and electricity, are incorrectly modeled, and commenters expressed c oncerns regarding the EPA's IPM modeling.

a. 1.a. Commenters asserted that EPA modeling does not adeq uately reflect sourcespecific or regional considerations.

Commenters stated that they were concerned that Neb raska's public power districts may be unduly affected by EPA's proposed Clean Power Plan. Commenters said that Nebraska is the only state who, by statute, meets all of its power needs through a public power system. Commenters said all power in Nebraska is delivered by entities governed by independently elected boards. Commenters said this system continu es to be extremely effective in meeting the needs of Nebraska citizens by delivering reliable, low-cost electricity. Commenters said that as it stands, the Nebraska public power districts may nee d to reduce capacity and reliance on existing units in order to comply with this proposal.

Page 153

Response 1.a. : Commenters asserted that EPA modeling does not adeq uately reflect sourcespecific or state-specific concerns. A number of co mmenters stated that the CPP will impact particular states and sources disproportionately co mpared to others. Commenters contended that states more heavily dependent on coal generation wi ll have greater impacts that are not adequately considered in the design of the CPP. The EPA disagrees with these commenters. EPA has directly considered differences that exist in state, locality, and source circumstances in its development of the CPP and has built into the r ule flexibilities that will allow states to make optimal planning choices. The IPM modeling conducte d for the CPP does consider source, locality, and state circumstances to estimate emiss ion reductions, costs, and economic impacts of84

the CPP, and this modeling is discussed in the IPM documentation available at: http://www.epa.gov/airmarkets/powersectormodeling.h tmlhttp://www.epa.gov/powersectormode ling , in the RIA, and in the GHG Mitigation Measures TS D for the CPP Final Rule.

Page 155

a. 1.b. Commenters discussed that energy markets including coal, natural gas, and electricity are incorrectly modeled.

Commenters stated that nuclear reactors are the mos t expensive electric generators available. The commenters stated that the cost of retaining nuclea r generation has not been analyzed. The commenters stated that new nuclear generation is al so exceedingly expensive requiring both federal and state subsidies for construction, putti ng a burden on consumers many times the costs of renewables. The commenters stated that since the re was no analysis associated with non-air quality health and environmental issues, there shou ld be no inclusion of nuclear as part of the renewable block and no credits for nuclear generati on should be permitted in the carbon rule.

Page 170

Response 1.b. : Commenters disagreed with the modeling of energy ma rkets used by the EPA to develop the CPP. A number of commenters asserted th at increased electricity generation from natural gas will cause natural gas prices to rise, resulting in economic impacts. Commenters stated that EPA has not fully considered the potent ial volatility and increases in natural gas prices that will occur in the future potentially re sulting in higher costs to consumers of electricity and natural gas. Some commenters asserted that EPA had not fully considered pipeline infrastructure and transmission requirements of the CPP. Others stated that EPA had not considered market structure within the electricity market nor capital market requirements associated with retirements and new power plants. C ommenters also discussed that electricity prices will rise as a result of the CPP. Commenters also took issue with the proposed treatment of nuclear power generation. In the final rule, the EP A made refinements to the building blocks, and these are reflected in the final BSER, including th e exclusion of the proposed nuclear generation components. Comments relating to the impact of CPP on system reliability are discussed in section 8.9 of this response to response to comment s document.

Page 171

c. 1.c. Commenters cited studies that report large cost and economic impacts will result from implementation of the Clean Power Plan

Commenters stated that the proposed rule will incre ase energy costs and reduce the diversity of growth. The commenters stated that EPA estimates an nual compliance costs between $5.4 and $7.4 billion in 2020, hitting $8.8 billion in 2030; but these numbers include only future power sector compliance costs, failing to capture the res idual impacts of higher electricity rates on overall economic activity. Citing a recent Wall Str eet Journal editorial and an HIS study, the commenters stated that raising the price of carbon energy will also raise costs across the economy, which will ultimately flow to consumers an d businesses resulting in slower economic growth, job losses, and less disposable income. The commenters stated that the IHS estimates85

that the rule will result in an additional $289 bil lion in cumulative electricity payments by consumers from 2014 through 2030; a loss of 224,000 jobs on average through 2030; more than $50 billion in average annual GDP loss through 2030 , with a peak GDP loss of nearly $104 billion in 2025; and from 2014 through 2030, a cumu lative reduction of $586 billion in disposable income. The commenters stated that famil ies will have less disposable income as they spend more to light and heat their homes, with midd le-income and lower-income Americans being hit the hardest. According to the commenters, in 2001, lower-income households spent 16 percent of their after-tax income on energy and in 2014, these households will spend 26 percent of their budgets on energy (before taking into acco unt any energy assistance programs). The commenters stated that lower-income families are es pecially vulnerable because energy costs represent a larger portion of their budgets and red uce the amount of income they can spend on food, housing, health care, and other necessities.

Page 175

Response 1.c. : A number of commenters stated that EPA’s cost estim ates and the economic impacts of the CPP are understated. These commenter s referenced studies conducted by HIS, NERA, EVA, the Chamber of Commerce, and other organ izations. The EPA believes the studies referenced incorporate modeling assumptions that di ffer greatly from those used by EPA leading to erroneous conclusions. See responses to section 8.6, comment 5 of this Response to Comment document for responses to these referenced studies. The EPA believes that the modeling and analyses conducted by the EPA fully analyze the cos t and economic impacts of the CPP and is a reasonable representation of the actions states mak e take in the design of their implementation plans. See section V of the preamble, the RIA and t he GHG Mitigation Measures Technical Support Document for more information about the met hods and modeling assumptions used by EPA to develop the cost and economic impacts of the CPP.

e. 1.d. Commenters disagreed with EPA IPM modeling and mode ling assumptions.

American Action Forum: Commenters cited an American Action Forum estimate that if the new EPA regulations go into effect, Americans could see their electric bills increase annually by more than 10 percent - $150 for the average consume r- by the end of the decade.

Commenters stated that the proposal overestimates w hat is technically feasible, and/or entails costs significantly higher than those projected by EPA. The commenters stated that if finalized in its current form, the proposal would substantially increase the rates Wyoming consumers, including WIEC's members, pay for their electricity , and could significantly impact the reliability of the electrical service they receive.

Page 180

Response 1.d. : Commenters asserted the energy markets including ga s, coal and electricity are incorrectly modeled by EPA. Commenters discussed co ncerns about the Integrated Planning Model (IPM) modeling completed to support the CPP. Some commenters disagreed with the assumptions used in the modeling, while others expr ess concern about the ability of the model to adequately reflect factors such as reliability, inf rastructure needs, and various aspects of electricity generation. Some commenters also conten d that documentation of IPM is inadequate.86

EPA disagrees with these comments. EPA used the In tegrated Planning Model (IPM) version 5.15 to estimate the illustrative costs, emission r eductions, and economic impacts of the CPP. IPM is a multi-regional, dynamic, deterministic lin ear programming model of the continental U.S. electric power sector. It provides forecasts o f least-cost capacity expansion, electricity dispatch, and emission control strategies while mee ting energy demand and environmental, transmission, dispatch, and reliability constraints . EPA has used IPM for over two decades to better understand power sector behavior under futur e business-as-usual (i.e. baseline) conditions and evaluate the economic and emission impacts of p rospective environmental policies. The model is designed to reflect electricity markets as accurately as possible. EPA uses the best available information from utilities, industry expe rts, gas and coal market experts, financial institutions, and government statistics as the basi s for the detailed power sector modeling in IPM. The model documentation provides additional informa tion on the assumptions discussed here as well as all other model assumptions and inputs. EPA used IPM to project likely future electricity market conditions with and without the rule. The le vel of energy efficiency-driven reductions in electricity demand, and their associated costs, are reported in chapter 3 of the RIA. Within the IPM analysis reported in the RIA, cost impacts on t he electric markets of needed additional gas pipeline infrastructure, transmission system upgrad es, and other infrastructure investments as well as capital costs of new capacity, and other co sts associated with retirement of generating units are considered. Additional demand-side energy efficiency measures that may be adopted in response to the regulation, and the resulting chang es to future demand projections, are also accounted for in the illustrative compliance scenar ios. The costs of energy efficiency programs are also incorporated into the illustrative cost es timates of the emission guidelines discussed in the RIA. See the Resource Adequacy and Reliability technical support document for additional analysis and discussion of the reliability analysis conducted by EPA for the CPP. Additionally, see IPM documentation available at: http://www.epa.gov/airmarkets/powersectormodeling.h tmlhttp://www.epa.gov/powersectormode ling . See section V of the preamble for a discussion of costs of the final guidelines.

Page 179 (Footnote 3)

___________________________
3 Detailed information and documentation of EPA’s Bas e Case using IPM (v5.15), including all the underlying assumptions, data sources, and archi tecture parameters can be found on EPA’s website at: http://www.epa.gov/airmarkets/powersectormodeling.h tmlhttp://www.epa.gov/powersectormode ling
Description of the correction:
Corrected web address, for clarity.

Pages 235-281
Description of multiple corrections that appear bel ow:87

Inserted and corrected sub heading labels on sub he adings and responses omitted or erroneously entered for Comment 5 comment summaries and respons es.

Page 235

Comment 5: Jobs will be lost (or gained) as a result of the Cl ean Power Plan.

a. 5.a. Commenters state that the Clean Power Plan will res ult in loss of jobs related to coal

Commenters suggested that EPA now claims economic g rowth does not require commensurate electric energy growth despite economic principles and the EPA regulatory impact analysis observations that growth and the availability of el ectric power in this country has closely paralleled the growth in our economy for decades. T he commenters stated that states such as Missouri that still build cars, process or produce aluminum, process meat and lumber, or have other energy intensive industries will be impacted by changes in the electric energy base load. Commenters questioned how a reduction in coal could result in a job growth of 28,000 jobs in the fuel extraction sector in 2020, as estimated by EPA. The commenters suggested that "when the health and welfare of people are adversely affe cted by the actions of man, some positive action is sometimes justified when very limited neg ative economic activity might occur". However, the commenters stated that the rule will r esult in severe economic hardships the proposed rule will result in job losses in coal min ing states based upon unproven theories of climate change and should therefore not be accepted

. Page 240

Response 5.a. : The EPA recognizes that as older fossil-fuel fired power plants – chiefly coalfired power plants – retire, demand for coal will d ecrease, along with the jobs operating the closed plants and extracting coal. The EPA also rec ognizes that coal miners and coal plant operators have been facing ongoing job losses becau se of shifts in the market from coal to natural gas, and that there is likely to be additio nal job loss in sectors related to coal attributabl e to implementation of the CPP. Impacts on employment are estimated in the RIA for the CPP, see

... Page 241

b. 5.b. Commenters state that the Clean Power Plan will cau se job loss in specific locations

Commenters cited EPA's projections that five of the seven coal units in Arkansas and all of the coal units in Arizona would shut down as a result o f the proposed rule. As such, the commenters stated that these high wage job losses would devast ate local economies, even in areas where new

... Page 25188

Response 5.b. : While the EPA expects that there is likely to be a dditional job loss in sectors related to coal attributable to implementation of t he CPP, many jobs in this field are expected to remain. For example, the Department of the Interior continues to work on an environmental impact statement to evaluate the potential environm ental impacts of extending the operation of the Navajo Generating Station (NGS) and production of coal at the nearby Kayenta Mine for an extra 25 years, through 2044.

Page 252

c. 5.c. Commenters state generally that the Clean Power Pla n will result in job loss.

Commenters proposed that implementation of the rule would cause serious economic harm, reduce energy diversity, increase electricity price s, jeopardize grid reliability, result in major job losses, hinder coal technology advances and fail to achieve the administration and EPA's goal of global leadership on CO2.

Commenters expressed concern that the rule would su bstantially increase electricity and natural gas costs, create liability problems, put the manuf acture sector at risk, and reduce good paying jobs with relatively small global climate impact. T he commenters cited EPA’s estimates that the proposed rule would reduce 730 million metric tons of carbon by 2030 but then stated that China increased its emissions nearly that same amount in one year.
Page 257
Response 5.c. : The EPA disagrees with commenters who assert that e lectricity prices are going to rise so dramatically as to cause widespread job loss, or to cause U.S. industries to be driven overseas. Below in section 8.6 comment 5 (titled: Commenters cite results from specific reports issued by stakeholder groups ), the EPA discusses problems with the analyses in specific reports that make such assertions. The EPA acknowledges tha t there will be additional job loss in certain sectors of the economy associated with fossil fuel, and that is discussed earlier in section 8.6, comment 5 (titled: Commenters state that the Clean Power Plan will res ult in loss of jobs related to coal as well as Commenters state that the Clean Power Plan will cau se job loss in specific locations) and in the RIA.

d. 5.d. Commenters state that energy efficiency creates mor e jobs than gas or coal.

Commenters stated that a popular measure is to esti mate jobs per dollar invested. The commenters stated that in the electricity space, a comparative analysis of efficiency compared to generation found that efficiency created twice as m any jobs per dollar spent on nuclear power and 50% more jobs than coal and gas generation, and these large increases in economic activity lead to increases in employment. The commenters sta ted that the effect is magnified by the fact that the non-energy sectors of the economy are subs tantially more labor intensive than energy production, and the energy sector is less than half as labor intensive as the rest of the economy. The commenters puts forward that this effect is com pounded where energy is imported (as in the

... Pages 258-25989

Response 5.d. : The EPA recognizes that studies assessing implement ation of energy efficiency measures across the country have shown increases in employment, and that many measures taken to increase efficiency are labor-intensive. For exa mple, weatherizing buildings directly employs energy auditors and construction workers. While it is difficult to precisely estimate, much of the economic activity that is created it does increase employment directly. For example, there may be more machinists to manufacture new energy effici ent appliances and equipment, construction workers to weatherize homes and buildings, service providers to conduct energy audits, and engineers and programmers to improve building energ y management systems.

e.5.e. Commenters state that the Clean Power Plan should h ave analyzed state and local effects.

Commenters stated that EPA failed to analyze the Pr oposed Rule's state-level employment and other economic impacts of Building Block 1 and Buil ding Block 2. The commenters contended that the retirements that Building Block 2 in parti cular precipitates could have dramatic local economic impacts; for example, if any of our coal-f ired plants were forced to shut down it would mean the loss hundreds of high-wage jobs in rural a reas where there are few or no alternative employment options, devastating the local economies . Further, the commenters believes that these areas would remain hard hit even if new NGCC facilities were constructed close by as the siting, permitting, financing and construction of N GCCs would take several years and require less than a third of the staff required to operate coal-fired power plants. Coal mine and craft labor job losses should also be expected. Commenters also stated that despite the extensive local economic impacts caused by Building Block 2, EPA's Regulatory Impact Assessment (RIA) only analyzes national employment impacts. The commenter s also stated that while the employment impacts from some aspects of the Proposed Rule may be felt across all states (e.g., demand-side energy efficiency), the employment impact from coal plant retirements assuredly would not. The commenters recommends that to appropriately analyze the Proposed Rule's economic impact, EPA should determine state-specific employment effe cts.
Response 5.e. : Because states have broad flexibility in tailoring programs to meet their goals, we cannot predict exactly where specific impacts will occur, although we know they are not spread evenly across the country.

The national jobs estimates we have provided are il lustrative – they represent one possible implementation scenario. The analysis relies on pro jections and costing analysis from the IPM model, which uses industry-specific data and assump tions to estimate costs and energy impacts of the CPP. The EPA uses IPM to predict coal genera ting capacity that is likely to undertake improvements in heat rate efficiency, and also to p redict impacts of the CPP on fuel use, retirement of existing units, and construction of n ew ones. The IPM expenditure predictions are distributed across different labor categories. The EPA does, however, recommend that states in designing their state plans, consider the effects o f their plans on employment and overall economic development to assure that the opportuniti es for economic growth and jobs that the plans offer are manifest. See Section VIII.G.3 of the preamble. The IPM model makes specific choices that may or may not match what states decid e to do. For example, IPM assumes that units slated to retire will tend to all retire by 2 020. In the real world, states and utilities will h ave the flexibility to change the timing and magnitude of retirement decisions, as long as they can90

meet their goals. In addition, the EPA anticipates positive employment impacts – job gains – in many areas as a result of increased investment in d emand-side energy efficiency and renewable
energy.

f. 5.f Commenters state that the Clean Power Plan will hav e a variety of negative ripple effects through the economy.

Commenters stated the Plan callously disregards the impact of increased energy costs that have a domino impact on every step in the supply chain res ulting increased costs of our goods and services, reduced competiveness and job losses.

Page 262
Response 5.f. : The EPA agrees that plant closures affect other bu sinesses that provide them with materials and fuels, and that closures also affect businesses in local communities where their employees spend their pay. However, the Clean Power Plan employment analysis illustrates not only declines in employment in some sectors (such a s coal generated power) but also an increase in employment in other sectors (such as demand-side energy efficiency). The sectors experiencing growth will positively affect their su ppliers and positively affect businesses where their employees spend their pay.

The power sector of the 21 st century is going to look somewhat different from t he power sector of the 20 th

century, and the EPA recognizes that the transitio n is not going to affect everyone equally. That is why, as stated above, the CPP prov ides a ten-year timeframe from plan development to plan implementation. The ten-year ti meframe allows states, utilities, and other stakeholders to work together to tailor their plans in the ways that best support their communities, so that they can not only reduce their greenhouse gas emissions, but also ease the transition of their workforces to the low carbon ec onomy.
g. 5.g. Commenters state that EPA should have done economy- wide modeling for the Clean Power Plan.
Commenters stated that EPA's analysis of the employ ment impacts of the Proposed Rule was arbitrary and capricious because EPA only evaluated employment impacts in a few select industries. The commenters stated that EPA's parti al economy model failed to address impacts in the communities that support coal-fired electric ity generation and on consumers of electricity. The commenters stated that a whole economy model mu st include employment across a wide range of sectors, sufficient detail at the regional level to identify changes in the regional distribution of output and employment, internationa l trade flows to evaluate how regulations will affect tradable sectors and dynamic analyses to exa mine adjustments in labor and capital markets in response to regulations over time.

Page 264
Response 5.g. : To support the Transport Rule proposed in the summe r of 2010, among other rulemakings, the EPA used the Economic Model for Po licy Analysis (EMPAX) to estimate the effect of impacts projected by the Integrated Plann ing Model (IPM) on markets outside the electricity sector. EMPAX is a dynamic computable g eneral equilibrium (CGE) model that91

forecasts a new equilibrium for the entire economy after a policy intervention. While the external Council on Clean Air Compliance Analysis (Council) peer review of this study stated that inclusion of benefits in an economy-wide model, spe cifically adapted for use in that study, “represent[ed] a significant step forward in benefi t-cost analysis,” EPA recognizes that serious technical challenges remain when attempting to eval uate the benefits and costs of potential regulatory actions using economy-wide models. Cons istent with the Council’s advice regarding the importance of including benefit-side effects de monstrated by the 1990 to 2020 Clean Air Act study, and the lack of available multi-year air qua lity projections needed to include these benefitside effects, EPA has not conducted CGE modeling fo r this final rule.

Pages 265-266

h. 5.h. Commenters take issue with the job-estimation appro ach in the Clean Power Plan.

Commenters stated that EPA has omitted the lost emp loyment costs from retired coal and drastically underestimated the green energy investm ent needed to create 78,800 jobs by 2020. The commenters stated that if EPA's employment proj ections of 78,800 are true, the cost of installing zero carbon energy will cost the economy $30.7 billion in 2020, a figure never mentioned in the RIA. (1)

Commenters cited that the EPA estimates that employ ment could increase between 57,000 and 78,800 jobs, rely on a jobs multiplier with no basi s in reality. The commenters stated that EPA concedes, "Employment impacts of demand-side energy efficiency programs have not been extensively studied in the peer-reviewed, published economic literature." The commenters cited the EPA's use of a multiplier of 2.56 energy effici ency jobs per million dollars of spending, or $390,625 per job. The commenters stated that the ea rnings for the median worker are $30,454. The commenters stated that EPA's multiplier of $1 m illion in investment to create 2.56 jobs strains credibility, and compares it to the work of Richard Morgenstern, who found that $1 million in environmental spending translates into r oughly 1.5 new jobs. The commenters stated that EPA also relies on models of green investment spending in states, which multiplied by EPA's 2.56 jobs per $1 million in investment, yield s roughly 78,800 jobs, meaning that the nation will spend more than $30.7 billion on energy efficiency investments by 2020. The commenters stated that this figure is not contained in EPA's RIA, but instead EPA claims from $8 billion to $12.3 billion "demand-side" energy ef ficiency costs by 2020. The commenters stated that EPA underestimates demand-side costs by threefold, and that a similar extrapolation for 2030 costs would approach $150 billion. The com menters stated that EPA's multiplier is significantly higher than past estimates and $30 bi llion in energy efficiency spending by 2020 is three times what EPA reports.

Response 5.h. : The EPA has analyzed employment impacts in the coal industry (see chapter 6 of the RIA). The EPA fully recognizes that any displac ed worker suffers costs, and, similarly, job search costs stop when newly hired workers start wo rk. However, there is no agreement in the economics literature to date on whether we should, or how best to monetize employment impacts, both negative and positive. EPA has revise d the demand-side energy efficiency jobs multiplier from the proposal and now uses a range, rather than a single estimate. In addition, EPA has included other estimates of demand-side ene rgy efficiency jobs multipliers, from92

government sources. A bar chart and discussion with in the RIA show EPA’s estimates in the context of these other multipliers.

i. 5.i. Commenters cite results from specific reports issue d by stakeholder groups.

Commenters cited the following reports in expressin g concern about the potential for high costs, high electricity prices, and large numbers of jobs lost. Commenters stated these reports make a variety of assumptions that do not match the propos ed or final Clean Power Plan, and do not consider the benefits of the Clean Power Plan, incl uding job creation. Below is discussion of some major highlights of each report.

5.i.1. US Chamber of Commerce / Institute for 21st Century Energy report:

Commenters cited the U.S. Chamber of Commerce's fin dings that the EPA's rules would result in 225,000 jobs lost and an annual loss of $50 billion to the gross domestic product. The commenters stated that electric industry analysts s uggest increases of 10-15 mills/kWh at current gas prices and the impact could escalate significan tly if gas prices increase more than projected.

Commenters cited a US Chamber of Commerce calculati on of economy-wide job losses of 224,000 per year through 2030.

Pages 267-273

Response 5.i.1. : The Chamber of Commerce report was issued before th e Clean Power Plan was proposed. The Chamber reports costs that far exceed the Clean Power Plan’s projected costs; job losses that dwarf those estimated in the Clean Powe r Plan; and zero benefits or job gains.

The report’s starting point is a set of policies re sulting in a 42 percent drop in carbon dioxide emissions, which is significantly more stringent th an the 30 percent reduction expected from the proposed Clean Power Plan. The resulting higher cos ts are further inflated by assuming that new natural gas-fired power plants would be required to apply carbon capture and storage (CCS), which is not the basis of BSER. On the other hand, no job gains are assigned to construction or operation of those plants.

In general, spending on compliance is incorrectly a ssumed to be an unproductive use of capital, precipitating a loss in GDP, an effect for which re al world evidence has never been produced. This “GDP loss” is then tied to prediction of signi ficant job losses.

The report also understates the likely implementati on of energy efficiency measures. Its results include electricity demand growth (1.2%/year) that significantly exceeds the projections in the EIA 2014 Reference Case used by EPA (0.9%/year). Th e Chamber also assigns $50 billion of cost to energy efficiency implementation, while at the same time assuming no jobs will be created to implement those efficiency measures. It also assumes that states will only meet 50 percent of their own state-level Energy Efficiency Resource standards, thereby assigning additional implementation cost (but no jobs) to the CPP.93

5.i.2. NERA/NMA/ACCCE report:

Commenters stated that Federal regulations have alr eady forced two plants in his district to close over the last two years. The commenters cited a Nat ional Mining Association projection that more than 300 plants would retire nation-wide due t o EPA rules over the next six years. The commenters cited a Heritage Foundation study predic ting that the EPA's anti-coal policies could terminate 600,000 American jobs by 2023 while causi ng economic growth to drop by more than $2 trillion.

Commenters stated that the GHG ESPS will reduce dem and for Indiana coal and result in losses of good paying jobs in rural communities. The comm enters stated that manufacturing and agriculture are significant users of electricity in Indiana and will suffer significant losses if the proposed GHG ESPS is promulgated. The commenters st ated that manufacturing and agriculture in Indiana are dependent on the low cost of electri city. The commenters stated that state's utility rate forecasting experts have predicted electrical rates in Indiana will rise by more than 30% over the next decade- prior to considering the impacts o f the GHG ESPS. The commenters cited NERA projections that rates will be 12% more costly each year compared to EPA's projections. The commenters cited an Energy Ventures Analysis pr ediction that electric rates for industrial customers will increase by 50% by 2020, and natural gas costs in Indiana will increase by 108%.

Commenters stated that the proposed rule would forc e Mississippi utilities to generate more electricity from natural gas, even ahead of lower-c ost options. The commenters stated that increasing customers' exposure to volatile natural gas prices is bad for business and business owners, as well as individual ratepayers. The comme nters cited the American Coalition for Clean Coal Electricity that the adoption of these regulat ions will lead to an increase of electricity rates of 14-19 percent in Mississippi and would place 3,4 00 direct and indirect coal jobs in jeopardy of being eliminated.

Commenters stated that the cost estimates fail to r eflect or capture the subsequent adverse spillover impacts of higher electricity rates on ou r nation's overall economic activity. The commenters cited an analysis by NERA Economic Consu lting indicating that average U.S. electricity prices would increase by 12% per year a nd the total costs of the rule could be between $366 billion and $479 billion over a 15-year timefr ame. The commenters stated that many of these costs will have to be absorbed by residential , commercial and industrial energy consumers. The commenters stated that higher energy prices dis proportionately harm low-income and middle-income families. The commenters stated that the Proposed Rule would result in a direct loss of 52,000 jobs in the electric utility, mining and rail sectors due to plant closures. The commenters stated that an additional 100,000 indire ct jobs are at risk for loss in communities affected by the closures, and that job losses would be concentrated in, "relatively poor, rural areas that are least able to afford the loss of hig h-wage skilled jobs."

Response 5.i.2. : National Economic Research Associates (NERA) Econo mic Consulting issued its report after proposal of the CPP. NERA reports costs that far exceed the Clean Power Plan’s projected costs, sharp electricity prices increases inconsistent with EPA’s projections, and zero benefits. NERA does not report estimates for jobs g ained or lost; its model assumes full employment across the economy. However, appendix A to the report suggests a method that could be used to derive “job-equivalents” from the model’s output.94

The NERA report show results from several different implementation cases. The highest costs come from a case wherein NERA assumes that building block 3 and 4 (renewable energy and energy efficiency) are not available due to legal c hallenges. These costs are frequently cited by
commenters.
NERA derives its relatively high cost estimates by changing some key assumptions. For building block 1, instead of the 6 percent heat rate improve ment for coal-fired plants that represent BSER in the proposed Clean Power Plan, NERA assumes a ma ximum improvement of 1.5 percent is possible, with other groups of units achieving eith er 1 percent improvement or no improvement.

For proposed building block 3 (renewable energy), N ERA does not report the cost assumptions in its model.

For proposed building block 4 (demand-side energy e fficiency), NERA uses a range of efficiency improvement costs significantly higher t han the Clean Power Plan. Where the CPP uses a range of $550-770 dollars/MW-hour, NERA uses a range of 896-1,253 dollars/MW-hour.

The combination of all of these choices made by NER A is overestimated negative impacts.

5.i.3. Energy Ventures Analysis report:

Commenters stated that the GHG ESPS will reduce dem and for Indiana coal and result in losses of good paying jobs in rural communities. The comm enters stated that manufacturing and agriculture are significant users of electricity in Indiana and will suffer significant losses if the proposed GHG ESPS is promulgated. The commenters st ated that manufacturing and agriculture in Indiana are dependent on the low cost of electri city. The commenters stated that state's utility rate forecasting experts have predicted electrical rates in Indiana will rise by more than 30% over the next decade- prior to considering the impacts o f the GHG ESPS. The commenters cited NERA projections that rates will be 12% more costly each year compared to EPA's projections. The commenters cited an Energy Ventures Analysis p rediction that electric rates for industrial customers will increase by 50% by 2020, and natural gas costs in Indiana will increase by 108%.

Commenters stated that compliance with the proposed rule will significantly increase the cost of producing manufactured goods in the US, make US man ufacturers less competitive with foreign manufacturers, and result in loss of American jobs. The commenters cited Energy Ventures Analysis findings of many flaws in EPA's underlying assumptions about power plant process efficiency improvements, non-hydro renewable energy expansion and rapid growth in consumer energy efficiency that were used to calculate state emission rate limitations. The commenters stated that EVA also found that EPA's assumptions a re contrary to power industry practices and outside projections by the U.S Department of Energy (DOE) and other independent forecasts.

Response 5.i.3. : The Energy Ventures Analysis (EVA) study reports co sts that exceed the Clean Power Plan’s projected costs, sharp electricity pri ces increases inconsistent with EPA’s projections, and zero benefits. EVA makes several a nalytic decisions that differ sharply from EPA’s. First, EVA assumes that there will be no hea t rate improvements possible at coal-fired EGUs (building block 1).95

EVA also relies on its own internally-derived forec ast of state renewable power development, and appears to assume that some states will not mee t their own state-level renewable portfolio standards (building block 3). In reality, most stat es with renewable portfolio standards are on track to meet them or have already met them. 5

For energy efficiency (proposed building block 4), EVA’s energy efficiency results represent minimal improvement over EPA’s 2013 baseline (AEO 2 013); therefore they report far less energy efficiency savings than EPA has estimated is achievable.

5.i.4. Heritage Foundation report:

Commenters stated that Federal regulations have alr eady forced two plants in his district to close over the last two years. The commenters cited a Nat ional Mining Association projection that more than 300 plants would retire nation-wide due t o EPA rules over the next six years. The commenters cited a Heritage Foundation study predic ting that the EPA's anti-coal policies could terminate 600,000 American jobs by 2023 while causi ng economic growth to drop by more than $2 trillion.

Commenters cited a study by the Heritage Foundation that EPA's energy regulations would cost hundreds of thousands of jobs and cause a significa nt decline in personal income while having a minimal impact on global warming. The commenters st ated that these regulations would reduce aggregate gross domestic product by more than $2.5 trillion between now and 2030, and employment would track nearly 300,000 jobs below th e no-carbon-regulation baseline in an average year, with some years seeing an employment deficit of more than 1 million jobs. The commenters cited a NERA study estimating that the c osts to comply with EPA's proposed plan could total $366 billion, or more and finds that 43 states will have double-digit electricity price increases.

Commenters stated that Americans will be hit repeat edly with higher prices as businesses pass higher costs onto consumers. The commenters stated that if a company had to absorb the costs, high energy costs would shrink profit margins and p revent businesses from investing and expanding. The commenters stated that cutbacks resu lt in less output, fewer new jobs, and less income. The commenters stated that the impact of a revenue-neutral carbon tax starting at $37 per ton in 2015 through 2030 would be substantial, including an average employment shortfall of nearly 300,000 jobs; a peak employment shortfall of more than 1 million jobs; 500,000 jobs lost in manufacturing; an aggregate GDP loss of more tha n $2.5 trillion (inflation-adjusted); and a total income loss of more than $7,000 per person (i nflation-adjusted). The commenters stated that the Energy Information Administration (EIA) ha s analyzed the economic impact of a

Page 269, (Footnote 5)

5 “http://www.resource-solutions.org/images/events/r em/presentations/2014/Barbose_Galen.pdf, Renewables Portfolio Standards in the United States : A Status Update”, Galen Barbose, Lawrence Berkeley National Laboratory, Presentation given at Renewable Energy Markets 2014

, December, 2014.96

$25/ton carbon tax using essentially the same model and found more than $2 trillion in lost GDP from 2014 to 2030 and a peak employment differentia l of 1 million lost jobs.

Response 5.i.4. : The Heritage Foundation report was issued after the Clean Power Plan was proposed, but it does not analyze the proposed CPP. Instead it posits a national carbon tax. Heritage also reports job losses that dwarf those e stimated in the Clean Power Plan; and zero benefits or job gains.

The Heritage Foundation uses its own proprietary “i nput-out” model, the Heritage Energy Model (HEM) which is explained to be a derivative of EIA’ s National energy Model System (NEMS). As noted in NEMS documentation, the model link betw een the energy sector and the rest of the economy requires a large number of modeling assumpt ions and choices. These modeling choices are important for understanding their results, but were not reported in the Heritage study.

This modeling approach generally considers how high er production costs impact employment, but does not include the ability for firms to do th ings they would do in the real world, such as substitute materials used in the manufacturing proc ess or innovate and create new, cleaner production processes. Therefore, it is likely to ov erstate job loss in the regulated sector.

In addition, the Heritage report only focused on th e manufacturing sector and did not account for sectors that may have positive employment impacts a ssociated with implementation of the CPP. EPA’s employment analysis for the proposed Clean Po wer Plan included, in addition to the power sector and upstream industries such as coal a nd natural gas extraction, job gains resulting from new economic activity due to heat rate improve ments, renewable energy and demand-side energy efficiency activities.

5.i.5. UMWA/IBEW report:

Commenters cited the United Mine Workers of America prediction that there will be 75,000 direct coal generation jobs lost by 2020 and 152,00 0 by 2030. The commenters cited the International Brotherhood of Electrical Workers tha t the agency's plans also would result in the loss of some 52,000 permanent direct jobs in utilit ies, mining and rail and at least another 100,000 jobs in related industries, and that high-s kill, middle-class jobs would be lost, falling heavily in rural communities that have few comparab le employment opportunities. The commenters cited the US Chamber of Commerce project ions that there will be 224,000 jobs lost on average each year through 2030, and the rule wil l result in a loss of $50 billion in GDP on average. The commenters cited Dr. Gabriel Calzada A lvarez, who examined the impact of renewable energy policies in Spain, found that 2.2 jobs were lost for every one job created.

Commenters stated that EPA's carbon regulations cou ld cause serious harm to the U.S. economy, raising energy prices, and costing jobs. The commen ters cited United Mine Workers of America estimates that the rule will result in 187,000 dire ct and indirect job losses in the utility, rail, an d coal industries in 2020, and cumulative wage and be nefit losses from these sectors of $208 billion between 2015 and 2035. The commenters state d that higher energy prices disproportionately harm low-income and middle-incom e families. The commenters cited a Center for Strategic and International Studies (CSI S) analysis that the proposal could result in nationwide costs of up to $32 billion per year; and average electricity rate increases of up to 9.997

percent per year. The commenters cited the Wall Str eet Journal that the rule is a huge indirect tax and wealth redistribution scheme and that costs wil l ultimately flow to consumers and businesses. 23244 (9). Commenters cited an analysis by Eugene Trisko, counsel to the United Mine Workers of America that the CPP would destroy 187,000 direct and indirect jobs.

Commenters stated that the CPP rule will lead to th e closure of coal-burning power plants throughout the United States, resulting in the loss of more than 52,000 jobs in the coal, utility and railroad industries by 2020, and further direct job losses in those industries will reach 65,000 by 2030 as a result of this rule.

Commenters stated that the drastic reduction in coa l generation will cost 52,000 direct and 100,000 indirect jobs. The commenters stated that M ATS and the CPP will close 40% of the coal generation that exists today, and eliminate 400,000 or more irreplaceable American jobs. The commenters stated that under the CPP Colorado will not receive credit for plant closures already made and will be forced to close at least three add itional coal-fired plants. The commenters stated that in at least 22 other states the impact of the CPP will not be limited to the coal sector.

Commenters stated that these job losses will have a ripple effect in the communities throughout the coalfields and beyond, where more than 208,000 jobs will be lost by 2030.

Commenters stated that EPA estimates do not capture the subsequent spillover impacts of higher electricity rates on overall economic activity. The commenters stated that these increases will place an immense burden on U.S. businesses, and cou ld eliminate the critical competitive advantage that affordable and reliable electricity provides to the American economy. The commenters stated that the United Mine Workers Asso ciation has estimated that the rule will result in 187,000 direct and indirect job losses in the utility, rail, and coal industries in 2020, an d cumulative wage and benefit losses from these secto rs of $208 billion between 2015 and 2035.

Commenters stated that manufacturers and others who use natural gas for purposes other than electric generation will also see projected cost in creases up to $50 billion. The commenters stated that 187,000 direct and indirect job will be lost in the utility, rail, and coal industries alo ne by 2020 and these sectors will lose cumulative wage s and benefits of $208 billion by 2035. The commenters stated that by forcing the retirement of a significant portion of the state's electric generation capacity, the rule puts at risk the reli ability of Texas' electric grid, the failure of whi ch can have extremely dramatic financial impacts, as w ell as public health and safety impacts.

Response 5.i.5. : Summary materials on the UMWA analysis were availab le to the EPA, but the full report was not, and does not seem to be availa ble publicly. From the summary materials, the UMWA analysis appears to attribute all changes in t he use of coal for electricity generation from 2009 until 2030 entirely to the MATS and CPP rules, ignoring the significant drop in natural gas prices from 2009 to 2013, and fact that demand for electricity has been almost flat since 2009 (EIA, AEO 2013 and AEO 2014).

In addition, the UMWA materials cite job losses due to the changes in electricity generation, and appear to calculate future job losses by multiplyin g job-years 6 by the number of jobs in each year, a practice that inflates the job loss numbers . UMWA also does not discount the dollars underlying the job-years calculations over time, wh ich also artificially inflates job losses.98

Additionally, it does not address benefits. Finally , it does not appear to address job gains such as employment related to natural gas, renewable energy , or energy efficiency (such as employment weatherizing buildings, conducting building energy audits, constructing and installing renewable energy, programming building energy management syst ems, etc.).
j. 5.j. Commenters state that the clean power industry prot ects and creates jobs.

Commenters stated that the proposed rule will creat e jobs. Commenters supported the Clean Power Plan and stated that it will save jobs, help protect farming, fishing, forestry and other rural resources undeniably impacted by carbon pollution, and reduce the job-killing impacts of carbon pollution. The commenters further stated that the s olar energy employs roughly twice as many people as the coal mining industry, and added that other renewable resources also add jobs.
Commenters also supported the Clean Power Plan beca use it provides an opportunity for more research, manufacturing and construction jobs, more efficient and less costly energy, cleaner air, improved health outcomes and more.

Commenters stated that energy efficiency will help the economy through job creation and reduced energy expenditures, and cited a study by S outhface which found that over 4,100 Georgians were employed full-time in the energy-eff iciency and building sciences sector in 2013.

Similarly, commenters stated that even in coal's br ightest day in Georgia when it was producing about 70 percent of electricity, it only accounted for 2,700 jobs in Georgia whereas in 2012, there are already 10,000 jobs in the solar, wind, a nd energy efficiency industries.

Page 277
Response 5.j. : The EPA acknowledges the job growth opportunities discussed by the commenters. Chapter 6 of the RIA provides informati on on job growth that may occur in the energy efficiency sectors as a result of the CPP. T he Clean Power Plan encourages individual states to tailor their energy choices to suit their individual needs and circumstances, as long as goals are met. The EPA agrees that renewable energy will be an increasingly important building block in constructing our low carbon future.

k. 5.k. Commenters stated that reduction in GHG emissions l ed to increased employment.

Commenters stated that from 2006 to 2011, greenhous e gas emissions citywide fell 12% while population and workforce each grew by 6%. The comme nters stated that it is important a significant share of those GHG reductions can be at tributed to the shift to less carbon intensive electricity generation throughout the region.

Page 279

Response 5.k. : The EPA agrees that investment in energy efficienc y and renewable energy has created and will continue to create a significant n umber of jobs. Our analysis in the Regulatory99

Impact Assessment (RIA) for this rule estimates the potential employment benefits of the CPP. We also agree that most of the jobs installing and operating renewable energy, and making energy efficiency improvements to buildings, are by definition American jobs. Employment in energy efficiency and renewable energy includes emp loyment in construction and installation, some of which is short-term, and employment in oper ating existing power systems, most of which is long-term. (See chapter 6 of the RIA for t his rule.)

l. 5.l. Commenters stated that limiting climate change will protect jobs related to outdoor recreation.

Commenters stated concern over impacts of climate c hange on avian species. The commenters stated that America's 46 million birdwatchers spend roughly 32 billion dollars every year, generating 85 billion dollars in overall economic o utput, and 13 billion dollars in tax revenues. The commenters stated that bird-watching, hunting a nd other outdoor activities enjoyed by more than 80 million Americans support over 2.6 million jobs, and these jobs are at risk if EPA does not effectively control carbon emissions.

Commenters states that their family members work in the winter ski industry in Lake Tahoe and their jobs may disappear due to diminished snowfall patterns.
Response 5.l. : The EPA agrees that jobs related to outdoor recreat ion are an important part of the economy, and that climate change poses risks to wildlife habitat. In addition, many of these jobs are not located in major population centers, b ut in rural areas with fewer employment options -- near national parks, forests, and other class I areas, as well as near state parks and outdoor recreation areas

m. 5.m. Commenters stated that there will be a need for wor ker assistance and retraining and that new jobs created need to be good jobs

Commenters stated that union laborers are participa ting in the conversions of coal plants to natural gas, they are building the pipeline infrast ructure to meet the needs of the growing natural gas demand, they are building three of the five nuc lear reactor units under construction, and they are building wind farms and solar fields at unprece dented scale. The commenters stated that the

... Page 281
Response 5.m. : The EPA agrees that there will be a need for workfo rce retraining as part of the transition to a lower carbon economy. As noted abov e, we have been seeing many states implementing replicable programs to transition thei r workforces – by working in public-private partnerships with their community colleges and busi nesses - to secure an economic advantage as they transition local economies. In addition the De partment of Commerce, Department of Labor, Small Business Administration, and the Appalachian Regional Commission have together created an initiative to issue grants to partnershi ps of regionally-driven economic development and workforce development organizations in impacted coal communities. 7

The timeframe of the CPP from plan development to p lan implementation affords states, utilities and other stakeholders the ability to work together to tailor their plans in the ways that best100

support their communities. The EPA strongly encoura ges states to put effort into workforce development and creation of safe, good paying jobs, in order to help communities transition to a lower carbon economy.

n. 5.n. Commenters stated that biomass co-firing would crea te many additional jobs and should be included in the Clean Power Plan

Commenters stated that the inclusion of forest-deri ved biomass feedstocks in the Clean Power Plan creates economic development opportunities acr oss many sectors and throughout the supply chain. The commenters stated that an increase in bi omass feedstocks coming from sustainably managed forests would provide economic stimulus and job growth beginning with the individual forest owner and carrying through the logging, tran sportation and electricity generation industries.

Commenters stated that biomass co-firing in the U.S . Southeast is estimated to create 6 times the jobs lost from reduced coal demand, due to the incr eased labor needed for biomass supply chains. The commenters stated that a 500MW coal pla nt supports 2,540 direct jobs, while a 500MW biomass plant supports 3,480 jobs.

Response 5.n. : The EPA acknowledges the commenters remarks on the job creation potential of biomass co-firing. A discussion regarding the use o f some biomass feedstocks for compliance purposes can be found in section VIII.I.2.c and Sec tion VIII.K.1 of the final rule preamble. A discussion regarding employment and economic develo pment can be found in section VIII.G.3 and in Section XI.E.

Page 348 (Footnote 10)

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10 http://www.e pd a.gov/power/.
Description of the correction:

Web address corrected: http://www.eda.gov/power/

Pages 387-391
Description of multiple corrections shown below:
Inserted and corrected sub heading labels on sub he adings and responses omitted or erroneously entered for Comment 24 comment summaries and respon ses.101

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Comment 24: Clean Power Plan will impact Tribes.

a. 24.a. Commenters state that certain tribes are coal-based economies that the CPP may impact negatively affecting these tribal economies and tribal jobs.

Commenters stated that the Navajo Nation is a coal- based economy and believes that any climate change rule promulgated by EPA should consider the unique situation of the Navajo Nation, including its underdeveloped economy, lack of acces s to electricity, and staggering unemployment rate.

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Response 24.a. : As described in sections III.A and XI.F of the prea mble to the proposed carbon pollution emission guidelines for existing EGUs (79 FR 34845-34847; June 18, 2014) and sections II.D and VI.F of the preamble to the propo sed carbon pollution emission guidelines for existing EGUs in Indian Country and U.S. Territorie s (79 FR 65489; November 4, 2014), the final CPP was developed after extensive and vigorou s outreach to tribal governments. After issuing the supplemental proposal, the EPA held add itional consultation with tribes as described in the preamble for the final rule Section VII.F.

The EPA conducted an analysis of the cost, benefit and economic impacts of the CPP for tribes in the Regulatory Impact Analysis for the Carbon Po llution Emission Guidelines Supplemental Proposal and for the final emission guidelines in t he Regulatory Impact Analysis for the Clean Power Plan Final Rule (RIA) for illustrative implem entation scenarios. This rule does not directly impose specific requirements on EGUs locat ed in states, U.S. territories or areas of Indian country. The rule also does not impose speci fic requirements on tribal governments that have affected EGUs located in their area of Indian country. For areas of Indian country, the rule establishes CO 2 emission performance goals that could be addressed through either tribal or federal plans. See the RIA and final rule preamble section XII. F. for more information

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b. 24.b. Commenters state that renewable energy will be bene ficial to tribes by providing steady revenue, creating jobs, allowing tribes to m anage their own electricity projects and improving the standard of living for tribes.

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Response 24.b. : The EPA agrees with commenters that renewable energ y (RE) may be beneficial for tribes. Tribes may find opportunitie s to use renewable generation to obtain steady revenues for the tribal government (for example, th rough export of electricity), to create jobs on the reservation, to manage their own electricity pr ojects as opposed to depending on private entities for service delivery, and to ensure a bett er standard of living for tribal members who currently lack access to electricity services. See section IX.B of the final rule preamble for102

further discussion of how EPA is promoting communit y involvement in the state plan development process. Additionally, in sections IX.C and D the agency provides information on resources that it will be making available to help low-income communities access EE/RE and financial assistance programs. Additionally, in sec tion IX.C the EPA encourages states to consider similar approaches to approaches that othe r states are already using to help provide lowincome communities with access to financial and tec hnical assistance programs for EE and RE.

c. 24.c Commenters state that emissions from the Navajo Gen erating Station and five other coal-fired power plants are harming tribal health.

Commenters stated that EPA should be able to protec t public health and safety and that emissions from Navajo Generating Station and five o ther coal-fired power plants in the region is harming tribal health. Commenters stated that a ho st of respiratory illness plagued those living on Black Mesa with bronchitis and black lung diseas e and asthma.

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Response 24.c. : Tribal health and safety associated with air qualit y in and around the Navajo Generating Station and Four Corners Power Plants ar e important to the EPA and are a part of its mission as mandated by the Clean Air Act. Programs such as the National Ambient Air Quality Standards and National Emission Standards for Hazar dous Air Pollutants are established to protect health and welfare from criteria air pollut ants and hazardous air pollutants, respectively. Recent actions taken or planned for regional haze a t the Four Corners Generating Station and for the Navajo Generating Station will be beneficial fo r air quality in the region as well as resulting in regional haze improvements. In Navajo territory, units are expected to shut down in order to comply with requirements for Best Available Retrofi t Technology (BART) prior to the target date for the goals proposed in this action. 14 These units represented approximately 30 percent o f total EGU CO 2 emissions in Navajo territory in 2012.

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EPA used the Integrated Planning Model (IPM) to est imate the emission reductions, costs, changes in generation and economic impacts associat ed with the guidelines by EPA. This model has been peer reviewed and used extensively by EPA and other organizations to analyze costs and impacts of regulatory actions for the power sec tor. Detailed documentation for IPM v.5.15 is available at: http://www.epa.gov/airmarkets/powersectormodeling.h tmlhttp://www.epa.gov/powersectormode ling . It provides forecasts of least cost capacity expa nsion, electricity dispatch, and emission control strategies while meeting energy demand and environmental, transmission, dispatch, and reliability constraints. EPA has used IPM for over two decades to better understand power sector behavior under future business-as-usual (i.e. basel ine) conditions and evaluate the economic and emission impacts of prospective environmental polic ies. The model is designed to reflect electricity markets as accurately as possible. EPA uses the best available information from utilities, industry experts, gas and coal market ex perts, financial institutions, and government103

statistics as the basis for the detailed power sect or modeling in IPM. The EPA believes that the assumptions used in modeling the final rule and rep orted in the RIA best reflect actions that may be taken by states in implementation planning of th e final CPP. However as previously noted, states will make the ultimate decisions as to imple mentation planning. See the RIA completed for the final CPP, the GHG Mitigation Measures tech nical support document, and section 8.4 of this response to comment document for more discussi on of the underlying assumptions used in the IPM modeling for the final rule.

Description of the correction:

Corrected web address, for clarity.

Response 14: EPA disagrees with these comments. IPM is the best available modeling tool for assessing power sector/environmental impacts of pol icy initiatives. IPM is a multi-regional, dynamic, deterministic linear programming model of the U.S. electric power sector. It provides forecasts of least cost capacity expansion, electri city dispatch, and emission control strategies while meeting energy demand and environmental, tran smission, dispatch, and reliability constraints. The model is designed to reflect elect ricity markets as accurately as possible. The EPA uses the best available information from utilit ies, industry experts, gas and coal market experts, financial institutions, and government sta tistics as the basis for the detailed power sector modeling in IPM. The model documentation provides additional information on the assumptions discussed here as well as all other model assumptio ns and inputs. Detailed information and documentation of EPA’s Base Case using IPM (v5.15), including all the underlying assumptions, data sources, and architecture parameters can be fo und on EPA’s website at: http://www.epa.gov/powersectormodeling/BaseCasev513 .html

Chapter 8B

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Response 14: EPA disagrees with these comments. IPM is the best available modeling tool for assessing power sector/environmental impacts of pol icy initiatives. IPM is a multi-regional, dynamic, deterministic linear programming model of the U.S. electric power sector. It provides forecasts of least cost capacity expansion, electri city dispatch, and emission control strategies while meeting energy demand and environmental, tran smission, dispatch, and reliability constraints. The model is designed to reflect elect ricity markets as accurately as possible. The EPA uses the best available information from utilit ies, industry experts, gas and coal market experts, financial institutions, and government sta tistics as the basis for the detailed power sector modeling in IPM. The model documentation provides additional information on the assumptions discussed here as well as all other model assumptio ns and inputs. Detailed information and documentation of EPA’s Base Case using IPM (v5.15), including all the underlying assumptions, data sources, and architecture parameters can be fo und on EPA’s website at: http://www.epa.gov/airmarkets/powersectormodeling.h tmlhttp://www.epa.gov/powersectormode ling/BaseCasev513.html104

Description of the correction:

Corrected web address, for clarity.

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With regards to the comment that it is unclear as to whether future population growth and industry demand growth are considered in the develo pment of the CPP, the EPA does consider future electricity demand in the IPM modeling condu cted. EIA forecasts are incorporated into IPM. See Chapter 3 of the RIA and documentation fo r the IPM model available at: http://www.epa.gov/airmarkets/powersectormodeling.h tmlhttp://www.epa.gov/powersectormode ling

Description of the correction:

Corrected web address, for clarity in Response 15.

Chapters 9-12

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Response 1: The EPA agrees with the commenters that public part icipation and an open exchange of ideas in the regulatory process are cru cial and necessary to develop rules that

‘” protect public health, welfare, safety, and our env ironment while promoting economic growth, innovation, competitiveness and job creation... ’” Following the direction in the Presidential Memorandum to the Administrator (June 25, 2013), 1 the EPA engaged in extensive and vigorous outreach to stakeholders and the general public at every stage of development of the rule. The EPA’s outreach included direct engagement with the energy and environment officials in states, tribes, and a full range of stakeholders including leaders in the utility power sector, labor leaders, non-governmental organizations, other federal agenc ies, other experts, community groups and members of the public. The EPA participated in more than 300 meetings before the rule was proposed and more than 300 after the proposal. The proposed guidelines were also subject to a formal comment and response process. For more infor mation on the process afforded the public for participation in this rulemaking see section II .K (Stakeholder Outreach and Consultations) of the final rule preamble of the CPP. The EPA also co nducted a Regulatory Impact Analysis (RIA) to assess the benefits, costs and economic impacts to society for both the proposed and the final emission guidelines. In this analysis, the EPA foun d that the benefits of the guidelines to society far outweigh the costs. See the RIAs for the propo sed and final rule in the docket (EPA-HQOAR-2013-0602) for further information.

Description of the correction:105

Changed quotation marks from single to double and t he font to superscript for footnote 1 in the body of the response for Response 1 to provide clar ity.

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Response 2: The EPA conducted a n RIA assessing the costs and benefits of the Clean Power Plan proposal and final guidelines consistent with the requirements of E.O. 12866 and E.O.13563. The Integrated Planning Model (IPM) was used to estimate the emission reductions and costs associated with the guidelines. All promu lgated EPA regulations affecting the power sector are incorporated into the baseline of IPM fo r development of the emission reductions, costs, and benefits for the guidelines. (See docket EPA-HQ-OAR-2013-0602 for the RIA conducted for the proposed and final emission guide lines and more details on the analysis conducted.) The final CPP establishes emission guid elines for states to use in developing plans to

... Description of the correction:
Changed text from “a” to “an” in Response 2 for cla rity.

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Tribes are not required to submit implementation pl ans under the CAA. With respect to comments regarding states that decline to submit 11 1(d) plans or tribes without authority to develop and implement section 111(d) plans, the EPA has initiated a rulemaking for a federal plan as a mechanism for implementation of the emiss ion guidelines for those states or tribes that do not develop a plan and for which the EPA makes a finding that it is necessary or appropriate.

. The affected EGUs in the states or areas of Indian country that do not develop a state plan as part of the emission guidelines are the entities that wi ll be subject to the federal plan rulemaking. The federal plan rulemaking will appropriately assess t he direct impacts on those EGUs, including those owned by small entities.

Description of the correction:
Deleted extra period in last paragraph of Response 3.

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The EPA points out that, in accordance with Executi ve Order 12866, Executive Order 13563, and the EPA’s “Guidelines for Preparing Economic An alyses,” a n RIA was prepared in support of the proposed action as well as the final action. The RIA presents the expected benefits, costs, and economic impacts of illustrative strategies sta tes may implement to comply with the emission guidelines in 2020, 2025, and 2030. Additi onally, the RIA includes information on potential impacts on electricity markets, employmen t, and markets outside the electricity sector.106

Description of the correction:
Changed text from “a” to “an” in fifth paragraph of Response 1 for clarity.

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Comment 4: Net energy output
Response 4: The EPA has revised the definition of net energy o utput to include 100 percent of useful thermal output to address the issues raised by the commenters. See Comment 7 of this section noting that the EPA is using a definition o f useful thermal output for the final rule consistent with other subparts in 40 CFR part 60. A dditionally the EPA has added a definition for
Description of the correction:
Delete the words, “Additionally the EPA has added a definition for”. Add sentence “See Comment 7 on page 107 of this file noting that the EPA is using a definition of useful thermal output for the final rule consistent with other sub parts in 40 CFR part 60.”