Comments ofthe Florida Municipal Electric Association (FMEA) 

EPA's Proposed ESPS Rule 

Atlanta GA 

July 29, 2014 

I'm Robert Kappelmann, here on behalf of the Florida Municipal 

Electric Association (FMEA). FMEA represents 34 community-owned 

electric utilities serving three million Floridians. Our utilities are almost 

entirely dependent on fossil fuel-based generation. It's critically 

important to our customers and our communities that we are able to 

continue to deliver reasonably priced and reliable electric power to their 

homes and businesses. The flexibility provided with the 4 building 

block approach is not sufficient to meet the mandatory emission limiting 

goals in a cost-effective manner that will assure electric reliability. 

We have grave concerns that EPA has actually created de-facto "one 

size fits all" guidelines for the states that go far beyond traditional 

source-specific standards. The statute dictates that Section Ill (d) 

emissions standards be designed to be cost-effective and achievable at 

each specific source or electric generating unit (EGU) and not based on 

statewide emission limiting goals. 

The majority ofFMEA's coal-fired electric generating units are the 

direct result ofFederallegislation. In response to the Arab oil embargo 

in the early 1970s, Congress passed the Electric Power Industrial Fuel 

Use Act of 1977, which disallowed the use of natural gas and oil for 

any new electric generating units. Many of our utilities were forced by 

the Act to cancel planned gas-fired units and replace them with coalfired units. Fortunately t(Jr our customers these units have provided low 

cost reliable energy ror Floridians. 

FMEA members built over 2400 MW of coal-fired generation in 

response to the limitations of the Fuel Use Act. These coal units meet 

EPA's best available control technology requirements, which allowed 

Florida to maintain comnliance with National Amhient Air Oualitv 
Standards. FMEA member utilities invested billions of dollars in new 

coal-fired generation because we had no other choice for new 

generation. It is important to understand that many of our utilities 

still carry considerable debt on these coal-fired units. Creating 

standards that force them out of service prematurely will leave our 

ratepayers with lOOs of$ millions of dollars in stranded costs. 

Each Florida electric utility generating system is unique, just as each 

state's electric generating system is unique. We believe that the ESPS 

should allow each state to not only have a greater role in deciding how 

much emission reduction is technically possible, but also to be able to 

exempt certain facilities on a case by case basis as provided by the 

statute. 

The proposed ESPS emission reduction goals depend on 4 compliance 

building blocks (BBs) that were developed considering national and 

regional assumptions and costs that may not translate to a state and its 

utilities. This is especially the case regarding EPA's assumed 6% 

efficiency improvements (BB #1) for coal units, since Florida's 

relatively new coal-fired generating fleet already employs most of the 

available cost effective heat rate improvements. 

Florida's ESPS depends primarily on load shifting from coal to gas-fired 

generation (BB#2) for compliance and most of the reductions are frontloaded. The shift to natural gas would result in the premature closing of 

many of our coal-fired units. Recently, FMEA utilities added $2 billion 

of"state of the art" air pollution control systems to meet the emission 

I imits of EPA's Interstate Transport and utility MATS rules. EPA's 

proposal does not take into account the additional $1 OOs of millions in 

stranded costs for those units that will fall on our ratepayers. It is ironic 

that the Federal government, which dictated that our utilities build 

coal-fired generating units is now proposing a regulation that will 

assure their premature shutdown. 
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EPA's compliance BB#3 assumes that about 1 0% of Florida's 

generation could come from renewable energy by 2030. However, the 

most cost effective source of renewable energy, wind power, is not a 

feasible or cost effective resource in Florida. 

EPA's compliance BB#4 assumes that demand side management can 

reduce electric demand by 1 0% by 2030. Florida continues to 

experience significant population growth. EPA's ESPS does not take 

this into account for the state or a locality. This rule subjects states with 

high economic or population growth to disparate treatment. 

Unfortunately, the ESPS tends to punish early C02 reductions by 

including them in the calculation of the state emission limiting goals. 

EPA should allow states to adjust emission reduction goals to reflect 

early action reductions made prior to the effective baseline of2012. 

We have numerous concerns about EPA's decision to expand the 

traditional BSER boundary beyond not only the electric generating units 

specifically cited in the Clean Air Act but also to generating sources and 

segments of the economy not specifically regulated under the Clean Air 

Act. Our preliminary analysis indicates that EPA has greatly 

overestimated the monetized benefits for the ESPS and underestimated 

the cost to the public. Also, EPA failed to incorporate fully the impact 

ofiPCC AR 5 findings of reduced equilibrium climate sensitivity and 

moderated predictions of severe weather events. These concerns will be 

addressed in our formal comments on the proposed ESPS. 

Thank you.