UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

WASHINGTON, D.C. 20460 

OFFICE OF 

AIR AND RADIATION 

MEMORANDUM 

Subject: 

From: 

To: 

Summary of Stakeholder Meetings 

Carissa Cyran 

Dockets EPA-HQ-OAR-20 13-0602. EPA-HQ-OAR-20 13-0603, and EPA-HQOAR-20 13-0495 

This memorandum summarizes meetings with stakeholders during the week ofNovember 24. 

2014. 

On November 24. Associate Assistant Administrator for Climate and Senior Counsel for Air and 

Radiation Joseph Goffman participated in conference call with Commissioner ofNorth Carolina 

Utilities Susan Rabon. Sign-in sheet attached. 

On November 25. Associate Assistant Administrator for Climate and Senior Counse l for Air and 

Radiation Joseph Goffinan met with representatives from Advanced Energy Economy, All iance 

for Industrial Efficiency. Alliance to Save Energy. American Council for an Energy-Efficient 

Economy. American Gas Association, American Public Gas Association, Center for 

Neighborhood Teclmology, Gas Technology Institute. Heat is Power Association, and United 

Steelworkers. Sign-in sheet and handouts are attached. 

On November 25, Associate Assistant Administrator for Climate and Senior Counsel for Air and 

Radiation Joseph Goffl11an met with representatives from Bloomberg Philanthropies. Sign-in 

sheet attached. 

Internet Address (URL) · http //www epa gov 

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Date: November 24, 20 14 

Meeting: Conference call with Commissioner of North Carolina Utilities Susan 

Rabon 

Rule(s) Discussed: CPP 

Written Material: No 

Name Title and Organization 

Susan Rabon Commissioner of North Carolina Utilities 

Joe Goffman EPA 

Harvey Reid EPA 
Date: November 25, 2014 

Meeting: CHP Stakeholders Meeting 

Rule(s) Discussed: J/1 ( j ) 

Written Material~o 

Name Organization Phone Number 

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October 27, 2014 

U.S. Environmental Protection Agency 

Attention Docket ID No. EPA-HQ-OAR-2013-0602 

Mail code 28221 T 

1200 Pennsylvania Ave. NW. 

Washington, DC 20460. 

Via email: a-and-r-docket@epa.gov 

Attention Docket ID No. EPA-HQ-OAR-2013-0602 

Re: Carbon Pollution Emission Guidelines for Existing Stationary 

Sources: Electric Utility Generating Units, EPA-HQ-OAR-2013-0602, 

79 Fed. Reg. 34830 (June 18, 2014) 

Dear Administrator McCarthy, 

Our organizations represent interests from the environmental, efficiency, 

research and development, and manufacturing communities. While we have 

different positions on the emission targets in the Proposed Carbon Pollution 

Guidelines for Existing Stationary Sources: Electric Utility Generating Units 

(Carbon Guidelines)- and some of our organizations will be submitting more 

detailed comments on a separate basis -we are united in our support for 

combined heat and power (CHP) and waste heat to power (WHP) as valuable 

tools to reduce greenhouse gas emissions. 

By producing both heat and power from a single fuel source (CHP) and by 

capturing otherwise wasted heat from industrial processes to generate 

additional electricity (WHP), CHP and WHP are significantly more efficient 

than central power generation. CHP and WHP are proven and demonstrated 

approaches to lower emissions, make U.S. manufacturers more competitive, 

and enhance electric reliability. The Administration recognizes these benefits 

and has established a national goal to encourage greater deployment of CHP 

and WHP. If the final rule continues to rely on a system-wide approach to 

emission reductions, our organizations offer the following three 

recommendations to strengthen and improve the proposal: 

I. EPA should clarify that CHP and WHP at unaffected units are eligible 

compliance strategies for EGUs; 

II. Several modest changes are needed to ensure the Rule recognizes 

CHP's and WHP's benefits for affected units; and 

Ill. EPA should provide guidance to states to enable them to most 

effectively incorporate CHP and WHP into their compliance plans to reduce 

emissions from unaffected units. 
I. EPA Should Clarify that CHP and WHP at Unaffected Units Are Eligible 

Compliance Strategies for EGUs 

EPA should clarify that CHP qualifies as an efficiency resource in the proposed rule. EPA 

should also clarify that WHP produces no incremental carbon emissions. It is not clear that 

references to energy efficiency in the proposed rule include CHP, nor that references to low and 

zero-carbon resources include WHP. CHP is mentioned once as an example of "demand-side 

energy efficiency," 1 and WHP is not mentioned at all. The Rule should explicitly acknowledge 

that the use of these technologies at unaffected units is an eligible compliance strategy for 

EGUs and elaborate their environmental, economic, and reliability benefits. Explicit recognition 

of CHP and WHP will send a signal to states that they can and should include these 

technologies in their compliance plans. Absent this, states are unlikely to look beyond the 

policies included in the building blocks. 

II. Several Modest Changes Are Needed to Ensure the Rule Recognizes CHP and 

WHP's Benefits 

1. EPA Should Provide a Full Thermal Credit for Affected CHP Units 

CHP's chief benefit is that it can produce heat and electricity from a single fuel source. 

The proposed rule would credit all of the electricity produced from a CHP system, but only 75 

percent of the useful thermal output. EPA invites comment on "a range of two-thirds to 100 

percent credit for useful thermal output in the final rule to better align incentives with avoided 

emissions."

2 To fully account for the benefits of CHP's energy efficiency, the rule should credit 

100 percent of an affected facility's useful CHP thermal output. 

There is precedent supporting a 100 percent thermal credit. For instance, EPA has recognized 

100 percent of thermal output in the NSPS for Stationary Combustion Turbines. 

3 A 100 percent 

credit has likewise been applied in several states. 4 Notably, the Proposed Stationary 

Combustion Turbine Rule favorably cites Texas' permit-by-rule regulation, which gives facilities 

1 00-percent credit for steam generation thermal output. 5 

We understand that it may be appropriate to discount thermal output where there are concerns 

that the thermal energy is not being accurately measured or properly used. Such concerns do 

not exist here. The proposed rule includes strict monitoring requirements for CHP systems. 

6 It 

further limits eligibility to CHP systems where "20.0 percent of the total gross useful energy 

1 U.S. EPA, June 2, 2014, 79 Fed. Reg. 34830, 34888, "Proposed Rule: Carbon Pollution Emission 

Guidelines for Existing Stationary Sources: Electric Utility Generating Units" ("large energy users might 

independently see additional energy efficiency opportunities or opportunities for self-generation using 

options such as combined heat and power, solar, or power purchase agreements ... "). 

2 79 Fed. Reg. at 34914. 3 See New Source Performance Standard (NSPS) for Stationary Combustion Turbines (40 CFR Part 60, 

Subpart KKKK) (crediting 100% of thermal output); New Source Performance Standard (NSPS) for 

Electric Utility Steam Generating Units (40 CFR Part 60, Subpart Da) (crediting 75 percent of thermal 

output from CHP systems). 4 See U.S. EPA. CHP Partnership, Feb. 2013, Accounting for CHP in Output-Based Regulations, at 7-9 

(citing California's multi-pollutant regulations and Texas permit by rule and standard permitting program) 

http ://www epa gov chp documents accountinq pdf) . 

70 Fed. Reg. 8314, at 8318 (Feb. 18, 2005). 6 See, e.g., 79 Fed. Reg. at 34955 (§ 60.5805); 79 Fed. Reg. at 34913. 
output consists of useful thermal output."

7 These requirements should alleviate any concerns 

about so-called "sham" CHP projects. 

This matter has important implications for state compliance plans. While only a handful of 

existing CHP and WHP systems are large enough to be directly affected by the Carbon 

Guidelines, the proposed rule offers states the flexibility to credit emission reductions from 

smaller units in their state plans. States will look to EPA's treatment of thermal output from 

affected units as a guide for the appropriate treatment of these systems in their compliance 

plans and underlying policies (e.g., portfolio standards). Absent proper consideration oftheir 

thermal output, states will underestimate the emissions benefits of CHP units. 

Notably, the proposed rule seeks comment on the appropriate thermal credit "to better align 

incentives with avoided emissions."

8 As noted above, the Administration has supported 

numerous policies to encourage greater CHP and WHP deployment. Providing a full- 100%-

thermal credit would place the Carbon Guidelines squarely in line with these broader 

deployment goals. 

2. EPA Should Provide a More Generous Line-Loss Credit 

By producing electricity on site, CHP and WHP reduce the burden on transmission and 

distribution lines used to transport power from a central generator. EPA appears to recognize 

this benefit and includes a five-percent line-loss credit for affected CHP systems. For CHP 

facilities, net energy output is defined as "the net electric or mechanical output from the affected 

facility divided by 0.95, plus 75 percent of the useful thermal output."

9 There is no explanation 

for why output is "divided by 0.95"; however, the Standards of Performance for Greenhouse Gas 

Emissions from New Stationary Sources: Electric Utility Generating Units (111 (b)) explicitly 

provided a 5 percent "line loss credit" for CHP systems "to account for a five percent avoided 

energy loss in the transmission of electricity." 10 

We agree that a discount for avoided electricity losses through transmission and distribution is 

warranted; however, we believe that the proposed credit is inadequate. As a practical matter, 

average national transmission and distribution losses are 6 percent. 11 Thus, if EPA includes 

CHP and WHP in the final rule, we urge it to increase the discount factor from 5 percent to at 

least 6 percent to reflect average avoided line losses from these systems. 

We also urge EPA to eliminate any ambiguity surrounding the line-loss credit. As written, this 

credit only applies to a subset of existing CHP systems that are directly affected by the Rule. 

States will consider EPA's approach, however, when determining how to account for output 

from CHP and WHP systems in their compliance plans. For this reason, EPA should elaborate 

on CHP and WHP's transmission and distribution benefits and encourage states to apply a 

similar line-loss credit when accounting for CHP and WHP installations at unaffected units that 

7 79 Fed. Reg. at 34956-57. 8 75 Fed. Reg. at 34914. 9 79 Fed. Reg. at 34956-57. · 10 U.S. EPA, Jan. 8, 2014, 79 Fed. Reg. 1430, 1448, "Proposed Rule: Standards of Performance for 

Greenhouse Gas Emissions from New Stationary Sources: Electric Utility Generating Units." 11 U.S. Energy Information Administration, Frequently Asked Questions: How much electricity is lost in 

transmission and distribution in the United States? (reporting "about 6%") 

(http://www.eia.gov/tools/fags/fag.cfm?id=105&t=3) (visited May 9, 2014). 
the states will rely on to meet the Carbon Guidelines. These benefits are consistent with EPA's 

stated interest in "ensur[ing] electric system reliability." 12 

3. EPA Should Provide Assurances to CHP and WHP Hosts. 

If the final rule continues to apply a system-wide approach, states will seek to achieve their 

emission targets through off-site energy-efficiency investments. Under such an approach, 

hospitals, universities, manufacturing facilities, and others could help reduce emissions 

throughout the air shed by installing CHP and WHP systems. While these investments will 

reduce regional emissions, because these facilities are now producing electricity on site, their 

own emissions will modestly increase. To encourage these investments, EPA should find a way 

to assure hosts that actions taken by facilities that are not directly covered by the rule to help 

states comply with the Carbon Guidelines will not adversely affect them under any potential 

future carbon pollution NSPS for another sector. 

Ill. EPA Should Provide Guidance to States to Enable them to Most Effectively 

Incorporate CHP and WHP into their Compliance Plans. 

The proposed rule sets emissions targets, but allows states to determine the best way to 

achieve them. While EPA has said that states can go beyond the building blocks to achieve 

their targets, it does not explain how CHP and WHP at unaffected units might fit into a state 

plan. To the contrary, some of EPA's public materials on the Clean Power Plan do not even list 

CHP or WHP as an example of a potential state compliance measure. 

13 EPA should ensure that 

states are aware that CHP and WHP are valuable compliance tools and provide appropriate 

guidance for states to include policies that support their deployment in their compliance plans. 

EPA acknowledges that it "intends to develop guidance for evaluation, monitoring, and 

verification (EM&V) of renewable energy and demand-side energy efficiency programs and 

measures incorporated in state plans." 14 It is not clear whether this commitment encompasses 

programs that advance CHP and WHP. In particular, states will need model rules detailing the 

best way to include CHP and WHP in renewable portfolio and energy efficiency standards and 

guidance on how to appropriately credit CHP output. These written materials can be 

supplemented with a CHP and WHP conference for states and other stakeholders involved in 

developing compliance plans. 

12 79 Fed. Reg. at 34833. 13 See, e.g., U.S. EPA, "EPA Fact Sheet: Clean Power Plan, National Framework for States" 

(http ://www2. epa. qov/sites/p rod uction/fi les/2 0 14-05/docume nts/2 0 140602fs-setting-goa 1 s. pdO (vi sited 

Sept. 10, 2014). 14 79 Fed. Reg. at 34909. 
CONCLUSION 

We appreciate the Administration's growing recognition of CHP and WHP. These technologies 

offer a proven, cost-effective way to reduce emissions while enhancing manufacturing 

competitiveness and electric reliability. We believe there are significant opportunities to increase 

CHP and WHP deployment in the nation's hospitals, universities and factories. The modest 

changes detailed in these comments will support additional investments in CHP and WHP and 

we urge EPA to consider these recommendations as the Rule moves forward. 

Sincerely, 

Advanced Energy Economy (AEE) 

Alliance for Industrial Efficiency 

Alliance to Save Energy (ASE) 

American Council for an Energy-Efficient Economy (ACEEE) 

American Gas Association (AGA) 

American Public Gas Association (APGA) 

Center for Neighborhood Technology (CNT) 

Gas Technology Institute (GTI) 

Heat is Power Association (HiP) 

United Steelworkers (USW) 
ACEEE:: 

Amer,can Councrl for an Energy·Eiflcrent [conomy 529 14th Street. N. W .. Suite 600 0 Washrngton. D.C. 20045 o 202.507.4000 o 202.429.2246 o www.aceee.org 

Potential energy savings from CHP technologies (GWh) 

Annual energy Annual energy 

State savings in State savings in 

2030 2030 

Alabama 153 Montana 25 

Alaska 532 Nebraska 231 

Arizona 271 Nevada 84 

Arkansas 262 New Hampshire 804 

California 13,533 New Jersey 4,278 

Colorado 413 New Mexico 118 

Connecticut 2,438 New York 18,423 

Delaware 0 North Carolina 163 

District of Columbia 31 North Dakota 65 

Florida 3,221 Ohio 949 

Georgia 946 Oklahoma 83 

Hawaii 801 Oregon 0 

Idaho 0 Pennsylvania 504 

Illinois 1,351 Rhode Island 284 

Indiana 432 South Carolina 624 

Iowa 92 South Dakota 31 

Kansas 324 Tennessee 632 

Kentucky 1,065 Texas 3,959 

Louisiana 1,624 Utah 6 

Maine 34 Vermont 368 

Maryland 337 Virginia 766 

Massachusetts 3,690 Washington 0 

Michigan 471 West Virginia 299 

Minnesota 797 Wisconsin 1,786 

Mississippi 802 Wyoming 27 

Missouri 179 National 68,309 

*68,309 GWh is equivalent to approximately 20 GW of capacity by 2030. 

So/Jire:"Change ts In the Air: How States Can Harness Energy Efficiency to Strengthen the Economy and Reduce Pollution," ACEEE, 2014. http: //www.aceee.orgJ research-report/ e 140 1 
/.iCEEE:: 

Amer1cao Council for an fnergy-Etflc enl fconomy 529 14th Street N. W .. Su1te 600 0 Washmgton. O.C. 20045 o 202.507.400) 0 202.429.224B 0 www.aceee.org 

Potential energy savings from CHP technologies (GWh) 

Annual energy Annual energy 

State savings in State savings in 

2030 2030 

Alabama 153 Montana 25 

Alaska 532 Nebraska 231 

Arizona 271 Nevada 84 

Arkansas 262 New Hampshire 804 

California 13,533 New Jersey 4,278 

Colorado 413 New Mexico 118 

Connecticut 2,438 New York 18,423 

Delaware 0 North Carolina 163 

District of Columbia 31 North Dakota 65 

Florida 3,221 Ohio 949 

Georgia 946 Oklahoma 83 

Hawaii 801 Oregon 0 

Idaho 0 Pennsylvania 504 

Illinois 1,351 Rhode Island 284 

Indiana 432 South Carolina 624 

Iowa 92 South Dakota 31 

Kansas 324 Tennessee 632 

Kentucky 1,065 Texas 3,959 

Louisiana 1,624 Utah 6 

Maine 34 Vermont 368 

Maryland 337 Virginia 766 

Massachusetts 3,690 Washington 0 

Michigan 471 West Virginia 299 

Minnesota 797 Wisconsin 1,786 

Mississippi 802 Wyoming 27 

Missouri 179 National 68,309 

* 68,309 GWh is equivalent to approximately 20 GW of capacity by 2030. 

Soutre:"Change Is In the Air: How States Can Harness Energy Efficiency to Strengthen the Economy and Reduce Pollution," ACEEE, 2014. http://www.aceee.org/ research-report/ e 1401 
Date: November 25, 2014 

Meeting: Clean Power Plan w/Bioomberg 

Rule(s) Discussed: (_-\)~ 

Written Materials? ~ 

Name Organization Phone Number 

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