**MEMORANDUM**

DATE: September 1 6 , 2014 TO: Carbon Power Plan for Existing Power Plants; Docket Id: OAR

– 2013
- 0602 FROM: Gavin Lau , EPA Region 2/CASD

- APB SUBJECT: July

16 , 2014 Meeting Regarding Proposed Carbon Power Plan for Existing Power Plants
**SUMMARY** A meeting was held between EPA and the attendees listed below on July 16 , 2014 to discuss the proposed Carbon Power Plan for Existing Power Plants
. The Carbon Power Plan for Existing Power Plants was proposed on June 2 , 2014
. **ATTENDEES New Jersey Department of Environmental Protection**  **:** Mr. William O’Sullivan , Director, Division of Air Quality Mr. Robert Marshall , Assistant Commissioner, Sustainability and Green Energy Mr. Kenneth Frank Ms. Sarah Gentile Mr. John Gorgol Mr. Michael Hogan Mr. Steven Jenks **New Jersey Board of Public Utilities :**  Ms. Anne Marie McShea Mr. Michael WinkaQuestions Submitted for July 16, 2014 call **Attachment 1** NJ question/discussion topics regarding Clean Power Plan Proposal. Set #1 From Email WOS

- NJDEP to John F.

– EPA 6/5 7:53 PM Questions  How is performance determined with the numerical emission goals set for 2020 and 2030?  The logical compliance determination method is to sum up all the CO2 emitted from all the power plants in a state in a y ear and then divide by the sum of all the MWhrs of electricit y produced in that state in the same ye ar. I s there a different formula in the proposal?  Are there an y adjustments to this basic equation to determine performance, and if so, whe re in EPA proposal documents can this be found?  One logical adjustment is to give a state credit for renewables funded in another state. Does the proposal address that circumstance?  For a nuclear power plant that is scheduled to shut down before 2020, because of adverse environmental impacts, does EPA assume continued operation in 2020 and 2030, in setting a state’s goals? If so, why ?  For states with few coal EGUs and much combined cy cle gas EGUs does EPA’s goal setting procedure assume there will be no coal use in 2020 or 2030, if the coal provided electricit y can be provided by the combined cycle gas units? Might this result in some states having no coal and all the coal use further concentrating in the states with the most coal use now?  For coal units, did EPA determine which units already have been rebuilt and/or modified to improve efficiency ? Or was the 6% efficiency improvement assumption made for all coal units, regardless of age and current efficiency?  Why do states that have alread y reduc ed GHG emissions substantially have greater % reduction goals than states that have made little progress?  If State 1 installed 20% renewables before 2012, does this generate credits to meet the performance goal? I f state 2, with no renewables today , installs 20% renewables after 2012, does this generate credit towards the goal? If the amount of credits are d ifferent, why ?  Is NJ limited to the facilities that EPA used to derive NJ’s proposed goal in calculating whether goals are met? Set #2 From Email WOS

- NJDEP to John F.

– EPA 6/12 2:05 PM John

- I missed some of the EPA calls to answer questions, so don’ t know which of these have been answered alread y. Any specific feedback on these? [This question references set #1 questions above, actual question next paragraph

- GL ] I did get an opportunity

to ask a question on the ECOS call last week, which Joe G ans wered. My question was whether a state can include other EGU’s in the calculation of whether the goalis met, or whether we were limited to the 21 facilities in NJ that EPA used to derive the NJ

proposed goal. Joe explained that other EGUs can and sho uld be included in the compliance determination. That is what I expected, but I’m still unclear as to whether EPA expects to limit what units a state can include in the compliance calculation. I believe that the proposed rule text enables states to have the flexibility to include all their EGUs, for both CO2 emissions and MWhrs, in determining conformity with the goal, but the preamble language is unclear in this regard. I’d like clarification that states can include all it’s EGUs, and are not limited t o including only certain EGUs in the numerator and denominator, when calculating lb CO2/MWhr. (My thought is EPA should encourage this, for various reasons, and need to know whether EPA’s intent is different, so we can determine if this is an area we shou ld focus on in our comments.) Set #3 From Email WOS

- NJDEP to John F.

– EPA 6/18 4:21 PM AA Janet said EPA staff could sit down with each state and review in detail how their goals were derived. We would like to do that for NJ, perhaps in mid

- Ju ly
. We u nderstand in general the intent of the building blocks and goal calculation. We want to review the technical detail for each EGU included. Also, we want to discuss the consequences of at least the following EPA assumptions in calculating NJ goal. We wi ll refine, correct and supplement this list as we learn more. Please let me know when would be good for meeting with EPA experts. 1. Assumption

- Nucs can be uprated after 2012 Start of discussion

- NJ nucs (except Oy ster Creek) were uprated abou t 2008. This is a baseline issue. EPA’s stated flexibility to use 2005 as baseline where justified might address. 2. Assumption

- Oy ster Creek is an at risk nuc, which can have its shutdown date extended. Start of Discussion

- Oy ster Creek in NJ is the oldest nuclear plant in the nation. There is a consent decree to shut down in 2019, because of thermal impacts on Barnegat Ba y. Consequently , the NJ goal should be adjusted to delete a presumed lifecy cle extension for this nuc. 3. Assump tion

- All coal and oil use in NJ can be replaced b y increased use of natural gas. Start of Discussion

- Does the NJ goal actuall y assume this? Is there a minimum percentage of coal capacit y that the EPA building block does not convert to CC gas? Doe s conversion of coal and oil to CC gas consider annual or daily capacity needs? Annual capacity calculations miss daily

needs. For example, oil and coal units are needed during the cold winter day s, to keep the lights on when gas is being used to heat ho mes. Also, 4 coal plants have billions in modern air pollution control and alread y meet MAT and NOx RACT. These are the ty pe of coal units which should continue to operate for their useful life, not units without good NOx control. Coal use at 2 smal l NJ plants did cease in 2010, because of NJ’s criteria pollutant requirements. A change in baseline date would provide credit for these. 4. Assumption

– All coal units can achieve a 6% increase in heat rate. Start of Discussion

- 4 NJ coal fired power plants (6 units) are relativel y new or rebuilt. For these 6 units have they

alread y undergone energy efficiency improvement? Is there an y further ee improvement reasonably feasible? Can the NJ goal be adjusted to reflect the actual ee feasi ble, rather than the assumed 6% improvement in heat rate? 5. Assumption

- A significant amount of existing gas fired “affected units” in NJ can be replaced with nuclear, energy

efficiency

or RE? Start of Discussion

- Given the difficulties of 1, 2 , 3, and 4; the NJ goal if not adjusted might this result in the shutdown of some existing combined cycle units in NJ. Can the goal not includecombined cy cle units, especiall y those that meet 111(b). Our NOx rules will result in the

shutdown of about 3 700 MW of gas and oil peakers in 2015, which are not “affected units”. How can we get credit for the CO2 reductions? (not large because these are peakers) 6. Comparison

– NJ with Kentuck y. Does Kentucky get credit for new CC gas and NJ does not? Are the surviving Kentuck y coal plants less efficient than the at risk, and probabl y better controlled for criteria pollutants, NJ coal plants? Set #4 From Email B. Marshall

- NJ to G. Lau
- EPA 7/14 5:46 PM Please explain the mutual benefits or disadvanta ges that might be realized if a multi

- state approach were taken b y NJ and select states within the PJM region. For example, what specific advantages and disadvantages might be realized for NJ, Pennsylvania, Delaware, I llinois, Indiana, Kentuck y, Mar yland, Michigan, North Carolina, Ohio, Tennessee, Virginia, West Virginia and the District of Columbia to have a common plan for the entire PJM electric grid?