# Potential Impacts of

Future Environmental

Regulations

Extracted from the 2011 Long-Term

Reliability Assessment

November 2011NOTICE: This document includes the Assessment Area section s originally included in the " 2011 Long

‐ Term

Reliability Assessmen t ” ( http://www.nerc.com/ files/2011LTRA_Final.pdf )

, and i s not i ntended to be a standalone

repor t

.Potential Impacts of Future Environmental Regulations

2011 Long

‐ Term Reliability Assessment Page | 116

November 2011 

## Potential Impacts of Future Environmental Regulations

Summary

In the United States (U.S.), the Environmental Protection Agency (EPA) is in the process of promulgating

four regulations: the proposed Coal Combustion Residuals rule (CCR rule), the proposed Mercury and

Air Toxics Standards for Utilities, (Utility Air Toxics rule) the proposed Cooling Water Intake Structures §

316(b) rule (316(b) rule)

, and the final Cross

‐ State Air Pollution Rule (CSAPR). 119 In October 2010, NERC

released an assessment of the potential resource adequacy effects of precursors to these proposed

rules using 2009 bulk power system resource plan projections and demand forecasts. This 2010

assessment, entitled: Special Reliability Scenario Assessment: Resource Adequacy Impacts of Potential

U.S. Environmental Regulations (2010 NERC EPA Assessment), provided an in dependent and integrated

preliminary perspective on the potential for the accelerated retirement of fossil

‐ fired units under

assumptions based on earlier versions of the rules or expectations about what the rules would contain.

While it is not possible to determine the exact impacts of these regulations until each regulation is

finalized, many studies have been perf ormed which attempt to predict the effects of these regulations

as well as other economic factors driving retirements of electric generating units. This assessment,

which is included as a companion study in this 2011 Long

‐ Term Reliability Assessment

, updates the

resource and demand forecasts used in th e 2010 NERC EPA Assessment with the 2011 forecasts.

Additionally, NERC revised the assumptions applied in its 2010 NERC EPA Assessment, taking into

account new information that was not available at the time that report was prepared. Specifically, in

this update, NERC used updated assumptions determined from proposed rules, as well as other

viewpoints on how the rule will ultima tely be carried out ( i.e., how states may implement regulations),

to determine potential resource adequacy impacts. The expected retirements of electric generators are

driven by many economic factors, not simply the cost of pollution control equipment.

While these updated results are provided for informational purposes to inform stakeholders and policy

makers, they do not represent NE RC’s judgment on which units can, should, or will be retired. The two

cases assessed are based on scenarios that represent a range of potential outcomes. Based on the

results of the Moderate Case, 36 GW of incre mental capacity in coal, oil, and gas

‐ fired generation is

identified for either retirement or for capacity reductions to support additional station loads (deratings)

by 2018 (Figure 54). In the Strict Case, capacity reductions amount to approximately 59 GW. Of most

important, however, are the retirements that may occur, as well as the retrofits that need to be

imple mented, by 2015, which are primarily driven by compliance deadlines in the proposed Utility Air

Toxics rule.

119 EPA promulgated the Final CSAPR on August 8, 2011 establishing a Federal Implementation Plan requiring 27 states to

reduce power plant emissions of sulfur dioxide and nitrogen oxides that cross state lines and contribute to ozone and

particulate pollution in other states. However, on October 14, 2011 EPA proposed technical revisi ons to the August 8th final

rule, which are not yet finalized.Potential Impacts of Future Environmental Regulations

Page | 117 2011 Long

‐ Term Reliability Assessment

November 2011 Figure 54: Incremental Capacity Reductions Due to the Combined EPA Regulation Scenario

This update concludes, however, that of these four rules, the 316(b) rule will have the greatest impact

on the amount of capacity that may be economically vulnerable to retirement (approximately 25 to 39

GW) and, consequently, the greatest imp act on Planning Reserve Margins, (Figure 55).

Figure 55: Incremental Capacity Reductions Due to Individual Rules

Figure 55, shows the respective rules’ individual effects on retirements and derates. As the chart

indicates, retirements or derates are not expected in 2013 under the Moderate Case. For the Strict

Case, three of the four ru les are not expected to cause any retirements or derates, and CSAPR is

estimated to impact about 3.5 GW. In 2015, in the Moderate Case, CCR has no impact and the 316(b)

rule impacts less than 1 GW due to their assumed compliance dates occurring beyond 2015. For 2015,

the Utili ty Air Toxics rule alone would impact about 9 GW, in the Moderate Case, and could increase to

about 12 GW, in the Strict Case.

When compared to the 2010 assessment, the results of this update show a net increase in the amount

of potential decreases that can be expected by 2 018 (Figure 56). While the potential impacts of Moderate

Case Strict Case Moderate

Case Strict Case Moderate

Case Strict Case

2013 2015 2018

Derate (MW)

‐ 1,217 2,770 4,996 3,174 5,584

Retired (MW)

‐ 8,574 7,491 17,844 32,589 53,574 ‐ 10,000 20,000 30,000 40,000 50,000 60,000 70,000MW

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000

MSMSMSMSMSMSMSMSMSMSMSMS

2013 2015 2018 2013 2015 2018 2013 2015 2018 2013 2015 2018

CCR CSAPR Utility Air Toxics 316bMW Retired (MW) Derate (MW)

M=Moderate Case S= Strict CasePotential Impacts of Future Environmental Regulations

2011 Long

‐ Term Reliability Assessment Page | 118

November 2011 compliance with EPA regulations presented in this update are less than those in the 2010 NERC EPA

Assessment, a total of approximately 38 GW of generation capacity (23 GW of coal and 15 GW of gas/oil

units) have already committed and/or announced plans to retire. While these generating units most

likely announ ced plans to retire for a variety of reasons, a majority of these units were identified in the

2010 NERC EPA Assessment as economically vulnerable.

These retirement announcements and commitments have decreased the amount of assessed capacity in

the study baseline and narrowed the capacity for which compliance plans must be proje cted. In the

2010 NERC EPA Assessment, the amount of retirement announcements was 13 GW; 25 GW less than in

this update. These plant retirements have already been considered in the Regional assessments and the

reductions included in the 2011 LTRA Reference Case.

Figure 56: Comparison of Projected 2018 Capacity Reductions between 2010 and 2011 Study Results

For this update, NERC studied the effects on Planning Reserve Margins from both unit retirement

(assuming retired capacity is not replaced) and retrofits, which cause capacity reductions due to

increased station loads to support emission controls or new intake structures. If no action is taken to

replace existing resources, signs of not meeting resource adequacy requirem ents appear to be most

prevalent in the ERCOT Region. In ERCOT, the Anticipated Planning Reserve Margin falls below the NERC

Reference Margin in 2013 (Figure 57); 2015 when considering Adjusted Potential Resources.

MISO and NPCC

‐ New England show decreased Planning Reserve Margins below the NERC Refere nce

Margin Level by 2015—FRCC, PJM, SERC

‐ E, SERC

‐ N, and SERC

‐ W by 2018. These areas may need more

resources than are currently planned in this assessment.

For some Assessment Areas, Planning Reserve Margins are below the NERC Reference Margin Level in

the Reference Case as well. In these Assessment Areas, concerns even without appl ying scenario

assumptions may exist. For example, in the 2011 Reference Case, the ERCOT and NPCC

‐ New England

Anticipated Planning Reserve Margins fall below the NERC Reference Margin Level in 2014 and 2015,

respectively.

The impact on Planning Reserve Margins will be dependent on whether sufficient replacement ca pacity

(or other system reinforcements) can be added in a timely manner to replace the generation capacity

that is retired or lost. Unless additional resources are developed in certain Assessment Areas, beyond

what is planned in the 2011 Reference Case, or additional time is provided to units needed to maintain 0 20 40 60 80 100 120

2010

Assessment 2011

Assessment 2010

Assessment 2011

Assessment

Moderate StrictGW Derated

Retired

Retired GW included in

Reference CasePotential Impacts of Future Environmental Regulations

Page | 119 2011 Long

‐ Term Reliability Assessment

November 2011 Planning Reserve Margins, bulk power system reliability could be affected. Implementation must allow

sufficient time to construct new, or retrofit existing capacity, and allow the system to be planned and

operated in accordance with NERC Reliability Standards and Regional Criteria at all times. Therefore, the

timing of the rules must also consider the ti me needed for the industry to make incremental

transmission upgrades and perform any other system reconfigurations that may be needed to maintain

reliability. Additional time considerations should be made for the compliance period—the time period

following the finalization of any particular rule.

Figure 57: Assessment Areas with Potential Resource Adequacy Issues

A significant retrofit effort is expected over the next ten years in order to comply with proposed EPA

regulations. Environmental controls are expected to be put in place to meet air regulations by the end

of 2015. In total, between 576 and 677 coal

‐ fired unit retrofits (Moderate and Strict Case, respectively )

will be needed by the end of 2015, totaling 234 to 258 GW of retrofitted coal capacity. Constricted

compliance deadlines may challenge the electric industry’s planning horizons, existing planning

processes and typical construction schedules. Successful implementation of environmental regulations

will be highly dependent on the ability of units needed for re liability to obtain the necessary time

needed to comply with certain requirements. Given the timelines for compliance, many of the affected

units may need to take maintenance outages concurrently. The need to take multiple units out

‐ of

‐

service on extended scheduled outages can exacerbate resource adequacy concerns and reduce needed

flexibili ty, even during off

‐ peak periods. Outage coordination must be a priority to avoid resource

adequacy concerns during maintenance periods.

As discussed in the Emerging and Standing Reliability Issues section of this report, NERC identifies a

number of tools the industry has available to mitigate potential reliability impacts from the

imple mentation of EPA regulations. NERC’s expectation is that industry and regulators will use these

tools to ensure that bulk power system reliability is maintained as EPA regulations are finalized and

implemented. MISO

‐ US

Anticipated: 2015

Strict Case Only

ISO

‐ NE

Anticipated: 2015

Both Cases

PJM

Anticipated: 2018

Strict Case Only

SERC

‐ W

Anticipated: 2018

Both Cases SERC

‐ E

Anticipated: 2018

Strict Case Only SERC

‐ N

Anticipated: 2018

Both Cases 

### Year When Planning Reserve Margins (RM) Fall Below NERC Reference Margin Level

FRCC

Anticipated: 2018

Strict Case Only ERCOT

Anticipated: 2013

Strict CasePotential Impacts of Future Environmental Regulations

2011 Long

‐ Term Reliability Assessment Page | 120

November 2011 Recommendations

The following recommendations are pertinent to Federal and state regulators, the electric industry, as

well as NERC, and supplement the 2010 NERC EPA Assessment:

Regulators:

 The Electric Reliability Organization’s Reliability Standards and Regional Criteria must be met at

all times to ensure reliable operation and planning of the bulk power system. Based on the

results of this study, more time is neede d in certain areas to ensure resource adequacy and local

reliability requirements can be addressed during the transition and compliance period. EPA,

FERC, DOE, and state utility regulators, working together and separately, should employ the

array of tools at their disp osal and their regulatory authority to preserve bulk power system

reliability, including the deferral of compliance targets and granting extensions where there is a

demonstrated reliability need. Coordination among Federal agencies is necessary to ensure the

industry is not forced to violate one regulation to meet another.

Industry:

 Industry participants must meet NERC’s Reliability Standards to ensure reliability and as they

address compliance requirements of the EPA regulations. They should employ available tools

and processes to ensure that bulk power system reliability is maintained through any resource

transition. Toward that end, regional wholesale competitive market operators should ensure

capacity mar kets are functioning effectively to support the development of new replacement

capacity where needed. Similarly, stakeholders in areas without organized markets should

work to ensure that investments are made to retrofit or replace capacity that will be affected by

forthcoming EPA regulations. Additionally, affected unit owners that may be di sconnected from

wide

‐ area planning functions ( e.g., generator owners operating in an ISO/RTO), should provide

Planning Authorities timely and accurate information about the compliance plans for their units

in order to adequately measure.

 Perhaps one of the most significant risk factors will be taking the existing units out for

maintenance to install the needed environmental control equipment. Outages for retrofits, new

generation, and required transmission must be coordinated to ensure continued bulk power

system reliability not only during peak periods, but during off

‐ pe ak shoulder months when more

scheduled outages are expected to occur.

NERC:

 NERC should continue to assess the implications of the EPA regulations as greater certainty

emerges around industry obligations, technologies, timelines, and targets.

Further, NERC should lead industry’s effort and response to measure resource adequacy

implications along with impacts to operating reliability (e.g., deliverability, stability, localized

issues, outage scheduling, operating procedures, and industry coordinatio n) resulting from

proposed and pending EPA regulations. NERC should leverage the expertise of the Planning

Authorities to assess the local system conditions that could degrade reliability, review plans for

meeting environmental regulations as well as NERC Reliability Standards, and submit

recommendations to FERC on behalf of the in dustry.Potential Impacts of Future Environmental Regulations

Page | 121 2011 Long

‐ Term Reliability Assessment

November 2011 Introduction

Future environmental requirements will have direct impacts on power supply decisions and grid

reliability. The EPA is currently developing rules under its existing regulatory authority that could

potentially require existing power suppliers to invest in retrofitting environmental controls at their

existing units, or accelerate their retirement. NERC issued the Special Reliabili ty Scenario Assessment:

Resource Adequacy Impacts of Potential U.S. Environmental Regulations (2010 NERC EPA Assessment) in

October 2010 to address these concerns. 120 Since then, the EPA has issued proposed rules for Utility Air

Toxics and 316(b) (impingement and entrainment of aquatic organisms), and finalized

‐ CSAPR. 121 The

2010 NERC EPA Assessment recommended continued monitoring of pending EPA regulations, as greater

certainty emerged regarding industry obligations, technologies, timelines, and targets.

Based on events that have occurred since the initial report was released, NERC has revised the 2010

modeling to reflect updated assumptions, with additional consideration for new informati on received

from the industry. Building on the 2010 NERC EPA Assessment, this update compares resource plans

provided by Regional Entities and Planning Authorities throughout the U.S. The differential will be

granular, with a special focus on the Planning Reserve Margin impacts for each Assessment Area within

the U.S. Differences will be measured to identify po tential uncertainties in resource plans, and to better

understand what decisions are yet to be made by NERC’s stakeholders to address EPA’s rulemaking.

Since publication of the initial report, the following material changes have occurred regarding the

environmental regulation landscape in the U.S.:

 EPA proposed th e Utility Air Toxics rule that includes limits on emissions of hazardous air toxics:

particulate matter (PM) as a surrogate for non

‐ metals, acid gases in the form of hydrogen

chloride (HCl), and mercury. The Clean Air Act requires compliance with air toxics regulations

within 3 years of a final rule, with exte nsions permitted under certain circumstances. Although

extensions may be possible under the Clean Air Act, there is no guarantee they will be granted.

It will be uneconomic for some units to retrofit to comply with the Utility Air Toxics rule and thus

some units are expected to retire. Additionally, uni ts being retrofitted with necessary controls

may be unavailable for some time if retrofits cannot be completed prior to the compliance

deadline.

 EPA proposed a Section 316(b) rule that includes implementation options that differ from those

assumed in the 2010 NERC EPA Assessment. In the 2010 NERC EPA Assessment, cooling towers

were assumed to be required in order to comply with th e rule. The currently proposed rule,

which includes separate impingement and entrainment requirements, may permit the

applicability of modified technologies such as traveling screens for compliance with the

120 http://www.nerc.com/files/EPA_Scenario_Final_v2.pdf

121 EPA promulgated the Final Cross

‐ State Air Pollution Rule on August 8, 2011 establishing a Federal Implementation Plan requiring 27 states

to

reduce power plant emissions of sulfur dioxide and nitrogen oxides that cross state lines and contribute to ozone and particulate pollution in

other states. However, on October 14, 20 11 EPA proposed technical revisions to the August 8th final rule, which are not yet finalized.Potential Impacts of Future Environmental Regulations

2011 Long

‐ Term Reliability Assessment Page | 122

November 2011 impingement standard. However, the proposed rule would also require site specific

entrainment studies, which would ultimately leave the final determination of compliance

alternatives to each state. It is unknown how many facilities will be able to comply with the

proposed rule without cooling towers.

 As a total replacement to the existi ng Clean Air Interstate Rule (CAIR), the proposed Clean Air

Transport Rule (CATR) has been finalized with a variety of different requirements, titled the

Cross

‐ State Air Pollution Rule (CSAPR), including the addition of the state of Texas to the

program. For this analysis, the rule does not allow the use of ex isting banked allowances for

compliance and requires compliance with only limited trading without penalties starting in

2012. 122

 Forecast demand and resource plans for the 2011

‐ 2021 assessment timeframe have significantly

changed, directly affecting the Planning Reserve Margin projections.

 This update did not measure timelines for retrofitting to install needed environmental

equipment, as this scheduling optimization is part of operational reliability. However, a large

area view will be neede d (potentially throughout the interconnections) for this schedule outage

timing, to ensure sufficient operational reliability can be maintained while supporting bulk

power system reliability.

These considerations and the potential reliability implications they pose to the industry have triggered a

need for NERC to update the results of the 2010 NERC EPA Assessment, measuring the incrementa l

implications resulting from these four EPA regulations (the proposed CCR Rule, proposed Utility Air

Toxics Rule, proposed 316(b) Rule, and the final CSAPR). Additional rules that are not addressed but

that may also impact assumptions would include the existing and expected Greenhouse Gas (GH G)

requirements for new, modified, and existing sources, the Clean Air Visibility Rule (CAVR), and more

stringent air quality standards.

Overall impacts on Planning Reserve Margins across the U.S. are assessed and areas below the NERC

Reference Margin Level are identified. While the NERC analysis primarily focuses on the cumulative

impacts of the four regulations, the impacts of each individ ual rule is also provided. These four

regulations, plus other pending CO 2 regulations in the United States, are expected to go into effect on a

staggered basis over the next ten years.

122 This analysis does not consider the recent changes to CSAPR proposed by EPA, which would increase several state budgets

and provide increased compliance flexibility. Proposed revisions to the rule are now being considered by the EPA:

http://www.epa.gov/crossstaterule/techinfo.htmlPotential Impacts of Future Environmental Regulations

Page | 123 2011 Long

‐ Term Reliability Assessment

November 2011 Background

In the U.S., several regulations are being promulgated by the EPA. Depending on the outcome of any or

all of these regulations, the cost of compliance may result in early retirement of some fossil fuel

‐ fired

power plants. This update is designed to examine the potential reliability impacts, specifically

concerning P lanning Reserve Margins, from these environmental regulations. 123 The four regulations

reviewed in this update are:

1) Clean Water Act

– Section 316(b), Cooling

‐ Water Intake Structures (316(b) rule)

2) Coal Combustion Residuals (CCR)

3) Cross

‐ State Air Pollution Rule (CSAPR)

4) Title I, Clean Air Act –MACT –(Utility Air Toxics Rule)

Determinations on the cost of compliance were bas ed on assumptions regarding potential regulations

that have not been finalized by the EPA. 124 Ultimately, generation owners will determine the costs of

compliance and make decisions about investments versus unit retirements; however, assumptions were

intented to help stakeholders understand the potential impacts of these regulations. 125

The 2010 NERC EPA Assessment examined the potential system resource adequacy impacts of these

same four pending EPA regulations. This update estimated the future program requirements and the

compliance measures that these four EPA rules would ultimately require. For two programs (CSAPR,

CCR), the assessment was based upon draft regulations tha t had been issued during the summer of

2010. However, for the two other programs (316(b) and Utility Air Toxics), EPA had not yet developed

draft regulations. For these two programs, the assessment was built upon extensive discussions of the

possible program provisions with industry representatives, as EPA could not discuss thei r impending

draft rules still under development.

Since the release of the 2010 NERC EPA Assessment, EPA has finalized one program rule (July 2011 C

CSAPR, formerly proposed as the Clean Air Transport Rule). However, this rule is subject to revisions

proposed by the EPA in October 2011. EPA has also issued draft rules for publi c comment for two

pending programs—316 (b) Cooling Water Intake Structures (March 2011) and Utility Air Toxics Rule

(May 2011). These revisions are sufficiently different from the 2010 estimates and this update reflects

these program changes.

In addition, other market changes have occurred after the 2010 NERC EPA Assessme nt that have

significant impacts on grid reliability. For example, demand forecasts for the period have been updated

to 2011 projections. In some Regions, the demand forecasts have increased at a faster growth rate than

prior projections, further reducing projected reserve margins. In addition, more generator owners have

123 Analysis performed by Energy Ventures Analysis, Inc. ( http://www.evainc.com/ ) for NERC in September 2011 serves as the

basis for this report.

124 Assumptions for Clean Water Act

– Section 316(b), Cooling

‐ Water Intake Structures, Coal Combustion Residuals (CCR), and

Utility Air Toxics Rule were applied. The finalized Cross

‐ State Air Pollution Rule (CSAPR) requirements were included in this

analysis, but do not reflect the proposed changes to the Rule that EPA released in October 2011.

125 The material in this report is provided for informational purposes and is not intended to reflect NERC’s opinion on which

units can, should, or will be retired—it is a scenario that reflects potential outcomes.Potential Impacts of Future Environmental Regulations

2011 Long

‐ Term Reliability Assessment Page | 124

November 2011 announced their unit retirement plans. These retirement announcements have decreased the available

capacity in the study baseline and narrowed the capacity for which compliance plans must be projected.

Not surprisingly, most of the announced capacity retirements to date had been projected to retire

within the results of the 2010 NERC EPA Assessment. However, there have also been some that were

not projected to retire that have been announced since then

.

A high

‐ level timetable of rule implementation and compliance deadlines is presented below (Figure 58).

In general, short compliance timelines can stress the bulk power system if requirements cannot be met

by the compli ance date. However, given a timeline that accommodates retrofit construction times and

time to build or acquire additional resources, which may or may not include upgrades to the

transmission system, both reliability and environmental goals can be met.

Figure 58: Projected Timeline for Regulation Development and Implementation

Reliabilit y Assessment Study Design

This update focused on measuring the potential resource implications of the cumulative impact of the

four proposed regulations and also seeks to identify cases where additional resources, beyond what is

planned for in the 2011 Reference Case, may be required. The study objectives are as follows:

1. Identify and estimate potential future outcomes of four EPA rules.

2. Develop two cases (Moderate and Strict) to quantify the range of potential unit retirement risk

from the aggregated impacts for 2013, 2015 and 2018

3. Examine the impacts of the unit retirement on Planning Reserve Margin (by Assessment Area) 2010 2011 2012 2013 2014 2015 2016 2017 2018+



### Clean Water Act Compliance Prep Period Develop Rule Compliance

Coal Combustion

Residuals Compliance

Prep Period 

### Develop Rule Compliance

Clean Air Transport

Rule/Cross State Air

Pollution Rule Develop

Rule Compliance

Mercury and Air

Toxics Standards Compliance Prep

Period Develop

Rule ComplianceExtensionperiodPotential Impacts of Future Environmental Regulations

Page | 125 2011 Long

‐ Term Reliability Assessment

November 2011 Figure 59: Differences in Moderate and Strict Scenario Cases

Summary of Assumptions Used in This Report

The general approach used in this study assumes that there are only two choices to consider when

complying with the new EPA regulations:

1. Retrofit the generating unit and continue operating;

2. Retire the generating unit and replace it with a gre enfield natural gas unit

A more detailed discussion of this approach is included in the 2010 NERC EPA Assessment. 126

This update does not provide consideration for the additional impacts of future greenhouse gas (GHG)

control legislation, other state environmental control measures, national renewable portfolio standards

(RPS), or other potential environmental rules and regulations.

This update also excludes any consideration of CO 2 legislation, and also assumes that there is no risk of

future CO 2 legislation that will impact industry investment decisions. However, industry should consider

the additional impacts from this type of legislation when making plant investment decisions. Depending

on how power suppliers quantify these risks, unit retirements could result beyond those projected in

this assessment.

Additional assumptions employed in this reliability assessment are as follows:

126 http://www.nerc.com/files/EPA_Scenario_Final_v2.pdf

Using a different retirement method may produce different results. For instance, assessing merchant generation on future

asset performance may potentially increase the amount of economically vulnerable capacity of retirement depending on

the model input assumptions, if economics are unprofitable.Potential Impacts of Future Environmental Regulations

2011 Long

‐ Term Reliability Assessment Page | 126

November 2011  Plant retirements already committed or announced (37.63 GW) are excluded. These retirement

announcements and commitments have decreased the available capacity in the study baseline and

narrowed the capacity for which compliance plans must be projected. These plant retirements are

already included in the 2011 LTRA Reference Case. Information and data on the 201 1 LTRA

Reference Case can be found in this report, with summarized data included in the Estimated

Demand, Resources, and Reserve Margin section. Incremental capacity losses are assessed in this

scenario.

 Assessment of the ability of the industry to permit, engineer, finance and build the required

environmental controls within th e required compliance timeframe was not included. However,

implementation will place demands on the equipment and construction sectors since multiple EPA

programs will be phased

‐ in over the same timeframe. This situation is compounded by a significant

number of electric generation units that are likely to retrofit environmental controls, and th ere will

be competition created by replacement generation capacity projects and other heavy U.S.

infrastructure projects in other sectors. Costs could escalate beyond the assumed compliance costs,

should the EPA require compliance within three years of the final rulemaking dates. Therefore, the

Strict Case includes an increase of 25 pe rcent for the required control equipment.

 Compliance costs ( i.e., capital, O&M and performance changes) are based upon current average

retrofit costs with existing technology market conditions. As noted above, the update does not

assess any compliance cost risk impact caused by a run

‐ up in labor and material from a large

construction boom of environmental control and replacement po wer projects. By applying average

retrofit control costs by size in lieu of a detail, site

‐ specific engineering study, capital retrofit costs

may over

‐ or under estimate the cost at the site specific level.

 Increased CCR disposal costs can vary widely based upon site la nd availability, geology and state

disposal permit requirements. An EPA assumption of onsite disposal is adopted, and the calculated

disposal costs are similar to those employed in this update. However, if onsite disposal is prohibited

( i.e., land constraints, poor geology, etc.), the plant would incur additional costs to transport the ash

and residual s to a properly permitted landfill, as well as tipping fees. These costs could be

significant, but cannot be estimated without a site

‐ specific analysis. For these reasons, sensitivity

analysis is also performed for CCR disposal costs.

 Power suppliers will need to bring thei r units offline to tie in their retrofit environmental controls.

During these periods, suppliers will lose potential revenues and may need to procure higher cost

replacement power. While the capital and O&M costs are incorporated into the compliance

decision, the replacement purchased power costs have not been included. These replacement costs

are unlikely to change or accel erate unit retirement decisions, but would have the greatest effect on

the nuclear plants that would incur the largest replacement power costs.

 For retrofit of once

‐ through water cooling units, all nuclear plants are assumed to either become

exempted, be subject to alternative investments, or else will be able to make the r equired

investments. Therefore, no nuclear retirements are assumed in this update. This assessment doesPotential Impacts of Future Environmental Regulations

Page | 127 2011 Long

‐ Term Reliability Assessment

November 2011 not include any derate effects for nuclear capacity from Section 316(b). However, the maximum

loss of capacity due to derates of nuclear plants is estimated to be about 1.8 GW U.S.

‐ wide.

 Under its draft Section 316(b) regulations, EPA left the authority to set fish entrainment standards

(which are the regulatory driver for closed cycl e cooling) to state regulators. With lack of a specific

defined standard, compliance measures could range from low cost screens to very expensive

recirculating cooling water systems. While state regulators have some flexibility in setting standards

and can take reliability impacts into consideration, regulators are to use standards based upon

recirculating cooling water systems as their defaul t standard. For this update, an assessment of the

states’ past regulatory actions and current policies concerning closed cycle cooling were reviewed.

The Moderate Case assumes that only states with “more

‐ aggressive” water supply policies

(accounting for 75 percent of affected capacity ) would require recirculating water systems. In the

Strict Case, all plants would require recirculating cooling water systems. 127 While closed cycle

cooling is one of the options that states will consider under the guidelines required by the EPA, the

proposed rule does not mandate closed cycle cooling. Given its large potential compliance cost and

impact, this assumption may have the single largest impact in terms of the amount of capa city that

may be economically vulnerable.

 In practice, generating units identified in this update as economically vulnerable may choose to wait

until immediately prior to the compliance deadline before closing the generation unit. This ability to

delay retirement may tend to act as a binary option with the effect that many units would re tire on

December 31 prior to a January 1 deadline.

 All combined cycle plants are assumed to make required investments and not be forced into early

retirement. This may not be the case. For Utility Air Toxics, oil power stations are assumed to meet

emission limi ts through availability of suitable quality specifications of refined oil products.

 This update excludes any fossil fuel market price or supply risks created by a large shift in the power

generation mix from environmental compliance measures ( e.g., a shift from coal to natural gas fuel).

Delivered natural gas and coal prices are fixed and do not change based on th e level of retirements

or the level of new replacement capacity that may be required.

 If a coal plant is retired under this method, there is nothing to prevent a secondary, after

‐ the

‐ fact

decision. For instance, a coal unit may convert in to a biomass

‐ based unit, or convert to natural gas

burners and continue operating as a steam plant. Also, plant owners may decide to invest in

brownfield construction after retirement. Such analysis is beyond the scope of this update.

 Local reliability issues resulting from individual un it retirements were not studied. Operational

reliability impacts, such as generation deliverability or stability, were not analyzed by NERC. For

example, transmission system construction, enhancements, reconfiguration and development of

127 While the requirement of mandating cooling towers for all open

‐ loop cooled units is not explicitly noted in the proposed

EPA rule and has a low likelihood of materializing, these assumptions provide a full spectrum of potential outcomes.Potential Impacts of Future Environmental Regulations

2011 Long

‐ Term Reliability Assessment Page | 128

November 2011 new operating procedures may be necessary in some areas, all of which can create additional timing

considerations. However, some Regions and stakeholders within those Regions have assessed these

concerns, and a summary of their findings are included in the Regional Update section.

 Delivered natural gas, coal and oil prices were based on the forecasts of Energ y Ventures Analysis

(EVA) as of October 2011. Ten

‐ year forward averages are applied for 2013, 2015 and 2018. Varying

these price assumptions may produce different results. The wholesale fuel price forecasts on an

undelivered basis are depicted below (Figure 60). A sensitivity analysis to changes in na tural gas

commodity prices is presented in this update.

Figure 60: EVA Wholesale Wellhead Gas Price ForecastsPotential Impacts of Future Environmental Regulations

Page | 129 2011 Long

‐ Term Reliability Assessment

November 2011 Current Status of EPA Regulations and Expected Outcomes

Cross-State Air Pollution Rule (CSAPR)

The EPA published its final CSAPR regulations on July 6, 2011, followed by the publication of proposed

“technical corrections” in early October 2011. This rule was authorized under the 1990 Clean Air Act

Amendments to address long

‐ range transport of pollutants contributing to downwind non

‐ attainment of

fine particulate and ozone National Ambient Air Quality Sta ndards. The EPA final rule creates three new

pollutant cap and trade programs (SO

2 , annual NO X and seasonal NO X ) that will affect fossil fuel sources

across a twenty

‐ eight state region (Figure 61). Nearly 91 percent (259,603 MW) of the existing coal

‐

fired capacity (excluding announced retirement plans) are located within this affected region. The first

phase of CSAPR program will take effect on January 1, 2012 and targets an additional reduc tion in some

state SO 2 emission budgets in 2014.

Figure 61: CSAPR State Programs

States not covered by the Cross-State Air Pollution Rule States controlled for fine particles only (annual SO

2 and NOx) (2 States)

States controlled for ozone only (ozone season NOx) (5 States) States controlled for both fine particles (annual SO

2 and NOx) and ozone (ozone season NOx) (21 States)

The additional emission reductions needed to comply are significant and highly concentrated to a few

states (Figure 62). The constricted implementation period limits the available unit compliance options

for meeting the 2012 emission caps. Companies are unable to permit and implement additional retrofit

environmental control measures within 24

‐ 36 months, unless the constru ction phase has already

commenced. Upgrades of existing flue gas desulphurization (FGD) equipment to enhance the

performance of SO 2 removal and/or boiler upgrades enabling switching to lower sulfur fuels, will also

take more than one year to engineer, permit, finance and implement. Insufficient time to retrofit unitsPotential Impacts of Future Environmental Regulations

2011 Long

‐ Term Reliability Assessment Page | 130

November 2011 with necessary environmental controls 128 combined the anticipated initial shortage of surplus

allowances offered for sale will potentially leave companies with limited options to satisfy compliance

requirements by 2012. The remaining short

‐ term emission reduction measures include converting coal

units to natural gas or other zero emission generation or in some cases, accelerating unit retirement.

However, as a market

‐ bas ed cap and trade program, CSAPR does not mandate any specific controls, or

control installation dates, on generating units. For example, any new pollution control retrofit

installations desired by unit operators do not have to be operational on January 1 of 2012 or January 1

of 2014. Controls installed after Januar y 1 of any year simply reduce the number of allowances needed

by a unit for compliance during the balance of that year (and future years) and surplus allowances

created become available for compliance to other generation units. Ultimately, NERC’s modeling

projects CSAPR impacts will cause significant displ acement of coal

‐ fired megawatts, especially in 2012

and 2013.

Figure 62: CSAPR Concentrated Emission Reduction Burden

2010 State SO2 Emissions vs. 2012 Cross-State Air Pollution Rule

Allowances

868

-3,303 8,180 3,427

-28,130 21,524 -26,322

-9,821

- 122,383 -229,411

11,861 -60,384 -6,036 -35,656

19,306 -115,902

WV 38,652

-17,072

29,427 -17,874

Group 2- Deficit Group 1- Deficit

Group 2- Surplus Group 1- Surplus NJ -7,197

MD 173

-214,501

While coal generation will likely be displaced, CSAPR alone may not directly cause unit retirement.

Companies will still have the option to comply by operating affected plants on a shorter time

‐ frame,

while also ensuring that generators are available to provided capacity to support reliability, especially

during peak seasons and other periods when ca pacity is needed. Few studies have been published that

identify the specific impacts of CSAPR to the electricity industry, yet most conclude very limited impacts

on coal

‐ fired on

‐ peak capacity. EPA’s CSAPR analyses project only 4.8 GW in coal unit retirements. 129

Although CSAPR alone will not likely force unit retirements, plant owners may still elect to retire older

128 Including the need to switch to lower sulfur fuels.

129 Rule Regulatory Impact Assessment (RIA) for Final Air Transport Rule (June 2011) EPA, pg 262Potential Impacts of Future Environmental Regulations

Page | 131 2011 Long

‐ Term Reliability Assessment

November 2011 coal

‐ fired units with higher operating costs as early as next year to comply with CSAPR as part of a

combined environmental compliance strategy.

EPA’s final CSAPR rule included some significant program differences from its earlier July 2010 draft

proposal. These differences (versus its earlier proposal analyzed in the NERC 2010 EPA Assessment)

include stricter emission caps, added an d eliminated states from the program and increased the overall

compliance costs. These changes have accelerated some unit retirement decisions and triggered the

idling of additional units.

This update assumes that the program will be implemented as proposed and promulgated by EPA in July

2011 and does not consid er EPA’s more recent proposed rule that proposes to: 1) delay the Agency’s

“assurance provision” requirements from 2012 to 2014 to assist in the transition from CAIR to the

CSAPR; and (2) to increase nine state emission budgets to address state, industry and ISO requests for

increased state emission budge ts and to address a limited number of errors in EPA model input

assumptions as well as a few instances in which EPA modeling did not adequately address local system

constraints or localized rules that may require “out of merit” economic dispatch of some generating

units at certain times du ring the year. 130 The changes proposed by EPA in October will help mitigate the

impact of the rule, particularly in 2012 and 2013.

Section 316(b) Cooling Water Intake Structures

Cooling water intake operation and structures are regulated under Section 316(b) of Clean Water Act

(CWA). The 316(b) rule is implemented by the state water permitting agencies through the National

Pollution Discharge Elimi nation System (NPDES) permit program of the CWA. EPA provides state

permitting agencies with regulatory guidance and standards to determine Best Technology Available

(BTA) to protect aquatic life from impingement (being trapped against the intake screen) and

entrainment (passing through the screens and into the plant’s cooling water system).

The prior ver sion of the 316(b) rule that applied to existing generation facilities (known as the “Phase II

Rule) was promulgated in 2004 and applied only to facilities with water usage greater than 50 million

gallons per day (mgd), of which at least 25 percent was for cooling purposes. 131 However, many aspects

of the Phase II Rule were invalidated by the U.S. Court of Appeals in 2007 and the EPA withdrew the rule

and directed the state permitting agencies to continue to implement the 316(b) rule on a site

‐ specific

basis using their best professional judgment. 132 EPA published a proposed Phase II rule on April 20, 2011

that it is required to finalize under a Consent Agreement by July 2012.

130 See October 14, 2011 “Revisions to Federal Implementation Plans to Reduce Interstate Transport of Fine Particulate Matter

and Ozone” (76

FR 63,860).

131 The EPA promulgated rules applicable to cooling water intake structures at manufacturing facilities in three phases: Phase I

for new generation facilities, Phase II for existing large generation facilities, and Phase III for all remaining manufacturing

facilities, including small electric generators. Phase I is in effect and requires that all new generati on facilities install closed

cycle cooling. Phase III has now been merged into the remanded Phase II rulemaking described herein.

132 The U.S. Supreme Court did review one aspect of the U.S. Court of Appeals opinion in the Phase II Rule. The Supreme Court

determined that the EPA has the discretion under Section 316(b) to utilize a cost

‐ benefit test on a site

‐ specific basis to

determine BTA for each affected facility.Potential Impacts of Future Environmental Regulations

2011 Long

‐ Term Reliability Assessment Page | 132

November 2011 For this update, the final rule is assumed to be in effect by the end of 2012. However, the proposed rule

incorporates an extended compliance period to meet both the impingement mortality (IM) and the

entrainment mortality (EM) standards. These requirements will be implemented through the NPDES

permit renewal process which occurs in five year cycles. Unli ke the air rules, there will not be a single

date on which all plants must be in compliance with the BTA standards. The proposed rule sets forth a

number of interim deadlines prior to the time that BTA is to be installed and operating. These are

intended as milestones to ensure tha t the facility is obtaining the necessary site

‐ specific data and

performing the analyses required to determine the BTA for IM and EM. For facilities that were covered

under the now

‐ remanded Phase II Rule, the proposed rule provides for a five

‐ year period (representi ng

the initial permit term after the rule takes effect) to gather data about the facility and its cooling water

intake structure and the source water body, to design and conduct an entrainment characterization

study, and to perform technical feasibility and a cost–benefit analysis. The ultimate compliance date

will vary by pl ant and will be determined by the state permitting director.

The 316(b) rule will apply to all current and future nuclear and fossil steam generating units, accounting

for over 83 percent of 2010 U.S. generation. However, the greatest impact will be on those existing

plants that have once

‐ through cooling systems. Over 1,200 units with once

‐ throug h cooling water

systems were identified through EIA Form 923 and the older Form 767 ( Steam Electric Plant Operation

and Design Report ) data filings by power generators. The affected units include 754 coal units, 405

oil/gas steam units and 42 nuclear units (60.5 GW)

. Generators such as peaking turbines, hydroelectric

facilities, wind turbines, and solar PV panels do not use steam as the prime mover for generating

electricity and, therefore, do not require additional water for cooling purposes. These generators are

not subject to the requirements of this rule.

Major EPA rulemaking policy issues that could affect electri c grid reliability are:

 Implementation period

 Applicability to existing structures

 BTA

– the final IM and EM standards

In the original Phase II Rule, EPA established a flexible and cost

‐ effective process that had no

measurable effect on steam electric generating unit retirements. However, due to the nee d to meet the

deficiencies determined by the Court of Appeals, the proposed rule is substantially different. It is also

noted that in its opinion upholding the cost

‐ benefit aspects of the Phase II Rule, the U.S. Supreme Court

determined the EPA retains significant discretion in designing th e rule.

However, EPA’s 2011 draft 316 (b) rule is substantially different. The 2011 draft rule will require all

steam generating stations to meet BTA standards for both fish IM and EM. The proposed 316(b) rule

has two IM compliance alternatives for affected plants

– strict numeric IM standards (not more tha n

31% mortality in any month and 12% on an average annual basis) or a velocity no greater than 0.5 fps at

the cooling water intake. For those facilities that were not designed with the prescribed intake velocity,

IM compliance will involve either a fish return system by means of a retrofi t of the plant’s travelling

screens, or a diversion device like a velocity cap or a wedge wire screen attached to the intake pipe.

While the EPA recognized the effectiveness of closed cycle cooling as the most effective means ofPotential Impacts of Future Environmental Regulations

Page | 133 2011 Long

‐ Term Reliability Assessment

November 2011 reducing IM via flow reductions, it did not propose it as BTA for IM because it is not available at all

facilities and modified traveling screens are more cost

‐ effective. The EPA has received significant

comments from industry expressing concerns that even with state

‐ of

‐ the art traveling screens, it will be

impossible to meet th e numeric IM standards at some facilities due to site

‐ specific conditions. In

response, the EPA has indicated that it is reconsidering the IM standards to include an alternative

technology standard. Under this alternative, facilities could install a pre

‐ approved technology as BTA,

including screens or a diversionary technology, and would be de emed compliant in lieu of meeting the

numeric IM standards.

In its rule development, EPA had assumed this standard could be met by using modified traveling

screens. However, some existing power plants that employ EPA’s modified traveling screens technology

have been unable to meet the proposed fish mortality standard. If the EPA does not include such an

alternate technology standard in th e final rule, IM compliance options would be severely limited at

some plants and may require significant intake structure retrofits to meet the intake velocity of no

greater than 0.5 feet per second. Should this not be available to a plant, the EP A

‐ proposed strict fish IM

standard may effectively force recirculating cooling water systems options independent of the site

specific BTA entrainment standard.

Regarding the EM standards, the EPA did not designate closed cycle cooling, or any technology, as BTA.

Rather, due to the site

‐ specific natur e of determining BTA for EM, the EPA delegated this determination

to the state permitting directors.

EPA’s draft 316(b) rule also contained four different approaches to setting a fish EM standard. Two of

the proposed entrainment options would require affected facilities to have “ flow reduction

commensurate with close d cycle cooling as BTA for entrainment ”. Although not the preferred EPA

option, these options represent the highest compliance cost policy outcome and were incorporated in

the Strict Case of this update.

The other two options (including the preferred option) provide for BTA entrainment controls to be

determined on a site specific basis. This policy a pproach allows EPA not to quantify specific BTA

entrainment cost impact, since entrainment would remain undefined and left up to state regulators.

The challenge for NERC’s Moderate Case scenario is how state regulators will develop the BTA

entrainment standards. EPA rules require states to follow an entrainme nt standard that reflects

“maximum reduction in entrainment mortality” warranted after consideration of nine relevant factors.

In other words, closed

‐ cycle systems are EPA’s default BTA technology unless other listed relevant

factors make recirculating systems unfeasible. The nine factors are:

 Numbers/type of organisms entrained

 Entrainment impacts on waterbody

 Quantified and qualitative social benefits and costs

 Thermal discharge impacts

 Impacts on reliability of energy delivery within the immediate area

 Changes in particulate emissions and other pollutants associated with entrainment technologiesPotential Impacts of Future Environmental Regulations

2011 Long

‐ Term Reliability Assessment Page | 134

November 2011  Land availability

 Useful plant life

 Impacts on water consumption

However, of these factors, EPA only considered four issues to be important for the national standard

BTA determination:

 Energy reliability —Grid reliability can be a cumulative impact from multiple retirements and not

necessarily from any one facility contribution, except for local reliability concerns. Also, the

projected reliability problem must occur in the “immediate area.” Given the grid and industry’s

attempt to improve reliability, there is a significant risk that ve ry few cases may qualify for

different treatment under this provision. Because of the site

‐ specific evaluation, a

comprehensive, system

‐ wide reliability study will be difficult to incorporate into an individual

unit’s effect on reliability.

 Increased air emissions on a local basis associated with entrainment technologies —Given that

utility MACT will be in pla ce prior to 316(b), emission increases from lost energy efficiency may

not be significant or much different than new plant emission rates. EPA discussion also

concludes that cooling tower emission effects would generally be limited to facility property and

not an issue, with very few exceptions.

 Lan d Availability —EPA in its preamble states it has not identified any electric generating facility

with more than 160 acres per GW capacity that EPA believes would be unable to construct

retrofit cooling towers and that some facilities on smaller land parcels would still be able “to

install closed cycle cooling by engi neering creative solutions.” This EPA criterion would suggest

that the vast majority of power plant sites have sufficient land for cooling tower construction. As

is the case with this update, EPA admits it lacks data to analyze land constraints, but quotes an

Electric Power Research Institute (EPRI) report that indi cates six percent of sites investigated

had insufficient space for cooling tower systems. However EPA also suggests that higher cooling

system retrofit difficulty does not mean that cooling towers would not be BTA, but would also

depend upon the projected system benefits.

 Remaining useful life of the facility —EPA’s preambl e example is for a unit that would be shut

down in 3 years versus 20 years. The NERC analysis already takes remaining lifetime into

account in its analysis. However, the net impact may be that EPA uses this provision to force

retirements within a negotiated time period. In either case, the oil/gas steam uni ts, which are

not used often, will be retired anyway.

Without a specific entrainment defined standard, regulators could set entrainment standards ranging

from low cost screens to high cost recirculating cooling water systems.Potential Impacts of Future Environmental Regulations

Page | 135 2011 Long

‐ Term Reliability Assessment

November 2011 To gauge how strict state regulators would set the entrainment standard in the Moderate Case, an

assessment of past state water supply and water permitting practices was made. 133 This review found

Alabama, Arizona, California, Delaware, Florida, Georgia, New Mexico, New York, New Jersey, Texas and

states in New England (accounting for 75 percent of affected capacity) have raised water supply

concerns in the past that could potentially result in their regulators requiring recirculating water systems

to meet the fish entrainment. The re maining states (25 percent of affected capacity) were assumed to

require a combination of screens, barriers and seasonal flow limitations to comply with their fish

entrainment standards.

Capital cost to convert from once

‐ through cooling water to recirculating cooling water systems are

derived from three prior engineering studies and indu stry cost surveys:

 EPRI’s Issues Analysis of Retrofitting Once

‐ through Cooled Plants with Closed Cycle Cooling

(10/07)

 Maulbetsch Consulting EPRI Survey (7/2002) of 50 plant estimates

 Stone & Webster Study (7/2002) for Utility Water Assessment Group.

These studies found that capital conversion costs are directly tied to the once

‐ through cooling water

pumpi ng rate and heavily influenced by site layout and local conditions. Conversion costs ranged from

$170

‐ 440 gallons per minute (gpm) (in 2010 dollars), with an average capital conversion cost of $240

gpm. The average conversion costs were applied for most locations, except for known urban locations

having constr ained site conditions for which a 25 percent higher capital cost estimate of $300 gpm was

applied. The base case costs applied in this update are shown below (Figure 63).

Figure 63: Moderate Case Retrofit Cost Curve for Section 316(b)($/kW)

133 100 200 300 400 500 600 700RetrofitCost$/kW

Size of Generation Unit (MW)Potential Impacts of Future Environmental Regulations

2011 Long

‐ Term Reliability Assessment Page | 136

November 2011 In addition to the capital conversion costs, the station would lose both capacity and energy with larger

power consumption used to drive the cooling water pump. The capacity and energy losses estimated in

the 2008 DOE study and applied in this update are shown below (Table 31).

Table 31: Capacity Derating/Energy Penalties Due to Cooli ng Tower Conversion

The capital costs for the more flexible screen alternatives for the remaining alternatives were based

upon preliminary EPRI cost estimates.

Under these policy interpretations, 25

‐ 35 GW of older oil/gas unit steam generating units (Moderate to

Strict case) are estimated to be economically vulnerable for retirements in li eu of making the large

capital retrofit investments in recirculating cooling water systems alone. These results are higher than

EPA’s published results in its March 2011 report Economic and Benefit Analysis for Proposed Section

316(b) Existing Facilities Rule (EPA 821

‐ R

‐ 11

‐ 003). The EPA study assumed that only 1 GW of existing

capacity would retire earlier by 2028 u nder its preferred option and 14 GW are projected for retirement

earlier under its stricter forced recirculating system policy options. The EPA study did not quantify

specific BTA entrainment cost impact under its preferred option as the entrainment st andard would be

determined by state regulators applying the nine criteria set forth in the proposed rule.

These referenced compliance costs and reliability impacts may be underestimated. First, the published

studies used to develop the average capital cost estimates are based upon surveys done in 2002 and

2007. Open

‐ loop to closed

‐ loop conversions are rare and no historic cost data has been published

.

Since these surveys, the costs of environmental project construction have escalated. Second, the site

‐

specific conditions and plant layout can have significant impacts on conversion costs that are not

reflected by applying industrial average estimates. Although an adjustment was mad e for known 

### ERCOT 0.80% 2.50%

FRCC 0.90% 2.50%

MRO 1.40% 3.10%

NPCC 1.30% 3.40%

NYPP 1.20% 3.20%

PJM/MISO 1.60% 3.40%

SERC

‐ W 0

. 9 0 % 2.60%

SERC

‐ SE 0.80% 2.40%

SERC

‐ N 0

. 9 0 % 2.60%

SERC

‐ E 1

. 0 0 % 2.80%

SPP 1.00% 2.80%

WECC

‐ DSW 1.40% 2.70%

WECC

‐ CALN/CALS 0.90% 2.50%

WECC

‐ NWPP/WECC

‐ BASIN 1.40% 3.00%

RMPA 0.00% 2.50%

Total 1.20% 2.90% Assessment Areas Average Energy

Loss %

Source: DOE Electric Reliability Impacts of a Mandatory Cooling Tower

Rule for Existing Steam Generating Units (10/2008) Capacity Derating

Penalty %Potential Impacts of Future Environmental Regulations

Page | 137 2011 Long

‐ Term Reliability Assessment

November 2011 constrained urban sites, several more sites likely exist that may have similar (but unknown) site

constraint considerations. Finally, given the rule implementation period and the large amount of

affected power plants (252 GW), demand for labor and construction materials for conversions could be

in high demand and result in real cost escalation. Su ch capital cost run

‐ ups have occurred in pollution

control projects in the past. To capture these potential risks, the Strict Case scenario includes a 25

percent real price escalation in the average conversion cost to $300 gpm at most locations and $400

gpm at known constrained urban site lo cations.

Coal Combustion Residuals

Concerns raised by the December 2008 TVA Kingston ash spill and its widespread environmental impact

triggered EPA consideration of changing regulating coal ash and waste byproduct ( e.g., scrubber sludge)

disposal from its current special waste designation to Subtitle C Hazardous Waste under the Resource

Conservation and Recovery Act. EPA issued a draft rule on the disposal of CC Rs for public comment in

June 2010. A final rule has still not been issued. For this study, the final rule is assumed to be completed

in 2012 with implementation expected to start in 2013

‐ 2015 and full compliance by 2018.

This EPA rule is expected to regulate 13 6 million tons per year of coal ash and solid byproducts currently

produced by the coal

‐ fired stations. Major policy issues that will impact electric grid reliability include:

 hazardous waste designation of coal ash

 impoundment design standards

 groundwater protection standards

 rule i mplementation period.

EPA has proposed conversion of all coal ash handling systems from utility

‐ boilers to dry based systems.

Two options were provided for disposal of all ash and coal byproducts in a landfill, meeting either

Subtitle C or D, which entails different types of waste disposal standards, and to close or cap existing ash

ponds. Su ch a ruling may cause up to 359 coal units (128.5 GW) to convert their wet ash handling

systems to dry based systems, incur greater ash disposal costs for the 136 million tons per year (TPY) of

ash disposal, and close and/or cap the ex isting 500 ash ponds in operation.

In addition, a hazardous waste designation under Subtitle C would likely eliminate the market for 20

million tons of ash currently resold into the market. However, EPA is considering a “special waste”

designation that would allow “beneficial” reuse of the substance to continue. Haza rdous waste

designation without exceptions would expand the existing hazardous waste disposal market from its

current size of 2 million tons per year.

Prior public studies examining the ash disposal issue on power plant operation are limited. To provide

context for this assessment, a 2009 EOP Group Study titled Cost Estimates for the Mand atory Closure of

Surface Impoundments Used for the Management of Coal Combustion Byproducts at Coal fired Utilities

was reviewed. This 2009 industrial study concluded that EPA’s draft rule could directly affect operations

at 397 coal

‐ fired generating units (175 GW). The EOP Group study estimated bottom ash conversion

costs of $30 million per un it and this assumption are used in the Moderate Case of this assessment. In

addition, at some stations, the ash ponds also dispose of fly ash (15 million TPY) requiring an additionalPotential Impacts of Future Environmental Regulations

2011 Long

‐ Term Reliability Assessment Page | 138

November 2011 $3 billion investment to convert from wet to dry handling systems. Outside conversion costs, stations

would need to build alternative wastewater treatment facilities at 155 facilities ranging in cost from $80

million without a flue gas desulfurization system (FGD) to $120 million with an FGD per facility. These

conversions would provide storm water and/or FGD scrubber slud ge treatment currently handled by the

ash ponds. Ash pond closure costs were estimated to be $30 million per pond.

However, the 2009 EOP Study contained some deficiencies that could underestimate compliance costs,

as it excluded costs for:

 Land acquisition for a landfill or expande d wastewater treatment facilities.

 Increased disposal if ash was designated as hazardous waste.

 Existing ash pond closures.

Remediation costs will vary significantly based upon the extent of any groundwater contamination, site

geology and aquifer use. However, any remediation might be considered as a sunk cost since it would

be incurred indepe ndently of the future operating decision and would not be incorporated into the

power supplier’s unit retirement decision.

A total of 359 units (128.5 GW) of coal

‐ fired capacity reported using wet pond based systems for their

ash and/or byproduct handling systems in their EIA Form 767 and 923 filings. For these un its, the 2009

EOP study cost estimates for bottom ash conversion and wastewater treatment upgrades are applied on

an individual generator basis. The additional EOP ash waste disposal costs of $15 per ton for handling in

a regulated non

‐ hazardous onsite landfill were added to the unit operating costs in the Mo derate Case

of this update. The pond closure and remediation costs are assumed to become sunk costs that would

be incurred independent of the future power plant operations. Therefore, only incremental costs tied

to ongoing operations are accounted for in the decision to invest or retire the unit. When these

incremental power production costs exce eded new replacement capacity costs, the units became

potential retirement candidates.

To account for potential underestimation of investment requirements and based upon conversations

with various utilities, the capital compliance cost uncertainty is likely to be +/

‐ 25 percent. To account

for potentially higher cost s under stricter Subtitle C guidelines, landfill costs are assumed to be much

higher at $37.50 per ton (2010$) in the Strict Case, which is also similar to the EPA study’s estimated

disposal costs. Further, in lieu of conducting site

‐ specific analyses, a sensitivity analysis is performed

across a wide range of ash disposal costs from $37.50 up to $1,250 per ton (Figure 64). Th e costs are

believed to be contained well within the flat slope portion of the line on the far left side. However, the

additional costs that may become associated with distance removal of the hazardous substance to

existing certif ied landfills could drive costs upward.Potential Impacts of Future Environmental Regulations

Page | 139 2011 Long

‐ Term Reliability Assessment

November 2011 Figure 64: Sensitivity of Retirements as a Function of Higher Assumed Coal

‐ Ash Disposal Costs due to

Coal Combustion Residuals regulations

Utility Air Toxics Rule

Under Title I of the 1990 Clean Air Act, EPA is obligated to develop an emission control program for

listed air toxics for sources that emit at, or above, prescribe d threshold values. For the power sector,

the listed air toxics of greatest concern are mercury (coal), acid gases (coal), arsenic (coal), vanadium

(oil) and chromium (oil). EPA had originally developed a cap and trade program for controlling mercury

emissions. However, the U.S. Court of Appeals overturned this initial program in 2008 and c oncluded

that the Clean Air Act specifically required EPA to develop Maximum Achievable Control Technology

(MACT) emissions standards for air toxics listed in the Clean Air Act and did not allow a cap and trade

program. The Act was specific in how these MACT emission rate limitations were calc ulated ( i.e.,

average emission rate of lowest emitting 12 percent of the source population) and how quickly they

were to be implemented ( i.e., 3 years after final rule with up to a one year extension waiver).

The Clean Air Act requires existing plants to comply with the Utility Air Toxi cs Rule as expeditiously as

practicable, but in no event later than three years after the effective date of the rule. The proposed

Utility Air Toxics Rule provides the maximum amount of compliance time permitted by the Act. The Act

authorizes EPA or a state with an approved Title V permitting pr ogram to grant a one

‐ year extension of

time “if necessary for the installation of controls.” In addition, the Act authorizes the President to

exempt a source from compliance for a period of not more than 2 years if the President determines that

“the technology to implement such standard is not available and that it is in the na tional security

interests of the United States to do so.” Finally, EPA can exercise its enforcement discretion under the

Act to allow more time if a source has justified the need for an extension. 0 10 20 30 40 50 60 70 80 90 100$38$63$125$188$250$313$375$438$500$625$750$875$1,000$1,125$1,250

Effective Disposal Cost Per Ton of Coal AshGWofRetiredCapacity

GW of Retired CapacityPotential Impacts of Future Environmental Regulations

2011 Long

‐ Term Reliability Assessment Page | 140

November 2011 EPA published its draft Utility Air Toxics Rule in May 2011 and has announced that it will issue its final

regulations in December 2011. Assuming that the one year extension is granted when needed, power

suppliers will have until December 2015 to design, permit and implement the needed measures to meet

the emission rate limi tations for acid gases, mercury and non

‐ mercury metals. This assumption is used

in both the Moderate and Strict Cases. All coal

‐ fired power plant units must meet the emissions

standards at each unit: allowance trading between units and reduced unit use are not compliance

options.

In its draft proposal, EPA proposed th e acid gas rate limitation for existing coal

‐ fired units to be either

(1) 0.002 lbs of hydrochloric acid per MMBtu, or alternatively (2) 2.0 pounds of SO 2 /MWH (0.20 lbs

SO 2 /MMBtu). Given the US coal chlorine content for the major producing basins, this limit effectively

requires bituminous and lignite coal

‐ fired units to retrofit a FGD scrubber (at $400

‐ $900/kW) and a dry

sorbent injection ($50/kW) or spray dry scrubber ($400

‐ $900/kW) on sub

‐ bituminous coal units.

Roughly 72.5 percent of ex isting coal

‐ fired capacity have existing FGD equipment or have announced

plans to retrofit such equipment. The remaining 27.5 percent (89 GW) of uncontrolled existing capacity

could be forced to retrofit with FGD controls or retire by December 2015. Given 29 GW have already

announced their retirement plans, scrubber decisions to mee t acid gas limitations by 2015 remain for 60

GW of uncontrolled coal

‐ fired capacity.

In addition, the proposed EPA Utility Air Toxic rule also includes a total particulate emission limitation of

0.03 pounds (lbs)/MMBtu as a surrogate for non

‐ mercury metals, which is applicable to coal

‐ fired units.

Given the average ash conten t of coals, this limit will require power plants to remove 99.6

‐ 99.8 percent

of the particulate matter in the flue gas stream. Such high performance can only be achieved on a

consistent basis by fabric filter controls that cost between $200

‐ $400/kW to retrofit. Given that 75

perce nt of US coal

‐ fired capacity does not have, nor has announced plans for such controls, the

compliance costs will be significant for those plants to continue producing power beyond 2015. The

2011 Edison Electric Institute 134 study has made a similar assumption. In contrast, EPA analyses 135

suggested up to 30 percent of coal units with electrostatic precipitators may be able to meet the

particulate limit without retrofitting fabric filter controls. As a result, EPA projects a much lower 166 GW

of existing coal

‐ fired capacity would retrofit fabric filter controls under this rule.

EPA proposed a mercury emission standard of 1.2 lbs/TBtu for units that burn non

‐ ligni te coal and 4.0

lbs/TBtu for lignite

‐ fired units. These limits will likely be met with the forced FGD controls for acid gas

compliance and could require activated carbon injection systems ($15

‐ $25/kW retrofit capital cost) for

lignite and sub

‐ bi tuminous coal units. Plants that burn coals with high chlorine content (bituminous

coal) that are equipped with SCR and newer wet FGD units may be able to achieve the proposed

mercury emission standard without activated carbon injection (ACI.) While such controls will add to

plant operating costs and may eliminate ash reuse applications, the capi tal cost for mercury controls

alone is unlikely to require any additional coal unit retirements.

134 Potential Impacts of Environmental Regulation on the US Generation Fleet (Jan 2011) ICF for EEI pg 43

135 Regulatory Impact Analysis of the Proposed Toxics Rule: Final Report (EPA March 2011)Potential Impacts of Future Environmental Regulations

Page | 141 2011 Long

‐ Term Reliability Assessment

November 2011 The analysis in this update applies environmental control cost curves to develop unit

‐ specific

compliance costs estimates. The increased production cost, due to the new pollution controls, are then

compared to unit production costs of replacement power. In the Moderate Case of this study,

investments are made on existing coal units when FGD and fabric filter equi pment are not present, or

planned. Also, halide treated activated carbon injection (HACI) systems are added for lignite and sub

‐

bituminious coal types. These control retrofit costs were developed for an average difficulty plant. The

retrofit capital cost curves for FGD and fabric filter controls are shown below (F igure 65 and

Figure 66 ). Oil

‐ fired units (109.7 GW) are assumed to meet their air toxic limits through tighter oil

specifications at the refinery. Compliance costs increase by 25 percent in the Strict Case.

The combination of the three contaminants of the Utility Air Toxic Rule will require a larg e capital

investment in scrubbers, fabric filters and activated carbon injection systems that EPA estimated would

cost $10 to 11 billion per year to finance, build and operate. The EPA analysis assumed that 9.9 GW of

coal

‐ fired capacity would retire from the draft rule alone. 136

Figure 65: Average FGD Retrofit Capital Costs

136 IBIDPotential Impacts of Future Environmental Regulations

2011 Long

‐ Term Reliability Assessment Page | 142

November 2011 Figure 66: Retrofit Capital Cost for Baghouse/Fabric Filter Control Systems on Coal

‐ Fired Power PlantsPotential Impacts of Future Environmental Regulations

Page | 143 2011 Long

‐ Term Reliability Assessment

November 2011 Integrated and Cumulative Effects of Environmental Regulation Compliance

Power industry unit retirement decisions will not be based upon any single factor, but the combined

effect from all the EPA regulations, economic conditions, and potential future requirements ( e.g., from

stricter national ambient air quality standards for SO 2 , ozone and fine particulate, carbon control,

national clean energy standards, effluent guidelines, etc.) that may be proposed over the remaining

lifetime of the power plant facility.

EPA regulations may require existing coal

‐ fired capacity to make capital investments to add control

technologies to address air, waste, and water regulations. Those coal

‐ fired units that determine th ese

control modifications are not cost

‐ effective will retire sooner. With natural gas prices becoming more

competitive with the emergence of low cost shale gas, generators may be unable to fully recover their

retrofit environmental investment costs and may elect to retire higher cost coal

‐ fired capaci ty.

The cumulative effect of the four EPA rules is provided below (Table 32 through Table 34) for 2013, 2015

and 2018. As is shown in Table 32, an additional 11.4 GW of coal

‐ fired capacity retirements is projected

by 2013, due mostly to the combination of the Utility Air Toxics Rule and CSAPR. While th ese units are

expected to retire under the Utility Air Toxics rule assumptions, the dates are accelerated to provide the

needed incremental reductions needed for CSAPR compliance strategies.

By 2015, the bulk of the remaining coal

‐ fired capacity retirements are projected to comply with the

December 2015 Utility Air Toxics Rule deadline (noting that this update assumes that cer tain units are

able to gain a one

‐ year extension). As shown in Table 33, between 3.6 and 24.4 GW of coal

‐ fired

capacity is economically vulnerable by 2015. This table quantifies only the incremental impact and

excl udes the 37.6 GW of already announced and committed retirements—some of which have been

directly attributed to the environmental regulations. 137 The measurement used in this assessment is

Planning Reserve Margins, which provide an indication for the need for additional resources to maintain

bulk power system reliability. Further, this assessment does not take into account local reliability affects

resulting from individual unit retirements, such as transmission system voltage or stability impacts, nor

the a dditional costs of transmission facilities required to support reliability.

In this update, the assumed compliance deadline for 316(b) rule is 2018. These rules are projected to

trigger large amounts of older oil/gas

‐ fired steam generating capacity retirements as well as retirement

of some older coal

‐ fired units that have already added sufficient environme ntal controls to meet the

Utility Air Toxics and CSAPR requirements, but would be unable to justify the combination of needed

cooling tower retrofit investment and higher ash disposal costs. The total economically vulnerable

capacity could reach 36 GW under the Moderate Case, and up to 59 GW in the St rict Case (Table 34).

However, total capacity reductions will depend on the degree to which state regulators mandate closed

‐

loop cooling system. 138

137 These units faced economic challenges based on a variety of reasons, including gas

‐ prices and demand forecasts. In addition,

some plants have announced retirements as a result of previous settlements with government agencies requiring the

installation of pollution controls to comply with regulations other than the four that specifically assessed in this re port.

138 Impacts of individual rules are provided in the Additional Background Information section.Potential Impacts of Future Environmental Regulations

2011 Long

‐ Term Reliability Assessment Page | 144

November 2011 Table 32: Cumulative Projected Incremental Capacity Losses through 2013

Derated Retired

(MW) (MW) Total

Coal Units

ERCOT

‐ ‐              ‐

FRCC

‐ ‐              ‐

ISO

‐ NE

‐ ‐              ‐

NYISO

‐ ‐              ‐

MAPP

‐ ‐              ‐

MISO

‐ ‐              ‐

PJM

‐ ‐              ‐

SERC

‐ N

‐ ‐              ‐

SERC

‐ W

‐ ‐              ‐

SERC

‐ SE

‐ ‐              ‐

SERC

‐ E

‐ ‐              ‐

SPP

‐ ‐              ‐

CAL

‐ N

‐ ‐              ‐

CAL

‐ S

‐ ‐              ‐

Basin

‐ ‐              ‐

Desert SW

‐ ‐              ‐

RMPA

‐ ‐              ‐

NWPP

‐ ‐              ‐

TOTAL

‐ ‐              ‐

O/G

‐ ST Units

ERCOT

‐ ‐              ‐

FRCC

‐ ‐              ‐

ISO

‐ NE

‐ ‐              ‐

NYISO

‐ ‐              ‐

MAPP

‐ ‐              ‐

MISO

‐ ‐              ‐

PJM

‐ ‐              ‐

SERC

‐ N

‐ ‐              ‐

SERC

‐ W

‐ ‐              ‐

SERC

‐ SE

‐ ‐              ‐

SERC

‐ E

‐ ‐              ‐

SPP

‐ ‐              ‐

CAL

‐ N

‐ ‐              ‐

CAL

‐ S

‐ ‐              ‐

Basin

‐ ‐              ‐

Desert SW

‐ ‐              ‐

RMPA

‐ ‐              ‐

NWPP

‐ ‐              ‐

TOTAL

‐ ‐              ‐ Moderate Case Moderate Case Projections

Combined Impacts

‐ 2013

Derated Retired

(MW) (MW) Total

Coal Units

ERCOT 76

‐ 76

FRCC 13

‐ 13

ISO

‐ NE

‐ ‐              ‐

NYISO 12

‐ 12

MAPP

‐ ‐              ‐

MISO 387 1,679 2,066

PJM 225 3,173 3,398

SERC

‐ N 6 1 264 325

SERC

‐ W 1 0 0 75 175

SERC

‐ SE 72 1,555 1,626

SERC

‐ E 1 4 1,018 1,032

SPP 256 811 1,067

CAL

‐ N

‐ ‐              ‐

CAL

‐ S

‐ ‐              ‐

Basin

‐ ‐              ‐

Desert SW

‐ ‐ ‐

RMPA

‐ ‐              ‐

NWPP

‐ ‐              ‐

TOTAL 1,217 8,574 9,791

O/G

‐ ST Units

ERCOT

‐ ‐              ‐

FRCC

‐ ‐              ‐

ISO

‐ NE

‐ ‐              ‐

NYISO

‐ ‐              ‐

MAPP

‐ ‐              ‐

MISO

‐ ‐              ‐

PJM

‐ ‐              ‐

SERC

‐ N

‐ ‐              ‐

SERC

‐ W

‐ ‐              ‐

SERC

‐ SE

‐ ‐              ‐

SERC

‐ E

‐ ‐              ‐

SPP

‐ ‐              ‐

CAL

‐ N

‐ ‐              ‐

CAL

‐ S

‐ ‐              ‐

Basin

‐ ‐              ‐

Desert SW

‐ ‐              ‐

RMPA

‐ ‐              ‐

NWPP

‐ ‐              ‐

TOTAL

‐ ‐              ‐ Strict Case Strict Case Projections

Combined Impacts

‐ 2013Potential Impacts of Future Environmental Regulations

Page | 145 2011 Long

‐ Term Reliability Assessment

November 2011 Table 33: Cumulative Projected Incremental Capacity Losses through 2015

Derated Retired

(MW) (MW) Total

Coal Units

ERCOT 267

‐ 267

FRCC 176

‐ 176

ISO

‐ NE 93 144 237

NYISO 77 74 151

MAPP 8

‐ 8

MISO 519 1,110 1,629

PJM 606 2,850 3,456

SERC

‐ N 175 724 899

SERC

‐ W 9 5 0 96

SERC

‐ SE 318 1,358 1,675

SERC

‐ E 110 808 918

SPP 198 187 385

CAL

‐ N 4 15 18

CAL

‐ S 4 83 87

Basin 29 39 68

Desert SW 34

‐ 34

RMPA 23 89 111

NWPP 34 12 46

TOTAL 2,770 7,491 10,261

O/G

‐ ST Units

ERCOT

‐ ‐              ‐

FRCC

‐ ‐              ‐

ISO

‐ NE

‐ ‐              ‐

NYISO

‐ ‐              ‐

MAPP

‐ ‐              ‐

MISO

‐ ‐              ‐

PJM

‐ ‐              ‐

SERC

‐ N

‐ ‐              ‐

SERC

‐ W

‐ ‐              ‐

SERC

‐ SE

‐ ‐              ‐

SERC

‐ E

‐ ‐              ‐

SPP

‐ ‐              ‐

CAL

‐ N

‐ ‐              ‐

CAL

‐ S

‐ ‐              ‐

Basin

‐ ‐              ‐

Desert SW

‐ ‐              ‐

RMPA

‐ ‐              ‐

NWPP

‐ ‐              ‐

TOTAL

‐ ‐              ‐ Moderate Case Moderate Case Projections

Combined Impacts

‐ 2015

Derated Retired

(MW) (MW) Total

Coal Units

ERCOT 267

‐ 267

FRCC 156 1,592 1,748

ISO

‐ NE 88 239 327

NYISO 77 74 151

MAPP 10 0 10

MISO 1,400 3,583 4,982

PJM 1,323 5,725 7,048

SERC

‐ N 435 1,690 2,125

SERC

‐ W 9 5 265 360

SERC

‐ SE 265 2,942 3,206

SERC

‐ E 303 945 1,248

SPP 415 285 700

CAL

‐ N 2 67 68

CAL

‐ S

‐ 184 184

Basin 35 39 74

Desert SW 34

‐ 34

RMPA 53 203 256

NWPP 40 12 52

TOTAL 4,996 17,844 22,840

O/G

‐ ST Units

ERCOT

‐ ‐              ‐

FRCC

‐ ‐              ‐

ISO

‐ NE

‐ ‐              ‐

NYISO

‐ ‐              ‐

MAPP

‐ ‐              ‐

MISO

‐ ‐              ‐

PJM

‐ ‐              ‐

SERC

‐ N

‐ ‐              ‐

SERC

‐ W

‐ ‐              ‐

SERC

‐ SE

‐ ‐              ‐

SERC

‐ E

‐ ‐              ‐

SPP

‐ ‐              ‐

CAL

‐ N

‐ ‐              ‐

CAL

‐ S

‐ ‐              ‐

Basin

‐ ‐              ‐

Desert SW

‐ ‐              ‐

RMPA

‐ ‐              ‐

NWPP

‐ ‐              ‐

TOTAL

‐ ‐              ‐ Strict Case Strict Case Projections

Combined Impacts

‐ 2015Potential Impacts of Future Environmental Regulations

2011 Long

‐ Term Reliability Assessment Page | 146

November 2011 Table 34 

### : Cumulative Projected Incremental Capacity Losses through 2018

Derated Retired

(MW) (MW) Total

Coal Units

ERCOT 267

‐ 267

FRCC 176

‐ 176

ISO

‐ NE 93 144 237

NYISO 77 74 151

MAPP 8

‐ 8

MISO 519 1,110 1,629

PJM 606 2,850 3,456

SERC

‐ N 175 724 899

SERC

‐ W 9 5 0 96

SERC

‐ SE 318 1,358 1,675

SERC

‐ E 110 808 918

SPP 198 187 385

CAL

‐ N 4 15 18

CAL

‐ S 4 83 87

Basin 29 39 68

Desert SW 34

‐ 34

RMPA 23 89 111

NWPP 34 12 46

TOTAL 2,770 7,491 10,261

O/G

‐ ST Units

ERCOT 119 5,065 5,184

FRCC 27 904 931

ISO

‐ NE 4 4,898 4,901

NYISO 201 4,096 4,297

MAPP

‐ ‐              ‐

MISO

‐ ‐              ‐

PJM

‐ 903 903

SERC

‐ N

‐ ‐              ‐

SERC

‐ W

‐ ‐              ‐

SERC

‐ SE

‐ 237 237

SERC

‐ E

‐ ‐              ‐

SPP

‐ ‐              ‐

CAL

‐ N

‐ 2,138 2,138

CAL

‐ S 4 8 6,439 6,487

Basin

‐ ‐              ‐

Desert SW 5 418 423

RMPA

‐ ‐              ‐

NWPP

‐ ‐              ‐

TOTAL 404 25,097 25,502 Combined Impacts

‐ 2018

Moderate Case Moderate Case Projections

Derated Retired

(MW) (MW) Total

Coal Units

ERCOT 267

‐ 267

FRCC 156 1,592 1,748

ISO

‐ NE 88 239 327

NYISO 77 74 151

MAPP 10 0 10

MISO 1,400 3,583 4,982

PJM 1,323 5,725 7,048

SERC

‐ N 4 3 5 1,690 2,125

SERC

‐ W 9 5 265 360

SERC

‐ SE 265 2,942 3,206

SERC

‐ E 3 0 3 945 1,248

SPP 415 285 700

CAL

‐ N 2 67 68

CAL

‐ S

‐ 184 184

Basin 35 39 74

Desert SW 34

‐ 34

RMPA 53 203 256

NWPP 40 12 52

TOTAL 4,996 17,844 22,840

O/G

‐ ST Units

ERCOT 105 5,593 5,698

FRCC 27 904 931

ISO

‐ NE

‐ 5,015 5,015

NYISO 195 4,291 4,486

MAPP

‐ ‐              ‐

MISO

‐ 424 424

PJM 2 3,632 3,634

SERC

‐ N

‐ ‐              ‐

SERC

‐ W 1 9 0 3,134 3,324

SERC

‐ SE

‐ 349 349

SERC

‐ E

‐ 84 84

SPP 29 2,523 2,551

CAL

‐ N

‐ 2,138 2,138

CAL

‐ S 3 6 6,924 6,960

Basin 1 113 114

Desert SW 2 523 525

RMPA

‐ 84 84

NWPP

‐ ‐              ‐

TOTAL 588 35,730 36,318 Strict Case Strict Case Projections

Combined Impacts

‐ 2018Potential Impacts of Future Environmental Regulations

Page | 147 2011 Long

‐ Term Reliability Assessment

November 2011 Capacity losses modeled in this analysis are highly sensitive to changes in natural gas prices. All the

projected capacity losses outlined above were projected using EVA’s Base natural gas and delivered coal

prices. For the 2018 case, sensitivity studies were run to quantify the sensitivity of the retirement

decisions to a range of +/

‐ $2.00/MMBtu from the EVA Base Henry Hub (H H) natural gas price. In

addition, EVA has developed high and low natural gas price forecasts that reflect our interpretation of a

90 percent confidence level incorporating the full range of reasonable potential outcomes of market,

technology and regulatory changes. Sensitivity of the 2018 coal unit retirements (excl udes derate

capacity losses) are shown below (Table 35).

Table 35: Projected 2018 Coal Retirements Based on Gas

‐ Price Sensitivity

A significant retrofit effort is expected over the next ten years in order to comply with proposed EPA

regulations. Environmental controls are expe cted to be put in place to meet air regulations by the end

of 2015. In total, between 576 and 677 coal

‐ fired unit retrofits (Moderate and Strict Case, respectively)

will be needed by the end of 2015, totaling 234 to 258 GW of retrofitted coal capacity (Table 36). 139 For

water regulations, a majority of the retrofits are expected to be performed beyond 2015. While the

compliance date for 316(b) is assumed to be in 2018, retrofits are likely to continue into 2020 and

beyond depending on the individual circumstances and requirements for each plant; therefore, these

retrofits are not shown.

139 These values do not include retrofits that would be needed to meet 316(b) compliance. Base - $2 Low HH Base HH High HH Base+ $2

NG Price NG Price NG Price NG Price NG Price

Year $/MMBtu $/MMBtu $/MMBtu $/MMBtu $/MMBtu

2013 $2.47 $4.27 $4.53 $5.07 $6.60

2014 $2.82 $4.72 $4.92 $5.50 $7.02

2015 $3.42 $5.31 $5.54 $5.84 $7.67

2016 $3.65 $5.49 $5.81 $6.19 $7.96

2017 $3.89 $5.68 $6.08 $6.56 $8.26

2018 $4.15 $5.88 $6.37 $6.93 $8.59

2019 $4.51 $6.08 $6.76 $7.32 $9.02

2020 $4.89 $6.28 $7.17 $7.71 $9.45

2021 $4.99 $6.49 $7.31 $7.99 $9.62

2022 $5.11 $6.70 $7.46 $8.28 $9.81

2023 $5.30 $6.91 $7.69 $8.58 $10.07

2024 $5.50 $7.13 $7.92 $8.89 $10.34

2025 $5.92 $7.36 $8.37 $9.20 $10.83

2026 $6.02 $7.52 $8.50 $9.45 $10.99

2027 $6.11 $7.69 $8.63 $9.71 $11.16

2028 $6.20 $7.86 $8.75 $9.97 $11.31

2029 $6.31 $8.03 $8.90 $10.23 $11.49

2030 $6.44 $8.21 $9.06 $10.51 $11.69

Moderate Case (MW) 13,261 9,879 7,491 7,062 5,678

Strict Case (MW) 34,570 19,755 17,844 14,390 10,665

Note: Base

‐ $2 HH and Base+$2 HH vary by $2 Real from base Henry HubPotential Impacts of Future Environmental Regulations

2011 Long

‐ Term Reliability Assessment Page | 148

November 2011 Table 36: Retrofits Needed by End of 2015 (by Number of Units and Capacity)

Constricted compliance deadlines may challenge the electric industry’s planning horizons, existing

planning processes and typical construction schedules. Successful implementation of environmental

regulations will be highly dependent on the ability of units needed for reliability to obtain the necessary

time needed to com ply with certain requirements. Given the timelines for compliance, many of the

affected units may need to take maintenance outages concurrently. The need to take multiple units

out

‐ of

‐ service on extended scheduled outages can exacerbate resource adequacy concerns and reduce

needed flexibility, even during off

‐ pe ak periods. Outage coordination must be a priority to avoid

resource adequacy concerns during maintenance periods. Number MW Number MW

ERCOT 23 13,424 27 15,720

FRCC 16 7,357 17 7,436

ISO

‐ NE 8 1,808 6 1,713

NYISO 9 1,890 10 1,890

MAPP 2 419 5 1,120

MISO 138 51,979 156 55,038

PJM 120 54,669 148 59,195

SERC

‐ N 56 19,238 70 21,500

SERC

‐ W 9 5,520 9 5,520

SERC

‐ SE 34 19,503 43 20,822

SERC

‐ E 31 14,156 35 15,048

SPP 59 22,106 65 23,135

CAL

‐ N 2 106 1 54

CAL

‐ S 1 101

- -

Basin 15 5,764 21 8,265

Dese rt SW 21 7,997 27 10,101

RMPA 23 4,058 27 6,694

NWPP 9 4,277 10 4,384

TOTAL 576 234,371 677 257,633 2015

Mode ra te Ca se Strict Ca sePotential Impacts of Future Environmental Regulations

Page | 149 2011 Long

‐ Term Reliability Assessment

November 2011 Reliability Assessment

Sufficient Planning Reserve Margins must be maintained to provide reliable electric service. With fewer

resources, flexibility is reduced and the risk of a capacity shortage may increase. Where Planning

Reserve Margins fall below zero there is a basic inability to serve load with projected resources.

Resources from these ten

‐ year projections are reduced to form the scenario cases (Mo derate Case and

Strict Case—previously described in the report) and the resulting Planning Reserve Margins are

calculated. This update includes a comparison of the impacts on Planning Reserve Margin for the years

2013, 2015, and 2018 based on the 2011 Long

‐ Term Reliability Ass essment reference case. The resulting

Planning Reserve Margin is compared to the NERC Reference Margin Level to determine if more

resources may be needed. For the resource adequacy assessment, NERC chose a range of resource

categories to evaluate Planning Reserve Margins for these scenarios. The range includes Anticipated

Capacity Resources on the low

‐ end and Adjusted Potential Capacity Resourc es on the high

‐ end. 140

Overall, impacts on Planning Reserve Margins and the need for more resources is a function of the

compliance timeline associated with the potential EPA regulations. Up to a 61 GW reduction of

incremental coal, oil, and gas

‐ fired generation capacity is identified as economically vulnerable for

retirement during the scenario timef rame. Absent sufficient industry response, the reduction in

capacity significantly affects projected Planning Reserve Margins for a majority of the Assessment Areas

in the 2018 Strict Case. Potentially significant reductions in capacity by 2015 may require heightened

concentration towards the addition of resources; however, for 2015, in a majority of the Assessment

Areas, retirements do not appear to significantly impact Planning Reserve Mar gins. Rather, the need for

retrofits and installation of environmental controls by that year is the primary concern.

Additionally, more transmission may be needed as the industry responds to resolve identified capacity

deficiencies. As replacement generation is constructed, new transmission may be needed to

interconnect new genera tion. Additionally, existing generation that may not be deliverable due to

transmission limitations may need enhancements to the transmission system in order to allow firm and

reliable transmission service. While NERC did not model deliverability, operational or stability impacts

to the transmission system in this ass essment, constructing new transmission or refurbishing existing

transmission may be required. These effects on local reliability can create additional timing challenges.

For example, transmission system enhancements and reconfiguration may be necessary in some areas,

which may create additional timing issues if transmission facilities take relatively longer to construct

than generati on.

In this update, NERC did not review the potential impact on scheduled maintenance to account for any

retrofit work on existing units. The assumption is that all retrofit work will be accomplished during

normal maintenance periods, and the reserves available during those maintenance periods will be

sufficient to accommodate the incr eased retrofit work load. However, this may not be the case as a

140 Refer to the Terms Used in This Report section for detailed definitions regarding supply/resource categories.Potential Impacts of Future Environmental Regulations

2011 Long

‐ Term Reliability Assessment Page | 150

November 2011 significant industry

‐ wide retrofit effort over the course of a short timeframe could add unforeseen

stresses.

The resource adequacy assessment results are highlights by Assessment Area in Table 37 through Table

45. Planning Reserve Margins impacts are illustrated in Figure 67 through Figure 72.

Note: For the WECC, individual Assessment Area cap acity reductions were aggregated to calculate the

WECC US Planning Reserve Margin.

Resource Adequacy Asse ssment Results: 2013

Table 37: 2013 Reference Case

Total

Internal

Demand

(MW) Anticipated

Capacity

(MW) Adjusted

Potential

(MW) Anticipated

Reserve

Margin (%) Adjusted

Potential

Reserve

Margin (%) NERC

Reference

Margin

Level (%)

United States

ERCOT 67,362 76,635 78,671 13.8% 16.8% 13.8%

FRCC 47,446 58,205 58,401 22.7% 23.1% 15.0%

MISO 94,834 114,509 131,651 20.7% 38.8% 15.0%

MRO

‐ MAPP 5,331 7,016 7,016 31.6% 31.6% 15.0%

NPCC

‐ New England 28,525 33,361 37,726 17.0% 32.3% 15.0%

NPCC

‐ New York 33,433 45,814 45,960 37.0% 37.5% 15.5%

PJM 162,489 200,244 203,310 23.2% 25.1% 15.0%

SERC

‐ E 44,863 56,526 56,526 26.0% 26.0% 15.0%

SERC

‐ N 47,359 61,080 61,605 29.0% 30.1% 15.0%

SERC

‐ SE 51,649 63,638 66,668 23.2% 29.1% 15.0%

SERC

‐ W 25,912 34,589 40,882 33.5% 57.8% 15.0%

SPP 55,149 69,226 73,665 25.5% 33.6% 13.6%

WECC US 144,881 200,779 202,109 38.6% 39.5% 14.2%

Total 809,235 1,021,622 1,064,190 26.2% 31.5% 15.0%Potential Impacts of Future Environmental Regulations

Page | 151 2011 Long

‐ Term Reliability Assessment

November 2011 Table 38: 2013 Moderate Case Results

Table 39: 2013 Strict Case Results Derates and

Retirements

(MW) Anticipated

Capacity

(MW) Adjusted

Potential

Capacity

(MW) Anticipated

Reserve

Margin (%) Adjusted

Potential

Reserve

Margin (%)

United States

ERCOT

‐ 76,635 78,671 13.8% 16.8%

FRCC

‐ 58,205 58,401 22.7% 23.1%

MISO

‐ 114,509 131,651 20.7% 38.8%

MRO

‐ MAPP

‐ 7,016 7,016 31.6% 31.6%

NPCC

‐ New England

‐ 33,361 37,726 17.0% 32.3%

NPCC

‐ New York

‐ 45,814 45,960 37.0% 37.5%

PJM

‐ 200,244 203,310 23.2% 25.1%

SERC

‐ E

‐ 56,526 56,526 26.0% 26.0%

SERC

‐ N

‐ 61,080 61,605 29.0% 30.1%

SERC

‐ SE

‐ 63,638 66,668 23.2% 29.1%

SERC

‐ W

‐ 34,589 40,882 33.5% 57.8%

SPP

‐ 69,226 73,665 25.5% 33.6%

WECC US

‐ 200,779 202,109 38.6% 39.5%

Total

‐ 1,021,622 1,064,190 26.2% 31.5%

Derates and

Retirements

(MW) Anticipated

Capacity

(MW) Adjusted

Potential

Capacity

(MW) Anticipated

Reserve

Margin (%) Adjusted

Potential

Reserve

Margin (%)

United States

ERCOT 76 76,559 78,595 13.7% 16.7%

FRCC 13 58,192 58,388 22.6% 23.1%

MISO 2,066 112,443 129,585 18.6% 36.6%

MRO

‐ MAPP 0 7,016 7,016 31.6% 31.6%

NPCC

‐ New England 0 33,361 37,726 17.0% 32.3%

NPCC

‐ New York 12 45,802 45,948 37.0% 37.4%

PJM 3,398 196,846 199,912 21.1% 23.0%

SERC

‐ E 1,032 55,494 55,494 23.7% 23.7%

SERC

‐ N 325 60, 755 61,280 28.3% 29.4%

SERC

‐ SE 1,626 62,012 65,042 20.1% 25.9%

SERC

‐ W 175 34,414 40,707 32.8% 57.1%

SPP 1,067 68,159 72,598 23.6% 31.6%

WECC US 0 200,779 202,109 38.6% 39.5%

Total 9,791 1,011,831 1,054,399 25.0% 30.3%Potential Impacts of Future Environmental Regulations

2011 Long

‐ Term Reliability Assessment Page | 152

November 2011 Figure 67: 2013 Peak Anticipated Reserve Margin Scenario Impacts

Figure 68: 2013 Peak Adjusted Potential Reserve Margin Scenario Impacts 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0%

Reference Case Moderate Case Strict Case NERC Reference Margin Level

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%

Reference Case Moderate Case Strict Case NERC Reference Margin LevelPotential Impacts of Future Environmental Regulations

Page | 153 2011 Long

‐ Term Reliability Assessment

November 2011 Resource Adequacy Asse ssment Results: 2015

Table 40: 2015 Reference Case

Total

Internal

Demand

(MW) Anticipated

Capacity

(MW) Adjusted

Potential

(MW) Anticipated

Reserve

Margin (%) Adjusted

Potential

Reserve

Margin (%) NERC

Reference

Margin

Level (%)

United States

ERCOT 71,910 79,682 82,575 10.8% 14.8% 13.8%

FRCC 49,278 60,761 61,288 23.3% 24.4% 15.0%

MISO 95,947 114,551 131,693 19.4% 37.3% 15.0%

MRO

‐ MAPP 5,497 7,065 7,065 28.5% 28.5% 15.0%

NPCC

‐ New England 29,380 32,886 36,936 11.9% 25.7% 15.0%

NPCC

‐ New York 33,678 46,819 47,052 39.0% 39.7% 15.5%

PJM 166,506 200,990 206,142 20.7% 23.8% 15.0%

SERC

‐ E 46,067 55,023 55,023 19.4% 19.4% 15.0%

SERC

‐ N 48,437 58,570 59,133 20.9% 22.1% 15.0%

SERC

‐ SE 53,378 64,256 67,342 20.4% 26.2% 15.0%

SERC

‐ W 26,806 33,814 41,110 26.1% 53.4% 15.0%

SPP 55,556 69,176 73,834 24.5% 32.9% 13.6%

WECC US 149,723 205,844 209,719 37.5% 40.1% 14.2%

Total 832,163 1,029,437 1,078,912 23.7% 29.7% 15.0%Potential Impacts of Future Environmental Regulations

2011 Long

‐ Term Reliability Assessment Page | 154

November 2011 Table 41: 2015 Moderate Case

Table 42: 2015 Strict Case Derates and

Retirements

(MW) Anticipated

Capacity

(MW) Adjusted

Potential

Capacity

(MW) Anticipated

Reserve

Margin (%) Adjusted

Potential

Reserve

Margin (%)

United States

ERCOT 267 79,415 82,308 10.4% 14.5%

FRCC 176 60,585 61,112 22.9% 24.0%

MISO 1,629 112,922 130,064 17.7% 35.6%

MRO

‐ MAPP 8 7,057 7,057 28.4% 28.4%

NPCC

‐ New England 237 32,649 36,699 11.1% 24.9%

NPCC

‐ New York 151 46,668 46,901 38.6% 39.3%

PJM 3,456 197,534 202,686 18.6% 21.7%

SERC

‐ E 918 54,105 54,105 17.4% 17.4%

SERC

‐ N 899 57,671 58,234 19.1% 20.2%

SERC

‐ SE 1,675 62,581 65,667 17.2% 23.0%

SERC

‐ W 95 33,719 41,015 25.8% 53.0%

SPP 385 68,791 73,448 23.8% 32.2%

WECC US 364 205,480 209,355 37.2% 39.8%

Total 10,261 1,019,176 1,068,651 22.5% 28.4%

Derates and

Retirements

(MW) Anticipated

Capacity

(MW) Adjusted

Potential

Capacity

(MW) Anticipated

Reserve

Margin (%) Adjusted

Potential

Reserve

Margin (%)

United States

ERCOT 267 79,415 82,308 10.4% 14.5%

FRCC 1,748 59,013 59,540 19.8% 20.8%

MISO 4,982 109,569 126,711 14.2% 32.1%

MRO

‐ MAPP 10 7,055 7,055 28.3% 28.3%

NPCC

‐ New England 327 32,559 36,609 10.8% 24.6%

NPCC

‐ New York 151 46,668 46,901 38.6% 39.3%

PJM 7,048 193,942 199,094 16.5% 19.6%

SERC

‐ E 1,248 53,775 53,775 16.7% 16.7%

SERC

‐ N 2, 125 56,445 57,008 16.5% 17.7%

SERC

‐ SE 3,206 61,050 64,136 14.4% 20.2%

SERC

‐ W 360 33,454 40,750 24.8% 52.0%

SPP 700 68,476 73,134 23.3% 31.6%

WECC US 668 205,176 209,051 37.0% 39.6%

Total 22,840 1,006,597 1,056,072 21.0% 26.9%Potential Impacts of Future Environmental Regulations

Page | 155 2011 Long

‐ Term Reliability Assessment

November 2011 Figure 69: 2015 Peak Anticipated Reserve Margin Scenario Impacts

Figure 70: 2015 Peak Adjusted Potential Reserve Margin Scenario Impacts 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0%

Reference Case Moderate Case Strict Case NERC Reference Margin Level

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0%

Reference Case Moderate Case Strict Case NERC Reference Margin LevelPotential Impacts of Future Environmental Regulations

2011 Long

‐ Term Reliability Assessment Page | 156

November 2011 Resource Adequacy Asse ssment Results: 2018

Table 43: 2018 Reference Case

Total

Internal

Demand

(MW) Anticipated

Capacity

(MW) Adjusted

Potential

(MW) Anticipated

Reserve

Margin (%) Adjusted

Potential

Reserve

Margin (%) NERC

Reference

Margin

Level (%)

United States

ERCOT 75,521 81,786 85,444 8.3% 13.1% 13.8%

FRCC 51,377 61,286 61,853 19.3% 20.4% 15.0%

MISO 98,110 114,633 131,775 16.8% 34.3% 15.0%

MRO

‐ MAPP 5,776 7,211 7,211 24.8% 24.8% 15.0%

NPCC

‐ New England 30,525 32,639 36,933 6.9% 21.0% 15.0%

NPCC

‐ New York 34,190 46,819 47,073 36.9% 37.7% 15.5%

PJM 171,067 200,990 206,392 17.5% 20.6% 15.0%

SERC

‐ E 47,636 56,104 56,104 17.8% 17.8% 15.0%

SERC

‐ N 50,162 57,010 57,952 13.7% 15.5% 15.0%

SERC

‐ SE 55,592 68,693 71,779 23.6% 29.1% 15.0%

SERC

‐ W 27,806 31,491 40,751 13.3% 46.6% 15.0%

SPP 57,682 71,654 77,028 24.2% 33.5% 13.6%

WECC US 157,408 209,508 216,792 33.1% 37.7% 14.2%

Total 862,851 1,039,825 1,097,086 20.5% 27.1% 15.0%Potential Impacts of Future Environmental Regulations

Page | 157 2011 Long

‐ Term Reliability Assessment

November 2011 Table 44: 2018 Moderate Case

Table 45: 2018 Strict Case Derates and

Retirements

(MW) Anticipated

Capacity

(MW) Adjusted

Potential

Capacity

(MW) Anticipated

Reserve

Margin (%) Adjusted

Potential

Reserve

Margin (%)

United States

ERCOT 5,451 76,335 79,993 1.1% 5.9%

FRCC 1,107 60,179 60,746 17.1% 18.2%

MISO 1,629 113,004 130,146 15.2% 32.7%

MRO

‐ MAPP 8 7,203 7,203 24.7% 24.7%

NPCC

‐ New England 5,138 27,501 31,795

‐ 9.9% 4.2%

NPCC

‐ New York 4,448 42,371 42,625 23.9% 24.7%

PJM 4,359 196,631 202,033 14.9% 18.1%

SERC

‐ E 918 55,186 55,186 15.9% 15.9%

SERC

‐ N 899 56,111 57,053 11.9% 13.7%

SERC

‐ SE 1,912 66,781 69,867 20.1% 25.7%

SERC

‐ W 95 31,396 40,656 12.9% 46.2%

SPP 385 71,269 76,643 23.6% 32.9%

WECC US 9,412 200,096 207,380 27.1% 31.7%

Total 35,761 1,004,064 1,061,325 16.4% 23.0%

Derates and

Retirements

(MW) Anticipated

Capacity

(MW) Adjusted

Potential

Capacity

(MW) Anticipated

Reserve

Margin (%) Adjusted

Potential

Reserve

Margin (%)

United States

ERCOT 5,965 75,821 79,479 0.4% 5.2%

FRCC 2,679 58,607 59,174 14.1% 15.2%

MISO 5,406 109,227 126,369 11.3% 28.8%

MRO

‐ MAPP 10 7,201 7,201 24.7% 24.7%

NPCC

‐ New England 5,342 27,297 31,591

‐ 10.6% 3.5%

NPCC

‐ New York 4,637 42,182 42,436 23.4% 24.1%

PJM 10,682 190,308 195,710 11.2% 14.4%

SERC

‐ E 1,332 54,772 54,772 15.0% 15.0%

SERC

‐ N 2,125 54,885 55,827 9.4% 11.3%

SERC

‐ SE 3,555 65,138 68,224 17.2% 22.7%

SERC

‐ W 3,684 27,807 37,067 0.0% 33.3%

SPP 3,251 68,403 73,777 18.6% 27.9%

WECC US 10,489 199,019 206,303 26.4% 31.1%

Total 59,157 980,668 1,037,929 13.7% 20.3%Potential Impacts of Future Environmental Regulations

2011 Long

‐ Term Reliability Assessment Page | 158

November 2011 Figure 71: 2018 Peak Anticipated Reserve Margin Scenario Impacts

Figure 72: 2018 Peak Adjusted Potential Reserve Margin Scenario Impacts ‐ 10.0%

‐ 5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0%

Reference Case Moderate Case Strict Case NERC Reference Margin Level

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0%

Reference Case Moderate Case Strict Case NERC Reference Margin LevelPotential Impacts of Future Environmental Regulations

Page | 159 2011 Long

‐ Term Reliability Assessment

November 2011 Regional Assessment

For this update, NERC requested additional information from the Regional Entities. The Regions were

requested to provide an update to NERC detailing the potential impacts caused by potential

environmental regulations, identify the methods used to assess these impacts, and provide results of

individual studies, if studies have been performed. Additionally, the Re gional Entities identified

potential issues unique to their area, measures in place, or being considered for implementation, to

mitigate potential reliability concerns, and outline future activities planned to understand potential

reliability impacts within the Region. The individual assessments are provided in the following sections.

These regional assessments are not based on NERC’s modeling results provided in this update, bu t

instead, are summaries of their own assumptions and studies developed by each Regional Entity.

ERCOT

Potential or pending environmental regulations are studied, as they occur or are proposed, to determine

the potential impact on system reliability. Regulations that could challenge the economic or operational

viability of a generation re source are studied to determine the likelihood of that regulation to create

resource adequacy issues within the ERCOT Region. For example, should a particular environmental

regulation restrain or restrict coal

‐ fired generating stations, ERCOT would perform an economic and

transmission system study to determine the rel iability implications to ERCOT given the proposed

limitations to an existing resource or group of resources. One such study 141 has recently been

completed to determine the reliability implications of the Clean Water Act (Section 316(b), Title I of the

Clean Air Act (new emissions standards for hazardous air pollutants), Clean Air Transport Rule (CATR),

and Coal Combustion Residuals (CCR) Disposal Regulations. A preliminary analysis of localized

transmission system impacts included in the study indicates tha t the potential loss of 9,800 MWs of gas

‐

fired generation would have impacts on transmission reliability in certain load center regions, likely

requiring additional reactive devices and new import pathways into those regions. Redevelopment of

existing generation sites in these areas with new generating units could reduce or delay the nee d for

additional transmission infrastructure. In addition, ERCOT recently completed an assessment 142 of the

proposed inclusion of Texas in the Cross

‐ State Air Pollution Rule (replaces CATR). The assessment found

that, if the rule is implemented as currently scheduled on January 1, 2012, then generators’ current

compliance plans indicate that 1,200 to 1,400 MW of generation would be unavailable year round and

an addi tional 1,800 to 4,800 MW would be unavailable during the off

‐ peak months. The unavailability of

this generation would increase capacity insufficiency and the potential need for emergency actions

including rotating outages, not only during the peak months but also during the off

‐ peak months until

retrofits or alternative resources are i mplemented.

FRCC

Entities may face challenges in scheduling the required overlapping maintenance outages of fossil

‐ fired

generating units. Resource adequacy in the near

‐ term could also potentially be affected due to the lack

of materials needed to retrofit existing resources. In addition, operational impacts associated with

changes in dispatch patterns under cer tain conditions may occur. In order to address these concerns,

141 http://www.ercot.com/content/news/presentat ions/2011/ERCOT_Review_EPA_Planning_Final.pdf

142 http://www.ercot.com/content/news/presentations/2011/ERCOT_CSAPR_Study.pdfPotential Impacts of Future Environmental Regulations

2011 Long

‐ Term Reliability Assessment Page | 160

November 2011 entities within the FRCC Region are closely monitoring legislation related to EPA initiatives and

evaluating potential options.

MRO

Recent environmental EPA rule proposals and the uncertainty around carbon control challenge

industry’s ability to finalize their plans. Ultimately, they could impact the configuration and operation of

the bulk power system. These impacts may result in retirements of generati on within the MRO

‐ MISO

footprint. If this occurs, the system within MRO

‐ MISO may experience reliability impacts from the

generation and transmission perspective.

To maintain compliance with environmental rules, capacity will be reduced from the system associated

with both retrofits and retirements. In the MR O

‐ MISO footprint, this will reduce the amount of existing

capacity available to meet resource adequacy requirements. Transmission adequacy could also be

impacted depending on what units retire from the bulk power system as a result of the rules. For

example, a unit needed for transmission reliability and voltage support in a metro area may require

additional transmission support to mee t the reliability requirements on the system.

The current proposed rules will impact the coal

‐ fired generation fleet located throughout the MRO

‐

MISO footprint. From internal rule evaluation, the units most likely targeted for retirement are

expected to be small, old units. Howev er, all units that do not meet the proposed rule requirements will

be impacted through retrofit costs and operational impacts of the new equipment. Carbon reduction

requirements could put additional pressure on the coal

‐ fired fleet in the MRO

‐ MISO footprint and result

in additional retirements. In fact, the uncertainty around future carbon reduc tion requirements may

result in accelerated unit retirements rather than retrofit to reduce future cost risks.

Up to this point, the final and proposed EPA rules and the uncertainty around carbon reduction has not

resulted in any current reliability issues. MRO and MISO are evaluating the potential im pacts to be

prepared to meet the stakeholders’ needs as they determine whether units are to retire or retrofit. This

will include evaluating impacts on resource and transmission adequacy. A proposed new capacity

construct within MISO will also provide additional mitigation of reduced capacity on the system by

allowing better management and inte gration of demand side resources and the management of the

participation of intermittent resources.

NPCC

New England: ISO

‐ NE routinely reviews the existing, pending, and promulgating environmental

regulation for their potential impacts on existing or future capacity. Under the workloads associated

with its Strategic Planning Initiative, ISO

‐ NE has ide ntified several regional power stations that may be

retired due to the economics of compliance with pending state and Federal air and water regulations.

Emerging environmental regulations will very likely require large capital investments that are

uneconomic for many older fossil

‐ fueled resources. While the exact form and timing of th e

requirements remain uncertain, the stated intent of and requirements on the U.S. EnvironmentalPotential Impacts of Future Environmental Regulations

Page | 161 2011 Long

‐ Term Reliability Assessment

November 2011 Protection Agency (in certain instances through court order) means that there is a very high likelihood

that substantial compliance investments will be required by owners of existing New England resources

to continue operations. This could lead to a significant quantity of older generation choosing to retire

rather than comply.

Compliance with a wide r ange of environmental requirements is expected to trigger capital investments

beginning as soon as within the next two years and extending out for several years. Consequently,

decisions on resource retirement and capacity pricing in light of these emerging requirements may

affect current capacity auctions.

Currently, procedures are in place th at would maintain system reliability. These include reliability

agreements and out

‐ of

‐ merit unit commitment. However, appropriate enhancements to wholesale

market design and system planning procedures could reduce the need for reliability agreements and

out

‐ of

‐ merit unit commitment and dispatch, which would degrade the efficiency of market operations

and/or prompt regula tory action. In addition, losing a significant quantity of coal, oil and nuclear

capacity could further increase the areas dependence on natural gas

‐ fired resources. The retirement of

a significant quantity of capacity will almost certainly trigger a vigorous debate on whether to solve the

resulting reliability problems with mar ket resources or transmission. If all of the area’s older oil units

were to seek retirement, new capacity resources would be required to satisfy the Installed Capacity

Requirement.

ISO

‐ NE has initiated and is aggressively promoting a regional dialogue focused on solutions that can

avert undesirable outcomes. ISO

‐ NE has initiated a study to better qu antify the implications of this

issue. This analysis will complement the 2010 economic planning studies.

New York : Environmental initiatives that may affect generation resources may be driven by either or

both the State and Federal programs. The 2009 New York State Energy Plan provides a long range visio n

and framework for New York’s energy usage. The State’s Department of Environmental Conservation

(NYS DEC) annual publication of its regulatory agenda describes the new environmental initiatives that it

will focus on during the coming year. The U.S. Environmental Protection Agency also publishes a similar

report on it s regulatory agenda.

There are numerous environmental initiatives that may impact the manner in which the existing

generating fleet operates or require retrofitting environmental control technologies in order to comply

with the new requirements. Several proposals have been identified for which impacts are expected to

be widespread and likely to require significa nt capital investments in order to achieve the new

standards.

RFC

Both PJM and MISO are independently reviewing the impacts of potential retirements within their RTOs.

This assessment, which has been completed by Reliability First staff, reviews the moderate and Strict

Cases for all four EPA regulations at the same ti me. Regional resource adequacy within Reliability First isPotential Impacts of Future Environmental Regulations

2011 Long

‐ Term Reliability Assessment Page | 162

November 2011 determined by assessing the resource adequacy of each RTO, and this regional retirement scenario

determines the reserve margin impact of each RTO.

PJM and MISO are the RTOs that operate within the Reliability First footprint. Both stakeholders (PJM

and MISO) have processes in place to review the reliability impacts of planned retirements prior to the

schedul ed retirement date. Each planned retirement is reviewed for any potential reliability issues, and

any issues must first be mitigated before the planned retirement can occur. Since most generation

owners do not announce their intent to retire a generating unit before it is necessary to get the RTO

review, only a small number of units have been identifie d for future retirement through the PJM and

MISO processes. In previous Long Term Reliability Assessments, the amount of unit retirements included

in the assessment has been low.

Based on the data in this retirement assessment, PJM and MISO are projecte d to need additional

resources or demand response by 2019 and 2018, respectively, under the moderate assumptions case.

For the strict assumptions case, additional resources or demand response will be need as early as 2015

by MISO and in 2017 by PJM. The amount of retirements in this assessment, while exceeding re cent

experience, is a reasonable representation of the range of potential future generation retirements given

the scope of the NERC special assessment and compliance to new EPA regulations. The amount of

uncertainty in demand forecasts, future capacity additions and future generation retirements becomes

greater with each additional year of the projected forecast. Th e inherent uncertainties in forecasting

future reserve margins means that future retirement plans need to be more closely monitored in order

to assess whether future reserve margin targets can be satisfied.

Recently, AEP has announced plans to retire nearly 6,000 MW of existing capacity to comply with these

proposed regulations. Many of the proposed AEP capacity retirements ar e included in this future

retirement assessment. As much as 1,900 MW of capacity identified by AEP as retirement candidates,

were considered retrofitted in the NERC special assessment. The AEP announcement also indicated the

repowering of several retired coal units with natural gas. This would effectively replace an additional

600 MW. Th e analysis in this assessment does not include any additional future capacity additions or

repowering beyond what was already listed in the PJM and MISO generator interconnection queues.

Modifying the PJM retirement assessment data for the AEP projected changes would reduce generation

an additional 1,300 MW within PJ M in the Moderate Case and 800 MW in the Strict Case. When these

are added to those in the retirement scenario, PJM may need additional resources one year earlier.

SERC

Entities within SERC are currently in the process of evaluating the potential impacts of the Cross

‐ State

Air Pollution Rule (CSAP R) to meet the compliance obligations that begin January 1, 2012. The short

timeframe to comply is a concern amongst entities, as there is the possibility of significant reductions in

capacity factors for some generating units, which will require Must Run operations under certain system

conditions. I mplementation of CSAPR in 2012 will restrict dispatch flexibility, reducing options for

addressing reliability challenges during adverse operating conditions such as weather extremes and

significant unplanned events. The Utility MACT Rule that EPA plans to issue in December 2011, will

initiate a three year implementation period requiring an aggressive construction sche dule in SERC toPotential Impacts of Future Environmental Regulations

Page | 163 2011 Long

‐ Term Reliability Assessment

November 2011 install transmission reinforcements, generation additions, and environmental controls retrofits.

Transmission and generation outage coordination will be significantly challenged. CSAPR limits in

interstate allowance trading may also impact the ability to obtain assistance from neighboring areas.

With Utility MACT compliance requirements in 2015, severe reductions in capacity could result

depending upon the level s of environmental controls required by the final rule and the ability of entities

to retire/replace generation and install controls within the 3 year compliance deadline. In many areas of

SERC, utilities are working internally and with consultants to gain a better understanding of the EPA

rules and to assess the costs and schedulin g of implementing various pollution control measures or

generation alternatives. Efforts are ongoing at this time as entities strive to develop strategies to

comply based upon the thresholds provided in EPA’s proposed rules. However, these strategies will not

be finalized until future regulations are released.

The data be low represents additional information collected in August 2011, as requested by NERC.

Fluctuations in capacity reflect the changes that entities have made for the 2011 annual peak data

reported from February to September 2011. Announced retirements and station loads due to retrofits

are reflected in the values of the SERC 2011 Long

‐ Ter m Reliability Assessment reference case. However,

many generation retirement decisions will not be made until the final Utility MACT rules have been

issued and assessed. These uncertain retirement decisions are not included in the 2011 reference case

because resource plans typically reflect only existing rules and regulations and do not include resource

impacts related to poten tial requirements.

Flue Gas Desulfurization Scrubbers (FGD) and Select Catalytic Reduction (SCR) controls have already

been installed on many units to address emission concerns. Recent SERC entities’ responses indicate

that approximately 129 units have been retrofitted with FGDs and/or SCRs to comply with EPA

regulations. It was reported that 24 retrofit projects are underway or awaiting regulatory approval. Of

these projects, 5 (1,563 MW) are sc heduled to be completed by the summer of 2012. More than 52

units (~ 8,000 MW) require additional environmental controls for compliance. Many entities note that

these are preliminary projections of the projects needed and will continue to evaluate the remaining

uncontrolled units to deter mine which, if any, of the units will be retrofitted with FGD systems and SCRs.

Decisions to retrofit, retire, convert to gas operation, or replace those units will be made when future

EPA Regulations’ criteria and im plementation timelines become more transparent. In many cases,

transmission enhancements and gas pipeline infrastructure to support these decisions cannot be

accomplished during a three year implementation period.

Depending upon the emissions levels established by the final Utility MACT rules, additional controls

(such as baghouses) may need to be added to units that are alrea dy equipped with FGDs and SCRs. It is

unknown whether units which have already installed FGDs and SCRs would be permitted to operate

beyond 2015 if additional required controls, such as baghouses, cannot be completed in time.

Units to be retired within the areas are also uncertain at this time. Initial reports show that

approximatel y 10,250 MW (58 units) of coal

‐ fired generation will be retired within the SERC Region to

be compliant with the recent rules. Although entities feel it is very early in the process to determine the

impacts of the rules, their analyses consider all current, proposed, and expe cted rules such as: the Cross

‐Potential Impacts of Future Environmental Regulations

2011 Long

‐ Term Reliability Assessment Page | 164

November 2011 State Air Pollution Rule (or its predecessors CAIR/the proposed Transport Rule), Clean Air Visibility Rule

(CAVR), the proposed Electric Generating Unit Maximum Achievable Control Technology (Utility MACT)

rule, the proposed 316(b) rule for cooling water intake structures, the proposed Coal Combustion

Residuals (CCR) rule, and expected regulation of Greenhouse Gases (GHGs), along with a range of

potential fuel prices. State regulators are also involved in the pro cess to help entities establish plans to

replace any capacity that may be lost, and approve retirements and retrofits that are needed.

Significant amounts of potential generation capacity retirements have not yet been provided for

inclusion in the 2011 Long

‐ Term Relia bility Assessment reference case because many state resource

plans do not reflect the potential impacts of proposed EPA rules.

Recent SERC entities’ analyses shows that approximately 6,200 MW or more of coal

‐ and oil

‐ fired

generation is expected to be converted to other fuels, such as natural gas. Some capac ity will be

permanently retired, whereas other capacity may be unable to operate pending additional

environmental controls or gas conversion infrastructure. Consideration of various resource selections in

the assessment process may require transmission enhancements and take into account construction

schedules. In general, many entities are uncertain of specific sites for addition al capacity, if needed, at

this time. Ongoing nuclear, demand

‐ side management, biomass and renewable resource projects are

also being implemented. New resources and programs would require additional time to design, obtain

regulatory approval, implement and gain reasonable scale.

SERC entities are also assessing operational reliability impacts related to changes in th e generation fleet

makeup and operating parameters. These reliability assessments include revisions to System

Restoration Plans (Blackstart), gas pipeline contingency studies, multiple unit outage contingencies

related to common environmental controls, stability and voltage security impacts, fault current studies,

and others.

Entities within SERC are taking various steps to assess the impa cts of the EPA rules. Consultants have

been hired to assess entity costs, studies are in progress to develop plans for generation redispatch, and

operational procedures are being revised to compensate for alternative generation mixes. These tasks

reflect SERC entity efforts to find strategies to achieve the lowest reasonable operational co st consistent

with the provision of adequate and reliable electric service, while complying with environmental

regulations. Entities are concerned that the timeframe to become compliant with the new rules is not

sufficient to complete the many retrofit projects needed on existing units. Some deem the impact of

these new rules will jeopa rdize reliability because: 1) units without all of the required environmental

control retrofits may not be allowed to operate, 2) replacement generation or infrastructure upgrades

for fuel switches may not be complete, and 3) final decisions regarding whether to retrofit, retire and

replace, or change the fuel supply of units to natural gas will not be made un til all the rules are final.

SPP

Due to the EPA’s adoption of the CSAPR in July 2011, the SPP RTO and its members have not had time to

fully assess the Rule’s impacts to individual systems or to the RTO as a whole. The SPP EPA Study di d not

originally include the final CSAPR impacts, but the SPP RTO began working on a 2012 assessment of the

CSAPR in September 2011 (SPP CSAPR Study). The study began with a review of the EPA CSAPR ModelPotential Impacts of Future Environmental Regulations

Page | 165 2011 Long

‐ Term Reliability Assessment

November 2011 results which showed that 10.7 GWs of generating capacity in the SPP RTO footprint would not be

deployed in 2012. 143 Further analysis to account for capacity that is not expected to be needed for peak

yielded a net impact of CSAPR of 5.4 GWs from 48 units that would be unavailable across the 2012

Summer Peak. Additionally, the SPP CSAPR Study showed a shift in the generation from larger plants to

smaller plan ts. Preliminary results of the SPP CSAPR study show that many overloads greater than 120

percent of a facility’s emergency ratings were found under N

‐ 1 conditions. Furthermore, due to the

non

‐ deployment of major units in some areas there were voltage issues below 85 percent, with two

‐

thirds of the voltage issues occurring on 115kV lines, and the remaining one

‐ third on 69 kV lines.

However, th e reliability impacts have not yet been fully determined and work continues on the SPP

CSAPR Study. 144

WECC

On May 4, 2010, California’s State Water Resources Control Board (SWRCB) adopted a policy regarding

once

‐ through cooling used at electricity

‐ producing power plants in California. Statewide Policy on the

Use of Coastal and Estuarine Waters for Power Plant Cooling 145 provides clear and consistent standards

for implementing the Clean Water Act for electricity

‐ producing power plants, which operate under

National Pollutant Discharge Elimination System (NPDES) permits issued by California’s nine Regional

Water Boards. In developing the policy, the State Water Board staff met regularly with representatives

from the agencies that oversee the ele ctricity supply grid (including the California Energy Commission,

the California Public Utilities Commission, and the California Independent System Operator) to develop

realistic and phased

‐ in implementation plans and schedules. Under the draft policy, the State Water

Board will continue to work with the energy agencies to ensure that the compliance sche dules assure

electric supply reliability. Information regarding the policy, a proposed policy amendment and the

compliance plans filed by the owners of the 19 plants (21,000 MW) is available on the SWRCB

website. 146 The current fluid nature of compliance plans combined with long

‐ term plans for California’s

resource additions has created problematic issues in producing a detailed reliability assessment.

Despite these circumstances, WECC staff is currently not aware of planned individual unit retirements

that are expected to have a significant impact on reliability.

143 The EPA Model deployed generating units based on a unit retro

‐ fit analysis instead of on a system reliability basis. EPA

CSAPR Model

144 These results are based on EPA CSAPR Model unit deployments rather than individual SPP Member plans for their

generation assets.

145 http://www.waterboards.ca.gov/water_issues/programs/ ocean/cwa316/powerplants/alamitos/docs/ags_ip2011.pdf

.

146 SWRCB Once

‐ Through Cooling Information: http://www.waterboards. ca.gov/water_issues/programs/ocean/cwa316/

.Potential Impacts of Future Environmental Regulations

2011 Long

‐ Term Reliability Assessment Page | 166

November 2011 Conclusions

While none of the EPA rules are final, and thus their

impact cannot be completely measured, the results of

this update show a measurable impact to Planning

Reserve Margins should the four potential EPA rules

NERC has examined be implemented as assumed in

this update. Impacts to both bulk power system

plannin g and operations may cause serious concerns

unless prompt industry action is taken. Planning

Reserve Margins appear to be impacted in certain

Assessment Areas, driving potential resource

adequacy concerns. Additionally, considerable

operational challenges will exist in managing,

coordinating, and scheduling an industry

‐ wide

environmental control retrofit effort, along with the

need to add system reinforcement. The update

results along with inform ation provided by NERC stakeholders and industry representatives revolve

around five key conclusions:

1. Timing

– Compliance deadlines will challenge the electric industry’s planning horizons, existing

planning processes and typical construction schedules. Transmission lines, power plants, and

environmental control retrofits are often planned and constructed over a long period of time.

Successful implementation of the proposed EPA rules will be highly dependent on the amount of

time the i ndustry will be given to comply with future environmental regulations and that tools are

in place within a timely manner to support the industry’s transition given the large number of units

that must be retrofit.

2. Regionality

– The fuel

‐ mix differs greatly across the country. Each area will face different dynamics

due to the types of generators as well as the types of regulatory environments within a given area

( i.e., deregulated markets, regulated utility service areas, state regulations). State decisions could

greatly influence the cumulative impacts.

3. Outag e Coordination

– Given the window for compliance, many affected units may need to take

long

‐ term maintenance outages concurrently. The need to take multiple units out

‐ of

‐ service on

extended scheduled outages can exacerbate resource adequacy concerns and reduce needed

flexibility, even during off

‐ peak periods. Outage coordination must be a priority to avoid resource

adequacy co ncerns.

4. Transmission and Operational Issues

– The retirement of larger and/or strategically situated

generating units will cause changes to the power flows and stability dynamics of the bulk power

system. These changing characteristics will require enhancements to the interconnected

transmission systems to provide reactive and voltage support, address thermal constraints, and

provide for system stability. Based on information gathered fro m stakeholders and the RegionalPotential Impacts of Future Environmental Regulations

Page | 167 2011 Long

‐ Term Reliability Assessment

November 2011 Entities, these issues may cause some reliability concerns unless the transmission system is

reconfigured. In some cases, these reliability issues can result in violations of NERC Reliability

Standards and, therefore, pose a threat to reliability if they are not addressed.

As more gas

‐ fired generation is incorporated into a given system gas and electric inter dependency

issues must also be addressed. More gas

‐ fired generation will require additional gas pipeline

infrastructure, increased coordination with pipeline operators, and developing operational

strategies to minimize potential fuel delivery issues. These issues were highlighted in a recent

NERC report on gas and electric interdependencies.

5. Uncer tainty

– A major concern among planning entities and regulatory bodies, such as NERC, is the

lack of certainty both on the generating supply side and from EPA. Planning Authorities

disconnected from the owning/operating functions of generation do not have the visibility needed

to accurately model these potentially significant system changes. For example, rules within th e

ISO/RTO market structures allow generators to request retirement within 90 days of the requested

retirement date. Even with facilities which are not being retired, Planning Authorities and grid

operators may not be aware of significant changes in plant operating parameters and new common

contingencies. The lack of information and data sha ring, and therefore sufficient planning, causes

concern.

Uncertainty remains within the regulatory policy making process as to what the final requirements

will be on generators. While many of the rules have been proposed, with some already finalized,

the industry is forced to continue to make assumptions on what the final rules will require. While

the proposed rules give a good representation, final rules can be quite diff erent ( e.g., as seen in

Texas/ERCOT). Increasing the certainty with respect to the timing and requirements of the

regulations would promote timely and sound engineering planning to support the implementation

of these ru les in an orderly and predictable manner.

Furthermore, as rules are finalized and more flexibility is needed to reliably operate the bulk power

system, an efficient and systematic process is needed to grant waivers and extensions for

generators that are vital to the grid ( i.e., critical reliability un its, black

‐ start).



### K EY 

### F INDINGS



### ‐ E NVIRONMENTAL 

### R EGULATIONS



### Existing and proposed environmental regulations in the U.S. may significantly affect bulk

power system reliability depending on the scope and timing of the rule implementation and

the mechanisms in place to preserve reliability.Potential Impacts of Future Environmental Regulations

2011 Long

‐ Term Reliability Assessment Page | 168

November 2011 Recommendations

The following recommendations are pertinent to Federal and state regulators, the electric industry, as

well as NERC, and supplement the 2010 NERC EPA Assessment:

Regulators:

 The Electric Reliability Organization’s Reliability Standards and Regional Criteria must be met at

all times to ensure reliable operation and planning of the bulk power system. Based on the

results of this study, more time is neede d in certain areas to ensure resource adequacy and local

reliability requirements can be addressed during the transition period. EPA, FERC, DOE and

state utility regulators, working together and separately, should employ the array of tools at

their disposal and their regulatory authority to preserve bulk power system reliability, in cluding

the deferral of compliance targets and granting extensions where there is a demonstrated

reliability need. Coordination among Federal agencies is necessary to ensure the industry is not

forced to violate one regulation to meet another.

Industry:

 Industry participants must meet NE RC’s Reliability Standards to ensure reliability and as they

address compliance requirements of the EPA regulations. They should employ available tools

and processes to ensure that bulk power system reliability is maintained through any resource

transition. Toward that end, regional wholesale competitive market operators should ensure

capacity markets are functioning effectively to supp ort the development of new replacement

capacity where needed. Similarly, stakeholders in areas without organized markets should work

to ensure that investments are made to retrofit or replace capacity that will be affected by

forthcoming EPA regulations. Additionally, affected unit owners that may be disconnected from

wide

‐ area pl anning functions ( e.g., generator owners operating in an ISO/RTO), should provide

Planning Authorities timely and accurate information about the compliance plans for their units

in order to adequately measure.

 Perhaps one of the most significant risk factors will be taking the existing units out for

maintenance to install the neede d environmental control equipment. Outages for retrofits, new

generation, and required transmission must be coordinated to ensure continued bulk power

system reliability not only during peak periods, but during off

‐ peak shoulder months when more

scheduled outages are expected to occur.

NERC:

 NERC should continue to assess the implica tions of the EPA regulations as greater certainty

emerges around industry obligations, technologies, timelines, and targets.

Further, NERC should lead industry’s effort and response to measure resource adequacy

implications along with impacts to operating reliability (e.g., deliverability, stability, localized

issues, outage scheduling, operating procedures, and industry coordination) resulting from

proposed and pending EPA regulatio ns. NERC should leverage the expertise of the Planning

Authorities to assess the local system conditions that could degrade reliability, review plans for

meeting environmental regulations as well as NERC Reliability Standards, and submit

recommendations to FERC on behalf of the industry.Potential Impacts of Future Environmental Regulations

Page | 169 2011 Long

‐ Term Reliability Assessment

November 2011 Additional Background Information

Table 46: Projected Incremental Capacity Losses through 2013 by Regulation

– Moderate Case

Retired Derate Retired Derate Retired Derate Retired Derate Retired Derate

Coal Units

ERCOT

‐ ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐

FRCC

‐ ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐

ISO

‐ NE

‐ ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐

NYISO

‐ ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐

MAPP

‐ ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐

MISO

‐ ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐

PJM

‐ ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐

SERC

‐ N

‐ ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐

SERC

‐ W

‐ ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐

SERC

‐ SE

‐ ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐

SERC

‐ E

‐ ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐

SPP

‐ ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐

CAL

‐ N

‐ ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐

CAL

‐ S

‐ ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐

Basin

‐ ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐

Desert SW

‐ ‐             ‐             ‐             ‐ ‐ ‐             ‐             ‐             ‐

RMPA

‐ ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐

NWPP

‐ ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐

TOTAL

‐ ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐

Oil/Gas

‐ Steam Turbine Units

ERCOT

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

FRCC

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

ISO

‐ NE

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

NYISO

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

MAPP

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

MISO

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

PJM

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

SERC

‐ N

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

SERC

‐ W

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

SERC

‐ SE

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

SERC

‐ E

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

SPP

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

CAL

‐ N

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

CAL

‐ S

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

Basin

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

Desert SW

‐ ‐        ‐        ‐        ‐ ‐ ‐        ‐        ‐        ‐

RMPA

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

NWPP

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

TOTAL

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐ Moderate Case

Combined Section 316 (b) Coal Ash Ponds CSAPR Air ToxicsPotential Impacts of Future Environmental Regulations

2011 Long

‐ Term Reliability Assessment Page | 170

November 2011 Table 47: Projected Incremental Capacity Losses through 2013 by Regulation

– Strict Case

Retired Derate Retired Derate Retired Derate Retired Derate Retired Derate

Coal Units

ERCOT

‐ ‐             ‐             ‐             ‐ 67

‐             ‐             ‐ 76

FRCC

‐ ‐             ‐             ‐             ‐ 8

‐             ‐             ‐ 13

ISO

‐ NE

‐ ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐

NYISO

‐ ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐ 12

MAPP

‐ ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐

MISO

‐ ‐             ‐             ‐ 851 212

‐             ‐ 1,679 387

PJM

‐ ‐             ‐             ‐ 1,487 81

‐             ‐ 3,173 225

SERC

‐ N

‐ ‐             ‐             ‐ 65 44

‐             ‐ 264 61

SERC

‐ W

‐ ‐             ‐             ‐             ‐ 57

‐             ‐ 75 100

SERC

‐ SE

‐ ‐             ‐             ‐ 157 8

‐             ‐ 1,555 72

SERC

‐ E

‐ ‐             ‐             ‐ 262

‐             ‐             ‐ 1,018 14

SPP

‐ ‐             ‐             ‐ 26 136

‐             ‐ 811 256

CAL

‐ N

‐ ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐

CAL

‐ S

‐ ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐

Basin

‐ ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐

Desert SW

‐ ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐

RMPA

‐ ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐

NWPP

‐ ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐

TOTAL

‐ ‐             ‐             ‐ 2,847 612

‐             ‐ 8,574 1,217

Oil/Gas

‐ Steam Turbine Units

ERCOT

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

FRCC

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

ISO

‐ NE

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

NYISO

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

MAPP

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

MISO

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

PJM

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

SERC

‐ N

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

SERC

‐ W

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

SERC

‐ SE

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

SERC

‐ E

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

SPP

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

CAL

‐ N

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

CAL

‐ S

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

Basin

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

Desert SW

‐ ‐        ‐        ‐        ‐ ‐ ‐        ‐        ‐        ‐

RMPA

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

NWPP

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

TOTAL

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐ Strict Case

CSAPR Air Toxics Combined Section 316 (b) Coal Ash PondsPotential Impacts of Future Environmental Regulations

Page | 171 2011 Long

‐ Term Reliability Assessment

November 2011 Table 48: Projected Incremental Capacity Losses through 2015 by Regulation

– Moderate Case

Retired Derate Retired Derate Retired Derate Retired Derate Retired Derate

Coal Units

ERCOT

‐ 159

‐             ‐             ‐ 9

‐ 99

‐ 267

FRCC

‐ 77

‐             ‐             ‐             ‐ 628 65

‐ 176

ISO

‐ NE

‐ 32

‐             ‐             ‐             ‐             ‐ 22 144 93

NYISO

‐ 51

‐             ‐             ‐             ‐ 74 16 74 77

MAPP

‐ ‐             ‐             ‐             ‐             ‐             ‐ 8

‐ 8

MISO

‐ ‐             ‐             ‐             ‐ 10 1,110 508 1,110 519

PJM

‐ 8

‐             ‐             ‐ 16 2,650 536 2,850 606

SERC

‐ N

‐ ‐             ‐             ‐             ‐ 12 262 168 724 175

SERC

‐ W

‐ ‐             ‐             ‐             ‐             ‐             ‐ 95

‐ 95

SERC

‐ SE 10 47

‐             ‐             ‐ 4 699 179 1,358 318

SERC

‐ E

‐ ‐             ‐             ‐             ‐             ‐ 656 112 808 110

SPP

‐ ‐             ‐             ‐             ‐ 1 187 197 187 19 8

CAL

‐ N

‐ 1

‐             ‐             ‐             ‐ 15 1 15 4

CAL

‐ S

‐ 3

‐             ‐             ‐             ‐ 83 1 83 4

Basin

‐ ‐             ‐             ‐             ‐             ‐ 39 29 39 29

Desert SW

‐ ‐             ‐             ‐             ‐             ‐             ‐ 34

‐ 34

RMPA

‐ ‐             ‐             ‐             ‐             ‐ 99 23 89 23

NWPP

‐ ‐             ‐             ‐             ‐             ‐ 12 34 12 34

TOTAL 10 377

‐             ‐             ‐ 53 6,513 2,127 7,491 2,770

Oil/Gas

‐ Steam Turbine Units

ERCOT

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

FRCC

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

ISO

‐ NE

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

NYISO

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

MAPP

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

MISO

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

PJM

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

SERC

‐ N

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

SERC

‐ W

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

SERC

‐ SE

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

SERC

‐ E

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

SPP

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

CAL

‐ N

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

CAL

‐ S

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

Basin

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

Desert SW

‐ ‐        ‐        ‐        ‐ ‐ ‐        ‐        ‐        ‐

RMPA

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

NWPP

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

TOTAL

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐ Moderate Case

Section 316 (b) Coal Ash Ponds CSAPR Air Toxics CombinedPotential Impacts of Future Environmental Regulations

2011 Long

‐ Term Reliability Assessment Page | 172

November 2011 Table 49: Projected Incremental Capacity Losses through 2015 by Regulation

– Strict Case

Retired Derate Retired Derate Retired Derate Retired Derate Retired Derate

Coal Units

ERCOT

‐ 159

‐             ‐             ‐ 50

‐ 99

‐ 267

FRCC

‐ 6

‐             ‐             ‐ 4 1,254 60 1,592 156

ISO

‐ NE

‐ ‐             ‐             ‐             ‐             ‐ 144 19 239 88

NYISO

‐ 22

‐             ‐             ‐ 9 74 16 74 77

MAPP

‐ 2 0

‐             ‐             ‐             ‐ 8

‐ 10

MISO 44 799 0

‐ 928 257 1,297 506 3,583 1, 400

PJM 5 377

‐             ‐ 1,506 168 4,016 513 5,725 1,323

SERC

‐ N

‐ 214 0

‐ 65 59 547 164 1,690 435

SERC

‐ W

‐ ‐             ‐             ‐ 0.02 57 0.02 95 265 95

SERC

‐ SE 10

‐             ‐             ‐ 478 60 1,181 170 2,942 265

SERC

‐ E

‐ ‐             ‐             ‐ 490 11 903 108 945 303

SPP

‐ 196

‐             ‐ 77 165 187 197 285 415

CAL

‐ N 15

‐             ‐             ‐             ‐             ‐ 15 1 67 2

CAL

‐ S

‐ ‐             ‐             ‐             ‐             ‐ 83 1 184

‐

Basin 39 6

‐             ‐             ‐             ‐ 39 29 39 35

Desert SW

‐ ‐             ‐             ‐             ‐             ‐             ‐ 34

‐ 34

RMPA 18 32

‐             ‐             ‐             ‐ 143 22 203 53

NWPP

‐ 6

‐             ‐             ‐             ‐ 12 34 12 40

TOTAL 130 1,817 0.09

‐ 3,544 841 9,893 2,078 17,844 4,996

Oil/Gas

‐ Steam Turbine Units

ERCOT

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

FRCC

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

ISO

‐ NE

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

NYISO

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

MAPP

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

MISO

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

PJM

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

SERC

‐ N

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

SERC

‐ W

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

SERC

‐ SE

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

SERC

‐ E

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

SPP

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

CAL

‐ N

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

CAL

‐ S

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

Basin

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

Desert SW

‐ ‐        ‐        ‐        ‐ ‐ ‐        ‐        ‐        ‐

RMPA

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

NWPP

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

TOTAL

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐ Combined Section 316 (b) Coal Ash Ponds CSAPR Air Toxics Strict CasePotential Impacts of Future Environmental Regulations

Page | 173 2011 Long

‐ Term Reliability Assessment

November 2011 Table 50: Projected Incremental Capacity Losses through 2018 by Regulation

– Moderate Case

Retired Derate Retired Derate Retired Derate Retired Derate Retired Derate

Coal Units

ERCOT

‐ 159

‐             ‐             ‐ 9

‐ 99

‐ 267

FRCC

‐ 107

‐             ‐             ‐             ‐ 628 65

‐ 176

ISO

‐ NE

‐ 79

‐             ‐             ‐             ‐             ‐ 22 144 93

NYISO 74 60

‐             ‐             ‐             ‐ 74 16 74 77

MAPP

‐ ‐             ‐             ‐             ‐             ‐             ‐ 8

‐ 8

MISO

‐ ‐ 96

‐             ‐ 10 1,110 508 1,110 519

PJM 209 67

‐ ‐             ‐ 16 2,650 536 2,850 606

SERC

‐ N

‐ ‐ 135

‐             ‐ 12 262 168 724 175

SERC

‐ W

‐ ‐             ‐             ‐             ‐             ‐             ‐ 95 95

SERC

‐ SE 10 179

‐             ‐             ‐ 4 699 179 1,358 318

SERC

‐ E

‐ ‐             ‐             ‐             ‐             ‐ 656 112 808 110

SPP

‐ ‐             ‐             ‐             ‐ 1 187 197 187 198

CAL

‐ N 15 3

‐             ‐             ‐             ‐ 15 1 15 4

CAL

‐ S 83 3

‐             ‐             ‐             ‐ 83 1 83 4

Basin

‐ ‐             ‐             ‐             ‐             ‐ 39 29 39 29

Desert SW

‐ ‐             ‐             ‐             ‐             ‐             ‐ 34

‐ 34

RMPA

‐ ‐             ‐             ‐             ‐             ‐ 99 23 89 23

NWPP

‐ ‐             ‐             ‐             ‐             ‐ 12 34 12 34

TOTAL 390 657 231

‐             ‐ 53 6,513 2,127 7,491 2,770

Oil/Gas

‐ Steam Turbine Units

ERCOT 5,065 119

‐        ‐        ‐        ‐        ‐        ‐ 5,065 119

FRCC 904 27

‐        ‐        ‐        ‐        ‐        ‐ 904 27

ISO

‐ NE 4,898 4

‐        ‐        ‐        ‐        ‐        ‐ 4,898 4

NYISO 4,096 201

‐        ‐        ‐        ‐        ‐        ‐ 4,096 201

MAPP

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

MISO

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

PJM 903

‐        ‐        ‐        ‐        ‐        ‐        ‐ 903

‐

SERC

‐ N

‐ ‐        ‐        ‐ ‐ ‐        ‐        ‐        ‐        ‐

SERC

‐ W

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

SERC

‐ SE 237

‐        ‐        ‐        ‐        ‐        ‐        ‐ 237

‐

SERC

‐ E

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

SPP

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

CAL

‐ N 2,138

‐ ‐        ‐        ‐        ‐        ‐        ‐ 2,138

‐

CAL

‐ S 6,439 48

‐        ‐        ‐        ‐        ‐        ‐ 6,439 48

Basin

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐ ‐

Desert SW 418 5

‐        ‐        ‐        ‐        ‐        ‐ 418 5

RMPA

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

NWPP

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

TOTAL 25,097 404

‐        ‐        ‐        ‐        ‐        ‐ 25,097 404 Moderate Case

Section 316 (b) Coal Ash Ponds CSAPR Air Toxics CombinedPotential Impacts of Future Environmental Regulations

2011 Long

‐ Term Reliability Assessment Page | 174

November 2011 Table 51: Projected Incremental Capacity Losses through 2018 by Regulation

– Strict Case

Retired Derate Retired Derate Retired Derate Retired Derate Retired Derate

Coal Units

ERCOT

‐ 159

‐             ‐             ‐ 50

‐ 99

‐ 267

FRCC

‐ 107 628

‐             ‐ 4 1,254 60 1,592 156

ISO

‐ NE

‐ 79

‐             ‐             ‐             ‐ 144 19 239 88

NYISO 74 60

‐             ‐             ‐ 9 74 16 74 77

MAPP

‐ 2

‐             ‐             ‐             ‐             ‐ 8

‐ 10

MISO 714 987 109

‐ 928 257 1,297 506 3,583 1,400

PJM 1,334 949

‐             ‐ 1,506 168 4,016 513 5,725 1,323

SERC

‐ N 200 308 135

‐ 65 59 547 164 1,690 435

SERC

‐ W

‐ 11

‐             ‐             ‐ 57

‐ 95 265 95

SERC

‐ SE 120 176 120

‐ 478 60 1,181 170 2,942 265

SERC

‐ E 143 204

‐             ‐ 490 11 903 108 945 303

SPP 74 216 51

‐ 77 165 187 197 285 415

CAL

‐ N 15 3

‐             ‐             ‐             ‐ 15 1 67 2

CAL

‐ S 83 3

‐             ‐             ‐             ‐ 83 1 184

‐

Basin 39 6

‐             ‐             ‐             ‐ 39 29 39 35

Desert SW

‐ ‐             ‐             ‐             ‐             ‐             ‐ 34

‐ 34

RMPA 43 33

‐             ‐             ‐             ‐ 143 22 203 53

NWPP 12 6

‐             ‐             ‐             ‐ 12 34 12 40

TOTAL 2,850 3,308 1,043

‐ 3,544 841 9,893 2,078 17,844 4,996

Oil/Gas

‐ Steam Turbine Units

ERCOT 5,593 105

‐        ‐        ‐        ‐        ‐        ‐ 5,593 105

FRCC 904 27

‐        ‐        ‐        ‐        ‐        ‐ 904 27

ISO

‐ NE 5,015

‐ ‐        ‐        ‐        ‐        ‐        ‐ 5,015

‐

NYISO 4,291 195

‐        ‐        ‐        ‐        ‐        ‐ 4,291 195

MAPP

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

MISO 424

‐        ‐        ‐        ‐        ‐        ‐        ‐ 424

‐

PJM 3,632 2

‐        ‐        ‐        ‐        ‐        ‐ 3,632 2

SERC

‐ N

‐ ‐        ‐        ‐ ‐ ‐        ‐        ‐        ‐        ‐

SERC

‐ W 3,134 190

‐        ‐        ‐        ‐        ‐        ‐ 3,134 190

SERC

‐ SE 349

‐        ‐        ‐        ‐        ‐        ‐        ‐ 349

‐

SERC

‐ E 84

‐        ‐        ‐        ‐        ‐        ‐        ‐ 84

‐

SPP 2,523 29

‐        ‐        ‐        ‐        ‐        ‐ 2,523 29

CAL

‐ N 2,138

‐ ‐        ‐        ‐        ‐        ‐        ‐ 2,138

‐

CAL

‐ S 6,924 36

‐        ‐        ‐        ‐        ‐        ‐ 6,924 36

Basin 113

‐        ‐        ‐        ‐ 1

‐        ‐ 113 1

Desert SW 523 2

‐        ‐        ‐        ‐        ‐        ‐ 523 2

RMPA 84

‐        ‐        ‐        ‐        ‐        ‐        ‐ 84

‐

NWPP

‐ ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐        ‐

TOTAL 35,730 587

‐        ‐        ‐ 1

‐        ‐ 35,730 588 Strict Case

Section 316 (b) Coal Ash Ponds CSAPR Air Toxics Combined

### 3353 Peachtree Road NE

Suite 600, North Tower

Atlanta, GA 30326

(404) 446-2560 | www.nerc.com