CHEAPER AND CLEANER:Using the Clean Air Act to Sharply ReduceCarbon Pollution from Existing PowerPlants, Delivering Health, Environmentaland Economic BenefitsMarch 2014 Update“We limit the amount of toxic chemicals like mercury and sulfur and arsenic in our air or our water, butpower plants can still dump unlimited amounts of carbon pollution into the air for free. That’s not right,that’s not safe, and it needs to stop.”-President Obama, June 25th, 2013CLOSING THE POWER PLANT CARBON POLLUTION LOOPHOLE:SMART WAYS THE CLEAN AIR ACT CAN CLEAN UP AMERICA’SBIGGEST CLIMATE POLLUTERS2THE TIMELINEJanuary 20thEnd of President Obama's second term.2017January 20thStart of President Obama's second term.June 25thPresident Obama announces Climate Action Plan.September 20thEPA proposes carbon pollution standards for future power plants.2013May 9thEnd of public comment period for future power plant proposal.June 1stEPA to propose guideline for carbon pollution standards for existingpower plants.June-SeptemberPublic comment period on existing power plant proposal.2014June 1stEPA to finalize power plant carbon pollution standards.2015June 30thStates to submit implementation plans for existingpower plants to EPA.July-DecemberEPA reviews state plans for compliance with its guideline.201639EPA proposes “emission guideline” June 2014, final June 2015.9Guideline includes performance standard and compliance provisions.9States have until June 2016 to adopt and submit state plans. If a statesubmits no plan, or one EPA cannot approve, EPA must issue a federal plan.EPA CO2 Emissions Guideline & State PlansTHE CLEAN AIR ACT AND EXISTING POWER PLANTSTHE “101” ON 111 (d)9“Source-based” approach limited to options plants can do “within the fenceline”(e.g. heat-rate improvements) – yields limited reductions, higher costs9“System-based” approach includes all options that reduce emissions –yieldsdeeper reductions, lower costsHeat-rate improvementsShifting generation from coal to gasIncreasing zero -emission power (renewables and nuclear)Increasing energy efficiency“Best System of Emission Reduction”4State-specificfossil-fleet average CO2 emission rates (lbs/MWh)for 2020 and 2025Calculatedby applying benchmark coal and gas rates to eachstate’s baseline (2008-2010) fossil generation mixAveragingallowed among all fossil units in state (including newunits subject to the 111(b) standard)States may opt in tointerstate averagingor credit tradingCredit for incrementalrenewables and energy efficiency(equivalent to adding MWhs to denominator in calculatingemission rate for compliance purposes)NRDC PROPOSALSYSTEM-BASED, STATE SPECIFIC STANDARDSStates may adoptalternative plans, includingmass-basedstandards, provided they achieve equivalent emission reductions5FLEXIBLECOMPLIANCE OPTIONSHeat rate reductionsCleaner power sourcesMore renewablesInvestments in efficiency6Reference CaseModerate Case,ConstrainedEfficiencyAmbitious Case,Full EfficiencyAmbitious Case,ConstrainedEfficiency, PTCAmbitious Case,ConstrainedEfficiencyModerate Case,Full EfficiencyNRDC SPECIFICATIONSLIST OF SCENARIOS79AEO 2013 demand projections9Onshore wind costs: DOE/LBL 2012 Wind Technologies Report9Nuclear units re-licensedAll CasesNRDC SPECIFICATIONSLIST OF SCENARIOS9Full Efficiency Cases: 482 TWh available in 2020 (Synapse)9Constrained Efficiency Cases: 241 TWh available in 2020Efficiency AssumptionsAmbition Assumptions89EE Program Costs(cents/kWh)2013-2020 2021-2030Low 2.3 2.6Middle2.62.9High3.23.59Same energy efficiency potential(maximum MWhs saved) as in 2012analysis9Divided evenly into three cost blocksin each region, 482 TWh in totalEnergy Efficiency QuantityAssumptions9Costs apply nationwide, do not varyacross regions9Derived based on utility program costsfrom Synapse and relative values fromLBNL cost curve to estimate costs ofeach block9Middle cost block is equal to theSynapse utility program cost9Customer contribution at 45% of totalcost is included in cost-benefitcalculationsEnergy Efficiency CostAssumptionsNRDC SPECIFICATIONSSIMPLE ENERGY EFFICIENCY SUPPLY CURVE2012 Actual2020 ReferenceNRDC POLICY CASES vs REFERENCE CASEGENERATION MIX: 2012 vs. 2020 REFERENCE CASE10NRDC POLICY CASES vs REFERENCE CASEPROJECTED GENERATION MIX IN 20201112NRDC POLICY CASES vs REFERENCE CASEEMISSIONS 2014-2025HistoricalReference CaseModerate, ConstrainedEfficiencyModerate, FullEfficiencyAmbitious, ConstrainedEfficiencyAmbitious, FullEfficiencyAmbitious, ConstrainedEfficiency, PTC-5001,0001,5002,0002,5003,0002005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

CO 2 Emissions (short tons)NRDC POLICY CASES vs REFERENCE CASEEMISSIONS REDUCTIONS IN 2020: CO2SO2NOx13CO2reductions are morethan double those fromEPA’s vehicle emissionstandards.SO2reductions add onethird to reductions fromMATS.Nox reductions arecomparable to Tier 3vehicle reductions.NRDC POLICY CASES vs REFERENCE CASECOSTS AND BENEFITS FROM REDUCED EMISSIONS IN 202014ddoniger@nrdc.orgsyeh@nrdc.orgdhawkins@nrdc.org