## Summary	of	Interagency	Working	Comments	on	Draft	Language	under EO12866/13563	Interagency	Review.		Subject	to	Further	Policy	Review. Note: Page numbers throughout this document correspond to the page numbers in the redline/strikeout version of the RIA . 

## PRIORITY COMMENTS **Incentives for EGU Modification and Reconstruction**  **Pages: ES -**  **2, ES -** **4 and 6 -**  **2, and throughout document** Page ES -4 states: “ Historically, the EPA has been notified of very few modifications (for criteria pollutants) or reconstructions under the NSPS provisions. As such, the EPA anticipates few covered units will trigger the reconstruction or modification provisions in the period of analysis. Therefore, based on the analysis presented in Chapter 4 of this RIA, the EPA anticipates that the EGU New, Modified, and Reconstructed Source GHG Standard s will result in negligible CO2 emission changes, energy impacts, quantified benefits, costs, and economic impacts by 2022. Accordingly, the EPA also does not anticipate this rule will have any significant impacts on the price of electricity, employment or labor markets, or the U.S. economy. ” Page 6 - 2 states: “ Instead, the EPA has determined that it is appropriate to establish standards of performance at this time for large
- scale modifications of steam generating units, such as major facility upgrades inv olving the reconstruction or replacement of steam turbines and other equipment upgrades that result in substantial increases in a unit’s potential hourly CO2 emissions rate. The EPA does not have sufficient information at this time to predict the full arra y of actions that existing steam generating units may undertake, including those in response to applicable requirements under an approved CAA section 111(d) plan. ” Reviewer reiterates that it is concerned that using historical data on large modifications and reconstructions may not be an accurate way to assess future decisions about reconstruction or modifications because incentives in the future differ from historical incentives. I n a separate submission reviewer provided EPA staff with data on 7 examples of modifications to fossil steam EGUs that resulted in unit capacity increases ranging from 8% to 20%. Reviewer hopes that these data will provide a rationale for strengthening the technical basis for the “large modification” threshold. Reviewer found the technical basis for the 10% “large modification” threshold to be unclear given the current explanation and examples that are included in the Preamble, and suggests clarifying. In a ddition, Reviewer would be happy to consult with EPA to determine and strengthen the technical basis for an appropriate “large modification” threshold.

## Summary	of	Interagency	Working	Comments	on	Draft	Language	under EO12866/13563	Interagen cy	Review.		Subject	to	Further	Policy	Review.

Page **2** of **4** 

## TECHNICAL COMMENTS **P. 2 -**  **5, Table 2 -**  **2 (Redline/strike out version)**  Reviewer notes that t he 2012 da ta in Table 2.2 of the RIA appears to be inconsistent with the referenced EIA data. For coal, the data appears to be 2014 data, for natural gas 2012 data , for nuclear 2013 data , for hydro not clear but possibly 2013, petro not sure, for wind 2013 data . Re viewer recommends double checking the 2012 data provided in table 2.2 of the RIA. **P. 2 -**  **29 (Redline/strike out version)**  “(4) conventional coal
- fired generation with carbon capture and storage (CCS).” Reviewer recommends rephrasing to read: “ (4) conventional **highly efficient coal -** **fired generation**  **(e.g., modern supercritical or ultra**  **- supercritical steam units)**  with **partial** carbon capture and storage (CCS) ” as this is the technology that h as been identified as BSER by EPA in this rulemaking. In add ition, reviewer recommends beginning the list of approaches with number (4), given that this is the BSER in this rulemaking. **P. 2 -**  **33 (Redline/strike out version)**  “The resulting CO2 emission rate is expected to be ~800 pounds per MWh produced .” Reviewer suggests clarifying whether the emissions rate quoted here is on a net or gross basis. **P. 2 -** **4 1**  **(Redline/strike out version)** “ 160 lb/MMBtu
- net” Reviewer recommends correcting the text to remove the “
- net” designation as it does not apply to an i nput standard. **P 2 -** **4 2**  **(Redline/strike out version)** “To qualify, plants must capture and store emissions so that they emit less than 1 , 100 lbs CO 2/MWh, among other requirements. ” Reviewer recommends clarifying to specify whether this is a gross or net emission rate. **P. 4 -**  **2 (Redline/strike out version)**  “The purpose of the sales threshold criterion is to permit gas
- fired combustion turbines that only sell a small portion of the gross electricity generated to the grid (“peaking units”) to not have to meet the same emission standard as a combustion turbine unit designed primarily to generate base and intermediate electricity to be sold to the grid.” Reviewer recommends replacing the phrase “peaking units” with “non
- base load units” to conform with the term inology in the preamble.

## Summary	of	Interagency	Working	Comments	on	Draft	Language	under EO12866/13563	Interagen cy	Review.		Subject	to	Further	Policy	Review.

Page **3** of **4 P. 4**  **- 27,**  **(Redline/strike out version) ,**  **Figure 4 -**  **3. Illustrative Wholesale Levelized Cost of Electricity of**  **Alternative New Generation Technologies by Cost Component** Reviewer notes that this figure indicates that an SCPC unit will require 18 percent capture to meet the 1,400 lb 

### CO 2/ MWh
- g ross standard, which is not consistent with the rule preamble. The rule preamble shows that the same unit will require 16 percent capture to meet the 1,400 lb/MWh Gross standard. Reviewer suggests c hecking the consistency of this assumption. Reviewer notes that the LCOE estimates in this figure differ from the LCOE estimates provided in the rule preamble. Reviewer recommends using a consistent set of LCOE estimates throughout the rulemaking and supp orting materials and analyses. **P. 4 -**  **33 (Redline/strike out version)**  “Thus, in practice, the EPA expects that potential CT units would not meet the applicability requirements finalized in this rule and would therefore, not be subject to the standards of p erformance.” Reviewer notes that these CT units likely would meet the applicability criteria for the clean fuels standards contained in the most recent version of the 111(b) preamble. Reviewer suggests updating text to reflect this. **P. 4 -**  **34 (Redline/strike out version)**  “Furthermore, the design net efficiencies for currently available potentially impacted aeroderivative simple cycle combustion turbines range from approximately 32 percent for smaller designs to 39 percent for the largest intercooled designs. The efficiencies of industrial frame units range from 30 percent for smaller designs to 36 percent for the largest units.” Reviewer notes that simple cycle turbines are available at efficiencies greater than those quoted here, and suggests updating accordingly. See: **http ://site.ge**  **** **energy.com/prod_serv/products/tech_docs/en/downloads/ger4222a.pdf**
. **P. 4 -**  **34 (Redline/strike out version)**  “The EPA therefore does not expect new CT units to be constructed, that would meet the applicability requirements.” Reviewer notes that th ese CT units likely would meet the applicability criteria for the clean fuels standards contained in the most recent version of the 111(b) preamble. Reviewer suggests updating text to reflect this. **P. 4 -**  **34, Footnote 58 (Redline/strike out version)**  “CT co st, performance, and financial assumptions from AEO 2013.” Reviewer notes that these assumptions are cited from AEO 2013. Reviewer notes that more recent AEO2015 cost and financial assumptions are available at: http://www.eia.gov/forecasts/aeo/pdf/electricity_generation.pdf . Reviewer notes that more recent CT performance assumptions are available at: http://www.eia.gov/forecasts/aeo/assumptions/pdf/electricity.pdf . Reviewer suggests using the most recent data available.

## Summary	of	Interagency	Working	Comments	on	Draft	Language	under EO12866/13563	Interagen cy	Review.		Subject	to	Further	Policy	Review.

Page **4** of **4 Page 5**  **- 8**  “As explained previously, the power sector has moved away from the construction of coal
- fired power plants in favor of other generation options (e.g., natural gas
- fired power plants) due, in part, to the significant cost differential. ” Reviewer suggests editing text as indicated above to correct an inaccuracy. **P. 5 -**  **20, Figure 5 -**  **1, Footnote 2 (Redline/strike out version)**  “A non
- compliant 550 MW (net capacity) unit SCPC requires NG co
-firing at 34% to achieve a 1,400 lb/MWh CO2 emission rate. A non
- compliant 620 MW (net) IGCC unit requires 6 percent NG co
-firing. LCOE costs for co
-firing were estimated assuming a levelized $6.19/MMBtu price of delivered gas.” Reviewer notes that the natural gas co
- firing rates quoted here differ from the natural gas co
-firing rates quoted in the 111(b) preamble. Reviewer also notes that the natural gas co
-firing rates described here differ from the co
-firing rates described on page 2
- 29 of the RIA (Redline/strike out version) . Reviewer suggests using a consistent set of co
-firing rates throughout the preamble and RIA. **P .**  **5 -**  **20, (Redline/strike out version) Figure 5 -**  **1 Levelized Cost of Elec tricity, Uncontrolled Coal and Coal**  **with Partial CCS (1,400 lb/MWh gross ), and throughout RIA.**  Reviewer notes that the NETL LCOE estimates displayed in this table (and throughout the RIA) for SCPC units with partial CCS as well as for IGCC units use higher financing costs in comparison to the SCPC unit without capture. Reviewer recommends adding a footnote to clarify this. The financing costs used in the NETL analysis are detailed on page 7 of the following report: “A high
- risk financial structure resulting in a capital charge factor (CCF) of 0.124 is used to evaluate the costs of all cases with CO2 capture (non
- capture case uses a conventional financial structure with a CCF of 0.116).”

“ Cost and Performance Baseline for Fossil Energy Plants Supplement: Sensitivity to CO 2 Capture Rate in Coal
- Fired Power Plants ,” DOE/NETL
- 2015/1720, June 22, 2015. Available at http://www.netl.doe.gov/File%20Library/Research/Energy%20Analysis/Publications/BitBase_Partial_Ca pture_final.pdf .