### The State of New Hampshire



### I!HDES DEPARTMENT OF ENVIRONMENTAL SERVICES

~ Thomas S. Burack, Commissioner

Oral Comments July 30, 2014 Public Hearing

Re: Docket ID No. EPA-HQ-OAR-2013-0602 Proposed Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units

Thank you for the opportunity to present oral comments on behalf of the New Hampshire Departrnent of Environmental Services (DES) in response to the Environmental Protection Agency's (EPA's) proposed Clean Power Plan to cut carbon emissions from existing power plants. We appreciate EPA's comprehensive efforts to reach out to states and other stakeholders, and we welcome this proposal. New Hampshire has demonstrated, and will continue to demonstrate, leadership in this arena. In 2002, we enacted the New Hampshire Clean Power Act, first-in-the-nation legislation that addressed CO 2 emissions from power plants. In 2008, New Hampshire enacted legislation that authorized the state's participation in the Regional Greenhouse Gas Initiative (RGGI), and in 2009, New Hampshire, along with nine other RGGI States, began implementing the program. One of the original purposes of the RGGI program was to demonstrate the viability of a flexible, market-based regional cap on emissions as the basis for a potential federal program. Our states collectively represent the world's 7 th largest economy, and our region's economy has benefitted significantly from the investments of RGGI allowance revenues at the same time that they have helped to lower regional emissions.

New Hamushire's Plan

With respect to New Hampshire's plan for compliance with EPA's proposal, first, and foremost, our state requests that EPA recognize and accommodate our state's, and the RGGI region's, early leadership by providing the greatest available flexibility to the states in complying with theproposed Section 111(d) guidelines by continuing to participate in RGGI via one multi-state, massbased plan submission. DES supports the RGGI comments previously submitted to EPA by letter dated December 2, 2013 posted at http://www.rggi.org/docs/RGGI_States_l l ld_Letter Comments.pdf . Not only have regional CO2 emissions already been reduced by more than 40% from 2005 levels, but New Hampshire COZ emissions have been reduced by over 48%. RGGI will achieve an additional 14% reduction from its 2014 cap of 91 million tons by 2020. Also, new sources are covered under the RGGI cap, which may represent significant additional reductions. DES believes that a reliable and effective method for developing mass-based emission targets is critical to helping states take advantage of the lowest cost carbon reduction options under EPA's proposal, thereby avoiding duplicative regulation. DES is hopeful that we will be able to work with EPA to ensure that RGGI serves as an effective compliance mechanism. DES further believes that a mass-based program, like RGGI, will be one of the most effective ways to transparently track and verify emissions reductions and compliance.

DES is still reviewing and analyzing many details of EPA's proposal, including the proposed rate-based 2030 goal of 486 lbs/MWh for New Hampshire, and the applicability of the four building blocks (heat rate improvements for coal, greater dispatch to natural gas, increased renewable andPublic Hearing on Proposed CO Z Emissions Guidelines from Existing EGUs July 30, 2014

NHDES' Oral Comments to U.S. EPA Pa e 2 o 2

nuclear energy, and energy efficiency). In general, we believe that the required EPA state rate goals should be equitably distributed amongst the states and should not disadvantage states that have been early movers in reducing their CO2 emissions from power plants. DES plans to include additional feedback on the proposed rate targets, and other aspects of EPA's proposal, in comments that we will submit before the close of the 120-day comment period.

There are some broad issues relating to formulation of the Best System of Emission Reductions (BSER) as established under section 111(d) of the Clean Air Act that I would like to point out relating to renewable energy and nuclear energy.

Renewable Ener

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DES lauds EPA for its intent to recognize and incent non-emitting renewable generation as one of the "building blocks" in its approach to determining BSER. However, based on DES' analysis to date, we do not believe that EPA's primary proposal that involves averaging of state Renewable Portfolio Standards (RPS) goals across regions is workable. DES believes that EPA's alternative approach may be more workable, and DES looks forward to engaging with EPA to ensure the effectiveness of this building block.

Nuclear EnerEy

DES stresses the importance of setting standards that preserve nuclear and other options for fuel diversity and maintain grid reliability. However, we are unclear as to what actions our state might be expected to undertake in response to the proposed 6% allowance for nuclear plants considered to be "at risk" nationally. Furthermore, even the nuclear plants that remain operating preserve fuel diversity and maintain grid reliability and are non-emitting. Seabrook Station, New Hampshire's only nuclear plant, completed an early 100 MW uprate in 2005 and 2006 that avoids additional fossil fuel-fired generation and that should be recognized under EPA's proposal.

Conclusion

In summary, DES applauds EPA's recognition of regional cost-effective market-based programs, like RGGI, which have demonstrated that they can help states realize environmental and economic goals while maintaining electricity grid reliability. Again, DES supports the flexibility provided by the current proposal, which signals that a multi-state, mass-based program, such as RGGI, can serve as the Best System of Emission Reductions.