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## Chapter **10 Issues for**  **w hich EP**  **A Requested Comments** 
**Contents** 10.1 General
................................ ................................ ................................ ................................ ............. 2 10.2 Not Proposing Separate N 2 O or CH 4 Emission L imits
................................ ................................ .... 4 10.3 Gross vs. Net Output Based Standards
................................ ................................ ............................ 610
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### 10.1 **GENERAL Comment 10.1**  **- 1:**  One commenter (10098) stated that while alternative proposals may have benefit in some rulemakings by

allowing commenters to weigh the pros and cons of various rulemaking options, it is counterproductive in the context of an NSPS rulemaking. Under NSPS, EPA takes the position that a standard becomes effective at the time of p roposal, meaning that any fossil
- fuel
- fired EGU commencing construction after January 8, 2014 could be subject to whatever final standard EPA selects. However, given all of the competing provisions in the proposal, it is impossible for such a facility to k now what the final standard will be. **Response 10.1 -**  **1:** EPA sy mpathizes with this comment, although EPA notes that the final standard of performance for fossil
- fired steam electric units is quite similar to that proposed: BSER remains partial CCS, and there are alternative compliance pathway s encompassed by the proposal (e.g. IGCC). **Comment 10.1 -**  **2:** One commenter (10664) stated that they appreciate EPA's interest in the potential for beneficial reuse technologies and its solicitation of comments on how the proposed performance standard may be revised to support the development and ultimate commercial deploy ment of such technologies. At the same time, however, EPA proposes to prohibit any technological sy stem of continuous emission reduction ("technology ") other than geologic sequestration to meet the proposed performance standard, until it approves alternatives for use. Such prohibition offers so much uncertainty and risk to effectivel y eliminate an y incentive to innovate. If adopted, it would have an intense stifling effect on the further de velopment and ultimate commercial deploy ment of algae
- based technologies, solar fuel technologies, and possibly other beneficial CO 2 reuse technologies. **Response 10.1 -**  **2:** Partly in response to this and similar comment s , the final rule establishes a case
- by
case mechanism under which EPA may approve alternative storage methodologies demonstrated to be of equal efficacy

to sequestration. **Comment 10.1 -**  **3:** One commenter (10681) stated that EPA ask ed for comments on the use of the 1/3 output sales criteria versus a criteria between 20 and 40%. The commenter stated that the original 1/3 criterion in the Part 75 rule was not derived from rigorous anal ys is. However there is significant value from using the Part 75 criterion in this rule for consistency between the two sets of requirements. While th ere might be technical and design grounds to change this percentage for CO 2 , the resulting confusion and additional workload on the sources and the regulators may not be worth changing this aspect of rule applicability . The commenter suggests that it may b e preferable to establish a different criteria, such as permitted hours of operation or design LHV heat input rate instead of using the 1/3 sales and 219,000 MWh criteria as part of the applicability test to define what might be a simple cycle combustion turbine. **Response 10.1 -**  **3:** As explained in Sections IX.A and B of the preamble to the final rule, the EPA finalized a version of the broad applicability approach where the percentage electric sales criterion is used to distinguish two subcategories of natural gas
- fired comb ustion turbines. We abandoned the proposed one
- third electric sales threshold in favor of the sliding scale, which is based on a turbine’s LHV design efficiency

rating. We also abandoned the 219,000 MWh aspect of the total electric sales criterion for non
- CHP combustion turbines. **Comment 10.1 -**  **4:** One commenter (10619) stated that EPA requested comment on a range of 950
- 1,100 lb CO 2 /MWh for new stationary combustion turbines with a heat input rating greater than 850 MMBtu/h. The commenter believes the use of a 1,000 lb CO 2 /MWh standard would be an acceptable10
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standard. The combined cycle natural gas units built in Oklahoma since 1999, with a capacity factor of greater than .33, are able to meet this standard. **Response 10.1 -**  **4:** The EPA is in fact adopting a standard of performance of 1000 lb. C O 2 /MWh
. **Comment 10.1 -**  **5:** One commenter (10619) stated that EPA requests comments to provide for an alternative method to calculate compliance on an annual period. Using a calendar ye ar period simplifies the execution or enablement of any trading program. **Response 10.1 -**  **5:** The EPA has conclu ded that a 12
- operating month rolling average is appropriate. This approach assures that sufficient data is available for a representative emission rate. An annual standard would not necessarily include 12 operating months. The EPA notes that trading progr ams have separate goals than the 111(b) emission standards. **Comment 10.1 -**  **6:** One commenter (10619) stated that EPA requested comment on whether to provide an explicit exclusion for simple cycle combustion turbines. Efficiency and economic concerns should govern which units are used for greater than one third of their capacity. Providing an explicit exclusion for simple cycle units in addition to the one third capacity factor would not provide an incentive to limit the use of a higher emitting unit when the grid is not in pe ak load condition. Therefore, the commenter does not believe EPA should provide an explicit exclusion for simple cycle units. **Response 10.1 -**  **6:** We agree with the commenter and are not finalizing an exclusion for simple cycle combustion turbines. Instead, we are finalizing a subcategory for non
- base load natural gas
- fired units, the majority

of which will be simple cycle turbines. The BSER for this subcategory is clean fuels, and the final standard is 120 lb CO 2 /MMBtu, which can readil y be achieved b y simple cycle turbines. **Comment 10.1 -**  **7:** One commenter (10618) supports the position that emergency conditions do occur and may require that all available operable EGUs interconnected to the electrical grid supply power to the grid. Multiple commenters (8964, 8969, 8970, 8973, 8995, 9318, 9671, 9672, 9736, 10392, and 10876) asked that electricity that is generated in response to a grid emergency declared by

a regional transmission organization (RTO), independent system operator (I SO), or control area administrator be exempted from the amount that is used to determine net sales for EGU applicability
. **Response 10.1 -**  **7:** The sy stem emergency exemption is included in this final rule. Electricity sold as result of a s ys tem emergency will not could toward the percentage electric sales criterion determining the applicabili ty

of the non
- base load and base load subcategories. **Comment 10.1 -**  **8:** Regarding the calculation of the number of daily violations within an averaging period, one commenter (10618) stated that they object to the automatic imposition of penalties for exceedances without som e exercise of discretion. There may be valid reasons, such as sustained periods of extremely

cold weather that would support the need for exercise of enforcement discretion in cases of small exceedances of the CO 2 standards. These objections aside, AEP agr ees that violations should not be "double counted." **Response 10.1 -**  **8:** Specific monitoring and reporting requirements are specified in preamble section X. and in the Rule Language at Table 3 to Subpart TTTT of Part 60
- Applicability of Subpart A General Provisions to Subpart TTTT
. **Comment 10.1 -**  **9:** Regarding the appropriate method to recognize the environmental benefit of district energy s ys tems, one commenter (9042) agrees that there may be environmental benefit to a district10
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energy s ys tem, particularly

in comparison to multiple small er heating and cooling s ys tems. However, Colorado requests that EPA conduct a more thorough anal ys is of district energy s ys tems before setting an emissions standard for these sy stems. Commenter (10681) stated that the determination of the useful energy actuall y used should be done through thermodynamic calculations that have been reviewed and approved or accepted b y the permitting authority. Commenter (10554) stated that District Energy Sy stem's emission rates should not be adjusted for thermal output. Thes e s ystems are already realizing a reduction in the cost to comply with environmental controls and cost to operate, which is providing an added benefit. Therefore, they should be held to the same standard, if applicable, without an adjustment. **Response 10.1 -**  **9:** This final ru le does not include an y special consideration for determining the useful thermal output from district energy s ys tems for compliance purposes. The EPA notes that few district energy s ys tems would meet the final electric sales applicability criteria. 

### 10.2 **NOT PROPOSING SEPARA TE**  **N 2**  

### O **OR CH**  **4** 

### EMISSION LIMITS **Comment 10.2 -**  **1:** One commenter (10098) stated that EPA fails to address the inconsistency between the scope of the Section 202(a) endangerment finding, which included CO 2 , nitrous oxide, and other GHGs, and the proposed rul e here, which onl y applies to CO 2 . While EPA suggests that the emissions of nitrous oxide and methane from the new source category are insignificant, it fails to address the fact that these emissions played an important role in EPA's endangerment determination under Section 202(a). One commenter (5605) stated these other GHGs 100
- ye ar global warming potential is 21 to 310 times greater than that of carbon dioxide. Measuring these by product gases is essential and could be beneficial for regulatory

purposes, as well as the means of potentially urging for aggregating those gases for fuels for existing vehicles and mechanisms able to utilize the combustion of the gases in a cleanl y manner. **Response 10.2 -**  **1:** EPA has insufficient information on CH 4 and N 2 O emissions from this sect or to develop standards of performance for these pollutants at this time. **Comment 10.2 -**  **2:** One commenter (10045) stated that EPA proposed to set standards only for emissions of CO 2 and, hence, not to set standards for the five other GHGs for which they made the 2009 Endang erment/Contribution Findings. EPA based that proposal solely on the ground that emissions of those other GHGs represent less than 1 percent of total estimated GHG emissions from fossil fuel
- fired EGUs and, evidentl y regulation of emissions of those other G HGs would yield a gain of trivial or no value, yet impose significant cost burdens. **Response 10.2 -**  **2:** EPA has insufficient information on CH 4 and N 2 O emissions from this sector to develop standards of performance for these pollutants at this time. EPA notes further, howev er, that these pollutants would be considered and addressed on a source
- by
- source basis as part of the PSD permitting process, so that each new source would have an individual permit limit based on BACT for both CH 4 and N 2 O . Indeed, these pollutants have been addressed in various PSD permits issued by EPA and states to date. **Comment 10.2 -**  **3:** Multiple commenters (8939; 9678, 9425, 8952, 8957, 9426, 9471, 9591, 9593, 10095, 9666, 10048; 10102; 10242; 10554; 10606; 10618; 9661) supported EPA's decision to regulate only CO 2 em issions. One commenter (9678) stated that current best practices are most appropriate for minimizing non
- CO 2 GHGs emissions, and would not support collecting emissions information under this rulemaking. Given10
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the magnitude of the current effort, including upcoming existing source regulations, the commenter supports EPA's focus on CO 2 . One commenter (9425) stated that they agree that EPA should not propose separate CH 4 or N 2 O emission limits although nitrous oxi de (N 2 O ) (and to a lesser extent, methane ( CH 4 )) may be emitted from fossil fuel
- fired EGUs, representing onl y about 0.4 percent of total CO 2 equivalent emissions from fossil fuel
- fired electric power generating units. Several commenters (9425; 9426; 10048 ; 10095; 10102; 10618) stated that they agree with EPA's decision to focus on CO 2 and not focus its efforts at this time nor burden compliance entities with this small fraction of emissions. In general, the N 2 O and CH 4 emitted at any of the commenter's fa cilities makes up approximately

one percent or less of that facility's total GHGs. The commenter (10102) provided a table of percentage of total GHG emissions from N 2 O and CH 4 from the commenter's power plants. One commenter (8957) stated that they believe that EPA's rationale to focus on CO 2 as opposed to CO 2 e appears to be well founded citing other data from EIA and AP
- 42 emission factors that indicate that the other GHG are a small percentage of total GHG. One commenter (9471) stated that because the cos ts of monitoring and reporting these de minimis emissions would outweigh any marginal benefits that might result from regulation they support EPA's proposed action. One commenter (9591) stated that to the extent that non
- CO 2 emissions are included in a PSD permit, limits are set using emissions factors and controlled through best practices. Therefore, establishing an NSPS is not appropriate at this time. One commenter (10095) stated that CO 2 is the primary GHG emitted from a fossil fuel fired EGU. One comm enter (9666) stated that there is no basis or reason to set standards for nitrous oxide or methane. Valid or accurate data for methane and N 2 O emissions are lacking. The commenter stated that the costs that would be imposed on sources to monitor and report these emissions would far outweigh any negligible benefits that might accrue from any emission limits for these substances under section 111. One commenter (9666) stated that they s upport EPA's proposed decision and does not believe that EGUs equipped wi th SCR produce much, if an y, N 2 O , and new EGUs will likely have such equipment to meet NOx NSPS. One commenter (9666) stated that the costs to monitor and report these emissions far outweigh any negligible benefits that might accrue from any emission limits for these substances under section 111. One commenter (9593) stated the emissions of N 2 O and CH 4 from power generation are de m inimis compared to emissions of CO 2 . For example the commenter has found
- and EPA's Emissions & Generation Resource Integrated Database (eGRID) confirms
- that power plant emissions of N 2 O and CH 4 per MWh are approximately six orders of magnitude smaller than per MWh emissions of CO 2 . Even after accounting for the higher global warming potential of these gases, their CO 2 equivalent emissions are approximately one half of one percent of the CO 2 emissions. One commenter (10618
- 3395) stated that because exist ing EGUs have been calculating and reporting N 2 O and CH 4 emissions under the GHG Reporting Rule since 2011, using emissions factors, additional measurement and reporting is not justified.10
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**Response 10.2 -**  **3:** The final rule onl y includes standards for emissions of CO2. The iss ue is discussed in Section III.G. of the preamble to this final rule. **Comment 10.2 -**  **4:** One commenter (9666) stated that they do not know the basis for EPA's statement in the preamble that units equipped with SCR equipment generate N 2 O . EPRI's work on a pilot
- scale SCR pro gram, confirmed b y tests in Europe, led to its conclusion that " N 2 O was not being formed across the vanadia/titania cataly st." **Response 10.2 -**  **4:** Since N 2 O is not being regulated in this final rule the comment is not relevant. 

### 10.3 **GROSS VS. NET OUTPUT BASED STANDARDS**  **Comment 10.3 -**  **1:** One commenter (10098) stated that EPA requested comments on alternative proposals, which created uncertainty and confusion regarding EPA's intentions for the final standard. Examples include: EPA requests comment on three competing definitions of "gross energy output," 79 Fed. Reg. at 1447; EPA requests comment on whether it should appl y a gross - output based standard or a net
- output based standard. **Response 10.3 -**  **1:** See preamble section III.F.1. **Comment 10.3 -**  **2:** Several commenters (7990; 8937; 9194; 9425; 9426; 9592; 9597; 9661; 9665; 9666; 9780; 10023; 10031; 10100; 10500; 10520; 10554; 9396) stated that they support gross output - based standards. The commenters does not believe that a net basis standard is appropriate in this context. Pollution control technology , including the use of CCS, often imposes significant parasitic load requirements on an EGU. If EPA were to adopt a standard that was calculated on a net basis, that level would need to be even higher to account for parasitic load. However, given the potential range of control o ptions and corresponding parasitic load requirements, arriving at such a standard is impractical and would not further the objective of the Proposal. A gross output
- based standard also is consistent with the monitoring requirements under Part 75, and with other programs, such as the Acid Rain Program, which already relies on gross megawatt data. If EPA adopts a standard based on net output, then that standard needs to be even higher to account for the parasitic load. Net output
- based standards, if included in any final rule, should be included only as an optional alternative to gross output
- based standards. The gross methodology

does not factor into the emissions rate added parasitic loads from emissions control retrofits, which may

avoid future NSPS modific ation issues with such retrofits. One commenter (9425) stated that net output is often simply an indicator of the level of environmental controls at a facility . A net power approach would drasticall y increase the stringency of the proposed 1,000 lb/MWh NSP S for CCS applications. The additional stringency is not warranted. Commenters (9425; 9426) stated that in the NSPS for Subpart Da conventional pollutants rulemaking, EPA agreed not to require a net output approach. EPA should remain consistent and use gross output when finalizing this rule. EPA justifies a net output standard as an alternative by saying that it would provide incentive to choose a more efficient EGU design, select fuels that require less emission controls, and recognize the environmental b enefit of higher efficiency pumps motors and fans. However, economic forces already provide utilities appropriate incentives to minimize all these factors. Therefore, gross generation is a sufficient indicator of compliance with environmental standards.10
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On e commenter (9665) supports gross output
- based standards and stated that the proposed use of periodic fuel sampling as an acceptable monitoring method provides appropriate compliance assurance such that further requirements should not be imposed. One comme nter (9665) stated that if EPA adopts a partial CCS standard, it should be no more stringent than the proposed standard of 1,100 lb. CO 2 /MWh and must be on a gross output basis. EPA has proposed that "the level of partial capture of CO 2 that qualifies as the BSER supports a standard of 1,100 lb CO 2 /MWh on a gross basis. This standard is based on an emission level achievable with a single
- stage, water - gas shift (WGS) reactor and a two
- stage acid gas removal s ys tem. EPA also solicited comment on the achiev ability of standards ranging between 1,000 and 1,200 lb CO 2 /MWh
gross, and whether EPA should adopt what amounts to an adjusted gross energy output standard or alternativel y a net - output based standard. The commenter stated that EPA would be better served to adopt an emission limit achievable by state of
- the
- art IGCC and other highl y efficient technologies without CCS. However, if EPA moves forward with a partial CCS
- based standard, then the commenter recommends that EPA finalize its proposed output - based s tandard. The commenter does not dispute EPA's conclusion that a new IGCC EGU configured with a single
- stage WGS reactor and a two
- stage acid gas removal sy stem should be able to achieve a gross output standard of 1,100 lb CO 2 /MWh on a 12
- month rolling basi s. However, the commenter does not support an adjusted gross energy output or net - output based limit. One commenter (9665) stated that they support a gross output - based standard for subpart Da and subpart KKKK sources (and for Subpart TTTT if that option i s finalized). The commenter does not support net output - based standards. In general, determining the net output of an EGU is complicated and prone to errors. Although complications may be less for traditional coal
- fired sources versus IGCC units, the comm enter supports the use of gross output standards for all sources provided that all parasitic loads and auxiliary equipment are accounted for when determining the gross output of the unit. EPA should revise the definition of IGCC to clarify that the entiret y of the unit is assessed in accounting for the gross electricity output of such units. EPA should finalize its proposed definition of "gross energy output." Regarding EPA's suggestion that net output
- based standards might remove an incentive to power feedwater pumps by

electricity

instead of steam (since using electricity for this activity would not act to raise the CO 2 emissions calculated for a source under a gross output
- based standard), one commenter (9665) stated that even assuming that such incentive exists, the benefit of switching to net output
- based standards would be small and would not justify the substantial complexities in both defining and implementing such a standard at affected sources. Regarding EPA's position that net output supplied to th e end user could be considered a "better indicator" of the environmental performance of a unit than gross output one commenter (9665) stated that this observation ignores the substantial economic incentives that all electricity providers have to generate e lectricity

efficiently . Especiall y within deregulated electricity markets, an electricity provider has no incentive to use more fossil fuel to produce the same amount of electricity as a competitor. The commenter also agrees with EPA's assessment that it l acks sufficient data to establish a net output
- based standard since continuous emission monitoring system (CEMS) emission data are reported on a gros s output basis pursuant to 40 CFR Part 75. One commenter (9427) stated that using gross MWH criteria for de termining applicability of the standard to a stationary

combustion turbine is warranted because:10
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- Gross MWH applicability criteria places the entire focus on the combustion turbine, not on sales to the utility

distribution/transmission system (the "electric grid"), and not on station service energy that may or not be directl y relevant to the combustion turbine.

- Gross MWH applicability criteria would be based on the same measurement location as for compliance, that is, the combustion turbine's electric output terminals where watt meters would be installed as required by proposed rule section 60.4373(d).

- Gross MWH applicability criteria would appear to match the intent of the example in the proposed "potential electric output" definition, which refers to a "35% efficient stationary combustion turbine" (the efficiency of the turbine itself, not efficiency based on sales to the electric grid). Commenter (8957, 10098) stated that they believes that a gross output
- based standard is more appropriate than the n et output - based standard because the units controlled by scrubbers and selective catal yt ic reduction devices would consume more energy than from uncontrolled units. The definition of gross output should allow for 100% of the useful thermal energy being pro duced and used to be included, as opposed to the 75% credit being proposed. To fully account for the climate benefits of CHP and to reflect the Administrations' efforts to promote CHP, EPA must count 100% of the useful thermal energy . Such an approach is a lso consistent with the past practice of EPA and the states. One commenter (9591) stated that they suppo rt an output - based because it does not penalize a facility for emplo yi ng pollution control sy stems that consume electricity, such as scrubbers or SCR. T he use of gross output aligns this rule with recent EPA rulemakings, including the Mercury and Air Toxics Standards (MATS). According to the commenter, if EPA were to finalize a net
- output based standard or include an optional net
- output based standard, it would be important for EPA to clarify the definition of net electric output for the purposes of calculating the emission rate. EPA's proposed definition under KKKK for non
- CHP units is "[t]he gross electric sales to the utility power distribution system m inus purchased power on a 3 calendar ye ar rolling average basis". However, there could be cases when an operator would purchase power to satisfy contractual requirements that would not reduce gross electric sales from the unit. If that is the case, the cur rent definition would reduce the MWh in the denominator while the emissions in the numerator are unchanged, effectivel y tightening the standard. Two commenters (9426; 10095) stated that gross output
- based standards are the simplest to measure and for the C O 2 emission rate calculation for compliance purposes rather than an unduly complex net output calculation. The use of gross output allows the plant operator to account for electrical, mechanical, and thermal energy

use b y the plant, giving operators the ne eded flexibility to design s ys tems in the most efficient and economic manner. Commenter (9661) stated that the calculation of compliance using the annual average basis for a calendar year is much simpler to administer, is less costly and, based on our anal ys is, provides the same guarantee that the environmental standard will be achieved. EPA should allow the option of conducting a calendar ye ar average (sum of the emissions for all annual (calendar ye ar) operating hours and to divide that value b y the sum o f the annual [gross] electrical energy output and useful thermal energy output). One commenter (10095) stated that gross MWh output is straightforward, simple, consistent, directly measured, and already reported to EPA for other purposes as required b y 40 C.F.R. part 75. Furthermore, market drivers will continue to ensure that power producers operate efficiently because utilities have a strong incentive to ensure the gap between gross and net output is as small as possible,10
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maximizing the return on investme nt. By recognizing that a generating unit's gross energy output is comprised of electrical, mechanical, and thermal energy uses, EPA avoids creating an incentive for utilities to power station equipment with electricity rather than steam. If EPA had focuse d solel y on the electrical component of gross output, the generation of more electricity to serve the plant's equipment would result in a lower lb/MWh calculation than if the equipment were powered b y steam, even though the use of electricity could be less efficient in some cases. One commenter (10095) stated that a gross energy output standard that incorporates useful thermal energy would also encourage the use of waste heat produced during the energy conversion process or steam used throughout the CCS pro cess. The commenter specificall y supports EPA's acknowledgment that supplying steam for anime regeneration in a CCS system is categorized as "useful energy ." By allowing for the incorporation of waste heat and steam as a compliance option (increased gross MWh output with no additional CO 2 emissions), a gross output
- based standard that recognizes electrical, mechanical, and thermal energy uses would allow operators to respond to market drivers and make choices with respect to the quality of the waste heat an d steam they produce, increasing the overall utilization of the energy
. One commenter (10095) stated that net MWh output is facility
- specific and difficult to accuratel y calculate. For example, many facilities have transformers that support multiple units at the facility , making unit
- level reporting difficult. More importantly , station electric services may come from other outside sources to supply lighting, well pumps, and other ancillary loads. Additionally , some station services are dedicated per unit, while other station services may be measured at a facility level. Examples of facility
- wide equipment that often serve more than one unit include coal handling equipment such as unloaders and conveyors, electric fire pumps, cooling tower makeup pumps, and p ollution control equipment (e.g., FGD and baghouses). Accuratel y measuring and reporting all of these sources would require complex calculations and would naturally lead to variations among affected sources and inconsistencies in both reporting CO 2 emissio n rates and complying with the proposed CO 2 standard. A net output
- based standard would also discourage the deploy ment of technologies that could successfull y reduce CO 2 emissions at a lower cost, such as combined heat and power ("CHP") and co
generation. One commenter (9666) stated that nothing has changed from February 2012 that would now make a net generation
- based emission rate appropriate and achievable Parasitic power demands at NGCC plants would be much less than at coal
- fired EGUs with CCS. The Agen cy's suggested conversion from gross to net NSPS may

not properly

take into account all of the variables such as base
- load versus cycling operation. The commenter has no objection to the inclusion of an optional net output
- based standard that may appeal to some owners or operators of NGCC units. One commenter (9666) stated that they disagree with EPA's statement that a net
- output based standard "would provide more operational flexibility and expand the technology options available to compl y with the standard for coal
- fired PC and CFB EGUs." The commenter has found no explanation in the preamble or the record as to why the Agency

believes such operational flexibility might occur. As discussed elsewhere, the commenter doubts that any coal
- fired units will be planned or built if CCS continues to be required, so this issue is theoretical and moot. One commenter (10554) stated that they support a gross output basis because using a net
- output - based standard could create a perverse incentive to provide auxiliary loads from the grid or to supply ancillary support services (natural gas compression, circu lating water suppl y, etc.) from off site to reduce the emission limit. This could actuall y increase CO 2 emissions by not using the most efficient method of providing these services.10
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One commenter (3862) supports the optional use of net energy or gross ene rgy

output. Since the current Part 75 Acid Rain rule specifies gross output, it may be preferable for us to continue using gross energy , but less preferable for a coal fired facility seeking greater operating flexibility . The 75% credit for onsite steam sh ould be evaluated for use of a higher value vs. a lower value as suggested. EPA should reiterate the basis for this value as it is used in the calculations of gross energy output for combustion turbines. One commenter (10136), on EPA's request for input o n calculation of gross output and whether the Agency should instead express emissions on a net output basis, stated that the Agency should utilize the sy stem that best and most transparentl y reflects the "costs"
-- carbon costs, criteria pollutant costs, and costs in extra fuel burned
-- of putting a megawatt
- hour of electricity on the grid. Compatibility and transferability

between calculations used to estimate greenhouse gas emissions and conventional pollutants should be emphasized, as well, to promote the simplest and most information
- rich s ys tem for evaluating costs. One commenter (3175) stated that for affected units with a heat input of less than or equal to 850 MMbtu/h, they

support basing the emissions rate on the gross output of the gas turbine as measured at the generator terminals as opposed to the net output taking into account parasitic loads. We are confident that plant owners will alway s select the most efficient auxiliary s ys tems, but variations in site conditions, available gas pressure, available cooling water sources, etc. will likely penalize some owners and benefit others simply through variations in their particular plant site conditions if a net basis is used with negligible overall effect, but potentially significant effect for certain operators. We feel taking these variations off the table will simplify measurement and enforcement with negligible overall effect. One commenter (10618) stated that EPA should be consistent in the use of gross
- based output standards in this rulemaking. G enerally , the commenter supports the use of gross output
- based standards, however, the use of gross
- based generation results in a number of complex technical and operational considerations that can influence emission rates and unit efficiencies. These issu es warrant a much greater technical anal ys is, which further supports that finalization of these standards is premature and that the proposed rule should be changed to an advanced notice of proposed rulemaking so that the agency can full y evaluate the impli cations and design of gross
- based output standards. **Response 10.3 -**  **2:** See preamble section III.F.1. **Comment 10.3 -**  **3:** One commenter (9664) stated that they are seeking final subpart Da standards that are expressed on a net output basis, and as well in seeking more robust net emissions rate standards for subpart KKKK units. One commenter (8952) stated that they support net output - based standards. One commenter (9650) stated that a standard utilizing "Net Output" allows more leeway and, should it continue to mandate CCS, EPA must adopt the pro posed "net output based standards." One commenter (10466) stated that net output should be used as the basis for the standard, rather than gross output, to be consistent with State standards and to reduce the reporting/compliance burden on sources in States that have already implemented GHG standards. One commenter (9201) stated that they support the use of net output
- based approaches for all covered sources, as the utilization of those approaches more accuratel y captures advances in boiler efficiencies. EPA appears to onl y focus on applicability to units with CCS controls, despite the general recognition that net output
- based approaches account for advances in process efficiencies on a much broader scale.10
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Net output
- based approaches are particularl y appro priate to advance emission reductions from base load sources at either units with or without CCS technology , and as such should be adopted as an option for those sources at a minimum. One commenter (9514) stated that the final rule must promote more effic ient designs of all coal
- and gas - fired facilities, including those provided b y s etting the standard on a net
- output basis for all affected facilities. Commenters (9514; 10038; 10682) stated that one stated objective of EPA's proposal is to encourage the development and use of more efficient generation. The proposed gross
- output based standard actually discourages this result b y ignoring the amount of electricity that the facility uses before it sells the electricity to the grid. A gross
- output based stand ard merely tracks the total amount of electricity generated per unit of pollutant emitted. By contrast, under a net
- output based standard, compliance is determined based on the amount of electricity made available to the grid per unit of pollutant emitted. Commenters (9514, 10619 ) stated that a net
- based standard better promotes "technology forcing" throughout the industry

by encouraging the selection of more efficient electric generating unit designs. It also provides incentives over the long run for furth er research and development of even more energy efficient control processes and equipment. One commenter (9514) stated that EPA is misguided to argue that a gross
- output standard is needed to accomplish "technology

forcing;" in fact the opposite is true
- a net - output based standard better provides the necessary

incentives to move technology that incremental step forward towards not only deeper reductions, but deeper reductions that can be achieved more efficiently
. One commenter (9514) stated that current generation I GCC or ultra
- supercritical (USC) plants are able to achieve emission rates of 1,600 lb CO 2 /MWh (net
- output) using 100 percent coal without capture technology . Future development of an advanced ultra
- supercritical plant (AUSC) is projected to lead to design emission rates of less than 1,500 lb CO 2 /MWh (net
- output) but not without a regulatory driver. With a small percentage of natural gas co
- firing or a solar preheating s ys tem, such units might well comply with EPA's proposed standard, but onl y if the associated emission limitation standard was set on a net output basis. However, these units' future compliance with EPA's proposed gross
- output emission rate of 1,100 lb CO 2 /MWh could not be achieved because such non
- CCS units would not have the large parasitic loads associated with CCS. Without that load their gross emission rates would be much closer to net emission rates and higher than the proposed limit. Thus, a net
- output based standard would promote more flexibility

to the facility

in finding new, innovative way s to comply while still preventing substantial CO 2 emissions. One commenter (9514) stated that a gross output standard also biases the future development of CCS, and other equal or better carbon dioxide control options, by providing an advantage to IGCC units over AUSC units with CCS. EPA has proposed to address this issue with a third unit of measurement
- an "adjusted gross output" standard in which the electric load needed to power the additional IGCC equipment is subtracted from the gross load. Because IGCC units have a much higher ancillary load than AUSC units, if one discounts the emissions associated with this load, an IGCC unit would only have to capture 25 percent of the CO 2 emissions from the unit to comply with the proposed s tandard while an AUSC unit would have to capture 40 percent. This would result in greater real world CO 2 emi ssions from the IGCC unit and a cost advantage for IGC C/CCS units over AUSC/CCS units. There is no reason for EPA to create this distinction. Any advantages to I GCC/CCS units will be revealed, promoting the technology

without the need for special treatment. Moreover, there is no need for a separate treatment regardless, as EPA should finalize standards on a net output basis for all units.10
- 12

Referring to Table 8 (Comparison of Net, Gross, and Adjusted Gross Emissions of Different Coal Configurations) of their submittal, one commenter (9514) stated the comparison highlights how EPA's proposed usage of a gross
- output based standard may obscure the scope of the improvements that are potentially

available from the proposed standard. By comparing gross emission rates (and ignoring the GHG emissions from the energy that it takes to operate CCS) EPA asserts that it estimates "this standard will result in reductio n in emissions of at least 40 percent when compared to the expected emissions of a new SCPC boiler." While it is true that the actual CO 2 emissions of a unit meeting EPA's proposed gross - output based standard would emit less CO 2 than would a new, high effi ciency SCPC unit, that reduction is closer to 15
- 20 percent when analyzed on a "pounds
- of
- CO 2 "per unit
- of

- electricity delivered
- to - a - consumer" basis. In other words, the gross output standard overstates the real world impacts of the standard by at least factor of 2. One commenter (9514) recommended that EPA finalize an emission level of 1,200 lb CO 2 /MWh (net
output), which EPA asserts is equivalent to 1,000 lb CO 2 /MWh (gross). There should not be a significant cost increase associated with a somewhat more stringent net emissions limit than proposed. Since, as described above, IGCC units without C CS have relativel y high parasitic loads, setting the standard at the levels we suggest on a net
- output basis would preclude compliance b y IGCCs that co
- fire relativel y small percentages of natural gas. Because an y IGCC/CCS unit would likely be a baseload unit, if fired on natural gas the CCGT portion of the IGCC would meet an emission limit of less than 850 lb CO 2 /MWh (net
- output). For this reason, the flexibility of operation, by

way of co
- firing an IGCC with natural gas, which the agency seeks to promote can still be readily achieved at a lower level than proposed. Moreover, EPA's proposal would appl y the Subpart KKKK standard to an y IGCC that fires above a given percentage. If set at an appropriate level, this feature of the rule would preclude gaming of the partial CCS rule as EPA suggests. Regarding the EPA suggestion that determining the net output of an IGCC facility could be "more challenging to implement, one commenter (9514) stated this would entail simply measuring the electricity associated with the primary gas compressors for electricity production
- and EPA has not explained why

this measurement would be "challenging." The agency's assertion simply does not support the proposed gross
- output based emission standard for IGCC units, nor for subpart Da and KKKK units more generally
. One commenter (9514) stated that they urge EPA to finalize rules that provide impetus for improving the efficiency

of all generating technologies, including IGCC, through net
- output based standards, because it is simply not the case that measuring net electric output poses too burdensome of a technical or financial challenge today
- particularl y for newly constructed units. It cannot be "more challenging" to require an operator to submit basic information for a new unit that it already gathers, apparently without difficulty , for existing units. In fact, EPA has ready access to net metering data, and net electrical metering has become common in the industry for reasons set out by

FirstEnergy

fifteen years ago: One commenter (9514) stated that EPA's preference for a gross output based standard because the agency onl y has CEMS emissions data reported on a gross output basis is inaccurate and largel y irrelevant in setting standards for new coal
- fired units with CCS. In this rul emaking, EPA is not setting an emission limit for either existing or new coal fired units without CCS. Part 75 data does not yet include emission data for CCS
- equipped coal fired units and EPA does not rely on any Part 75 emission data in support of its proposed emission limit for new fossil
- fuel fired steam EGUs. EPA bases the selection of the proposed level of capture in part on a policy preference to keep the levelized cost of electricity for new coal plants at or below that of new nuclear units and to a llow development of a fossil10
- 13

fuel
- fired standard on an output basis. Thus, the fact that Part 75 data include gross electrical output is not relevant to a determination of the numerical emission limit associated with a BSER of partial CCS for fossil fuel
- f

ired steam EGUs. One commenter (9514) stated that facilities calculate, and EPA has access to, emissions on a net output basis, which further demonstrates the Agency 's flawed reasoning in further justifying a gross based standard based on a claim that it only has CEMS emissions data reported on a gross output basis. Facilities can easil y calculate emissions data on a net
- output basis as evidenced b y the reports from the NETL , which includes detailed cost
- and performance
- anal ys es for new, state
- of
- the
- art units with CCS providing both net and gross CO 2 emission rates. Moreover, EPA has relied on this data, in part, to support its choice of BSER, indicating that it is aware that facilities calculate emissions data on a net output basis. In fact, EPA proposes to use net output data as a foundation of its rule. Although EPA proposes to establish the emission limitation on a gross
- output basis, it also proposes that a source must determine whether it is an affected facility on the basis of the facility's net ele ctrical output. This requirement further, and substantially , undercuts the agency 's argument that determining net
- output is too difficult to require of new sources subject to the regulation. One commenter (9514) stated that even without a Part 75 requirement to do so, electricit y generators are still currently

required to report monthly gross and net generation data to EIA using EIA Form 923.290 These data allow EPA to determine the net generation directly for many units and, for other units, to convert the gross generation reported for each unit in its data set to net generation. One commenter (9514) stated that additional data on the relationship between net and gross electric output of specific units and the achievable emission levels are available in permit files for new units seeking BACT determinations or PUC approvals. We note that in December of 2013, EPA Region IV issued a PSD permit for the reconstructed FPLPort Everglades facility that contained a 12
- month limit of 830 lb CO 2 e/MWh on a net emissi ons basis. Clearl y, a new facility has the ability to keep track of its emissions on a net
- output basis. ( Commenter provided links and attachments for example permitting documentation) One commenter (9514) stated that they agree with the Agency

that one of the key

purposes of the proposed rule is to serve as a necessary "predicate for the regulation of existing sources within this source category

under CAA section 111(d)." It is important to preserve the ability to encourage all available options to reduce emissions from EGUs, including efficiency improvements and reductions in parasitic loads. This is another extremely important reason to employ a true net - output standard. One commenter (9514) stated that EPA should not allow sources an option to choose a n et or gross output standard. As we point out above, a gross output standard fails to promote the agency 's goal of encouraging the development of more and more efficient control options for carbon dioxide. Moreover, it also results in more real world CO 2 em issions (per unit of electricity sold). Indeed, the fact that EPA is considering providing the option for facilities to choose demonstrates our point
- that net
- output standards are feasible. EPA has not provided an y anal ys is in this proposal or the materi als accompan yi ng it of the additional emissions that might result from offering sources the opportunit y to choose between net and gross output based standards. **Response 10.3 -**  **3:** See preamble section III.F.1. **Comment 10.3 -**  **4:** One commenter (8918) stated that EPA's logic is not clear for deducting the electric energy used to power boiler feed pumps from the definition of gross power output. Deducting the boiler feedwater pump's electric energy consumption is a step that would b e involved in a net energy output10
- 14

not a gross output. Furthermore, it appears that a facility with steam driven feedwater pumps would get to add, under (Pt)HR or (Pt)IE, the thermal energy in the steam used to drive the pump. Allowing the addition of steam energy

to drive a boiler feedwater pump to the facility 's gross energy output, while requiring the deduction of electric energy , double penalizes facilities with electric driven pumps. One commenter (9650) stated that EPA should define "gross energy out put" for traditional and icc facilities differently
. One commenter (9591) supports the proposal's revised definition of potential electric output, which would allow the source the option of calculating its potential electric output on the basis of actual design electric output efficiency, rather than a default of 33 percent. This proposed approach would avoid effectivel y penalizing more
- efficient units. **Response 10.3 -**  **4:** The gross electric output includes the energy used by electric feedwater pumps to avoid distorting the market. Feedwater pumps require large amounts of energy and can either be run by steam or electricity . The energy used b y steam powered feedwater pumps is not available to produce electricity and hence the gross efficiency is reduced. In contrast, the electricity to run feedwater pumps is after the measurement of gross electricity . Without this approach to measuring gross energy output, units with electric feedwater pumps would appear more efficient and have a lower output based emission rate. The definition of potential electric output in this final rule is based on either 33 percent or the design efficiency of the unit. For CHP units, design efficiency for purposes of calculating the potential electric output is at the maximum electric production rate. For example, a CHP unit with an extraction steam turbine that is capable of running at 100 percent condensing would determine the design efficiency for determining the potential electric output when only generating electricity. In contrast, a CHP unit without a steam condensing cycle would use the overall base load efficiency , including the useful thermal out, when determining the potential electric output. This approach satisfies one of our criteria for the industrial CHP exemption

– exempting industrial units whose primary purpose is to provide useful thermal output. **Comment 10.3 -**  **5:** One commenter (9665) stated that an adjusted gross energy output standard would be inappropriate for IGCC units. As EPA points out in the preamble, because IGCC facilities can produce by
- products along with electricity , it would be "challenging" to measure electricity used by the primary gas compressors associated with electricity production and hard to enforce. Thus, if EPA goes forward with a partial
- CCS standard, it should finalize its proposal to define "gross electric output" for IGCC as "electricity measured at the generator terminals." The commenter stated that they also cannot support either a net
- output based standard or a standard more stringent than 1,100 lb CO 2 /MWh given the uncertainty regarding whether such standards can in fact be achieved. **Response 10.3 -**  **5:** The definition of gross output in this final rule does not subtract out the electricity used by the gas compressors. **Comment 10.3 -**  **6:** One commenter (7977) stated that the proposed rule improperl y uses gross output a s the basis for the standard and the proposed structure of regulatory applicability

for co
- generation units. One commenter (10606 ) stated that EPA should adopt an optional standard that is expressed as a pound per MMBtu CO 2 limit, in addition to a lb/MWh s tandard. This approach will simplify the process of applying the proposed lb/MWh standard to an integrated s ys tem where several boilers feed a common header, which feeds multiple electric generators and also provides steam to an industrial process.10
- 15

However , the lb/MWh limit should also be retained in order to account for inherent inefficiencies in the sy stem. **Response 10.3 -**  **6:** The EPA notes that the lb/MWh standard includes 100 percent credit for useful thermal output. The definition of affected facility in this final rule does not include multiple boilers feeding a common steam header. In this case, each boiler would be a separate affected facility that would demonstrate compliance with the applicable emission standard separatel y.