Oklahoma DEQ and OK Coal Utilities Questions

Questions from Oklahoma DEQ:

1. Were the Renewable Generation growth factors developed before the Renewable Electricity 

Production Tax Credit expired? If so, will those growth factors be recalculated?

2. What is a self-correcting mechanism? How does it differ from a measure that is not selfcorrecting? Please provide examples.

3. How are retired and replacement fossil-fuel fired units handled under the proposed rules? Can 

states get credit in State Plan for retirement of coal units and replacement with NG CC units 

other than removal of CO2 emissions from the numerator and reduction of MW in 

denominator?

4. How does the proposal ensure that states with a lot of NG electricity generation do not bear 

proportionately more of the burden for reducing CO2 emissions than those with only coal or 

coal and very little NG generation?

Questions from Oklahoma Corporation Commission/Public Utility Division:

1. 2012 Test Year- understanding of what, if any, credits that states may receive regarding actions 

taken to reduce carbon emissions prior to this period.

2. With utilities currently working to comply with Regional Haze and other environmental 

compliance requirements, how do measures to be taken in the future (ie plans to retire a coal 

plant) affect the state’s credits?

3. Now that many of our OK utilities are members of the Southwest Power Pool and operating 

under the Integrated Marketplace, thus no longer in control of dispatching its own units, how 

does this impact, if at all, Oklahoma’s CO2 emissions calculations? 

4. With Oklahoma being a very rich wind source, the rule notes (in the state goal calculator 

denominator) that electricity generation “in the state” is calculated. Irrespective of where the 

renewable source is consumed, would OK be able to take this wind into account? 

5. Has there been any analysis/consideration concerning Renewable Energy Credits, and, if so, how 

do/would states participating in any REC market(s) be able to gain credits?

6. Further explanation of building block 4 (purpose: to better ascertain how current DSM and EE 

programs implemented on the state level may be impacted and timing issues).

Questions from Western Farmers Electric Cooperative:

1. WFEC has new customers (4 distribution cooperatives) in another state that we began serving 

after the baseline year of 2012. The previous power supplier may benefit from this but we will 

not receive credit in the 4 building blocks formula. How can EPA help? (This is not new load to 
the grid, but the four cooperatives were served for many years through power agreements with 

the incumbent IOU. Those contracts were terminated and WFEC signed contracts as a G&T 

supplier for these cooperatives. The load is a net decrease of 500 mw to the incumbent utility 

and a net increase to WFEC of 500 mw, but there is no new added load to the system. For 

carbon it basically a transfer of carbon footprint from one utility to another across state 

boundaries.)

2. When a coal unit is shutdown, the capacity has to be replaced immediately. There is not a great 

deal of excess capacity sitting idle, so new units will have to be built. That will take time and 

resources. What can EPA do to alleviate the burden that this brings to rate payers in Oklahoma?

Question from Associated Electric Cooperative:

1. How will renewable energy sources such as hydro be used in each states emission rate 

calculation. Much of the hydro generation is purchased from a pool and each utility may know 

how many MWh they are purchasing but not know the exact source of the generation? Many of 

these projects are owned by the federal government, how will the generation efficiency option 

for generators be calculated? For example, if a hydro project improves its efficiency can that be 

counted by the state toward the fossil efficiency calculation?

Questions from OGE Energy Corp:

1. What is the basis for the single, 2012 baseline year and would EPA be prepared to consider an 

earlier, multi-year baseline? This baseline would be more reflective of a period where electric 

demand was not as economically and thereby, artificially lower and, the multiyear, allows any 

variability due to weather and unit outages to be accounted for.

2. Can you (EPA) walk us through how a state might convert its rate target to a mass cap? (We 

have read the TSD and are not clear).

3. I have heard it explained that the 4 building blocks are not mandates but, a basis for the 2030 

target. These 4 block-targets are very aggressive. What other CO2 compliance options would 

EPA accept in the state plan to compensate for the inability to meet any or all of the 4 blocktargets, especially for a single state or group of states that have similar compliance concerns?

4. What is the basis for the 70% value chosen for Natural Gas combined cycle dispatch (block 2)?

5. Can wind and other renewable generation be used as credits if they are operational post 2012 

even if they were built & put into operation before 2012?

6. Can you (EPA) confirm that units covered under 111(b) are not required to be included in the 

111(d) program? Can you walk us though what are defined in eGRID as ‘exempt’ units and how 

they fit into the state’s target-setting?