# Regional Market Trends Forum Curt Spalding April 23, 2015

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# CLEAN POWER PLAN Proposed Carbon Pollution Standards For Existing Power Plants

# Outline

• President’s Climate Action Plan • Background on Clean Air Act Section 111(d) • Setting State Goals • Flexibilities Available to States • Costs and Benefits • How to comment

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# President’s Climate Action Plan

• Reduce carbon pollution from power plants
• Prepare the U.S. for the impacts of climate change
• Lead international efforts to address global climate change

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# This Proposal Deals With the Largest Source of GHG Emissions in the U.S.

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# Reducing Carbon Pollution From Power Plants President’s Directive to EPA: Develop carbon pollution standards, regulations or guidelines, as appropriate, for: 1. New power plants • Proposed: January 8, 2014 

## 2. Modified and reconstructed power plants • Proposed: June 2014 • Final : Summer 2015 

## 3. Existing power plants • Proposed Guidelines: June 2014 • Final Guidelines: Summer 2015 • Federal Plan Proposal: Summer 2015 • State Plans due: Summer 2016

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## • Establishes a mechanism for controlling air pollution from stationary sources • Applies to sources for which the Administrator, in her judgment, finds “causes, or contributes significantly to, air pollution which may reasonably be anticipated to endanger public health or welfare” • Can apply to new, existing, modified and reconstructed sources. 

## • More than 70 stationary source categories and subcategories are currently regulated under section 111
• A full list of sources regulated under section 111 can be found in 40 CFR Part 60 

# EPA’s Regulatory Approach Clean Air Act Section 111

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# • Lays out different approaches for new and existing sources • New sources under section 111(b) • Federal standards for new, modified and reconstructed sources 

## • Existing sources under section 111(d) • State programs for existing sources that are equivalent to federal guidelines 

# • Applies the “Best System of Emissions Reduction ” (BSER) • Feasibility • Costs • Technology • Size of Reductions 

# EPA’s Regulatory Approach Clean Air Act Section 111

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# States and Communities with Programs That Reduce Carbon Pollution

State programs that reduce carbon include carbon cap and trade programs and energy efficiency and renewable energy standards or goals. 9Building Block Strategy EPA Used to Calculate the State Goal Maximum Flexibility: Examples of State Compliance Measures 1. Make fossil fuel -fired power plants more efficient Efficiency Improvements Efficiency improvements Co -firing or switching to natural gas Coal retirements Retrofit CCS ( e.g.,WA Parish in Texas) 2. Use lower-emitting power sources more Dispatch changes to existing natural gas combined cycle (CC) Dispatch changes to existing natural gas CC 3. Build more zero/lowemitting energy sources Renewable Energy Certain Nuclear New NGCC Renewables Nuclear (new and up - rates) New coal with CCS 4. Use electricity more efficiently Demand - side energy efficiency programs Demand - side energy efficiency programs Transmission efficiency improvements Energy storage 10

# State Performance Goals

0 500 1000 1500 2000 2500

Coal Residual Oil Natural Gas Nuclear Solar Wind HydroAverage CO2Emissions Rates (lbsCO2/MWh)

Fuel Type 

### 2013 Average CO2 Emissions Rates ( lbs CO 2

### / MWh )

Note: Average emissions rates are rounded to the nearest hundred. Source: U.S. Energy Information Administration. http://www.eia.gov/tools/faqs/faq.cfm?id=74&t=11 

# Pounds of Carbon Dioxide (lbs CO 2

# ) Megawatt Hour ( MWh) of Electricity Produced 

# 2012
2030

# State Performance Goals (lbs/ MWh )
State 2012 Fossil Emission Rate 1 Interim Goal (2020 - 2029 average) 2 Final Goal (2030 and thereafter) 2 Connecticut 844 597 540 Maine 873 393 378 Massachusetts 1,001 655 576 New Hampshire 1,119 546 486 Rhode Island 918 822 782

1 From Goal Computation Technical Support Document, Appendix 5 – 2012 Emissions Rate and Building Block Application 2 From Table 1 to Subpart UUUU of Part 60 – State Rate-Based CO2 Emission Performance Goals, Proposed 12

# Flexibilities Available To States

• Timing: • Up to 15 -year window in which to plan for and achieve reductions in carbon pollution. • U p to two or three years to submit final plans. • Form of goal: States can use either a rate - based or mass - based goal. • Single or multi -state plans: States can collaborate and develop plans on a multi -state basis. • Selection of measures : • States will choose how to meet the goal through whatever collection of measures reflects its particular circumstances and policy objectives. • State measures may impact and, in fact may be explicitly designed to reduce, CO 2 

### emissions from utilities on a regional basis. • EPA would support building off existing reduction programs.

1322% 12%

- 20%

-71%

-93% -100%

-80% -60% -40% -20%

0% 20% 40% 

## New England Economic Growth and ISO New England System Emissions, 1999 - 2012

New England GDP Total Generation CO2 Emissions NOx Emissions SO2 Emissions Data Sources: 2012 ISO New England Electric Generator Air Emissions Report, US Department of Commerce, Bureau of Economic Analysis 14

# Next Steps Milestones Dates Final Standards for New Sources Summer 2015 Final Standards for Modified and Reconstructed Sources Summer 2015 Final Emissions Guidelines for Existing Sources Summer 2015 Proposal for Federal Plan Summer 2015 State Plans due Summer 2016

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# Addressing Methane & VOC Emissions

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# Addressing Methane and VOC Emissions

• New Source Performance Standards (NSPS) • We are looking at cost- effective, commonsense requirements for new and modified oil and gas sources that are significant emitters of methane and VOCs . • Control Technique Guidelines • CTGs provide states guidelines for requiring reasonably available control technology (RACT) to achieve VOC reductions from existing sources in ozone nonattainment areas that are classified as Moderate and above, and in states in the Ozone Transport Region • Voluntary Efforts
• EPA plans to expand the successful Natural Gas STAR Program by launching a new partnership in collaboration with key stakeholders by the end of this year • Under the new partnership, EPA plans to enter into voluntary agreements with individual companies that achieve the following: • Encourage innovation and ambitious commitments with flexible achievement mechanisms • Provide accountability and transparency for reduction commitments, and • Track progress toward specific methane emission reduction activities • Feedback • EPA has been talking with states and tribes to to get feedback that will help us as we develop the rule . 17

# Schedule
Milestones Dates Propose Voluntary Program Spring 2015 Propose NSPS for public comment Summer 2015 Issue draft CTGs for public comment Summer 2015 Launch Voluntary Program End of 2015 Finalize NSPS Spring 2016 Publish CTGs Spring 2016

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