From: Vasu, Amy

Sent: Tuesday, July 28, 2015 2:34 PM

To: nfrey@omb.eop.gov

Cc: Szabo, Aaron; Tsirigotis, Peter; Harvey, Reid; Culligan, Kevin

Subject: For interagency review -- New Source Complement TSD for CPP Final Rule

Nathan,

Attached, for interagency review, is the New Source Complement TSD for the Clean Power Plan

final rule and an accompanying spreadsheet.

Thank you.

Amy

~~~~~~~~~~~~~~~~~~~~~~~ Amy B. Vasu

U.S. EPA / OAQPS

Sector Policies and Programs Division

email: vasu.amy@epa.gov

phone: 919.541.0107

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# New Source Complements to Mass Goals

Technical Support Document for CPP

Final Rule

U.S Environmental Protection Agency

Office of Air and Radiation

August 2015New Source Complements to Mass Goals under 111(d)

This Technical Support Document (TSD) provides info rmation that supports the EPA’s quantification of

new source complements in Section VIII.J of the preamble. These new source complements represent the

EPA’s estimated new source emissions associated with satisfying incremental demand from 2012. States

may add these new source complements to the final rule’s mass goals in pursuing a mass-based

compliance pathway inclusive of both affected EGUs and new fossil fuel-fired sources. The methodology

for quantifying these new source complements is presented in five steps:

1. Calculate incremental generation needed for each in terconnection to satisfy projected load growth

from 2012 levels 1

2. Subtract generation from under constructi on facilities included in the final rule

3. Subtract generation growth from affected E GUs and incremental renewable energy (RE)

accounted for in the calculation of mass goals

4. Apportion remaining incremental generation to st ates on the basis of each state’s 2012 share of

the interconnection’s affected EGU generation total 2

5. Convert state-level incremental generation to st ate-level incremental emissions by assuming the

New Source Performance Standard emission rate for NGCC of 1,030 lbs/MWh

The spreadsheet ‘New Source Complements’ is availabl e in the docket and provides the complete set of

calculations for each state.

1. Calculate incremental generation needed for ea ch interconnection to satisfy projected load

growth from 2012 levels

For this step, the EPA relies on net energy for load values from the Energy Information Administration’s

(EIA’s) 2015 Annual Energy Outlook (AEO2015). Those values are presented in Figure 1 for the

baseline year of 2012 and all years, 2022 through 2030.

Figure 1. Net Energy for Load by Interconnection (TWh)

Year Eastern

Interconnection Western

Interconnection Texas

Interconnection

2012 2,881 730 333

2022 3,094 775 361

2023 3,114 782 365

2024 3,137 789 369

2025 3,158 797 372

2026 3,178 803 376

2027 3,196 810 380

2028 3,213 816 383

2029 3,231 823 387

2030 3,245 829 391

1 In this document, unless otherwise indicated, “incremental” means beyond the level observed in 2012.

2 Affected EGU generation total is equal to the 2012 adjusted baseline used to calculate goal ratesThe AEO projections are then converted into a perc ent increase in net energy for load, relative to 2012,

for each interconnection and each year. Conversion to a percent increase enable s the EPA to apply the

projected demand growth to 2012 historical data.

Figure 2. Increase in Net Energy for Load From 2012 (%)

Year Eastern

Interconnection Western

Interconnection Texas

Interconnection

2022 7.4% 6.2% 8.6%

2023 8.1% 7.1% 9.6%

2024 8.9% 8.2% 10.8%

2025 9.6% 9.2% 11.9%

2026 10.3% 10.1% 13.0%

2027 10.9% 11.0% 14.0%

2028 11.5% 11.9% 15.1%

2029 12.2% 12.8% 16.3%

2030 12.7% 13.6% 17.4%

The historical generation associated with each in terconnection is calculated as 2012 historical sales

adjusted to account for an average transmission loss factor of 7.51%: 3

 2012 Generation = 2012 Sales * (1+ Transmission Losses)

 2012 Eastern Interconnection Generation = 2,626,988 GWh * 1.0751 = 2,824,274 GWh

 2012 Western Interconnection Generation = 671,260 GWh * 1.0751 = 721,672 GWh

 2012 Texas Interconnection Generation = 365,467 GWh * 1.0751 = 392,914 GWh

For each year, 2022 through 2030, the incremental ge neration required to suppor t demand growth is 2012

sales multiplied by the percent increase in net energy for load for that year. 4 For example:

 2030 Incremental Generation to Support Dema nd Growth in the Eastern Interconnection =

2,824,274 GWh * 12.7% = 357,353 GWh

Figure 3 contains the incremental generation to su pport demand growth for each interconnection in each

year:

Figure 3. Incremental Generation to Support Demand Growth

Year Eastern

Interconnection Western

Interconnection Texas

Interconnection

2022 209,623 44,887 33,605

2023 228,901 51,476 37,525

2024 251,878 59,148 42,332

3 The 7.51% scaler represents an average historical difference between total net generation of electricity and retail

sales of electricity. http://www.eia.gov/electricity/state/pdf/sep2010.pdf a

4 This relationship assumes that the international export/import balance remains constant at 2012 levels and all

incremental demand is met with generation from the U.S.2025 272,214 66,281 46,616

2026 291,203 72,570 51,229

2027 308,827 79,060 55,042

2028 325,981 85,759 59,323

2029 343,525 92,729 64,065

2030 357,353 98,181 68,244

2. Subtract generation from under construction facilities included in the final rule

The incremental generation to support demand growth cal culated in step 1 would be served in part by the

under construction facilities that are part of the final ru le but not reflected in the 2012 historical data.

Figure 4 displays the under construction capacity that did not commence operations in 2012 for each

facility type – affected coal-fired EGUs, affected natural gas-fired EGUs, and nuclear units that are

eligible for compliance. 5

Figure 4. Under Construction Facilities by Interconnection (MW)

Facility

Type Eastern

Interconnection Western

Interconnection Texas

Interconnection

NGCC 10,633 2,636 2,489

Coal 655 0 0

Nuclear 5,522 0 0

Each facility type is assigned an annual net capacity factor associated with the amount of generation

expected to meet future demand. This capacity fact or does not represent expected total annual output, but

instead represents the portion of total annual output that will deduct from the incremental generation

needed to support demand growth. Consistent with th e application of building bl ock 2, under construction

NGCC is assigned a capacity factor associated with future demand of 55%; coal-fired EGUs are assigned

a capacity factor of 60%; and nuclear facilities are assigned a capacity factor of 66%. 6 The generation

totals associated with applying these capacity factors to under construction facilities are shown in Figure

5:

Figure 5. Incremental Generation Assumed to Meet Future

Demand from Under Construction Facilities by Interconnection

(GWh)

5 Under construction facilities that commenced operation in 2012 are excluded from this adjustment due to the

unknown impact their full

‐ year operations would have on the 2012 data. Instead, the assumed output of full

‐ year

operations from these facilities is reflected in each state’s adjusted 2012 baseline generation total, which is the

basis for apportioning interconnection

‐ level new source complement generation to state

‐ level new source

complement generation.

6 The 66% capacity factor assigned to nuclear is set at the same ratio of future demand to total output (66%

dedicated to future demand; total output of 90%) as under construction NGCCs in building block 2 (55% dedicated

to future demand; total output of 75%)Facility

Type Eastern

Interconnection Western

Interconnection Texas

Interconnection

NGCC 51,231 2,636 2,489

Coal 3,443 0 0

Nuclear 31,926 0 0

3. Subtract generation growth from affected EG Us and incremental RE accounted for in the

calculation of mass goals

The calculation of mass goals incorporates an amount of generation growth from both affected EGUs and

RE that would serve to meet future demand requirements. 7 Consequently, because the estimated

emissions from this particular incremental genera tion are already included in the mass goals, it is

necessary to deduct this amount of generation, listed in Figure 6, from the incremental generation needed

to support demand growth that will inform the estimation of the new source complements.

Figure 6. Affected EGU and RE Generation Growth Incorporated in

Mass Goal Calculation (GWh)

Year Eastern

Interconnection Western

Interconnection Texas

Interconnection

2022 138,054 29,209 22,689

2023 131,858 27,898 21,670

2024 135,132 28,591 22,208

2025 149,186 31,565 24,518

2026 161,395 34,148 26,525

2027 164,934 34,897 27,106

2028 191,779 40,576 31,518

2029 218,279 46,183 35,873

2030 241,664 51,131 39,716

The amount of generation remaining after deducting the generation growth incorporated in mass goals is

referred to as the new source complement generation, and it is defined as:

 Interconnection-level new source complement ge neration = Incremental generation to support

demand growth – Generation fro m under construction facilities dedicated to serving future

demand (step 2) – Generation gr owth from affected EGUs and RE assumed in the mass goal

calculation (step 3) 8

7 For more information, please see sec tion VII of the preamble and the CO2 Emission Performance Rate and Goal

Computation TSD

8 For the year 2022, this procedure yields negative incremental generation results in the Eastern and Texas

Interconnections, because under

‐ construction capacity and the amount of generation growth already represented

in the mass goals would suffice to meet projected load growth in that year. As a result, the new source

complement generation in these instances is assigned a value of zero. Eastern Interconnection new source complement generation in 2030 = 357,353 GWh

– 86,600

GWh

– 241,664 GWh

= 29,090 GWh

The new source complement generation for each interc onnection in each year is provided below in Figure

7:

Figure 7. Interconnection

‐ Level New Source Complement

Generation (GWh)

Year Eastern

Interconnection Western

Interconnection Texas

Interconnection

2022

‐ 2,976

‐

2023 10,443 10,876 3,864

2024 30,146 17,855 8,133

2025 36,428 22,015 10,107

2026 43,208 25,720 12,714

2027 57,294 31,462 15,945

2028 47,602 32,480 15,814

2029 38,647 33,844 16,200

2030 29,090 34,349 16,537

4. Apportion remaining incremental generation to st ates on the basis of each state’s 2012 share of

the interconnection’s affected EGU generation total

The apportionment of interconnection-level new source complement generation to states is performed on

the basis of each state’s 2012 adjusted share of the interconnection’s 2012 adjusted affected EGU

generation. 9 For the purposes of this calculation, states th at are in multiple interconnections are assigned

the interconnection that contains the majority of that state’s territory. Each state’s new source

complement generation share is provided in Figure 8 below: 10

Figure 8. Generation Shares for State

‐ Level Apportionment

State Interconnection Share of Interconnection

2012 Affected EGU

Generation 11

Alabama Eastern 5.0%

Arkansas Eastern 2.4%

Arizona Western 12.5%

California Western 24.9%

Colorado Western 10.9%

Connecticut Eastern 0.8%

9 The goal rates are calculated based on adjusted 2012 generation data to reflect the impact of significant unit

outages, estimated impact of normalizing hydropower output, and all under construction facilities

10 For full generation data, refer to ‘New Source Complements’ spreadsheet

11 Values rounded to tenth of a percent; for unrounded values refer to ‘New Source Complements’ spreadsheetDelaware Eastern 0.5%

Florida Eastern 10.3%

Lands of the Fort

Mojave Tribe Western 0.3%

Georgia Eastern 4.0%

Iowa Eastern 1.8%

Idaho Western 0.8%

Illinois Eastern 4.8%

Indiana Eastern 5.5%

Kansas Eastern 1.5%

Kentucky Eastern 4.4%

Louisiana Eastern 2.9%

Massachusetts Eastern 1.3%

Maryland Eastern 1.0%

Maine Eastern 0.2%

Michigan Eastern 3.7%

Minnesota Eastern 1.7%

Missouri Eastern 3.9%

Mississippi Eastern 2.4%

Montana Western 3.7%

Lands of the Navajo

Nation Western 7.1%

North Carolina Eastern 4.1%

North Dakota Eastern 1.4%

Nebraska Eastern 1.3%

New Hampshire Eastern 0.4%

New Jersey Eastern 1.8%

New Mexico Western 4.6%

Nevada Western 6.8%

New York Eastern 3.1%

Ohio Eastern 5.6%

Oklahoma Eastern 3.4%

Oregon Western 4.0%

Pennsylvania Eastern 7.4%

Rhode Island Eastern 0.4%

South Carolina Eastern 2.0%

South Dakota Eastern 0.3%

Tennessee Eastern 2.1%

Texas Texas 100.0%Lands of the Uintah

and Ouray

Reservation Western 0.7%

Utah Western 8.6%

Virginia Eastern 2.7%

Washington Western 4.7%

Wisconsin Eastern 2.1%

West Virginia Eastern 3.6%

Wyoming Western 10.4%

The new source complement generation level for a state is defined as:

 State-level new source complement generation = Interconnection-level new source complement

generation * 2012 state share of inte rconnection affected EGU generation

 2030 Alabama new source complement generation = 29,090 GWh * 5.0% = 1,467 GWh

State-level new source complement generation totals ar e provided for each state in each year in the ‘New

Source Complements’ spreadsheet.

5. Convert state-level generation to state-level emissions assuming the emissions intensity of the

New Source Performance Standard emission rate for NGCC of 1,030 lbs/MWh

Each state-level new source complement generation level is multiplied by the NSPS NGCC emission rate

standard of 1,030 lbs/MWh to produce a mass value:

 New source complement = State-level new source complement generation * NSPS NGCC

emission rate standard

 2030 Alabama new source complement = 1,467 GWh * 1,030 lbs/MWh = 755,700 short tons

New source complements are calculated for each y ear and each state, from 2022 through 2030. The

interim period new source complement is equal to the average of the annual values from 2022 through

2029. The final period new source complement is equal to the 2030 value. The interim and final period

new source complements are provided in Figure 9 below: 12

Figure 9. New Source Complement (Short Tons)

State Interim Period Final Period

Alabama 856,524 755,700

Arizona 1,424,998 2,209,446

Arkansas 411,315 362,897

California 2,846,529 4,413,516

12 Final and interim period new source complements are rounded up to the nearest ton.Colorado 1,239,916 1,922,478

Connecticut 135,410 119,470

Delaware 78,842 69,561

Florida 1,753,276 1,546,891

Georgia 677,284 597,559

Idaho 94,266 146,158

Illinois 818,349 722,018

Indiana 939,343 828,769

Iowa 298,934 263,745

Kansas 260,683 229,997

Kentucky 752,454 663,880

Louisiana 484,308 427,299

Maine 40,832 36,026

Maryland 170,930 150,809

Massachusetts 225,127 198,626

Michigan 623,651 550,239

Minnesota 286,535 252,806

Mississippi 410,440 362,126

Missouri 668,637 589,929

Montana 421,674 653,801

Nebraska 216,149 190,706

Nevada 770,417 1,194,523

New Hampshire 71,419 63,012

New Jersey 313,526 276,619

New Mexico 527,139 817,323

New York 522,227 460,753

North Carolina 692,091 610,623

North Dakota 245,324 216,446

Ohio 949,997 838,170

Oklahoma 581,051 512,654

Oregon 453,663 703,399

Pennsylvania 1,257,336 1,109,330

Rhode Island 70,035 61,791

South Carolina 344,885 304,287

South Dakota 46,513 41,038

Tennessee 358,838 316,598

Texas 5,328,758 8,516,408

Utah 981,947 1,522,500

Virginia 450,039 397,063Washington 531,761 824,490

West Virginia 602,940 531,966

Wisconsin 364,841 321,895

Wyoming 1,185,554 1,838,190

Lands of the Navajo

Nation 809,562 1,255,217

Lands of the Uintah

and Ouray

Reservation 84,440 130,923

Lands of the Fort

Mojave Tribe 37,162 57,619