1

King, Melanie

From: King, Melanie

Sent: Friday, October 24, 2014 1:25 PM

To: Higgins, Cortney

Cc: Wayland, Robertj; Elman, Barry; Culligan, Kevin; CurryBrown, Amanda

Subject: EO 12866 review of RIN 2060-AR33 Carbon Pollution Guidelines for EGUs in Indian Country 

and Territories - revised NPRM

Attachments: EO 12866_EGUs Indian CountryTerritories 2060-AR33 SupNPRM_20141024 RLSO.docx

Hi Cortney,

Attached is an updated preamble which shows in redline/strikeout the edits we made in response to the interagency

comments.  We also made some additional minor edits, such as adjusting the public hearing language and minor

adjustments to the goals after some additional QA of the calculations.  Also we made some edits to have things in the

proper format for the FR.  Please let me know if you have any questions.  If we don’t talk this afternoon, have a nice

weekend.

Melanie King

Energy Strategies Group

Sector Policies and Programs Division

Office of Air Quality Planning and Standards

U.S. Environmental Protection Agency

Mail Code D243‐01

RTP, NC  27711

Phone:  (919) 541‐2469

Fax:       (919) 541‐5450

king.melanie@epa.gov
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6560-50-P

EO 12866_EGUs Indian Country/Territories 2060-AR33 SupNPRM_20141024 

ENVIRONMENTAL PROTECTION AGENCY 

40 CFR Part 60 

[EPA-HQ-OAR-2013-0602, FRL-9918-54-OAR] 

RIN 2060-AR33 

Carbon Pollution Emission Guidelines for Existing Stationary 

Sources: EGUs in Indian Country and U.S. Territories; Multijurisdictional Partnerships 

AGENCY: Environmental Protection Agency. 

ACTION: Supplemental proposed rulemaking. 

SUMMARY: On June 18, 2014, the Environmental Protection Agency 

(EPA) proposed emission guidelines for states to follow in 

developing plans to address greenhouse gas (GHG) emissions from 

existing fossil fuel-fired electric generating units (EGUs). In 

this supplemental action, the EPA is proposing emission 

guidelines for U.S. territories and areas of Indian country with 

existing fossil fuel-fired EGUs. Specifically, the EPA is 

proposing rate-based goals for carbon dioxide (CO2) emissions for 

U.S. territories and areas of Indian country with existing 

fossil fuel-fired EGUs, as well as guidelines for plans to 

achieve those goals. The EPA is also soliciting comment on 

authorizing jurisdictions (including any states, territories, 

and areas of Indian country) without existing fossil fuel-fired 

EGUs subject to the proposed emission guidelines to partner with 
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jurisdictions (including any states) that do have existing 

fossil-fuel fired EGUs subject to the proposed emission 

guidelines in developing multi-jurisdictional plans. The EPA is 

also soliciting comment on the treatment of renewable energy, 

demand-side energy efficiency, and other new low- or nonemitting electricity generation across international boundaries 

in a state plan. This supplemental proposed rule would continue 

progress already underway to reduce CO2 emissions from existing 

fossil fuel-fired power plants in the United States. 

DATES: Comments on the supplemental proposed rule. Comments must 

be received on or before December 19, 2014. 

Comments on the information collection request. Under the 

Paperwork Reduction Act (PRA), since the Office of Management 

and Budget (OMB) is required to make a decision concerning the 

information collection request between 30 and 60 days after 

[insert the date of publication in the Federal Register], a 

comment to the OMB is best assured of having its full effect if 

the OMB receives it by [insert the date 30 days after the date 

of publication in the Federal Register]. 

Public Hearing. A public hearing will be held to accept oral 

comment on the supplemental proposed rule on November 19, 2014, 

at the Phoenix Convention Center and Venues, 100 N. 3rd St., 

Phoenix, Arizona. The hearing will begin at 9:00 a.m. (Mountain 

Standard Time) and will conclude at 8:00 p.m. (Mountain Standard 
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Time). There will be a lunch break from 12:00 p.m. to 1:00 p.m. 

and a dinner break from 5:00 p.m. to 6:00 p.m. To register for 

the hearing please use the online registration form available 

at: http://www2.epa.gov/carbon-pollution-standards/clean-powerplan-proposed-rule. For questions regarding registration, please 

contact Ms. Pamela Garrett at (919)–541–7966. The last day to 

pre-register to speak at the hearing will be November 14, 2014. 

Additionally, requests to speak will be taken the day of the 

hearing at the hearing registration desk, although preferences 

on speaking times may not be able to be fulfilled. If you 

require the service of a translator or special accommodations 

such as audio description, we ask that you pre-register for the 

hearing by November 14, 2014, as we may not be able to arrange 

such accommodations without advance notice. Please note that any 

updates made to any aspect of the hearing will be posted online 

at: http://www2.epa.gov/carbon-pollution-standards/clean-powerplan-proposed-rule. While the EPA expects the hearing to go 

forward as set forth above, we ask that you monitor our Web site 

or contact Pamela Garrett at (919)–541–7966 to determine if 

there are any updates to the information on the hearing. The EPA 

does not intend to publish a notice in the Federal Register

announcing any such updates. The hearing will provide interested 

parties the opportunity to present data, views or arguments 

concerning the proposed action. The EPA will make every effort 
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to accommodate all speakers who arrive and register. The EPA may 

ask clarifying questions during the oral presentations, but will 

not respond to the presentations at that time. Written 

statements and supporting information submitted during the 

comment period will be considered with the same weight as oral 

comments and supporting information presented at the public 

hearing. Verbatim transcripts of the hearing and written 

statements will be included in the docket for the rulemaking. 

The EPA plans for the hearing to run on schedule; however, due 

to onsite schedule fluctuations, actual speaking times may shift 

slightly.A public hearing will be held on [XXX] at XXX to accept 

oral comment on the supplemental proposed rule. The hearing will 

begin at 9:00 a.m. (XXX) and will conclude at 8:00 p.m. (XXX). 

There will be a lunch break from 12:00 p.m. to 1:00 p.m. and a 

dinner break from 5:00 p.m. to 6:00 p.m. Please contact Ms. 

Pamela Garrett at 919–541–7966 or at garrett.pamela@epa.gov to 

register to speak at the hearing. The last day to pre-register 

in advance to speak at the hearing will be [XXX]. Additionally, 

requests to speak will be taken the day of the hearing at the 

hearing registration desk, although preferences on speaking 

times may not be able to be fulfilled. If you require the 

service of a translator or special accommodations such as audio 

description, we ask that you pre-register for the hearing by 

[XXX], as we may not be able to arrange such accommodations 
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without advance notice. The hearing will provide interested 

parties the opportunity to present data, views or arguments 

concerning the proposed action. The EPA will make every effort 

to accommodate all speakers who arrive and register. Because 

this hearing is being held at a U.S. government facility, 

individuals planning to attend the hearing should be prepared to 

show valid picture identification to the security staff in order 

to gain access to the meeting room. Please note that the REAL ID 

Act, passed by Congress in 2005, established new requirements 

for entering federal facilities. If your driver’s license is 

issued by Alaska, American Samoa, Arizona, Kentucky, Louisiana, 

Maine, Massachusetts, Minnesota, Montana, New York, Oklahoma or 

the state of Washington, you must present an additional form of 

identification to enter the federal building. Acceptable 

alternative forms of identification include: Federal employee 

badges, passports, enhanced driver’s licenses and military 

identification cards. In addition, you will need to obtain a 

property pass for any personal belongings you bring with you. 

Upon leaving the building, you will be required to return this 

property pass to the security desk. No large signs will be 

allowed in the building, cameras may only be used outside of the 

building and demonstrations will not be allowed on federal 

property for security reasons. The EPA may ask clarifying 

questions during the oral presentations, but will not respond to 
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the presentations at that time. Written statements and 

supporting information submitted during the comment period will 

be considered with the same weight as oral comments and 

supporting information presented at the public hearing. Verbatim 

transcripts of the hearing and written statements will be 

included in the docket for the rulemaking. The EPA will make 

every effort to follow the schedule as closely as possible on 

the day of the hearing; however, please plan for the hearing to 

run either ahead of schedule or behind schedule. 

ADDRESSES: Comments. Submit your comments, identified by Docket 

ID No. EPA-HQ-OAR-2013-0602, by one of the following methods: 

 Federal eRulemaking portal: http://www.regulations.gov. 

Follow the online instructions for submitting comments. 

 Email: A-and-R-Docket@epa.gov. Include docket ID No. EPAHQ-OAR-2013-0602 in the subject line of the message. 

 Facsimile: (202) 566-9744. Include docket ID No. EPA-HQOAR-2013-0602 on the cover page. 

 Mail: Environmental Protection Agency, EPA Docket Center 

(EPA/DC), Mail code 28221T, Attn: Docket ID No. EPA-HQ-OAR2013-0602, 1200 Pennsylvania Ave., NW, Washington, DC 

20460. In addition, please mail a copy of your comments on 

the information collection provisions to the Office of 

Information and Regulatory Affairs, OMB, Attn: Desk Officer 

for the EPA, 725 17th St. NW, Washington, DC 20503. 
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 Hand/Courier Delivery: EPA Docket Center (EPA/DC), Room 

3334, EPA WJC West Building, 1301 Constitution Ave., NW, 

Washington, DC, 20004, Attn: Docket ID No. EPA-HQ-OAR-2013-

0602. Such deliveries are accepted only during the Docket 

Center’s normal hours of operation (8:30 a.m. to 4:30 p.m., 

Monday through Friday, excluding federal holidays), and 

special arrangements should be made for deliveries of boxed 

information. 

Instructions: All submissions must include the agency name and 

docket ID number (EPA-HQ-OAR-2013-0602). The EPA’s policy is to 

include all comments received without change, including any 

personal information provided, in the public docket, available 

online at http://www.regulations.gov, unless the comment 

includes information claimed to be Confidential Business 

Information (CBI) or other information whose disclosure is 

restricted by statute. Do not submit information that you 

consider to be CBI or otherwise protected through 

http://www.regulations.gov or email. Send or deliver information 

identified as CBI only to the following address: Mr. Roberto 

Morales, OAQPS Document Control Officer (C404-02), Office of Air 

Quality Planning and Standards, U.S. EPA, Research Triangle 

Park, North Carolina 27711, Attention Docket ID No. EPA-HQ-OAR2013-0602. Clearly mark the part or all of the information that 

you claim to be CBI. For CBI information on a disk or CD-ROM 
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that you mail to the EPA, mark the outside of the disk or CD-ROM 

as CBI and then identify electronically within the disk or CDROM the specific information you claim as CBI. In addition to 

one complete version of the comment that includes information 

claimed as CBI, you must submit a copy of the comment that does 

not contain the information claimed as CBI for inclusion in the 

public docket. Information so marked will not be disclosed 

except in accordance with procedures set forth in 40 CFR part 2. 

 The EPA requests that you also submit a separate copy of 

your comments to the contact person identified below (see FOR 

FURTHER INFORMATION CONTACT). If the comment includes 

information you consider to be CBI or otherwise protected, you 

should send a copy of the comment that does not contain the 

information claimed as CBI or otherwise protected. 

 The www.regulations.gov Web site is an “anonymous access” 

system, which means the EPA will not know your identity or 

contact information unless you provide it in the body of your 

comment. If you send an email comment directly to the EPA 

without going through http://www.regulations.gov, your email 

address will be automatically captured and included as part of 

the comment that is placed in the public docket and made 

available on the Internet. If you submit an electronic comment, 

the EPA recommends that you include your name and other contact 

information in the body of your comment and with any disk or CD-
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ROM you submit. If the EPA cannot read your comment due to 

technical difficulties and cannot contact you for clarification, 

the EPA may not be able to consider your comment. Electronic 

files should avoid the use of special characters, any form of 

encryption and be free of any defects or viruses. 

Docket: All documents in the docket are listed in the 

http://www.regulations.gov index. Although listed in the index, 

some information is not publicly available (e.g., CBI or other 

information whose disclosure is restricted by statute). Certain 

other material, such as copyrighted material, will be publicly 

available only in hard copy. Publicly available docket materials 

are available either electronically in 

http://www.regulations.gov or in hard copy at the EPA Docket 

Center, EPA WJC West Building, Room 3334, 1301 Constitution 

Ave., NW, Washington, DC. The Public Reading Room is open from 

8:30 a.m. to 4:30 p.m., Monday through Friday, excluding federal 

holidays. The telephone number for the Public Reading Room is 

(202) 566-1744, and the telephone number for the Air Docket is 

(202) 566-1742. Visit the EPA Docket Center homepage at 

http://www.epa.gov/epahome/dockets.htm for additional 

information about the EPA’s public docket. 

 In addition to being available in the docket, an electronic 

copy of this proposed rule will be available on the World Wide 

Web (WWW). Following signature, a copy of this proposed rule 
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will be posted at the following address: 

http://www2.epa.gov/cleanpowerplan/. 

FOR FURTHER INFORMATION CONTACT: Ms. Melanie King, Energy 

Strategies Group, Sector Policies and Programs Division (D243-

01), Environmental Protection Agency, Research Triangle Park, 

North Carolina 27711; telephone number: (919) 541-2469; 

facsimile number: (919) 541-5450; email address: 

king.melanie@epa.gov. 

SUPPLEMENTARY INFORMATION: Acronyms. A number of acronyms and 

chemical symbols are used in this preamble. While this may not 

be an exhaustive list, to ease the reading of this preamble and 

for reference purposes, the following terms and acronyms are 

defined as follows:

BART Best Available Retrofit Technology 

BSER Best System of Emission Reduction 

CAA Clean Air Act 

CBI Confidential Business Information 

CFR Code of Federal Regulations 

CO2 Carbon Dioxide 

EGU Electric Generating Unit 

EIA Energy Information Administration 

EO Executive Order 

EPA Environmental Protection Agency 

FR Federal Register 

GHG Greenhouse Gas 

HAP Hazardous Air Pollutant 

HCl Hydrochloric Acid 

Hg Mercury 

ICR Information Collection Request 

IGCC Integrated Gasification Combined Cycle 

LNG Liquefied Natural Gas 

MHA Mandan, Hidatsa and Arikara 

MW Megawatt 

MWh Megawatt-hour 
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NAAQS National Ambient Air Quality Standards 

NAICS North American Industry Classification System 

NGCC Natural Gas Combined Cycle 

NOx Nitrogen Oxides 

OMB Office of Management and Budget 

PM Particulate Matter 

PM2.5 Fine Particulate Matter 

PRA Paperwork Reduction Act 

PREPA Puerto Rico Electric Power Authority 

RE Renewable Energy 

RFA Regulatory Flexibility Act 

RIA Regulatory Impact Analysis 

SCC Social Cost of Carbon 

SO2 Sulfur Dioxide 

TAR Tribal Authority Rule 

TAS Treatment in the same manner as a State 

TSD Technical Support Document 

UMRA Unfunded Mandates Reform Act of 1995 

VCS Voluntary Consensus Standard 

Organization of This Document. The information presented in this 

preamble is organized as follows: 

I. General Information 

A. Executive Summary 

B. Organization and Approach for this Supplemental Proposal 

II. Background 

A. Carbon Pollution Emission Guidelines Proposal 

B. Implications for U.S. Territories

C. Implications for Areas of Indian Country 

D. Additional Outreach and Consultation 

III. Goals for U.S. Territories and Areas of Indian Country 

A. Overview 

B. Proposed Goals and Computation Procedure 

C. Alternate Goals Offered for Comment and Other Approaches 

Considered 

D. Additional Considerations for U.S. Territories and Indian 

Country 

IV. Section 111(d) Plans 

A. U.S. Territories 

B. Areas of Indian Country with Affected EGUs 

C. Applicability of the Proposed Emission Guidelines to U.S. 

Territories and Eligible Indian Tribes 

D. Areas without Affected EGUs

V. Impacts of the Proposed Action

A. What are the air impacts? 
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B. What are the energy impacts? 

C. What are the compliance costs? 

D. What are the economic and employment impacts? 

E. What are the benefits of the proposed action? 

VI. Statutory and Executive Order Reviews 

A. Executive Order 12866, Regulatory Planning and Review, and 

Executive Order 13563, Improving Regulation and Regulatory 

Review 

B. Paperwork Reduction Act 

C. Regulatory Flexibility Act 

D. Unfunded Mandates Reform Act of 1995 

E. Executive Order 13132, Federalism 

F. Executive Order 13175, Consultation and Coordination with 

Indian Tribal Governments 

G. Executive Order 13045, Protection of Children from 

Environmental Health Risks and Safety Risks 

H. Executive Order 13211, Actions Concerning Regulations That 

Significantly Affect Energy Supply, Distribution, or Use

I. National Technology Transfer and Advancement Act

J. Executive Order 12898, Federal Actions to Address 

Environmental Justice in Minority Populations and Low-Income 

Populations 

VII. Statutory Authority 

I. General Information 

A. Executive Summary 

1. Purpose of the Regulatory Action 

 Under the authority of Clean Air Act (CAA) section 111(d), 

the EPA is proposing emission guidelines to address GHG 

emissions from existing fossil fuel-fired EGUs located in U.S. 

territories and areas of Indian country. The EPA is proposing 

rate-based goals for CO21 emissions in U.S. territories and areas 

 

1 In the June 18, 2014, proposal, the EPA noted that the primary 

GHG emitted by fossil fuel-fired EGUs is CO2. Therefore, both 

that proposal and this supplemental proposal focus on reductions 

of CO2 emissions and impose control requirements on only CO2 

emissions. 
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of Indian country with existing fossil fuel-fired EGUs that meet 

applicability requirements (“affected EGUs”)2, as well as 

guidelines for plans to achieve those goals. This rule, as 

proposed, would continue progress already underway to reduce CO2

emissions from existing fossil fuel-fired power plants in the 

United States. This action is a supplemental proposal to the 

June 18, 2014, proposed carbon pollution emission guidelines for 

states to follow in developing plans to address GHG emissions 

from existing fossil fuel-fired EGUs.3 This action is based on 

the same analytic framework as the June 18, 2014, proposal for 

existing sources, with minor adjustments to address data 

limitations and other circumstances unique to Indian country 

and/or territories.4 This preamble presumes familiarity with that 

June 18, 2014, proposal.5

2. Summary of the Major Provisions of the Regulatory Action 

 

2 In this preamble, the terms “existing fossil fuel-fired EGUs,” 

“existing sources,” “existing fossil fuel-fired power plants,” 

“affected fossil fuel-fired EGUs” and the like generally refer 

to affected EGUs.

3 79 FR 34830. 

4 As noted below, the EPA issued a second proposal on June 18, 

2014, under CAA section 111, which proposed standards of 

performance for CO2 emissions from modified or reconstructed 

fossil fuel-fired EGUs. 79 FR 34960. Unless otherwise indicated, 

all references in this preamble to the June 18, 2014, proposal 

refer to the proposal for existing sources. 

5 The EPA has received numerous comments on the June 18, 2014, 

proposal. This supplemental proposal is consistent with the 

analytic framework used in the June 18, 2014, proposal and does 

not reflect any type of response to the comments that the EPA 

has received to date on that proposal. 
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The proposal has two main elements: (1) Emission rate-based 

CO2 goals specific to each U.S. territory and area of Indian 

country that has affected EGUs; and (2) guidelines for the 

development, submission and implementation of plans to achieve 

the goals. The EPA is aware of three areas of Indian country 

with affected EGUs: lands of the Navajo Nation, lands of the Ute 

Tribe of the Uintah and Ouray Reservation and lands of the Fort 

Mojave Tribe. The EPA’s information is that there are two U.S. 

territories that have affected EGUs: Puerto Rico and Guam. 

To set the proposed area-specific CO2 goals, the EPA 

generally applied the same approach to determining the “Best 

System of Emission Reduction” as called for in CAA section 

111(d) used in the June 18, 2014, proposal for establishing CO2

goals for states. This approach, which relies on four groups of 

emission reduction measures that the EPA refers to as “building 

blocks,” includes improvements in efficiency at carbon-intensive 

power plants; programs that enhance the dispatch priority of, 

and spur private investments in, low emitting and renewable 

power sources; and programs that help homes and businesses use 

electricity more efficiently. As explained in the June 18, 2014, 

proposal for existing sources, these building blocks are based 

on practical and affordable strategies that are already being 

used to lower carbon pollution from the power sector. In 

addition, in calculating each CO2 goal, the EPA took into 
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consideration each area’s fuel mix, its electricity market and 

other factors that are relevant to application of the four 

building blocks. Thus, each goal reflects the unique conditions 

for each U.S. territory or area of Indian country. 

For U.S. territories that contain affected EGUs, while 

this proposal lays out jurisdiction-specific CO2 goals, it 

does not prescribe how the territory should meet its goal. 

CAA section 111(d) creates a partnership between the EPA 

and the U.S. territories (as well as states) under which 

the EPA sets these goals and the territories take the lead 

on meeting them by creating plans that are consistent with 

the EPA guidelines. Each territory will have the 

flexibility to design a program to meet its goal in a 

manner that reflects its particular circumstances and 

energy and environmental policy objectives. Each territory 

can do so alone or can collaborate with other 

jurisdictions, including states, on multi-jurisdictional 

plans that may provide additional opportunities for cost 

savings and flexibility. To facilitate the planning 

process, this proposal lays out guidelines for the 

development and implementation of plans. 

For areas of Indian country that contain affected 

EGUs, this proposal also lays out specific CO2 goals, 

without prescribing how each area should meet its goal. A 
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tribe with jurisdiction over the affected EGUs in its area 

has the opportunity, but not the obligation, to establish a 

plan for its area of Indian country. Each tribe can do so 

alone or can collaborate with other jurisdictions, 

including states and territories, on multi-jurisdictional 

plans that may provide additional opportunities for cost 

savings and flexibility. If a tribe does not seek and 

obtain the authority to establish a plan, the EPA is 

responsible for establishing a plan if it determines that a 

plan is necessary or appropriate. At this time, the EPA is 

not including a proposal for whether it is necessary or 

appropriate to establish a plan for any area of Indian 

country, and is not proposing a federal plan for any area 

of Indian country. 

3. Costs and Benefits 

Actions taken to comply with the proposed guidelines 

set out in this supplemental proposal will reduce emissions 

of CO2 and other air pollutants, including sulfur dioxide 

(SO2) and nitrogen oxides (NOx), from the electric power 

industry, specifically from affected EGUs in Guam and 

Puerto Rico. The costs and benefits of these compliance 

actions are discussed below. As discussed in more detail in 

section V, the EPA does not expect any additional costs or 

benefits associated with compliance for areas of Indian 
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country with affected EGUs; one area is expected to meet 

its proposed goal through compliance with other 

regulations, and the costs and benefits for the other areas 

were already accounted for in the June 18, 2014, proposal. 

The U.S. territories of Guam and Puerto Rico will make the 

ultimate determination as to how their proposed emission 

guidelines are implemented in their jurisdictions. Thus, 

all costs and benefits reported for this action are 

illustrative estimates. The illustrative costs and benefits 

are based upon compliance approaches that reflect a range 

of measures consisting of improved operations at EGUs, 

increased dispatching of lower-emitting EGUs and zeroemitting energy sources, and increasing levels of end-use 

energy efficiency. 

For Guam and Puerto Rico, the EPA estimates that in 2020, 

the illustrative compliance approach for Option 1 – Approach A6

will yield monetized climate benefits of approximately $73 

million (3 percent model average, 2011$), as shown in Table 1. 

The illustrative annual compliance costs and monitoring and 

reporting costs are a savings of approximately $140 million 

 

6 Option 1 represents compliance with the goals calculated using 

the procedure outlined in section III.B. As explained in more 

detail in section III.B, Approach A mirrors the proposed 

methodology from the June 18, 2014, proposal for building block 

3. 
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(2011$) in 2020. The quantified 2020 net benefits (the 

difference between monetized benefits and costs) are $210 

million (2011$) using a 3 percent discount rate. In 2030, as 

shown in Table 1, the illustrative compliance approach for 

Option 1 – Approach A in Guam and Puerto Rico will yield 

monetized climate benefits of approximately $170 million (3 

percent model average, 2011$). The illustrative annual 

compliance costs and monitoring and reporting costs in 2030 are 

a savings of $350 million, including reduced fuel 

expendituressavings from energy efficiency programs and redispatch. The quantified 2030 net benefits are $520 million 

(2011$, 3 percent discount rate). 

For Option 2 - Approach A,7 the EPA estimates that in 2020, 

the illustrative compliance approach for EGUs in Guam and Puerto 

Rico will yield monetized climate benefits of approximately $68 

million (3 percent model average, 2011$), as shown in Table 2. 

The illustrative annual compliance costs and monitoring and 

reporting costs are a savings of approximately $130 million 

(2011$) in 2020. The quantified 2020 net benefits (the 

difference between monetized benefits and costs) are $200 

million (2011$) using a 3 percent discount rate. In 2025, as 

 

7 Option 2 represents compliance with the goals calculated using 

the procedure outlined in section III.C, reflecting less 

stringent application of the building blocks and a shorter 

implementation period. 
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shown in Table 2, the illustrative compliance approach for 

Option 2 – Approach A in Guam and Puerto Rico will yield 

monetized climate benefits of approximately $99 million (3 

percent model average, 2011$). The illustrative annual 

compliance costs and monitoring and reporting costs in 2025 are 

a savings of $200 million, including reduced fuel 

expendituressavings from energy efficiency programs and redispatch. The quantified 2025 net benefits are $290 million 

(2011$, 3 percent discount rate). 

For Guam and Puerto Rico, the EPA estimates that in 2020, 

the illustrative compliance approach for Option 1 – Approach B8

will yield monetized climate benefits of approximately $77 

million (3 percent model average, 2011$), as shown in Table 3. 

The illustrative annual compliance costs and monitoring and 

reporting costs are a savings of approximately $140 million 

(2011$) in 2020. The quantified 2020 net benefits (the 

difference between monetized benefits and costs) are $220 

million (2011$) using a 3 percent discount rate. In 2030, as 

shown in Table 3, the illustrative compliance approach for 

Option 1 – Approach B in Guam and Puerto Rico will yield 

 

8 Option 1 represents compliance with the goals calculated using 

the procedure outlined in section III.B. As explained in more 

detail in section III.B, Approach B includes an adjustment to 

the proposed methodology from the June 18, 2014, proposal for 

building block 3.
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monetized climate benefits of approximately $180 million (3 

percent model average, 2011$). The illustrative annual 

compliance costs and monitoring and reporting costs in 2030 are 

a savings of $360 million, including reduced fuel 

expendituressavings from energy efficiency programs and redispatch. The quantified 2030 net benefits are $540 million 

(2011$, 3 percent discount rate). 

For Option 2 – Approach B,9 the EPA estimates that in 2020, 

the illustrative compliance approach for Guam and Puerto Rico 

will yield monetized climate benefits of approximately $73 

million (3 percent model average, 2011$), as shown in Table 4. 

The illustrative annual compliance costs and monitoring and 

reporting costs are a savings of approximately $140 million 

(2011$) in 2020. The quantified 2020 net benefits (the 

difference between monetized benefits and costs) are $210 

million (2011$) using a 3 percent discount rate. In 2025, as 

shown in Table 4, the illustrative compliance approach for 

Option 2 – Approach B in Guam and Puerto Rico will yield 

monetized climate benefits of approximately $110 million (3 

percent model average, 2011$). The illustrative annual 

compliance costs and monitoring and reporting costs in 2025 are 

 

9 Option 2 represents compliance with the goals calculated using 

the procedure outlined in section III.C, reflecting less 

stringent application of the building blocks and a shorter 

implementation period. 
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a savings of $200 million, including reduced fuel 

savingsexpenditures from energy efficiency programs and redispatch. The quantified 2025 net benefits are $300 million 

(2011$, 3 percent discount rate). 

For all options and approaches, the proposed guidelines 

would reduce emissions of precursor pollutants (e.g., SO2, NOx, 

and directly emitted particles) in the territories, which in 

turn would lower ambient concentrations of fine particulate 

(PM2.5) and ozone (O3). Apart from the climate benefits described 

above, there will also likely be significant health co-benefits 

association with the projected reductions of SO2 and NOx

emissions in Guam and Puerto Rico. However, the EPA is unable to 

quantify these health co-benefits because the benefit-per-ton 

values the EPA typically uses for this purpose are only 

appropriate for areas within the continental United States. As 

is described in the June 18, 2014, proposal, reducing exposure 

to PM2.5 is associated with significant human health benefits, 

including avoiding premature mortality for adults and infants, 

cardiovascular morbidities such as heart attacks, hospital 

admissions, and respiratory morbidities such as asthma attacks, 

acute bronchitis, hospital and emergency department visits, work 

loss days, restricted activity days, and respiratory symptoms. 

Reducing exposure to O3 is also associated with significant human 

health benefits, including avoiding mortality and respiratory 
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morbidity such as fewer asthma attacks, hospital and emergency 

room visits, and school loss days. 

Table 1. Summary of the Monetized Benefits, Compliance Costs, 

and Net Benefits for the Proposed Guidelines for Guam and Puerto 

Rico – Option 1 – Approach Aa

[Millions of 2011$] 

2020 2030 

Proposed Guidelines Illustrative Compliance Approach 

Climate bBenefits 

b

$73 $170 

Annualized 

Capital, Energy 

Efficiency and 

Monitoring, 

Reporting, & 

Recordkeeping 

Costs 

$24 $190 

Change in Fuel 

Expenditure 

-160 -$540 

Total Compliance 

Costs c

-$140 -$350 

Net Monetized 

Benefits d

$210 $520 

Non-monetized 

Benefits 

Health benefits of reductions in SO2, NO2, 

PM2.5 and O3. 

Reductions in hazardous air pollutants (HAP) 

such as mercury (Hg) and hydrochloric acid 

(HCl). 

Ecosystem effects. 

Visibility impairment. a All estimates are rounded to two significant figures, so 

figures may not sum. 

b The climate benefit estimate in this summary table reflects 

global impacts from CO2 emission changes and does not account for 

changes in non-CO2 GHG emissions. Also, different discount rates 

are applied to the social cost of carbon (SCC) than to the other 

estimates because CO2 emissions are long-lived and subsequent 

damages occur over many years. The benefit estimates in this 

table are based on the average SCC estimated for a 3 percent 

discount rate. However, the EPA emphasizes the importance and 

value of considering the full range of SCC values. As shown in 

the regulatory impact analysis (RIA), climate benefits are also 

estimated using the other three SCC estimates (model average at 
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2.5 percent discount rate, 3 percent, and 5 percent; 95th

percentile at 3 percent). The SCC estimates are year-specific 

and increase over time. 

c Total costs are estimated for the proposed guidelines using a 

discount rate of approximately 5 percent. This estimate includes 

monitoring, recordkeeping, and reporting costs, demand side 

energy efficiency program and participant costs, and changes in 

fuel costsexpenditures. d The estimates of net benefits in this summary table are 

calculated using the global SCC at a 3 percent discount rate 

(model average). The RIA includes combined climate and health 

estimates based on these additional discount rates. 

Table 2. Summary of the Monetized Benefits, Compliance Costs, 

and Net Benefits for the Proposed Guidelines for Guam and Puerto 

Rico – Option 2 – Approach Aa

[Millions of 2011$]

2020 2025 

Proposed Guidelines Illustrative Compliance Approach 

Climate benefits b $68 $99 

Annualized Capital, 

Energy Efficiency 

and Monitoring, 

Reporting, & 

Recordkeeping Costs 

$19 $78 

Change in Fuel 

Expenditure 

-$150 -270 

Total Compliance 

Costs c

-$130 -$200 

Net Monetized 

Benefits d

$200 $290 

Non-monetized 

Benefits 

Health benefits of reductions in SO2, NO2, 

PM2.5 and O3. 

Reductions in HAP such as Hg and HCl. 

Ecosystem effects. 

Visibility impairment. a All estimates are rounded to two significant figures, so 

figures may not sum. 

b The climate benefit estimate in this summary table reflects 

global impacts from CO2 emission changes and does not account for 

changes in non-CO2 GHG emissions. Also, different discount rates 

are applied to SCC than to the other estimates because CO2

emissions are long-lived and subsequent damages occur over many 

years. The benefit estimates in this table are based on the 

average SCC estimated for a 3 percent discount rate. However the 
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EPA emphasizes the importance and value of considering the full 

range of SCC values. As shown in the RIA, climate benefits are 

also estimated using the other three SCC estimates (model 

average at 2.5 percent discount rate, 3 percent, and 5 percent; 

95th percentile at 3 percent). The SCC estimates are yearspecific and increase over time. 

c Total costs are estimated using a discount rate of 

approximately 5 percent. This estimate includes monitoring, 

recordkeeping, and reporting costs, demand side energy 

efficiency program and participant costs, and changes in fuel 

costsexpenditures. d The estimates of net benefits in this summary table are 

calculated using the global SCC at a 3 percent discount rate 

(model average). The RIA includes combined climate and health 

estimates based on these additional discount rates. 

Table 3. Summary of the Monetized Benefits, Compliance Costs, 

and Net Benefits for the Proposed Guidelines for Guam and Puerto 

Rico – Option 1 – Approach Ba

[Millions of 2011$] 

2020 2030 

Proposed Guidelines Illustrative Compliance Approach 

Climate benefits b $77 $180 

Annualized 

Capital, Energy 

Efficiency and 

Monitoring, 

Reporting, & 

Recordkeeping 

Costs 

$38 $220 

Change in Fuel 

Expenditure 

-$180 -$580 

Total Compliance 

Costs c

-$140 -$360 

Net Monetized 

Benefits d

$220 $540 

Non-monetized 

Benefits 

Health benefits of reductions in SO2, NO2, 

PM2.5 and O3. 

Reductions in hazardous air pollutants (HAP) 

such as mercury (Hg) and hydrochloric acid 

(HCl). 

Ecosystem effects. 

Visibility impairment. a All estimates are rounded to two significant figures, so 

figures may not sum. 
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b The climate benefit estimate in this summary table reflects 

global impacts from CO2 emission changes and does not account for 

changes in non-CO2 GHG emissions. Also, different discount rates 

are applied to the social cost of carbon (SCC) than to the other 

estimates because CO2 emissions are long-lived and subsequent 

damages occur over many years. The benefit estimates in this 

table are based on the average SCC estimated for a 3 percent 

discount rate. However, the EPA emphasizes the importance and 

value of considering the full range of SCC values. As shown in 

the regulatory impact analysis (RIA), climate benefits are also 

estimated using the other three SCC estimates (model average at 

2.5 percent discount rate, 3 percent, and 5 percent; 95th

percentile at 3 percent). The SCC estimates are year-specific 

and increase over time. 

c Total costs are estimated for the proposed guidelines using a 

discount rate of approximately 5 percent. This estimate includes 

monitoring, recordkeeping, and reporting costs, demand side 

energy efficiency program and participant costs, and changes in 

fuel costsexpenditures. d The estimates of net benefits in this summary table are 

calculated using the global SCC at a 3 percent discount rate 

(model average). The RIA includes combined climate and health 

estimates based on these additional discount rates. 

Table 4. Summary of the Monetized Benefits, Compliance Costs, 

and Net Benefits for the Proposed Guidelines for Guam and Puerto 

Rico – Option 2 – Approach Ba

[Millions of 2011$]

2020 2025 

Proposed Guidelines Illustrative Compliance Approach 

Climate benefits b $73 $110 

Annualized Capital, 

Energy Efficiency 

and Monitoring, 

Reporting, & 

Recordkeeping Costs 

$33 $98 

Change in Fuel 

Expenditure 

-$170 -$300 

Total Compliance 

Costs c

-$140 -$200 

Net Monetized 

Benefits d

$210 $300 

Non-monetized 

Benefits 

Health benefits of reductions in SO2, NO2, 

PM2.5 and O3. 

Reductions in HAP such as Hg and HCl. 
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Ecosystem effects. 

Visibility impairment. a All estimates are rounded to two significant figures, so 

figures may not sum. 

b The climate benefit estimate in this summary table reflects 

global impacts from CO2 emission changes and does not account for 

changes in non-CO2 GHG emissions. Also, different discount rates 

are applied to SCC than to the other estimates because CO2

emissions are long-lived and subsequent damages occur over many 

years. The benefit estimates in this table are based on the 

average SCC estimated for a 3 percent discount rate. However the 

EPA emphasizes the importance and value of considering the full 

range of SCC values. As shown in the RIA, climate benefits are 

also estimated using the other three SCC estimates (model 

average at 2.5 percent discount rate, 3 percent, and 5 percent; 

95th percentile at 3 percent). The SCC estimates are yearspecific and increase over time. 

c Total costs are estimated using a discount rate of 

approximately 5 percent. This estimate includes monitoring, 

recordkeeping, and reporting costs, demand side energy 

efficiency program and participant costs, and changes in fuel 

costsexpenditures. d The estimates of net benefits in this summary table are 

calculated using the global SCC at a 3 percent discount rate 

(model average). The RIA includes combined climate and health 

estimates based on these additional discount rates. 

There are additional important benefits that the EPA 

could not monetize. These unquantified benefits include 

climate benefits from reducing emissions of non-CO2 GHGs 

(e.g., nitrous oxide and methane)10 and co-benefits from 

reducing direct exposure to HAP (e.g., Hg and HCl), as well 

 

10 Although CO2 is the predominant greenhouse gas released by the 

power sector, EGUs also emit small amounts of nitrous oxide and 

methane. See Chapter 2 of the June 2014 RIA for more detail 

about power sector emissions and the U.S. Greenhouse Gas 

Reporting Program’s power sector summary, 

http://www.epa.gov/ghgreporting/ghgdata/reported/powerplants.htm

l.
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as from reducing ecosystem effects and visibility 

impairment. 

B. Organization and Approach for this Supplemental Proposal 

This action presents the EPA’s proposed emission guidelines 

for developing plans to reduce GHG emissions from the electric 

power sector in U.S. territories and areas of Indian country 

with affected EGUs. This action is based on the analytical 

approach of the June 18, 2014, proposal, and this preamble 

incorporates by referenceadopts and relies on all of the 

information in that proposal, including the background 

information, explanations, analyses, alternatives, solicitations 

of comment, etc. 

Section II of this supplemental proposal provides 

background, implications for U.S. territories and areas of 

Indian country, and a summary of the EPA’s stakeholder outreach 

efforts. Section III of this supplemental proposal describes how 

this proposal is based on the analytical approach of the June 

18, 2014, proposal, including the use of the four building 

blocks, as applied to each U.S. territory or each area of Indian 

country with affected EGUs, for setting goals, and also 

identifies the proposed goals for those areas. Section IV of 

this supplemental proposal provides an explanation of the 

proposed requirements for the required jurisdictional plans, 

which, again, are based on the proposed requirements in the June 
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Page 28 of 114 

18, 2014, proposal. Impacts of the proposed action are then 

described in section V of this supplemental proposal, followed 

by a discussion of statutory and executive order reviews in 

section VI and the statutory authority for this action in 

section VII of this supplemental proposal. 

In addition to relying on, and building upon, the June 18, 

2014, proposal for existing sources, this supplemental proposal 

is related to two other recently proposed rulemakings for CO2

emissions: the proposed rulemaking that the EPA published on 

January 8, 2014, for newly constructed affected sources,11 and 

the proposed rulemaking that the EPA published on June 18, 2014, 

for modified and reconstructed sources.12 Each of tThose threewo

rulemakings each hasve itstheir own rulemaking docket, and the 

comment period for each of thosethose two rulemakings has 

closed. This action is a supplemental proposal for the June 18, 

2014, proposal for existing sources, and, as a result, comments 

on this supplemental proposal will be included in the docket for 

that June 18, 2014, proposal. Accordingly, commenters who wish 

to comment on any aspect of this supplemental proposal, 

including a topic that overlaps an aspect of one or both of the 

other related rulemakings, should make those comments on this 

supplemental proposal. Because this supplemental proposed 

 

11 79 FR 1430.

12 79 FR 34960. 
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rulemaking (i) incorporates by reference adopts and relies on 

the information in the June 18, 2014, proposal, as noted above, 

as well as generally applies the same analytic framework 

described in the June 18, 2014, proposal, and (ii) is in the 

same docket as that June 18, 2014, proposal, commenters should 

limit their comments on this supplemental proposed rulemaking to 

the issues of the analytic framework that are relevant for U.S. 

territories and areas of Indian country with affected EGUs, as 

well as the question of how areas without affected sources could 

participate in multi-jurisdictional plans, as discussed in the 

next paragraph and in section IV.D. 

The EPA is also soliciting comment on whether jurisdictions 

– including any states, territories, and areas of Indian country 

- without existing fossil fuel-fired EGUs subject to this rule 

can partner with jurisdictions that are subject to this rule in 

developing multi-jurisdictional plans. An important benefit of 

these types of partnerships may include crediting investments 

that jurisdictions without affected sources may be able to make 

in renewable energy (RE) or demand-side energy efficiency 

resources for reducing CO2 emissions from affected sources in 

other jurisdictions. 

II. Background 

A. Carbon Pollution Emission Guidelines Proposal 
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Page 30 of 114 

On June 18, 2014, the EPA proposed emission guidelines for 

states to follow in developing plans to address greenhouse gas 

emissions from existing fossil fuel-fired EGUs under the 

authority of CAA section 111(d).13 More specifically, the EPA 

proposed state-specific rate-based goals for CO2 emissions from 

affected EGUs, as well as guidelines for states to follow in 

developing plans to achieve the state-specific goals. The EPA 

indicated in the June 18, 2014, proposal that it intended to 

publish a supplemental proposal to establish emission 

performance goals for areas of Indian country and U.S. 

territories with affected EGUs.14 

The June 18, 2014, proposal discussed the climate change 

impacts from GHG emissions, GHG emissions from fossil fuel-fired 

EGUs, the utility power sector, statutory and regulatory 

requirements, pre-proposal stakeholder outreach, the 

applicability requirements, the legal basis, the authority to 

regulate CO2 and EGUs, combining the two existing categories for 

affected EGUs into a single category, the best system of 

emission reduction (BSER) and building blocks for setting goals, 

guidelines for plans, implications for other EPA programs and 

rules, the impacts of the June 18, 2014, proposal and other 

considerations. This supplemental proposal presumes familiarity 

 

13 79 FR 34830. 

14 79 FR 34854. 
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with the June 18, 2014, proposal. Moreover, in this supplemental 

proposal, the EPA relies on the information and analytic 

framework provided in the June 18, 2014, proposal, is not 

repeating that information and analytic framework and 

incorporates by referenceadopts that information and analytic 

framework as they pertain to the requirements for U.S. 

territories and areas of Indian country. The EPA specifically 

solicited comment on the issues in the analytic framework in the 

June 18, 2014, proposal. 

B. Implications for U.S. Territories

 As discussed previously, the June 18, 2014, proposal for 

existing sources did not propose CO2 goals for U.S. territories 

with affected EGUs. The EPA indicated in the June 18, 2014, 

proposal that, after conducting additional outreach, it intended 

to issue this supplemental proposal to establish territoryspecific rate-based goals for CO2 emissions and guidelines for 

U.S. territories to follow for the development, submission and 

implementation of plans to achieve their goal. The EPA intends 

to take final action on this supplemental proposal in 

conjunction with the final action for the June 18, 2014, 

proposal. 

The EPA is aware of two U.S. territories with affected 

EGUs: Puerto Rico and Guam. The EPA is not aware of any affected 

EGUs in American Samoa or the Commonwealth of the Northern 
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Page 32 of 114 

Mariana Islands. Information provided to the EPA indicates that 

there are two potentially affected EGUs in the U.S. Virgin 

Islands; however, they have not been in operation since before 

2012. Therefore, in this action, Puerto Rico and Guam are the 

only U.S. territories for which the EPA is proposing to set 

goals. 

 The U.S. territories are generally subject to CAA section 

111(d) requirements in the same manner as states. CAA section 

111(d) imposes obligations on “each State,” and CAA section 

302(d) defines the term “State” to include the U.S. territories. 

As discussed in more detail in section IV of this supplemental 

proposal, the CAA section 111(d) state plan requirements for 

U.S. territories are the same as those proposed for states in 

the June 18, 2014, proposal for existing sources. 

C. Implications for Areas of Indian Country 

 Although affected EGUs located in Indian country operate as 

part of the interconnected system of electricity production and 

distribution, those affected EGUs would not generally be 

encompassed within any state’s CAA section 111(d) plan because 

state plans are generally not approved in Indian country. The 

EPA is aware of four affected EGUs located in Indian country:

the South Point Energy Center, in Fort Mojave Indian country 

geographically located within Arizona; the Navajo Generating 

Station, in Navajo Indian country geographically located within 
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Arizona; the Four Corners Power Plant, in Navajo Indian country 

geographically located within New Mexico; and the Bonanza Power 

Plant, in Ute Indian country geographically located within Utah. 

The South Point facility is a natural gas combined cycle (NGCC) 

power plant, and the Navajo, Four Corners and Bonanza facilities 

are coal-fired EGUs. The EPA is not aware of any affected EGUs 

that are owned or operated by tribal governments. The operators 

and co-owners of these four facilities include investor-owned 

utilities, cooperative utilities, public power agencies15 and 

independent power producers, most of which also own or co-own 

affected EGUs within states, but outside of areas of Indian 

country. 

 The EPA indicated in the June 18, 2014, proposal that, 

after conducting additional outreach, the agency would issue 

this supplemental proposal to establish rate-based CO2 emission 

performance goals for the three areas of Indian country with 

affected EGUs. As noted above, the EPA intends to take final 

action on this supplemental proposal in conjunction with the 

final action for the June 18, 2014, proposal. As discussed in 

more detail in section IV.B, tribes are not required to develop 

plans to implement the guidelines under CAA section 111(d) for 

affected EGUs in their areas of Indian country. Pursuant to the 

 

15 One of these public power agencies is the U.S. Bureau of 

Reclamation. 
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Tribal Authority Rule (TAR),16 the EPA must promulgate federal 

plan provisions if it determines that such provisions are 

necessary or appropriate, unless a tribe on whose lands an 

affected source (or sources) is located seeks and obtains 

authority from the EPA to establish a plan itself. If the EPA 

determines that it is necessary or appropriate to promulgate 

implementation plan provisions, it will promulgate such 

provisions as are necessary or appropriate to achieve CO2

emission performance goals through a transparent public process 

and after providing opportunity for consultation with the 

affected tribal government or governments. 

D. Additional Outreach and Consultation 

 Section III (“Stakeholder Outreach and Conclusions”) of the 

June 18, 2014, proposal documents the EPA’s extensive outreach 

efforts prior to the proposal, including outreach to officials 

in the territories and tribal officials. Prior to the June 18, 

2014, proposal, agency officials held meetings with the Governor 

of Puerto Rico, the Governor of the U.S. Virgin Islands, the 

Puerto Rico Environmental Quality Board, and the U.S. Virgin 

Islands Department of Planning and Natural Resources. The EPA 

also met with stakeholders from Puerto Rico on July 22 and 23, 

2014, to provide an overview of the June 18, 2014, proposal and 

 

16 63 FR 7254, February 12, 1998. See 40 CFR 49.1 to 49.11.
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ask for input on this supplemental proposal. Issues raised 

during the meetings included concerns regarding the crediting of 

pre-2012 building block control strategies as well as resource 

plans that integrate some of the building block control 

strategies. On September 8, 2014, the EPA met with Guam 

Environmental Protection Agency, Guam Power Authority and the 

Consolidated Commission on Utilities to provide an overview of 

the June 18, 2014, proposal and ask for input on this 

supplemental proposal. Issues raised during the meeting included 

Guam’s plans to modify certain power plants, including 

introduction of ultra-low sulfur diesel fuel and liquefied 

natural gas (LNG). 

Tribes are not required to, but may, develop or adopt CAA 

programs. Because this supplemental proposal addresses affected 

sources located within Indian country, the EPA offered 

consultation with tribal officials to permit tribes to have 

meaningful and timely input into its development. The EPA held 

consultations with all three tribes that have affected EGUs on 

their lands, as well as other tribes that requested 

consultation. The EPA held a consultation with the Ute Tribe, 

the Crow Nation, and the Mandan, Hidatsa and Arikara (MHA) 

Nation (the Three Affiliated Tribes of Ft. Berthold) on July 18, 

2014, the Fort Mojave Tribe on August 22, 2014, and the Navajo 

Nation on September 15, 2014. The Navajo Nation sent a letter to 
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Page 36 of 114 

the EPA on September 18, 2014, summarizing the information 

presented at the consultation and the Navajo Nation’s position 

on this supplemental proposal. The EPA also met with tribal 

environmental staff with the National Tribal Air Association, by 

teleconference, on June 26, 2014, August 4, 2014, and September 

5, 2014. In those teleconferences, the EPA provided background 

information on the GHG emission guidelines to be developed and a 

summary of issues being explored by the agency. The tribes 

expressed an interest in the scope of the guidelines being 

considered by the agency (e.g., over what time period, 

relationship to state and multi-state plans) and how tribes will 

participate in these planning activities. Tribes raised concerns 

about the impacts of the regulations on EGUs and the subsequent 

impact on jobs and revenue for their tribes. The Navajo Nation 

raised concerns about the application of certain building blocks 

to the EGUs on their lands, the impact of the proposed rule on 

renewable energy projects on their lands, and the ability of the 

Navajo Nation to control any available carbon credits under a 

trading program. Detail regarding the EPA’s outreach to tribes 

can be found in section VI.F of this supplemental proposal. 

The EPA has used information from these meetings to inform 

this supplemental proposal. The EPA expects that a dialogue with 

tribal governments and other stakeholders will continue through 

the comment period and even after the rule is finalized. The EPA 
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Page 37 of 114 

recognizes the importance of working with all stakeholders to 

ensure a clear and common understanding of the role they will 

play in addressing carbon pollution from power plants. 

III. Goals for U.S. Territories and Areas of Indian Country 

A. Overview 

In this section, the EPA sets out proposed CO2 emission 

performance goals to guide U.S. territories with affected EGUs 

in developing their plans. The EPA also sets out proposed 

emission performance goals for areas of Indian country with 

affected EGUs. The proposed goals reflect the EPA’s 

quantification of each area’s adjusted output-weighted average 

emission rate from affected EGUs that could be achieved by 2030 

and sustained thereafter. The EPA is also proposing interim 

goals that would apply over a 2020-2029 phase-in period, through 

reasonable implementation, considering the unique circumstances 

of each individual area, of the BSER adequately demonstrated 

(based on all four building blocks as described in the June 18, 

2014, proposal). See 79 FR 34855. These goals are presented in 

section III.B and are the basis for Option 1 in the discussion 

of the impacts of this proposed action in sections I.A and V. In 

addition, the EPA is taking comment on a second set of areaspecific goals for U.S. territories and Indian country with 

affected EGUs that would reflect less stringent application of 

the same BSER, in this case by 2025, with interim goals that 
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would apply over a 2020-2024 phase-in period. These goals are 

presented in section III.C and are the basis for Option 2 in the 

discussion of the impacts of this proposed action in sections 

I.A and V. When promulgated in the final rule following 

consideration of comments received, the interim and final goals 

would be binding emission guidelines for plans in each area. See 

79 FR 34893 for a discussion of the stringency of the building 

blocks used to calculate goals. 

 The proposed goals are expressed in the form of areaspecific, adjusted17 output-weighted-average CO2 emission rates 

for affected EGUs. However, jurisdictions are authorized to 

translate the form of the goal to a mass-based form, as long as 

the translated goal achieves the same degree of emission 

limitation.18

B. Proposed Goals and Computation Procedure 

 

17 As described below, the emission rate goals include 

adjustments to incorporate the potential effects of emission 

reduction measures that address power sector CO2 emissions 

primarily by reducing the amount of electricity produced at an 

area’s affected EGUs (associated with, for example, increasing 

the amount of new low- or zero-carbon generating capacity or 

increasing demand-side energy efficiency) rather than by 

reducing their CO2 emission rates per unit of energy output 

produced. 

18 A method for translating from a rate-based goal to a massbased goal is discussed in the “Projecting CO2 Emission 

Performance in State Plans Technical Support Document” (TSD) 

issued in conjunction with the June 18, 2014, proposal. 
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The methodology used to compute the proposed interim and 

final CO2 emission performance goals for U.S. territories and 

areas of Indian country with affected EGUs mirrors to the 

fullest extent possible the approach used to calculate goals for 

states discussed in section VII of the preamble to the June 18, 

2014, proposal. See 79 FR at 34892 for a detailed discussion of 

the methodology. That methodology is described in more detail in 

the “Goal Computation Technical Support Document”19 issued in 

conjunction with the June 18, 2014, proposal, which includes a 

numerical example illustrating the full procedure. The 

development of the data inputs used in the computation procedure 

for the state goals is discussed in section VI of the June 18, 

2014, proposal (79 FR at 34855), and in the “GHG Abatement 

Measures” TSD20 issued in conjunction with the June 18, 2014, 

proposal. The methodology and data inputs used to compute the 

proposed goals for U.S. territories and areas of Indian country 

are discussed in detail in the “Technical Support Document for 

Calculating Carbon Pollution Goals for Existing Power Plants in 

Territories and Areas of Indian Country,” available in the 

docket for this rulemaking. 

 

19 This document is included in the docket with document number 

EPA-HQ-OAR-2013-0602-0460. 

20 This document is included in the docket with docket number 

EPA-HQ-OAR-2013-0602-0437. 
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The EPA has developed proposed CO2 emission performance 

goals for territories and areas of Indian country with affected 

EGUs, reflecting application of the BSER, based on all four 

building blocks described in the June 18, 2014, proposal, to 

pertinent data for each territory and area of Indian country 

with affected EGUs. The final goal for each area, expressed as a 

CO2 emission rate on an output-weighted-average basis, is 

intended to represent the emission performance level achievable 

collectively by all of an area’s affected EGUs by 2030, after a 

2020-2029 phase-in period, with certain computation adjustments 

described below, to reflect the potential to achieve emission 

reductions by avoiding fossil fuel-fired generation. For each 

area, in addition to the final goal, the EPA has developed an 

interim goal that would apply during the 2020-2029 period on a 

cumulative or average basis as the area progresses toward the 

final goal. The proposed goals are set forth in Tables 5 and 6 

below, followed by a discussion of several considerations that 

should be noted regarding the computation methodology. For U.S. 

territories, as detailed in the discussion of the 

considerations, the EPA is co-proposing two approaches for the 

application of building block 3, which are shown as approaches A 

and B in Table 5, and also taking comment on an alternative to 

the proposed approaches for the application of building block 3, 

as shown in Table 7. For areas of Indian country with affected 
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Page 41 of 114 

EGUs, the EPA is proposing one option, as shown in Table 6, and 

taking comment on alternatives. (The issue of how areas could 

demonstrate emission performance consistent with the interim and 

final goals is addressed in section IV of this supplemental 

proposal, below, which addresses plans.) 

Table 5. Proposed Goals for Territories with Affected EGUs 

(Adjusted Output-Weighted-Average Pounds of CO2 Per Net MWh From 

All Affected Fossil Fuel-Fired EGUs) 

Area 

Goal Using Proposed 

Approach A for 

Building Block 3 

Goal Using Proposed 

Approach B for 

Building Block 3 

Interim 

Goal 

Final 

Goal 

Interim 

Goal 

Final 

Goal 

Guam 1,733 1,586 1,708 1,556 

Puerto Rico 1,470 1,413 1,459 1,399 

Table 6. Proposed Goals for Areas of Indian Country with 

Affected EGUs (Adjusted Output-Weighted-Average Pounds of CO2 Per 

Net MWh From All Affected Fossil Fuel-Fired EGUs) 

Area 

Goal Using Proposed Approach A 

for Building Block 3 

Interim Goal Final Goal

Lands of the Fort Mojave Tribe 856 855 

Lands of the Navajo Nation 1,991 1,989 

Lands of the Ute Tribe of the 

Uintah and Ouray Reservation 

2,000 1,988

 

 As stated previously, the EPA applied the same four 

building blocks described in the June 18, 2014, proposal to 

determine the goals. However, applying the methodology from the 

June 18, 2014, proposal for building block 1 would not result in 
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any adjustments to the goals for Guam or the Fort Mojave Indian 

country because there are no coal-fired affected EGUs in those 

areas. Applying the methodology for building block 2 would not 

result in any adjustments to the goal for the Fort Mojave Indian 

country for the same reason. Applying the methodology for 

building block 2 also would not result in any adjustments to the 

goals for Guam or any of the other three areas of Indian country 

because there are no NGCC units for re-dispatch within those 

areas. With respect to Puerto Rico, the EPA believes that 

existing and planned LNG import capacity in Puerto Rico supports 

70 percent dispatch at the territory’s existing NGCC facility in 

building block 2 of goal setting.21 

The EPA is co-proposing two options for the application of 

building block 3 for the territories with affected EGUs. The 

first co-proposal option, shown as approach A in Table 5, 

mirrors the proposed methodology from the June 18, 2014, 

proposal for determining RE, which applies, for each 

jurisdiction, an annual growth factor to the area’s baseline 

(that is, the year 2012) amount of RE. This methodology applies 

the annual growth factor for each year from 2017 to the final 

 

21 The information supporting the potential for the LNG capacity 

to support 70 percent dispatch is further detailed in the 

“Technical Support Document for Calculating Carbon Pollution 

Goals for Existing Power Plants in U.S. Territories and Areasin

of Indian Country.” 
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target in 2029. The EPA is also proposing this option for the 

application of building block 3 for areas of Indian country, as 

shown in Table 6. For the territories, the EPA applied Hawaii’s 

9 percent annual growth factor because the territories appear to 

have relatively similar RE resource bases and power system 

characteristics (e.g., independent utility grids and unique 

fossil fuel generation portfolios with high electricity and fuel 

costs). For areas of Indian country, the EPA applied the West 

region’s 6 percent annual average growth factor because those 

areas are geographically located within the West region. 

However, with respect to all of the U.S. territories and areas 

of Indian country for which the EPA is proposing goals in this 

supplemental proposal, the available information indicates that 

there was no generation from utility-scale, non-hydroelectric RE 

in 2012. Because each territory and area of Indian Country has a 

baseline amount of RE equal to zero, the application of the 

growth factor (that is, multiplying the baseline amount of zero 

by the growth factor) results in each of those areas having an 

RE amount of zero for building block 3. Therefore, strictly 

applying the methodology from the June 18, 2014, proposal for 

building block 3 would result in no additional emission 
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reductions required, and, therefore, no change to the goals for 

these areas.22 

The second co-proposal option for U.S. territories with 

affected EGUs, shown as approach B in Table 5, reflects a 

conclusion that there is potential for RE development in the 

territories and includes an adjustment to the proposed 

methodology, which results in a positive amount of RE for 

building block 3 for each of the territories. This adjustment is 

based on the EPA’s view that there is in fact potential for 

renewable generation in each of the territories with affected 

EGUs. With this adjustment, the EPA changed the amount of RE in 

2017 to be 0.37 percent of the 2012 total electricity 

generation, which is consistent with the lowest amount among the 

50 states in 2012.23 Proceeding with the methodology, the EPA 

then applies the annual growth factor for each area in the 

assigned amount (noted above) through 2029. Using this approach, 

RE targets for the U.S. territories grow from 0.37 percent to 

1.0 percent of 2012 total generation by 2030. The goals 

 

22 Consistent with the methodology used in the June 18, 2014, 

proposal, the proposed RE target for Puerto Rico does not 

include 2012 hydropower generation. The “Technical Support 

Document for Calculating Carbon Pollution Goals for Existing 

Power Plants in U.S. Territories and Areas ofin Indian Country” 

presents Puerto Rico’s RE target both with and without the 

inclusion of 2012 hydropower generation. 

23 With 0.37%, Kentucky had the lowest percentage of renewable 

generation in 2012. See 79 FR 34868 and Table 4-1 in the “GHG 

Abatement Measures” TSD on page 4-6. 
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calculated using this approach are presented as proposed 

approach B for building block 3 in Table 5. 

The EPA’s view is that there is also potential for RE 

generation in each of the areas of Indian country with affected 

EGUs. The EPA notes that if the methodology described above 

(changing the amount of RE in 2017 to be 0.37 percent of the 

2012 total electricity generation and applying the annual growth 

factor for each area in the assigned amount through 2029) is 

used for areas of Indian country, the amount of RE included 

under this option would be a significant portionin excess of the 

area's electricity demand. This is due to the fact that, unlike 

all other jurisdictions covered by the June 18, 2014, proposal 

and this supplemental proposal, there are significant 

differences between the electricity generation in each of the 

areas of Indian country with affected EGUs and electricity 

demand within those same areas. Although the basis for including 

RE in building block 3 as part of the BSER, as discussed in the 

June 18, 2014, proposal, does not depend on the amount of 

electricity demand within state, territory, or area of Indian 

country (79 FR 34883-34890), the Navajo Nation stated during its 

consultation, that building block 3 is not appropriate for the 

Navajo Nation because the tribe’s use of electricity is small 

compared to the generation at the power plants. The EPA seeks 

comment on whether the methodology co-proposed for the 
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territories is appropriate for areas of Indian country, or if 

adjustments to the proposed option or other approaches for the 

application of building block 3 for areas of Indian country are 

more appropriate. For example, an RE target could be established 

based on a percentage of the electric demand within the 

jurisdiction, where the percentage would be consistent with the 

amounts of RE generation in building block 3 in other 

jurisdictions (e.g. the lowest, average or greatest percentage 

of RE per electric demand in other affected jurisdictions). 

In the June 18, 2014, proposal, the EPA solicited comment 

on an alternative RE approach for building block 3 that relied 

on technical potential within states, and in this supplemental 

proposal, the EPA is soliciting comment on that same approach as 

applied to U.S. territories with affected EGUs. The goals 

calculated using this approach are presented in Table 7. The EPA 

is presenting information on this alternative approach for 

Puerto Rico. The EPA is not presenting information on this 

alternative approach for Guam because the EPA does not have 

technical potential data for Guam. The EPA is seeking comments 

on available technical potential for Guam in order to allow us 

to calculate a RE target based on the alternative approach. The 

EPA has limited technical potential data for Puerto Rico – that 

is, only solar photovoltaic and wind data – and is also seeking 

comments on available technical potential for that jurisdiction. 
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Even without RE market potential data to pair with the technical 

potential data for Puerto Rico, the RE target is 1.2 percent of 

2012 total generation by 2030, which is well below the mandatory 

renewable portfolio standard target of 15 percent by 2020. For 

areas of Indian country, similar to the discussion above 

regarding the application of approach B for areas of Indian 

country, in light of concerns expressed by the Navajo Nation 

that its use of electricity is small compared to generation at 

the power plants, coupled with the fact that the amount of RE 

required for each area of Indian country under this alternative 

approach would be in excess of the area's electricity demand, 

the EPA seeks comment on the need for, and possible types of, 

adjustments to the alternative approach for the application of 

building block 3 for areas of Indian country. 

The cumulative RE amounts for each territory using the two 

options for the proposed approach and the alternative approach 

for building block 3, represented as percentages of 2012 total 

generation, are shown in Table 8. The EPA is co-proposing the 

two RE approaches for U.S. territories and is proposing one 

option and taking comment on alternatives for areas of Indian 

country with affected EGUs as well as seeking comment on the 

alternative approach for territories. The EPA is also seeking 

comment on sources of RE data from these areas. 
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Table 7. Proposed Goals for Territories with Affected EGUs Using 

Alternative Approach for Building Block 3 (Adjusted OutputWeighted-Average Pounds of CO2 Per Net MWh From All Affected 

Fossil Fuel-Fired EGUs) 

Area 

Goal Using Alternative Approach for 

Building Block 3 

Interim Goal Final Goal

Guam 1,7334 1,586 

Puerto Rico 1,452 1,397 

Table 8. RE Generation Levels for Territories Goal Development 

(Percentage of 2012 Total Generation)

 

Area 2012 

Nonhydro 

RE 

2012 

Total 

RE 

Proposed 

Approach A for 

Building Block 3

Proposed 

Approach B for 

Building Block 

3 

Alternative 

Approach for 

Building Block 3

Interim 

Level 

Final 

Level 

Interim 

Level 

Final 

Level 

Interim 

Level 

Final 

Level 

Guam 0% 0% 0% 0% 0.71% 1.0% 0% 0% 

Puerto 

Rico 

0% 10.7% 0% 0% 0.71% 1.0% 1.2% 1.2% 

The proposed goal computation procedure for building block 

4, demand-side energy efficiency, for U.S. territories and 

Indian country, mirrors the method and data sources used for 

setting goals for states to the fullest extent possible. Data 

sources the EPA has used for purposes of establishing demandside energy efficiency targets for states are generally 

available for areas of Indian Country with identified affected 

EGUs. These sources include reduced fuel expendituressavings

from demand-side energy efficiency programs (Energy Information 
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Administration (EIA) Form 861), retail sales (EIA Form 861), and 

projections of future growth of retail sales by region (Annual 

Energy Outlook (AEO)). For the U.S. territories, Guam and Puerto 

Rico, however, projected retail electricity sales growth is not 

available from the 2012 AEO as it was for states24. The EPA is 

not aware of another source for this information and, thus, is 

using a zero percent per year growth rate for the retail sales 

data. Other values that the EPA considered using were the recent 

historic sales growth value from EIA Form 861 of -0.19 percent 

annually for Puerto Rico and –0.76 percent annually for Guam, or 

the projected sales growth rate for the continental U.S. from 

the 2012 AEO of 0.78 percent per year (2012-2040). The EPA 

solicits comments identifying alternative approaches and/or data 

sources for projections of retail electricity sales in these two 

territories. For the three areas of Indian country with affected 

EGUs, the EPA was able to employ the exact same method and data 

sources as used for states to compute goals for building block 

4. For the Ute Tribe of the Uintah and Ouray Reservation, 

however, the source for retail sales is based on EIA Form 861 

data for the Moon Lake Electric Association (MLEA) in Utah. 

Because MLEA does not serve the Ute Tribe exclusively, the EPA 

developed and applied a methodology for apportioning a subset of 

 

24 For states, projected retail sales growth was derived from AEO 

regional results. 
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total MLEA retails sales to the Ute Tribe. This method is 

discussed in the “Technical Support Document for Calculating 

Carbon Pollution Goals for Existing Power Plants in U.S. 

Territories and Areas of in Indian Country,” and the EPA 

solicits comment on this approach.

One issue raised by the Navajo Nation during consultation 

was the need to increase access to electricity in areas of 

Indian country where electricity access and consumption is 

significantly below the national average. For example, the 

Navajo Nation indicated that 32 percent of the Navajo do not 

have electricity. The Navajo Nation indicated that the goal for 

their area of Indian country should account for the need to 

increase energy usage on their lands. The proposed goal is not 

intended to limit the ability to increase the availability of 

electricity in unserved portions of Indian country. The EPA 

notes that the methodology for building block 4 applies demandside energy efficiency assuming future growth in sales of 

electricity, with the goal of ensuring future growth is 

accomplished efficiently. For the areas of Indian country, the 

EPA used the projected retail electricity sales growth for the 

grid region from the 2012 AEO, which is 1.3 percent per year for 

the Navajo Nation and the Fort Mojave Tribe, and 1 percent per 

year for the Ute Tribe. The EPA requests comment on this 

approach. It should also be noted that sales of electricity in 
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areas of Indian country are small compared to the total 

generation from affected EGUs in those areas. As a result, the 

avoided generation due to demand-side energy efficiency measures 

in building block 4 would yield very few emission reductions and 

therefore would have a very small impact on the overall goal for 

these areas. Accordingly, the EPA is seeking comment on the 

appropriateness of using, in the alternative, a minimum starting 

value for demand-side energy efficiency in areas of Indian 

country, and what that value should be. 

The EPA invites comment on all aspects of the goal 

computation procedure for U.S. territories and areas of Indian 

country with affected EGUs. The EPA also specifically invites 

comment on the area-specific historical data for affected EGUs 

in U.S. territories and Indian country to which the building 

blocks are applied in order to compute the area’s goals, as well 

as the area-specific data for U.S. territories and Indian 

country used to develop the area-specific data inputs for 

building blocks 3 and 4. These data are contained in the 

“Technical Support Document for Calculating Carbon Pollution 

Goals for Existing Power Plants in U.S. Territories and Areas 

ofin Indian Country.” Consistent with the June 18, 2014, 

proposal, the EPA also requests comment on whether CO2 emission 

reductions associated with other measures not currently included 

in any of the four proposed building blocks should be accounted 
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for in developing the goals for U.S. territories and Indian 

country. Section VI.C.5 of the June 18, 2014, proposal discusses 

such other measures. See 79 FR 34875. 

C. Alternate Goals Offered for Comment and Other Approaches 

Considered 

Consistent with the June 18, 2014, proposal, in addition to 

the proposed area-specific emission rate-based goals described 

above, the EPA has developed for public comment an alternate set 

of goals reflecting less stringent application of the building 

blocks and a shorter implementation period. The alternate final 

goals represent emission performance that would be achievable by 

2025, after a 2020-2024 phase-in period, with interim goals that 

would apply during the 2020-2024 period on a cumulative or 

average basis as areas progress toward the final goals. As 

discussed in section III.B, the EPA is co-proposing two 

approaches for the application of building block 3 for U.S. 

territories. 

 The alternate goals are set forth in Tables 9 and 10 below. 

See 79 FR 34898 for a discussion of the alternate goals and how 

the stringency of the building blocks used to calculate 

alternate goals compares to the proposed goals. 

Table 9. Alternate Goals for Territories with Affected EGUs 

(Adjusted Output-Weighted-Average Pounds of CO2 Per Net MWh From 

All Affected Fossil Fuel-Fired EGUs) 

 Goal Using Proposed Goal Using Proposed 
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Area Approach A for Building 

Block 3 

Approach B for Building 

Block 3 

Interim 

Goal 

Final Goal Interim 

Goal 

Final Goal 

Guam 1,8690 1,794 1,847 1,768

Puerto Rico 1,548 1,521 1,539 1,510 

Table 10. Alternate Goals for Areas of Indian Country with 

Affected EGUs (Adjusted Output-Weighted-Average Pounds of CO2 Per 

Net MWh From All Affected Fossil Fuel-Fired EGUs) 

Area 

Goal Using Proposed Approach A 

for Building Block 3 

Interim Goal Final Goal 

Lands of the Fort Mojave Tribe 858 857 

Lands of the Navajo Nation 2,035 2,034 

Lands of the Ute Tribe of the 

Uintah and Ouray Reservation 

2,053 2,0487

In the June 18, 2014, proposal, the EPA discussed issues 

related to the stringency and timing of these alternative goals. 

See 79 FR 34898. The EPA continues to seek comment on those 

issues as they relate to U.S. territories and areas of Indian 

country with affected EGUs. 

D. Additional Considerations for U.S. Territories and Indian 

Country 

With respect to U.S. territories, the EPA is aware of 

affected EGUs in only Puerto Rico and Guam. As noted above, 

although the EPA has identified two fossil fuel-fired EGUs in 

the U.S. Virgin Islands, neither of these EGUs has operated 

recently or is currently operating, and, as a result, the EPA is 

not proposing a goal for the U.S. Virgin Islands. The EPA plans 

to evaluate whether a goal is appropriate for the U.S. Virgin 
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Islands if either of its affected EGUs resumes operations in the 

future. 

In the June 18, 2014, proposal, the EPA sought comment on 

issues related to U.S. territories. In particular, the EPA 

solicited comment on appropriate alternatives for those 

territories that do not have access to natural gas.25 In 

addition, the EPA requested comment on whether heat rate 

improvements for non-coal fossil fuel-fired EGUs, including oilfired steam EGUs, should be included in the building blocks and, 

therefore, be part of the basis for determining the BSER, with 

particular reference to the U.S. territories.26 The EPA is 

reiterating its request for comments on those issues, including 

on whether heat rate improvements are appropriate for oil-fired 

steam EGUs in territories in light of the fact that these EGUs 

make up a large portion of the EGU fleet in the territories. 

In addition, U.S. territories have many high utilization 

oil combustion turbines and oil-fired combined cycle units. 

These units are currently not included in the 2012 baseline 

because they are not covered by the proposed CAA section 111(b) 

rules for CO2 emissions from newly constructed or 

modified/reconstructed fossil fuel-fired EGUs. See 79 FR 1430, 

1446 (Jan. 8, 2014) (newly constructed EGUs); 79 FR 34960, 34972 

 

25 79 FR 34893. 

26 79 FR 34877.
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(June 18, 2014) (modified/reconstructed EGUs). The EPA is 

requesting comment on the appropriateness of including these 

units in the section 111(d) plans for the territories. 

IV. Section 111(d) Plans 

A. U.S. Territories 

After the EPA establishes the jurisdiction-specific ratebased CO2 goals in the emission guidelines, as described in 

section III above, each territory that has a goal must then 

develop, adopt and submit a plan under CAA section 111(d) for 

achieving its goal. In the June 18, 2014, proposal, the EPA 

discusses at length the procedural and substantive requirements 

for section 111(d) plans and solicits comment on numerous 

issues. Although, as noted above, that discussion is 

incorporated by reference in this proposal, for convenience, key 

aspects of the plan requirements are reiterated here. 

A territory must first determine the emission performance 

level it will include in its plan, which entails deciding 

whether it will adopt the rate-based CO2 goal set by the EPA or 

translate the rate-based goal to a mass-based goal. The 

territory must then establish an emission standard or set of 

emission standards, and, perhaps, other measures, along with 

implementing and enforcing measures, that will achieve a level 

of emission performance that is equal to or better than the 

level specified in the plan. The territory has discretion to 
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choose the measures it will include in its plan to achieve its 

goal as long as it can demonstrate that those measures will 

achieve the goal, and those measures meet and address necessary 

plan approvability criteria and plan components. The territory 

may use the same set of measures as in the EPA’s approach to 

setting the goals, or the territory may use other or additional 

measures to achieve the required CO2 reductions. A territory’s 

plan may rely on enforceable CO2 emission limits that are applied 

directly to affected EGUs such that those limits are sufficient 

to ensure compliance with the territory’s CO2 performance goal, 

or, alternatively, the plan may take a portfolio approach, which 

includes enforceable CO2 emission limits that apply to specific 

affected EGUs as well as other enforceable measures, such as RE 

and demand-side energy efficiency measures, which avoid EGU CO2

emissions and are implemented by the territory or by another 

entity. 

The EPA is proposing that U.S. territories follow the same 

guidelines for developing their plans that were proposed for 

states in the June 18, 2014, proposal. These guidelines include 

four general plan approvability criteria, twelve required 

components for a plan to be approvable, the process and timing 

for plan submittal and the process and timing for demonstrating 

achievement of the CO2 emission performance level in the plan. 
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These guidelines are summarized briefly below, and discussed in 

more detail in section VIII of the June 18, 2014, proposal. 

The EPA is proposing to evaluate and approve a 

territory’s plan based on four general criteria: (1) 

enforceable measures that reduce EGU CO2 emissions; (2) 

projected achievement of emission performance equivalent to 

the goals established by the EPA, on a timeline equivalent 

to that in the emission guidelines; (3) quantifiable and 

verifiable emission reductions; and (4) a process for 

reporting on plan implementation, progress toward achieving 

CO2 goals and implementation of corrective actions, if 

necessary. In addition, each territory’s plan must follow 

the EPA framework regulations at 40 CFR 60.23. The proposed 

components of the plans that territories are required to 

submit under CAA section 111(d) are as follows: 

• Identification of affected entities 

• Description of plan approach and geographic scope 

• Identification of territory’s emission performance level 

• Demonstration that plan is projected to achieve emission 

performance level 

• Identification of programmatic milestones 

• Identification of corrective measures 

• Identification of emission standards and any other measures 

• Demonstration that each emission standard is quantifiable, 

non-duplicative, permanent, verifiable and enforceable 

• Identification of monitoring, reporting and recordkeeping 

requirements 

• Description of territory’s reporting 

• Certification of hearing on territory’s plan 

• Supporting material 
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The plan must also include a process for annual 

reporting on plan implementation, provisions ensuring 

progress toward achieving CO2 goals and provisions requiring 

implementation of corrective actions if necessary. No less 

frequently than every 2 rolling calendar years, beginning 

January 1, 2022, the territory will be required to compare 

CO2 emission performance achieved by affected EGUs in the 

territory with the emissions performance projected in the 

territory’s plan, and report that to the EPA. 

The proposed timetable for submission of plans by the 

territories is the same as described in the June 18, 2014, 

proposal for the states. That is, each territory must 

submit a plan to the EPA by June 30, 2016. However, the EPA 

recognizes that some territories may need more than 1 year 

to complete all of the actions needed for their final 

plans, including technical work, legislative and rulemaking 

activities, coordination with third parties and 

coordination among jurisdictions involved in multijurisdictional plans. Therefore, the EPA is proposing an 

optional two-phased submittal process for plans. In phase 

1, each territory needing additional time to submit a 

complete plan would be required to submit an initial plan 

containing certain required components by June 30, 2016. 

The initial plan would also document the reasons the 
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territory needs more time and include commitments to take 

concrete steps that will ensure that the territory will 

submit a complete plan by June 30, 2017 or 2018, as 

appropriate. To be approvable, the initial plan must 

include specific components, including, among others, a 

description of the plan approach, initial quantification of 

the level of emission performance that will be achieved 

through the plan, a commitment to maintain existing 

measures that limit CO2 emissions, an explanation of the 

path to completion and a summary of the territory’s 

response to any significant public comment on the 

approvability of the initial plan. 

If the EPA does not notify the territory within 60 

days that the initial plan is deficient because it does not 

contain one or more of the required components, the 

extension of time to submit a complete plan will be deemed 

granted and a territory would have until June 30, 2017, to 

submit a complete plan if the geographic scope of the plan 

is limited to that territory. If the territory develops a 

plan that includes a multi-jurisdictional approach, it 

would have until June 30, 2018, to submit a complete plan. 

Further, the EPA is proposing that where a territory is 

participating in a multi-jurisdictional plan, a single 

joint plan may be submitted on behalf of all of the 
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participating jurisdictions, provided it is signed by 

authorized officials for each of the jurisdictions 

participating in the plan and contains the necessary 

regulations, laws, etc. for each jurisdiction in the plan. 

The EPA is proposing the same process for EPA review 

of the plans submitted by the territories as in the June 

18, 2014, proposal. Following submission of complete plans, 

the EPA will review plan submittals for approvability. 

Given the diverse approaches territories may take to meet 

the emission performance goals in the emission guidelines, 

the EPA is proposing to extend the period for EPA review 

and approval or disapproval of territories’ plans from the 

4-month period provided in the EPA framework regulations to 

a 12-month period. 

The EPA is proposing the same timetables for 

territories to achieve their emission performance levels as 

in the June 18, 2014, proposal for states. Under this 

proposed timetable, a territory would need to meet its 

interim CO2 emission performance level on average over the 

10-year period from 2020-2029, as well as achieve its final 

CO2 emission performance level by 2030 and maintain that 

level subsequently. For a more detailed discussion of the 

proposed guidelines for plans, see section VIII of the June 

18, 2014, proposal. In that proposal, the EPA specifically 
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solicited comment on several aspects of the guidelines as 

they relate to state plans, and the EPA now solicits 

comment on the same issues as they relate to U.S. 

territories. 

B. Areas of Indian Country with Affected EGUs 

The TAR identifies CAA provisions for which it is 

appropriate for the EPA to grant Indian tribes treatment in the 

same manner as states (TAS). Pursuant to the TAR, tribes may 

apply for TAS for purposes of CAA section 111(d). As a result, a 

tribe that has an affected EGU located in its area of Indian 

country has the opportunity, but not the obligation, to apply 

for TAS status and, if granted that status by the EPA, to 

develop a plan that establishes standards of performance for CO2

emissions from affected EGUs located in its area of Indian 

country. The EPA is not proposing a determination regarding any 

particular tribe’s eligibility for TAS or ability to regulate 

EGUs located in its area of Indian country as part of this 

supplemental proposal. If a tribe has an affected EGU located in 

its area of Indian country, but does not seek and obtain the 

authority from the EPA to establish a CAA section 111(d) plan, 

then the EPA has the responsibility to establish such plans for 

the areas of Indian country where affected sources are located 

if the EPA determines that such a plan is necessary or 

appropriate. If a tribe with affected EGUs located in its area 
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of Indian country obtains the authority to develop and submit a 

plan, the tribe would have the flexibility and authority27

described in section VIII of the June 18, 2014, proposal for 

states in developing a plan. 

 The EPA asked for comment on a number of specific aspects 

of plans in section VIII of the June 18, 2014, proposal, and the 

EPA solicits comment on those same issues as they relate to 

areas of Indian country with affected EGUs.28 In particular, the 

EPA requested comment on whether a tribe wishing to develop and 

implement a CAA section 111(d) plan should have the option of 

including the EGUs located in its area of Indian country in a 

multi-jurisdictional plan with one or more states, territories 

or tribes. As stated previously in section II.D, the Navajo 

Nation indicated during consultation that the Navajo Nation 

should control, under a trading program, any available CO2

allowances from the affected EGUs at Navajo Generating Station 

and Four Corners Power Plant. The EPA also requested comment in 

the June 18, 2014, proposal on whether a federal plan for areas 

of Indian country with affected EGUs, should the EPA conclude at 

a later date that such a plan is necessary or appropriate, could 

 

27 This authority is found in CAA section 301(d) and the TAR.

28 For a list of the topics that the EPA is soliciting comment on 

regarding plans please see 

http://www2.epa.gov/sites/production/files/2014-

08/documents/clean-power-plan-comment-categories.pdf under the 

Category heading of “State Plans.” 
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be developed on a multi-jurisdictional basis in conjunction with 

nearby (or potentially other) states developing CAA section 

111(d) state plans. 

C. Applicability of the Proposed Emission Guidelines to U.S. 

Territories and Eligible Indian Tribes 

As stated previously, the EPA is proposing the same 

emission guidelines for U.S. territories and tribes that seek 

and obtain the authority to establish a plan that were proposed 

for states in the June 18, 2014, proposal. The term “state” as 

used in the emission guidelines proposed in the June 18, 2014, 

proposal would encompass U.S. territories with one or more 

affected EGUs that commenced construction on or before January 

8, 2014, and any Indian tribe that has been approved by the EPA 

pursuant to 40 CFR 49.9 as eligible to administer the emission 

guidelines, in addition to the fifty states and the District of 

Columbia that have one or more affected EGUs. The EPA believes 

that this is the case without the need for the emission 

guidelines to directly and separately refer to these entities. 

Section 302(d) of the CAA defines the term “State” to include 

the Commonwealth of Puerto Rico, the Virgin Islands, Guam, 

American Samoa and the Commonwealth of the Northern Mariana 

Islands. While 40 CFR part 60 contains a separate definition of 

“state” at section§ 60.2, this definition expands on, rather 

than narrows, the definition in section 302(d) of the CAA. The 
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introductory language to 40 CFR 60.2 provides: “The terms in 

this part are defined in the Act or in this section as follows.” 

Section 60.2 defines “State” as “all non-Federal authorities, 

including local agencies, interstate associations, and Statewide programs that have been delegated authority to implement: 

(1) the provisions of this part and/or (2) the permit program 

established under part 70 of this chapter. The term State shall 

have its conventional meaning where clear from the context.” 

(Emphasis added.) The EPA believes that the last sentence refers 

to the conventional meaning of “state” under the CAA. Thus, the 

EPA believes the term “state” as used in the emission guidelines 

is most reasonably interpreted as including the meaning ascribed 

to that term in section 302(d) of the CAA, which expressly 

includes U.S. territories. Further, an Indian tribe with one or 

more affected EGUs in its area of Indian country seeking to 

obtain approval of a plan would need to be approved by the EPA 

as eligible to administer the emission guidelines following the 

procedure set forth in 40 CFR part 49. Once a tribe is approved 

as eligible for that purpose, it would be treated in the same 

manner as a state, and references in the emission guidelines to 

states would refer equally to the tribe. The EPA notes that 

while tribes have the opportunity to apply for eligibility to 

administer CAA programs, they are not required to do so. 

Further, the EPA has established procedures in 40 CFR part 49 
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(see particularly 40 CFR 49.7(c)) that permit eligible tribes to 

request approval of reasonably severable partial program 

elements. Those procedures are applicable here. Although the EPA 

believes the current emission guidelines are sufficiently 

inclusive, the EPA has decided to amend the applicability 

provision of the emission guidelines slightly to avoid any doubt 

that the guidelines apply to territories with affected EGUs and 

to any Indian tribe that has been approved by the EPA as 

eligible to develop and implement a plan. The revised regulatory 

text can be found in the “Amended Regulatory Text for 

Supplemental Proposal: Carbon Pollution Emission Guidelines for 

Existing Power Plants in Indian Country and U.S. Territories” 

memo in the rulemaking docket. 

D. Areas without Affected EGUs29

Certain areas, including the state of Vermont, the District 

of Columbia, certain U.S. territories and most areas of Indian 

country, do not have any affected EGUs. Numerous stakeholders 

have expressed interest in areas that do not have affected EGUs 

having the opportunity to participate in multi-jurisdictional 

plans with areas that have affected EGUs. With this approach, an 

area without affected EGUs, which in many cases consumes energy 

produced elsewhere, could contribute to meeting a multi-

 

29 It should be noted that this subsection applies to all types 

of areas, and not just territories and areas of Indian Country. 
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jurisdictional CO2 goal with its RE resources, demand-side energy 

efficiency programs, and other new low- or non-emitting 

electricity generation.30 The Navajo Nation, which does have 

affected EGUs on its lands, also expressed an interest during 

consultation in the ability of RE resources on the Navajo Nation 

to contribute to the achievement of state CO2 goals. 

The EPA requests comment on whether areas without affected 

EGUs may participate in multi-jurisdictional plans. The EPA 

requests comment on whether there are considerations that would 

specifically pertain to a multi-jurisdiction mass-based plan 

versus a rate-based plan. The EPA also requests comment on how 

CO2 emissions avoided through RE generating resources,31, demandside energy efficiency measures, and other new low- and nonemitting electricity generation from areas without affected EGUs 

could be used to adjust or credit CO2 emission rates in states 

required to develop section 111(d) plans. The EPA also requests 

comment on how RE generating resources, demand-side energy 

efficiency measures, and other new low- and non-emitting 

electricity generation in areas of Indian country that do have 

 

30 See the June 18, 2014, proposal at 79 FR 34923 for a more 

robust description of how new NGCC can aid in meeting a 

jurisdiction’s goal.

31 Further discussion of applying RE (in particular renewable 

energy certificates) across jurisdiction borders can be found in 

the “State Plan Considerations” TSD, which is available in the 

docket for this rulemaking.
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affected EGUs can be included, and if their inclusion is 

dependent upon whether or not the tribe has adopted a section 

111(d) plan or EPA has made a finding and adopted a federal plan 

for that area of Indian country. 

Some stakeholders are also interested in the treatment of 

RE across international boundaries, particularly in instances 

where entities in another country are providing, or could 

provide, low- or non-emitting electricity generation to serve an 

area in the United States. In particular, stakeholders have 

asked whether RE resources from Canada can be used to contribute 

to meeting a jurisdiction’s goal. The EPA is soliciting comment 

on all aspects of the treatment of RE, demand-side energy 

efficiency, and other new low- or non-emitting electricity 

generation across international boundaries in a CAA section 

111(d) plan, considering the components for approvable plans 

described in the June 18, 2014, proposal, including any 

mechanisms that could be used to ensure that the low or nonemitting generation was in fact offsetting fossil-fuel-fired 

generation in the jurisdiction that would use it to meet its 

goal. 

It should be noted that multi-jurisdictional plans that 

include areas without affected EGUs must still meet the plan 

components and criteria to determine whether a state’s plan is 

"satisfactory" under CAA section 111(d)(2)(A) as described in 
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section VIII of the June 18, 2014, proposal.32 The EPA solicits 

comment on these components and criteria for jurisdictions 

without affected EGUs that wish to be a part of a multijurisdiction plan. 

V. Impacts of the Proposed Action

A. What are the air impacts? 

With regard to Guam and Puerto Rico, the EPA estimates 

implementation of Option 1 – Approach A33 will result in emission 

reductions of roughly 1.6 million metric tons of CO2 in 2020 and 

reductions of 3.1 million metric tons of CO2 in 2030. The EPA 

estimates that implementation of Option 2 – Approach A34 would 

result in emission reductions of roughly 1.5 million metric tons 

of CO2 in 2020 and reductions of 2.0 million metric tons of CO2

in 2025. 

For Guam and Puerto Rico, the EPA estimates implementation 

of Option 1 – Approach B35 will result in emission reductions of 

roughly 1.7 million metric tons of CO2 in 2020 and reductions 

of 3.3 million metric tons of CO2 in 2030. The EPA estimates that 

 

32 For more information on plan components see the June 18, 2014, 

proposal at 79 FR 34911.

33 Option 1 represents compliance with the goals calculated using 

the procedure outlined in section III.B. 

34 Option 2 represents compliance with the goals calculated using 

the procedure outlined in section III.C, reflecting less 

stringent application of the building blocks and a shorter 

implementation period. 

35 Option 1 represents compliance with the goals calculated using 

the procedure outlined in section III.B. 
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implementation of Option 2 – Approach B36 would result in 

emission reductions of roughly 1.6 million metric tons of CO2 in 

2020 and reductions of 2.1 million metric tons of CO2 in 2025. 

For all options and approaches, the EPA also expects 

reductions of criteria pollutants including SO2, NOx, and PM2.5 as 

a result of actions taken to implement the goals proposed in 

this action. Due to data limitations, the EPA is not able to 

accurately estimate the co-reductions of criteria pollutant that 

would occur as a result of actions to implement the proposed 

goals. 

The EPA does not expect any additional emission reductions 

from areas of Indian country with affected EGUs. The EGUs in the 

Navajo Nation’s area of Indian country are already expected to 

meet the proposed goals through compliance with other 

regulations. Three EGUs at Four Corners Power Plant shut down at 

the beginning of 2014 to comply with requirements for Best 

Available Retrofit Technology (BART).37 At Navajo Generating 

Station, the EPA expects that by 2019, one EGU will shut down or 

generation will be curtailed to comply with requirements for 

 

36 Option 2 represents compliance with the goals calculated using 

the procedure outlined in section III.C, reflecting less 

stringent application of the building blocks and a shorter 

implementation period. 

37 See 79 FR 46514, August 24, 2012. 
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BART.38 These units represented approximately 30 percent of total 

EGU CO2 emissions in Navajo territory in 2012. As a result, 

substantial CO2 reductions from the shutdowns are expected prior 

to the target date for the goals proposed in this action, which 

would mean the Navajo territory would meet the proposed goal 

without additional actions beyond the shutdowns, if the goal is 

converted to a mass-based goal. The reductions associated with 

compliance with the goals for the lands of the Fort Mojave Tribe 

and the Ute Tribe of the Uintah and Ouray Reservation were 

already accounted for in the June 18, 2014, proposal. The 

impacts analysis for the June 18, 2014, proposal did not 

separate out and exclude electricity demand and reduced fuel 

expenditures associated with energy efficiency savings potential 

from tribal lands from the states in which they are located. 

Thus, the emission reductions associated with achieving reduced 

electricity generationsavings levels of building block 4 as part 

of this supplemental proposal were previously accounted for in 

the June 18, 2014, proposal. There is one affected EGU on Ute 

territory. This EGU was not an affected unit in the June 18, 

2014, proposal, but had the option to implement a heat rate 

improvement in the system-wide modeling conducted for that 

 

38 See 77 FR 51620, August 8, 2014. 
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proposal.39 Because the modeling reflected this optional heat 

rate improvement, the emission reductions from a heat rate 

improvement for this EGU were accounted for in the June 18, 

2014, proposal. 

B. What are the energy impacts? 

As discussed previously, one area of Indian country with 

affected EGUs is expected to meet the proposed goal based on 

compliance with other regulations, and the impacts of compliance 

with the proposed goals for the other two areas were already 

accounted for in the June 18, 2014, proposal. In U.S. 

territories, the EPA anticipates a small degree of re-dispatch 

from coal- and oil-fired generation to natural gas-fired 

generation. It is possible that some portion of this shift away 

from coal- and oil-fired generation may occur in the absence of 

the rule, due primarily to the relatively high cost of 

petroleum-based fuel and electricity in these areas. For 

example, the Puerto Rico Electric Power Authority (PREPA) plans 

to add natural gas capacity at existing petroleum-burning 

plants. Additionally, both Guam and Puerto Rico are implementing 

Renewable Portfolio Standards programs. 

While the EPA did not perform a full resource adequacy 

 

39 See IPM results at: 

http://www.epa.gov/airmarkets/powersectormodeling/cleanpowerplan

.html.
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analysis as was conducted for the June proposal, the EPA does 

not expect actions taken to implement the proposed goals to 

raise reliability concerns because these actions are likely 

consistent with planned activities in the affected areas. (For 

example, present and planned actions on Navajo territory to 

implement criteria pollutant reductions and planned expansion of 

natural gas-fired capacity in Puerto Rico.) 

C. What are the compliance costs? 

The compliance costs of this proposed action are 

represented in this analysis as the change in electric power 

generation costs between the base case and the proposed rule in 

which U.S. territories pursue a distinct set of strategies 

beyond the strategies taken in the base case to meet the 

proposed goals. The compliance assumptions and projected 

compliance costs set forth in this analysis are illustrative in 

nature. There is uncertainty about the precise measures that 

territories will adopt to meet the proposed requirements, 

because there are considerable flexibilities afforded to them in 

developing their state plans. These illustrative compliance 

scenarios are designed to reflect, to the extent possible, the 

scope and the nature of the proposed guidelines. 

For Guam and Puerto Rico, the illustrative annual 

compliance costs and monitoring and reporting costs for Option 1 

– Approach A are a savings of approximately $140 million (2011$) 
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in 2020 and a savings of $350 million in 2030, including reduced 

fuel savings expenditures from energy efficiency programs and 

re-dispatch. For Option 2 – Approach A, the illustrative annual 

compliance costs and monitoring and reporting costs for Guam and 

Puerto Rico are a savings of approximately $130 million (2011$) 

in 2020 and a savings of $200 million in 2025, including reduced 

fuel expendituressavings from energy efficiency programs and redispatch. 

For Guam and Puerto Rico, the illustrative annual 

compliance costs and monitoring and reporting costs for Option 1 

– Approach B are a savings of approximately $140 million (2011$) 

in 2020 and a savings of $360 million in 2030, including reduced 

fuel savings expenditures from energy efficiency programs and 

re-dispatch. For Option 2 – Approach B, the illustrative annual 

compliance costs and monitoring and reporting costs for Guam and 

Puerto Rico are a savings of approximately $140 million (2011$) 

in 2020 and a savings of $200 million in 2025, including reduced

fuel expendituressavings from energy efficiency programs and redispatch. 

The EPA does not expect any additional compliance costs for 

areas of Indian country with affected EGUs. As discussed in 

section V.A, the EPA expects that the goal for the lands of the 

Navajo Nation will be met without any further action beyond the 

shutdowns that are occurring, if the goal is converted to a 
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mass-based goal. The costs for meeting the goal for the lands of 

the Fort Mojave Tribe and the Ute Tribe of the Uintah and Ouray 

Reservation were already included in the June 18, 2014, 

proposal. 

D. What are the economic and employment impacts? 

Changes in supply or demand for electricity, natural gas, 

oil, and coal can impact markets for goods and services produced 

by sectors that use these energy inputs in the production 

process or that supply those sectors. Changes in cost of 

production may result in changes in price and/or quantity 

produced and these market changes may affect the profitability 

of firms and the economic welfare of their consumers. The EPA 

recognizes that these guidelines provide significant 

flexibilities and the territories implementing the guidelines 

may choose to mitigate impacts to some markets outside the EGU 

sector. Similarly, demand for new generation or energy 

efficiency can result in changes in production and profitability 

for firms that supply those goods and services. Similarly, 

demand for new generation or energy efficiency can result in 

changes in production and profitability for firms that supply 

those goods and services. The guidelines provide flexibility for 

territories that may want to enhance demand for goods and 

services from those sectors. 

Executive Order 13563 directs federal agencies to consider 
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regulatory impacts on job creation and employment. According to 

the Executive Order, “our regulatory system must protect public 

health, welfare, safety, and our environment while promoting 

economic growth, innovation, competitiveness, and job creation. 

It must be based on the best available science”. Although 

standard benefit-cost analyses have not typically included a 

separate analysis of regulation-induced employment impacts, 

during periods of sustained high unemployment, employment 

impacts are of particular concern and questions may arise about 

their existence and magnitude. 

Under all scenarios analyzed for the territories of Guam 

and Puerto Rico, the annualized costs of the illustrative 

compliance strategies are expected to be negative for each year 

in the analysis as a result of reductions in field expenditures. 

Quantifying any employment impacts associated with implementing 

the proposed goals is difficult, as each area has the 

flexibility to implement a wide range of policies and practices 

for compliance with the proposed goals. The June 18, 2014, 

proposal used the cost projections from the engineering-based 

Integrated Planning Model to help estimate employment impacts in 

the electricity, natural gas, and coal sectors but these 

projections are not available for territories, making 

quantitative assessment of employment impacts for Guam and 

Puerto Rico more difficult. However, because annualized costs 
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for the territories are relatively low or negative, the EPA does 

not expect significant adverse employment impacts under the 

illustrative compliance strategies. A critical component of the 

overall labor impacts of implementing the GHG guidelines is the 

impact of the labor associated with the demand-side energy 

efficiency activities. Like the RIA for the June 18, 2014, 

proposal indicated, the EPA anticipates that this rule may 

stimulate investment in clean energy technologies and services, 

resulting in considerable increases in energy efficiency in 

particular. The EPA expects these increases in energy 

efficiency, specifically, to support a significant number of 

jobs existing in related industries. 

The EPA does not expect any economic or employment impacts 

for EGUs in Indian country arising from this proposed action, as 

the costs for meeting the proposed goals for the lands of the 

Fort Mojave Tribe and the Ute Tribe of the Uintah and Ouray 

Reservation were already accounted for in the June 18, 2014, 

proposal, and the goal for the lands of the Navajo Nation is 

expected to be met without any further action beyond the 

shutdowns that are occurring.

E. What are the benefits of the proposed action? 

The EPA has used the SCC estimates presented in the 2013 

“Technical Support Document: Technical Update of the Social Cost 

of Carbon for Regulatory Impact Analysis Under Executive Order 
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12866” (2013 SCC TSD) to analyze CO2 climate benefits of this 

rulemaking.40 The EPA refers to these estimates, which were 

developed by the U.S. government, as “SCC estimates.” The U.S. 

government first published the SCC estimates in 2010 following 

an interagency process that included the EPA and other executive 

branch entities; the process used three integrated assessment 

models (IAM) to develop SCC estimates and selected four global 

values for use in regulatory analyses. The U.S. government 

recently updated these estimates using new versions of each IAM 

and published them in 2013. The 2013 update did not revisit the 

2010 modeling decisions (e.g., with regard to the discount rate, 

reference case socioeconomic and emission scenarios or 

equilibrium climate sensitivity). Rather, improvements in the 

way damages are modeled are confined to those that have been 

incorporated into the latest versions of the models by the 

developers themselves and published in the peer-reviewed 

 

40 Docket ID EPA–HQ–OAR–2013–0495, Technical Support Document: 

Technical Update of the Social Cost of Carbon for Regulatory 

Impact Analysis Under Executive Order 12866, Interagency Working 

Group on Social Cost of Carbon, with participation by Council of 

Economic Advisers, Council on Environmental Quality, Department 

of Agriculture, Department of Commerce, Department of Energy, 

Department of Transportation, Environmental Protection Agency, 

National Economic Council, Office of Energy and Climate Change, 

Office of Management and Budget, Office of Science and 

Technology Policy, and Department of Treasury (May 2013, Revised 

November 2013). Available at: 

http://www.whitehouse.gov/sites/default/files/omb/assets/inforeg

/technical-update-social-cost-of-carbon-for-regulatorimpactanalysis.pdf. 
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literature. The 2010 SCC Technical Support Document (2010 SCC 

TSD) provides a complete discussion of the methods used to 

develop these estimates and the 2013 SCC TSD presents and 

discusses the updated estimates.41 

The EPA and other agencies have sought public comment on 

the SCC estimates as part of various rulemakings. In addition, 

OMB’s Office of Information and Regulatory Affairs recently 

sought public comment on the approach used to develop the 

estimates. The comment period ended on February 26, 2014, and 

OMB is reviewing the comments received. 

The four SCC estimates, updated in 2013, are as follows: 

$13, $46, $68, and $137 per metric ton of CO2 emissions in the 

year 2020 (2011 dollars).42 The first three values are based on 

the average SCC from the three IAMs, at discount rates of 5, 3, 

 

41 Docket ID EPA–HQ–OAR–2009–0472–114577, Technical Support 

Document: Social Cost of Carbon for Regulatory Impact Analysis 

Under Executive Order 12866, Interagency Working Group on Social 

Cost of Carbon, with participation by the Council of Economic 

Advisers, Council on Environmental Quality, Department of 

Agriculture, Department of Commerce, Department of Energy, 

Department of Transportation, Environmental Protection Agency, 

National Economic Council, Office of Energy and Climate Change, 

Office of Management and Budget, Office of Science and 

Technology Policy, and Department of Treasury (February 2010). 

Also available at: 

http://www.whitehouse.gov/sites/default/files/omb/inforeg/foragencies/Social-Cost-of-Carbon-for-RIA.pdf. 

42 The 2010 and 2013 TSDs present SCC in $2007. The estimates 

were adjusted to 2011$ using the GDP Implicit Price Deflator. 

Also available at: http://www.gpo.gov/fdsys/pkg/ECONI-2013-

02/pdf/ECONI-2013-02-Pg3.pdf. 
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and 2.5 percent, respectively. SCCs at several discount rates 

are included because the literature shows that the SCC is quite 

sensitive to assumptions about the discount rate, and because no 

consensus exists on the appropriate rate to use in an 

intergenerational context (where costs and benefits are incurred 

by different generations). The fourth value is the 95th 

percentile of the SCC from all three models at a 3 percent 

discount rate. It is included to represent higher-than-expected 

impacts from temperature change further out in the tails of the 

SCC distribution (representing less likely, but potentially 

catastrophic, outcomes). 

The proposed guidelines would reduce emissions of precursor 

pollutants (e.g., SO2, NOx, and directly emitted particles) in 

the territories, which in turn would lower ambient 

concentrations of PM2.5 and O3. However, the EPA is unable to 

quantify the health co-benefits of SO2 and NOx reductions in the 

U.S. territories because the benefit-per-ton values the EPA used 

in the June 18, 2014, proposal are only appropriate for areas 

within the continental U.S. These benefit-per-ton values are not 

appropriate to use in estimating co-benefits for the U.S. 

territories because those territories were not represented in 

the air quality modeling used to generate the benefit-per-ton 

estimate.
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As described in the June 18, 2014, proposal, reducing 

exposure to PM2.5 is associated with significant human health 

benefits, including avoiding premature mortality for adults and 

infants, cardiovascular morbidities such as heart attacks, 

hospital admissions, and respiratory morbidities such as asthma 

attacks, acute bronchitis, hospital and emergency department 

visits, work loss days, restricted activity days, and 

respiratory symptoms. Reducing exposure to O3 is also associated 

with significant human health benefits, including avoiding 

mortality and respiratory morbidity such as fewer asthma 

attacks, hospital and emergency room visits, and school loss 

days. In addition, the EPA could not monetize other important 

benefits, including climate benefits from reducing emissions of 

non-CO2 GHG and co-benefits from reducing exposure to HAP (e.g., 

Hg and HCl) concentrations, as well as ecosystem and visibility 

benefits.

For Guam and Puerto Rico, the EPA estimates that in 2020, 

the illustrative compliance approach for Option 1 – Approach A 

will yield monetized climate benefits of approximately $73 

million with a 3 percent model average (2011$). The EPA 

estimates that in 2030, the illustrative compliance approach for 

Option 1 – Approach A in Guam and Puerto Rico will yield 

monetized climate benefits of approximately $170 million with a 

3 percent model average (2011$). For Option 2 – Approach A, the 
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EPA estimates that in 2020, the illustrative compliance approach 

for Guam and Puerto Rico will yield monetized climate benefits 

of approximately $68 million with a 3 percent model average 

(2011$). The EPA estimates that in 2025, the illustrative 

compliance approach for Option 2 – Approach A in Guam and Puerto 

Rico will yield monetized climate benefits of approximately $99 

million with a 3 percent model average (2011$). 

For Guam and Puerto Rico, the EPA estimates that in 2020, 

the illustrative compliance approach for Option 1 – Approach B 

will yield monetized climate benefits of approximately $77 

million with a 3 percent model average (2011$). The EPA 

estimates that in 2030, the illustrative compliance approach for 

Option 1 – Approach B in Guam and Puerto Rico will yield 

monetized climate benefits of approximately $180 million with a 

3 percent model average (2011$). For Option 2 – Approach B, the 

EPA estimates that in 2020, the illustrative compliance approach 

for Guam and Puerto Rico will yield monetized climate benefits 

of approximately $73 million with a 3 percent model average 

(2011$). The EPA estimates that in 2025, the illustrative 

compliance approach for Option 2 – Approach B in Guam and Puerto 

Rico will yield monetized climate benefits of approximately $110 

million with a 3 percent model average (2011$). 

The EPA does not expect any additional benefits associated 

with compliance for areas of Indian country with affected EGUs, 
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as the benefits for meeting the proposed goals for the lands of 

the Fort Mojave Tribe and the Ute Tribe of the Uintah and Ouray 

Reservation were already accounted for in the June 18, 2014, 

proposal, and the goal for the lands of the Navajo Nation is 

expected to be met without any further action beyond the 

shutdowns that are occurring. 

VI. Statutory and Executive Order Reviews 

A. Executive Order 12866: Regulatory Planning and Review, and 

Executive Order 13563: Improving Regulation and Regulatory 

Review 

Under section 3(f) (1) of Executive Order (EO) 12866 (58 FR 

51735, October 4, 1993), this action is an "economically 

significant regulatory action” because it is likely to have an 

annual effect on the economy of $100 million or more or to 

adversely affect in a material way the economy, a sector of the 

economy, productivity, competition, jobs, the environment, 

public health or safety, or state, local, or tribal governments 

or communities. The $100 million threshold can be triggered by 

either costs or benefits, or a combination of them. Accordingly, 

the EPA submitted this action to OMB for review under Executive 

Orders 12866 and 13563 (76 FR 3821, January 21, 2011), and any 

changes made in response to OMB recommendations have been 

documented in the docket for this action. The EPA also prepared 
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an analysis of the potential costs and benefits associated with 

this action in the RIA for this supplemental proposal. 

Consistent with EO 12866 and EO 13563, the EPA estimated 

the costs and benefits for illustrative compliance approaches of 

implementing the proposed guidelines. This proposal sets goals 

to reduce CO2 emissions from the electric power industry in U.S. 

territories and in Indian country. Actions taken to comply with 

the proposed guidelines will also reduce the emissions of 

directly emitted PM2.5, SO2 and NOX. The benefits associated with 

these PM, SO2 and NOX reductions are referred to as co-benefits, 

as these reductions are not the primary objective of this rule.43

The EPA has used the SCC estimates (i.e., the monetary 

value of impacts associated with a marginal change in CO2

emissions in a given year) to analyze CO2 climate impacts of this 

rulemaking. The four SCC estimates are associated with different 

discount rates (model average at 2.5 percent discount rate, 3 

percent, and 5 percent; 95th percentile at 3 percent), and each 

increases over time. In this summary, the EPA provides the 

estimate of climate benefits associated with the SCC value 

deemed to be central by the U.S. government (the model average 

at 3 percent discount rate). There will likely be significant 

 

43 More details about the health benefits associated with 

reductions in PM2.5, SO2 and NOx can be found in the RIA for the 

June 18, 2014, proposal. 
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health co-benefits associated with reductions of SO2 and NOX.

However, the EPA is unable to quantify health co-benefits SO2 and 

NOX reductions in the U.S. territories because the benefit-perton values that the EPA often uses for this purpose are only 

appropriate for areas within the continental U.S. In addition, 

the EPA could not monetize other important benefits, including 

climate benefits from reducing emissions of non-CO2 GHG and cobenefits from reducing exposure to HAP (e.g., Hg and HCl) 

concentrations, as well as ecosystem and visibility benefits. 

For Guam and Puerto Rico, the EPA estimates that in 2020, 

the illustrative compliance approach for Option 1 – Approach A 

will yield monetized climate benefits of approximately $73 

million with a 3 percent model average (2011$). The annual 

illustrative compliance costs are a savings of approximately 

$140 million (2011$) in 2020. The EPA estimates that in 2030, 

the illustrative compliance approach for Option 1 – Approach A 

in Guam and Puerto Rico will yield monetized climate benefits of 

approximately $170 million with a 3 percent model average 

(2011$). The annual illustrative compliance costs are a savings 

of approximately $350 million (2011$) in 2030. For Option 2 – 

Approach A, the illustrative compliance approach for Guam and 

Puerto Rico will yield monetized climate benefits of 

approximately $68 million with a 3 percent model average 

(2011$). The annual illustrative compliance costs are a savings 
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of approximately $130 million (2011$) in 2020. The EPA estimates 

that in 2025, the illustrative compliance approach for Option 2 

in Guam and Puerto Rico will yield monetized climate benefits of 

approximately $99 million with a 3 percent model average 

(2011$). The annual illustrative compliance costs result in a 

net savings of approximately $200 million (2011$) in 2025, 

including reduced fuel savingsexpenditures associated with 

energy efficiency programs and re-dispatchfuel switching. 

For Guam and Puerto Rico, the EPA estimates that in 2020, 

the illustrative compliance approach for Option 1 – Approach B 

will yield monetized climate benefits of approximately $77 

million with a 3 percent model average (2011$). The annual 

illustrative compliance costs are a savings of approximately 

$140 million (2011$) in 2020. The EPA estimates that in 2030, 

the illustrative compliance approach for Option 1 – Approach B 

in Guam and Puerto Rico will yield monetized climate benefits of 

approximately $180 million with a 3 percent model average 

(2011$). The annual illustrative compliance costs are a savings 

of approximately $360 million (2011$) in 2030. For Option 2 – 

Approach B, the illustrative compliance approach for Guam and 

Puerto Rico will yield monetized climate benefits of 

approximately $73 million with a 3 percent model average 

(2011$). The annual illustrative compliance costs are a savings 

of approximately $140 million (2011$) in 2020. The EPA estimates 
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that in 2025, the illustrative compliance approach for Option 2 

in Guam and Puerto Rico will yield monetized climate benefits of 

approximately $110 million with a 3 percent model average 

(2011$). The annual illustrative compliance costs result in a 

net savings of approximately $200 million (2011$) in 2025, 

including reduced fuel expendituressavings associated with 

energy efficiency programs and re-dispatchfuel switching. 

The EPA does not expect any additional benefits associated 

with compliance for areas of Indian country with affected EGUs, 

as the benefits for meeting the proposed goals for the lands of 

the Fort Mojave Tribe and the Ute Tribe of the Uintah and Ouray 

Reservation were already accounted for in the June 18, 2014, 

proposal, and the goal for the lands of the Navajo Nation is 

expected to be met without any further action beyond the 

shutdowns that are occurring. 

B. Paperwork Reduction Act 

The information collection requirements in this proposed 

rule have been submitted for approval to OMB under the PRA, 44 

U.S.C. 3501 et seq. The Information Collection Request (ICR) 

document prepared by the EPA has been assigned the EPA ICR 

number 2503.02[Placeholder for new ICR number]. 

This proposal does not directly impose specific 

requirements on EGU sources, including those located in U.S. 

territories and in Indian country. The proposal also does not 
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impose specific requirements on tribal governments that have 

affected EGUs located in their area of Indian country. For 

Indian country, the proposal establishes CO2 emission performance 

goals that could be addressed through either tribal or federal 

plans. A tribe would have the opportunity under the TAR, but not 

the obligation, to apply to the EPA for TAS for purposes of a 

section 111(d) plan and, if approved by the EPA, to establish a 

CAA section 111(d) plan for its area of Indian country. To date, 

no tribe has requested or obtained TAS eligibility for purposes 

of a section 111(d) plan. For areas of Indian country with 

affected sources where a tribe has not applied for TAS and 

submitted any needed plan, if the EPA determines that a CAA 

section 111(d) plan is necessary or appropriate, the EPA would 

have the responsibility to establish the plans. Because tribes 

are not required to implement section 111(d) plans and because 

no tribe has yet sought TAS eligibility for this purpose, this 

proposed action is not anticipated to impose any information 

collection burden on tribal governments over the 3-year period 

covered by this ICR. 

This proposal does impose specific requirements on U.S. 

territory governments that have affected EGUs. Their information 

collection requirements are based on the recordkeeping and 

reporting burden associated with the requirement that the two 

affected U.S. territories (i.e., Puerto Rico and Guam) develop, 
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implement and enforce a plan to limit CO2 emissions from existing 

sources in the power sector within those U.S. territories. These 

recordkeeping and reporting requirements are specifically 

authorized by CAA section 114 (42 U.S.C. 7414). All information 

submitted to the EPA pursuant to the recordkeeping and reporting 

requirements for which a claim of confidentiality is made is 

safeguarded according to agency policies set forth in 40 CFR 

part 2, subpart B. 

The annual burden for this collection of information for 

the territories (averaged over the first 3 years following 

promulgation of this proposed action) is estimated to be 29,200 

hours at a total annual labor cost of $2.07 million. The total 

annual burden for the federal government (averaged over the 

first 3 years following promulgation of this proposed action) is 

estimated to be 2,530 hours at a total annual labor cost of 

$141,000. Burden means the total time, effort or financial 

resources expended by persons to generate, maintain, retain, or 

disclose or provide information to or for a federal agency. This 

includes the time needed to review instructions; develop, 

acquire, install and utilize technology and systems for the 

purposes of collecting, validating, and verifying information, 

processing and maintaining information, and disclosing and 

providing information; adjust the existing ways to comply with 

any previously applicable instructions and requirements; train 
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personnel to be able to respond to a collection of information; 

search data sources; complete and review the collection of 

information; and transmit or otherwise disclose the information. 

An agency may not conduct or sponsor, and a person is not 

required to respond to a collection of information unless it 

displays a currently valid OMB control number. The OMB control 

numbers for the EPA’s regulations in 40 CFR are listed in 40 CFR 

part 9. 

To comment on the agency's need for this information, the 

accuracy of the provided burden estimates, and any suggested 

methods for minimizing respondent burden, the EPA has 

established a public docket for this rule, which includes this 

ICR, under Docket ID Number EPA-HQ-OAR-2013-0602. Submit any 

comments related to the ICR to the EPA and to OMB. See the 

ADDRESSES section at the beginning of this notice action for 

where to submit comments to the EPA. Send comments to OMB at the 

Office of Information and Regulatory Affairs, Office of 

Management and Budget, 725 17th Street, NW, Washington, DC 

20503, Attention: Desk Officer for the EPA. Since OMB is 

required to make a decision concerning the ICR between 30 and 60 

days after [insert date of publication in the Federal Register], 

a comment to OMB is best assured of having its full effect if 

OMB receives it by [insert date 30 days after publication in the 

Federal Register]. The final rule will respond to any OMB or 
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public comments on the information collection requirements 

contained in this proposal. 

C. Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA) generally requires an 

agency to prepare a regulatory flexibility analysis of any rule 

subject to notice and comment rulemaking requirements under the 

Administrative Procedure Act or any other statute unless the 

agency certifies that the rule will not have a significant 

economic impact on a substantial number of small entities. Small 

entities include small businesses, small organizations and small 

governmental jurisdictions. 

For purposes of assessing the impacts of this rule on small 

entities, small entity is defined as: (1) A small business that 

is defined by the Small Business Administration’s (SBA’s) 

regulations at 13 CFR 121.201 (for the electric power generation 

industry, the small business size standard is an ultimate parent 

entity with less than 750 employees). The North American 

Industry Classification System (NAICS) codes for the affected 

industry are in Table 11 below); (2) a small governmental 

jurisdiction that is a government of a city, county, town, 

school district or special district with a population of less 

than 50,000; and (3) a small organization that is any not-forprofit enterprise which is independently owned and operated and 

is not dominant in its field. 
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Table 11. Potentially Regulated Categories and Entitiesa

 

Category NAICS 

Code 

Examples of Potentially 

Regulated Entities 

Industry 

 

221112 Fossil fuel electric power 

generating units. 

State/Territorial/Local 

Government 

 

221112b

 

Fossil fuel electric power 

generating units owned by 

municipalities. 

a Include NAICS categories for source categories that own and 

operate electric power generating units (includes boilers and 

stationary combined cycle combustion turbines). 

b State, territory or local government-owned and operated 

establishments are classified according to the activity in which 

they are engaged. 

After considering the economic impacts of this proposed 

rule on small entities, I certify that this action will not have 

a significant economic impact on a substantial number of small 

entities. 

The proposed rule will not impose any requirements on small 

entities. Specifically, emission guidelines established under 

CAA section 111(d) do not impose any requirements on regulated 

entities and, thus, will not have a significant economic impact 

upon a substantial number of small entities. After emission 

guidelines are promulgated, each affected U.S. territory 

establishes standards on existing sources, and it is those 

requirements that could potentially impact small entities. Our 

analysis here is consistent with the analysis of the analogous 
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situation arising when the EPA establishes national ambient air 

quality standards (NAAQS), which do not impose any requirements 

on regulated entities. As here with regard to U.S. territories, 

any impact of a NAAQS on small entities would only arise when 

states take subsequent action to maintain and/or achieve the 

NAAQS through their state implementation plans. See American 

Trucking Assoc. v. EPA, 175 F.3d 1029, 1043-45 (D.C. Cir. 1999) 

(NAAQS do not have significant impacts upon small entities 

because NAAQS themselves impose no regulations upon small 

entities). 

Nevertheless, the EPA is aware that there is substantial 

interest in the proposed rule among small entities. As detailed 

in section II.D of this supplemental proposal and section III.A 

of the preamble to the proposed carbon pollution emission 

guidelines for existing EGUs (79 FR 34845-34847, June 18, 2014), 

the EPA has conducted an unprecedented amount of stakeholder 

outreach on setting emission guidelines for existing EGUs. While 

formulating the provisions of the June 18, 2014, proposed rule, 

as well as this proposed rule, the EPA considered the input 

provided over the course of the stakeholder outreach. Sections 

II.D and VI.F of this supplemental proposal and section III.B of 

the preamble to the June 18, 2014, proposal (79 FR 34847) 

describe the key issues and messages from stakeholders. The EPA 

invites comments on all aspects of this proposal and its 
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impacts, including potential impacts on small entities. 

D. Unfunded Mandates Reform Act of 1995 

This proposed action does not contain a federal mandate that 

may result in expenditures of $100 million or more for state,44

local and tribal governments, in the aggregate, or the private 

sector in any one year. The emission guidelines proposed under CAA 

section 111(d) do not impose any direct compliance requirements on 

EGU sources. As explained in section VI.B above, the proposal also 

does not impose specific requirements on tribal governments that 

have affected EGUs located in their area of Indian country. The 

proposal does impose specific requirements on U.S. territory 

governments that have affected EGUs. Specifically, the U.S. 

territories are required to develop plans to implement the 

guidelines under CAA section 111(d) for affected EGUs. The burden 

for U.S. territories to develop CAA section 111(d) plans in the 3-

year period following promulgation of the rule was estimated and 

is listed in section VI.B above, but this burden is estimated to 

be below $100 million in any one year. Thus, this proposed rule is 

not subject to the requirements of section 202 or section 205 of 

the UMRA. 

 

44 “State” is defined under the Unfunded Mandates Reform Act 

(UMRA) as “a State of the United States, the District of 

Columbia, a territory or possession of the United States, and an 

agency, instrumentality, or fiscal agent of a State but does not 

mean a local government of a State.” 
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This proposed rule is also not subject to the requirements 

of section 203 of UMRA because it contains no regulatory 

requirements that might significantly or uniquely affect small 

governments. Specifically, the governments with affected EGUs 

for which this action proposes specific requirements (i.e., the 

U.S. territories of Puerto Rico and Guam) are not considered 

small governments. 

In light of the interest among governmental entities, the 

EPA initiated outreach with U.S. territory and tribal 

governmental entities while formulating the provisions of this 

proposed rule. Section III.A of the preamble to the proposed 

carbon pollution emission guidelines for existing EGUs (79 FR 

34845-34847, June 18, 2014) describes the extensive stakeholder 

outreach the EPA has conducted on setting emission guidelines 

for existing EGUs. Section II.D of this supplemental proposal 

details the specific outreach that the EPA conducted to the U.S. 

territories with potentially affected EGUs. In addition, section 

VI.F of this supplemental proposal and section XI.F of the 

preamble to the June 18, 2014, proposed rule describe outreach 

to tribes and consultation with tribal officials. The EPA 

considered the input provided over the course of its stakeholder 

outreach developing the provisions of these proposed emission 

guidelines. 

E. Executive Order 13132: Federalism 
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 This action does not have federalism implications. It will 

not have substantial direct effects on the states, on the 

relationship between the national government and the states or 

on the distribution of power and responsibilities among the 

various levels of government, as specified in Executive Order 

13132. Executive Order 13132 applies only to states, whereas 

this action proposes emission performance goals covering 

affected power plants located in the U.S. territories and in 

specified areas of Indian country.45 Thus, Executive Order 13132 

does not apply to this action. 

 Nevertheless, as described in section II.D of this 

supplemental proposal and section III.A of the preamble to the 

proposed carbon pollution emission guidelines for existing EGUs 

(79 FR 34845-34847, June 18, 2014), the EPA has conducted an 

unprecedented amount of stakeholder outreach on setting emission 

guidelines for existing EGUs. Section II.D of this supplemental 

proposal details the outreach that the EPA conducted to the U.S. 

territories with potentially affected EGUs. In addition, section 

VI.F of this supplemental proposal and section XI.F of the 

 

45 “State” or “States” are defined under E.O. 13132 as “the 

States of the United States of America, individually or 

collectively, and, where relevant, to State governments, 

including units of local government and other political 

subdivisions established by the States.” 
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preamble to the June 18, 2014, proposed rule describe outreach 

to tribes and consultation with tribal officials. 

 In the spirit of Executive Order 13132, and consistent with 

the EPA’s policy to promote communications between the EPA and 

State and local governments, the EPA welcomes comment on this 

proposed action from U.S. territory and tribal officials. 

F. Executive Order 13175: Consultation and Coordination with 

Indian Tribal Governments 

 Subject to Executive Order 13175 (65 FR 67249, November 9, 

2000) the EPA may not issue a regulation that has tribal 

implications, that imposes substantial direct compliance costs 

on tribal governments and that is not required by statute, 

unless the federal government provides the funds necessary to 

pay the direct compliance costs incurred by tribal governments, 

or the EPA consults with tribal officials early in the process 

of developing the proposed regulation and develops a tribal 

summary impact statement. 

 The EPA has concluded that this action may have tribal 

implications. However, it will neither impose substantial direct 

compliance costs on tribal governments, nor preempt tribal law. 

Tribes are not required to develop or adopt CAA programs, but 

they may apply to the EPA for TAS and, if approved, do so. 

Tribes are not required to develop plans to implement the 

guidelines under CAA section 111(d) for affected EGUs in their 
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areas of Indian country. To the extent that a tribal government 

seeks and attains TAS status for that purpose, these proposed 

emission guidelines would require that planning requirements be 

met and emission management implementation plans be executed by 

the tribes. The EPA notes that this proposal does not directly 

impose specific requirements on affected EGUs, including those 

located in Indian country, but provides guidance to any tribe 

approved by the EPA to address CO2 emissions from EGU sources 

found subject to section 111(d) of the CAA. The EPA also notes 

that none of the affected EGUs are owned or operated by tribal 

governments. 

 The June 18, 2014, proposed rule and this supplemental 

proposal were developed after extensive and vigorous outreach to 

stakeholders, including tribes. Tribes were invited to 

participate in the national informational webinar, “Building a 

Common Understanding: Clean Air Act and Upcoming Carbon 

Pollution Guidelines for Existing Power Plants,” held August 27, 

2013. The EPA also held a series of listening sessions prior to 

development of this proposed action. Tribes participated in a 

session on September 9, 2013, together with the state agencies, 

as well as in a separate tribe-only session on September 26, 

2013. In addition, an outreach meeting was held on September 9, 

2013, with tribal representatives from some of the 566 tribes. 

As part of the outreach to tribes, EPA representatives also 
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met with tribal environmental staff with the National Tribal Air 

Association, by teleconference, on July 25, 2013, December 19, 

2013, June 26, 2014, and webinars on August 4, 2014, and 

September 5, 2014. In those teleconferences and webinars, the 

EPA provided background information on the GHG emission 

guidelines to be developed and a summary of issues being 

explored by the agency. Tribes have expressed varied points of 

view. Some tribes raised concerns about the impacts of the 

regulations on EGUs and the subsequent impact on jobs and 

revenue for their tribes. Other tribes expressed concern about 

the impact the regulations would have on the cost of water to 

their communities as a result of increased costs to the EGU that 

provide energy to transport the water to the tribes. Other 

tribes raised concerns about the impacts of climate change on 

their communities, resources, ways of life and hunting and 

treaty rights. The tribes were also interested in the scope of 

the guidelines being considered by the agency (e.g., over what 

time period, relationship to state and multi-state plans) and 

how tribes will participate in these planning activities. 

The EPA conducted outreach to tribal environmental staff 

and offered consultation with tribal officials in developing 

this action. Because this supplemental proposal would affect 

sources located within Indian country, the EPA offered 

consultation with tribal officials early in the process of 
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developing the proposed regulation to permit tribes to have 

meaningful and timely input into its development. The EPA sent 

consultation letters to the leaders of all of the federally 

recognized tribes. The letters provided information regarding 

the EPA’s development of emission guidelines for existing power 

plants and offered consultation. The EPA held a consultation 

with the Ute Tribe, the Crow Nation, and the MHA Nation on July 

18, 2014. On August 22, 2014, the EPA held a consultation with 

the Fort Mojave Tribe. On September 15, 2014, the EPA held a 

consultation with the Navajo Nation. The Navajo Nation sent a 

letter to the EPA on September 18, 2014, summarizing the 

information presented at the consultation and the Navajo 

Nation’s position on this supplemental proposal. One issue 

raised by tribal officials was the potential impacts of the June 

18, 2014, proposal and this supplemental proposal on tribes with 

budgets that are dependent on revenue from coal mines and power 

plants, as well as employment at the mines and power plants. The 

tribes noted the high unemployment rates and lack of access to 

basic services on their lands. Tribal officials also asked 

whether the rules will have any impact on a tribe’s ability to 

seek TAS. Tribal officials also expressed interest in agency 

actions with regard to facilitating power plant compliance with 

regulatory requirements. The Navajo Nation made the following 

recommendations in their letter of September 18, 2014: the 
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Navajo Nation supports a mass-based CO2 emission standard based 

on the highest historical CO2 emissions since 1996; the Navajo 

Nation requests that the EPA grant the Navajo Nation carbon 

credits and that the Navajo Nation retains ownership and control 

of such credits; building block 2 is not appropriate for the 

Navajo Nation because there are no NGCC plants located on the 

Navajo Nation; building block 3 is not appropriate for the 

Navajo Nation because the Navajo people already receive 

virtually all of their electricity from carbon-free sources 

(mostly hydroelectric power) and their use of electricity is 

negligible compared to the generation at the power plants; 

building block 4 is not appropriate for the Navajo Nation 

because of the inadequate access to electricity, and the goal 

should allow for an increase in energy consumption on the Navajo 

Nation; the supplemental proposal should consider the useful 

life of the power plants located on the Navajo Nation; and the 

supplemental proposal should clarify that RE projects located 

within the Navajo Nation that provide electricity outside the 

Navajo Nation should be counted toward meeting the relevant 

state’s RE goals under the Clean Power Plan.. 

 The EPA will continue the ongoing dialogue with tribal 

officials regarding this proposed action. During the public 

comment period for this proposal, the EPA will hold meetings 

with tribal environmental staff to inform them of the content of 
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Page 101 of 114 

this proposal, as well as offer further consultation with tribal 

elected officials, where it is appropriate. The EPA specifically 

solicits additional comment on this proposed action from tribal 

officials.

G. Executive Order 13045: Protection of Children from 

Environmental Health Risks and Safety Risks 

 The EPA interprets Executive Order 13045 (62 FR 19885, 

April 23, 1997) as applying to those regulatory actions that 

concern health or safety risks, such that the analysis required 

under section 5-501 of the Executive Order has the potential to 

influence the regulation. This action is not subject to 

Executive Order 13045 because it does not involve decisions on 

environmental health or safety risks that may disproportionately 

affect children. The EPA believes that the CO2 emission 

reductions resulting from implementation of the proposed 

guidelines, as well as substantial O3 and PM2.5 emission 

reductions as a co-benefit, would further improve children’s 

health. 

H. Executive Order 13211: Actions Concerning Regulations That 

Significantly Affect Energy Supply, Distribution, or Use 

This action is not a “significant energy action” as defined 

in Executive Order 13211 (66 FR 28355 (May 22, 2001)), because 

it is not likely to have a significant adverse effect on the 

supply, distribution, or use of energy. Affected EGUs in one 
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area of Indian country are expected to meet the proposed goal 

based on compliance with other regulations; the impacts of 

meeting the proposed goals for the other two areas of Indian 

country were already accounted for in the June 18, 2014, 

proposal. In U.S. territories, the EPA anticipates a small 

degree of re-dispatch from coal- and oil-fired generation to 

natural gas-fired generation. It is possible that some portion 

of this shift away from coal- and oil-fired generation may occur 

in the absence of the rule, due primarily to the relatively high 

cost of petroleum-based fuel and electricity in these areas. For 

example, PREPA plans to add natural gas capacity at existing 

petroleum-burning plants. Additionally, both Guam and Puerto 

Rico are implementing Renewable Portfolio Standards programs 

which may contribute to implementing these goals at a different 

cost than projected in the RIA. The “Technical Support Document 

for Calculating Carbon Pollution Goals for Existing Power Plants 

in U.S. Territories and Areas of in Indian Country” provides 

additional information about PREPA's planned expansion of 

natural gas electricity generation and the Guam and Puerto Rico 

Renewable Portfolio Standards programs. The EPA does not account 

for these existing trends in this analysis due to data 

limitations. Additionally, since the EPA estimated these impacts 

without the use of an economic dispatch model, the EPA is 

potentially overstating the costs of implementation in these 
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areas. 

I. National Technology Transfer and Advancement Act 

Section 12(d) of the National Technology Transfer and 

Advancement Act (NTTAA) of 1995 (Public Law No. 104-113; 15 

U.S.C. 272 note) directs the EPA to use voluntary consensus 

standards (VCS) in its regulatory and procurement activities 

unless to do so would be inconsistent with applicable law or 

otherwise impractical. VCS are technical standards (e.g., 

materials specifications, test methods, sampling procedures and 

business practices) that are developed or adopted by one or more 

VCS bodies. The NTTAA directs the EPA to provide Congress, 

through OMB, explanations when the agency does not use available 

and applicable VCS. This proposed rulemaking does not involve 

technical standards. 

The EPA welcomes comments on this aspect of the proposed 

rulemaking and specifically invites the public to identify 

potentially-applicable VCS and to explain why such standards 

should be used in this action.

J. Executive Order 12898: Federal Actions to Address 

Environmental Justice in Minority Populations and Low-Income 

Populations 

Executive Order 12898 (59 FR 7629, February 16, 1994) 

establishes federal executive policy on environmental justice. 

Its main provision directs federal agencies, to the greatest 
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extent practicable and permitted by law, to make environmental 

justice part of their mission by identifying and addressing, as 

appropriate, disproportionately high and adverse human health or 

environmental effects of their programs, policies and activities 

on minority populations and low-income populations in the U.S. 

Section II.A of the preamble to the proposed carbon 

pollution emission guidelines for existing EGUs (79 FR 34841-

34843, June 18, 2014) summarizes the public health and welfare 

impacts from GHG emissions that were detailed in the 2009 

Endangerment Finding under CAA section 202(a)(1).46 As part of 

the Endangerment Finding, the Administrator considered climate 

change risks to minority or low-income populations, finding that 

certain parts of the population may be especially vulnerable 

based on their circumstances. These include the poor, the 

elderly, the very young, those already in poor health, the 

disabled, those living alone, and/or indigenous populations 

dependent on one or a few resources. The Administrator placed 

weight on the fact that certain groups, including children, the 

elderly and the poor, are most vulnerable to climate-related 

health effects. 

 

46 “Endangerment and Cause or Contribute Findings for Greenhouse 

Gases Under Section 202(a) of the Clean Air Act,” 74 FR 66496 

(Dec. 15, 2009) (“Endangerment Finding”). 
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Strong scientific evidence that the potential impacts of 

climate change raise environmental justice issues is found in 

the major assessment reports by the U.S. Global Change Research 

Program, the Intergovernmental Panel on Climate Change and the 

National Research Council of the National Academies, summarized 

in the record for the Endangerment Finding. Their conclusions 

include that poor communities can be especially vulnerable to 

climate change impacts because they tend to have more limited 

adaptive capacities and are more dependent on climate-sensitive 

resources such as local water and food supplies. In addition, 

Native American tribal communities possess unique 

vulnerabilities to climate change, particularly those on 

established reservations that are restricted to reservation 

boundaries and, therefore, have limited relocation options. 

Tribal communities whose health, economic well-being and 

cultural traditions depend upon the natural environment will 

likely be affected by the degradation of ecosystem goods and 

services associated with climate change. Southwest native 

cultures are especially vulnerable to water quality and 

availability impacts. Native Alaskan communities are likely to 

experience disruptive impacts, including shifts in the range or 

abundance of wild species crucial to their livelihoods and wellbeing. The most recent assessments continue to strengthen 
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scientific understanding of climate change risks to minority and 

low-income populations. 

This proposed rule would limit GHG emissions by 

establishing CO2 emission guidelines for use in developing 

section 111(d) plans to address CO2 emissions from affected EGUs. 

In addition to reducing CO2 emissions, implementing the proposed 

rule through the development of section 111(d) plans would 

reduce other emissions from EGUs that become dispatched less 

frequently due to their relatively low energy efficiency. These 

emission reductions will include SO2 and NOx, which form ambient 

PM2.5 and O3 in the atmosphere, and HAP, such as Hg and HCl. In 

the final rule revising the annual PM2.5 NAAQS,47 the EPA 

identified persons with lower socioeconomic status as an at-risk 

population for experiencing adverse health effects related to PM 

exposures. Persons with lower socioeconomic status have been 

generally found to have a higher prevalence of pre-existing 

diseases, limited access to medical treatment, and increased 

nutritional deficiencies, which can increase this population’s 

risk to PM-related and O3-related effects.48 Therefore, in areas 

 

47 “National Ambient Air Quality Standards for Particulate 

Matter, Final Rule,” 78 FR 3086 (Jan. 15, 2013). 

48 U.S. Environmental Protection Agency (U.S. EPA). 2009. 

Integrated Science Assessment for Particulate Matter (Final 

Report). EPA-600-R-08-139F. National Center for Environmental 

Assessment – RTP Division. December. Available on the Internet 

at http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=216546.
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where this rulemaking ultimately results in reductions in 

exposure to PM2.5, O3 and methylmercury, persons with low 

socioeconomic status would also benefit. The RIA for this 

rulemaking, included in the docket for this rulemaking, provides 

additional information regarding the health and ecosystem 

effects associated with these emission reductions. 

While there will be many locations with improved air 

quality for PM2.5, O3 and HAP, there may also be EGUs whose 

emissions of one or more of these pollutants or their precursors 

increase as a result of implementation of the proposed emission 

guidelines for existing fossil fuel-fired EGUs. This may occur 

at EGUs that become dispatched more intensively than in the past 

because they become more energy efficient. The EPA has 

considered the potential for such increases and the 

environmental justice implications of such increases. 

As noted in the preamble for the June 18, 2014, proposal, 

as part of a jurisdiction’s section 111(d) plan, the 

jurisdiction may require an affected EGU to undertake physical 

or operational changes to improve the EGU’s efficiency that 

result in an increase in the EGU’s dispatch and an increase in 

its annual emissions of GHGs and/or other regulated pollutants. 

However, a jurisdiction can take steps to avoid increased 

utilization of particular EGUs and emissions of regulated 

pollutants whose environmental effects would be more localized 
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around the affected EGU. To the extent that jurisdictions take 

this path, there would be no new environmental justice concerns 

in the areas near such EGUs. In addition, the applicable 

jurisdiction or federal permitting program can adjust its 

section 111(d) plan to ensure that there are no new NAAQS 

exceedances and that no existing NAAQS exceedances are made 

worse. For those EGUs in a permitting situation for which the 

EPA is the permit reviewing authority, the EPA will consider 

environmental justice issues as required by Executive Order 

12898. 

In addition to some EGUs possibly being required by a 

jurisdiction to make modifications for increased energy 

efficiency, another potential effect of the proposed CO2 emission 

guidelines for existing fossil fuel-fired EGUs would be 

increased utilization of other, unmodified EGUs with relatively 

low GHG emissions per unit of electrical output, in particular 

high efficiency gas-fired EGUs. Such plants would have more 

hours in the year in which they operate and emit pollutants, 

including pollutants whose environmental effects if any would be 

localized rather than global as is the case with GHG emissions. 

Changes in utilization already occur now as demands for and 

sources of electrical energy evolve, but the proposed CO2 

emission guidelines for existing fossil fuel-fired EGUs can be 

expected to cause more such changes. Because gas-fired EGUs emit 
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Page 109 of 114 

essentially no Hg, increased utilization would not increase 

methylmercury concentrations in their vicinities. Increased 

utilization generally would not cause higher peak concentrations 

of PM2.5, NOx or O3 around such EGUs than is already occurring 

because peak hourly or daily emissions generally would not 

change, but increased utilization may make periods of relatively 

high concentrations more frequent. It should be noted that the 

gas-fired sources that are likely to become dispatched more 

frequently than at present have very low emissions of primary 

PM, SO2 and HAP per unit of electrical output, such that local 

(or regional) air quality for these pollutants is likely to be 

affected very little. For natural gas-fired EGUs, the EPA found 

that regulation of HAP emissions “is not appropriate or 

necessary because the impacts due to HAP emissions from such 

EGUs are negligible based on the results of the study documented 

in the utility RTC [response to comments].”49 In studies done by 

the U.S. Department of Energy’s National Energy Technology 

Laboratory comparing cost and performance of coal- and natural 

gas-fired generation, they assumed SO2, PM (and Hg) emissions to 

be “negligible.” Their studies predict NOx emissions from a NGCC 

unit to be approximately 10 times lower than a subcritical or 

supercritical coal-fired boiler. Many are also very well 

 

49 65 FR 79831. 
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Page 110 of 114 

controlled for emission of NOx through the application of after 

combustion controls such as selective catalytic reduction, 

although not all gas-fired sources are so equipped. Depending on 

the specificity of the jurisdiction’s CAA section 111(d) plan, 

the jurisdiction may be able to predict which EGUs and 

communities may be in this type of situation and to address any 

concerns about localized NOx concentrations in the design of the 

CAA section 111(d) program, or separately from the CAA section 

111(d) program but before its implementation. In any case, 

existing tracking systems will allow jurisdictions and the EPA 

to be aware of the EGUs whose utilization has increased most 

significantly, and, thus, to be able to prioritize our efforts 

to assess whether air quality has changed in the communities in 

the vicinity of such EGUs. There are multiple mechanisms in the 

CAA to address situations in which air quality has degraded 

significantly. In conclusion, this proposed rule would result in 

regional and national pollutant reductions; however, there 

likely would also be some locations with more times during the 

year of relatively higher concentrations of pollutants with 

potential for effects on localized communities than would be 

experienced in the absence of the proposed rule. The EPA cannot 

exactly predict how emissions from specific EGUs would change as 

an outcome of the proposed rule due to the jurisdiction-led 

implementation. Therefore, the EPA has concluded that it is not 
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Page 111 of 114 

practicable to determine whether there would be 

disproportionately high and adverse human health or 

environmental effects on minority, low income or indigenous 

populations from this proposed rule. 

In order to provide opportunities for meaningful 

involvement early on in the rule making process, the EPA has 

hosted webinars and conference calls on August 27, 2013, and 

September 9, 2013, for the June 18, 2014, proposal specifically 

for environmental justice and tribal communities and has taken 

all comments and suggestions into consideration in the design of 

the emission guidelines. Additionally, after the June 18, 2014, 

rule was proposed, the EPA hosted public hearings in Denver, 

Colorado, Atlanta, Georgia, Washington D.C. and Pittsburgh, 

Pennsylvania, from July 29-August 1, 2014. Additionally, as 

referenced in the public hearing section of this proposal, the 

EPA will also be holding a public hearing on this supplemental 

proposal. Also, as part of the outreach conducted for the Clean 

Power Plan, wethe EPA haves created interactive maps that 

provide the locations of fossil fuel fired power plants covered 

by the proposed Clean Power Plan and summaries that describe 

each area’s power sector CO2 emission rates (using 2012 data) and 

each area’s proposed emission rate goal. These interactive maps 

are available at: 

http://cleanpowerplanmaps.epa.gov/CleanPowerPlan/. Additionally, 
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Page 112 of 114 

tThe public is invited to submit comments or identify peerreviewed studies and data that assess effects of exposure to the 

pollutants addressed by this proposal. 

VII. Statutory Authority

The statutory authority for this action is provided by 

sections 111, 301, 302, and 307(d)(1)(V) of the CAA, as amended 

(42 U.S.C. 7411, 7601, 7602, 7607(d)(1)(V)). This action is also 

subject to section 307(d) of the CAA (42 U.S.C. 7607(d)).
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Carbon Pollution Emission Guidelines for Existing Stationary 

Sources: EGUs in Indian Country and U.S. Territories; 

Multi-jurisdictional Partnerships 

Page 113 of 114

List of Subjects in 40 CFR part 60 

Environmental protection, Administrative practice and 

procedure, Air pollution control, Intergovernmental relations, 

Reporting and recordkeeping requirements.

__________________. 

Dated: 

__________________ 

Gina McCarthy, 

Administrator. 

 
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Page 114 of 114 

Proposed Rule Amendment with Changes 

The Environmental Protection Agency proposed rule amending 40 

CFR part 60, which was published at 79 FR 34830, June 18, 2014, 

proposed to create a new subpart (40 CFR part 60, subpart UUUU) 

to include emission guidelines for greenhouse gas emissions and 

compliance times for existing EGUs. To facilitate understanding 

of the amendments to the proposed subpart UUUU being proposed in 

this action, the EPA is providing a Technical Support Document 

in the docket for this rulemaking that shows in track changes 

the proposed amendments to the text of the proposed subpart UUUU 

in the June 18, 2014, Federal Register publication.