MEMORANDUM

Date: August 1, 2015

Subject: Projections for New, Modifie d, and Reconstructed Electric Utility Generating Units for the Carbon Dioxide New Source Performance Standards in Alaska, Hawaii, a nd the United States Territories

From: Shelly Johnson, RTI International

To: Christian Fellner U.S. Environmental Protection Agency Research Triangle Park, NC 27711

I. Introduction

Under section 111(b) of the Clean Air Act (CAA), the U.S. Environmental Protection Agency (EPA) is required to establish new s ource performance standards (NSPS) for the fossilfuel-fired electric steam generating units and the combustion turbines source categories. The U.S. Supreme Court ruled that GHGs meet the definition of “air pollu tant” in the CAA and premised that the CAA displaced any federal co mmon law right to compel reductions in carbon dioxide (CO 2 ) emissions from fossil fuel-fired power plants. The EPA is finalizing NSPS under CAA section 111(b) that, for the first time, will establish standards for emissions of CO 2 for newly constructed, modified, and reconstructed affected fossil fuel-fired electric utility generating units (EGUs). The acti on establishes separa te standards of pe rformance for fossil fuel-fired electric utility steam generating units and fossil fuel -fired stationary combustion turbines. To be considered an EGU, the unit mu st: (1) be capable of combusting more than 250 MMBtu/h (260 GJ/h) heat input of fossil fuel; and (2) serve a generato r capable of supplying more than 25 megawatts (MW) net to a utility di stribution system (i.e., for sale to the grid).

The purpose of this memorandum is to present the information reviewed and methodology used to project the number of new, m odified, and reconstructed emission units that may trigger NSPS in the 3-year period following th e applicability date for the NSPS review in Alaska, Hawaii and the U.S. territories. The elec tric generating units NSPS is scheduled to be signed by August 3, 2015. The proposal date for new sources under this rule was January 8, 2014, and the proposal date for modified and rec onstructed units was June 18, 2014. The dates of proposal represent the applicability dates for NSPS, such that new sources or sources that are modified or reconstructed following the appli cability date would be subject to the NSPS. Economic impact analyses consider the im pacts of an NSPS over the 3 years following applicability of the NSPS. Therefore it is necessa ry to project the number of new, modified, or

reconstructed emission units that would become s ubject to the revised NSPS in the 3-year time period from 2014 to 2017. Subpart TTTT of 40 CFR pa rt 60 defines terminology that relates to

when new sources commence constructi on, modification, or reconstruction.Projections for New, Modified, and Reconstructed EGUs for the CO 2 NSPS in Alaska, Hawaii, and U.S. Territories
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II. Alaska and Hawaii

The U.S. Energy Information Administration (E IA) collects detailed data on the electric utility industry for the 50 states and the Distri ct of Columbia. Form EIA-860 collects generatorlevel specific information about existing and plan ned generators and associated environmental equipment at electric power plants with 1 MW or greater of combined nameplate capacity. Reporting in this form must be all existing plants and proposed ( 10-year plans) plants that: (1) have a total generator nameplat e capacity (sum for generators at a single site) of 1 MW or greater; and (2) where the generator(s), or the fa cility in which the generator(s) resides, is connected to the local or regional electric power grid and has the ability to draw power from the grid or deliver power to the gr id. In the case of generators lo cated in Alaska and Hawaii which are not a part of the North American interc onnected grid (U.S. EIA, 2014a and U.S. EIA, 2014b), generators that are connected to a “public grid,” meaning a local or regional transmission or distribution system that supplies power to the public, must be reported on Form EIA-860 (U.S. EIA, 2015a).

The latest Form EIA-860 is from 2013. In this form, utilities entered any planned upgrades or changes to existing generators a nd any proposed generato rs. Alaska and Hawaii reported planned electric utility power plants with expected years of starting operation that range from 2014 to 2018. The reported planned generation from these states did not include EGUs subject to the NSPS. Table 1 displays the propos ed generation per prime mover type for Alaska and Hawaii. Combustion (gas) turb ines and steam turbines are the only prime mover types that would be subject to this rule if they meet the remaining app licability criteria. The proposed 50 MW of combustion turbine generation in Alaska was for Homer Electric Association's Soldotna plant in Kenai Peninsula County. The plant had be gun construction before this rule was proposed and began commercial operation in March 2014, so it is an exis ting source. There are no other EGUs proposed that are capable of supplying more than 25 MW. Neither Alaska nor Hawaii reported any upgrades or repowering projects to units that would be a ffected by this rule indicating there are no planned modi fications or reconstructions.

Table 1: Proposed Generating Capacity for Alaska and Hawaii by Prime Mover Type.

Prime Mover Description Alaska (MW) Hawaii (MW)

Energy Storage, Concentrated Solar Power 0 6

Combustion (Gas) Turbine 50 0

Hydroelectric Turbine 26 0

Internal Combustion Engine 178 11

Photovoltaic 0 74

Steam Turbine, including nuclear, geothermal and solar steam 17 9.3

Wind Turbine, Onshore 0 25

Total Generation (MW) 271 125 Source: Based on U.S.EIA, 2015aProjections for New, Modified, and Reconstructed EGUs for the CO 2 NSPS in Alaska, Hawaii, and U.S. Territories
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III. U.S. Territories

The inhabited U.S. territories that were revi ewed to determine unit projections for new,

modified or reconstructed EGUs were Puerto Rico, American Samoa, Guam, Northern Mariana Islands, and the U.S. Virgin Islands. The U.S. terr itories do not report utility sector data to Form EIA-860, so determination was derived from EI A Energy Profiles, territory-specific power reports and media articles. The applicability cr iteria states that EGUs not covered by the standards include stationary co mbustion turbines that are not physically capable of combusting natural gas (e.g., not connected to a natural gas pipeline). As none of the territories have access to a natural gas pipeline, they will not have any units that could be applicable to the standards for combustion turbine units. Only new, modified or reconstructed fossil fuel-fired electric utility steam generating units would be subject to this rule.

Each of the territories relies heavily on petroleum products fo r electricity production. Each of these islands is very isolated and import all fossil fuels used at the electric power plants. Distillate fuel oil is the primary fuel source for these plants, but liquefied natural gas, jet fuel, kerosene, residual fuel oil and other petroleum pr oducts may also be imported for use as fuel.

Due to the locations and resources available at e ach of the territories, there is a large focus for increasing the use of renewable fuel sources. Table 2 displays the popul ation for each of the territories and their action plan goals for incorporation of rene wable resources. American Samoa did not have a renewables action plan reported.

Table 2: Population and Renewable Fuel Goals for Territory Action Plans

State or Territory Name Population Percent of Net Electricity Sales

to Come From Renewables Date for

Renewables Action

Puerto Rico a 4,000,000 20% 2035

American Samoa b 55,000

Guam c 175,000 25% 2035

Northern Mariana Islands d 54,000 80% 2015

U.S. Virgin Islands e 106,000 60% 2025

a U.S. EIA, 2015b, b U.S. EIA, 2015c, c U.S. EIA, 2015f, d U.S. EIA, 2015d, e U.S. EIA, 2015e

Puerto Rico has the largest population of all of the islands and has one coal-fired EGU (U.S. EIA, 2015b). All electricity is supplied by Pu erto Rico Electric Power Authority (PREPA), a government agency that owns the electric distribution system . PREPA has large debts and 50 percent more capacity than is currently needed. The island has one coal plant that is not expected to modify or reconstruct. (Allen, 2015) It is not expected any EGUs will be newly constructed,

modified or reconstructed in the near future.

American Samoa is a string of smaller isla nds with a generating capacity of 40 MW (U.S. EIA, 2015c) produced by four power plants. The largest power plant is 23 MW (FEMA, 2011); the rest of the plants are much smaller than this. A tsunami in 2009 crippled the island's power supply creating a need to build a 24.5 MW repl acement plant (U.S. EIA, 2015c). No additional EGU capacity is needed for this territory.Projections for New, Modified, and Reconstructed EGUs for the CO 2 NSPS in Alaska, Hawaii, and U.S. Territories
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Guam is the second largest territory by populat ion. There are reports of Guam planning to build a 180 MW combined cycle unit that will have the capability to fire bo th liquefied natural gas (LNG) and distillate fuel oil (Pacific Islands Developmen t Program, 2015). This unit would not be subject to this rule, as it does not meet the combustion turbine applicability criteria requiring access to the pipeline. With the planne d construction of this unit and additional solar and wind projects, no additional need for more MW capacity from an EGU is expected.

Northern Mariana Islands has a total gene ration capacity less than 100 MW and a large focus on increasing generation from renewable resources to 80% of net electric sales by 2015. Their renewable plans include generation from waste gasification, geothermal, solar, and wind (U.S. EIA, 2015d).

The U.S. Virgin Islands have a total gene ration capacity of about 320 MW and average loads are less than half the capac ity. They have recently constructe d two solar facilities that add 9 MW of generation. Between their goal of 60% ne t electricity sales from renewable resources by 2025 (U.S. EIA, 2015e) and the available generati on in their fossil fuel-f ired fleet, it is not expected there will be any newly constructed, modified or reconstruction EGUs that will be subject to this NSPS.

IV. Conclusion

From the available information and research con ducted, we are projecting that no new fossil-fuel fired EGUs applicable to this standard will be built in Alaska, Hawaii, or the US territories

between 2014 and 2017.

V. References

Allen, G. and Peñaloza M. 2015. Power Problems: Puerto Rico 's Electric Utility Faces Crippling Debt . National Public Radio. Available at http://www.npr.org/2015/05/07/403291009/power-probl ems-puerto-ricos-electric-utility-facescrippling-debt

FEMA. 2011. Critical Infrastructu re Restoration: The Three-Ph ased Power Restoration Plan

After the American Samoa Tsunami. Available at https://www.llis.dhs.gov/s ites/default/files/GS_American_S amoa_Power_Restoration_Plan.pdf

Pacific Islands Development Program, 2015. Guam Power Authority Approves New Power Plan

Construction. Available at ht tp://pidp.eastwestcenter.org/pi report/2015/January/01-28-14.htm

U.S. EIA (U.S. Energy Information Administra tion). 2014a. Alaska. State Profile and Energy Estimates. Available at http://www. eia.gov/state/analysis.cfm?sid=AK

U.S. EIA (U.S. Energy Information Administ ration). 2014b. Hawaii. State Profile and Energy Estimates. Available at http://www. eia.gov/state/analysis.cfm?sid=HI

U.S. EIA (U.S. Energy Inform ation Administration). 2015a. Electricity. Form EIA-860 detailed

data. Available at http://www.eia.gov/elec tricity/data/eia860/

U.S. EIA (U.S. Energy Information Administra tion). 2015b. Puerto Rico. Territory Profile and Energy Estimates. Available at http:/ /www.eia.gov/state/analysis.cfm?sid=RQProjections for New, Modified, and Reconstructed EGUs for the CO 2 NSPS in Alaska, Hawaii, and U.S. Territories
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U.S. EIA (U.S. Energy Information Administrati on). 2015c. American Samoa. Territory Profile and Energy Estimates. Available at http ://www.eia.gov/state/analysis.cfm?sid=AQ

U.S. EIA (U.S. Energy Information Administra tion). 2015d. Northern Mari ana Island. Territory Profile and Energy Estimates. Available at http://www.eia.gov/state/analysis.cfm?sid=CQ

U.S. EIA (U.S. Energy Information Administra tion). 2015e. U.S. Virgin Islands. Territory Profile and Energy Estimates. Available at http://www.eia.gov/state/analysis.cfm?sid=VQ

U.S. EIA (U.S. Energy Information Administra tion). 2015f. Guam. Territory Profile and Energy Estimates. Available at http://www. eia.gov/state/analysis.cfm?sid=GQ