UNITED STATES ENVIRONMENTAL PROTECTION AGENC'?
WASHINGTON, D 0 20460

The Honorable Eugene F. Wallace Mayor City of Coldwater Henry L. Brown Municipal Building
One Grand Street Coidwater, Michigan 49036

Dear Mayor Wallace:

Thank you for your letter of July 18, 2011, to Administrator Lisa Jackson, expressing concern over potential impacts of the proposed "National Emission Standards for Hazardous Air Pollutants fromCoal- and Oil-fired Electric Utility Steam Generating Units and Standards of Performance for FossilFuel-Fired Electric Utility, Industrial-Commercial -Institutional, and Small Industrial-CommercialInstitutional Steam Generating Units" (the Mercury and Air Toxics Standards rule, MATS), which was published in the Federal Register on May 3, 2011. The Administrator asked that I respond on her behalf.

The U.S. Environmental Protection Agency carefully analyzed the issue of electric supply, working closely with the Department of Energy (DOE). Our modeling shows that these proposed standards would result in relatively small changes in the average retail price of electricity, primarily due to increased demand for natural gas, keeping electricity prices below 1990 levels. This translates into a 1.3 percent increase in residential natural gas prices and a consumer electricity price increase of approximately $3-4 per month.

The proposed standards, which will save thousands of lives and prevent tens of thousands of asthma and heart attacks, are both reasonable and achievable, and many sources already are meeting them. Investing in pollution control at power plants creates high-quality American jobs in manufacturing steel, cement, and other materials needed to build pollution control equipment, and in installing, operating and maintaining that equipment. The EPA estimates this proposed rule will provide employment for thousands by supporting 31,000 short-term construction jobs and 9,000 long-term utility jobs. These jobs would be distributed nationwide, in proportion to the number of coal-fired units that need upgrades.

The EPA, the Federal Energy Regulatory Commission and the DOE will work with entities whose responsibility is to ensure an affordable, reliable supply of electricity, including State Utility Commissions, Regional Transmission Organizations and the National Electric Reliability Council to share information and encourage them to begin planning for compliance and reliability as early as possible. This will ensure orderly, affordable compliance with the proposed standards. Energy efficiency investments that achieve moderate levels of energy demand reduction in compliance strategies can also substantially cut total emissions control costs for the power sector.

yeIabe FnttiWith regard to the compliance period, the Clean Air Act gives existing units three years to comply. State

and local permitting authorities (rather than the EPA) are allowed, under certain circumstances, to provide for an additional year and the EPA will support this permitting authority flexibility where appropriate.

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Again, thank you for your letter. It will be placed in the public docket for this rulemaking. I appreciate the opportunity to be of service and trust the information provided is helpful.