Rulemaking for Greenhouse Ga

Emissions

from Electric Utility Generating U

Update Briefing, February 26, 2014
Agenda

► President’s Climate Action Plan► Affected Sources► Section 111(b) and (d) Overview► Stakeholder Outreach► Modified Sources► Reconstructed Sources► Existing Sources► Questions/Comments► Appendix A – State & Local Governments Potentially 

to Regulation
Reducing Carbon Pollution from Power Pl

The President’s Directive to EPA:► Set flexible carbon pollution standards, regulations or guid

appropriate, for power plants under section 111 of the Cle

► Focus on the following elements when developing the stan

guidelines

► Stakeholder engagement on program design► Flexibilities in the program design► Costs► Continued importance of relying on a range of energy source► Other regulations that affect the power sector
EPA’s Task: Using the Clean Air Act Author

1. Issue carbon pollution standards for new power plan

► Proposal published in the Federal Register on Jan

2014

• Informed by the more than 2.5 million comments r

on the April 2012 proposal

• Reflects recent developments and trends in the po

sector

• Public hearing held in Washington, DC on Februa

– Over 150 people testified in 2 concurrent sessio

representing industry, environmental groups, fa

and the general public

• Comments may be submitted through March 10, 2

2. Issue carbon pollution standards for modified and

reconstructed power plants

► Proposal: June 2014► Final: June 2015
3. Issue carbon pollution guidelines for existing power pla

► Issue federal guidelines for states

• Work in partnership with states

• States will develop plans that set standards for existing • States use EPA guidelines as a reference

► Federal guidelines should build on states’ leadership an

experience with programs that reduce GHGs

► Proposal: June 2014► Final: June 2015► States submit implementation plans to EPA: June 2016

EPA’s Task Using the Clean Air Act Authorit
Affected Sources

► Fossil fuel‐fired steam generating units and integrate

gasification combined cycle (IGCC) units that:

► Have a design heat input greater than 73 MW (250MM

heat input of fossil fuel (either alone or in combinatio

other fuel);

► Combust fossil fuel for more than 10% percent of the 

annual heat input during a 3‐year rolling average basi

► Were constructed for the purpose of supplying, and s

third or more of its potential electric output and more 

219,000 MWh net‐electric output to a utility distribut

on an annual basis

► Fossil fuel means natural gas, petroleum, coal, and an

solid, liquid or gaseous fuel derived from such materia

purpose of creating useful heat
Affected Sources (cont.)

► Natural gas‐fired stationary combustion turbines tha

► Have a design heat input to the turbine engine greate

MW (250 MMBtu/h);

► Combust over 90% natural gas on a heat input basis o

rolling average basis; and

► Were constructed for the purpose of supplying, and s

third or more of its potential electric output and more 

219,000 MWh net‐electrical output to a utility distribu

system on a 3‐year rolling average basis
Affected Sources (cont.)

► ≈ 1,212 utility boilers at 536 facilities

► ≈ 827 coal‐fired boilers at 373 facilities► ≈ 33 oil‐fired boilers at 17 facilities► ≈ 352 gas‐fired boilers at 172 facilities

► 4 IGCC plants currently operating in the U.S.► ≈ 1,516 stationary combustion turbines at 526 facilitie

► Includes investor‐owned, publicly‐owned and rural

cooperative EGUs

► 175 state/local jurisdictions are estimated to own EGUs 

be affected by this action

► See Appendix A for list of potentially impacted state/loc

jurisdictions
Power Plants Covered by the EGU GHG Ru

Source: National Electric Energy Data System (NEEDS 5.13) (EPA, November 2013)Note: This map displays facilities that are included in the NEEDS 5.13 database and that contain at least one coal, oil or gas-fired steam generating unit, or combustion turbine that generate

25 megawatts of power. This includes coal-fired units that burn petroleum coke and that turn coal into gas before burning (using integrated gasification combined cycle or IGCC). NEEDS ravailable capacity on-line by the end of 2015; this includes committed new builds and committed retirements of old units. In areas with a dense concentration of facilities, the facilities on thoverlap and some may be impossible to see. 
Clean Air Act Section 111

► Authorized in 1970► Establishes a mechanism for controlling air pollution 

stationary sources

► Applies to sources for which the Administrator, in her 

finds “causes, or contributes significantly to, air pollut

may reasonably be anticipated to endanger public hea

welfare”

► Can apply to new, existing, modified and reconstructe

► More than 70 stationary source categories and subca

are currently regulated under section 111

► A full list of sources regulated under section 111 can 

in 40 CFR Part 60
CAA Section 111(b) for Modified & Reconstructe

► Federal standards for reconstructed and modified sources 

following the same process used to set standards for new s

► Standards reflect the degree of emission limitation achieva

the application of the best system of emission reduction (B

Administrator determines has been adequately demonstra

► EPA may distinguish among classes, types and sizes of source► In determining BSER, EPA may take into account:

• Technical feasibility of the system• Implementation costs• Amount of emission reductions• Promotion of advanced technology

► Modification – a physical change that increases the source

achievable hourly rate of emissions

► Reconstruction – when a single project replaces componen

exceeds 50 percent of the fixed capital cost that would be 

construct a comparable entirely new facility, and it is techn

and economically feasible to meet the applicable standard
CAA Section 111(d) for Existing Sources

► Emission guidelines for existing sources are set by EPA

► Different approach for achieving emission reductions th

approach used for new, reconstructed and modified so

► EPA establishes (1) a procedure for states to issue perfo

standards for existing sources and (2) guidance about t

appropriate level of the standard

► EPA has established section 111(d) regulations for 5 sou

categories

• Sulfuric acid plants (acid mist)• Phosphate fertilizer plants (fluorides)• Primary aluminum plants (fluorides)• Kraft pulp plants (total reduced sulfur)• Municipal solid waste landfills (landfill gases)
CAA Section 111(d) for Existing Sources (c

► Emission guidelines (cont.)

► Common elements of past guidelines

• Description of Best System of Emission Reduction (BSER) th

adequately demonstrated

• Degree of emission limitation achievable, costs and environ

of application

• Time required to implement• Other information to facilitate development of state plans• A goal for reductions – or “standard of performance” – base

analysis

► Section 111(d) is broad by design

► Recognition that existing sources do not have as much 

new ones to build emission controls into their design

► Provides greater flexibility to EPA and states to design a 

consultation with a diverse range of stakeholders
CAA Section 111(d) for Existing Sources (c

► How section 111(d) has worked:

► Previously established guidelines have not prescribed t

that must be used to comply

► Once EPA set the guidelines, states developed section 1

establishing standards of performance for the covered 

their state

► States submitted section 111(d) plans to EPA for review 

approval

► After evaluating the plans, EPA took action through not

comment rulemaking

► EPA has authority to prescribe a plan for a state in case

state fails to submit a satisfactory plan and to enforce t

of a plan in cases where the state fails to enforce them
CAA Section 111(d) for Existing Sources (c

► How state plans have worked:

► States determine the combination of measures that wi

guidelines

► State plans set standards of performance

• Can be identical to EPA’s guidelines

• Can differ from, but be equivalent to, EPA’s guidelines

► State plans provide for implementation and enforceme

• States have had flexibility when applying the standard of 

in their plans to take into consideration, among other fac

remaining useful life of the source

► Timeframe to submit state plans has been set by EPA in 

guidelines
Stakeholder Outreach

► EPA has engaged in extensive stakeholder outreach

► Will inform the emission guidelines and standards deve► EPA held 11 public listening sessions in October & Nove

• More than 1,600 people spoke

► EPA provided multiple opportunities to engage with ea

• EPA officials met with state leaders, including governors,

environmental commissioners, energy officers, public ut

commissioners and air directors

► Other stakeholders EPA officials have met with include:

• Electric utility associations

• Electric grid operators• Labor unions
Stakeholder Outreach (cont.)

► Other stakeholders (cont.):

• Leaders representing large and small industries

– Utilities and utility industry representatives

– Energy industry representatives (e.g., coal and natural 

– Companies offering technologies to reduce/prevent ca

(e.g., renewable energy and energy efficiency interests

– Representatives of energy intensive industries (e.g., iro

and aluminum)

• Environmental justice organizations• Environmental groups• Religious organizations

► EPA established a new email account called “Carbon P

Input” to which over 2,000 emails providing stakeholdhave been submitted
Stakeholder Outreach (cont.)

► Key messages from stakeholders

► Broad agreement that opportunities exist to lower the carbo

power generation through a wide range of measures

• Measures implementable at the source• Measures implementable across the broader power generation 

► Multiple opinions about how broader system measures coul

programs

• System‐wide measures factored into the goals EPA establishes• System‐wide measures allowed for compliance, but not factore

► Varied views regarding form and stringency of standards

• Rate‐based versus mass‐based• Provide states flexibility to choose among multiple forms of the 

their own goals

• Goal stringency should vary by state to account for different cir
Stakeholder Outreach (cont.)

► Key messages (cont.)

► General support for giving states flexibility

• Recognize existing programs and achievements in reducing CO

– Allow state plans to take into account the reductions already 

• Allow compliance options that permit the use of approaches th

the facility fence line (e.g., demand‐side management)

► Broad agreement that states need more time to develop and 

• Necessary due to legislative/regulatory schedule in many state• Would allow and promote multi‐state and regional programs a

► Support for flexibility in the timing of state plan implementa

compliance with goals

• Accommodates diverse CO2 reduction potential• Supports approaches that are more cost‐effective

► General concern that rulemaking could have negative impac

• Jobs and ratepayers• Reliability of power• Utilities (e.g., stranded generation assets)
Modified Sources

► Trigger: Physical change that results in an increase in t

maximum potential hourly emission rate

► Potential regulatory approaches

► Boilers/IGCC units

• EGU case‐specific numerical standard• National standard

► Combustion turbines

• Numerical standard

► EPA doesn’t project any modified EGUs

► Historically, few EGUs have notified EPA that they have 

increase in the hourly rate for pollutants most often res

increase in the ability to combust fuel

► Increases in a pollutant that are a result of the installat

pollution control technology are not considered NSPS m

(pollution control project exemption)
Reconstructed Sources

► Trigger: Fixed capital cost of the new components for 

project must exceed 50 percent of the fixed capital cowould be required to construct a comparable new fac

► Potential regulatory approaches

► Boilers/IGCC units

• Efficiency standard based on combustion technology• Considering separate standards based on EGU size

► Combustion turbines

• Numerical standard

► EPA doesn’t project any reconstructed EGUs

► Aware of one EGU that has triggered reconstruction an

result of an industrial accident (Hawthorn Power Plant 

City, MO)
Existing Sources

► Emission guidelines will set state‐specific goals► Goals will likely be rate‐based

► States would be able to convert to mass‐based goals► Would provide flexibility and accommodate existing sta

based programs

► Goals would not include an assumption of CCS

► State plans including CCS would get credit for it

► Setting goals – Potential design approaches

► Source‐based approach

• Emission reduction measures that could be taken directl

plants

► System‐based approach

• Broader portfolio of measures including those taken bey

plants but still reduce emissions at power plants
Existing Sources (cont.)

► Setting goals – Potential options to reduce emissions

► Supply‐side options

• Actions at power plants that reduce/avoid CO2 emissions

– Heat rate improvements/energy efficiency at the EGU

– Fuel switching to a lower‐emitting fuel or co‐firing with a 

fuel

– Re‐dispatch of EGUs based on CO2 emission rate

– Renewable energy portfolio requirements

► Demand‐side options

• Actions at locations where electricity is used, as well as t

and distributed, that lower electricity demand

– End‐use energy efficiency requirements and programs

– Demand‐side management programs
Existing Sources (cont.)

► Approach for state plans ‐‐ considerations

► Timing of submittals► Use of existing state and multi‐state programs► Use of regional plans/partnerships

► Timing of reductions ‐‐ considerations

► States are at different stages in improving CO2 emission► Time needed to attain emission reductions varies based 

emission reduction measure used

► Time needed for legislative approval if required
Questions?

► Project/Program lead: Bob Wayland

• (919)541‐1045

• wayland.robertj@epa.gov

► Technical leads: Christian Fellner

• (919)541‐4003

• fellner.christian@epa.gov

Nick Hutson

• (919)541‐2968• hutson.nick@epa.gov

► Federalism Contact: Andrew Hanson

• (202)564‐3664

• hanson.andrew@epa.gov
Appendix

A
State & Local Governments Potentially S

to Regulation

OWNERSHIP TYPE – MUNICIPAL tings Utilities (NE)

Alabama Municipal Electric Authority Chanute Municipal Electric Utility Floydada TX (City of)Alexandria LA (City of) Chaska Public Utilities Freeport Inc (Village oAlgona Municipal Utilities Chillicothe Municipal Utilities Fremont Department oAlta IA (City of) Clarksdale Water & Light Department Gainesville Regional UAmerican Municipal Power Inc. Coffeyville Municipal Light & Power Garland Power & LighAmes Municipal Electric System Colorado Springs Utilities Geneseo Municipal UtAnaheim CA (City of) Colton Electric Utility Department Gillette WY (City of)Atlantic Municipal Utilities Columbia Water & Light Glendale Water & PowAustin Energy Connecticut Municipal Electric Energy Coop Graettinger Municipal Austin Utilities Conway Corp Grand Haven Light & PAzusa CA (City of) Coon Rapids IA (City of) Grand Island Utilities

Bancroft Municipal Utilities CPS Energy Great Falls MT (City oBanning Electric Division Dalton GA (City of) Greenville Electric UtilBraintree Electric Light Department Delaware Municipal Electric Corp Hamilton Department 

Brownfield Municipal Power & Light Detroit Public Lighting Harlan Municipal UtilitBrownsville Public Utility Board Dover DE (City of) Hastings Utilities (NE)Bryan Texas Utilities Eldridge IA (City of) Henderson Municipal Burbank Water & Power Farmington NM (City of) Higginsville Municipal Cedar Falls Utilities Fayetteville Public Works Commission Hingham Municipal LigCerritos (City of) Florida Municipal Power Agency Holland Board of Publ
State & Local Governments Potentially S

to Regulation (cont.)

OWNERSHIP TYPE – MUNICIPAL tings Utilities (NE)

Holyoke Gas & Electric Department Laurens IA (City of) North Attleborough EleHudson Light & Power Department Lincoln Electric System North Carolina Eastern Hutchinson Utilities Commission Littleton MA (Town of) Northern Municipal PoIllinois Municipal Electric Agency Los Alamos County Omaha Public Power Imperial Irrigation District Los Angeles Department of Water & Power Orlando Utilities CommIndependence MO (City of) Lubbock Power & Light Department Orrville OH (City of)Independence Power & Light Lyndonville Electric Department Osceola AR (City of)Indiana Municipal Power Agency Manitowoc Public Utilities Owensboro Municipal Intermountain Power Agency Marquette Board of Light & Power Pasadena Water & PoJamestown Board of Public Utilities Marshfield Electric & Water Department Peabody Municipal LigJEA Massachusetts Bay Transmission Authority Ponca City OK (City oJonesboro Water & Light McPherson Board of Public Utilities Provo City Corp

Kansas City Board of Public Utilities Michigan South Central Power Agency Redding Electric UtilityKeys Energy Services Milford Municipal Utilities Reedy Creek ImproveKissimmee Utility Authority Montezuma Municipal Utilities Richmond Power & LigLafayette Utilities System Morgan City LA (City of) Riverside Public UtilitieLake Worth Utilities Municipal Electric Authority of Georgia Rochester DepartmenLakeland Department of Electric Water Utilities Muscatine Power & Water Roseville ElectricLamar Utilities Board Nebraska City Utilities Sacramento Power AuLansing Board of Water & Light New Hampton Municipal Light Plant Santa Clara CA (City o
State & Local Governments Potentially S

to Regulation (cont.)

OWNERSHIP TYPE – MUNICIPAL

Santee Cooper West Bend IA (City of)Sikeston Utilities West Memphis Utility DepartmentSouth Eastern Electric Development Corp. Winfield KS (City of)Spencer Municipal Utilities WPPI EnergySpringfield MO (City of) Wyoming Municipal Power AgencySpringfield Water, Light & Power DepartmentSt George Department of Water & PowerSumner Municipal Light PlantTallahassee FL (City of)Taunton Municipal Lighting PlantTerrebonne Parish ConsolidatedTexas Municipal Power AgencyTipton IA (City of)Tulia TX (City of)Turlock Irrigation DistrictUtah Municipal Power AgencyVero Beach Municipal UtilitiesVineland NJ (City of)Waverly Light & PowerWebster City IA (City of)
State & Local Governments Potentially S

to Regulation (cont.)

OWNERSHIP TYPE – STAT

California Department of Water ResourcesGrand River Dam AuthorityLower Colorado River AuthorityMichigan Public Power AgencyMissouri Joint Municipal Electric Utility CommNew York Power AuthorityNorthern California Power AgencyOklahoma Municipal Power Authority

OWNERSHIP TYPE – SUBDIVISION

Arkansas River Power Authority

Calhoun Port AuthorityConnecticut Resource Recovery AuthorityHeartland Consumers Power DistrictKansas Power PoolKentucky Municipal Power AgencyKings River Conservation DistrictLafayette Public Power AuthorityLouisiana Energy & Power AuthorityMassachusetts Municipal Wholesale Electric Co.Missouri River Energy ServicesModesto Irrigation DistrictMunicipal Energy Agency of NebraskaNebraska Public Power DistrictNorthern Illinois Municipal Power AgencyPlatte River Power AuthorityPUD No 1 of Clark CountySacramento Municipal Utility DistrictSalt River ProjectSouthern Nevada Water AuthorityUtah Associated Municipal Power SystemWestern Minnesota Municipal Power Agency