Rulemaking for Greenhouse GasEmissionsfrom Electric Utility Generating UnitsUpdate Briefing, February 26, 2014Agenda►President’sClimateActionPlan►AffectedSources►Section111(b)and(d)Overview►StakeholderOutreach►ModifiedSources►ReconstructedSources►ExistingSources►Questions/Comments►AppendixA– State&LocalGovernmentsPotentiallySubjecttoRegulation2ReducingCarbonPollutionfromPowerPlantsThePresident’sDirectivetoEPA:►Setflexiblecarbonpollutionstandards,regulationsorguidelines,asappropriate,forpowerplantsundersection111oftheCleanAirAct►Focusonthefollowingelementswhendevelopingthestandardsandguidelines►Stakeholderengagementonprogramdesign►Flexibilitiesintheprogramdesign►Costs►Continuedimportanceofrelyingonarangeofenergysources►Otherregulationsthataffectthepowersector3EPA’sTask:UsingtheCleanAirActAuthority1.Issuecarbonpollutionstandardsfornewpowerplants►Proposal published in the Federal Register on January 8,2014•Informed by the more than 2.5 million comments receivedon the April 2012 proposal•Reflects recent developments and trends in the powersector•Public hearing held in Washington, DC on February 6, 2014–Over150peopletestifiedin2concurrentsessions–representingindustry,environmentalgroups,faithgroupsandthegeneralpublic•Comments may be submitted through March 10, 20142.Issuecarbonpollutionstandardsformodifiedandreconstructedpowerplants►Proposal:June2014►Final:June201543.Issuecarbonpollutionguidelinesforexistingpowerplants►Issuefederalguidelinesforstates•Workinpartnershipwithstates•Stateswilldevelopplansthatsetstandardsforexistingsources•StatesuseEPAguidelinesasareference►Federalguidelinesshouldbuildonstates’leadershipandexperiencewithprogramsthatreduceGHGs►Proposal:June2014►Final:June2015►StatessubmitimplementationplanstoEPA:June 2016EPA’sTaskUsingtheCleanAirActAuthority(cont.)5AffectedSources►Fossilfuel‐firedsteamgeneratingunitsandintegratedgasificationcombinedcycle(IGCC)unitsthat:►Haveadesignheatinputgreaterthan73MW(250MMBtu/h)heatinputoffossilfuel(eitheraloneorincombinationwithanyotherfuel);►Combustfossilfuelformorethan10%percentoftheaverageannualheatinputduringa3‐yearrollingaveragebasis;and►Wereconstructedforthepurposeofsupplying,andsupply,one‐thirdormoreofitspotentialelectricoutputandmorethan219,000MWhnet‐electricoutputtoautilitydistributionsystemonanannualbasis►Fossilfuelmeansnaturalgas,petroleum,coal,andanyformofsolid,liquidorgaseousfuelderivedfromsuchmaterialforthepurposeofcreatingusefulheat6AffectedSources (cont.)►Naturalgas‐firedstationarycombustionturbinesthat:►Haveadesignheatinputtotheturbineenginegreaterthan73MW(250MMBtu/h);►Combustover90%naturalgasonaheatinputbasisona3‐yearrollingaveragebasis;and►Wereconstructedforthepurposeofsupplying,andsupply,one‐thirdormoreofitspotentialelectricoutputandmorethan219,000MWhnet‐electricaloutputtoautilitydistributionsystemona3‐yearrollingaveragebasis7AffectedSources(cont.)►≈1,212utilityboilersat536facilities►≈827coal‐firedboilersat373facilities►≈33oil‐firedboilersat17facilities►≈352gas‐firedboilersat172facilities►4IGCCplantscurrentlyoperatingintheU.S.►≈1,516 stationarycombustionturbinesat526facilities►Includesinvestor‐owned,publicly‐ownedandruralcooperativeEGUs►175state/localjurisdictionsareestimatedtoownEGUsthatmaybeaffectedbythisaction►SeeAppendixAforlistofpotentiallyimpactedstate/localjurisdictions8PowerPlantsCoveredbytheEGUGHGRule9Source: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-firedsteam generating unit, or combustion turbine that generates more than25 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 reflectsavailable 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 the map mayoverlap and some may be impossible to see.CleanAirActSection111►Authorizedin1970►Establishesamechanismforcontrollingairpollutionfromstationarysources►AppliestosourcesforwhichtheAdministrator,inherjudgment,finds“causes,orcontributessignificantlyto,airpollutionwhichmayreasonablybeanticipatedtoendangerpublichealthorwelfare”►Canapplytonew,existing,modifiedandreconstructedsources►Morethan70stationarysourcecategoriesandsubcategoriesarecurrentlyregulatedundersection111►Afulllistofsourcesregulatedundersection111canbefoundin40CFRPart6010CAASection111(b)forModified&ReconstructedSources►Federalstandardsforreconstructedandmodifiedsourcesaresetfollowingthesameprocessusedtosetstandardsfornewsources►Standardsreflectthedegreeofemissionlimitationachievablethroughtheapplicationofthebestsystemofemissionreduction(BSER)thattheAdministratordetermineshasbeenadequatelydemonstrated►EPAmaydistinguishamongclasses,typesandsizesofsources►IndeterminingBSER,EPAmaytakeintoaccount:•Technicalfeasibilityofthesystem•Implementationcosts•Amountofemissionreductions•Promotionofadvancedtechnology►Modification– aphysicalchangethatincreasesthesource’smaximumachievablehourly rateofemissions►Reconstruction– whenasingleprojectreplacescomponentsandexceeds50percentofthefixedcapitalcostthatwouldberequiredtoconstructacomparableentirelynewfacility,anditistechnologicallyandeconomicallyfeasibletomeettheapplicablestandards11CAASection111(d)forExistingSources►EmissionguidelinesforexistingsourcesaresetbyEPA►Differentapproachforachievingemissionreductionsthantheapproachusedfornew,reconstructedandmodifiedsources►EPAestablishes(1)aprocedureforstatestoissueperformancestandardsforexistingsourcesand(2)guidanceabouttheappropriatelevelofthestandard►EPAhasestablishedsection111(d)regulationsfor5sourcecategories•Sulfuricacidplants(acidmist)•Phosphatefertilizerplants(fluorides)•Primaryaluminumplants(fluorides)•Kraftpulpplants(totalreducedsulfur)•Municipalsolidwastelandfills(landfillgases)12CAASection111(d)forExistingSources(cont.)►Emissionguidelines(cont.)►Commonelementsofpastguidelines•DescriptionofBestSystemofEmissionReduction(BSER)thathasbeenadequatelydemonstrated•Degreeofemissionlimitationachievable,costsandenvironmentalimpactsofapplication•Timerequiredtoimplement•Otherinformationtofacilitatedevelopmentofstateplans•Agoalforreductions– or“standardofperformance”– basedonaBSERanalysis►Section111(d)isbroadbydesign►Recognitionthatexistingsourcesdonothaveasmuchflexibilityasnewonestobuildemissioncontrolsintotheirdesign►ProvidesgreaterflexibilitytoEPAandstatestodesignaprograminconsultationwithadiverserangeofstakeholders13CAASection111(d)forExistingSources(cont.)►Howsection111(d)hasworked:►Previouslyestablishedguidelineshavenotprescribedtechnologythatmustbeusedtocomply►OnceEPAsettheguidelines,statesdevelopedsection111(d)plansestablishingstandardsofperformanceforthecoveredsourcesintheirstate►Statessubmittedsection111(d)planstoEPAforreviewandapproval►Afterevaluatingtheplans,EPAtookactionthroughnoticeandcommentrulemaking►EPAhasauthoritytoprescribeaplanforastateincaseswherethestatefailstosubmitasatisfactoryplanandtoenforcetheprovisionsofaplanincaseswherethestatefailstoenforcethem14CAASection111(d)forExistingSources(cont.)►Howstateplanshaveworked:►Statesdeterminethecombinationofmeasuresthatwillmeettheguidelines►Stateplanssetstandardsofperformance•CanbeidenticaltoEPA’sguidelines•Candifferfrom,butbeequivalentto,EPA’sguidelines►Stateplansprovideforimplementationandenforcement•Stateshavehadflexibilitywhenapplyingthestandardofperformanceintheirplanstotakeintoconsideration,amongotherfactors,theremainingusefullifeofthesource►TimeframetosubmitstateplanshasbeensetbyEPAintheguidelines15StakeholderOutreach►EPAhasengagedinextensivestakeholderoutreach►Willinformtheemissionguidelinesandstandardsdevelopment►EPAheld11publiclisteningsessionsinOctober&November2013•Morethan1,600peoplespoke►EPAprovidedmultipleopportunitiestoengagewitheachstate•EPAofficialsmetwithstateleaders,includinggovernors,environmentalcommissioners,energyofficers,publicutilitycommissionersandairdirectors►OtherstakeholdersEPAofficialshavemetwithinclude:•Electricutilityassociations•Electricgridoperators•Laborunions16StakeholderOutreach(cont.)►Otherstakeholders(cont.):•Leadersrepresentinglargeandsmallindustries–Utilitiesandutilityindustryrepresentatives–Energyindustryrepresentatives(e.g.,coalandnaturalgasinterests)–Companiesofferingtechnologiestoreduce/preventcarbonpollution(e.g.,renewableenergyandenergyefficiencyinterests)–Representativesofenergyintensiveindustries(e.g.,ironandsteel,andaluminum)•Environmentaljusticeorganizations•Environmentalgroups•Religiousorganizations►EPAestablishedanewemailaccountcalled“CarbonPollutionInput”towhichover2,000emailsprovidingstakeholderinputhavebeensubmitted17StakeholderOutreach(cont.)►Keymessagesfromstakeholders►Broadagreementthatopportunitiesexisttolowerthecarbonemissionsofpowergenerationthroughawiderangeofmeasures•Measuresimplementableatthesource•Measuresimplementableacrossthebroaderpowergenerationsystem►Multipleopinionsabouthowbroadersystemmeasurescouldfactorintoprograms•System‐widemeasuresfactoredintothegoalsEPAestablishes•System‐widemeasuresallowedforcompliance,butnotfactoredintogoals►Variedviewsregardingformandstringencyofstandards•Rate‐basedversusmass‐based•Providestatesflexibilitytochooseamongmultipleformsofthegoalsortosettheirowngoals•Goalstringencyshouldvarybystatetoaccountfordifferentcircumstances18StakeholderOutreach(cont.)►Keymessages(cont.)►Generalsupportforgivingstatesflexibility•RecognizeexistingprogramsandachievementsinreducingCO2emissions–Allowstateplanstotakeintoaccountthereductionsalreadyachieved•Allowcomplianceoptionsthatpermittheuseofapproachesthatareoutsidethefacilityfenceline(e.g.,demand‐sidemanagement)►Broadagreementthatstatesneedmoretimetodevelopandsubmitplans•Necessaryduetolegislative/regulatoryscheduleinmanystates•Wouldallowandpromotemulti‐stateandregionalprogramsandcooperation►Supportforflexibilityinthetimingofstateplanimplementationandcompliancewithgoals•AccommodatesdiverseCO2reductionpotential•Supportsapproachesthataremorecost‐effective►Generalconcernthatrulemakingcouldhavenegativeimpactson:•Jobsandratepayers•Reliabilityofpower•Utilities(e.g.,strandedgenerationassets)19ModifiedSources►Trigger:Physicalchangethatresultsinanincreaseinthemaximumpotentialhourlyemissionrate►Potentialregulatoryapproaches►Boilers/IGCCunits•EGUcase‐specificnumericalstandard•Nationalstandard►Combustionturbines•Numericalstandard►EPAdoesn’tprojectanymodifiedEGUs►Historically,fewEGUshavenotifiedEPAthattheyhavemodified‐anincreaseinthehourlyrateforpollutantsmostoftenresultsfromanincreaseintheabilitytocombustfuel►IncreasesinapollutantthatarearesultoftheinstallationofapollutioncontroltechnologyarenotconsideredNSPSmodifications(pollutioncontrolprojectexemption)20ReconstructedSources►Trigger:Fixedcapitalcostofthenewcomponentsforasingleprojectmustexceed50percentofthefixedcapitalcostthatwouldberequiredtoconstructacomparablenewfacility►Potentialregulatoryapproaches►Boilers/IGCCunits•Efficiencystandardbasedoncombustiontechnology•ConsideringseparatestandardsbasedonEGUsize►Combustionturbines•Numericalstandard►EPAdoesn’tprojectanyreconstructedEGUs►AwareofoneEGUthathastriggeredreconstructionanditwastheresultofanindustrialaccident(HawthornPowerPlantinKansasCity,MO)21ExistingSources►Emissionguidelineswillsetstate‐specificgoals►Goalswilllikelyberate‐based►Stateswouldbeabletoconverttomass‐basedgoals►Wouldprovideflexibilityandaccommodateexistingstatemass‐basedprograms►GoalswouldnotincludeanassumptionofCCS►StateplansincludingCCSwouldgetcreditforit►Settinggoals– Potentialdesignapproaches►Source‐basedapproach•Emissionreductionmeasuresthatcouldbetakendirectlybypowerplants►System‐basedapproach•Broaderportfolioofmeasuresincludingthosetakenbeyondpowerplantsbutstillreduceemissionsatpowerplants22ExistingSources(cont.)►Settinggoals– Potentialoptionstoreduceemissions►Supply‐sideoptions•Actionsatpowerplantsthatreduce/avoidCO2emissions–Heatrateimprovements/energyefficiencyattheEGU–Fuelswitchingtoalower‐emittingfuelorco‐firingwithalower‐emittingfuel–Re‐dispatchofEGUsbasedonCO2emissionrate–Renewableenergyportfoliorequirements►Demand‐sideoptions•Actionsatlocationswhereelectricityisused,aswellastransmittedanddistributed,thatlowerelectricitydemand–End‐useenergyefficiencyrequirementsandprograms–Demand‐sidemanagementprograms23ExistingSources(cont.)►Approachforstateplans‐‐considerations►Timingofsubmittals►Useofexistingstateandmulti‐stateprograms►Useofregionalplans/partnerships►Timingofreductions‐‐considerations►StatesareatdifferentstagesinimprovingCO2emissions►Timeneededtoattainemissionreductionsvariesbasedontypeofemissionreductionmeasureused►Timeneededforlegislativeapprovalifrequired24Questions?►Project/Programlead: BobWayland•(919)541‐1045•wayland.robertj@epa.gov►Technicalleads: ChristianFellner•(919)541‐4003•fellner.christian@epa.govNickHutson•(919)541‐2968•hutson.nick@epa.gov►FederalismContact: AndrewHanson•(202)564‐3664•hanson.andrew@epa.gov25AppendixA26State&LocalGovernmentsPotentiallySubjecttoRegulationOWNERSHIP TYPE – MUNICIPALtings Utilities (NE)Alabama Municipal Electric Authority Chanute Municipal ElectricUtility Floydada TX (City of)Alexandria LA (City of) Chaska Public Utilities Freeport Inc (Village of)Algona Municipal Utilities Chillicothe Municipal Utilities Fremont Departmentof Public UtilitiesAlta IA (City of) Clarksdale Water & LightDepartment Gainesville Regional UtilitiesAmerican Municipal Power Inc. Coffeyville Municipal Light & PowerGarland Power & LightAmes Municipal Electric System ColoradoSprings Utilities Geneseo Municipal UtilitiesAnaheim CA (City of) ColtonElectric Utility Department Gillette WY (City of)Atlantic Municipal Utilities ColumbiaWater & Light Glendale Water & PowerAustin Energy Connecticut Municipal ElectricEnergy Coop Graettinger Municipal Light PlantAustin Utilities Conway Corp Grand Haven Light & PowerAzusa CA (City of) Coon Rapids IA(City of) Grand Island UtilitiesBancroft Municipal Utilities CPS Energy Great Falls MT (City of)Banning Electric Division Dalton GA (City of) Greenville Electric Utility SystemBraintree Electric Light Department Delaware Municipal Electric Corp Hamilton Department of Public UtilitiesBrownfield Municipal Power & Light DetroitPublic Lighting Harlan Municipal UtilitiesBrownsville Public Utility Board DoverDE (City of) Hastings Utilities (NE)Bryan Texas Utilities Eldridge IA (City of) Henderson Municipal Power & LightBurbank Water & Power Farmington NM (City of) Higginsville Municipal UtilitiesCedar Falls Utilities Fayetteville PublicWorks Commission Hingham Municipal Light PlantCerritos (City of) Florida Municipal PowerAgency Holland Board of Public Works27State&LocalGovernmentsPotentiallySubjecttoRegulation(cont.)OWNERSHIP TYPE – MUNICIPALtings Utilities (NE)Holyoke Gas & Electric Department Laurens IA(City of) North Attleborough Electric DepartmentHudson Light & Power Department Lincoln Electric System North Carolina Eastern Municipal Power AgencyHutchinson Utilities Commission Littleton MA (Town of) Northern Municipal Power AgencyIllinois Municipal Electric Agency Los Alamos County Omaha Public Power DistrictImperial Irrigation District Los Angeles Department of Water & Power Orlando Utilities CommissionIndependence 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 UtilitiesIntermountain Power Agency Marquette Board ofLight & Power Pasadena Water & Power DepartmentJamestown Board of Public Utilities Marshfield Electric & Water Department Peabody Municipal Light PlantJEA Massachusetts Bay Transmission Authority Ponca City OK (City of)Jonesboro Water & Light McPherson Board of PublicUtilities Provo City CorpKansas City Board of PublicUtilities Michigan South Central Power Agency Redding Electric UtilityKeys Energy Services Milford MunicipalUtilities Reedy Creek Improvement DistrictKissimmee Utility Authority Montezuma Municipal Utilities Richmond Power & LightLafayette Utilities System Morgan City LA(City of) Riverside Public UtilitiesLake Worth Utilities Municipal Electric Authority of Georgia Rochester Department of Public UtilitiesLakeland Department of Electric Water Utilities Muscatine Power & Water Roseville ElectricLamar Utilities Board Nebraska CityUtilities Sacramento Power AuthorityLansing Board of Water & Light New Hampton Municipal Light Plant SantaClara CA (City of)28State&LocalGovernmentsPotentiallySubjecttoRegulation(cont.)OWNERSHIP TYPE – MUNICIPALSantee 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)29State&LocalGovernmentsPotentiallySubjecttoRegulation(cont.)OWNERSHIP TYPE – STATECalifornia Department of Water ResourcesGrand River Dam AuthorityLower Colorado River AuthorityMichigan Public Power AgencyMissouri Joint Municipal Electric Utility CommissionNew York Power AuthorityNorthern California Power AgencyOklahoma Municipal Power AuthorityOWNERSHIP TYPE – SUBDIVISIONArkansas River Power AuthorityCalhoun Port AuthorityConnecticut Resource Recovery AuthorityHeartland Consumers Power DistrictKansas Power PoolKentucky Municipal Power AgencyKings River Conservation DistrictLafayette Public Power AuthorityLouisiana Energy & Power AuthorityMassachusetts MunicipalWholesale 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 Agency30