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# ^ BOBBY ,TINDAL GOVERNOR PEGGY M. HATCH
SECRETARY 

# *tate of loui!6iana DEPARTMENT OF ENVIItONMENTAI. QUALITY 

### ENVIRONMENTAL SERVICES
April 9, 2014


### Regina McCarthy Administrator U.S. Environmental Protection Agency 1200 Pennsylvania Avenue, N.W. Washington, DC 20460 

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Re: Input on Clean Air Act 111(d) emission standards

Dear Administrator McCarthy: The Louisiana Department of Environmental Quality (LDEQ) appreciates the opportunity to submit input on the upcoming Clean Air Act (CAA) 111(d) emission standards for existing fossil fuel electric generating units. We also. appreciate the telephone call hosted by EPA on November 14, 2013 where EPA expressed interest in working with the State on flexible compliance options and clarified that carbon capture and sequestration (CCS) was not contemplated in this 111(d) exercise. This was a refreshing exchange which brought optimism that Louisiana, with its diverse energy portfolio, would have a seat at the table in the upcoming ruletnaking. While LDEQ does not support the development of greenhouse gas standards for existing power plants under Section 111(d) of the Clean Air Act, if EPA does decide to move forward, we believe it is essential that the final rule provide States with implementation flexibility and that the rules are structured in a manner that ensures the reliability of the nation's electric grid. The LDEQ appreciates EPA's role is to establish guidelines and procedures for the State to submit State Implementation Plans (SIPs) containing performance standards reflecting the Best System of Emission Reduction (BSER). LDEQ urges that BSER be developed at the unit level. These initial comments also ask for guidelines that allow flexibility for States with diverse fuels and electricity demands to receive approval of their compliance options. It is important that reliable affordable energy supply remains available in Louisiana. It is not only important in the current landscape, but for the future of Louisiana to remain economically viable while achieving reductions in CO2. As you are aware, there is not an achievable "one size fits all" approach to COZ reductions and guidance from EPA shouldnot unduly limit the ability of States to come

Post Office Box 4313 . Baron Rouge, Louisiana 70821-4313 • Phone 225-219-3181 . Fax 225-219-3309 www.deq.louisiana.gov

### up with innovative compliance options. For example, these guidelines should aiso not

limit the ability of the States to take into account COz reductions already achieved in the State at existing power plants, including unit retirements. These plants have made significant investments to comply with other environmental regulations and any guidelines that do not acknowledge this would strand these investments and place more financial burdens on ratepayers. The guidance should also provide mechanisms for an adaptable remaining useful life provision. Among factors to be considered by the EPA as part of the performance standards should be unit age, operational characteristics, equipment in-place, book value, future capital requirements, resource adequacy, tax base and other local impacts. Further, it will be important to recognize that remaining useful lives will vary considerably across existing coal fired units. EPA should incorporate substantial flexibility into the compliance guidelines, allowing for implementation by energy efficiency projects, renewable energy projects, regional or state market-based approaches, as well as conventional emission reduction approaches or a combination thereof. EPA should establish a method for crediting the emission reductions associated with energy efficiency and renewable energy projects both past and future. For example, utilities which receive and manage renewable power from individual customers such as from solar systems on individual homes should be afforded a method for being credited with the associated emission reductions. Compliance timelines in upcoming guidance should not be exceptionally prescriptive. Like many States, Louisiana has a mix of electricity sources and any construction investments in these plants would need to occur with limited interruption of electricity supply. A timeline where sources are forced to make reductions simultaneously to meet a strict compliance deadline would jeopardize constant reliable electricity. The ability of the States to have flexibility in compliance timelines and in the SIP development itself is a priority LDEQ would like to see in the upcoming guidance. As mentioned above, affordable reliable electricity for the state is erucial today and in the future. There should be flexibility in the timing for submission of a compliance plan to ensure adequate consideration of alternative approaches by all parties including state environmental agencies, public service commissions, and state legislative bodies. A short timeframe to consider alternatives and to submit an implementation plan following EPA's finalization of the rule will be difficult and may produce unintended consequences. In conclusion, the upcoming guidance should be based on what is actually achievable at existing units with the option of utilizing existing fuel at these sources such that utility ratepayers are not saddled with an extraordinary economic burden and/or reliability concerns. The guidance should be clear as to how the BSER guidelines eould ultimately be translated into SIPs and elearly indicate the factors to be considered by EPA in SIP approval. EPA should also consult with the Federal Energy Regulatory

### Commission as necessary to ensure that the integrity of the grid is not compromised by

any GHG standard and to explore ways to minimize costs to the nation's consumers. Again, LDEQ appreciates the opportunity to provide these initial comments and look forward to working with you on this important rulemaking.

Sincerely,


# ^ Sam L. Phillips Assistant Secretary

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