August 24, 2011 MEMORANDUM From: William H. Maxwell EPA/SPPD/ESG (D243-01) To: Docket Number EPA-HQ-OAR-2009-0234 Subject: Meeting with PJM Attendees: Sam Napolitano, EPA/OAR/OAP/CAMD Jeb Stenhouse, EPA/OAR/OAP/CAMD Misha Adamantiades, EPA/OAR/OAP/CAMD Robert J. Wayland, EPA/OAR/OAQPS/SPPD Bill Maxwell, EPA/OAR/OAQPS/SPPD Craig Glazera, PJM Gary helm PJM Paul Setkiewicz, PJM Jennifer Tribulski, PJM Discussion: A general discussion of the comments submitted by PJM on the proposed Mercury and Air Toxics Standards was heldalong with the attached.,Ð



### EPA's 

## Briefing

## to EPA 

## Staff: PJM 

### Comments 0n 

### Hazardous Ai 

### r Pollutants (NESHAP) Rule
August24,2011

PJN4(ì20i 1Overview of Comments 

## o PJM's Comments: Explain PJM's reliability role and provide overview of reliability concepts Focus 

### on Proposed Rule'sfindings relating 

### to impact 

### on reliability Propose a "safetyvalve" for compliance timeframe o Two-year notification to allow time for analysisPlanning for Reliability of System 

## o PJM responsible 

### for reliability of the 

### transmission grid 

### serving 13 

### states and the 

### District 

### of Columbia. 

### Transmission planning is key

### to ensuring short

### and long-term reliability of 

### transmission system 

### in response 

### to generation retirements. 

## o PJM 

### stakeholders reviewing changes to 

### planning process. One key driver is 

### "al risk" generationPJM Proposal Overview 

### EPA Proposed Rule: Comply in 3years; possible 1year extension 

### PJM 

### proposed extension of compliance 

### timeframe where: Advance notice 

### of retirement Unit is a "Reliability Critical Unit" Lead time needed 

### for reinforcements 

## o Broad 

### support among 

### affected RTOs

PJM(Ò2011PJM Proposal: Advance Notice



### Key 

### to getting extension is 

### advance notice of 

### retirement 2 years priorto compliance deadline Reliability analysis to determine need for reinforcements Ensures generators do nottake advantage of extension at

### the last minutePJM Proposal: Reliability Critical Unit 

## "Reliab¡lity Critical Units" are

### those generating units

### whose retirement/deactivation 

### would result in

### violations of 

### applicable reliability 

### criteria unless appropr¡ate 

### transmission 

### or resource 

### reinforcements are forthcoming. 

## o Unit-specific determination 

## o Analysis conducted upon unit 

### retirement providing 

### notice ofPJM Proposal: Reinforcements 

### Necessary 

### transmission reinforcements an

### dlor replacement resources could to 

### take more than 3

### years 

### to be in service Benning & Buzzard 

### (-5 yrs) Eddystone & Cromby 

### (- 3yrs) 

### TrAIL Line 

### (- 5yrs) Susquehanna-Roseland (-G yrs)

www.plm com PJMO201 1PJM Proposal Targeted 

## o Extension only on 

### case-by-case basis 

## o Safe harbor

# - extensions beyond 1

### year 

### established under pro 

### forma Consent DecreeObservations About F¡ndings inthe Proposed Rule 

### EPA's 

### findings in its Notice 

### of Proposed Rulemaking: focus 

### on resource adequacy acknowledged no analysis of local reliability impacts understate 

### the level of expected generation retirements (just 

### over 1,000 MW in PJM)

PJMO201 1Empirical Evidence: What is Happening? 

## o Public 

## announcements 7,000 MW 

## o 201 411

### 5 

### capacity (RPM) 

### auction results 

### approximately 7,000 MW less 

### capacity 

### than prior 

### year

www,plm comCoal-Fired Generation: Smaller, Older Units Challenged



### Over 40 Years 

### Old, Under 

### 400 MW 

### Capacity Total 

### No 

### SO, Control 

### No Baghouse No 

### SO, Control 

### & No Baghouse 

### No SCR 

### No 

### SO, Control 

### & No SCR 

### 22,907 17,397 

### 20,104 16,775 18,762 14,541,Ð Coal-Fired Generation At Risk MW of lnstalled Capacity with Revenue Requirements vs. Net CONE in

PJMwith a 20 Year Recovery of Retrofit Costs

€ õ (J (u = €

= 0 E 60,000.00

40,oo0.o0

30.000.00 RTO LDA Ner CONE lrC,Spt = s¡ZO.A+/N'tW-day MAAC frrer COhrE (rcAp) = 5226.?9iuW-day

10,oo0.00

10,000.00

NF O 5-1 ll Nêì ':ô\F rì- 1 q Nnt al-f Ntr > 1-5 N¿.Ì CONF r 20 Yr Hich Gas 59,28C'.10 2,817.10 809_00 É45.û0
ss 2O Yr All G¡s Oi-1O 51,260.1 0 7,952,0O 3,442.04 897.10 x 20 Yr Loln¡ G.r ¡8.6¿5 _10 13,855.O0 6,3DD.OO 4,75r.L3

PJlv1o201 1Observations


## o Resource 

### adequacy not 

### a near-term concern. 

## o System security

# - especially local reliability

# - more likely

### to be impacted.

PJMO201 1Key Takeaways



### ln

### face of

### this uncertainty, need narrowly tailored 

### flexibility to allow more 

### time 

### to comply when needed. 

## o PJM's proposal does

### just that: Advance notice Reliability Critical Unit Reinforcements

PJMO201 1