## Summary of Listening Session 1: Electric Power Industry R epresentatives February 4 , 2011

How to set the standard

• General Advice

o Think of the industry as an interconnected grid and not plant by plant

. o Rate

- based approach is preferred (i.e. lbs CO2 / MWh)

 A potential danger to be avoided is wealth transfer among regions

o Allow for technological and fuel flexibility

o Allow for flexibility for states when demonstrating equivalency

• New sources:

o Set a rate

- based standard by fuel type s based on the best performing existing and commercially available technologies

o Standards must differentiate between fuel and technology to avoid wholesale fuel switching

 Differentiate between peaking, baseload, combined cycle , and capacity factor

• Existing s ources:
o S ector

- wide performance standard (includes all generating units)

 prefer lbs of CO2 / MWh

 determine best practices nationwide using existing technologies and set the standard based on those technologies

 Give states flexibility in regards to meeting those standards (e.g. allow for the use of existing programs and varying technologies)

 Allow for a fleet

- wide approach to meet performance standards

• Allow for emissions averaging and the use of offsets across companies

o Efficiency

 Take into account limitati ons for existing units

• Some existing fleets may be as efficient as they can be

 Legal and regulatory pathway s must be clear

• Some efficiency opportunities on existing units have had issues with the EPA enforcement initiative over the last ten years

 Standards must differentiate between fuel types and technologies

• Differentiate between peaking, baseload, combined cycle , and capacity factor

o Give credit for retiring old dirtier sources and replacing with cleaner or renewable

sources

• Approaches to A void

o Limitation s on the technologies that can be used to comply with the standard

o Plant by plant approach to existing units

How to implement the standard

• Keep in mind GHGs are part of a suite of regulations applied to power plants Chris Frantz 3/11/2011o Utilities need to see the full timeline of implementation of all the regulations for investment planning

o Many regulations decrease plant efficiency (parasitic load) , which increases GHG emissions

o Creating reliability issues for utilities

o Modification required under a different rule may move a plant from “existing” to “modified” under the GHG rule

• Implementing on a state by state basis creates limitations because the grid and utilities span many states

• Mimic the light duty vehicle rule: began with reasonably achievable standards that beco me progressively more stringent as new technologies come on line

o Provide incentives for the different fuel sources and technologies to adjust over time

• Timeline

o Must allow for utilities to maintain reliability (slower timeline)

o Must move quickly to addres s global warming effects

How to provide states flexibility to use mechanisms they are already pursuing (e.g., cap and trade, clean coal/clean energy standards)

• S ector

- wide performance standard s that include all generating units for existing sources and allow for flexibility in demonstrating equivalency

o Allow for fleet

- wide approach to demonstrate equivalency with averaging and offsets

• Avoid a plant by plant approach for existing units
Technologies

• Carbon Capture and Storage (CCS)

o Not ready to be deployed on a commercial scale (only in demonstration phase)

o Some geographies have no available storage sites

• Integrated Combined Cycle Plants (IGCC) are being built

• In several cases utilities are butting up against transmission limit s, which restricts flexibility in meeting standards

Chris Frantz 3/11/2011