### MEMORANDUM

**DATE:** 11/20/14 **FROM:** Ken Mitchell/EPA Region 4 **TO:** Clean Power Plan for Existing Power Plants; Docket Id: OAR–2013 - 0602 **SUBJECT:** Discussion of the Clean Power Plan with Kentucky Energy and Environment Cabinet
**SUMMARY :**  Region 4 provided information on the Clean Power Plan to the Kentucky Energy and Environment Cabinet on August 2 5 , 2014 . The Clea n Power Plan for Existing Power Plants was p roposed on June 2, 2014. **ATTENDEES :**  **EPA** Ken Mitchell/EPA R4 Keith Goff/EPA R4 Other EPA HQ Staff **External Stakeholders** Sean Alteri/Kentucky Energy and Environment Cabinet John Lyons/Kentucky Energy and Environment Cabinet
**ATTACHMENT Advance Questions for Discussion of the Clean Power Plan wit**  **h the**  **Kentucky Energy and Environment**

**Cabinet on 8** **/ 2**  **5 /14**  1. If a state utilizes a mass
- based approach, does that state have to convert back to the rate
based goal in 2030 to demonstrate compliance? 2. Does EPA plan to revise state
- specific goals if the court vaca tes a building block that was used to establish BSER, in light of the severability language in the proposed rule? 3. EPA has stated that new NGCC can be used as a compliance option in meeting the state
specific goal. Will a state be able to use the emissio n rate of new NGCC in meeting the state - specific goal or just the incremental reductions that go above and beyond the 111(b) standard? 4. Can retirements that occur between 2014 and 2020 be used as emission reduction credits to meet the state
- specific goal? 5. In a state without an RPS, can a state use power purchase agreements, where RECs are tied to electricity consumed, as an enforceable mechanism for imported renewables as part of the state plan? 6. After reviewing the proposal in greater detail, Kentucky is prepared to conduct a state
specific call with Region 4. Obviously, our review of the proposal is on
- going; however, one aspect that remains unresolved is the conversion from the state rate
- based CO2 emissions performance goal to a mass
- based CO2 emissio ns performance goal. EPA’s interpretation of the following proposed regulatory citation will assist Kentucky greatly in understanding our obligations under the proposal: **§ 60.5770 What is the procedure for converting my state rate -**  **based CO2 emissions performance goal to a mass**  **- based CO2 emissions performance goal?**  (d) The conversion must represent the tons of CO2 emissions that are projected to be emitted by affected EGUs, in the absence of emission standards contained in the plan, if the affected EGU s were to perform at an average lb CO2/MWh rate equal to the rate
- based goal for the state identified in Table 1 of this Subpart. The basic question is: “Will the remaining affected EGUs in 2030 be required to meet the final rate
- based goal based on the generation in 2012 or 2030?” As an example: In 2012, Kentucky’s emissions from affected EGUs is ~91 M tons of CO2, based on our emission rate of 2,166 lbs CO2/MWh. Using the same calculation and MWh generated in 2012, applying the rate of 1763 lbCO2/MW h (final goal) would result in CO2 emissions of 74 M tons from the existing fleet. Does this ~17M ton reduction constitute an equivalent mass reduction goal that must be met in 2030? Or will the affected EGUsremaining in 2030 be required “to perform at a n average lb CO2/MWh rate equal to” 1763

lbsCO2/MWh?