NOTE

DATE: March 5, 2012

TO: Docket EPA-HQ-OAR-2011-0660

FROM: Mary Johnson

SUBJECT: Summary of June 17, 2011 Meeting with Small Entities

Standards of Performance for GHG Emissions for New Stationary Sources: EGUs: Proposed Rule

The EPA’s outreach to small entities regarded planned actions for new and existing sources, but only 

new sources would be affected by the currently proposed action. At that time, the EPA believed it likely

that proposed regulations for greenhouse gas (GHG) emissions from electric utility generating units

(EGUs) (new sources as well as existing sources) would not result in a significant economic impact on a 

substantial number of small entities (SISNOSE). However, because the EPA believes that outreach to 

small entities is an important element in the development of these regulations, the EPA requested that a 

Small Business Advocacy Review (SBAR) Panel be convened to allow that outreach to occur.

It has since been determined that new source performance standards (NSPS) for emissions of carbon 

dioxide (CO2) for new affected fossil-fuel-fired EGUs will be proposed at this time. At a future date, the 

EPA intends to promulgate emission guidelines for states to develop plans reducing CO2 emissions from 

existing fossil-fuel-fired EGUs.

Summary of June 17, 2011 Meeting with Small Entities

The EPA conducted outreach with representatives from 20 various small entities that potentially would 

be affected by GHG regulations rule. The representatives included small entity municipalities, 

cooperatives, and private investors. The EPA distributed outreach materials to the small entity

representatives; these materials included background, an overview of affected sources and GHG 

emissions from the power sector, an overview of CAA section 111, an assessment of CO2 emissions 

control technologies, potential impacts on small entities, a summary of the listening sessions held with 

various stakeholders, applicable small entity definitions, and small entities potentially subject to 

regulation.

The SBAR Panel (EPA, OMB, SBA) met with eight of the small entity representatives, as well as three 

participants from organizations representing power producers (participating as viewers/technical 

backup), on June 17, 2011. The goal of the meeting was to familiarize the small entity representatives

with the background on the rulemaking itself, as well as the Panel process, and their role as a small 

entity representative (SER) in the Panel process. When conducted, this meeting with small entity

representatives was referred to as the first SBAR Panel Outreach Meeting. A list of meeting participants 

is attached to this note. Copies of four documents used during the meeting are included as attachments 

to the docket entry Agenda and Materials for first Outreach Meeting_06-17-2011_email and include:

1. Agenda for the 6-17-11 Meeting) 

2. Presentation by the Small Business Advocacy Chair

3. Presentation on the Rulemaking

4. Document outlining the regulatory options that EPA heard at the GHG NSPS listening sessions
The meeting began with the EPA’s Small Business Advocacy Review Chair presenting an overview of 

the SBAR Panel process; this included a presentation that explained what a SBAR Panel is, how the 

Panel fits into the rulemaking process, how SERs participate in the Panel process, and what the Panel 

does with SER recommendations. The EPA’s Office of Air Quality Planning and Standards (OAQPS) 

went through its presentation on the rulemaking and then directed the SERs’ focus to the list of 

questions the EPA prepared for SERs (actual questions shown below). The purpose of these questions 

was for the EPA to collect the SERs’ advice and recommendations regarding the rulemaking to be 

proposed and its potential impact on small entities. Main topics for which the EPA solicited input

included appropriate CO2 control levels, mechanisms for achieving CO2 emissions reductions, and State 

equivalency with the emission guidelines. The SERs were encouraged to provide comment on the 

specific questions as well as on regulatory alternatives that could minimize the impact on small entities 

while still meeting the statutory objectives of the CAA.

In addition, OMB and SBA solicited the SERs’ views on the use of alternative applicability thresholds, 

alternative ways to address modified sources, how the EPA should choose between the various 

regulatory alternatives, whether the EPA should establish a cost-effectiveness benchmark for energy

efficiency or other technological improvements at each unit, whether the EPA should establish a system 

of CO2-equivalent credits and trading among EGUs or among a broader set of industries and/or sources, 

and whether the EPA should adopt BACT guidance as BDT for new and existing sources and rely on 

case-by-case evaluation of facilities for cost-effective improvements (actual questions shown below).

EPA’s questions for SERs:

► Applicability

► Is EPA’s description of applicability of these standards on slides 29-31 appropriate?

► Should applicability include stationary combustion turbines (combined cycle gas turbines 

and simple cycle gas turbines)?

► Current Practices

► Do you employ measures to ensure that your EGU operates in an energy efficient 

manner?

► What are the energy efficient measures you employ?

► Are these measures a result of regulatory requirements, initiated voluntarily, or employed 

for other reasons?

► What are the estimated emissions reductions associated with the energy efficient 

measures?

► What are the costs of implementing the energy efficient measures?

► Appropriate Control Levels for New Sources 

► Should new source standards be based on fuel and technology specific efficiency

standards based on the best performing coal units being permitted/ built (e.g., IGCC 

and/or ultra-supercritical coal)?

► Alternatively, should tighter standards that require new coal units to go beyond 

technologies such as IGCC and ultra-supercritical coal and be designed/built to perform 

at lower CO2/MWh levels be considered?

► Given the existence of generation alternatives such as natural gas combined cycle 

and renewables, tighter standards could be based on the use of technologies such 

as co-firing of lower carbon fuels, integration of renewables or the use of some 

level of CCS.

► Should new source standards include emission rate averaging?
► Should the new source standards be fuel neutral (i.e., standards would not be fuel or 

technology specific but instead would be based on use of lower GHG fuels such as 

natural gas)?

► Should EPA consider a phased approach where a fuel and technology specific standard 

based on existing technologies would apply initially and, after several years, a tighter 

standard would apply?

► Are there other options that should be considered?

► Appropriate Control Levels for Modified Sources

► Will compliance with other regulations impacting the power sector cause EGUs to 

become modified sources subject to the GHG standards?

► How should modified sources be addressed in the GHG standards?

► Should modified source standards be based on efficiency improvements?

► Alternatively, given that the modifications are likely to involve more significant changes 

to the boiler and/or turbine, is it appropriate to consider other options such as fuel 

switching or co-firing with lower carbon fuels?

► Are there other options that should be considered (e.g. different applicability thresholds)?

► Appropriate Control Levels for Existing Sources 

► Should existing source guidelines be based on efficiency improvements?

► What is an appropriate heat rate reduction to require for existing EGUs?

► Should replacement of older generation be part of the guidelines?

► Should there be a linkage between remaining useful life and tightened standards?

► Should guidelines be based on a system wide generation performance standard 

that would decrease as there was fleet turnover?

► Should EPA consider a phased approach where a fuel and technology specific efficiency

standard based on existing technologies would apply initially and, after several years, a 

tighter standard would apply?

► Should other options such as fuel switching or co-firing with lower carbon fuels be 

considered?

► Should States incorporate considerations of fleet turnover when considering potential 

GHG reductions?

► Are there other options that should be considered?

► Mechanisms to Get Emissions Reductions

► Do output based standards (e.g. lbs/MWh) make sense? ? 

► Does a net output based standard make sense for new facilities? 

► Should emission averaging be allowed?

► Traditionally new source standards have been set at the individual unit level.

► If EPA considers alternatives, should different approaches for new, modified and 

existing sources be considered?

► Should all generating sources (e.g., renewables, nuclear) be included?

► Over what universe of sources should emissions averaging be considered?

– Within a facility

– Within a State

– Within a company within a State

– Within a company across State lines

– Across state lines

► Should other alternatives be considered?
► Should EPA develop a model rule that States can follow or just develop general 

guidelines?

► How should useful thermal output from CHP be credited?

► State Equivalency With the Emission Guidelines

► Should EPA set a more prescriptive set of requirements or a more general set of 

principals?

► Are there certain types of programs that should (or should not) be allowed?

► Programs that allow crediting of reductions from, or averaging with, non-affected 

sources (e.g., generation performance standards or California’s AB-32 program)

► Programs that allow crediting of reductions from, or averaging with, sources in 

other States (e.g., the RGGI program)

► Are there other important factors for EPA to address as it sets forth criteria for 

demonstrating equivalency?

► Compliance, Monitoring, Recordkeeping & Reporting

► Should fewer requirements be placed on low mass emission units?

► If so, what should those requirements be?

► Are there compliance and monitoring alternatives that would simplify the requirements?

► Are there recordkeeping and reporting alternatives that would simplify the requirements?

► How should useful thermal output from CHP facilities be monitored?

► Issues that may Impact Control Options

► What types of subcategories based on class, type, or size do you think EPA should 

consider and why?

► What type of size cut-off, if any, do you think EPA should consider and why?

► Are there other regulatory options or small entity flexibilities that EPA should consider?

Additional topics that OMB and SBA were interested in SERs’ views on:

► The use of alternative applicability thresholds (e.g. 50 MWs instead of 25 MWs)

► Alternative ways to address modified sources

► How should EPA choose between the regulatory alternatives offered?

► What factors should EPA consider?

► What emissions benefits should be included in EPA’s consideration - just GHGs or all 

pollutants that would be reduced by either reducing fuel utilization or the 

decommissioning of facilities?

► Should EPA establish an economy-wide emissions goal, an energy-intensity goal, or a 

cost-effectiveness goal for GHG emissions reductions?

► Should EPA establish a cost-effectiveness benchmark for energy efficiency or other 

technological improvements at each unit?

► For example, if the social cost of carbon is currently approximately $20/ton 

(understanding that under current guidance this would grow over time), should EPA only

require improvements at any particular unit that cost less than $20/ton CO2 equivalent 

(CO2e)?
► Should the cost of improvements be based on case-by-case engineering evaluations or 

economy-wide projections?

► Should EPA establish a cost-effectiveness benchmark for energy efficiency or other 

technological improvements for the economy as a whole?

► If not $20/ton or the social cost of carbon, what other monetary benchmark could be 

used?

► Should EPA establish a system of CO2e credits and trading among EGUs? Among a 

broader set of industries and/or sources?

► What should credits represent - allowances or emission reductions?

► If allowances, how should the supply of allowances be set? Be allocated?

► If emissions reductions, how should EPA establish emissions benchmarks?

► Are there any reasons - legal, practical or competitive - that a trading scheme 

should be restricted?

► Should EPA adopt the Best Available Control Technology (BACT) guidance as Best 

Demonstrated Technology (BDT) for new and existing sources and rely on case-by-case 

evaluation of facilities for cost-effective improvements?

Information for the docket was provided during the meeting (4 documents) and is attached to this note. 

The information included support for SERs’ concerns that geologic sequestration is not proven and that 

there are limitations caused by other regulations (statutory issues that are non-air) and that fuel 

switching to natural gas is not available in all instances due to the inadequate infrastructure.

Attachments