## From: Higgins, Cortney <Cortney_Higgins@omb.eop.gov>

Sent: Wednesday, May 28, 2014 6:55:19 PM

To: Wayland, Robertj

Cc: Culligan, Kevin; Elman, Barry

Subject: RE: Biomass language in preamble and memo

A follow up explanation:

We prefer to leave open the question of whether biomass is in or not. The way it was framed

implies it is out and EPA is asking for comments on whether to let it in.

Let me know if you have additional questions; I can arrange a call tomorrow to discuss.

Regards,

Cortney

From: Higgins, Cortney <Cortney_Higgins@omb.eop.gov>

Sent: Wednesday, May 28, 2014 11:36 AM

To: 'Wayland, Robertj'

Cc: Culligan, Kevin (Culligan.Kevin@epa.gov); Elman, Barry (Elman.Barry@epa.gov)

Subject: Biomass language in preamble and memo

Hi all,

One additional comment on the biomass language in the preamble. I also received comments on

the BB1&2 memo related to biomass (also attached).

On page 483 of the RSLO version of the preamble EPA included a lot of new text on biomass. We

had a couple suggested edits:

(page 483 of RLSO) “...States may include measures in their plans beyond those that the EPA

included in its determination of the BSER. A wide range of other measures that could CO 2 

## emission reductions. These include, for example, transmission improvements, retrofitting EGUs

with partial CCS, the use of biomass-derived fuels, use of new NGCC units online, and new

hydroelectric power and increments, and they are am ong the measures that states might consider

for inclusion in their plans. The agency solicits comment on whether these measures are

appropriate to include in a state plan to achieve CO 2 

## emission reductions. We also request

comment on other measures that would be approp riate. In addition, should the EPA provide

specific guidance on these measures?

We request comment, in particular, on the use of biomass-derived fuels, in place of affected EGUs,

For example, as a measure to include in a state plan to achieve CO 2 

## emission reductions t hrough

President Obama’s Climate Action Plan, the Administration is working to identify new approaches

## to protect and restore our forests, as well as other critical landscapes including grasslands and

wetlands, in the face of a changing climate. Sustainable forestry and agriculture can improve

resiliency to climate change, be part of a national strategy to reduce dependence on fossil fuels,

and contribute to climate....”

<< Memo BB 1+2_5-21-14_v2_Comments.pdf >>

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- 1 

## MEMO : EMISSION REDUCTIONS, COSTS, BENEFITS AND ECONOMIC

IMPACTS ASSOCIATED W ITH BUILDING BLOCKS 1 AND 2

1 Introduction

This memo provides estimates of the costs, energy impacts, and the monetize d climate

benefits and air pollution health co

- benefits associated with emission reductions for two

illustrative compliance scenarios associated with building blocks 1 and 2 only. It also includes

estimates of the labor impacts on the regulated sector. The methods applied to generate these

estimates are described in detail in Chapter 3

, 4 , and 6 of the Regulatory Impact Analysis (RIA).

For brevity, this memo just reports the results of these analyses.

EPA used the Integrated Planning Model (IPM) , developed by ICF International, to

conduct this analysis. It provides forecasts of least cost capacity expansion, electricity dispatch,

and emission control strategies while meeting energy demand and environmental, transmission,

dispatch, and reliability constraints. In the IPM least

- cost capacity expansions the model was

discouraged from adopting co

- firing of biomass in the existing pul verized coal

- fired fleet

through implementation of an extremely high CO2 emission factor for biomass (195 lbs

CO2/MMBtu). Non

- fossil waste was assigned an emission factor of 0 lbs/MMBtu. EPA is

committed to conducting future IPM runs where biomass is assigned an emissions factor of 0 lbs

CO2/MMBtu, these future model runs will allow the model an additional least

- cost option of

operating a portion of the existing coal fleet with sustainable biomass co

- firing. This modeling

could dramatically affect the findings of this report including costs, energy impacts, monetized

climate benefits, and air pollution health co

- benefits

.

This analysis also evaluates the climate benefits associated with emission reductions of

CO 2 

### and the potential for air pollution h ealth co

- benefits associated with reduced emissions of

SO 2 

### , NOx , and PM 2.5 

### , which would could lead to lower ambient concentrations of PM 2.5 

### and

ozone. The existing fleet of power plants are strictly regulated for ambient air pollutants like

SO2, NOx, and PM. Co

- benefits are not the primary objective of this policy. Unlike the analysis

of health co

- benefits in Chapter 4 of the RIA, estimates of emissions reductions of directly

emitted particles available are not available for this analysis. Similar to Chapter 4 of the RIA,

unquantified co

- benefits include exposure to several HAP ( including mercury and hydrogen Formatted: Font color: Red

Formatted: Font color: Red

Formatted: Font color: Red

Formatted: Font color: Red

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3

- 2 chloride ) , carbon monoxide, SO 2 

### , and NO 2 

### , as well as ecosystem effects, and visibility

impairment. Many of these co

- benefits will likely be present in the biomass scenarios that EPA

has committed to running

.

2 State Goals for Building Blocks 1 and 2

This analysis i ncludes state

- specific rate

- based goals that reflect a two

- building block

approach. It is also based upon the same modeling framework, assumptions and calculations as

presented in the RIA. The two

- blocks incorporated in the following state goals include ef ficiency

improvements at existing coal steam electric generating units (EGUs) and use of lower emitting

power sources (increased utilization of existing NGCCs) and are identical to the proposed levels,

included for purposes of establishing state

- specific g oals, associated with Option 1 (6%

efficiency improvement and no more than 70% redisptach).

Table 1 . State

- specific Goals for Two

- Block Approach

State Interim Rate (2020

- 2029 average) Final Rate (2029 Rate)

Alabama 1,329 1,329

Alaska 1,252 1,252

Arizona 900 900

Arkansas 1,115 1,115

California 838 838

Colorado 1,521 1,521

Connecticut 809 809

Delaware 1,013 1,013

Florida 910 910

Georgia 1,296 1,296

Hawaii 1,751 1,751

Idaho 858 858

Illinois 1,865 1,865

Indiana 1,834 1,834

Iowa 1,846 1,846

Kansas 2,186 2,186

Kentucky 1,986 1,977

Louisiana 1,099 1,099

Maine 848 848

Maryland 1,868 1,868

Massachusetts 886 886

Michigan 1,511 1,511

Minnesota 1,369 1,369

Mississippi 843 843

Missouri 1,784 1,784

Montana 2,295 2,295

Nebraska 1,941 1,941

Nevada 882 882

New Hampshire 878 878

New Jersey 905 905

New Mexico 1,447 1,447 Formatted: Font color: Red

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3

- 3 New York 927 927

North Carolina 1,329 1,329

North Dakota 2,226 2,226

Ohio 1,714 1,714

Oklahoma 1,186 1,186

Oregon 852 852

Pennsylvania 1,480 1,480

Rhode Island 918 918

South Carolina 1,514 1,514

South Dakota 1,456 1,456

Tennessee 1,798 1,798

Texas 1,083 1,083

Utah 1,559 1,559

Virginia 1,135 1,135

Washington 811 811

West Virginia 1,933 1,933

Wisconsin 1,619 1,619

Wyoming 2,151 2,145



### 3 Emissions and Power Sector Impacts

Tables 2 through 16 report the emissions and power sector impacts of the two

- block approach

.

Table 2. Projected CO 2 

### Emission Impacts

CO 2 Emissions

(MM Tonnes) CO 2 Emissions

Reductions from Base

Case

(MM Tonnes) CO 2 Emissions Reductions:

Percent Change from Base

Case

2020 2025 2030 2020 2025 2030 2020 2025 2030

Base Case 2,161 2,231 2,256

Two

- Block Regional 1,930 1,973 1,997 231 258 258 11% 12% 11%

Two

- Block State 1,908 1,947 1,963 252 284 292 12% 13% 13%

Source: Integrated Planning Model run by EPA, 2014



### Table 3. Projected Non

- CO 2 

### Emissions Reductions, 2020

- 2030

Base Case Two Block Two Block

Reg ional State Regional State

2020

SO 2 (thousand tons) 1,476 1,243 1,199

- 15.7%

- 18.8%

NO X (thousand tons) 1,559 1,319 1,286

- 15.4%

- 17.5%

Hg (tons) 8.3 7.2 7.1

- 12.8%

- 13.9%

HCl (thousand tons) 8 8 8 2.9%

- 1.3%

2025

SO 2 (thousand tons) 1,515 1,228 1,171

- 19.0%

- 22.7%

NO X (thousand tons) 1,587 1,317 1,272

- 17.0%

- 19.9%

Hg (tons) 8.7 7.4 7.3

- 14.9%

- 16.2%

HCl ( thousand tons) 8 9 9 0.8% 3.0%

2030

SO 2 (thousand tons) 1,530 1,188 1,134

- 22.3%

- 25.9%

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- 4 NO X (thousand tons) 1,537 1,274 1,224

- 17.1%

- 20.4%

Hg (tons) 8.8 7.4 7.3

- 15.2%

- 16.8%

HCl ( thousand tons) 9 9 9 0.0%

- 5.1%

Source: Integrated Planning Model run by EPA, 2014



### Table 4. Annualized Compliance Costs (billions of 2011$)

2020 2025 2030

Two Block Regional 3.2 3.0 6.8

Two Block State 4.4 4.6 9.8

Source: Integrated Planning Model run by EPA, 2014

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- 5 Table 5 1 . Generation Mix (thousand GWh)

Base Case Two Block Two Block

Regional State Regional State

2020

Pulverized Coal 1,665 1,435 1,395

- 14%

- 16%

NG Combined Cycle (existing) 1,003 1,178 1,170 17% 17%

NG Combined Cycle (new) 85 153 199 81% 134%

Combustion Turbine 19 34 31 79% 63%

Oil/Gas Steam 52 25 26

- 51%

- 50%

Non

- Hydro Renewables 299 300 300 0% 0%

Hydro 280 283 283 1% 1%

Nuclear 817 819 819 0% 0%

Other 8 8 9 11% 17%

Total 4,227 4,235 4,232 0% 0%

2025

Pulverized Coal 1,702 1,420 1,377

- 17%

- 19%

NG Combined Cycle (existing) 919 1,176 1,144 28% 24%

NG Combined Cycle (new) 280 310 385 11% 37%

Combustion Turbine 27 42 38 57% 42%

Oil/Gas Steam 37 20 20

- 47%

- 46%

Non

- Hydro Renewables 335 335 335 0% 0%

Hydro 280 282 282 1% 1%

Nuclear 817 819 819 0% 0%

Other 6 7 8 15% 22%

Total 4,404 4,411 4,408 0% 0%

2030

Pulverized Coal 1,668 1,372 1,321

- 18%

- 21%

NG Combined Cycle (existing) 810 1,144 1,099 41% 36%

NG Combined Cycle (new) 599 551 644

- 8% 7%

Combustion Turbine 23 43 40 92% 78%

Oil/Gas Steam 23 15 17

- 34%

- 29%

Non

- Hydro Renewables 350 352 353 1% 1%

Hydro 280 282 282 1% 1%

Nuclear 797 797 797 0% 0%

Other 6 7 8 23% 31%

Total 4,557 4,565 4,560 0% 0%

Note: “Other” mostly includes MSW and fuel cells. Source: Integrated Planning Model run by EPA, 2014



### Table 6. Total Generation Capacity by 2020

- 2030 (GW)

Base

Case Two Block Two Block

Reg. State Reg. State

2020

Pulverized Coal 244 219 211

- 10%

- 13%

NG Combined Cycle (existing) 219 221 221 1% 1%

NG Combined Cycle (new) 12 23 30 93% 153%

Combustion Turbine 146 148 149 1% 2%

Oil/Gas Steam 83 80 79

- 3%

- 5% Comment [A1]: Co

- firing of biomass is not

included as an option in this round of IPM runs but

will be included in the future and may change the

generation mix within this t able.

Comment [A2]: This table will be updated to

include biomass co

- firing in the future.

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6 Non

- Hydro Renewables 93 93 93 0% 1%

Hydro 101 101 101 0% 0%

Nuclear 103 103 103 0% 0%

Other 5 5 5 2% 2%

Total 1,005 994 992

- 1%

- 1%

2025

Pulverized Coal 243 219 211

- 10%

- 13%

NG Combined Cycle (existing) 219 221 221 1% 1%

NG Combined Cycle (new) 39 49 59 25% 52%

Combustion Turbine 149 160 160 8% 7%

Oil/Gas Steam 82 80 79

- 2%

- 4%

Non

- Hydro Renewables 103 104 104 0% 1%

Hydro 101 101 101 0% 0%

Nuclear 103 103 103 0% 0%

Other 5 5 5 2% 2%

Total 1,044 1,042 1,043 0% 0%

2030

Pulverized Coal 240 217 209

- 10%

- 13%

NG Combined Cycle (existing) 219 221 221 1% 1%

NG Combined Cycle (new) 84 88 101 6% 20%

Combustion Turbine 156 174 172 12% 10%

Oil/Gas Steam 82 80 79

- 2%

- 4%

Non

- Hydro Renewables 107 108 109 1% 1%

Hydro 101 101 101 0% 0%

Nuclear 101 101 101 0% 0%

Other 5 5 5 2% 2%

Total 1,095 1,095 1,096 0% 0%

Source: Integrated Planning Model run by EPA, 2014



### Table 7. Projected Capacity Factor of Existing Coal Steam and Natural Gas Combined

Cycle Capacity

Existing Coal Steam Existing Natural Gas Combined

Cycle

2020 2025 2030 2020 2025 2030

Base Case 78% 80% 79% 52% 48% 42%

Option 2 Regional 75% 74% 72% 61% 61% 59%

Option 2 State 75% 74% 72% 60% 59% 57%

Source: Integrated Planning Model run by EPA, 2014

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7 Table 8 . Projected Capacity Additions, Gas (GW)

Cumulative Capacity Additions: Gas

Combined Cycle Incremental Cumulative Capacity

Additions: Gas Combined Cycle

2020 2025 2030 2020 2025 2030

Base Case 11.9 38.9 83.8

Two Block Regional 23.1 48.7 88.5 11.1 9.8 4.7

Two Block State 30.2 58.9 100.7 18.3 20.0 17.0

Source: Integrated Planning Model run by EPA, 2014



### Table 9 . Projected Capacity Additions, Non

- hydro Renewable (GW)

Cumulative Capacity Additions:

Renewables Incremental Cumulative Capacity Additions:

Renewables

2020 2025 2030 2020 2025 2030

Base Case 17.8 28.4 32.7

Two Block Regional 18.1 28.8 33.6 0.3 0.4 0.8

Two Block State 18.3 29.0 33.7 0.5 0.6 1.0

Source: Integrated Planning Model run by EPA, 2014



### Table 10

. Coal Production for the Electric Power Sector, 2020

Coal Production (MM Tons) Percent Change from Base Case

Two Block Two Block

Base Case Reg ional State Regional State

Appalachia 140 110 111

- 22%

- 21%

Interior 249 230 224

- 8%

- 10%

West 446 324 308

- 27%

- 31%

Waste Coal 9 11 11 20% 20%

Imports 0 0 0

Total 844 675 654

- 20%

- 22%

Source: Integrated Planning Model run by EPA, 2014



### Table 11 . Power Sector Gas Use

Power Sector Gas Use (TCF) Percent Change in Power Sector Gas Use

2020 2025 2030 2020 2025 2030

Base Case 8.35 8.88 9.89

Two Block Regional 9.90 10.90 12.14 18.7% 22.7% 22.6%

Two Block State 10.14 11.14 12.42 21.5% 25.5% 25.6%



### Table 1 2 . Projected Average Minemouth and Delivered Coal Prices (2011$/MMBtu)

Minemouth Delivered

- Electric Power Sector

2020 2025 2030 2020 2025 2030

Base Case 1.73 1.88 2.06 2.62 2.80 2.98

Two Block Regional 1.55 1.69 1.81 2.32 2.47 2.59

Two Block State 1.55 1.69 1.83 2.31 2.47 2.62



### Table 1 3 . Projected Average Minemouth and Delivered Coal Prices: Percent Change from

Base Case Projections

Minemouth Delivered

- Electric Power Sector

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8 2020 2025 2030 2020 2025 2030

Two Block Regional

- 10.6%

- 10.5%

- 12.1%

- 11.5%

- 11.8%

- 13.0%

Two Block State

- 10.5%

- 10.4%

- 11.0%

- 11.7%

- 11.9%

- 12.2%

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9 Table 1 4 . Projected Natural Gas Prices (2011$/MMBtu)

Henry Hub Delivered

- Electric Power

Sector

2020 2025 2030 2020 2025 2030

Base Case 4.98 5.68 6.00 5.36 6.11 6.39

Two Block Regional 5.53 6.06 6.62 5.90 6.42 6.94

Two Block State 5.56 6.10 6.73 5.93 6.45 7.05



### Table 1 5

. Projected Natural Gas Prices: Percent Change from Base Case Projections

Henry Hub Delivered

- Electric Power

Sector

2020 2025 2030 2020 2025 2030

Two Block Regional 10.9% 6.7% 10.3% 9.9% 5.0% 8.6%

Two Block State 11.5% 7.3% 12.2% 10.6% 5.5% 10.3%



### Table 1 6 . 2020 Projected Contiguous U.S. and Regional Retail Electricity Prices

(cents/kWh)

2020 Projected Retail Price

(cents/kWh) Percent Change from Base

Case

Base

Case Two Block

Regional Two Block

State Two Block

Regional Two Block

State

ERCT 9.9 10.3 10.4 4.8% 5.1%

FRCC 10.6 11.0 11.2 3.6% 5.1%

MROE 10.4 10.5 10.5 0.6% 0.5%

MROW 9.2 9.2 9.3 0.0% 1.8%

NEWE 13.8 14.2 14.5 2.5% 5.0%

NYCW 18.0 18.3 18.5 1.9% 2.6%

NYLI 14.7 15.1 15.2 2.5% 3.3%

NYUP 12.7 13.0 13.1 2.1% 2.8%

RFCE 12.2 12.6 12.7 3.2% 3.6%

RFCM 10.7 10.7 10.8 0.3% 1.1%

RFCW 10.1 10.3 10.4 1.7% 2.5%

SRDA 9.0 9.2 9.2 2.8% 2.6%

SRGW 9.3 9.5 9.6 1.9% 2.9%

SRSE 10.4 10.4 10.5 0.5% 0.7%

SRCE 8.2 8.2 8.2

- 0.9%

- 0.9%

SRVC 10.7 10.6 10.7

- 0.3%

- 0.1%

SPNO 10.6 10.5 10.5

- 1.0%

- 1.3%

SPSO 8.3 8.8 8.8 5.0% 5.3%

AZNM 10.5 10.7 10.8 1.7% 2.9%

CAMX 14.3 14.6 14.6 2.2% 2.4%

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10 NWPP 7.3 7.4 7.4 1.3% 1.4%

RMPA 8.9 9.0 9.2 0.7% 2.9%

Contiguous

U.S. 10.4 10.6 10.7 1.9% 2.5%



### Table 1 7 . 202 5 Projected Contiguous U.S. and Regional Retail Electricity Prices

(cents/kWh)

2025 Projected Retail Price (cents/kWh) Percent Change from Base Case

Base Case Two Block

Regional Two Block State Two Block

Regional Two Block State

ERCT 11.2 11.5 11.5 2.5% 3.0%

FRCC 10.9 11.2 11.3 2.6% 4.0%

MROE 10.5 10.5 10.4 0.3%

- 0.8%

MROW 9.2 9.4 9.6 1.9% 4.2%

NEWE 14.2 14.6 14.9 2.2% 4.4%

NYCW 18.8 19.2 19.3 2.0% 2.3%

NYLI 15.6 16.0 16.1 2.9% 3.3%

NYUP 13.2 13.5 13.6 2.0% 2.3%

RFCE 12.6 12.8 12.9 1.6% 2.0%

RFCM 10.7 10.8 10.9 0.7% 1.8%

RFCW 10.9 11.0 11.1 0.7% 1.0%

SRDA 9.3 9.6 9.6 2.7% 3.0%

SRGW 10.1 10.3 10.3 1.3% 1.9%

SRSE 10.3 10.5 10.5 1.1% 1.1%

SRCE 8.2 8.1 8.1

- 1.5%

- 1.7%

SRVC 10.6 10.6 10.6

- 0.1% 0.1%

SPNO 10.3 10.3 10.3

- 0.2%

- 0.3%

SPSO 8.8 9.3 9.2 4.9% 4.4%

AZNM 10.8 11.1 11.3 2.7% 4.7%

CAMX 13.9 14.1 14.1 1.0% 1.0%

NWPP 7.4 7.4 7.5 0.7% 1.7%

RMPA 9.4 9.5 9.7 0.9% 3.3%

Contiguous U.S. 10.8 10.9 11.0 1.4% 2.0%



### Table 1 8 . 20 3 0 Projected Contiguous U.S. and Regional Retail Electricity Prices

(cents/kWh)

2030 Projected Retail Price (cents/kWh) Percent Change from Base Case

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11 Base Case Two Block

Regional Two Block State Two Block

Regional Two Block State

ERCT 11.6 12.1 12.1 4.0% 4.8%

FRCC 10.9 11.5 11.6 5.0% 6.3%

MROE 10.5 10.7 10.7 2.3% 1.6%

MROW 9.4 9.6 9.8 2.1% 4.9%

NEWE 15.1 15.4 15.4 2.0% 1.8%

NYCW 19.9 20.3 20.3 1.7% 1.6%

NYLI 16.9 17.2 17.1 1.8% 1.3%

NYUP 14.2 14.5 14.5 1.7% 1.6%

RFCE 12.4 12.8 12.8 2.8% 3.4%

RFCM 10.8 11.0 11.1 1.8% 2.9%

RFCW 11.2 11.4 11.4 1.3% 1.8%

SRDA 9.5 9.9 10.0 4.5% 5.0%

SRGW 10.4 10.5 10.6 0.9% 1.6%

SRSE 10.4 10.6 10.7 2.4% 2.6%

SRCE 8.1 8.1 8.1

- 1.2%

- 1.2%

SRVC 10.4 10.4 10.5 0.6% 1.1%

SPNO 10.2 10.2 10.2

- 0.1% 0.2%

SPSO 9.1 9.7 9.6 6.3% 6.1%

AZNM 11.5 11.8 12.0 2.7% 4.4%

CAMX 14.1 14.4 14.5 1.9% 2.3%

NWPP 7.4 7.5 7.6 1.2% 2.6%

RMPA 9.9 10.1 10.4 2.1% 5.7%

Contiguous U.S. 10.9 11.2 11.3 2.3% 2.9%



### 4 Estimated Climate Benefits from CO 2 

### Emission Reductions

Table s 1 9 through 21 report the climate benefits estimated in three analysis years (2020,

2025, and 2030) for the two illustrative compliance scenarios (i.e., state and regional) evaluated.

Table 1 9

. Estimated Global Climate Benefits of CO 2 

### Reductions for Building Blocks 1 and

2 in 2020 (billions of 2011$)*

Discount Rate and Statistic State Regional

Million metric tonnes of CO 2 reduced 252 231

5% (average) $3.2 $3.0

3% (average) $12 $11

2.5% (average) $17 $16

3% (95 th percentile) $34 $31

* The SCC values are dollar

- year and emissions

- year specific. SCC values represent only a partial accounting of

climate impacts.

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12 Table 20 Estimated Global Climate Benefits of CO 2 

### Reductions in 2025 (billions of 2011$)*

Discount Rate and Statistic State Regional

Million metric tonnes of CO 2 reduced 284 258

5% (average) $4.2 $3.9

3% (average) $14 $13

2.5% (average) $21 $19

3% (95 th percentile) $43 $39

* The SCC values are dollar

- year and emissions

- year specific. SCC values represent only a partial accounting of

climate impacts.



### Table 21 Estimated Global Climate Benefits of CO 2 

### Reductions in 2030 (billions of 2011$)*

Discount Rate and Statistic State Regional

Million metric tonnes of CO 2 reduced 292 258

5% (average) $5.0 $4.4

3% (average) $16 $14

2.5% (average) $23 $21

3% (95 th percentile) $50 $44

* The SCC values are dollar

- year and emissions

- year specific. SCC values represent only a partial accounting of

climate impacts.



### 5 Estimated Human Health Co

- Benefits

Tables 22 through 24 provide the emiss ion reductions estimated to occur in three analysis

years (2020, 2025, and 2030) for two illustrative compliance scenarios (i.e., state and regional)

by region (i.e., East, West, and California). Tables 25 through 27 report the health co

- benefits

estimated in three analysis years (2020, 2025, and 2030) for the two illustrative compliance

scenarios (i.e., state and regional) evaluated.

Table 22 Emission Reductions of Criteria Pollutants in 2020 (thousands of short tons)

Region SO 2 All

- year NOx Ozone

- Season NOx

State

East 253 233 96

West 23 40 17

California 0 0 0

Total 277 273 113

Regional 216 209 86

East 15 29 12

West 1 2 1

California 232 240 98

Total 216 209 86



### Table 23 Emission Reductions of Criteria Pollutants in 2025 (thousands of short tons)

Region SO 2 All

- year NOx Ozone

- Season NOx

State

East 318 265 111

West 26 41 17

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13 California 0 9 1

Total 344 315 128

Regional

East 265 237 97

West 22 26 11

California 1 8 1

Total 287 270 109



### Table 24 Emission Reductions of Criteria Pollutants in 2030 (thousands of short tons)

Region SO 2 All

- year NOx Ozone

- Season NOx

State

East 365 265 108

West 31 48 21

California 0 0 0

Total 396 313 128

Regional

East 316 233 92

West 26 29 12

California 1 1 0

Total 342 263 105



### Table 2 5 Summary of Estimated Monetized Health Co

- benefits in 2020 (millions of

2 011$) *

Pollutant 3% Discount Rate 7% Discount Rate

S tate

SO 2 $10,000 to $23,000 $9,300 to $21,000

NOx (as PM 2.5 ) $1,600 to $3,600 $1,400 to $3,200

NOx (as Ozone) $450 to $1,900 $450 to $1,900

Total $12,000 to $29,000 $11,000 to $26,000

Regional

SO 2 $8,900 to $20,000 $8,000 to $18,000

NOx (as PM 2.5 ) $1,500 to $3,300 $1,300 to $3,000

NOx (as Ozone) $410 to $1,700 $410 to $1,700

Total $11,000 to $25,000 $9,800 to $23,000

* All estimates are rounded to two significant figures so numbers may not sum down columns. The estimated

monetized co

- benefits do not include climate benefits or reduced health effects from direct exposure to NO 2 , SO 2 , ecosystem effects, or visibility impairment. All fine particles are assumed to have equivalent health effects, but the

benefit

- per

- ton estimates vary depending on the location and magnitude of their impact on PM 2.5 levels, which

drive population exposure. The monetized co

- benefits incorporate the conversion from precursor emissions to

ambient fine particles and ozone. Co

- benefits for PM 2.5 precursors are based on regional benefit

- per

- ton estimates.

Co

- b enefits for ozone are based on ozone season NOx emissions. Ozone co

- benefits occur in analysis year, so they

are the same for all discount rates. Confidence intervals are unavailable for this analysis because of the benefit

- per

ton methodology. In general, the 95 th percentile confidence interval for monetized PM 2.5 benefits ranges from

approximately

- 90 percent to +180 percent of the central estimates based on Krewski et al. (2009) and Lepeule et

al. (2012).

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14 Table 2 6 Summary of Estimated Monetized Health C o

- benefits in 2025 (millions of

2011$) *

Pollutant 3% Discount Rate 7% Discount Rate

S tate

SO 2 $14,000 to $32,000 $13,000 to $29,000

NOx (as PM 2.5 ) $2,100 to $4,800 $1,900 to $4,300

NOx (as Ozone) $680 to $2,900 $680 to $2,900

Total $17,000 to $40,000 $15,000 to $36,000

Regional

SO 2 $12,000 to $27,000 $11,000 to $24,000

NOx (as PM 2.5 ) $1,900 to $4,200 $1,700 to $3,800

NOx (as Ozone) $600 to $2,600 $600 to $2,600

Total $14,000 to $34,000 $13,000 to $30,000

* All estimates are rounded to two significant figures so numbers may not sum down columns. The estimated

monetized co

- benefits do not include climate benefits or reduced health effects from direct exposure to NO 2 , SO 2 , ecosystem effects, or visibility impairment. All fine particles are assumed to have equivalent health effects, but the

benefit

- per

- ton estimates vary depending on the location and magnitude of their impact on PM 2.5 levels, which

drive population exposure . The monetized co

- benefits incorporate the conversion from precursor emissions to

ambient fine particles and ozone. Co

- benefits for PM 2.5 precursors are based on regional benefit

- per

- ton estimates.

Co

- benefits for ozone are based on ozone season NOx emiss ions. Ozone co

- benefits occur in analysis year, so they

are the same for all discount rates. Confidence intervals are unavailable for this analysis because of the benefit

- per

ton methodology. In general, the 95 th percentile confidence interval for monetize d PM 2.5 benefits ranges from

approximately

- 90 percent to +180 percent of the central estimates based on Krewski et al. (2009) and Lepeule et

al. (2012).



### Table 2 7 Summary of Estimated Monetized Health Co

- benefits in 2030 (millions of

2011$) *

Pollutant 3% Discount Rate 7% Discount Rate

State

SO 2 $17,000 to $39,000 $16,000 to $35,000

NOx (as PM 2.5 ) $2,100 to $4,700 $1,900 to $4,200

NOx (as Ozone) $700 to $3,000 $700 to $3,000

Total $20,000 to $47,000 $18,000 to $43,000

Regional

SO 2 $15,000 to $34,000 $14,000 to $31,000

NOx (as PM 2.5 ) $1,800 to $4,100 $1,700 to $3,700

NOx (as Ozone) $600 to $2,600 $600 to $2,600

Total $18,000 to $41,000 $16,000 to $37,000

* All estimates are rounded to two significant figures so numbers may not sum down columns. The estimated

monetized co

- benefits do not include climate benefits or reduced health effects from direct exposure to NO 2 , SO 2 , ecosystem effects, or visibility impairment. All fine particles are assumed to have equivalent health effects, but the

benefit

- per

- ton estimates vary depending on the location and magnitude of their impact on PM 2.5 levels, which

drive population exposure. The monetized co

- benefits incorporate the conversion from precursor emissions to

ambient fine particles and ozone. Co

- benefits for PM 2.5 precursors are based on regional benefit

- per

- ton estimates.

Co

- benefits for ozone are based on ozone season NOx emissions. Ozone co

- benefits occur in analysis year, so they

are the same for all discount rates. Confidence intervals are un available for this analysis because of the benefit

- per

ton methodology. In general, the 95 th percentile confidence interval for monetized PM 2.5 benefits ranges from

approximately

- 90 percent to +180 percent of the central estimates based on Krewski et al. (2009) and Lepeule et

al. (2012).

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15 6 Combined Climate Benefits and Health Co

- benefits

Table s 28 through 30 provide the combined climate and health benefits for each

compliance scenario s evaluated for 2020, 2025, and 2030

.

Table 2 8 Combined Climate Benefits and Health Co

- Benefits in 2020 ( billions of 2011$)*

SCC Discount Rate Climate

Benefits

Only Climate Benefits and Health Co

- Benefits

(Discount Rate Applied to Health Co

- Benefits)

3% 7%

State 252 million metric ton ne s CO 2

5% $3.2 $16 to $32 $14 to $29

3% $12 $24 to $40 $23 to $38

2.5% $17 $30 to $46 $28 to $43

3% (95 th percentile) $34 $47 to $63 $46 to $61

Regional 231 million metric ton ne s CO 2

5% $3.0 $14 to $28 $13 to $26

3% $11 $21 to $36 $20 to $33

2.5% $16 $27 to $41 $26 to $39

3% (95 th percentile) $31 $42 to $57 $41 to $54

*All estimates are rounded to two significant figures. Climate benefits are based on reductions in CO 2 emissions.

Co

- benefits are based on regional benefit

- per

- ton estimates. Co

- benefits for ozone are based on ozone season NOx

emissions. Ozone co

- benefits occur in analysis year, so they are the same for all discount rates. The health co

benefits reflect the sum of the PM 2.5 and ozone co

- benefits and reflect the range based on adult mortality functions

(e.g., from Krewski et al. (2009) with Bell et al. (2004) to Lepeule et al. (2012) with Levy et al. (2005)). T he

monetized health co

- benefits do not include reduced healt h effects from direct exposure to NO 2 , SO 2 , and HAP ;

ecosystem effects ; or visibility impairment.



### Table 2 9 Combined Climate Benefits and Health Co

- Benefits in 2025 ( billions of 2011$)*

SCC Discount Rate Climate

Benefits

Only Climate Benefits and Health Co

- Benefits

(Discount Rate Applied to Health Co

- Benefits)

3% 7%

S tate 284 million metric tonnes CO 2

5% $4.2 $21 to $44 $20 to $40

3% $14 $31 to $54 $30 to $50

2.5% $21 $38 to $61 $36 to $57

3% (95 th percentile) $43 $60 to $83 $59 to $79

R egional 258 million metric tonnes CO 2

5% $3.9 $18 to $37 $17 to $34

3% $13 $27 to $46 $26 to $43

2.5% $19 $33 to $52 $32 to $49

3% (95 th percentile) $39 $54 to $73 $52 to $70

*All estimates are rounded to two significant figures. Climate benefits are based on reductions in CO 2 emissions.

Co

- benefits are based on regional benefit

- per

- ton estimates. Co

- benefits for ozone are based on ozone season NOx

emissions. Ozone co

- benefits occur in analysis year, so they are the same for all discount rates. The health co

benefits reflect the sum of the PM 2.5 and ozone co

- benefits and reflect the range based on adult mortality functions

(e.g., from Krewski et al. (2009) with Bell et al. (2004) to Lepeule et al. (2012) with Levy et al. (2005)). It is

important to note that the monetized health co

- benefits do not include reduced health effects from direct exposure to

NO 2 , SO 2 , and HAP ; ecosystem effects ; or visibility impairment.

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16 Table 30 Combined Climate Benefits and Health Co

- Benefits in 2030 ( billions of 2011$)*

SCC Discount Rate Climate

Benefits

Only Climate Benefits and Health Co

- Benefits

(Discount Rate Applied to Health Co

- Benefits)

3% 7%

S tate 292 million metric tonnes CO 2

5% $5.0 $25 to $52 $23 to $48

3% $16 $36 to $63 $35 to $59

2.5% $23 $44 to $70 $42 to $66

3% (95 th percentile) $50 $70 to $97 $68 to $92

R egional 258 million metric tonnes CO 2

5% $4.4 $22 to $45 $20 to $41

3% $14 $32 to $55 $30 to $51

2.5% $21 $38 to $62 $37 to $58

3% (95 th percentile) $44 $61 to $85 $60 to $81

*All estimates are rounded to two significant figures. Climate benefits are based on reductions in CO 2 emissions.

Co

- benefits are based on regional benefit

- per

- ton estimates. Co

- benefits for ozone are based on ozone season NOx

emissions. Ozone co

- benefits occur in analysis year, so they are the same for all di scount rates. The health co

benefits reflect the sum of the PM 2.5 and ozone co

- benefits and reflect the range based on adult mortality functions

(e.g., from Krewski et al. (2009) with Bell et al. (2004) to Lepeule et al. (2012) with Levy et al. (2005)). It is

important to note that the monetized health co

- benefits do not include reduced health effects from direct exposure to

NO 2 , SO 2 , and HAP ; ecosystem effects ; or visibility impairment.



### 7 Net B enefits

Tables 31 through 33 summarize the benefits, costs, a nd net benefits for 2020, 2025, and

2030 for the two illustrative compliance scenarios evaluated for building blocks 1 and 2 only.

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17 Table 31 Summary of Monetized Benefits, Compliance Costs, and Net Benefits in 2020

(billions of 2011$) a

State

3% Discount Rate 7% Discount Rate

Climate Benefits b

5% discount rate

3% discount rate

2.5% discount rate

95 th percentile at 3% discount rate $3.2

$12

$17

$34

Air pollution health co

- benefits c $12 to $29 $11 to $26

Total Compliance Costs d $4.4

Net Benefits e $20 to $36 $18 to $33

Non

- Monetized Benefits Direct exposure to SO 2 and NO 2

1. 1 tons of Hg

Ecosystem Effects

Visibility impairment

R egional

3% Discount Rate 7% Discount Rate

Climate Benefits b

5% discount rate

3% discount rate

2.5% discount rate

95 th percentile at 3% discount rate $3.0

$11

$16

$31

Air pollution health co

- benefits c $11 to $25 $9.8 to $23

Total Compliance Costs d $3.2

Net Benefits e $18 to $32 $17 to $30

Non

- Monetized Benefits Direct exposure to SO 2 and NO 2

1. 1 tons of Hg

Ecosystem Effects

Visibility impairment

a All estimates are for 2020 and are rounded to two significant figures, so figures may not sum.

b The climate benefit estimates in this summary table reflect global impacts from CO 2 emission changes and do not account for

changes in non

- CO 2 GHG emissions. Also, different discount rates are applied to SCC than to the other estimates because CO 2 emissions are long

- lived and subsequent damages occur over many years. The SCC estimates ar e year

- specific and increase over

time.

c The air pollution health co

- benefits reflect reduced exposure to PM 2.5 and ozone associated with emission reductions of directly

emitted PM 2.5 , SO 2 and NO X . The range reflects the use of concentration

- response fun ctions from different epidemiology studies.

The reduction in premature fatalities each year accounts for over 90 percent of total monetized co

- benefits from PM 2.5 and ozone.

These models assume that all fine particles, regardless of their chemical composit ion, are equally potent in causing premature

mortality because the scientific evidence is not yet sufficient to allow differentiation of effect estimates by particle type

. d Total costs are approximated by the illustrative compliance costs estimated using the Integrated Planning Model and a discount

rate of approximately 5%. This estimate includes monitoring, recordkeeping, and reporting costs and demand side energy

efficiency program and participant costs.

e The estimates of net benefits in this summary t able are calculated using the global SCC at a 3 percent discount rate (model

average). T ables 10

- 12 in this memo present combined climate and health estimates based on additional discount rates.

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18 Table 32 Summary of Monetized Benefits, Compliance Costs, and Net Benefits in 2025

(billions of 2011$) a

S tate

3% Discount Rate 7% Discount Rate

Climate Benefits b

5% discount rate

3% discount rate

2.5% discount rate

95 th percentile at 3% discount rate $4.2

$14

$21

$43

Air pollution health co

- benefits c $17 to $40 $15 to $36

Total Compliance Costs d $4.6

Net Benefits e $27 to $49 $25 to $46

Non

- Monetized Benefits Direct exposure to SO 2 and NO 2

1.4 tons of Hg

Ecosystem Effects

Visibility impairment

R egional

3% Discount Rate 7% Discount Rate

Climate Benefits b

5% discount rate

3% discount rate

2.5% discount rate

95 th percentile at 3% discount rate $3.9

$13

$19

$39

Air pollution health co

- benefits c $14 to $34 $13 to $30

Total Compliance Costs d $3.0

Net Benefits e $24 to $43 $23 to $40

Non

- Monetized Benefits Direct exposure to SO 2 and NO 2

1. 3 tons of Hg

Ecosystem Effects

Visibility impairment

a All estimates are for 2025 and are rounded to two significant figures, so figures may not sum.

b The climate benefit estimates in this summary table reflect global impacts from CO 2 emission changes and do not account for

changes in non

- CO 2 GHG emissions. Also, different discount rates are applied to SCC than to the other estimates because CO 2

emissio ns are long

- lived and subsequent damages occur over many years. The SCC estimates are year

- specific and increase over

time.

c The air pollution health co

- benefits reflect reduced exposure to PM 2.5 and ozone associated with emission reductions of directly

emitted PM 2.5 , SO 2 and NO X . The range reflects the use of concentration

- response functions from different epidemiology studies.

The reduction in premature fatalities each year accounts for over 90 percent of total monetized co

- benefits from PM 2.5 and ozone

. These models assume that all fine particles, regardless of their chemical composition, are equally potent in causing prematur e

mortality because the scientific evidence is not yet sufficient to allow differentiation of effect estimates by particle type

. d Total costs are approximated by the illustrative compliance costs estimated using the Integrated Planning Model and a discoun t

rate of approximately 5%. This estimate includes monitoring, recordkeeping, and reporting costs and demand side energy

efficie ncy program and participant costs.

e The estimates of net benefits in this summary table are calculated using the global SCC at a 3 percent discount rate (model

average). Tables 10

- 12 in this memo present combined climate and health estimates based on add itional discount rates.

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19 Table 33 Summary of Monetized Benefits, Compliance Costs, and Net Benefits in 2030

(billions of 2011$) a

State

3% Discount Rate 7% Discount Rate

Climate Benefits b

5% discount rate

3% discount rate

2.5% discount rate

95 th percentile at 3% discount rate $5.0

$16

$23

$50

Air pollution health co

- benefits c $20 to $47 $18 to $43

Total Compliance Costs d $9.8

Net Benefits e $27 to $53 $25 to $49

Non

- Monetized Benefits Direct exposure to SO 2 and NO 2 1.5 tons of Hg

Ecosystem Effects

Visibility impairment

Regional

3% Discount Rate 7% Discount Rate

Climate Benefits b

5% discount rate

3% discount rate

2.5% discount rate

95 th percentile at 3% discount rate $4.4

$14

$21

$44

Air pollution health co

- benefits c $18 to $41 $16 to $37

Total Compliance Costs d $6.8

Net Benefits e $25 to $48 $23 to $45

Non

- Monetized Benefits Direct exposure to SO 2 and NO 2

1. 3 tons of Hg

Ecosystem Effects

Visibility impairment

a All estimates are for 2030, and are rounded to two significant figures, so figures may not sum.

b The climate benefit estimates in this summary table reflect global impacts from CO 2 emission changes and do not account for

changes in non

- CO 2 GHG emissions. Also, different discount rates are applied to SCC than to the other estimates because CO 2 emissions are long

- lived and subsequent damages occur over many years. The SCC estimates are year

- specific and increase over

time.

c The air pollution health co

- ben efits reflect reduced exposure to PM 2.5 and ozone associated with emission reductions of directly

emitted PM 2.5 , SO 2 and NO X . The range reflects the use of concentration

- response functions from different epidemiology studies.

The reduction in premature fat alities each year accounts for over 90 percent of total monetized co

- benefits from PM 2.5 and ozone.

These models assume that all fine particles, regardless of their chemical composition, are equally potent in causing prematur e

mortality because the scienti fic evidence is not yet sufficient to allow differentiation of effect estimates by particle type.

d Total costs are approximated by the illustrative compliance costs estimated using the Integrated Planning and a discount rate of

approximately 5%. This est imate includes monitoring, recordkeeping, and reporting costs and demand side energy efficiency

program and participant costs

.

e The estimates of net benefits in this summary table are calculated using the global SCC at a 3 percent discount rate (model

average). Tables 10

- 12 in this memo present combined climate and health estimates based on additional discount rates.

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20 8 Labor

Ta ble 34 presents the labor changes estimated in job

- years associated with the illustrative

building blocks 1 and 2 analysis.

Table 34 Engineering

- Based a 

### Changes in Labor Utilization, Building Blocks 1 & 2 ( Number

of Job

- Years of Employment in Year)

Category Regional Compliance State Compliance

2017

- 2020 2021

- 2025 2026

- 2030 2017

- 2020 2021

- 2025 2026

- 2030

Construction

- related (One

- time) Changes*

Heat Rate Improvement: Total 37,400 0 0 35,300 0 0

Boilermakers and General

Construction 26,000 0 0 24,500 0 0

Engineering and Management 6,900 0 0 6,500 0 0

Equipment

- related 3,300 0 0 3,200 0 0

Material

- related 1,200 0 0 1,100 0 0

New Capacity Construction:

Total 7,700 7,300 1,600 11,000 9,400 1,000

Renewables 0 500 1,600

- 700 500 1,600

Natural Gas 7,700 6,800 0 11,700 8,900

- 600

Recurring Changes**

2020 2025 2030 2020 2025 2030

Operation and Maintenance:

Total - 10,970

- 9,500

- 8,300

- 14,100

- 12,200

- 10,600

Changes in Gas 1,330 1,500 1,100 2,200 2,400 2,100

Retired Coal

- 11,800

- 10,700

- 9,200

- 15,600

- 14,100

- 12,300

Retired Oil and Gas

- 500

- 300

- 200

- 700

- 500

- 400

Fuel Extraction: Total

- 1,900

- 1,000

- 700

- 1,500

- 1,000

- 800

Coal

- 9,700

- 11,100

- 12,000

- 10,500

- 12,400

- 13,500

Natural Gas 7,800 10,100 11,300 9,000 11,400 12,700

Supply Side Employment

Impacts

– Quantified 32,230

- 3,200

- 7,400 30,700

- 3,800

- 10,400

a Job

- year estimates are derived from IPM investment and O&M cost estimates, as well as IPM fuel use estimates

(tons coals or MMBtu gas)

b All job

- year estimates on this are Full Time Equivalent (FTE) jobs. Job estimates in the Demand

- Side energy

efficiency section (below) include both full time and part time jobs

*Construction

- related job

- year changes are one

- time impacts, occurring during each year of the 2 to 4 year period

duri ng which construction and HRI installation activities occur. Figures in table are average job

- years during each of

the years in each range. Negative job

- year estimates when additional generating capacity must be built in the base

case, but is avoided in th e Guideline implementation scenarios due to HRI or Demand

- side energy efficiency

programs.

**Recurring Changes are job

- years associated with annual recurring jobs including operating and maintenance

activities and fuel extraction jobs. Newly built genera ting capacity creates a recurring stream of positive job

- years,

while retiring generating capacity, as well as avoided new built capacity, create a stream of negative job

- years. In

addition, there are recurring jobs prior to 2020 to fuel and operate new ge nerating capacity brought online before

2020; the recurring jobs prior to 2020 are not estimated. Comment [A3]: Does not yet include biomass.

Co

- firing the existing coal fleet with sustainable

biomass could be the least

- cost near

- term option.

### ***E.O. 12866 Review

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21 9 References

Bell, M.L., et al. 2004. “Ozone and Short

- Term Mortality in 95 U.S. Urban Communities, 1987

- 2000.” Journal of the American Medical Association, 292(19): pp. 2372

- 8.

Krewski D; M. Jerrett; R.T. Burnett; R. Ma; E. Hughes and Y. Shi, et al. 2009. Extended Fo llow

Up and Spatial Analysis of the American Cancer Society Study Linking Particulate Air

Pollution and Mortality. HEI Research Report, 140, Health Effects Institute, Boston, MA.

Lepeule, J.; F. Laden; D. Dockery and J. Schwartz. 2012. “Chronic Exposure t o Fine Particles

and Mortality: An Extended Follow

- Up of the Harvard Six Cities Study from 1974 to

2009.” Environmental Health Perspectives, July, 120(7): pp. 965

- 70.

Levy, J.I.; S.M. Chemerynski and J.A. Sarnat. 2005. “Ozone Exposure and Mortality: An

Em piric Bayes Meta

- regression Analysis.” Epidemiology, 16(4): pp. 458

- 68. Comment [A4]: EPA is encouraged to support

this document w ith additional co

- benefits and health

effects literature. Are there BenMap and other

applicable co

- benefits papers available to support

these findings?