1

TABLE OF CONTENTS

4.5 Errors in 2012 Baseline Data ................................................................................................. 2

4.6 Rate-to-mass Conversion...................................................................................................... 35

4.7 state flexibilities................................................................................................................... 134

4.7.1 Opportunities to adjust the goals.................................................................................... 134

4.7.2 Stranded assets/stranded investments............................................................................ 170

4.7.3 Other ................................................................................................................................. 238

4.8 Other goal-setting approaches........................................................................................... 309

4.9 Choice of Baseline Other than 2012 .................................................................................. 369
2

4.5 ERRORS IN 2012 BASELINE DATA

Section 4.5 covers public comments related to errors in the 2012 baseline data in relation to the 

computation procedure of the final and interim goals. 

Commenters have raised a number of issues related to this subsection which are organized by 

topics (comments) below. Responses are provided for these topics.

Comment 1: The EPA should provide more information about the baseline calculations.

Response 1: The EPA made the underlying data available at both proposal and again in final. 

This data can be found in Appendix 1 of the CO2 Emission Performance Rate and Goal 

Computation TSD for CPP Final Rule and a description of its derivation found in Appendix 9. 

The underlying unit-level, state-level, and regional level data are available along with the 

calculations so any stakeholder can replicate The EPA’s calculations. The EPA made all the 

information on calculating state-level generation totals available in Appendix 1, Appendix 7, and 

the 2012 baseline data at proposal. This was available in the docket and on the EPA’s website. 

The following are summaries of the specific public comments under this comment:

Commenters stated EPA must provide more information on its methods and rationale in 

calculating 2012 electricity generation data for the states. 

Commenters added EPA has not provided sufficient information on how it derived the final 

state-wide generation totals based on the spreadsheet listing unit-level 2012 electricity generation 

data nationwide. The commenters stated NDEQ has been unable to reproduce the precise totals 

in megawatt-hours that match EPA's numbers, without this information, the NDEQ cannot 

confirm the accuracy of EPA's findings or accurately assess the potential impact of the Clean 

Power Plan on regulated sources. The commenters requested that EPA provide the raw data, 

spreadsheet calculations, and detailed methodology and procedural information demonstrating 

how it derived each state's 2012 electricity generation numbers, as this will increase the 

credibility and transparency of the Clean Power Plan by allowing NDEQ to reproduce and verify 

EPA's findings and input data; if there are inconsistencies or errors, NDEQ requests an 

opportunity to make corrections.

Comment 2: General Errors in baseline

Response 2: The EPA appreciates the information regarding corrections to the baseline values. 

Please see sections VI and VII of the final rule preamble of the CPP and the CO2 Emission 

Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP for 

more information about the final goals and how they were calculated.

The following are summaries of the specific public comments under this comment:
3

Commenters stated the EPA misstates the emission rate using EPA published technical data and 

its own calculation formula; the 2012 base year should be 1255 pounds of CO2 per megawatthour not 1234. Commenters stated the 2030 target for Delaware should be 890, not 841.

Commenters stated the coal model is wrong. 

Comment 3: The use of 2012 as the baseline limits flexibility

Response 3: See Section VI of the Preamble for the EPA’s discussion why it relied on 2012 data 

as the starting point for forming its baseline. The EPA believes starting with 2012 data and only 

making limited adjustments uses the best available historical data and most accurately reflects an 

appropriate baseline from which to evaluate BSER potential. 

See the Chapter 2 of the GHG Aabatement TSD for the EPA’s discussion about use of regional 

interconnections to assess potential heat rate improvements and the potential impact of new air 

pollution control devices to comply with other Federal pollution control requirements, including 

the Mercury and Air Toxics Standards.

The following are summaries of the specific public comments under this comment:

Commenters stated the use of 2012 as a baseline does not recognize either the unusually mild 

2011 /2012 winter, which reduced overall demand, or the temporarily very low price of natural 

gas, which caused a considerable customer switching from coal-fueled power generation to 

optional to sources fueled by natural gas. The commenters said the four Building Blocks EPA 

defines as its Best System of Emission Reductions are based upon arbitrary and hypothetical 

estimates of reductions, not realistically achievable; multiple states including Kansas and Texas 

have already provided comments on the Clean Power Plan that seriously question whether heat 

rates improvement in Building Block #1 reductions are achievable, given their coal plants 

already operate in the most efficient manner; further, generators in Illinois and other states are 

concerned that compliance with additional environmental requirements as a result of the Mercury 

and Air Toxics Standards will cause heat rates to deteriorate and net power output, per ton of 

carbon emitted, to decline. The commenters said the combined result of a non-representative 

baseline year, together with the overstatement of reduction potential under the Best System of 

Emission Reductions, effectively limits compliance strategy to a reduction in coal-fired 

generation; thus states do not have the flexibility in compliance represented by EPA.

Comment 4: The EPA should make corrections to the baseline values.

Response 4: The EPA appreciates the information regarding corrections to the baseline values. 

Bayfront Unit 5 was not included because, according to EIA data, the unit used less than 10% 

fossil fuel. Useful thermal output is not included in the quantification of BSER in the final rule. 

Affected sources would be responsible for all emissions regardless of their useful thermal output

activity or biomass use. The EPA added categories indicating units that were under construction 

or commenced operations in 2012. Please see sections VI and VII of the final rule preamble of 

the CPP and the CO2 Emission Performance Rate and Goal Computation TSD for CPP Final 
4

Rule supporting the final CPP for more information about the final goals and how they were 

calculated.

Bayfront was not included as a likely affected unit because of data on its capacity and its fuel 

use. However, this does not constitute a final applicability determination. See section VII.E of 

the preamble regarding and state goal adjustments.

The following are summaries of the specific public comments under this comment:

Wisconsin

Commenters stated EPA needs to make the following additional corrections to the data used in 

calculating Wisconsin's baseline. 

A. EPA should include Bayfront unit 5, operated by Northern States Power Wisconsin, in the 

baseline; this unit fired both coal and natural gas in 2012, generating 6,214 MWh of electricity 

and emitting 5337.8 tons CO2, based on EPA's Acid Rain Program database for 2012. 

B. EPA must remove MWh and CO2 emissions resulting from biomass fuels fired with fossil 

fuels at Manitowoc Public Utilities unit 9; commenters provided Table 4. Generation and 

emissions data for Manitowoc Public Utilities unit 9. 

C. EPA should include useful thermal output (UTO) in 2012 for the following power plants in 

Wisconsin, as part of the data derived using the eGRID methodology and used in the goal 

calculation: 

• Manitowoc Public Utilities 

• Valley 

• West Campus Cogeneration Facility;

Also note that in the October 2014 notice of data availability for the proposed rule, when seeking 

comment on including 2010 and 2011 as part of the baseline, EPA included UTO in 2010 and 

2011 for these plants in the eGRID methodology. 

D. EPA should remove MWh and CO2 emissions resulting from biomass fuels fired from the 

baseline at Wisconsin combined heat and power (CHP) and industrial generators; commenters

provided Table 5: Generation data for biomass at Wisconsin CHP and industrial generators.

Oregon

Commenters sought clarification regarding whether investments made under Oregon's CO2 

Standard (ORS 469.503) were taking into consideration when determining Oregon's 2012 

baseline under the proposed Clean Power Plan.
5

South Dakota

Commenters stated EPA’s use of 2012 data, in its proposal, as the criteria for establishing state 

goals fails to recognize carbon dioxide reductions achieved before 2012 and results in disparities 

of impact from one state to another; South Dakota is especially negatively affected for several 

reasons.

Commenters stated South Dakota's total energy production in 2012 was one of the highest on 

record; therefore, the mandate to increase renewable energy generation and decrease usage 

through energy efficiency mechanisms (goals that are tied to the state's total generation in 2012) 

is more onerous than the mandate would be using a multi-year approach or if EPA had used 

another year as the baseline. 

Commenters stated South Dakota's one natural gas combined cycle plant was under construction 

in 2012; despite the fact that it operated at less than a 1 percent capacity factor for the year; EPA 

considers it an existing unit under its proposal. The commenters said using data from an earlier 

year would reduce this plant's impact on South Dakota's state goal or eliminate it from being 

considered as an operational unit depending on the year selected. 

Commenters stated wind generation in South Dakota drastically increased between 2008 and 

2012; by using 2012 data to create the criteria for the state goal, South Dakota receives no credit 

for the dramatic increase of renewable energy added to the state's generation portfolio prior to 

2012. The commenters said if EPA had used 2010 data to calculate state goals, the goal for South 

Dakota would be approximately 1,148 pounds of carbon dioxide per megawatt-hour; Building 

block 2 would continue to be a factor in the equation because EPA includes natural gas 

combined cycle plants that were already planned. The commenters said this plant was already 

planned, as evidenced by Basin Electric Power Cooperative's submission of an air quality permit 

application for the plant in 2009. 

Commenters stated if EPA had used 2005 data to calculate state goals, the goal for South Dakota 

would be approximately 1,627 pounds of carbon dioxide per megawatt-hour, which is consistent 

with EPA's goals for many other states. The commenters added there would be continuity 

between the data used to calculate state goals and EPA's goal of reducing carbon emissions by 

2030 from carbon emissions levels recorded in 2005; in this case, building block 2 is eliminated 

because the natural gas combined cycle plant was not planned in 2005.

Commenters recommended EPA recalculate state goals based on calendar year 2005 electrical 

production and sales data instead of 2012. 

Kansas

Commenters recommended that non-Kansas wind be subtracted out from total state electric 

generation to estimate its RE target, the same process should be carried out for setting the 

baseline CO2 emission rate, which EPA calculated as 1,940 lbs/MWh (1,939lbs/MWh using 

corrected 2012 data). The commenters said the corrected Kansas 2012 baseline CO2 emission 

rate, after data correction and accounting for wind generation owned by non-Kansas entities, 

comes to 2,088 lbs/MWh. 
6

Comment 5: Planned retirements.

Response 5: As explained in the CO2 Emission Performance Rate and Goal Computation TSD 

for final Final CPP, the EPA did not adjust the baseline based on scheduled or planned 

retirements.

The following are summaries of the specific public comments under this comment:

Commenters stated the units for which retirement decisions have already been made for 

VA include: 

• Chesapeake Units 1, 2, 3, 4_12 

• Yorktown Units 1 and 2_13 

• Clinch River Unit 3_14 

• Glen Lyn Units 5 and 6_15 

The commenters said the electric generation and carbon emission levels from these four coalfired EGUs were included in Virginia's baseline 2012 carbon emissions rate; however, EPA did 

not include the planned retirement of these EGUs when calculating Virginia's emission reduction 

target. The commenters said combined, these units represented 2,391,610 megawatt hours 

("MWh") of generation in 2012, including 16 percent of the carbon emissions and 17 percent of 

the electric generation in Virginia's coal-fired EGU fleet. 

The commenters said applying these retirements to Virginia's 2012 baseline emission rate results 

in a decrease from 1,438 lbs/MWh to 1,383 lbs/MWh, a reduction of 55 lbs/MWh; it should be 

noted that this reduction is larger than the emissions rate reduction for EPA's building block 1 (6 

percent heat rate improvement at existing coal-fired EGUs), which reflected a reduction of 49 

lbs/MWh. The commenters said thus, simply continuing on course with the plan to retire these 

units would reduce Virginia's 2012 emissions rate by more than EPA's application of building 

block 1; this demonstrates that the assumed reductions from Virginia's coal-fired EGUs are 

achievable.

Commenters stated some units simply retire and questioned why didn't the EPA account for the 

changing profile of the coal fleet from 2012 forward when setting state goals.

Comment 6: Units that were out of service or retired.

Response 6: See section VI of the final rule preamble of the CPP and the CO2 Emission 

Performance Rate and Goal Computation TSD for CPP Final Rule for an explanation on why the 

EPA believes unit-level variation does not impact its regional calculations, and why the EPA 
7

relied on a historical baseline rather than a projected future-year baseline that projected behavior 

post inventory turnover.

EPA notes that there are both NGCC and coal units that retired in 2012, but that are still in EPA 

2012 baseline reflecting their reported generation and emission from that year. EPA discussed in 

the CO2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule why it was 

not removing scheduled retirements from its baseline. It appreciates the comment on 55 MW 

Hansel as one of the unique NGCC untis units that retired in 2012. EPA notes there were many 

more fossil steam units that retired in 2012. More units of each technology will retire before the 

first year of compliance in 2022. Consistent with its approach to remain with a historical 

baseline and not begin projecting the impact of retirements in its baseline, EPA leaves these units 

in its baseline. Commenters suggest that 55 MW of capacity from Hansel therefore overstates 

BB2. However, EPA believes its decision on retirement treatment has the opposite impact. It is 

conservative to leave the units in the baseline. If it removed Hansel, to be consistent it would 

also need to remove the fossil steam generation already scheduled for retirement (and therefore 

no longer around to absorb incremental NGCC generation). As stated above, EPA steers clear of 

attempting to adjust for retirments, butretirements. If the EPA if it chose to go the route 

expressed by commenters, - the effect would likely be one of a more stringent impact, not less 

stringent, as the amount of incremental generation potential removed from the baseline would be 

drastically smaller (one 55 MW plant in the east) relative to the amount of fossil steam.

The following are summaries of the specific public comments under this comment:

Commenters stated EPA also errors in its treatment of "existing" units that were out of service, 

or retired in 2012. 

Commenters added units that were out of service during 2012 may report artificially low 

capacity factors because they did not accumulate a full year of operating data by the end of that 

year. 

Commenters added units that retired in 2012 would appear to have capacity available for redispatch that will not actually be available to displace coal generation in the future. 

Commenters added retired units should not be included in state goal calculations; Plant Hansel 

was included in Florida's goal calculation despite the fact that the facility retired in 2012; if a unit 

is no longer in operation then it is impossible to dispatch.

Comment 7: Canceled, indefinitely postponed, no longer in resource plan, or that construction 

had not been commenced units, should be included in baseline

Response 7: For the EPA’s response to this comment, see the CO2 Emission Performance Rate 

and Goal Computation TSD for CPP Final Rule supporting the final CPP. Plant Washington is 

not considered a likely affected units in EPA BSER quantification. However, this does not 

constitute a final applicabily determination.

The following are summaries of the specific public comments under this comment:
8

Commenters stated canceled, indefinitely postponed, no longer in resource plan, or that 

construction had not been commenced projects, and should be included in baseline.

Commenters stated the Plant Washington project was mistakenly excluded from Georgia's 

baseline calculation due to EPA's assumption that the project has been "canceled" or 

"indefinitely postponed". The commenters said that P4G executed contracts for the purchase and 

erection of the Plant Washington boiler prior to the publication of the New Source Proposal and 

that the development of the project is continuing to this day. The commenters added that on 

October 15, 2014, the Director of the Georgia Environmental Protection Division ("GAEPD") 

issued a final permit amendment extending the construction deadline under Plant Washington's 

PSD permit until April 2016. The commenters stated that the New Source Proposal expressly 

exempts Plant Washington as one of three projects from coverage because as currently designed 

they could not meet the proposed standard of 1,100 pounds of CO2 per gross megawatt-hour (lb. 

CO2/MWh) because they were not sited or designed to incorporate carbon capture sequestration 

("CCS") technology. The commenters added since Plant Washington was excluded from 

coverage under the New Source Proposal, there is currently no proposed greenhouse gas standard 

of performance applicable to the facility if the Existing Source Proposal does not apply; that 

being so, EPA would be required to complete a site-specific rulemaking, or to make a case by 

case determination, before a standard could be applied to the facility. The commenters concluded 

given these uncertainties and the advanced stage of Plant Washington's development, estimated 

emissions from Plant Washington as currently permitted should be included in the baseline. 

Comment 8: Offline units should be included in the 2012 baseline calculation.

Response 8: As described in preamble section VI, the EPA has made an adjustment to the 2012 

data to account for the Sherburne County Unit 3 outage. Its final coal steam generation estimate 

for baseline is consistent with levels observed in years where Sherburne County Unit 3 is 

operating.

The following are summaries of the specific public comments under this comment:

Commenters stated the Northern States Power Minnesota (Xcel Energy)-Sherburne County-Unit 

3-0RIS 6090 938 MW (nameplate capacity) coal-fired electric generating unit was out of service 

during the entire calendar year 2012 due to an explosion in 2011 in the turbine as the unit was 

returning to service after an outage. The commenters said the unit was off line for about 2 years 

while repairs were made, and did not return to full service until January 2014 where it will be 

used henceforth. The commenters stated that the average generation from 2009 to 2011, the three 

years prior to the explosion, is the best approximation of likely generation at Sherco Unit 3 in the 

year 2012, that is, 5,492,640 MWh releasing a total mass of 5,775,175 tons of CO2, as calculated 

from the monthly data reported to the CAMD database for this unit. The commenters added the 

selection of these years reflects generation during the recession (2009) as well as the increasing 

reliance on wind generation by Xcel to meet its renewable energy generation required by 

Minnesota statute. The commenters stated since reaching full capacity in January 2014, the unit 

has operated at an average monthly load of 469,000 MWh, which represents an annual average 
9

generation of 5,630,000 MWh, thus the MPCA's recommendation is a slightly conservative but 

reasonable approximation of likely 2012 generation at Sherco 3. 

Commenters were aware that EPA's baseline emissions data did not include the emissions from 

Xcel Energy's Sherburne County Generating Station ("Sherco") Unit 3 because Sherco Unit 3 

was not operating in 2012 due to an unexpected outage. The commenters said there are other, 

more minor, data errors identified in Minnesota's data set, and the commenters assumed that 

other states have identified certain data errors and are likely to request corrections or updates. 

The commenters said Clean Power Plan stakeholders in Minnesota have held many discussions 

about how to best account for these necessary data corrections; although we are not advocating 

for any particular data correction approach, the commenters recognized that some corrections 

may occur and we simply urge EPA to protect the overall Clean Power Plan target, and the 

individual state targets, as much as possible when adjusting for these errors in its final rule.

Comment 9: Units that were off-line for most or all of the baseline year/ not operational in 2012

Response 9: In the final CPP quantification of BSER, the EPA has made adjustments to the 

state-level data for Minnesota recognizing the significance of the Sherco unit 3 outage 

highlighted below. See preamble section VI and the CO2 Emission Performance Rate and Goal 

Computation TSD for CPP Final Rule for a description on how the EPA tested for and identified 

significant outages that warranted an adjustment to state-level totals. 

The Kemper facility is maintained in the baseline as it is a likely affected source as identified by 

the commenters. The EPA recognizes the 2012 baseline did not provide accurate emission and 

generation data for the facility given it’s commence operation date. Therefore, the EPA used 

assumptions for plant-level operation consistent with the expectations by the facility owners and 

on which it proposed and took comment.

The following are summaries of the specific public comments under this comment:

Commenters stated EPA should address corrections related to affected units that were off-line for 

most or all of the baseline year.

Commenters added EPA did not adjust for extended outage periods. The commenters stated Unit 

3 at Xcel Energy's Sherburne County Generating Station, the largest electric generating unit in 

Minnesota, was offline for the entirety of 2012 due to a major unplanned outage. The 

commenters added in Kansas, Westar Energy experienced extended outages for half of its coalfired fleet in 2012; during these extended outages, Westar Energy was installing pollution control 

equipment (electrostatic precipitators (ESPs), fabric filter baghouses, wet limestone scrubbers, 

selective non-catalytic reduction (SNCR), etc.) in order to ensure compliance with other Clean 

Air Act obligations. 

Commenters added for Mississippi's 2012 baseline emission rate, EPA included emissions from 

the Kemper Integrated Gasification Combined Cycle (IGCC) plant as "other emissions" and 

"other generation" in the goal computation table; although this plant satisfies the definition of an 

existing affected source, the plant was not operational in the proposed 2012 baseline period; 
10

therefore, this plant provides no credible emissions or operational data towards establishing 

standards for existing units. The commenters recommended these units be removed from the goal 

computation table.

Commenters stated the proposed target emission rates set for Minnesota under the Proposed Rule 

are arbitrary and capricious because they are based on faulty data and erroneous assumptions 

resulting from the use of 2012 as the baseline year; specifically, Sherco 3 - the largest coal-fired 

plant in Minnesota - was offline during the entirety of 2012; as a result, the plant's generation 

capacity and emissions levels were not factored into EPA's baseline assumptions. The 

commenters said in light of EPA's flawed assumptions, compliance with the Proposed Rule's 

emission reduction goals for Minnesota would likely require retirement of Sherco 3 not long 

after its co-owners invested $21 million in efficiency upgrades, and spent an additional $200 

million repairing the facility after a turbine failure in 2011; this would result in a significant 

stranding of assets. 

Commenters stated on November 19, 2011, Sherco 3 experienced a catastrophic failure as the 

unit was being returned to service following a turbine efficiency upgrade; the event caused 

extensive damage to the turbine, generator, exciter, and some associated plant systems, and 

resulted in the facility being offline for the remainder of 2011, the entirety of 2012, and the 

majority of 2013 while repairs were made. The commenters said the nearly two-year-long 

restoration of the facility was completed on October 27, 2013, at a cost exceeding $200 million; 

the plant resumed full commercial operations in January 2014. 

Commenters stated because EPA used 2012 as the baseline for the Proposed Rule - a year when 

Sherco 3 was completely out of service - its starting assumptions for coal-fired generation in 

Minnesota are fundamentally flawed; the EPA erroneously attributed a negative generation 

capacity of -55,562.0 MWh to Sherco 3, with a mere 131.3 tons in emissions. The commenters

said by contrast, from 2009 to 2011, Sherco 3's average generation was 5,492,640 MWh, 

releasing a total mass of 5,775,175 tons of CO2. The commenters said it is highly likely that, for 

Minnesota to meet the Proposed Rule's mandatory goals of 873 and 911 pounds of CO2/MWh, 

both of which are based on the faulty assumption that Sherco 3 does not generate power, the 

facility would have to be off-line for most of each year; unfortunately, this would likely force 

Sherco 3 to retire prematurely, as it would be uneconomic to operate a baseload generation unit 

like Sherco 3 so infrequently, particularly after the unit has undergone a capital-intensive 

environmental retrofit to comply with unrelated EPA rules. The commenters said this result 

would strand the millions of dollars that SMMPA and, in turn, its members, have invested in the 

facility. The commenters said as EPA is aware, baseload generating units like Sherco 3 are 

planned, designed and built to last a long time, and they are capital-intensive undertakings, the 

costs of which are recovered during a long period of years; if a generating unit that takes years 

and millions (if not billions) of dollars to build is forced to prematurely close when it has not yet 

reached the end of its useful life, the owners of that unit are left with stranded assets. The 

commenters said in this case, if Sherco 3 is forced to retire prematurely, not only would SMMPA 

be left with a stranded asset, but it would also have to incur additional costs to either build 

another baseload unit or enter into PPAs with other utilities to provide the same energy that 

Sherco 3 now provides. The commenters said it would be unfortunate if SMMPA's multi-million 

dollar investment to serve its members and the continued viability of its primary and most 
11

efficient source of baseload electric energy were jeopardized because of EPA's patently flawed 

assumptions about the emissions levels in Minnesota.

Commenters stated one of Minnesota's newest and most efficient coal power plant (Sherco 3) 

was offline during all of 2012, due to a major outage. The commenters said Minnesota's historic 

coal generation data relied upon in developing the rule is therefore abnormally low and must be 

adjusted to include the energy produced by the 884 megawatt plant in a typical year. The 

commenters said based on some preliminary calculations and the base line for Minnesota coal 

generation the plant produces a substantial change in Minnesota's interim and final goals. 

Comment 10: Units that came online during, and were operational for only part of, 2012

Response 10: As described in section VI of the preamble, the EPA is adjusting the baseline data 

to account for the likely affected units that commenced operation in 2012. This adjustment 

(made at the state-level) substitutes in higher utilization assumption consistent with the 

incremental impact of a full year operation rather than lower utilization observed in 2012 due to 

partial year operation. The EPA made this adjustment to address the concerns expressed in the 

comment below. The states in which the EGUs mentioned below are located now have 

generation and emissions values assumed commensurate with a full year of baseline operation of 

the under construction units typical for that technology.

When assessing the incremental generation and emission to add to a state’s baseline for under 

construction sources, EPA was mindful of comments that noted there would be some 

replacement effect to this incremental capacity. Some commenters suggested using a baseline 

value utilization of only 15% for particular under construction NGCC as the rest would have a 

replacement impact rather than an incremental impact. Some commenters suggested using a 

higher capacity factor. EPA had assumed an incremental impact on states generation for under 

construction NGCC at proposal of 55% utilization (and 70% for the under construction Kemper 

unit). At proposal, EPA had looked at (and docketed) data on the 2012 utilization of NGCC that 

had commenced operation in the previous five years. 2012 was a year when the NGCC units had 

a particular incentive to operate more given lower natural gas prices. EPA felt the 55% 

utilization rate was in line with historic data and a reasonable capacity factor to assume when 

estimating the incremental impact on baseline data. EPA recognized that some newly under 

construction NGCC may operate at utilization rates greater than 55% in some cases, but also 

recognizes that some of this generation may offset existing 2012 generation and not reflect a 

purely incremental change to the baseline. EPA also performed a 10-year look back in the final 

rule to complement the 5-year look back at proposal. Based on all of these factors and 

comments, EPA determined that the proposed 55% utilization for under construction NGCC 

capacity was reasonable estimate when estimating the incremental impact on a state’s 2012 data.

Likewise, commenters noted that although EPA had identified no under construction coal units 

in post-2012 years at proposal, that there were a several coal plants that commenced operation 

partway through 2012 and therefore the 2012 annual data was not representative. In response to 

these comments, EPA adjusted its baseline approach in this final rule for states to better reflect 

the incremental impact of these under construction coal EGUs. EPA had to derive a similar 
12

capacity factor assumption for newly categorized under construction coal units in the final rule. 

It used a similar approach to that which it had used at proposal for under construction NGCC. It 

looked back at a significant sample size (greater than 30 units) of relatively new coal units and 

their utilization in 2012. Because fewer coal units have come online in the last five years relative 

to NGCC, EPA had to rely on a 10-year lookback to get a reasonable sample size. At proposal, 

EPA had used heat input and maximum hourly heat input capacity to estimate capacity factors 

and retained it when beginning its assessment of reasonable coal utilization rates (EPA had used 

this data as the “commenced commercial operation” data point was not readly available in the 

2012 data file) . The 10 year look back using this metric suggested a 60% capacity factor. EPA 

considered this, along with comments that pointed out that under construction capacity would 

have some replacement value instead of incremental value. EPA took all of this into account 

along with the notion that these coal EGUs were located in coal intensive regions or states that 

had some coal retirements scheduled to occur. As discussed in section VI, EPA did not want to 

project where under construction generation would potentially replace 2012 generation. EPA 

recognizes that some of these coal units do and likely will continue to operate at capacity factors 

greater than 60% utilization, but it determined that 60% utilization was a reasonable estimate to 

utilize given the resulting generation and emissions were assumed to be incremental to the 2012 

data. EPA also notes that 60% was within the range of 2013 net capacity factors provided by 

commenter for the coal units that had commenced construction in 2012.

These types of considerations were necessary as EPA tried to reconcile the commenters support 

to continue to use a historical dataset for its baseline, but also to reflect the remaining affected 

EGUs that were still under construction in 2012. One alternative would be to use a projected 

model baseline that estimated the incremental versus replacement impact of these sources. 

However, as described in preamble section VI and supported by commenters, EPA continued to 

use a historical baseline for its final rule analysis.

Finally, for the handful of under construction coal plants, EPA conservatively assumed the state 

average coal emission rate for existing units as the emission rate for the under construction 

sources. This is consistent with EPA’s proposed treatment of under construction NGCC. EPA 

recognizes that some of these coal facilities (e.g., Edwardsport) will likely operate at emission 

rates well below this state average value. However, EPA took the conservative approach to 

estimating emissions from these under construction fossil steam sources to be consisistent with 

its proposed approach, support from from comments to use such an approach for under 

construction coal units, and to avoid potentially understating the emission rates expected from 

the under construction units.

The following are summaries of the specific public comments under this comment:

Commenters stated partial year operation of new units in 2012 affected state baseline emissions.

Commenters stated EPA should give such units the benefit of at least a 55% capacity factor, 

which EPA presumes for NGCC capacity that was under construction in 2012.

Commenters added EPA did not adjust for these partial year operations. The commenters stated 

in Arkansas the newly-constructed Turk Power Plant came on-line and operated for only nine 

days in 2012. The commenters said in Idaho, Idaho Power's new Langley Gulch NGCC came on-
13

line half-way through 2012; due to start up and the partial year operation, Langley Gulch had 

only a 20 percent capacity factor. The commenters added because of Idaho's emission goal of 

228 lbs/MWh, it will be impossible for Idaho Power to increase utilization of its most efficient 

unit to offset the declines in imported coal-fired generation from other states.

Commenters added many of the EGUs that EPA has classified as "existing" for the purposes of 

re-dispatch under Building Block 2 did not commence commercial operation in 2012 at all. The 

commenters stated EPA incorrectly assumes that these units were available to provide generation 

throughout the year but operated at a zero percent capacity factor, meaning that their entire 

capacity was available for re-dispatch under Building Block 2. The commenters said the 

Agency's faulty analysis added substantial amounts of NGCC generation to the state goal 

calculation for Alaska, California, Florida, Louisiana, and Utah - and as a result, inappropriately 

reduced generation from Subpart Da units in equal amounts. The commenters stated these units 

should have been considered to be "under construction" and unavailable for redispatch in state 

goal calculation. 

Commenters added South Dakota's Deer Creek Station appears to have a 1 percent capacity 

factor based on nameplate capacity, but in fact did not begin commercial operation until August 

2012. 

Commenters added the state goals for California, Colorado, Connecticut, Georgia, Idaho, 

Mississippi, North Carolina, Ohio, and Tennessee (and potentially others) all include artificially 

low 2012 generation levels from NGCC units that commenced operation during that year. The 

commenters stated for nearly all of these units, the annual capacity factor increased significantly 

during the following full year of operation. The commenters added North Carolina's Dan River 

facility commenced operation in December 2012 and reported an annual capacity factor of only 1 

percent, but reported a 73.2 percent annual capacity factor the following year. 

Commenters added as described in the Marchetti Report, for Florida, EPA's value for existing 

NGCC capacity incorrectly includes the 1,210 MW Cape Canaveral NGCC facility (which did 

not begin commercial operation until April 2013) and the 122.4 MW Orlando Cogen facility (a 

compressed storage facility). 

Commenters added as described in the Marchetti Report, EPA's goal calculation for North 

Carolina includes "existing" NGCC capacity from the 691.1 MW Dan River facility, which only 

commenced operation in the last month of 2012, and the 1068 MW Lee Combined Cycle Plant, 

which did not provide any generation to the grid until 2013.

Commenters added the proposed Rule's current baseline year (2012) does not include annual 

emissions from the John W. Turk, Jr. Power plant; the plant was placed in service in December 

2012.

Comment 11: Under construction Units

Response 11: Under construction units are identified in Appendix 1 and 2 of the CO2 Emission 

Performance Rate and Goal Computation TSD for CPP Final Rule. The Dresden unit is 
14

categorized as under construction based on comments that the EPA treat units commencing 

operation in 2012 as under construction. The Dresden facility is not double counted in the final 

CPP rule inventory of likely affected units.

Cheyenne Prairie Generating Station capacity assumed in building block two has been adjusted 

down to the reported net summer capacity value which his most more closely aligned with the 

commenters’ value.

The Moselle units 1 and 2 constitute the 150 MW of identified under construction NGCC 

capacity in Mississippi.

The EPA has categorized Cane Rune facility as a likely affected unit that is under construction 

based on the under construction status reported in the 2013 EIA-860 form and based on 

Louisville Gas and Electric public statements (and comment) regarding the construction start of 

the facility such as those available at https://lge-ku.com/our-company/power-plants-andcompressor-stations/cane-run-generating-station/cane-run-updates

In regards to the applicability status of the Orlando Cogeneration unit,. EPA has left the unit 

them in the baseline inventory as a likely affected units upon review of its status in other EPA air 

programs, the size of the unit, and the amount of net electricity generation of the unit. However, 

EPA notes that this does not constitute a final applicability determination. See section VII of the 

preamble for further discussion.

The following are summaries of the specific public comments under this comment:

Commenters stated the treatment of certain under-construction EGUs contains errors. 

Commenters added least one NGCC unit - Ohio's Dresden Energy Facility - is double-counted as 

both existing and under-construction in 2012, meaning that a portion of its generation is redispatched twice in the goal calculation. 

Commenters added American Electric Power's ("AEP") NGCC plant in Dresden, Ohio and 

American Municipal Power's NGCC plant in Fremont, Ohio both operated for 11 months in 

2012; EPA, however, incorrectly concluded that those plants operated for a fraction of that time; 

as a result, Ohio's actual NGCC generation in 2012 was much higher than is reflected in EPA's 

calculations for Ohio. The commenters added equally important, EPA assumed that 539 MW of 

new NGCC capacity is "under construction" in Ohio; however, that figure is attributable to the 

AEP Dresden plant, which is already fully operational and has been accounted for in the existing 

NGCC calculations. The commenters said the correct value of NGCC capacity "under 

construction" in Ohio is 0 MW; EPA significantly overstated the potential for redispatch to 

NGCC units in Ohio, resulting in more stringent emission standards for Ohio. 

Commenters stated the Dresden Plant was operational on January 31, 2012; therefore, the 

commenters asserted that there were no under-construction NGCC units in 2012 and that the 

value in the goal setting calculation should be 0 MW for Ohio. 
15

Commenters added the amounts of under-construction capacity listed for California, Colorado,

Florida, Mississippi, and North Carolina are also questionable, and the fact that EPA is unable to 

identify any under-construction units in those states by name suggests that development of those 

units is too uncertain to rely on those units for re-dispatch.

Commenters stated the EPA lists 1,157 MW of unspecified under-construction capacity for 

Florida as described in the Marchetti Report. 

Commenters added EPA included NGCCs under construction in state goal calculations 

subsequently making emission rate goals more stringent, particularly in North Carolina. The 

commenters said first, EPA assumed NGCCs under construction will meet the operational 

applicability criteria. The commenters said second, EPA assumed NGCCs under construction 

will operate at a 55 percent average capacity factor in the absence of this proposal. The 

commenters said finally, EPA did not identify the specific NGCCs under construction in each 

state. 

Commenters added EPA cannot and should not incorporate NGCCs that are under construction 

into state goal calculations; for an NGCC to become an affected source it must supply "one-third 

or more of its potential electric output...to a utility distribution system on a three-year rolling 

average basis." The commenters said EPA has not provided any data to support that NGCCs 

under construction will meet the proposed applicability criteria because it is not possible for EPA 

to predict the future electric output of units that are not commercially online and EPA must 

remove these units from state goal calculations. 

Commenters added EPA did not identify the unit names that are under construction further 

complicating the inclusion of these units. The commenters said for example, one can surmise that 

Florida's unit under construction is Riviera; however, the capacity that EPA used does not match 

Riviera's actual capacity of 1,212 MW. The commenters said the only under construction unit 

that Southern Company could identify in North Carolina is L.V. Sutton with a capacity of 622 

MW, which leaves 1,627 MW of unidentified under construction capacity in North Carolina. The 

commenters said EPA should omit or clarify these data anomalies.

Commenters added EPA has mistakenly identified the Under Construction Capacity of the 

Cheyenne Prairie Generating Station as 220 MW. The commenters said as constructed and put 

into operation on October 1, 2014, the net output of the combined cycle (NGCC) unit is 95 MW; 

which is the net output adjudicated and authorized for inclusion in rate base in proceedings 

recently concluded before this Commission. The commenters said although the name plate 

capacity of the unit is 100 MW, its capacity has been adjusted to account for the fact that it will 

be operated at over 6000 feet above sea level, as both elevation and air density affect output. The 

commenters said Wyoming's target should be corrected to accurately reflect the 95MW net 

output.

Commenters identified an error in the data used to calculate Mississippi's 2012 baseline emission 

rate. The commenters said EPA identified a 150 MW NGCC believed to be under construction 

and included its projected emissions in the goal computation table, the commenters have been 

unable to identify this unit and is unsure of its existence; therefore believe its inclusion to be in 

error. 
16

Commenters stated Building Block 2 includes the re-dispatch of a separate category of units that 

EPA determined were "under construction," but that had not commenced operation as of January 

8, 2014 - the effective date of proposal for the 111(b) guidelines. The commenters said EPA's 

approach for re-dispatching these "under construction" units assumes that these facilities are 

intended to be constructed to meet a demand that is equivalent to a 55 percent capacity factor; 

based on this assumption, EPA calculated that 15 percent of this "under construction" capacity 

would be re-dispatched under Building Block 2. 

Commenters stated EPA determined that nine states had NGCC units that were "under 

construction" - a determination that has been found to be incorrect for each of the nine states. 

The commenters said for five of nine states, the units determined to be "under construction" by 

EPA represent "potential" units identified within EPA's NEEDS database and Integrated 

Planning Model; NEEDS describes the potential units as follows: "'Potential' units refer to new 

generating options used in IPM for capacity expansion projections of the electric industry... 

whereas potential units are endogenous to the model in the sense that the model determines the 

location and size of all the potential units that end up in the final solution for a specific model 

run." The commenters said these "potential" units do not exist and therefore cannot represent real 

projects that have been proposed, designed, permitted, or constructed; to the extent that these 

"potential" projects come to fruition, they would be subject to the new, not existing, source 

requirements; as such, these "potential" units should not be considered in Building Block 2. The 

commenters added for the remaining four states, inaccuracies in the "under construction" 

capacity identified are largely a result of the EPA incorrectly representing the disposition of 

these units; for example, the one "under construction" facility identified by EPA for Ohio is the 

Dresden Plant that was actually commissioned in 2012; the one "under construction" facility in 

Kentucky is the Cane Run project, which has yet to receive an air permit and has not yet 

commenced construction.

Comment 12: Units that do not meet the applicability criteria should not be included in state 

goal calculations; NGCCs not meeting the "one-third" sales criteria and/or the 219,000 MWh 

net-electric output criteria.

Response 12: The EPA believes that non-cogeneration NGCC facilities greater than 25 MW 

likely meet the final rule applicability provisions and are thus included in the baseline.

The following are summaries of the specific public comments under this comment:

Commenters stated EPA misapplied Building Block 2 to non-affected NGCCs based on the 

proposed applicability criteria. The commenters said the Agency did not complete an evaluation 

of NGCCs on a three-year rolling average-basis. The commenters evaluated the 2010, 2011, and 

2012 eGrid generation data for the NGCCs that EPA included in the goal calculations for select 

states; several NGCCs did not meet the Agency's proposed "one-third" sales and/or 219,000 

MWh output criteria on a three-year rolling average basis. The commenters removed these units 

from the goal calculations; and all other factors affected by the removal of these units were 

adjusted accordingly, such as historic NGCC generation, the NGCC emission rate, and the 
17

NGCC nameplate capacity. The commenters provided a table (Table 13) of the NGCCs not 

meeting the "one-third" sales criteria and/or the 219,000 MWh net-electric output criteria.

Comment 13: Incorrect inclusion of co-generation units that do not meet the definition of an 

affected source

Response 13: The EPA has revised the proposed goals to not include useful thermal output in 

subcategory-specific emission performance rate calculations or state goals. Moreover, EPA has 

reviewed the comment and made corrections to Lamar Stall, Louisianna 1 units, Perryville units, 

and Washington Parish based on the commenters feedback.

The following are summaries of the specific public comments under this comment:

Commenters stated the inclusion of co-generation units that do not meet the definition of an 

affected source was incorrect.

Comment 14: Unpermitted sources should be removed from baseline

Response 14: The EPA agrees Washington Parish should be removed from the baseline. It is 

now listed as “EXCLUDE” in column A of The EPA’s Appendix 1 of the CO2 Emission 

Performance Rate and Goal Computation TSD for CPP Final Rule.

The following are summaries of the specific public comments under this comment:

Commenters stated unpermitted sources should not be included in EPA's computations. 

Commenters stated the Washington Parish Energy Center was first permitted on June 25, 2000, 

however, construction of the facility was never completed. The commenters added on June 19, 

2009, at the request of Calpine Corporation, LDEQ withdrew the facility's application for a Title 

V renewal, effectively rendering the existing permits for the facility null and void. The

commenters stated the facility remains unpermitted as of today, and therefore should be removed 

from EPA's computations.

Comment 15: Incorrect inclusion of natural gas steam plant emissions with co-located gas steam 

units

Response 15: The EPA has attributed the emissions from the Arsenal Hill Units 6A and 6B to the 

J Lamar Stall units per the comment.

The following are summaries of the specific public comments under this comment:
18

Commenters stated the CO2 emissions attributed to the company's Arsenal Hill natural gas steam 

plant in Louisiana were mistakenly included with those from the co-located gas steam units at 

the Arsenal Hill Plant.

Comment 16: Incorrect inclusion of units that are natural gas steam boilers or simple cycle 

units

Response 16: The EPA has made adjustments to the baseline based on this comment and your 

attachment. This revised unit-level data is available in Appendix 1 of the CO2 Emission 

Performance Rate and Goal Computation TSD for CPP Final Rule. As discussed in Sections IV

and VI of the preamble, the EPA does view some of oil gas steam boilers as being likely affected 

sources based on the unit characteristics. As noted in Section VI of the final rule preamble, no 

simple cycle units are viewed as being likely affected sources and none are included in the 

baseline in this final rule.

The following are summaries of the specific public comments under this comment:

Commenters stated the inclusion of units that are natural gas steam boilers or simple cycle units 

was incorrect.

Commenters added another data quality concern pertains to EPA's confusion regarding the 

configuration and operation the AEP Arsenal Hill and J. Lamar Stall ("Stall") generation units in 

Louisiana. The commenters said the Arsenal Hill plant is a natural gas steam boiler unit that was 

commissioned in 1960; the Stall plant is a natural gas combined cycle unit commissioned in 

2010 that consists of two combustion turbines and heat recovery steam generator trains that 

supply steam to a common steam turbine. The commenters said the Stall plan is co-located at the 

Arsenal Hill facility; both units are covered under the same Title V operating permit, which 

identifies the Arsenal Hill unit as 5A and the two Stall combustion turbine units as 6A and 6B. 

The commenters said the Clean Air Markets Division database identifies CO2 emissions from 

the units using a common Arsenal Hill facility name (e.g. Arsenal Hill 5A, Arsenal Hill 6A, and 

Arsenal Hill 6B). The commenters said this nomenclature led to emissions from the facility 

being incorrectly considered in the Louisiana state goal calculations. The commenters provided a 

table identifying the error and correct values. The commenters said CO2 emission data used by 

EPA to calculate the proposed Louisiana state goal should be updated to accurately reflect the 

emissions associated with the Arsenal Hill and Stall units; specifically (if EPA continues to use 

the building block approach and 2012 data), the CO2 emissions data for Arsenal Hill should be 

revised to 38,301 tons (from 1,484,758 tons); for the J. Lamar Stall facility, the CO2 emission 

data should be revised to 1,446,457 tons (from 1,462,385.1 tons). The commenters provided 

a summary of other data discrepancies in Appendix B to their comments. The commenters

said EPA must correct these issues and perform a thorough quality assurance check of all the 

data inputs and calculations used to calculated the state goals.
19

Comment 17: BB1; heat rate improvements

Response 17: See section V.C. of the final rule preamble of the CPP for the EPA’s response to 

this comment and more information about Building Block 1 and the CO2 Emission Performance 

Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP for the final 

goals.

The following are summaries of the specific public comments under this comment:

Commenters stated owners of generating units have deployed heat rate improving technologies 

as usual business practice; with fuel as the largest variable operating cost component, deriving 

even small savings provides payoff over time. The commenters said the pace of technology 

deployment - and the specific means themselves - differs from those proposed by EPA. The 

commenters said the key differences are in the means selected and the payoff anticipated; the 

heat rate reducing actions described by EPA have all been broadly used in industry - for those 

actions where the pace of application is low, it is usually because cost is prohibitive or that 

application is not feasible. The commenters said many unit owners or operators employ industry 

and supplier "best practices" to improve unit heat rates; that many owners have implemented 

these heat-rate improving techniques means the 2012 baseline for EPA's analysis already 

includes CO2 reductions due to heat rate improvements listed by EPA.

Commenters added discussions with numerous owners show many heat rate-improving options 

are already consistently deployed as matter of conventional practice; for example, one large 

multi-state system owner has deployed, or has plans to deploy, steam turbine upgrades on over 

90% of the 2016 planned generating capacity. The commenters said the investments are mostly 

distributed from 2003 through 2016; steam turbine upgrades represents the most significant heat 

rate improvement option available to industry, thus units that have already deployed turbine 

upgrades receive no credit and have limited options to meet the rule. The commenters said as a 

consequence, the CO2 emission baseline for 2012 includes for many units the payoff of 

investments made in recent years.

Commenters stated in setting each state's target goal for CO2 emissions, EPA uses Building 

Block 1 to reduce emissions of CO2 from the 2012 baseline. Building Block 1 assumes an 

average efficiency increase of 6% for each coal plant by reducing the heat rate (btu/kw) by 

6%; EPA bases this assumption on a study conducted by Sargent and Lundy in 2009 to assess 

available heat rate improvement at coal plants in the United States; EPA further assumes that 2% 

of the efficiency increase comes from physical changes, such as equipment upgrades, and 4% of 

the efficiency increase comes from changes in operational practices. The commenters said these 

assumptions are flawed; where available, many coal units, such as Independence Unit 2, already 

have undertaken efficiency improvements; the turbine for Independence Unit 2 was upgraded 

prior to the 2012 baseline. The commenters said because EPA's proposal uses a certain, singleyear baseline, this unit gets no credit for reducing its CO2 emissions prior to the baseline and is, 

in fact, penalized, because now the unit must implement additional measures to further reduce 

CO2, and these measures likely will have a higher marginal cost than the actions already taken. 

The commenters said similar projects, such as the installation of intelligent soot blowers, the 

operational improvement of feedwater heaters, the installation of improved fan blades, and the 
20

installation of neural networks, frequently took place at coal units across the nation prior to the 

2012 baseline.

Commenters stated the foundation for EPA's BSER - its 2012 baseline - is unreasonable and 

arbitrary. The commenters said opportunities for improving heat rate efficiency have already 

been captured by generators in Texas and elsewhere prior to 2012, mainly due to participation in 

competitive, wholesale markets that dispatch from lower cost units. The commenters said these 

heat rate improvements that have already been implemented are not accounted for in the analysis 

for building block 1. The commenters said within building block 1, EPA relies on a database 

(National Electric Energy Data System ("NEEDS") database) of the existing power plant fleet, 

including coal-fueled, natural gas-fired, and other units. The commenters said utilizing the 

NEEDS database as referenced by EPA within the proposal, there was approximately 314 

gigawatts ("GW") of coal-fueled generating capacity operating in 2012. The commenters said of 

the 314 GW of coal-fueled capacity, approximately 207 GW was operating in a competitive 

wholesale energy market as of 2014, representing approximately 65% of the coal fleet. The 

commenters said due to the nature of the competitive wholesale energy market (i.e. plants that 

are more efficient are dispatched more than units that are less efficient), many of the coal-fueled 

power plants would have likely already implemented many of the heat rate improvements to 

improve the plants' economic position in the market. The commenters said NERC has confirmed 

this for U.S. units and, as confirmed by ERCOT, Texas EGUs in particular have aggressively 

pursued efficiency improvements already, and thus the heat rate improvements EPA assumes 

cannot be achieved from existing EGUs. The commenters said Texas Public Utilities 

Commissioner Kenneth W. Anderson, Jr. affirmed this for Texas in recent legislative testimony: 

"ERCOT's competitive market has in effect, already been implementing Block 1 for over a 

decade. By using 2012 as the base year, Texas gets no credit for having already achieved a 

significant amount of EPA's Block 1 goals." The commenters said a major expense in generating 

electricity is fuel; wherever possible, the commenters (and other market participants) have 

looked for and adopted efficiency measures to reduce the amount of fuel used to generate 

electricity, thus heat rate improvements are not available for additional reductions.

Commenters stated that Clean Water Act Section 316(b) regulations were finalized in May 2014, 

and some units could be required to go from once through cooling to closed cycle cooling. The 

commenters stated that if this is required, new cooling towers will be needed and other 

compliance controls could include fish screens, new intake structures, and fish handling systems 

which could increase heat rate. The commenters stated that these heat rate degradations have not 

been included in the 2012 heat rate baseline for Building Block 1. 

Comment 18: BB2 NGCC errors

Response 18: See section V.D. of the final rule preamble of the CPP for the EPA’s response to 

this comment and more information about Building Block 2 and the CO2 Emission Performance 

Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP for the final 

goals.

The following are summaries of the specific public comments under this comment:
21

Commenters stated individual utilities have identified specific errors made by the EPA on the 

amount of NGCC capacity that could be redispatched in submissions to their public service 

commissions. The commenters said for example, Southwestern Electric Power Company 

(SWEPCO) in comments to both the Louisiana Public Service Commission and the Public 

Utility Commission of Texas on the Proposed Guidelines identified several steam electric and 

simple-cycle units that are not NGCC units, as well as the inclusion of a cogeneration unit that 

does not meet the definition of an affected source under the Proposed Guidelines. The 

commenters said the erroneous inclusion of these units adds almost 7.7 million MWh of excess 

natural gas-fired generation into the denominator of the calculation of Louisiana's state goal; this 

excess generation represents almost 20 percent of Louisiana's redispatched NGCC generation 

under Building Block 2.

Commenters added for those units that began operation after 2012, the EPA needs to shift them 

to NGCC capacity "under construction." The commenters said in terms of units that have been 

either out of service or have/will be retired, EPA should remove them from the 2012 baseline, 

because they inflate the amount of NGCC capacity available for redispatch. The commenters

said also, the EPA needs to remove all non-affected units from the 2012 baseline, such as those 

identified by SWEPCO; these erroneous inclusions inflate the amount of NGCC generation that 

is included in calculation of the state goals in Building Block 2, resulting in greater amounts of 

coal and O/G steam generation being displaced in a particular state.

Commenters noted several discrepancies with the treatment of the Dresden Plant, a 539 MW 

nameplate capacity NGCC facility in Ohio. The commenters said firstly, it appears that the unit 

was "double-counted" in the re-dispatch calculations; that is, the generation of the Dresden Plant 

was counted as an existing unit, but the 539 MW of nameplate capacity were dispatched as an 

"under-construction" unit. The commenters understood that the Dresden Plant became 

operational on January 31, 2012, and is therefore not to be treated as an "under-construction" unit 

in the re-dispatch calculation. The commenters added the 2012 EIA-923 report incorrectly 

published the net generation data for only November and December 2012 for these units; net 

generation for this facility in 2012 was 2,599,011 MW-h, and not the incorrectly published 

470,486 MW-h used in the goal setting calculations. The commenters said via stakeholder 

outreach to American Electric Power, the commenters were provided corrected generation data 

for the Dresden facility, as well as AEP's correspondence with EIA to correct the publication 

issue.

Comment 19: Planned re-dispatch

Response 19: As explained in the CO2 Emission Performance Rate and Goal Computation TSD 

for final CPP, the EPA did not adjust the baseline based on scheduled or planned retirements or 

conversions.

The following are summaries of the specific public comments under this comment:

Commenters stated under building block 2, EPA evaluated the re-dispatch of existing natural 

gas EGUs and assumed that such EGUs would operate at a 70 percent capacity factor; this 70 
22

percent assumption reflects plans that Virginia's utilities already have in place. The commenters

said for example, excluding the units for which generation contracts with Dominion will expire 

in the next few years (Hopewell and Doswell), the average capacity factor for existing natural 

gas EGUs in Virginia was already 71.6 percent in 2012. 

Commenters added EPA assumed that a state's generation can only be re-dispatched to this 70 

percent level if there is enough historical fossil generation to be displaced; in 2012, existing 

natural gas EGUs in Virginia were operating at an average capacity factor of 60 percent; thus, 

Virginia would require an increase of 6.2 million MWh to achieve a 70 percent capacity factor. 

The commenters said since Virginia's 2012 coal and steam generation was 14.8 million MWh, 

there is already sufficient generation to allow for re-dispatch of the state's natural gas EGUs up 

to the 70 percent assumption. 

Commenters stated the 70 percent natural gas capacity assumption is also reasonable in light of 

existing pipeline capacity; according to the EIA, the total capacity of the gas pipelines delivering 

into Virginia is 8,011 MMcf per day, which includes 1,800 MMcf per day of pipeline capacity 

entering Virginia from the Cove Point LNG terminal. The commenters said the 70 percent 

capacity assumption would increase the level of total gas delivered to customers during the peak 

month from 1,485 MMcf per day to 1,583 MMcf per day; even subtracting the 1,800 MMcf per 

day of gas inflow capacity from the LNG terminal and the 2,175 MMcf per day that flows out of 

Virginia to other markets, the average daily amount of pipeline capacity available to supply 

Virginia markets would still be more than two and a half times the peak month gas use 

(approximately 4,000 MMcf per day of capacity vs. approximately 1,600 MMcf per day of 

consumption); thus, existing pipeline capacity should be able to accommodate the additional 

capacity at existing natural gas EGUs. 

Commenters stated Synapse Energy Economics analyzed the 2012 U.S. electric dispatch system 

and evaluated the available, unused natural gas generation that could feasibly displace coal-fired 

generation on a region-by-region basis; parts of Virginia are in three different sub-regions: 

SRVC, SRTV, and RFCW. The commenters said the Synapse analysis indicated that each of 

these three regions could exceed EPA's natural gas re-dispatch target of 70 percent and could, 

under the assumptions modeled, reach an 80 percent capacity factor. 

Commenters stated as such, based on utility plans and the reasonableness of the assumption as 

applied to Virginia, the commenters included the 70 percent assumption in their calculations; as 

with EPA's calculation, the increased capacity from existing NGCC units were assumed to 

operate at the average historical emissions rate of 903 lbs/MWh; applying this assumption results 

in a decrease from 1,383 lbs/MWh to 1,245 lbs/MWh, a reduction of 138 lbs/MWh.

Comment 20: Nameplate capacity

Response 20: The EPA relies on net summer capacity for building block two and BSER 

quantification in the final rule. See section V.A of the final rule preamble of the CPP for more 

information. EPA has changed the capacity on the Beatrice unit, although it no longer relies on 

nameplate capacity for BB2 quantification.
23

The following are summaries of the specific public comments under this comment:

Commenters stated the interim and final state targets increase when select unit data errors are 

corrected. The commenters used the goal calculation spreadsheet provided by EPA and replaced 

the state's NGCC nameplate capacity with the appropriate net summer capacity while holding all 

other assumptions constant; this change increased final goals: six percent for Alabama; 14 

percent for Florida; three percent for Georgia; two percent for Mississippi; and four percent for 

North Carolina.

Commenters added EPA erred by re-dispatching to the nameplate capacity of NGCCs; EPA 

should have used net summer capacity to represent accurately the generation potential from 

NGCCs. The commenters said EPA's use of nameplate capacity is in direct conflict with the 

capacity of existing generating units included in NEEDS v.5.13 and used in IPM modeling, for 

example, Base Case v.5.13. The commenters said per EPA, the NEEDS unit capacity values 

implemented in EPA Base Case v.5.13 "reflect net summer dependable capacity" to the extent 

possible. The commenters said EPA further defines "net summer dependable capacity" as "the 

net capability of a generating unit in megawatts (MW) for daily planning and operation purposes 

during the summer peak season, after accounting for station or auxiliary services."

Commenters stated in quantifying the amount of energy that could be generated from existing 

NGCC units in Nebraska, the EPA, while using the correct nameplate capacity for the steam 

turbine at NPPD's Beatrice Power Station, used incorrect data for the nameplate capacity for both 

Combustion Turbine 1 (CT1) and CT2 at the Station. The commenters said the correct nameplate 

capacity for each of CT1 and CT2 is 76.6 MW. Commenters said with these corrections, the total 

nameplate capacity for Beatrice Power Station should be 247.1 MW.

Comment 21: Incorrect net generation data

Response 21: Based on comments, the EPA is treating units that commenced operation in 2012 

as under construction and estimating generation and emissions of a capacity factor assumption of 

55% for NGCC units. Therefore, the EPA’s baseline and BSER quantification no longer relies 

on the EIA 923 generation data – which commenters asserted was incorrect - for the Dresden 

facility.

Also, Red Oak Power is included in the inventory of likely affected units in the final CPP rule.

The following are summaries of the specific public comments under this comment:

Commenters stated the incorrect net generation data was used in the baseline NGCC capacity 

calculation.

Commenters stated the 2012 EIA-923 report incorrectly published net generation data for AEP's 

Dresden NGCC plant by only including two months of generation. The commenters said this 

plant was actually operated for 11 months, so its actual generation was much higher than is 

reflected in EPA's calculations, resulting in a significant error in EPA's calculation of the Ohio 

state goal. NGCC capacity in Ohio, based on data in the 2012 EIA-923 report. 
24

Commenters added EPA relied upon the 2012 EIA-923 report for generation data, which 

incorrectly reported the generation for the Dresden NGCC unit as 470,486 MWh, instead of the 

2,599,011 MWh the unit actually generated. The commenters said in reviewing the error, it was 

determined that AEP had correctly reported the generation to the EIA, however a publication 

error by EIA led to the 923 report only reporting generation data for November and December of 

2012. The commenters said AEP notified EIA of this publication error on August 21, 2014; at 

the request of EIA, AEP resubmitted the 2012 generation data for the Dresden plant on August 

27, 2014. The commenters said AEP followed up with EIA on September 3, October 16, and 

most recently on November 19, 2014, regarding the status of revising and republishing the 2012 

EIA-923 report with the corrected information. The commenters said EIA's most recent response 

on November 20, 2014 indicates that the agency is targeting "mid-January" of 2015 for the 

revision.

Commenters stated EPA's spreadsheet titled "20140602tst-plant-level-data-unit-level-inventory" 

failed to include the Red Oak Power generation facility. The commenters said based on EIA 

data, this NGCC facility generated 5,083,335 MWhrs in 2012. The commenters added the 

facility reported 2,171,353 tons of CO2 to EPA's Clean Markets Division in 2012. The 

commenters said EPA must revise the baseline calculation to include this facility.

Comment 22: NGGC errors; combined cycle units used for cogeneration purposes.

Response 22: For the EPA’s response to this comment, see the CO2 Emission Performance Rate 

and Goal Computation TSD for CPP Final Rule supporting the final CPP. The EPA no longer 

quantifies useful thermal output in its BSER quantification, and believes this may address the 

commenters concern.

The following are summaries of the specific public comments under this comment:

Commenters noted that there appears to be an inconsistency in the way that the Sum of Carbon 

Dioxide (tons), Sum of Electric Generation (MWh) and Sum of Net Energy Output (MWh) in the 

Natural Gas Combined Cycle (NGCC) data for Algonquin Windsor Locks in the 2012 Plant level 

data for likely covered fossil sources (Goal Computation TSD Data File - Appendix 7) 

spreadsheet was calculated, as compared with the data for Capitol District Energy Center. The 

commenters said on the Unit-Level Inventory (Goal Computation TSD Data File - Appendix 7) 

spreadsheet, the Carbon Dioxide (tons), Electric Generation (MWh) and Net Energy Output 

(MWh) data for the STG was not added to the Carbon Dioxide (tons), Electric Generation 

(MWh) and Net Energy Output (MWh) data for the GTG for Algonquin Windsor 

Locks; however, the GTG and STG Carbon Dioxide (tons), Electric Generation (MWh) and Net 

Energy Output (MWh) data for Capitol District Energy Center were added together. The 

commenters said both facilities have combined cycle units that are used for cogeneration 

purposes. The commenters recommended that the Carbon Dioxide (tons), Electric Generation 

(MWh) and Net Energy Output (MWh) data be calculated on a consistent basis for Algonquin 

Windsor Locks and Capitol District Energy Center; the commenters realized that if a data 

correction is warranted, it will likely not impact Connecticut's final state goal.
25

Comment 23: Rebalance generation

Response 23: For the EPA’s response to this comment, see the CO2 Emission Performance Rate 

and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenters recognized that the EPA would likely be interested in "balancing" the assignment 

of generation at Sherco 3 by eliminating generation elsewhere. The commenters stated it would 

not be correct to simply assume that Sherco 3 generation could be replaced by adjusting 

generation at other Minnesota coal plants, or to remove generation from combined cycle plants 

in an effort to "rebalance" generation. The commenters added Xcel Energy responded to an 

inquiry from Minnesota's Department of Commerce, the state authority charged with reviewing 

electric utility rate requests: "... Given the dynamic nature of generation systems and the need to 

make multiple purchase decisions instantaneously in order to respond to load variations, it is 

impossible to manually determine what energy source was deployed in place of an out-of-service 

plant..."

Commenters suggested that EPA conduct an ex post modeling exercise using an electricity 

system dispatch simulation model to evaluate which generation resources would be pushed out 

of the dispatch order if units certain units had run in 2012, and adjust all generation accordingly.

Comment 24: Nuclear plant closed post 2012; recommendations for adjusting baseline

Response 24: The EPA understands the unique circumstances of the The Kewaunee Nuclear 

Plant closure. It has not made an adjustment to the baseline or the final Wisconsin state goal. 

EPA has consistently used a 10% threshold when considering similar adjustments for unit outage 

or hydro concerns. While it recognizes the immediate impact on fossil generation in 2013, the 

first year of compliance in the final CPP had been moved to 2022 – which provides more time 

for changes in the states power supply. Moreover, the EPA notes that there are significant 

capacity additions in the same region that are accounted for elsewhere in the baseline thay could 

conceivably be providing replacement generation for scheduled closures such as this one. For 

more information about how the final goals were calculated please see the CO2 Emission 

Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenters stated Kewaunee Nuclear Plant closed in May of 2013; the loss of Kewaunee's 

generation (it provided 7.3% or 4.5 million MWh of Wisconsin's electricity generation in 2012) 

resulted in other generators (mostly fossil) filling the void. The commenters said any historical 

baseline that EPA could choose based on currently available data would include generation from 

Kewaunee and thus would not truly represent Wisconsin's power sector going forward. The 

commenters said because of the loss of this carbon-free generation source, it will be impossible 

for the state to attain the emissions levels achieved in 2012 without dramatic actions; 
26

accordingly, EPA must adjust Wisconsin's 2012 baseline to account for the loss of generation 

from Kewaunee. The commenters said EPA has already adjusted Wisconsin's nuclear goal in 

building block 3 by eliminating Kewaunee's generation from the 2012 baseline for purposes of 

that building block. The commenters requested that the EPA treat the closure of Kewaunee 

consistently in each building block of the rule by adjusting the 2012 baseline to exclude the 

generation previously attained from that unit.

Commenters stated there are four different ways were investigated by which EPA could adjust 

Wisconsin's baseline and goals to account for the retirement of Kewaunee. These approaches 

include: 

1. Assuming the generation would be replaced by coal; 

2. Assuming the generation would be replaced by a combination of coal and natural gas; 

3. Assuming the generation would be replaced by a combination of coal, natural gas and 

renewables; and 

4. Using a 12-month baseline from July 2013 to June 2014 to represent how the power 

sector actually functioned after Kewaunee closed. 

Commenters stated electricity sales remained flat from 2010-2013, but overall fossil generation 

in Wisconsin increased significantly from 2012 to 2013, and all of this increase can be correlated 

with replacement of Kewaunee's power. The commenters said because sales were similar in 2011 

and 2013, the commenters compared fossil generation in 2013 (when Kewaunee operated on a 

much smaller scale as it was shutting down) with that in 2011 (when it was fully operational) to 

determine the proportion in which NGCC and coal units ramped up during this time. (2012 was 

excluded because gas prices were so low that year.) The commenters used the amount by which 

in-state renewable generation expanded from 2012 to 2013 (2012 was used in this case because 

RE generation would not be directly affected by natural gas prices). The commenters said the 

combination of expanded fossil generation and additional renewables accounts for 99% of the 

needed expansion.

Comment 25: Nuclear in base year

Response 25: Nuclear generation is not part of BSER quantification in this final rule. See section 

V.A of the final rule preamble for discussion of nuclear generation and the final BSER 

determinattion. See section VIII of the final rule preamble of the CPP for a discussion on how it 

may be used in compliance.

The following are summaries of the specific public comments under this comment:

Commenters stated EPA specifically requests comment on the timing aspect of whether nuclear 

uprates and similar zero-emission source additions to generation should be allowed to count 

toward a state's compliance with 111(d) goals and indicates some flexibility to this baseline year 

approach, likely because of the long time horizon and significant expense of planning and 
27

constructing a nuclear uprate. The commenters said EPA also indicates that states are given and 

should exercise flexibility in development of 111(d) plans that incentivize fossil emission 

reductions (such as those that may be created through nuclear uprates). 

Commenters stated the inflexible use of 2012 as a single year baseline for a nuclear uprate (even 

the "end of the base year") is problematic. For example, the commenters completed the 

construction portion of a 178 MW uprate of its Grand Gulf Nuclear Station ("GGNS") near Port 

Gibson, Mississippi in June 2012 at an approximate cost of $874 million; from June until 

September 2012, GGNS continued to operate at its pre-uprate capacity while finalizing 

preparations for movement to the higher (post-uprate) capacity; GGNS began operations at its 

uprated capacity in September 2012; however, as part of the extended power uprate project, the 

commenters included an operational flexibility power flow mapping design called 

MELLA(plus). The inclusion of MELLA (plus), and operation under the parameters it allows, 

requires an additional operating license modification approval by the Nuclear Regulatory 

Commission. The commenters submitted its MELLA (plus) license request change as a part of 

the extended power uprate project in the first quarter of 2014 and expects NRC approval in May 

2015; these activities have delayed final close-out of this project. 

Commenters stated there is no basis for disallowing the states that use GGNS's capacity and 

electricity the benefit of applying 178 new MW of zero-emission electricity toward their 

compliance demonstrations merely because the construction phase of the extended power uprate 

project ended in September 2012 rather than in January 2013, or in February 2014, especially 

since other phases of project approval by the NRC have taken until after January 2014 (the rule 

proposal date). The commenters said this is the type of issue that should be left to the discretion 

of the state in developing its section 111(d) plan and, indeed, in "establishing standards of 

performance" under section 111(d)(1)(A). The commenters said the substantial investmentbacked decision, made by the commenters and the co-owners of GONS and approved by state 

utility regulators through the issuance of a certificate of public convenience and necessity, likely 

has avoided or displaced significant fossil emissions and will continue to do so for many years to 

come. The commenters said states should be given the flexibility to use a variable baseline year 

when determining which zero-emission projects can be used for compliance demonstrations.

Commenters stated the rule as it is currently structured would almost entirely discount the clean 

energy contributions (nearly 2/3 of the carbon free energy in the US) of our current nuclear 

energy facilities and effectively penalize states that have new plants under construction. The 

commenters asked how is it possible that the formula for calculating the "baseline" emissions 

profile of each state specifically excludes operating nuclear plants; the commenters said 

the formula must treat clean energy generators equally and include 100% of their output in the 

baseline calculation.

Comment 26: The EPA should remove all the non-fossil generation from the BSER baseline 

year.

Response 26: The final rule does not include any non-fossil sources in its baseline value of 

emissions and generation from likely affected EGUs. However, the 2012 unit-level sheet does 
28

provide information on approximately 20,000 units – including non-fossil units – but the 

designation of “exclude” in column A indicates that they were not included in the baseline totals 

relied on as the starting point for deriving subcategory-specific rates.

The following are summaries of the specific public comments under this comment:

Commenters stated EPA has included non-hydro renewables and a portion of nuclear power in 

calculating the 2012 state emission rates; we encourage EPA to examine the benefits of 

removing all the non-fossil generation from the BSER baseline year starting point in the formula.

Comment 27: The EPA should include all the non-fossil generation from the BSER year

Response 27: The adjusted baseline value shown at proposal and referred to here by 

commenters did reflect some of the existing non-fossil technologies. See section VIII of the final 

rule preamble of the CPP for more discussion on what measures and sources may be counted 

towards compliance in the final CPP Rule. The final rule does not include any non-fossil sources 

in its baseline value of emissions and generation from likely affected EGUs. However, the 2012 

unit-level sheet does provide information on approximately 20,000 units – including non-fossil 

units – but the designation of “exclude” in column A indicates that they were not included in the 

baseline totals relied on as the starting point for deriving subcategory-specific rates.

The following are summaries of the specific public comments under this comment:

Commenters stated EPA's baseline does not include existing renewables, energy efficiency, and 

nuclear. The commenters said when 2012 generation from other sources - in particular, existing 

non-hydropower renewable energy generation and approximately 6% of total nuclear generation 

is taken into account, the baseline for North Carolina is much lower: 1,646 lbs/MWh. The 

commenters said EPA refers to this as the "adjusted baseline." The commenters said the adjusted 

baseline shows how far North Carolina had already gone toward achieving its target in 2012 (it 

does not, however, include energy efficiency savings as of 2012); North Carolina has progressed 

even farther toward its Clean Power Plan target since 2012.

Comment 28: Renewable Portfolio Standards

Response 28: See section V.E of the final rule preamble of the CPP for a discussion on building 

block three and RE potential assumed in quantifying BSER.

The following are summaries of the specific public comments under this comment:

Commenters stated EPA explains that Block 3 focuses on renewable energy requirements 

"established through Renewable Portfolio Standards (RPS), which provide specific quantifiable 

RE generation requirements over time." The commenters said generally speaking, an RPS 

requires a retail seller of electricity to supply its customers with a specified percent of its 

electricity originating from documented renewable energy sources; states generally have 

jurisdiction over retail sales within their borders. 
29

Commenters stated EPA started its Wyoming calculation with the wrong number, applied an 

unrealistic growth factor and reached a wrong conclusion. The commenters said EPA relied on 

Energy Information Administration (EIA) data for Wyoming wind facilities to quantify 

Wyoming's 2012 renewable energy generation of 4,369,107 MWh. The commenters said EPA 

then applied an annual escalator of 6.095% to this base number beginning in 2017; the escalator 

is said to reflect past performance in an eleven-state region designated as "the West." The 

commenters said the resulting Block 3 portion of Wyoming's overall goal reaches 9,427,996 

MWh in 2029.

Commenters added the EPA did not determine what portion of the 4,369,107 MWh was 

Wyoming consumption subject to Wyoming jurisdiction over retail sales; with or without an 

RPS, Wyoming RE consumption would be the outer limit of achievable MWh consistent with an 

RPS theory.

Commenters added to derive a number for renewable energy sold at retail in 

Wyoming, Commission staff reviewed the same EIA data used by EPA; for 2012, the format of 

this data was entries listing Plant ID number, Plant Name, Operator Name, Operator ID number, 

State, and Net Generation in Megawatts. The commenters said Commission staff verified the 

EIA totals for Wyoming wind plants, and readily found internet information to link listed 

facilities to their ownership and to the location where each facility's generation was consumed.

Commenters added PacifiCorp facilities accounted for 3,753,653 MWh of the 2012 total (about 

86%); the Commission confirmed its understanding that PacifiCorp treats this renewable 

production as a system asset for the utility's six-state system; as such, retail customers in all six 

states receive an allocated share of the electricity from the Wyoming wind generators connected 

to PacifiCorp's system. The commenters said Commission staff determined the Wyoming share 

of wind production using a factor which four of the six PacifiCorp states used in 2012 to allocate 

system costs among themselves. (The 2012 allocation factor for Wyoming was 15.5220%; for 

Utah, 42.8146%; for Oregon, 25.9294%; for Washington, 7.9620%; for Idaho, 5.7832%; for 

California, 1.6015%. Less than 0.4% was allocated to another entity.) The commenters said the 

factor reflects energy use and system demand, i.e., the system infrastructure required to meet 

peak demands in each state. The commenters provided a table showing when wind generation is 

used in state or is exported.

Commenters added in these calculations, an Exchange refers to an agreement to purchase 100% 

of the power of a wind facility; however, if PacifiCorp does not need all the power being 

produced, it may give some power back to its counter-party in a different period. The 

commenters said for example, when the facility is not running, the counter-party may give power 

back to PacifiCorp; the Exchange MWhs are a balance which accounts for these gives and 

takes; PacifiCorp also receives Network Resource designation for such generation, and as such 

sinks 100% of the output into Network Load.

Commenters concluded the base for calculated growth of Wyoming renewables should be retail 

sales of 666,212 MWh, not total renewable generation of 4,369,107 MWh; using EPA's annual 

growth factor of 6.095%, the 4,369,107 MWh grows by 5,058,889 MWh to reach the total of 

9,427,996 MWh in 2029. The commenters said this number comprises the single largest 
30

component of EPA's goal for Wyoming, and is large enough to frustrate any conceivable state 

effort to comply with that goal.

Comment 29: The EPA incorrectly accounts for baseline renewables in its goal-setting 

calculation. 

Response 29: The EPA agrees with the commenters that the final rule should rely on 

incremental RE instead of including existing RE. See section V.E of the final rule preamble of 

the CPP for a description of the other changes to building block 3. This change obviates many of 

the commenters’ concerns about baseline RE levels including biomass. It also obviates the 

concern regarding ownership-based versus location-based assignment of existing RE.

A discussion regarding the use of some biomass feedstocks for compliance purposes can be 

found in Section VIII of the preamble.

The following are summaries of the specific public comments under this comment:

Commenters stated the proposed rule creates a disconnect in the accounting of renewable energy 

between goal-setting and compliance; for the purpose of determining state goals. The 

commenters said EPA assigned existing renewables to the state in which they are physically 

located, rather than the state whose utilities own or purchase the output from these facilities; 

however, for compliance purposes, EPA proposes that "consistent with existing state RPS 

policies, a state could take into account all of the CO2 emission reductions from renewable 

energy measures implemented by the state, whether they occur in the state or in other states." 

The commenters said as a result, some existing renewable facilities will be applied to one state 

for goal-setting purposes, but to another state for compliance purposes. 

Commenters stated it is not clear whether Wisconsin utilities will be able to take credit for 

behind-the-meter facilities. The commenters said a significant portion of the renewable energy in 

Wisconsin's baseline is from behind-the- meter facilities owned by industrial customers -

primarily black liquor recovery and woodwaste- fired boilers owned by paper mills. The 

commenters said Wisconsin utilities typically do not purchase renewable energy credits 

("RECs") from these facilities; if those RECs are sold to entities in other states, those states, 

rather than Wisconsin, would be able to take credit for these behind-the- meter facilities for 

compliance purposes, although the RECs are counted against Wisconsin in setting the baseline. 

Commenters were concerned about how EPA will treat biomass facilities. The commenters said 

over half of the renewable energy in Wisconsin's baseline is from biomass facilities; while EPA 

considered these facilities to be carbon-free for the purpose of setting the state's goal, EPA has 

not yet determined in the proposed rule how to treat these facilities for compliance purposes. The 

commenters said EPA's November 19, 2014 guidance memorandum on biogenic CO2 emissions 

appears to support the treatment of certain biomass feedstocks as being carbon neutral, implying 

that CO2 emissions may be assigned to biomass facilities utilizing other feedstocks, contrary to 

the assumption in the goal-setting calculation. The commenters added the revised Framework for 
31

Assessing Biogenic CO2 Emissions from Stationary Sources, on which the guidance 

memorandum is based, remains a draft document subject to revision. 

Commenters noted that there are currently, and will continue to be, certain percentages of 

renewable generation purchased under green pricing programs. The commenters said in these 

programs, customers choose to pay a premium above their retail rate for electricity from 

renewable resources. The commenters did not believe that this renewable generation should be 

included in the baseline as existing renewables or assumed to be available for compliance, since 

it is being purchased by customers with the intent that it be in excess of what is required to meet 

regulatory requirements. 

Commenters realized that it will be difficult for EPA to resolve all of these issues with existing 

renewables as part of its calculation of state goals for the final rule. The commenters said a better 

approach that EPA should adopt is to exclude existing renewables from the goal-setting 

calculation and recalculate state goals based on the appropriate level of incremental renewables 

to be added by each state; thus, while state goals would be higher (and seemingly less stringent) 

than under the method in the proposed rule due to the exclusion of existing renewables from the 

goal-setting formula, existing renewables would not be eligible to be used for compliance 

purposes. The commenters said as a result, the stringency of the target would not actually be 

affected; in effect, existing non-hydro renewables would be treated the same way as existing 

hydro and the non-at-risk portion of existing nuclear facilities. The commenters said while these 

existing facilities would be expected to continue operating and providing carbon-free generation, 

only new renewable and nuclear facilities could be credited for compliance purposes. 

Commenters stated in conjunction with the exclusion of existing renewables from the goal 

setting calculation, a method to provide states with partial credit for early action would be to 

allow states to take credit for a portion of their existing renewables for compliance purposes in 

achieving the state's goal; states could be allowed to take credit for generation from renewable 

facilities that are in excess of the state's renewable portfolio standard requirements.

Commenters stated for the purpose of determining states' goals, EPA assigned existing 

renewables to the state in which they are physically located, rather than the state whose utilities 

own or purchase the output from those facilities; however for compliance purpose the EPA is 

proposing that "... consistent with existing state RPS policies, a state could take into account all 

of the CO2 emission reductions from renewable energy measures implemented by the state, 

whether they occur in the state or in other states." The commenters said this will result in the 

output from some existing renewable facilities being applied to one state for goal-setting 

purposes, and to another state for compliance purposes.

Commenters stated EPA's methodology fails to sufficiently recognize early action for states that 

have already supported renewables independently or through Renewable Energy Standards 

(RES) or Renewable Portfolio Standards (RPS) programs.

Commenters stated EPA's determination of regions for renewable energy goal setting was 

arbitrary, using Regional Transmission Organization (RTO) and North American Electric 

Reliability Corporation (NERC) regions as a general guide. The commenters said EPA used the 

average RPS requirement of the five states with an RPS requirement in their nine-state "North 
32

Central Region" to arrive at a 15 percent "Effective RE level". The commenters said EPA 

concludes that states in the same region have similar renewable energy potential, as measured by 

existing renewable energy standards adopted by some states in the region.

Commenters stated in its October 28, 2014 Notice of Data Availability (NODA), EPA states: 

"some stakeholders have highlighted that the state physically hosting the RE generation in 

question approved its siting, issued its permits, and may make other claims as to having 

supported its development and operation and, thus, has a stake in such renewable resources". The 

commenters said while it is true, that a host state issued permits and supported development, it is 

doubtful they have any legal claim to the resulting energy production and related environmental 

attributes. The commenters said they also neglect to recognize that the host state benefits from 

economic activities such as direct/indirect jobs along with local sourcing of materials related to 

both initial project development (local economic impacts of RE are touted in DOE & NREL 

studies of RE development), as well as the ongoing economic benefits of landowner lease 

payments, labor related to project operations and maintenance, and payment of annual property 

taxes on generators and related facilities.

Commenters stated for example, WPS owns the 99 Megawatt Crane Creek wind farm located in 

Riceville Iowa; the project is located on agricultural land owned by 42 participating property 

owners. The commenters said in 2014, WPS paid a total of $391,000 in compensation to 

property owners in the form of lease payments; over the expected 30 life of the project, WPS will 

pay just short of $17 million in lease payments to property owners; WPS paid $768,000 property 

taxes to local units of government in 2014.

Commenters stated over the next 20 years WPS estimates it will pay $25-$30 million in local 

property taxes. The commenters said the truth of the matter is that $42-$47 million of direct 

payments into the local economy will be paid by WPS Wisconsin and Michigan electric 

ratepayers over the next twenty years; those same electric ratepayers will have to fund the 

replacement RE under the proposed regulations which credits Crane Creek's 315,656 MWh of 

annual generation to Iowa's baseline rather than Wisconsin's baseline.

Commenters stated EPA has expressed concern with the interstate transfer of RE and the 

potential for double counting, and appears to propose that such transfers could only occur under 

a multi-state plan. The commenters asserted existing regional tracking systems which are in 

widespread use around the country can be adapted to keep track of MWhs, and prevent double 

counting of RE used for compliance as part of a state's 111(d) SIP.

Commenters stated that if an electric customer pays for renewable generation, they should 

receive credit for both state and federal compliance purposes and the EPA should correct the 

accounting for out of state renewable resources in the state goal calculation during the 

development of the final rule.

Commenters stated there are numerous problems with the baseline renewables used by the EPA 

in its goal-setting calculation. The commenters said one specific issue for Wisconsin is that a 

significant portion of the renewable energy in Wisconsin's baseline is from behind-the-meter 

facilities owned by industrial customers (primarily black liquor recovery and wood-waste-fired 

boilers owned by paper mills). The commenters said Wisconsin utilities generally do not 
33

purchase renewable energy credits (RECs) from these facilities, so it isn't clear that they would 

be able to take credit for these facilities for compliance purposes. The commenters

recommended EPA should exclude from the 2012 baseline used for setting state goals any 

renewables not eligible for state Renewable Energy Standards (RES) or Renewable Portfolio 

Standards (RPS) compliance, such as industrial behind-the meter sources. 

Comment 30: Calculating Renewable Energy Generation

Response 30: See section V.E of the final rule preamble of the CPP for a discussion on building 

block 3 and RE potential assumed in quantifying BSER.

The following are summaries of the specific public comments under this comment:

Commenters concurred with EPA's suggested floor for a renewable energy generation baseline, 

using 2012 figures. The commenters said there is a clear public policy imperative to generate 

increased levels of renewable energy, consistent with the Administration's Climate Action Plan, 

and broader policies in place both at the Federal and State levels. The commenters said a state's 

reported 2012 fossil fuel generation should not be treated as a ceiling for its renewable energy 

generation target as the relative economics of many technologies are changing rapidly. The 

commenters said careful attention must be paid to adhere to a policy and accounting standards 

that ensure renewable energy generation increases using highly transparent, accurate and recent 

baseline levels as well as levels of new generation. The commenters said due to wide variations 

in performance, nameplate capacity alone is not a sufficient basis on which to account for 

emissions reductions from renewable energy generation. The commenters recommend that 

certified annual energy estimates be used to ensure emission reductions.

Comment 31: Errors using electric output and net energy output for coal plants. 

Response 31: In this final rule, the EPA relies on net electric output. At proposal, the EPA was 

folding useful thermal output into the goal and the use of net energy output. Based on 

comments, the EPA no longer folds useful thermal output into its BSER quantification, but states 

are still permitted to use it when demonstrating compliance. As a consequence, the EPA is 

relying on net electric output in the denominator per the commenters’ suggestion.

The following are summaries of the specific public comments under this comment:

EPA appears to have made an error calculating Unadjusted (baseline) CO2 emission rate for 

coal EGUs. According to TSD -Goal Computation: 

CO2 Emission Rate = ((coal gen. * coal emission rate) + (NGCC gen * NGCC emission rate) 

+...)/ (coal gen. + NGCC gen + ...) 

The commenters said in Appendix 7, EPA assigned coal generation to equal "electric output"; 

however, the coal emission rate is based on "net energy output" (total CO2 emissions divided by 
34

net generation) instead of "electric output" (total CO2 emissions divided by electric output). The 

commenters asserted that EPA has interchanged the electric and net generation in the goal 

computation for coal; the commenters asserted the correct method is to use a coal rate based on 

"electric output." 

The commenters said in North Carolina's case, EPA used a coal rate of 2,0441b/MWh 

(104,197,978,000 tons CO2 divided by 50,970,369 MWh net energy output); instead, EPA 

should have used 2.0591b/MWh (104,197,978,000 tons CO2 divided by 50,607,838 MWh 

electric output). The commenters said this error correction applies nationally to all coal plants 

with CHP capability, where generation is reported in terms of "electric output" and "net energy 

output."

Comment 32: Errors in baseline "Sales" data used in setting EE target under Building Block 4

Response 32: See section V of the final rule preamble of the CPP for an explanation of why 

BB4 demand-side energy efficiency is not included in the final rule. This comment-driven 

change between proposal and final makes the above BB4 concern obsolete.

The following are summaries of the specific public comments under this comment:

Commenters stated Building Block Four goals were set by using 2012 utility sales; EPA 

calculated the total sales of "bundled" and "delivered" from "regulated" and "unregulated" 

utilities. The commenters said included in the sales was a "utility" named "Adjustment 2012" 

which reported 40,368 MWh. The commenters said these sales, however, are a summation of the 

total sales from "unregulated" utilities already reported and used in the baseline determination. 

The commenters said the data attributed to "Adjustment 2012" does not represent actual sales of 

electricity; accordingly, "Adjustment 2012" represents a double counting and should be removed 

from Connecticut's 2012 baseline utility sales. The commenters realized that this data correction 

will likely not impact Connecticut's final state goal significantly.

Commenters identified several problems with the EE data reported to EIA that have a small 

impact on the size of Wisconsin's EE goal. The commenters said the Focus on Energy program 

slightly underreported savings from the program and several utilities over-reported their EE 

savings (i.e., reported savings that had already been reported by the Focus on Energy program. 

The commenters provided Table 10, which shows differences between Wisconsin's energy 

efficiency savings reported to EIA and best estimates from the Public Service Commission of 

Wisconsin for 2012. The commenters said these reporting issues have been addressed and will 

not occur in future years, but Wisconsin encourages EPA to work with EIA to clarify reporting 

instructions to utilities and co-ops to ensure that similar errors do not occur in the future. The 

commenters said when the reported values are corrected, Wisconsin's overall goal becomes 

slightly less stringent. Commenters provided Table 9, which shows corrections to Wisconsin's 

goals from correcting energy efficiency data.

Commenters stated in the TSD spreadsheet, "20140602tsd-state-goal-data-computation", EPA 

uses a value of 83.97% for Wisconsin's state generation as a percent of sales; however, 

when attempting to reproduce this value using data from EIA, calculated 86.15%. The 
35

commenters have not found an explanation of how EPA calculated this value. Commenters

provided Table 11, which shows calculation of state generation as % of sales for Wisconsin. The 

commenters said EPA should either use the value determined by Wisconsin or explain how they 

calculated their value and justify why this value is more appropriate than the one calculated by 

the state. 

Comment 33: Artificially high electricity consumption baselines will generate false credit for 

emission reductions under the Clean Power Plan.

Response 33: The EPA does not agree with the commenters that the baseline will generate false 

credit for emission reductions. Moreover, it has changeds the way it applies building block three 

(as described in preamble section VI that address the commenters concern. Please see the CO2

Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final 

CPP for more information about the goals and section VIII of the final rule preamble of the CPP 

for more information about state plans and compliance.

The following are summaries of the specific public comments under this comment:

Commenters stated artificially high electricity consumption baselines will generate false credit 

for emission reductions under the Clean Power Plan; the EPA's Clean Power Plan relies on the 

AEO2013 reference case forecast in two key places. The commenters said if states are allowed to 

use the EPA's basic approach to calculating energy efficiency in state plans, then they will 

measure actual electricity sales against an artificially high baseline; thus, they would receive 

credit for efficiency improvements that would have occurred in the absence of the Clean Power 

Plan, in addition to those caused by the state plan. The commenters said for the same reasons, a 

state that adopts an equivalent mass-based standard for new and existing sources that is based on 

the AEO2013 reference case will face an artificially lenient target. The commenters said because 

the projected electricity sales are biased upwards, such a state will face an overly generous 

target; as a result, theses states would receive credit for efficiency improvements that would have 

occurred in the absence of the Clean Power Plan, in addition to those required by the state plan.

4.6 RATE-TO-MASS CONVERSION

Section 4.6 covers public comments related to the rate to mass conversion of the final and 

interim goals. 

Commenters have raised a number of issues related to this subsection which are organized by 

topics (comments) below. Responses are provided for these topics.

Comment 1: Support for mass based goals.
36

Response 1: The EPA agrees with commenters and has provided both rate-based and massbased goals in the final rule to allow states to choose the approach that is most appropriate for 

affected EGUs in their state.

The following are summaries of the specific public comments under this comment:

Commenters supported EPA's effort to make it easier for states to use a mass-based goal instead 

of an emission rate-based goal, if that is their preference. The commenters said mass-based goals 

may make it easier for states to maximize the use of cost effective demand reduction strategies 

such as programs to deploy more energy efficiency, CHP and direct use - particularly if states 

enter into multi-state regional plans that allow crediting programs that reduce demand from 

customers located in one state for electric grid power served by EGUs in another state; this better 

recognizes the regional nature of the electricity markets and dispatch.

Commenters stated as a theoretical matter, the commenters supported the concept of a massbased emissions target; such an option would provide States with additional flexibility in 

developing their implementation plans. The commenters said a mass-based approach may 

facilitate the use of offsets and other compliance options that may prove helpful in lowering the 

overall cost of the rule. 

Commenters added in the Preamble, the EPA states that it would allow a state to convert its ratebased goal to a mass-based goal. The commenters strongly supported the ability for states to 

convert to a mass-based goal. The commenters said a mass-based goal may facilitate consistency 

with California's existing, multi-sector, mass-based GHG reduction program.

Commenters noted that EPA may set rate-based goals and allow for conversion to mass-based 

goals. The commenters noted that in the Proposed Rule, the EPA expresses each state's emission 

guideline, or required level of emission performance, as an emission rate, namely pounds of CO2 

per net megawatt hour (lbs/MWh). The commenters noted that the Proposed Rule expressly 

permits, but does not require, states to translate their "rate-based" goals to equivalent "massbased" goals (for example, tons/year), 79 Fed. Reg. at 34893-94, giving states flexibility to 

accommodate and account for a wide variety of emission reduction strategies. The commenters

stated that the appropriateness of issuing state-specific emissions guidelines as rate-based goals 

is fairly standard and uncontroversial, as should be the option for states to translate "rate-based" 

goals to equivalent "mass-based" goals. The commenters interpreted that section 111(d) 

condones use of either metric as the "standard of performance." The commenters stated that 

nothing in the statute's language restricts the agency to use of any one measure, neither runs 

afoul of case law, and the EPA has used both standards in the past. The commenters stated that 

giving states flexibility to convert rate-based goals to mass-based goals accommodates a wide 

variety of emission reduction strategies, allowing states to fulfill their role under section 111(d) 

to develop effective implementation plans. The commenters explained that mass-based emissions 

are the currency of existing multi-state trading programs. Without that currency, the commenters

stated that it would be difficult for states to determine how to integrate their various standards of 

performance into a unified portfolio, for purposes of allotting emissions shares to states and to 

entities within those states. The commenters stated that use of a common currency will make it 

easier to expand the scope of any regional trading program, whether to include a new state 

participant or another sector of carbon-emitting sources. Even where a state does not participate 
37

in a regional trading program, the commenters stated that use of a mass-based standard may 

allow it greater flexibility to incorporate demand-side efficiency measures and increased reliance 

on low- and zero-emitting sources into its plan. In other words, the commenters noted that it 

creates opportunities for a state to diversify its portfolio of plan components, regardless of 

whether a particular component is itself federally enforceable. At bottom, the commenters argued 

that states should be allowed to choose the currency that will best suit their needs, including 

those that enable coordination with neighboring states and participation in regional emissions 

control programs. The commenters noted that EPA requests comment on whether it should 

provide a "presumptive translation" from rate-based to mass-based goals, or whether the agency 

should instead provide "guidance" for states to follow in making the switch. The commenters

noted that EPA also recently issued a Notice and accompanying technical support document 

containing information regarding two possible methodologies that states can use to translate 

emission rate-based goals to mass-based equivalent goals. The commenters stated that with 

respect to the translation issue (and disregarding the technical merits of the EPA's specific 

proposals), the commenters saw no legal issues with the range of translation options the EPA has 

proposed-from providing a "conversion table" of sorts, to allowing states to determine their own 

translations -- so long as the result is subject to the agency's review and approval, and so long as 

that approval is contingent on a determination that the state's mass-based goal would achieve the 

equivalent in stringency, including compliance timing, to the state-specific rate-based goal set by 

the EPA.

Commenters stated EPA itself recognizes the consistent success of mass-based programs in 

reducing emissions efficiently, citing to Title IV of the CAA, the NOX SIP Call, CSAPR, RGGI, 

and the California Cap-and-Trade Program. The commenters said beyond their track record at 

delivering reductions at least cost to ratepayers, mass-based programs are far easier to implement 

than programs designed to achieve rate-based goals because they avoid the need to "credit" the 

reductions achieved at the affected EGUs through RE and EE programs. 

Commenters stated accounting for compliance with a mass-based goal poses no such risks of 

incorrect crediting: The methods for measurement of emissions from affected EGUs are well 

established under both 40 CFR Parts 75 and 98 and thereby provide a much greater degree of 

accuracy and consistency among states in monitoring achievement of their respective goals; in 

other words, a ton of emissions emitted by one affected EGU is equivalent to a ton that is not 

emitted from another EGU. The commenters said despite the rigorous evaluation, measurement 

and verification ("EM&V") methods described by EPA as evolving throughout the country in 

recent years, EM&V methods are subject to significant variation and inaccuracy; as EPA notes 

with respect to EE measures, "all energy savings values are estimates of savings and not directly 

measured." The commenters said in contrast, the emissions reported under 40 CFR Parts 75 and 

98 are direct measurements and are not subject to the same degree of variation or inaccuracy as 

the adjustments that need to be quantified to demonstrate compliance with a rate-based goal 

through reliance on RE/EE measures. 

Commenters stated a mass-based approach avoids regulating parties other than the affected 

EGUs; because the emission reductions resulting from re-dispatch of existing NGCC, RE, and 

EE measure are reflected directly in the mass CO2 emissions of affected EGUs, no explicit 

crediting of these measures is necessary; nor would the entities implementing such measures 

need to be subject to potential liability under the CAA if the state's affected EGUs fail to achieve 
38

the mass-based goal. The commenters said therefore, a mass-based goal approach provides the 

opportunity for a more limited role for EPA in state energy policy. 

Commenters strongly supported states' endeavoring to implement mass-based goals to achieve 

the Clean Power Plan.

In a subsequent comment submitted, the commenters applauded EPA's November 6, 2014 

release of the Rate-to-Mass Notice and supporting TSD. The commenters viewed this TSD as an 

illustrative methodology and had no comment on the particular assumptions underlying the 

calculation of the mass-based goals given in the document. The commenters commended the 

Agency's provision of additional clarity to states at this early stage as they begin to consider 

possible approaches for individual and multi-state plans.

Comment 2: Support for rate based goals, clarifications needed.

Response 2: The EPA has given careful consideration to all of the comments in designing the 

methodology to calculate the mass-based goal for the final rule. The EPA provides the 

calculation of a mass-based goal directly in the rule in response to comments that includes the 

following considerations. See section VII of the preamble for further discussion.

The following are summaries of the specific public comments under this comment:

Commenters supported the ability to convert the rate-based goals into mass-based goals, but 

stated there needs to be some clarifications.

Commenters urged EPA to provide clear and simple guidance for states to use in translating a 

rate-based goal to a mass-based goal 

Commenters stated EPA should allow a state the flexibility to use a reasonable estimate of future 

generation from affected units, including utilization of the values the EPA assumed in its 

development of the target emission rates, to determine their mass cap. 

Commenters stated EPA should allow a state to multiply its baseline fossil generation by the 

final goal emission rate to establish emission caps; if a state elects to utilize such a simplified and 

conservative approach, EPA should expressly state that such an approach would be approved. 

Commenters added if the state desires to take other factors into account, EPA's guidance should 

specify acceptable analytical methods and tools for making the projections, as well as default 

input assumptions for key parameters that will likely influence projections, such as electricity 

load forecasts and projected fossil fuel prices; states should be allowed to deviate from these 

default methods and assumptions with justification. 

Commenters added following the guidance would provide a streamlined path for the EPA 

approval of emissions projections, but would still allow states the flexibility to use other

approaches, subject to EPA review; this guidance should ensure that all actions that reduce CO2 

emissions are counted under a mass-based program, and should clarify how to measure and 
39

include avoided CO2 emissions from RE, EE and other similar measures in a mass-based 

program. 

Commenters added EPA should allow states to rely on unit retirements occurring after the 

baseline year(s) to meet Section 111(d) goals; EPA must acknowledge that any EGU that a 

company or state has agreed to retire may be included in a state's "reference case." The 

commenters stated the generation from the reference case would then be used to determine the 

mass-based goal; if the retirement is not built into the reference case, then the lower generation 

and emissions rate would result in a lower mass-based target. The commenters said this would 

help ensure that utilities and states that have voluntarily planned retirements of existing coal 

plants are not penalized by that action. 

Commenters added clear guidance from EPA would promote faster action on multi-state 

compacts; cooperating states will be required to create new trading programs, and a clear 

methodology for conducting the conversion of an emission rate goal to a mass-based goal will 

facilitate this process.

Commenters added EPA guidance also would help reduce litigation over state plans; if EPA does 

not clearly outline a methodology for states to translate a rate-based goal to a mass-based goal, 

there will be litigation over the conversion on a state-by-state basis. The commenters stated such 

litigation will cut into the short time in which states are required to submit and implement their 

compliance plans, greatly hindering efforts to implement CO2 emission reduction measures.

Commenters added the November 6th guidance does not seem to provide clarity as to how a state 

is to make the rate to mass conversion; the guidance on its face appears to result in emissions 

rates and mass target that are not consistent with the Proposed Rule. The commenters stated 

these different mass-targets and implied emissions rates result in very different "glidepaths" for 

State Plans to achieve compliance with the Proposed Rule. The commenters asked for clarity, 

consistency, and simplicity from EPA in its final guidance on rate to mass conversions to allow 

states, as they are formulating their State Plans, to fully understand their choice in rate-based or 

mass-based glide paths so they, and entities responsible for reliability can better gauge the 

possible reliability effects. The commenters stated states should not be left guessing as to what 

constitutes an acceptable rate to mass conversion only to find their assumptions later questioned 

during EPA review of a submitted State Plan; moreover, as noted previously, given the disparate 

impacts on a regional dispatch and siting of new generation of use of different rate and mass 

targets and different methodologies for the conversion of one to another, clarity in this area is 

especially important as states and regions analyze their compliance options. 

Commenters added EPA should provide a clear process for states to propose alternative mass 

budgets that states can demonstrate are comparable to the prescribed rate-based goals. 

Commenters added EPA should recognize that mass budgets provide a level of environmental 

certainty that rate-based goals do not provide and EPA should make it as easy as possible for 

states to convert rate-based goals to mass-based budgets. 

Commenters added EPA should provide greater guidance on how EPA will ensure that the rateto- mass conversion does not weaken targets. 
40

Commenters added New Units should be Included in Rate-to-Mass Conversion; if states choose 

to include new units in their compliance plans, then those units should be included in 

calculations converting rate-based targets to mass-based targets. The commenters stated unless 

EPA incorporates new plants in the rate-to- mass conversion, RGGI's mandatory emission 

reduction targets will be difficult to compare with EPA requirements. The commenters

added new plants meeting EPA's 111(b) requirements may provide emission reduction 

opportunities under non-RGGI approaches, and this potential should be reflected in mass-based 

targets.

Commenters added because the rule includes obligations that extend to 2030 and beyond, it is 

critical both to develop a reasonable estimate of growth in electricity demand and a process for 

recalibrating the mass-based standard over time if projections about demand growth prove to be 

incorrect; projections of future demand growth are further complicated by their overlap with 

EPA's expectations regarding demand-side energy efficiency, which will also affect future 

growth. 

Commenters added a straightforward conversion from rate to mass is not possible here because 

the denominator in EPA's calculation of the rate-based limit includes several components that 

reflect avoided emissions rather than electricity generation. 

Commenters added for some categories such as nuclear generation, only a portion of electricity 

generation is included, complicating the conversion process. 

Commenters added in the first rate-to-mass conversion approach - a mass-based target applicable 

only to existing power plants-is a viable option only if EPA requires mechanisms to ensure that 

the mass-based emissions limit is not achieved simply by reducing generation from covered 

sources and increasing generation at new plants built in the state, an outcome through which the 

targets could ostensibly be met without achieving actual emission reductions equivalent to those 

that would be achieved under a rate-based system.

Commenters added in the second rate-to-mass approach - a mass-based target that is "inclusive 

of new fossil fuel-fired sources"- is a preferable option and should be the default approach. The 

commenters said this approach avoids the complication of tracking excess new fossil generation; 

and the critically important aspect of this approach is the determination of the level of demand 

growth. The commenters said this determination must be subject to a uniform methodology 

established by EPA. The commenters said an excessive projection of demand growth will 

weaken the target and void the required equivalency between the rate-based and mass-based 

targets; even states that are not attempting to weaken their target will inevitably face pressure to 

adopt an overly optimistic demand growth projection consistent with the state's aspirations for 

future economic development. The commenters added EPA must adopt a consistent and 

unbiased demand growth projection and we suggest that EPA use of the EIA projection.

Commenters added EPA performed modeling using the Integrated Planning Model to project 

future generation and CO2 emissions for the compliance period and provided unit-specific 

"parsed files" for the years 2020 and 2025. The commenters asked if EPA has considered 

whether the parsed files for each year of the compliance period (i.e. 2020-2029) would be helpful 

or necessary to determine CO2 emissions from 111(d) affected units during the compliance 
41

period, and whether states could use these files as a proxy to determine a mass-based goal 

comparable to the rate-based goal set by EPA.

Commenters stated the new TSD for conversion of rate-based goals to mass-based goals is

helpful, but does not lay out the criteria for approvability by the USEPA when submitted as part 

of a state plan. Commenters stated this guidance is still lacking.

Commenters asked if EPA could choose a specific state and walk through their methodology for 

the two approaches to translating rate targets to mass targets, including identifying alternative 

inputs or data sources that states could use.

Commenters asked if EPA would look to translate a state's rate-based target to a mass-based 

target in the event that the Agency imposes a federal implementation plan.

Commenters stated the proposed regulatory language for the 111(d) rule describes the process 

for converting a rate-based goal to a mass-based goal at 40 C.F.R. 60.5770. The commenters

asked if a state plan incorporates exactly one of the methodologies and mass-based targets from 

EPA's goal translation TSD, is the state's mass-based goal presumptively "equivalent" to the ratebased goal, as the regulations require; if not, what else would a state need to do to show it has an 

approvable mass-based goal.

Commenters appreciated EPA responding favorably to the request to release a more simplified 

methodology for the states to convert to a mass-based goal if they believe it will provide more 

flexibility for development of their SIP. The commenters said a mass-based approach has many 

advantages including providing certainty that reductions actually occur; it also gives an 

advantage to non-emitting resources. The commenters said for states and utilities with significant 

hydro power resources, the ability to approach carbon reduction with a massed-based approach 

provides a great opportunity for leveraging the value of excess hydro that might be available at 

certain times of the year. The commenters added the mass-based goal will better capture the 

wider range of energy efficiency strategies available, particular those outside the utility sector, 

such as building codes and appliance standards. The commenters said given the advantages of 

this approach, the commenters are concerned that the current methodology results in overly 

stringent targets and may discourage states from choosing it as a compliance approach. The 

commenters said EPA should ensure there is no penalty for using this approach, economic 

growth should be accounted for and states should be able to adjust their goal based on a 

significant change in circumstance such as a severe drought.

Commenters stated exogenous drivers are highly uncertain over the timeframe of the Proposed 

Rule (i.e., 15+ years), the commenters suggested that the EPA clarify how and when states can 

revise their mass-based goals if expectations regarding key exogenous factors turn out to be 

meaningfully different. The commenters said such revisions can help ensure that equivalent 

stringency between rate- and mass-based goals is maintained, as intended, and make it easier for 

states to seriously consider opting for mass-based approaches by reducing some of the risk 

associated with mass-based goals.

Commenters stated the EPA has proposed that the rate-based CO2 emission performance goals 

may be converted to mass-based emission performance goals; the EPA provides an explanation 
42

in the "Projecting EGU CO2 Emission Performance in State Plan Technical Support 

Document" of how such a translation would be made. The commenters said while the 

explanation in the TSD is a less than clear explanation of how the translation should be 

performed, based on comments made by EPA staff on this matter it would appear that what the 

EPA contemplates is that states wishing to make a rate-to-mass translation would employ a 

model such as IPM or other similar type model to project a state's compliance with its rate-based 

limits and pull from the model output for each year from 2020 to 2029 the total projected CO2 

emissions for the universe of affected sources, with the result being the state's equivalent massbased cap. The commenters said assuming this is generally correct, the procedure in Section 

60.5770317 of the proposal would appear to contradict this approach. It states that "(3) 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 EGUs 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 commenters said while it may not be what the EPA intended, this 

language could be interpreted as directing a state to multiply the MWh generation projected by a 

model by the state's emission rate goals for each year and that would be the equivalent massbased cap, which would yield a very low cap number. The commenters did not believe this is the 

EPA's intent, but given the lack of clarity in the Technical Support Document it is not possible to 

know with certainty what the EPA intends. 

Commenters stated given the tremendous interest in understanding what the proposed rate-based 

goals might translate into on a mass basis, especially given the significant barriers to 

implementing the proposed program on a rate basis and the likelihood that many states may 

default to a mass-based approach, the EPA needs to do a much better job of communicating 

precisely how it is proposing the translation be performed. The commenters said the EPA must 

also ensure that the regulatory language in any final guidelines is completely aligned with the 

approach the EPA envisions, or at least does not lock states into a single approach. The 

commenters said any translation procedure must provide for the capturing of the emission 

reduction benefits of coal units retired after the baseline period; in other words, emissions from 

coal units that were in the baseline and factored into state goal calculations and are either 

actually retired after the baseline period or retired by a model being used to project emissions for 

the purpose of developing a mass caps, must be captured in the mass limits. The commenters

said failing to include emissions from the coal units that were included in the baseline and state 

goal calculations but whose operation and emissions were not captured in the rate-to-mass 

translation procedure would mean that coal units retired after the baseline period would not 

contribute a single ton toward a state's compliance under a mass-based approach; in other words, 

the procedure must reflect an assumption that all coal units included in the baseline are assumed 

to continue to operate when performing a rate-to-mass translation. 

Commenters stated the TSD issued by the EPA in November 2014 appears to be an attempt to 

address the rate-to-mass translation issue, but is less than helpful guidance regarding what the 

EPA might consider to be an acceptable rate-to-mass translation procedure; for example, it is 

unclear how the EPA's reference to the calculation-based approaches described in the TSD as 

"illustrative" should be interpreted. The commenters said the EPA fails to state that EPA would 

accept the described translation approaches and the resulting mass-based caps if states were to 

use them as the basis for establishing a mass-based plan; in addition, if states are not bound to 

use either of the described approaches to establish a mass-based plan, it is uncertain if the cap 
43

numbers that result from the illustrative calculations would be binding on a state. The 

commenters said additional guidance from EPA is necessary; assuming that EPA would approve 

a conversion based on the illustrative calculations put forth in the TSD, it is unclear what 

happens if a state wants to develop a mass-based plan but does not want to do so based on the 

use of the approaches described in the Agency's November TSD, because they result in cap 

levels that are believed to be too stringent. The commenters said the EPA fails to identify 

available options for states; since the EPA omitted mention in the November 2014 TSD of the 

modeling-based translation approach it attempted to describe in the Projecting EGU CO2 

Emission Performance in State Plan TSD, it is unclear if EPA is still considering such an 

approach as a viable option. The commenters said if this original approach is no longer being 

considered by the EPA, a justification for this decision needs to be communicated to 

stakeholders; the EPA needs to provide a much fuller discussion of the modeling approach or 

approaches it envisions that would allow states to adequately evaluate their use as an option for 

establishing a mass- based plan.

Commenters stated EPA allows the states to use either mass-based or rate-based goals; but there 

is lack of direction and guidance from EPA on how mass-based goals should be calculated. The 

commenters said more details are needed so that the states and utilities can determine which 

method is more advantageous and flexible to achieve the final CO2 emission reductions. The 

commenters said on November 6, 2014, EPA released additional information on mass and rate 

based goals; the commenters are evaluating and may make additional comments.

Commenters stated EPA's current TSD does not adequately consider demand growth; the 

existing source mass cap is developed relative to 2012 generation levels and fails to consider 

demand growth at all. The commenters said the mass cap that factors in new units is generically 

based on the Energy Information Administration's (EIA's) 2013 Annual Energy Outlook 

(AEO2013) where EPA assigns an annual average growth rate based on regional demand 

projections in order to calculate projections of future demand. The commenters said in practice, 

electric utilities would not apply a generic approach in the development of integrated resource 

plans; this approach also fails to consider the interconnected nature of the bulk power system by 

assuming all increased demand growth would be provided solely by new NGCCs. The 

commenters recommended that EPA consider these additional factors when it issues its final 

guidelines and provide revised estimates of state-specific presumptive mass caps from those 

issued in the TSD. 

Commenters supported the EPA's proposal in the preamble to the rule to establish a mechanism 

for converting the rate-based goal into a mass-based goal; in so doing, EPA is proposing to apply 

a "proxy emission limit" to a reference case scenario, which projects the total mass of CO2 

emissions for affected EGUs if those EGUs were to implement the entire applicable state CO2 

emission rate goal in the absence of any other enforceable measures or requirements. The 

commenters said EPA's initial proposal does not provide enough specificity to allow states to 

determine how the rate-to-mass conversion would be implemented. The commenters are still 

reviewing EPA's November 6, 2014 information on rate-to-mass conversion, and reserve the 

right to comment at a future date on the proposed methodology. The commenters urged EPA to 

clarify and simplify the proposed rate-to-mass conversion process, and to do so in a manner that 

ensures full credit is provided for retirement of existing fossil generation and reduced utilization 

of existing coal-fired generation. The commenters said specifically, EPA should consider a "safe 
44

harbor" rate-to-mass conversion methodology under which (1) the state projects the average 

business-as-usual output (in GWh) from affected units in the state for the interim ten-year 

compliance period and for the first final goal compliance year, multiplied by (2) the state's 

interim goal (over a ten-year period) or final goal, as those goals are adjusted to reflect any 

building block changes.

Commenters stated EPA has proposed that each state may convert its rate-based CO2 emission 

performance goal to a mass-based emission performance goal; EPA should preserve this option 

in the final rule, and should also allow states to switch between rate-based and mass-based 

emission performance goals as desired. The commenters said EPA provides two TSDs regarding 

how such translations could be made. The commenters said while the TSDs are less than clear, in 

one TSD EPA appears to be contemplating that states wishing to make a rate-to-mass translation 

would employ IPM or a similar type of model to project a state's compliance with its rate-based 

limits and pull from the model output for each year from 2020 to 2029 the total projected CO2 

emissions for the universe of affected sources. The commenters said these projected CO2 

emissions would be the state's equivalent mass-based cap. The commenters said in the other 

TSD, EPA simply appears to use historic generation for existing sources and also offers an 

alternate method that includes a single average annual growth rate if new fossil fuel-fired sources 

are included. The commenters said that generation is multiplied by the state's rate-based goal to 

determine the equivalent mass-based goal. The commenters said the conversion from a ratebased emission performance goal to a mass-based emission performance goal is a desirable 

option that should be retained for the states, and each state should be permitted to determine 

exactly how such a conversion is made; however, EPA should also provide clearer guidance on 

the criteria for acceptable conversion options. The commenters said a helpful step would be for 

EPA to provide examples of the necessary modeling analysis for each state and provide detailed 

guidance for public review and comment.

Commenters recommended that EPA augment the current guidance it has offered on mass-based 

conversion to at a minimum include the following: 1) in-depth discussion of the attributes of 

mass-based vs. rate-based approaches to implementing carbon emissions standards, including 

side-by-side comparison as supported by the economic literature; 2) a regulatory impact analysis 

including detailed, realistic modeling of scenarios for the of mass-based vs. rate-based 

approaches given the actual configuration of power markets faced with state-by-state 

implementation 111(d); 3) A simplified step-by-step re-calculation for a sample jurisdiction 

[replicating the step-by-step approach EPA took for Ohio in its Goal Computation technical 

support document] for different types [including EPA's simplified calculation-based approaches 

for (1) "existing sources" and (2) "existing and new sources."] Of mass based budgets, with 

further explanation for how projections from electric sector models may be used in place of 

inputs from the goal computation calculation.

Commenters strongly supported EPA's guidance on how to convert emission-based standards to 

mass-based standards, as this provides stakeholders with a clear and more environmentally 

certain goal. EPA should provide clear guidance to states with how a mass-based standard affects 

compliance options, particularly with respect to any interstate impacts on emission reductions, if 

any.
45

Commenters stated EPA has proposed the Clean Power Plan based on a rate-based CO2 limit, 

with the option available to convert that limit to a mass-based one. The commenters said it is 

essential that clear and concise direction be provided by EPA; even after the release of its Rate to 

Mass Technical Support Document and related data files, the calculations are still confusing, and 

raise questions as to whether the mass-based goal is more stringent than the rate-based goal. The 

commenters said the release of this information has been welcomed, but it was so long in coming 

that state agencies and the regulated community have had little time to fully analyze the 

information to evaluate the potential alternative mechanisms to implement and measure 

compliance.

Commenters stated EPA needs to provide clearer guidance on how the state can establish and 

comply with a mass emissions cap. The commenters have made large investments to reduce CO2 

emissions, and plans to do still more by retiring existing coal units, increasing its reliance on 

renewable energy, and investing more in energy efficiency. The commenters asserted that it 

could meet a reasonable mass based emissions cap; however, the proposed rule provides 

insufficient guidance on how states are to establish a mass based cap and whether an individual 

company or political subdivision could separately establish and comply with a mass based cap.

Commenters stated EPA does not factor in the ability for increased utilization of existing sources 

in calculation of the mass equivalent; the commenters requested that EPA clarifies that when 

states choose to do a mass-based translation the states will have the option to include reasonable 

demand growth generation from existing affected EGUs.

Commenters stated viewed from the perspective of using RGGI as a compliance mechanism, a 

number of improvements should be made to the proposed rule, including: 

a) EPA should ensure that the methodology for translating rate-based targets to mass-based 

targets is clear and EPA should work with states to help set these targets; states in the RGGI 

region have years of experience using extensive modeling to help set reasonable emissions caps 

and this experience should be brought to bear in setting the final mass-based targets; states 

should also be able to bring their own credible information to bear during the translation process. 

b) EPA should give states the option for including new EGUs in CPP compliance plans; and if 

the new EGUs are included, then their emissions should be factored in the calculations 

converting rate to mass-based targets. 

c) EPA should recognize that RGGI's "program review" has allowed for much needed 

adjustments to the mass-based cap; during the RGGI design process, NEMA stakeholders 

encouraged these reviews to help regulators respond to unforeseen circumstances; a similar 

mechanism should be adopted in the CPP final rule to allow for periodic adjustments to the 

mass-based cap and further input from the states.

Commenters asserted that an equivalent mass-based target can simplify compliance calculations 

and should be available as an option. The commenters supported the inclusion of a mass-based 

option, the methodology to calculate that target and to determine compliance must be clear and 

unambiguous. The commenters said without clear standards, there will be overwhelming 

pressure for each state to interpret the guidance in the most advantageous manner; this will result 
46

in a patchwork of programs with varying stringency. The commenters said as inconsistent 

methodologies within a given market or trading region could influence costs and impact dispatch 

order, it is particularly important to be consistent on this level if not nationwide. 

Commenters stated EPA has recently issued guidance on conversion of the rate-based goals to 

mass-based goals, but additional questions remain; for example, demand growth calculation 

methodology should not rely on national defaults when better data is available nor should states 

be able to adjust their assumptions to t the desired outcomes. The commenters said the 

methodology selected should consider the current best practices in demand modeling, reflect the 

latest data available from transmission organizations, and be developed after a collaborative 

process involving the EPA, other states, and other stakeholders. The commenters said should 

EPA determine that sufficient data is available, establishing a presumptive mass-based goal 

along with more detailed guidance would be reasonable; however, the 

commenters recommended EPA conduct additional outreach to stakeholders and consider a 

supplemental comment period limited to this issue. 

Commenters stated that if the EPA is to accept mass-based conversions from the final rate 

established by the EPA, the EPA must provide modeling, data sources, default input 

assumptions, and guidance to the states on what would be acceptable methods and data sources 

to convert the state's rate to an equivalent mass of CO2. In addition, the commenters stated that 

the EPA must describe to states under what circumstances the EPA would approve a change in a 

mass-based plan. The commenters asserted that states should have the flexibility to allocate as 

they choose the amount of emissions to each year during the 2020-2029 compliance period from 

the 10-year interim mass total. 

The commenters stated that requesting a presumptive translation of the rate-based goal to a massbased goal should not be seen as a commitment to a mass-based plan or to EPA's presumptive 

mass caps. Instead, the commenters stated that the provision of presumptive translated goals by 

the EPA would help inform a state's decision-making process in developing its plan. Should a 

state choose to adopt the EPA's presumptive values, the commenters stated that these values 

should be acceptable to the EPA when a state submits its plan. The commenters requested that 

the final EPA rule should provide a presumptive translation of its final and interim rate-based 

goals to mass-based goals. 

The commenters suggested that the EPA also provide guidance on acceptable analytical methods 

and tools for translating rate-based goals to mass-based goals and provide guidance on 

appropriate default input assumptions and key parameters. The commenters suggested that states 

that submit a mass-based plan should be allowed to revise annual mass caps, if needed based on 

changes in load demand, so long as the overall emission rate for affected facilities meets the 

emissions targets proposed by the EPA.

Commenters stated EPA should clarify methodologies for translating the rate-based targets to 

mass-based targets and simplify the use of regional programs like RGGI for compliance. The 

commenters said as part of the rate-to-mass conversion process, EPA should allow states to 

consider the potential impact of the electrification of the transportation sector on emissions from 

affected sources under the CPP.
47

Commenters requested that guidance be provided to the regional EPA offices to ensure that 

approved mass based targets achieve at least an equivalent reduction from 2005 emissions from 

affected sources as modeling indicates would be achieved by the proposed rates.

Commenters recommended EPA develop rate-to-mass translation approaches that maintain 

flexibility on the methodology and data used to determine the translation, recognize the 

complexity and geographic connectedness of the electric grid, and provide enough oversight to 

ensure a meaningful equivalency of stringency between the rate-based and mass-based 

approaches. The commenters added the RGGI states firmly believe that a mass-based approach 

represents the most cost-effective method to demonstrate compliance with the CPP, and a simple 

translation methodology could facilitate this outcome by lessening administrative costs and 

uncertainties associated with the conversion process. The commenters suggested that EPA 

continue to analyze options for developing a simple translation approach, or at least streamlining 

aspects of the process.

Commenters added if EPA wants to define a specific approach to make this conversion, it should 

do so in rule, not guidance; this section would be the appropriate location to specify a conversion 

approach. The commenters stated if EPA wants to continue to allow states to utilize only an 

outline of an approach to the conversion, EPA needs to make it clear to the EPA Regional office 

reviewers that the method proposed in the TSD is not a requirement or a preferred approach. 

Commenters added EPA still has not provided adequate and definitive guidance on how a state 

would translate emission guidelines into mass emission caps under the proposed rule; therefore, 

states are forced into evaluating overly complex calculations and compliance scenarios. The 

commenters said States and utilities are already struggling with this complexity and need a 

simple, uniform framework that would allow for least-cost compliance; a holistic design 

approach should be used that can more easily account for reductions associated with RE, EE, and 

unit efficiency actions. The commenters supported EPA's intention to grant states flexibility on 

methods to allow multi-state electrical systems to demonstrate compliance; this should include a 

broad suite of options including bi-lateral agreements, trading of clean energy, renewable energy 

and avoided CO2 tons from EE, however, more time needs to be provided to do this. 

Commenters added a mass-based standard may have benefits over rate-based, including ease of 

compliance determinations and facilitating trading programs; the TSD will help Colorado in 

weighing the merits of rate- versus mass-based standards. The commenters stated the 

presumptive goal approach allows states to include a different goal in their plans with a 

demonstration on why their goal is more appropriate than EPA's. The commenters stated 

Colorado appreciates EPA's ongoing effort to provide supporting information and options to 

states, and requests that the final rule continue to provide states with broad flexibility to develop 

mass-based standard conversion methodologies that consider state-specific needs.

Commenters added a mass-based option would limit overall carbon emissions, consistent with 

California's larger climate goals, and would likely be easier to monitor and enforce given many 

of our existing climate programs are mass-based. The commenters said mass-based systems may 

also help better support regional planning, since ton-based accounting is a relatively 

straightforward way of addressing effects on emissions from power transfers across state lines. 

The commenters stated mass-based accounting may also, as a result, help reduce the need for 
48

standardized monitoring and verification systems in regional planning. The commenters added a 

careful analysis will be needed to determine the best approach for California; U.S. EPA provided 

some guidance on converting rate-based targets to mass-based, however, the language, as 

proposed, leaves room for multiple interpretations CARB staff has requested U.S. EPA to 

provide some specific examples of how they would perform this conversion.

Commenters recommended that in establishing methodologies for rate-to-mass based 

conversions, the EPA work with those mass-based states with substantial experience in modeling 

and analyzing CO2 emissions, such as the RGGI states, and that EPA be guided by a set of 

principles aimed at achieving the best outcome; these principles should include: 

• Collaboration in working with states, including sufficient stakeholder input, and a process 

that takes into account state recommendations, rather than EPA simply specifying massbased targets for each state. 

• Flexibility for how states may include energy efficiency in their compliance plans, 

acknowledging that different states have different levels of experience with evaluation, 

measurement and verification. 

• Fair, consistent and equitable treatment among and between states. 

• Transparency and clarity in what is required and documented. 

• Simplicity in what is required of states to not over-burden them. 

• Credibility of the process and the results by, as cited by the RGGI states, not arriving at a 

final rule that is "too open-ended," and which would allow states to "game the system."

Commenters added EPA should provide for a mass-based emission budget compliance option, 

either by articulating the standard as a mass-based emission budget, or providing a mechanism 

for translating from a rate-based standard to a mass-based emission budget. The commenters said 

such a methodology could apply an emission rate to the projected or historic generation from 

covered power plants in a state; for example, under a projected generation approach, modeling 

would be used to project how a state's generation from covered sources would change over a 

period of time, and then the EPA emission rate would be applied to that projected quantity of 

electricity generated; using such an approach would take into account changes in demand, and 

would therefore be more comparable to using a rate-based standard, where the emissions are 

proportionate to demand. The commenters said EPA could require states to reduce or offset the 

projected demand growth with readily available energy efficiency improvements (e.g., one 

percent annually); this approach could potentially involve a "true-up" as well - a review of 

whether actual changes in demand and related factors are consistent with projected changes, and 

a potential adjustment to the budget to reflect those changes. The commenters said under such an 

approach, it would be appropriate to require new sources to be subject to the new source standard 

as part of their New Source Performance Standard compliance obligation, as using projected 

generation to compute a state's emission budget would inherently reflect any new generation 

required to meet changes in load; such an approach was proposed by EPA in the Clean Air 

Mercury Rule. 70 Fed. Reg. 28622 (May 18, 2005). The commenters said a system-wide 
49

approach to reducing emissions includes reducing electricity demand through energy efficiency

or displacing demand for fossil fuel-fired generation through additional zero-carbon energy; 

therefore any projection of demand change or "true-up" should reflect those anticipated 

electricity savings or displacement. The commenters said if a historic generation approach is 

used, a state's emission budget would be based on the amount of emissions that would have 

occurred in a baseline year if the state's power plants had generated the same amount of 

electricity as they did during the baseline year, but had emitted at a target emission rate. The 

commenters noted that under these approaches, the emission budget would represent an 

aggregate budget for all covered sources in a state; states choosing to use the emission budget 

would be required to meet the standard in the aggregate, could use all cost-effective measures -

such as efficiency, renewables, end-use controls, carbon capture and sequestration - to obtain the 

necessary reductions, and could allow averaging of emissions or trading of emissions 

allowances; or a state could join a regional market-based program, and could demonstrate 

compliance if the group of states collectively met the states' aggregate mass-based standard. The 

commenters said if EPA articulates the standard as a rate-based standard, and if EPA's 

methodology for translating from a rate-based standard to a mass-based standard involves 

accounting for projected changes in generation from covered sources, the methodology should be 

transparent and consistent; the methodology should start with reliable, existing federal data 

sources, including the Clean Air Markets Division emissions database and the EIA Annual 

Energy Outlook. The commenters said EPA should also allow states to seek to use their own 

data, but EPA should require states to rigorously substantiate any changes to projections based 

on other, non-federal data sources. The commenters said for a simplified example, assume that 

the standard is 1100 lbs/MWh (the proposed rate for new coal plants), and that state "X" has one 

gas plant and one coal plant, each of 500 MW; in the hypothetical base year of 2013, the gas and 

coal plant together generate 7 million MWh of electricity and emit 5.2 million tons of CO2, at an 

average 2013 rate of 1500 lbs/MWh; the state's cap in 2025 would assume the same generation -

7 million MWh - and multiply that by the 2025 rate-based standard - 1100 lbs/MWh. The 

commenters said this yields a cap of 3.8 million ton per year, 27 percent less than actual 

emissions in 2013; note that this method could be adapted to accommodate different rates for 

different fuels or plant types, such as those proposed in the new plant standard. The commenters

said EPA should consider providing guidance for how a state can provide a rigorous 

demonstration of changes from specific factors, for example if a state is projecting significant 

increases in electricity demand due to increased electric vehicle deployment as a result of state 

policies that are not reflected in federal projections.

Comment 3: The EPA should consider commenters’ recommendations to the conversion of rate 

based goals to mass based goals.

Response 3: The EPA has given careful consideration to all of the comments above in designing 

the methodology to calculate the mass-based goal for the final rule. The EPA provides the 

calculation of a mass-based goal directly in the rule in response to comments that includes the 

following considerations. See section VII of the preamble for further discussion.

The following are summaries of the specific public comments under this comment:
50

Commenters stated we would urge EPA to take two additional steps in the final rule: 1) provide a 

step-by-step re-calculation for a sample jurisdiction for different types of mass-based budgets, 

and 2) offer further explanation for how projections from electric sector models may be used in 

place of inputs from the goal computation calculation. The commenters saluted the EPA's 

inclusion of a complete dataset to support the two examples of conversion to a mass-based 

budget for the rate-based standards included in the proposed Section 111(d) guidelines. The 

commenters urged that in the final rule EPA (as it did in the original goal computation technical 

support document for the state of Ohio) provide a written step-by-step deconstruction of the 

conversion process, culminating in the state mass-based budgets. The commenters said such a 

demonstration would eliminate the need to trace development of the components of the building 

blocks through the formulas in each cell of the accompanying spreadsheet. The commenters said 

EPA elected to use a "calculation-based" approach to mass-based conversion in the revised TSD 

which relies on the data used in computing the building blocks components of the final state 

goals. The commenters sympathized with EPA's concern not to tie the hands of the states in 

planning for mass-based programs by being overly prescriptive here; however, the 

commenters asserted that EPA should provide general guidance as to how forecast information 

could be used to generate mass-based budgets. The commenters said as one plausible guideline 

which could improve the reliability and consistency of CO2 budgets generated using forecast 

information, EPA should recommend that the states choose to rely on forecast models which are 

most commonly relied upon to produce planning studies in their region.

Commenters stated to be a viable option, the rate to mass conversion must be redesigned; the 

Clean Power Plan proposed for Wisconsin results in CO2 emission reductions which exceed the 

national goal of a 30 percent reduction from the 2005 CO2 emission level. The commenters said 

in November 2014 the EPA provided a technical support document on how to translate the Clean 

Power Plan emission rate-based CO2 goal to a mass-based equivalent; for Wisconsin the "Final 

Mass Equivalent - Existing Affected Sources" limit was reported as 25,275 thousand metric tons 

and the "Final Mass Equivalent - Existing Affected and New Sources" limit was reported as 

28,102 thousand metric tons. 

Commenters stated in 2005 the Clean Power Plan units included in Wisconsin utilities' reports to 

the Acid Rain Program had total CO2 mass emissions of 45,299 thousand metric tons; based on 

the 2005 Wisconsin CO2 emissions, the "Final Mass Equivalent - Existing Affected Sources" 

limit of 25,275 thousand metric tons represents a 44 percent reduction from the 2005 CO2 

emissions and the "Final Mass Equivalent - Existing Affected and New Sources" limit of 28,102 

thousand metric tons represents a 38 percent reduction from the 2005 CO2 emissions. The 

commenters said both reductions are greater than the objective to reduce 2005 emission by 30 

percent; this demonstrates the complexity of first developing a CO2 rate goal and then 

developing a rate to mass conversion methodology that results in a reduction in the state's CO2 

mass emissions that meets the design target. 

Commenters stated in order to have a viable option for a compliance goal that more accurately 

tracks the CO2 mass emission reduction objective, the EPA should develop the CO2 mass 

reduction goal based on the stated goal of reducing the 2005 CO2 emissions from affected units 

by 30 percent in 2030; therefore the sum of the states CO2 mass limits should sum to 70 percent 

of the states' 2005 CO2 mass emissions. The commenters said the only potential area of 

disagreement would be the allocation between states, since each state's share of the total United 
51

States emissions was likely different for 2005 compared to 2012, which is the year EPA used to 

apportion state-by-state emission reductions. The commenters said to address this concern, a 

mass limit for each state could be developed by comparing a 3-year average ratio of the 

individual state's CO2 mass emissions to the national total; this ratio could then be applied to the 

national 2005 CO2 mass emissions and then reduced by 30 percent. 

Commenters stated this will result in a CO2 mass limit for each state whose sum will equal the 

CO2 mass emission reduction objective; this approach to establishing a viable mass-based CO2 

reduction removes the uncertainty associated with converting from a CO2 rate goal to a CO2 

mass limit which is inherent in the current EPA proposal. The commenters said even if the EPA 

were to clarify exactly how to convert a state's CO2 rate to a CO2 mass limit, to the degree the 

conversion depends on a forecast of energy usage the conversion would be froth with uncertainty 

making it difficult for states to develop their implementation plans. 

Commenters added for instance, in its current emission rate form the rule relies on modeling of 

long term Mwh generation from the state's generating units; long term forecasts are uncertain 

and are dependent on a number of factors such as load growth, market prices, unit availability, 

and the particular model selected for the forecast. The commenters said this uncertainty would 

result in the state not knowing whether or not the EPA will approve the state's conversion of the 

CO2 rate to a mass limit until after the state has filed its implementation plan; also, since the 

state specific CO2 rate is a function of the assumed state specific renewable energy and energy 

efficiency targets, there is the potential for arguments being made about the equity of the 

assumed levels of renewable and energy efficiency targets. The commenters said states with 

more aggressive renewable and energy efficiency targets could raise the issue of whether or not 

their target CO2 rate is "fair"" compared to those states which have less aggressive renewable 

and energy efficiency targets. 

Commenters supported EPA developing as a compliance option, presumptive mass caps because 

it would reduce uncertainty surrounding the initial development of mass caps by states. The 

commenters said EPA should clearly articulate how the mass caps were developed and provide 

an opportunity for public notice and comment before the final rule is released; in addition, states 

should have the opportunity to develop their own mass caps to replace the presumptive EPA 

mass caps if they have reasonable justification to do so. The commenters said the state should be 

the entity to determine how new units are accounted for in the state's plan. The commenters said 

the final rule should include off ramps which could take the form of relaxed CO2 mass limits; 

these off ramps could be utilized in the event of either a reliability issue or economic hardship.

Commenters supported the state's ability to convert the rate based goals to mass based goals; 

however the commenters are concerned that the proposal would ignore - in fact punish - states' 

clean energy leadership. The commenters said EPA does this by using a 2012 baseline and 

setting more stringent targets for states that have retired coal plants, invested in renewable 

energy, and implemented customer energy efficiency programs than for states that have done less 

in these areas; this sends exactly the wrong message to states who acted early and customers who 

have paid for these clean energy investments, asking them to pay relatively more for future 

reductions. The commenters said with regard to the period between now and 2020, the proposal 

creates perverse incentives to delay further action until 2020; fortunately, there are several 
52

simple, targeted changes to the rule that can improve the proposal's treatment of early action. The 

commenters recommended that EPA in the final rule: 

• Recognize the retirement of coal plants occurring prior to 2012 by exempting from 

Building Block 2 the capacity of coal retired and replaced with natural gas combined 

cycle (NGCC) units on the same site; 

• Account for the effect of renewable energy on the dispatch of NGCC plants, by 

recalculating NGCC capacity factors to what they would have been without renewable 

energy leadership before applying Block 2; 

• Allow leading renewable states to bank renewable energy prior to 2020 for use in 

meeting their 2030 compliance obligations, and in general creating stronger incentives to 

continue renewable energy and energy efficiency leadership before 2020.

Commenters stated EPA offers a general approach to making the conversion from a rate goal to a 

mass-based goal, but does not specify methods and assumptions required to ensure consistency 

across states, including preventing states from choosing assumptions that would result in a more 

favorable mass-based goal. The commenters said many states are also looking for more clarity 

and guidance on their mass-based goal so that they can begin to think about whether a massbased approach would offer a viable compliance pathway and whether or not to coordinate with 

other states; in some cases, if the decision is left to states, this will trigger internal "due process" 

procedures. 

Commenters stated Bruce Phillips, a Director of the Northbridge Group, identified some issues 

to consider in defining the methodology for translating the rate standard to a mass-based goal 

and described several alternatives; in particular, EPA can facilitate adoption of a mass-based goal 

by translating the standard for states and ensuring the resulting state emissions limits are neutral 

(or attractive) relative to rate goals. The commenters said other considerations include 

maintaining the environmental integrity of the rule (achieving a 30 percent overall reduction in 

emissions) and administrative feasibility; options for converting from a rate to mass standard 

include: 

• EPA defines the mass-based standard using Integrated Planning Model (IPM); EPA uses 

IPM to estimate future generation and determines state mass-based goals by plugging in 

the applicable assigned state emissions rates for covered units; States would have the 

option to challenge and refine the assumptions, likely requiring EPA to rerun the model; 

this approach is rigorous but could lead to a problematic federal-state process; while 

some states (e.g., RGGI) are familiar with IPM, others may find the model less 

transparent than other alternatives. 

• EPA computes the mass-based standard based on forecasted or historic data; either would 

be less rigorous than IPM but would provide greater transparency and still foster 

consistency across states. 

• EPA computes the mass-based standard based on forecasted data; for states expecting 

load growth, a forecast methodology would result in a more generous mass-based 
53

standard; according to EIA's business-as-usual projections (not including a carbon price), 

on average, coal and natural gas generation is expected to grow by 12 and 23 percent 

respectively between 2012 and 2020 due to a 17 percent increase in electric load (If a 

carbon price were included in the load forecast, load might increase more slowly, so the 

advantage of using a forecast methodology would be less.)

• EPA computes the mass-based standard based on historic data; this method is more 

objective than forecasted data, but unless adjustments are made, would result in a stricter 

limit than a standard based on forecasts; in a separate presentation, Tom Curry, a Vice 

President with M.J. Bradley & Associates, presented a series of options to define a massbased standard using calculations based on historic rates of generation (MWh); 

specifically, he adjusted the mass calculation [state goal * historic fossil MWh] by adding 

in elements of EPA's building blocks (in MWh); each addition would essentially increase 

the effective mass based standard; using this approach, it is possible to approximate the 

overall compliance emissions limit that would result from multiplying the state emission 

rate goals by projected electric generation from affected units based on an IPM model 

forecast; however, the impacts at the state level would differ depending on the relative 

importance of the different building blocks in setting state level goals; this approach 

would tend to disadvantage states expected to experience higher levels of business-asusual growth in fossil generation. 

• EPA issues analytic guidance to states and the states estimate the mass-based standard 

using a growth model such as ERTAC; EPA reviews the analysis and either approves or 

disapproves the goal; both the process of EPA developing guidance and states 

undertaking modeling can be slow; use of different forecasting tools would result in 

inconsistency across states. 

• States choose their approach without specific guidance; EPA reviews the analysis and 

either approves or disapproves the goal; this would also be slow as states navigate 

through the options and would result in inconsistency across states. 

The commenters said one additional option that was suggested would involve having EPA 

simply indicate that states adopting a mass-based standard would need to achieve a set reduction 

in emissions (e.g., 30-40 percent). 

Commenters recommended that any mass-based goal conversion process account for key 

uncertainties with periodic updates of key factors, notably:

• the extent to which power sector emissions and emission rates may increase from the use 

of electricity as a transportation fuel.

• Economic and demographic growth through 2030;

• The relative level of imported and exported power, which affects in-state emissions.
54

Comment 4: The EPA's Method for Converting Rate-Based Goals to Mass-Based Goals Is 

Unjustified and Arbitrary 

Response 4: The EPA has converted the rate-based goals to mass-based goals. See section VII 

of the final rule preamble of the CPP and the CO2 Emission Performance Rate and Goal 

Computation TSD for CPP Final Rule supporting the final CPP for the final mass-based goals.

The following are summaries of the specific public comments under this comment:

Commenters stated the notice is unclear as to whether in EPA's view the proposed 

methodologies would be mandatory or optional if finalized. The commenters said on one hand 

the notice states that the two methods are "illustrations of two potential options" that States may 

choose; on the other hand, the notice also states that methodologies employed in translating a 

rate into a mass goal must achieve "...the equivalent in stringency." The commenters said the 

proposal's requirement that a State's rate-to-mass conversion must result in tonnage limits 

"equivalent in stringency" to that determined under the proposed methodologies indicates that, in 

EPA's view, methods a State employs cannot diverge from the methods described in the 

referenced technical support document (TSD), because otherwise the calculated tonnage goal 

would be inconsistent with the calculations required by the TSD and possibly not as "stringent." 

The commenters stated regarding EPA's authorities under Section 111(d), the methodologies 

proposed here can only serve as guidelines for States and cannot be binding on States. The 

commenters said EPA cannot displace authorities granted States under section 111(d) to establish 

performance standards; the establishment of a tonnage goal based on EPA-selected methodology 

would thus unlawfully usurp state authority and discretion; EPA's proposed methods can only 

serve as guidance to states and not requirements.

Commenters added EPA cannot regulate new sources as existing sources under Section 

111(d); thus, to mandate tonnage limits on for new fossil fuel sources as part of a Section 111(d) 

plan, as EPA proposes in its new source rate to mass-based methodology, is plainly unlawful.

Commenters stated very recently, in November 2014, EPA issued a Technical Support 

Document that sets forth two "illustrative calculation-based approaches for translating the Clean 

Power Plan (CPP) emission rate-based goals to a mass-based equivalent." The commenters said 

in the first approach, EPA derives the mass-based equivalent that would apply to existing 

sources, while in the second it derives the mass-based equivalent that would apply to new and 

existing sources. The commenters said EPA bases its "illustrative" calculations on several 

concepts, the first of which is that the "deployment of BSER measures will reduce generation 

from affected fossil fuel-fired sources." The commenters said no justification or basis is provided 

for this conclusory statement, however. The commenters said EPA uses that conclusion to justify 

omitting the generation from EE, incremental RE (that above 2012) and under construction 

nuclear in its [mass = CO2 emissions rate * generation] calculation. The commenters said as 

EPA notes in the Translation TSD, this approach is directly contrary to the approach taken in the 

goal calculation for the June 2014 Proposal. 

Commenters stated addressing the two approaches in reverse order, EPA has no authority under 

this Proposal - meant to establish guidelines for existing EGUs - to impose limits (here an 

emissions cap), on new EGUs; thus, the second approach cannot be justified under current law 
55

and should not be proposed or pursued further by EPA. The commenters said the first approach 

suffers a similar fate, albeit for different reasons; first, EPA provides absolutely no basis for 

concluding that EE, incremental RE or under construction nuclear will replace - on a 1-for-1 

basis - historical fossil fuel-fired generation; nor has EPA provided any analysis that would 

justify this approach - completely contrary to that taken in the Proposal - as part of the BSER for 

fossil-fuel fired EGUs. The commenters said failure to provide the basis for a determination of 

BSER renders this approach completely arbitrary and unjustified. The commenters said EPA's 

approach in the Translation TSD makes the CO2 ton cap significantly more restrictive than the 

rate-based goal in the Proposal; if a state were to use this approach, it would clearly result in 

reduced operations of fossil fuel-fired EGUs relative to the Proposal, exacerbating concerns of 

stranded investments and system reliability that are already acute under the existing Proposal. 

The commenters asked where are the Agency's analyses of the costs associated with this new 

approach, or the potential effects this increased stringency could have on electrical system 

reliability. The commenters added other obvious problems exist with the Translation TSD; for 

example, EPA has no authority to include within its emissions guidelines any of the measures in 

Building Blocks 2, 3 or 4. The commenters said EPA's approach unfairly penalizes those entities 

(states, utilities and state citizens) that have nuclear units under construction, EPA's Translation 

TSD fails to comply with existing law. The commenters said EPA must undertake the proper 

analyses, as part of a formally proposed rule - which the Translation TSD is not - that evaluates, 

and justifies, within the context and bounds of CAA section 111, a cap on CO2 emissions for the 

source categories to be regulated under CAA section 111; until that happens, EPA has failed to 

comply with CAA sections 111 and 307(d); it should either withdraw the Translation TSD or 

undertake the proper analyses to support a formal proposal that reflects its contents.

Comment 5: General criticism/questions of conversion.

Response 5: The EPA has converted the rate-based goals to mass-based goals. See section VII 

of the final rule preamble of the CPP and the CO2 Emission Performance Rate and Goal 

Computation TSD for CPP Final Rule supporting the final CPP for the final mass-based goals.

The following are summaries of the specific public comments under this comment:

Commenters stated because of the complexity of this nation's interdependent electricity grids and 

the dynamic nature of our energy markets, we are uncertain whether historically-based 

generation and capacity data can serve as the most reliable basis for building projections 

necessary to complete the translation process. The commenters added a simple conversion 

process could yield results that do not account for the dynamics that result directly from the 

complexity and interconnectedness of the electric grid.

Commenters stated electricity system modeling offers crucial insights pertaining to how the 

system will respond to changes in policy or market forces, especially related to the type and 

location of generation among states. The commenters said while a modeling-based approach 

would add cost and complexity to the translation process, EPA could address these issues by 

leveraging the large body of modeling experience and expertise that exists within EPA and the 

various state and regional organizations that routinely model the electric sector to support 
56

planning efforts, and by providing resources and technical assistance to states completing the 

rate-to-mass conversion process.

Commenters added supplementing the June proposed rule, EPA issued a technical document in 

November that provides two possible options for translating rate-based goals to a mass-based 

equivalents, including tables of two of these approaches. The commenters added they support 

EPA's effort to provide a more straightforward translation method based on the rate-based targets 

and historic data, however, requiring multiple model runs to derive a mass-based goal adds 

significant complexity to the state planning process, and they believe would discourage the 

adoption mass-based targets. 

Commenters added rate targets may have some advantages over mass based targets. The 

commenters stated California is unique in that policies are being implemented to greatly increase 

the deployment of electric vehicles and the infrastructure necessary to support them; in addition, 

some local air districts are looking at greater electrification of residential, commercial, and 

industrial sectors to minimize fuel combustion and its associated emissions. The commenters

stated these policies are likely to result in the need for more generation capacity; although some 

of this capacity will likely be served by new facilities not subject to section 111(d), some may 

come from existing facilities. The commenters stated a rate-based metric addresses this situation 

by providing some flexibility, allowing for growth in output while limiting carbon intensity.

Commenters stated EPA has not provided a transparent, replicable method to allow translation of 

the proposed rate-based goal to a mass-based goal

Commenters added the rate to mass conversion is a vital consideration in the development of a 

state or regional plan to comply with the proposed regulation; EPA's failure to timely provide a 

methodology by which to make this conversion prevents states, industry, and the public from 

adequately reviewing and commenting on the proposal. 

Commenters added EPA has failed to propose any methodology, only provide "two illustrative 

calculation-based approaches" for translating the rate-based goals to mass-based goals. 

Commenters added the agency displays the mass as metric tons rather than conventional short 

tons. 

Commenters added the "illustrative" rate-to-mass translation approaches that EPA provided in 

the TSD do not follow the original proposal. 

Commenters added EPA has essentially set conflicting goals for the states: rate-based goals in 

the original proposal and significantly more stringent mass-based goals later published in the 

November 6, 2014 TSD. 

Commenters added the agency sets forth the former goals with an iron hand, admonishing states 

that any variance will be met with harsh skepticism; then, with but little reference to comments 

already received, the agency does an about-face and publishes an illustrative approach to 

calculating mass-based goals that varies significantly from its original proposal. 
57

Commenters added for consistency with the original proposal, EPA cannot set a mass-based goal 

that would be lower than the base year fossil fuel emissions (after the application of Building 

Block 1). 

Commenters added the EPA cannot tinker around the edges of an unsound proposal to make it 

more to its liking. 

Commenters added the entire original proposal should be set aside permanently, or at least until 

the EPA can come up with proposed guidelines that are consistent with its legal authority and 

that are feasible through real "achievable" and "adequately demonstrated" BSER rather than 

wishful thinking.

Commenters added the proposal should have been an Advance Notice of Proposed Rulemaking 

rather than a Notice of Proposed Rulemaking. States, industry, and the public have been deprived 

of an opportunity to comment on whatever rate to mass methodology EPA decides to finalize.

Commenters stated EPA's proposed translation of emission rate-based CO2 goals to mass-based 

equivalents are inconsistent with methods utilized to determine state rate-based goals. The 

commenters stated for the denominator, the rate goal computation essentially incorporates the 

projected future sum total of all the MWhs of all the sources in Building Blocks 1-3, as well as 

the MWhs associated with energy efficiency measures, while backing out the MWhs associated 

with future projected loss of coal-fired dispatch in the numerator; the result is a maximization of 

goal MWhs and a minimization of CO2-based MWhs resulting in a stringent rate-based goal. 

The commenters said however, the proposed method to convert a rate-based to mass-based goal 

employs presumptions that are opposite of those employed in the goal computation. The 

commenters said here, EPA's proposed method backs out non-CO2 based MWhs that are 

included in the rate-based goal computation, yielding a mass-based computation process that 

would always result in fewer tons in a rate to mass conversion than if the MWhs in the rate-based 

goal computation were utilized instead. The commenters said the most straightforward approach 

that is consistent with the method used in the goal calculation for a rate to mass conversion is to 

use the product of the goal-computed MWHs (the denominator) and the goal-calculated CO2 

rate/ MWh.

Commenters added the 60.5770(a) (3) provision of the 111(d) proposal states "The conversion 

must represent the tons of CO2 emissions that are projected to be emitted, in the absence of 

emissions standards contained in the plan, if the affected EGUs 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 commenters said it does not make sense to apply the average lb CO2 /MWh rate equal to the 

rate-based goal for the state identified in Table 1 of this Subpart to "affected EGUs" when 

calculating the mass based goal since the rate-based goal was calculated based on the generation 

from "affected entities", not "affected EGUs". The commenters said that "affected entities" 

should replace "affected EGUs" in the provision cited. The commenters asked if EPA intended to 

set a mass based goal by having "affected EGUs" 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 commenters said if 

this was EPA's intention, it should be noted that Georgia's rate-based goal is 834 while our coal 

emissions rate (after HR improvement) and NGCC emissions rate are 2157 and 841 lbs/MWh, 

respectively; even if we dropped coal generation to 0, we would be left with an equivalent 
58

emissions rate of 841; this would fail the equivalency test in paragraph (a) (3). The commenters

said there are a number of other states in this same circumstance. The commenters asked what 

does "in the absence of emission standards contained in the plan" mean; is EPA saying that, for 

purposes of the calculation, all predicted electrical demand (i.e., generation) would be assumed 

to be from affected EGUs. 

Commenters added there have been reports that EPA staff has endorsed a method for calculating 

the mass-based goal that involves taking the EPA/IPM Option 1 CPP modeling results and 

adding up the emissions from the affected units. The commenters asked if EPA could elaborate 

on how this method relates to the method specified in proposed 60.5770(a) (3) - taking the 

projected generation of affected units and multiplying it by the rate-based goal.

Commenters stated in the NODA, EPA has provided additional guidance on two possible 

approaches to converting rate-based goals to mass-based goals; because state agencies are in the 

best position to evaluate and direct the future course of their electricity sector and their economy, 

EPA should allow states to convert their rate-based goals into mass-based equivalents. The 

commenters said states should be authorized to initially identify appropriate factors, 

assumptions, and inputs for this conversion and to calculate interim and final mass-based goals 

that match the emission performance that would be expected under a rate-based approach; EPA 

should not calculate mass-based equivalents for the states. 

Commenters stated the two optional approaches for converting rate-based goals to mass-based 

goals that EPA outlines in the Rate-to-Mass Technical Support Document (TSD) are flawed for 

at least three reasons. The commenters said both approaches reflect unreasonable assumptions 

about the effect that incremental RE, EE, and nuclear generation will have on affected EGUs' 

generation and emissions. The commenters said both of the TSD approaches would adjust 2012 

affected unit generation below baseline by assuming that the addition of incremental sources of 

zero-carbon generation will reduce the utilization of affected fossil EGUs. The commenters said 

however, it is incorrect to assume that the addition of a MWh of incremental RE, EE, or nuclear 

generation will reduce the output of existing fossil units by the same amount. The commenters

said numerous factors - including future demand growth, the attributes of the electric system, and 

the interconnected nature of the electric grid - affect the extent to which addition of new 

generation can displace existing fossil generation. 

Commenters added the approaches outlined in the TSD are inconsistent with the rate-based goal 

computation approach in the Proposed Rule; under EPA's initial proposal, the addition of 

incremental RE, EE, and under-construction nuclear generation would not be assumed to 

displace existing fossil generation. The commenters said under the alternate approaches 

discussed in the Rate-to-Mass TSD, by contrast, the addition of this incremental generation is 

assumed to reduce generation from existing fossil EGUs. The commenters said because these 

two methods are inconsistent, it would be unreasonable for EPA to convert state goals from rates 

to masses using the methodology in the Rate-to-Mass TSD.

Commenters added both approaches fail to adequately consider the impact of future demand 

growth on affected units' abilities to reduce emissions; the TSD's first proposal for calculating 

mass-based equivalents would not incorporate any future load growth into the projection of a 

mass-based equivalent; this result is clearly arbitrary. The commenters said by failing to 
59

incorporate any assumptions about how electricity demand may increase in future years, EPA 

would effectively prohibit states from meeting new electricity demand with additional generation 

from existing units, which are some of the most reliable, proven, and low-cost generation sources 

available. The commenters said EPA's second option under the Rate-to-Mass TSD incorporates 

one basic assumption about increased electricity demand, based on EIA regional projections; 

however, this load growth assumption may be unreasonably low in many parts of the country, if 

economic growth increases substantially beyond current expectations. The commenters said 

therefore, this option, too, could lead to severe implementation and reliability difficulties if load 

growth is greater than a state or EPA projects in calculating the mass-based equivalent. 

Commenters added rather than effectively prohibiting states from increasing generation from 

cost-effective, reliable existing units to meet new demand, EPA should defer to states' reasonable 

projections of future demand in calculating mass-based goals. The commenters added EPA 

should revise its guidance to align with its assumption in the Proposed Rule that the addition of 

incremental RE, EE, and nuclear generation does not displace historic fossil generation. The 

commenters said because states' initial load growth projections could underestimate the amount 

of load growth that the state will experience during a compliance period, EPA should provide a 

mechanism for a state to revise its mass-based goal based upon a showing that these and other 

assumptions the state may have used to convert goals from rates to masses were incorrect.

Commenters stated a state should be able to use EPA's IPM base case for 2020 and 2030 to 

convert its rate into a mass-based standard; however, a state would need the "parsed" files to do 

so. The commenters asked why did the EPA not run all the parsed files necessary for States to 

estimate their mass-based standards.

Commenters stated the premise for the translation is made clear by EPA. "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 EGUs [electric generating 

units] were to perform at an average lb CO2/MWh rate equal to the rate-based goal." (Federal 

Register, Vol. 79[117]; 34953) The commenters stated the "In the absence of emissions 

standards" implies that we need a business-as-usual (BAU) projection of generation by affected 

EGUs. The commenters said EPA already has deployed Integrated Planning Model (IPM) 

version 5.13 to project a Base Case for the power sector through 2030. The commenters said the 

confusion arises from whom are the affected EGUs EPA's formulation of the rate-based goals 

partly resolves the confusion; it is located on page 18 of the Goal Computation Technical 

Support Document. 

• rate goal [lbs/MWh] = emissions from existing fossil [lbs] / ( generation from existing 

fossil + 

• generation from at-risk nuclear + 

• generation from projected renewables +

• projected demand savings from energy efficiency) [MWh] 
60

The commenters said a little algebra translates a rate goal to a mass goal; the denominator in the 

formula is projected generation from affected EGUs under BAU conditions plus projected 

energy efficiency; the product of the rate goal and the denominator is the mass goal. 

The commenters said the rate goal comes from EPA, but generation by affected EGUs must be 

produced by a model; different models produce different projections, so allowing states to 

choose a model effectively invites them to manipulate the stringency of the rule. The 

commenters said if they choose a model that projects a high level of generation then emissions 

will be higher and costs lower than if they choose one that projects less generation. The 

commenters said EPA can simultaneously obviate this potential for manipulation and the burden 

they place on themselves to accept or reject the models chosen by the states if they employ a 

model themselves to project generation and make the rate-to-mass conversion.

Commenters stated the principal concern is that the two alternatives discussed in the Rate-toMass TSD are inconsistent with the rate-based goal computation approach in the Proposed Rule. 

The commenters said under EPA's initial proposal for calculating rate-based goals, the addition 

of incremental RE, EE, and under-construction nuclear generation would not be assumed to 

displace existing fossil generation; by contrast, the approaches discussed in the Rate-to-Mass 

TSD would reduce the expected level of generation during a given compliance year by the 

amount of incremental zero-carbon generation EPA projects a state could obtain under building 

blocks three and four. The commenters said these approaches are inconsistent with each other; as 

a consequence, the interim and final goals computed using these approaches would not be 

equivalent with each other. 

Commenters added the assumption that the addition of each MWh of incremental RE, EE, or 

nuclear generation will reduce the output of an existing fossil unit in the same state by the same 

amount is incorrect for a number of reasons. The commenters said the two approaches discussed 

in the Mass-to-Rate TSD both rely on this incorrect assumption. The commenters said were EPA 

to issue a final rule that relies on such an assumption in calculating mass-based emission budgets 

or in dictating guidelines for states to follow in calculating their own budgets, this approach

would effectively make unworkable any mass-based program that a state may wish to develop 

for achieving its applicable emission goal under the Clean Power Plan. The commenters said 

given the many administrative and flexibility benefits of a mass-based program, the loss of this 

implementation option would have the unfortunate effect of increasing the administrative 

challenges and burdens states will face in implementing their applicable state goals. 

Commenters added both of the proposed rate-to-mass conversion methodologies discussed in the 

TSD fail to adequately take into account the impacts that future demand growth could have on 

affected units' abilities to reduce emissions. The commenters said the first proposed methodology 

discussed in the Rate-to-Mass TSD would not incorporate any future load growth into the 

projection of a mass-based equivalent limits imposed states; the consequence of this oversight is 

that EPA would effectively prohibit states from meeting new electricity demand with additional 

generation from existing affected power plants. The commenters said in many cases, these 

existing generating units are likely to be the most reliable, low-cost generation sources available; 

moreover, as EPA recognizes, application of the building blocks-particularly building block twowill lead to significant spare capacity at coal-fired EGUs. The commenters said under a ratebased approach, this excess capacity could still be used to meet future demand as long as states 
61

deploy additional low-carbon generation to balance out the higher emissions from these units; 

however, under the first mass-based conversion methodology discussed in the TSD, states would 

be unable to increase these units' utilization rate to meet new electric demand, because the level 

of the cap would be set under the unrealistic assumption that demand growth will either be zero 

or will be met entirely by other sources of generation that are not regulated under the applicable 

state plan (e.g., peaking-cycle simple cycle combustion turbines, imported generation from 

neighboring states, or new fossil or zero-carbon generation). The commenters said the net effect 

of this approach would likely be to increase the cost of meeting new electrical demand, reduce 

economic growth, and potentially increase the number of stranded assets due to the premature 

shutdown of the nation's coal-fired generation fleet; moreover, if new demand is met by other 

fossil resources (such as new fossil-fueled facilities or electricity from fossil generators in 

neighboring states) rather than lower-carbon resource (which are typically more expensive), the 

emissions effect of capping state emissions could be completely negated. 

Commenters added the second option for converting rate-based goals to mass equivalents 

discussed in the Rate-to-Mass TSD does incorporate some assumptions about increased 

electricity demand; however, the commenters are concerned that the proposed load growth 

assumptions could be unreasonably low in many parts of the country if economic growth 

increases substantially beyond current expectations (as our members and their families hope it 

will), or if future technologies such as electric vehicles increase electricity demand significantly. 

The commenters said without further changes, both approaches would artificially constrain 

economic growth, lead to more stranded assets, and raise electricity costs while potentially 

having no effect on emissions. The commenters added this second option requires state to 

include new power plants as affected units in a regulatory program that is limited to the 

regulation of existing sources; the approach therefore is contrary to the requirements of the Clean 

Air Act, which expressly excludes "new sources" from the statutory definition of "existing 

source" for purposes of regulation under section 111.68.

Commenters have reviewed EPA's Translation of the Clean Power Plan Emission Rate-Based 

CO2 Goals to Mass-Based Equivalents TSD (November 2014) and supporting documents, and 

disagrees with its methodology and calculations. The commenters said this methodology 

severely underestimates the allowable amount of CO2 emissions based on each state's emission 

rate in the proposed Clean Power Plan. The commenters said for example, in the TSD's 

supporting Rate to Mass Translation Data File, in sheet "Mass Equivalents - States, Opt1," 

column CB, the sum of all states' emissions is equal to approximately 1.34 billion metric tons, or 

1.48 billion tons. The commenters said the correct tonnage for each state can be easily calculated 

from the emission rates as shown in the Goal Computation TSD supporting document, Goal 

Computation - Appendix 1 and 2. The commenters said the emission rate calculation is simply 

the emissions (in pounds), divided by the energy (in MWh). The commenters said using column 

AZ of sheet "Appendix 1 - Proposed Goals," and removing the denominator results in the 

appropriate pounds of CO2 for each state based on the proposed emission rates. The commenters

said one can then convert pounds to tons by dividing by 2,000. The commenters said the sum of 

all states' emissions is equal to approximately 1.82 billion tons, or approximately 23% higher 

than what EPA uses when doing the translation. The commenters said because EPA's method of 

converting the emission rate to a mass value as proposed in EPA's November 2014 Translation 

of the CPP Emission Rate-Based CO2 Goals to Mass-Based Equivalents TSD underestimates the 

mass emissions tonnage by almost 20%, the commenters supported setting the mass-based 
62

equivalent limits on the CO2 values used in the numerator of the state goal calculations as found 

in the document Goal Computation - Appendix 1 and 2 spreadsheet.

Commenters stated has the following comments and questions: 

1. The commenters recommended that EPA check its spreadsheets 

2. The commenters recommended developing this approach without the spreadsheets in 

mind; make this approach clear to someone trying to duplicate the method outside of the 

rulemaking proposal. 

3. The commenters recommended making it very clear how EPA intends existing and 

incremental RE and EE to be treated when converting the BSER goal from rate to mass 

for both approaches, exiting only and existing plus new generation. 

4. The commenters did not have sufficient time to comment on the many other methods 

proposed in the TSD. 

5. The commenters noted that more sophisticated methods for the conversion will take 

extensive analysis and complicated modeling tools which a) the commenters may not 

have access to and b) may not have sufficient time to perform, given that EPA has given 

states one year to make this decision and present its methodology for inclusion in the 

initial state plan submittal. 

6. EPA estimates the incremental generation in 2029 to be 18,323,738 MWh; it adds this 

value to the existing generation in 2012; it then applies the BSER rate to all generation. 

The commenters asked does this approach assume all the added generation, 167,369 

GWh, is generated by the existing fleet plus some additional renewables; or does EPA 

assume that new sources subject to 111b will be required to meet this projected 

demand; if 111(b) sources are required to meet the demand, the 

commenters recommended that EPA modify this approach.

Commenters stated this rate-based approach would impermissibly force the retirement of a 

significant portion of West Virginia's coal-fired units, which currently provide 97 percent of 

West Virginia's electric generation. The commenters said in order to comply with the rate-based 

proposal by 2020, West Virginia would have to replace 43.5 percent of its generation through 

fuel switching to lower CO2 emitting fuels (that emit at the same rate as NGCC units), or replace 

20.4 percent of its generation with renewables (zero-emitting sources), or some combination 

thereof. The commenters said such an approach is not realistic, nor is it feasible to assume that 

companies would be in a position to cost-effectively replace anywhere from 20 to 44 percent of 

their generation within less than 6 years. The commenters said to put this in perspective, the 

required level of reduction would require the installation of 15 - 500 Megawatt (MW) NGCC 

units by 2020, or the installation of nearly 2,500 - 2 MW windmills, or some combination 

thereof.

Commenters noted that the proposal would allow states to adopt either the rate-based goal as 

determined by EPA or an "equivalent" mass-based target. However, the commenters indicated 

that the proposal discussion of this topic is vague and does not provide clear guidance as to how 
63

to translate the proposed rate-based goals into mass-based goals. The commenters argued that 

translating from a rate-based to mass-based target appears to require complex and resource 

intensive modeling that may be beyond the capability of many states to undertake and complete 

in the timeframe that will be needed to inform the state plan development. 

Commenters stated whatever method for converting rate to mass EPA approves must be able to 

account for reductions of emissions in one state may drive emissions up in another state within 

the same RTO. The commenters said for example, if a coal plant in one state is retired, an 

existing natural gas EGU may replace that generation; this effect is encouraged by Building 

Block Two of the CPP, but if the states are not in a multi-state plan such a result would be 

discouraged by the state in which the existing natural gas generation facility resides.

EPA has made assumptions in the rate to mass conversion that may or may not hold true.

Commenters stated EPA uses the proposed rate-based goal which incorporates numerous 

assumptions to calculate a mass-based goal that includes even more assumptions; so the question 

must be asked, "Who is penalized if all of the assumptions are not realized." The commenters

said unfortunately, it will be the states and the individual utility companies that will be forced to 

offset EPA's assumptions because ultimately the burden of compliance lies with the company. 

The commenters said other assumptions included in this mass-based conversion that may or may 

not hold true are: 

• The continuing operation of existing resources under building block three (RE and at-risk 

nuclear) is not assumed to affect historical generation levels. 

• Inclusion of existing and incremental non-fossil generation connected to building blocks 

three and four is necessary to fully define the mass equivalent generation level. 

• To quantify a sales level for all future years, the annual average growth rate is applied to 

each jurisdiction's historical 2012 power sector sales. 

• Transmission losses are assumed to be 7.5% 

• Under construction NGCC EGUs are assumed to operate at a 55% capacity factor to 

satisfy future demand requirements. 

The commenters said the mass-based goal calculation is based on so many assumptions that it is 

inevitable some or all of these assumptions will not hold true; the inherent uncertainty is 

something that EPA should carefully consider. The commenters said if the overall purpose is to 

reduce carbon emissions by 30% from 2005, then this objective should be applied uniformly 

across all states.

Commenters stated that EPA's initial guidance was vague as to the methodology for converting 

rate-based goals to mass-based goals. The commenters interpreted EPA's methodology to require 

a state to model a reference case scenario that does not include EPA's proposed guidelines and 

any existing state requirement or future state requirements that could include measures that 

might otherwise count towards compliance in a state plan (e.g., incremental measures from an 
64

existing energy efficiency standard or RPS are not included in the reference case scenario). The 

commenters stated that results from the reference case scenario include generation levels (MWh) 

from affected sources. The commenters stated that generation from affected sources is totaled for 

the appropriate compliance year, and EPA's state emission rate goal is applied to the total 

generation from affected sources to produce a mass-based number. 

Commenters noted that in an attempt to provide clarity, EPA published additional information on 

November 13, 2014, regarding the conversion of emission rate-based CO2 goals to mass-based 

equivalents and EPA provided two additional methodologies for potential use in making rate-tomass conversions. The commenters noted that the first methodology adjusts the historical (2012) 

generation from affected sources based on the application of EPA's Building Blocks to develop a 

mass equivalent generation level. Specifically, the commenters stated that EPA reduces 

generation from affected sources due to the assumed levels of incremental renewable energy and 

under construction nuclear (Building Block 3) and incremental DSEE (Building Block 4). The 

commenters noted that the adjusted generation from affected sources is then added to the total 

generation from Building Blocks 3 and 4 and multiplied by EPA's proposed emission rate-based 

goals to produce mass-based equivalent goals. The commenters noted that EPA's second 

methodology follows a similar approach but incorporates incremental demand levels from new 

generation in developing a mass equivalent generation level.

Commenters expressed numerous concerns with EPA's illustrative conversion methodologies 

including: (1) the inappropriateness of using a single baseline year (2012); (2) the presumption 

that incremental renewable energy, under construction nuclear, and incremental DSEE will 

displace generation from affected sources; (3) the inherent uncertainty of future demand; and (4) 

the economic consequences of unpredictable and volatile fuel prices. 

Regarding their first concern, the commenters stated that any single-year baseline is not 

representative of historical and future operations of affected sources. Specifically, the 

commenters stated that generation from affected sources in 2012 was atypical due to historically 

low natural gas prices and diminished demand. The commenters stated that using 2012 as a 

baseline to establish an emission rate- or mass-based program results in overly stringent goals.

Regarding their second concern, the commenters stated that EPA is incorrect to assume Building 

Blocks 3 and 4 will displace generation from affected sources. The commenters explained that 

while new generation may, at times, be built to replace existing generation, more often it is built 

for other reasons. The commenters stated that one of the primary purposes of building new 

generation facilities is to meet increasing electricity demand. The commenters provided that 

Georgia Power's Plant Vogtle Units 3 and 4 are prime examples of constructing new units to 

meet load growth. The commenters stated that Georgia's under construction nuclear, Plant 

Vogtle Units 3 and 4, were explicitly approved by the Georgia PSC and the NRC to serve future 

demand in Georgia, which flatly contradicts EPA's attempt to replace existing generation with 

the generation from these units.

According to commenters, as discussed in the NRC's final environmental impact assessment for 

the Construction and Operating License for Plant Vogtle Units 3 and 4, "[a] certification for 

construction of the proposed Units 3 & 4 was approved by GPSC . . . [and] specifically found 

that: [t]here will be a need for new base-load generation in Georgia during the 2016 to 2017 
65

timeframe . . . [and] [d]emand side management programs do not eliminate the need for new 

base-load generation." As a result, the commenters stated that the NRC and the Georgia PSC 

explicitly have determined that Plant Vogtle Units 3 and 4 were needed to meet future demand. 

The commenters asserted that to repurpose these units into replacements for existing fossil fuelfired generation by making Georgia's goal more stringent would severely risk the provision of 

reliable and cost-effective power to Georgia's electricity customers. 

Regarding their third concern, the commenters stated that DSEE (Building Block 4) is dependent 

on customer behavior and is not guaranteed. As a result, the commenters stated that it serves a 

different purpose than existing fossil fuel-fired generation, which is capable of being called upon 

to meet customer demand. Moreover, the commenters stated that this overall approach 

contradicts the Agency's proposed emission rate-based goal computation when it assumes 

displacing generation from Blocks 3 and 4 and does not reflect real world demand increases 

when it locks in a baseline.

Regarding their fourth concern, the commenters stated that EPA is not capable of making 

accurate state-level assumptions for electricity demand growth and fuel prices both of which 

have significant ramifications in establishing emission reduction goals. The commenters noted 

that the Agency itself notes the "central importance" of these assumptions while highlighting the 

"uncertainties about future demand, inventory of EGUs and the relative amounts of generation 

among EGUs in light of, for example, fuel costs..." 

For these reasons, commenters argued that EPA cannot and should not provide states with 

binding rate to mass conversion methodologies and mass-based goals (or rate-based goals for 

that matter). The commenters contended that states are best equipped at developing goals that 

appropriately reflect the historical and future operations of affected sources within their 

boundaries. The commenters stated that based on the face of section 111(d), EPA must uphold 

the authority and flexibility already provided to states to establish standards of performance and 

compliance options.

Commenters stated the mass-based goal should be calculated as the product of the affected entity 

emissions rate (from Blocks 1 - 4 of the Goal Computation TSD) and the projected 2030 affected 

entity generation; the final year generation used for the mass-based goal should be based upon 

nationally recognized demand projection data such as EIA's Annual Energy Outlook (AEO). 

Commenters stated EPA did not assume any reduction in affected unit generation due to the 

deployment of building blocks three and four; however, in both approaches in the "Rate-toMass" TSD, EPA does reduce affected unit generation in the goal setting methodology due to 

building blocks three and four. The commenters stated this is not a valid approach; these 

resources do not directly displace existing fossil generation, and this change would significantly 

change the stringency of the proposed rule invalidating EPA's cost and impact analysis. The 

commenters stated EPA should not adjust affected unit generation in the goal-setting 

methodology for building blocks three and four.

Commenters stated in both approaches in the "Rate-to-Mass" TSD, EPA assumes generation 

from existing affected units is not adjusted for demand growth for future compliance periods, 

and that all demand growth is accommodated by generation from new generating sources. The 
66

commenters stated this is inconsistent with the rate-based approach in the proposed rule and not 

reflective of how power systems are operated. The commenters said under a rate-based standard, 

higher levels of generation with no change in unit efficiency do not impact unit emission 

rates; fossil-fueled generating units are primarily dispatched based on cost with no bias due to 

unit age. The commenters said assuming generation from existing units does not increase due to 

demand growth is not equivalent to the rate-based goals, but results in a much more stringent 

approach than the rate-based approach in the proposed rule. The commenters said mass 

equivalent methodologies should be based on projected future emissions from affected units that 

include increased generation due to demand growth for generation from those units. 

Commenters said, specifically in the rate-to-mass conversion context, states should have the 

flexibility to include generation from new fossil units if they choose, EPA should afford this 

flexibility whether a state chooses to comply with a rate or mass equivalent standard. 

Commenters stated that EPA's illustrative rate-to-mass translation in its November 2014 TSD 

failed to account for the complexity of regional electricity resource changes expected between 

2012 and 2030. The commenters offered that, in conducting the translation between the ratebased targets and a mass-based emissions cap, there may be some apparent value of providing a 

simple calculation-based methodology, such as the approach illustrated by the recently released 

RTM TSD. However, the commenters contended that the approach outlined by the proposed 

CPP is not especially conducive to a simplified calculation-based translation methodology. The 

commenters noted specific concern regarding the complexity of this nation's interdependent 

electricity grids as well as the dynamic nature of our energy markets, which both contribute to 

the resulting inability of historically-based generation and capacity data to provide reliable 

analyses of projected fuel mixes for individual states that participate in larger market structures. 

The commenters asserted that electricity system modeling offers crucial insights pertaining to 

how that system will respond to changes in policy or market forces. The commenters added that 

the accuracy of modeling results are only as reliable as the underlying assumptions, and therefore 

they recommended that EPA prescribe rebuttable presumptions for input source data, such as 

reliance on the ISO/RTO load forecasts and interconnection queues to determine firm retirements 

and firm builds, as well as Annual Energy Outlook projections for fuel prices.

Commenters suggested that EPA clarify that, for purposes of the rate-to-mass translation, 

underlying renewable energy and energy efficiency state policies should not be included in the 

baseline. The commenters added that, to require state renewable energy and energy efficiency 

policies to be modelled in the baselines essentially takes away the benefits of those programs 

during the compliance period for states that implement these very programs which EPA hopes to 

encourage states to undertake.

Commenters stated that, while a modeling-based approach for the rate-to-mass translation is 

most appropriate due to the system-wide structure of the CPP, a calculation-based methodology 

for the rate-to-mass translation could be appropriate if EPA corrects for the apparent doublecounting of fossil fuel displacement. They further explained that fossil fuel displacement may be 

already accounted for in the calculation of a state's rate and then EPA would potentially count 

that displacement again in the rate-to-mass translation.
67

Comment 6: The EPA should clarify that the examples presented in the TSD are not the only 

methods to convert the rate based goals to mass based goals. 

Response 6: The EPA has converted the rate-based goals to mass-based goals. See section VII 

of the final rule preamble of the CPP and the CO2 Emission Performance Rate and Goal 

Computation TSD for CPP Final Rule supporting the final CPP for the final mass-based goals.

The following are summaries of the specific public comments under this comment:

Commenters stated in its final rule, EPA should state explicitly that these examples are not the 

only ways in which the conversion may be performed; the TSD states: "The concepts and 

considerations presented in this section should not be viewed as prescriptive; rather, these 

concepts represent one particular way of constructing an approach that is capable of translating 

the form of the rate-based goal to a mass-based equivalent." The commenters said while this 

conveys the intention to allow states to use other methods to translate rate-based goals to a massbased equivalent, the commenters requested that EPA state clearly in the final rule that the 

examples included in the TSD are not the sole options for mass-based emission limits, should not 

be interpreted as a cap on emissions if a state adopts a mass-based approach, and that states 

retain the authority to adopt other methods to translate their rate-based goals into mass-based 

limits.

Commenters stated the Proposed Rule did not establish presumptive mass-based goals for 

states; EPA has since released the Mass Conversion TSD with two [potential] methodologies for 

making rate-to-mass translations that could be considered equivalent to the proposed rate-based 

goals. The commenters said EPA made clear upon publication of the Mass Conversion TSD that 

the published mass-based equivalents are merely illustrative. The commenters said EPA should 

reiterate in the Final Clean Power Plan that states have the option, upon submission of their 

plans, to propose adjustments to the methodology used by EPA in establishing the example 

mass-based goals to account for circumstances where the underlying assumptions are inaccurate 

or fail to account for particular circumstances, e.g., the unexpected retirement of a nuclear 

generating unit or increases in generation necessitated by initiatives to expand the electrification 

of the transportation sector as a means of attaining the ozone NAAQS. The commenters said to 

encourage states to proceed with the development of mass-based programs and so as not to limit 

the creativity of states in designing the best programs for their states, EPA should make clear 

that, if it should find a state plan deficient in some respect, including in a state's translation of its 

rate-based goal into a mass-based goal, the immediate remedy would not be wholesale rejection 

of the state plan and imposition of a federal implementation plan ("FIP"), but a more measured 

process that provides the state the opportunity to correct any deficiencies, while proceeding with 

implementation of plan. The commenters said this process has worked well for several decades 

in EPA's review and approval of SIPs submitted under Section 110 of the CAA. The commenters

said given Section 111(d)'s requirement that EPA follow its long-established practice for 

reviewing SIPs under Section 110, EPA should make clear in the final rule that it will similarly 

provide for limited approval and disapproval of plans where deficiencies are correctable and 

specifically where a state's translation of its rate-based goal to a mass-based goal is deficient due 

to some methodological flaw.
68

Commenters agreed with EPA that a mass-based target should be equivalent to a rate-based 

target, and should not in any way penalize or reward states that choose one approach over the 

other; it will be crucial for owners of affected units to ascertain with certainty whether or not the 

existing RGGI mass caps will match the interim rate targets or the final rate targets. The 

commenters appreciated the additional clarification provided in its November 6th Technical 

Support Document (TSD), but believes that the analysis presented by EPA in the end may 

penalize states that convert to a mass-based target, as states may wish to do to adopt RGGI as a 

compliance mechanism. The commenters recognized EPA intended that the example mass-based 

equivalents in the Technical Support Document are not required emissions limits nor should they 

be interpreted as a cap on emissions; they are only two of many ways to translate from a ratebased goal to a mass-based equivalent, and urges the EPA to accept a more accurate rate-to-mass 

translation from states as they file implementation plans. The commenters also requested that the 

EPA specify that its mass-based target as part of the November 6th TSD would not preclude the 

EPA's ability to recalibrate New York's adjusted emission rate target, as such an adjustment will 

be necessary as EPA responds to comments on the proposed rule. The commenters said 

regardless of how EPA proceeds with respect to the rate-to-mass conversion calculation, all 

targets should be recalculated to address changes made to the rate-based targets as a result of this 

comment process and upon adoption of the final rule. 

Commenters stated EPA should make the computation of the mass-based targets as simple as 

possible to reduce uncertainty for states taking the preferred compliance path; for example, as an 

alternative to the multiple scenarios suggested in the proposed rule, the EPA might allow states 

to adopt a mass emissions reduction at the percentage reduction required under the rate-based 

formula, so that Arkansas could opt to reduce average emissions in 2020-2029 by 41% from 

2012, and reduce emissions by 44% for 2030 and beyond.

Commenters have carefully reviewed the Technical Support Documents describing the 

requirements for state compliance plans and converting rate-to-mass; and agree with EPA that a 

mass-based target should be equivalent to a rate-based target, and should not in any way penalize 

or reward states that choose one approach over the other. The commenters said it will be crucial 

for owners of affected units and grid operators to ascertain with certainty whether or not the 

existing RGGI mass caps are comparable to the interim rate targets or the final rate targets. The 

commenters appreciated the additional clarification provided in its November 6th Technical 

Support Document ("TSD"), but believes that the analysis presented by EPA in the end may 

penalize states that convert to a mass-based target, as states may wish to do to adopt RGGI as a 

compliance mechanism. The commenters recognized EPA intended that the "example massbased equivalents in the Technical Support Document are not required emissions limits nor 

should they be interpreted as a cap on emissions. They are only two of many ways to translate 

from a rate-based goal to a mass-based equivalent," and urges the EPA to accept a more accurate 

rate-to-mass translation from states as they file implementation plans. The commenters also 

requested that the EPA specify that its mass-based target as part of the November 6th TSD would 

not preclude the EPA's ability to recalibrate New York's adjusted emission rate target, as such an 

adjustment will be necessary as EPA responds to comments on the proposed rule. The 

commenters said regardless of how EPA proceeds with respect to the rate-to-mass conversion 

calculation, all targets should be recalculated to address changes made to the rate-based targets 

as a result of this comment process and upon adoption of the final rule.
69

Commenters appreciated the release of EPA's TSD entitled "Translation of the Clean Power Plan 

Emission Rate-Based CO2 Goals to Mass-Based Equivalents," which provides examples of the 

ways in which a state may translate its rate-based standard into a mass-based standard; however, 

EPA should state explicitly in its Final Rule that these examples are not the only ways in which 

the conversion may be performed. The commenters said the TSD states, "The concepts and 

considerations presented in this section should not be viewed as prescriptive; rather, these 

concepts represent one particular way of constructing an approach that is capable of translating 

the form of the rate-based goal to a mass-based equivalent." The commenters said while this 

conveys EPA's intent that states may use other methods to translate its rate-based standard to a 

mass-based equivalent, the commenters requested that EPA state clearly in the Final Rule that 

the examples included in the TSD are not the sole options for mass-based emission limits, should 

not be interpreted as a cap on emissions if a state adopts a mass-based approach, and that states 

retain the authority to adopt other methods to translate their rate-based standards into mass-based 

limits. 

Commenters asserted that the conversion guidelines are inadequate. Commenters argued that the 

guidelines do not indicate what modeling assumptions are acceptable. Although the EPA 

described how rate-to-mass based goal conversions could be made in the Technical Support 

Document, this commenters asserted the EPA should provide further guidance on what could be 

a workable system outside of the approach provided in the Technical Support Document. 

Commenters felt the EPA had not allowed sufficient time for stakeholders to review the guidance 

released on November 6, 2014. 

Commenters appreciated the release of EPA's TSD entitled "Translation of the Clean Power Plan 

Emission Rate-Based CO2 Goals to Mass-Based Equivalents," which provides examples of the 

ways in which a state may translate its rate-based goal into a mass-based goal; however, EPA 

should clarify in its final rulemaking that these examples are not the only ways in which the 

conversion may be performed. The commenters said the TSD states, "The concepts and 

considerations presented in this section should not be viewed as prescriptive; rather, these 

concepts represent one particular way of constructing an approach that is capable of translating 

the form of the rate-based goal to a mass-based equivalent." The commenters said while this 

conveys EPA's intent that states may use other methods to translate its rate-based goal to a massbased equivalent, the commenters requested that EPA explain clearly in the final rule that the 

examples included in the TSD are not the sole options for mass-based emission limits, should not 

be interpreted as a cap on emissions if a state adopts a mass-based approach, and that states 

retain the authority to adopt other methods to translate their rate-based goals into mass-based 

limits.

Comment 7: The EPA should provide an equivalent mass emissions rate goal conversion.

Response 7: The EPA has carefully considered the comments and has provided a calculation of 

the mass-based goal directly in the final rule. See section VII of the preamble for further 

discussion.

The following are summaries of the specific public comments under this comment:
70

Commenters stated plans based on converted mass emission rate goals may provide states and 

regulated entities a more straightforward and enforceable implementation option. The 

commenters were concerned that the proposed rule does not provide state goals as both a 

lb/MWh emission rate and as a ton/year mass rate, and remains concerned despite the recent 

release of further technical support document (TSD) guidance from the EPA. The commenters

said without EPA providing clear unambiguous conversion guidance, or preferably providing 

presumptive equivalent mass emission goals, states and affected entities cannot adequately 

evaluate planning options. The commenters advocated for a straightforward equivalent emission 

rate to mass conversion procedure.

Commenters added EPA should also provide detailed calculations of an equivalent mass 

emission standard.

Commenters stated the proposed rule requires a state that elects to use mass-based goals rather 

than rate-based goals to produce a "reference case" forecast of generation by affected EGUs 

through 2030; this forecast would be done at the time a state's plan is prepared, and would 

determine the state's mass-based compliance goals for all compliance periods. The commenters

said preparing an accurate forecast this far in advance would be extremely problematic. The 

commenters recommended that the EPA should provide "presumptive" translations of rate-based 

goals to mass-based goals for each state, because it would reduce uncertainty surrounding the 

initial development of mass caps by states. The commenters said along with these mass cap 

values, the EPA should also provide detailed guidance, including examples, on their proposed 

method for developing these using a reference case scenario. The commenters said based on their 

review, states should be allowed to either adopt the presumptive translation, or propose an 

alternative mass-based goal as part of the state plan process based on unique circumstances and 

local resource plans. The commenters said in order to make a mass-based approach an attractive 

alternative to a rate-based approach, EPA should provide a process that allows states to adjust 

their mass-based goals factoring changes that occur after the generation projection is originally 

made with appropriate supporting justification.

Commenters recommended that any rate-to-mass translation approach accepted or adopted by 

EPA must reflect the complexity and geographic interconnectedness of the electric grid, while 

also providing sufficient oversight to ensure equivalent stringency between the rate-based and 

mass-based approaches.

Commenters stated the EPA has proposed allowing the use of a mass-based approach; EPA 

should provide the presumptive translations using its techniques for each state in the final rule. 

The commenters added, it should offer to provide the aggregated multi-state intensity and massbased values for the states considering a multi-state agreement.

Commenters urged EPA to further define the methodology for establishing mass-based goals and 

provide specific examples on how the mass-based goal might be calculated for a particular state. 

The commenters said providing additional guidance will ensure that there is consistency in 

development of mass-based budgets amongst the states. The commenters added it will be 

important for the states and stakeholders to have more certainty regarding the approvability of a 

calculated mass-based goal and, in the first instance, evaluating whether it is appropriate for any 

particular state to establish a mass-based goal.
71

Commenters stated as written EPA's proposed methodology for converting rate-based targets to 

mass-based targets is vague, and could lead to mass-based goals that are more stringent than ratebased goals. The commenters said in the rule EPA states generally that a mass-based CO2 

emission performance goal is calculated by projecting the tons of CO2 that would be emitted 

during a state plan performance period by affected EGUs in the state if they hypothetically were 

meeting the state rate-based CO2 emission performance goal for affected EGUs. The 

commenters said EPA next explains that when demonstrating projected emission performance 

under a mass-based plan, a state would project the CO2 emissions outcome that would be 

achieved under the suite of requirements, programs and measures in its state compliance plan. 

The commenters said EPA needs to provide more clarity on how the rate to mass-based 

conversion works and provide specific mass targets. The commenters said otherwise the state 

should be given broad flexibility to determine this factoring in reliability and cost issues. The 

commenters said it is important, that when converting between emission rates and mass, there 

must be logical consistency. The commenters said policy desires cannot overlook valid logic in 

the mathematical conversion between the emission rate and mass, and this may be seen as an 

arbitrary distinction by the courts. 

Commenters requested the agency's guidance on how the states convert the pounds per megawatt 

rate from the proposed guidelines to an annual tonnage rate.

Commenters requested the EPA to provide a mass-based formula and calculations for CO2 for 

all the states.

Commenters recommended the EPA should develop directions for states to follow when setting a 

mass-based limit, including periodic adjustments to correct for imperfect load-growth 

forecasts. Commenters asserted that mass-based limits must be based on consistent and 

transparent assumptions and that mass-based targets must be comparable to the rate-based 

targets.

Commenters asserted the method used to set the mass-based limits should not penalize early 

action and should minimize the likelihood that states will define business-as-usual assumptions 

that will result in a higher mass-based standard. 

Commenters requested EPA provide mass-based standard calculations so that states can better 

evaluate the impact of the rule and to get a better sense of what methodologies for calculating the 

mass-based state goals would be acceptable to EPA. 

Commenters felt the material released by EPA on June 2nd provides insufficient information for 

states. Commenters recommended EPA provide non-binding, illustrative examples of how states 

could convert their rate-based goals to mass, including the underlying calculations and 

assumptions. 

Commenters recommended these directions include designation of factors (e.g., rate of economic 

growth) and consistent data sources that would allow for conversion of an emission rate target 

into an emission budget. 

Commenters agreed with the EPA's description of what is required under "Identification of 

Affected Entities and Plan Inclusion," with the exception of the mass-based conversion elements. 
72

The commenters stated that to ensure consistency and acceptance of a state plan by the EPA 

regional offices, it is incumbent upon the EPA to provide the proper tools to translate from ratebased to mass-based goals. The commenters opposed requiring the state to use a proprietary 

model to make such a translation. The commenters stated that use of a proprietary model 

obfuscates the translation process, is not a transparent process as part of the rulemaking, and 

would make it impossible for some states to make this translation because of existing laws 

governing such transparency. The commenters supported a simplified method for this translation 

of rate-based to mass-based goals. 

Commenters stated the discussion in the Proposed Emission Guidelines on converting state 

emission rate goals into a mass emissions "cap" is vague and overly complicated; in addition, 

this guidance appears to require complex and resource intensive modeling that may be beyond 

the capability of many states to undertake or complete in a timely manner to inform the plan 

development process. The commenters said at the same time, such a conversion is vital to 

assessing the potential viability of existing and/or future interstate emissions trading programs 

that EPA acknowledges may be a more cost effective method of compliance for some states. 

Commenters recommended that EPA develop a simple and straightforward presumptive method 

for performing the rate-to-mass conversion that utilizes existing data and tools. The commenters

said a number of readily available sources of data on demand growth and emissions projections 

are currently available to the states such as the Energy Information Administration (EIA) and the 

state emissions projection tool developed by ERTAC. The commenters recommended, however, 

that EPA allow states to apply equivalent methods of rate-to-mass conversion upon an 

appropriate demonstration in their state plans. 

Commenters recognized that EPA provides some guidance on how to convert a state-specific 

rate-based goal to an equivalent mass-based goal in section III.B of EPA's "Projecting EGU CO2

Emission Performance in State Plans" Technical Support Document; however, additional 

guidance is needed. The commenters said one of the first questions a state must answer when 

developing its implementation plan is whether the state wishes to comply with a rate-based or 

mass-based emission goal; any conversion from a rate-based to mass-based emission goal is 

critical and must be done with accuracy and transparency. The commenters said it is imperative 

that states have this guidance as soon as possible, and definitely before the rule is finalized. 

Commenters stated at a minimum, EPA should provide states with detailed directions, equations, 

and examples explaining how states can convert EPA's proposed state goals to mass-based goals; 

it would also be extremely helpful if EPA provided this guidance via some type of electronic 

calculation tool. The commenters said this would also provide more consistency among the 

states' rate-to-mass conversion. 

Commenters stated EPA should perform a presumptive translation of the state-specific ratebased CO2 emission performance goal to an equivalent mass-based goal for all states and for 

multi-state regions; this should include default modeling assumptions and the results of modeling 

runs for a Reference Case Scenario and an EPA Mass-Based CO2 Emission Goal Policy 

Scenario, as described in section III.B of EPA's "Projecting EGU CO2 Emission Performance in 

State Plans" Technical Support Document. The commenters said EPA's translation should 

include a clear description of how the conversion was done so that states may easily replicate 

EPA's work. The commenters said State plans should be allowed to include a mechanism to 
73

recalculate the mass-based goal during the compliance plan based on demand growth and other 

factors.

Commenters requested that EPA clearly outline the steps for translating an emission-rate goal 

into a mass-based goal. The commenters said these changes would result in state goals that more 

accurately reflect real-world operations, properly reward early actors and incentivize early 

actions in the future, and facilitate faster compliance by states electing to employ a mass-based 

program.

Comment 8: The EPA should provide a single translation methodology of rate-based to massbased goals for all states to follow.

Response 8: The EPA has carefully considered the comments and rather than providing a 

methodology that each individual state would have to employ to translate the rate-based goals to 

mass-based goals, the EPA provides the calculated mass-based goals directly in the final rule. 

The methodology and date for the calculation are described in detail in section VII of the final 

rule preamble of the CPP and the CO2 Emission Performance Rate and Goal Computation TSD 

for CPP Final Rule.

The following are summaries of the specific public comments under this comment:

Commenters stated EPA provides a general discussion of how states might convert a rate-based 

goal to a mass-based goal, but does not propose a specific methodology. The commenters said 

failure to provide a specific methodology for all states to follow creates the potential for inequity 

among states that choose to translate their rate goals to mass-emission goals using difference 

methodologies.

Commenters added EPA's suggested approaches to setting a mass-based standard specified in the 

technical support document "Translation of the Clean Power Plan Emission Rate-Based CO2 

Goals to Mass-Based Equivalents" both prevent the concern about states gaming their businessas-usual forecast and also avoid having business-as-usual forecasts lock in planned mitigation 

measures into the baseline; however, the second approach, the "Final CPP Mass-Based 

Equivalent for Affected and New Sources" that factors in projected growth in regional electric 

generation may be closer to achieving equivalency with the rate-based methodology, which

allows for growth in electric generation so long as the emission rate is achieved. The commenters

said to support consistency in how states set their mass-based standards, we urge EPA to specify 

a preferred methodology such as the "Final CPP Mass-Based Equivalent for Affected and New 

Sources." The commenters said this methodology calculates the mass-based standard through a 

series of calculations that are based on historic (2012) generation levels. The commenters said by 

specifying a single method based on a fixed set of parameters and not using state-generated 

modeling, this approach prevents gaming and also avoids the issue of whether to assume planned 

clean energy capacity in the forecast; moreover, using a methodology such as this one that 

accounts for growth in electric generation to meet growth in demand will help avoid a situation 
74

where states opt for a rate-based goal in lieu of a mass-based standard only because the goal 

itself is seen as easier to achieve.

Commenters stated EPA should provide an acceptable method for translating the rate-based 

goals within the rule to a mass-based goal; this will prevent misinterpretation and miscalculation 

between and among states that discuss entering into a multi-state or regional plan. The 

commenters said it would also allow for a comparable standard between different states and 

ensure that multiple entities involved will arrive at the same goal after conversion. The 

commenters said EPA should not allow different methodologies for conversion when the goal 

calculation methodology is consistent for all states.

Commenters stated EPA should translate its rate-based goals into mass-based goals; it has 

already described, in broad terms, methods for states to make the translation, but the incentive 

for states to inflate their mass goals when translating is unavoidable. The commenters said a 

single standardized method for translation written by EPA would clear up confusion and remove 

the inevitability of goal inflation if states do the translations themselves.

Commenters stated EPA provides a general discussion of how states might convert a rate-based 

goal to a mass-based goal, but does not propose a specific methodology; failure to provide a 

specific methodology for all states to follow creates the potential for inequity among states that 

choose to translate their rate goals to mass emission goals.

Commenters stated EPA should develop a mass-based calculation and formula for states to 

use; Minnesota's regulators, like those in many other states, will be working on developing a 

mass-based formula. The commenters said EPA should develop a mass-based calculation and 

formula for all 50 states to use, to ensure uniformity and fairness among the states. 

Comment 9: The EPA should provide guidance to states; provide examples; work with states

Response 9: The EPA has converted the rate-based goals to mass-based goals. See section VII 

of the final rule preamble of the CPP and the CO2 Emission Performance Rate and Goal 

Computation TSD for CPP Final Rule supporting the final CPP for the final mass-based goals.

The following are summaries of the specific public comments under this comment:

Commenters stated EPA should develop a collaborative process with states and regions to 

develop mass-based targets 

Commenters added EPA should work together with states and regions in order to make the rateto-mass translation based on assumptions and policy decisions as recommended by the individual 

state.

Commenters added while the EPA must include clear methodologies in the final rule to ensure 

the credibility of each state's rate-to-mass translation, the states should retain a substantial role in 

the process. 
75

Commenters added the EPA should endeavor to provide as much support to the states as 

possible, including providing resources to states in the form of both technical and analytical 

resources and modeling costs; moreover, the analytical support the EPA provides should cover 

both the process for converting rate-based targets to mass-based targets, as well as subsequent 

modeling and other efforts used by states or regions to demonstrate compliance equivalency. 

Commenters added EPA must ensure the integrity and credibility of each state's rate-to-mass 

translation; if the process outlined in the final rule is too open-ended, then it could create 

opportunities for states to "game the system" by, for example, building unreasonable 

assumptions into their projections. The commenters added this could have the effect of reducing 

the level of stringency for a state, in terms of the required level of emission reductions. 

Commenters added States will need to have input on factors such as growth rate, as well as how 

the addition of incremental renewable energy and energy efficiency affect existing and new 

fossil generation and net imports based on the market dynamics of their individual electricity 

systems. The commenters said EPA should allow states to justify reliable growth rates, based on 

projections such as those developed by ISOs for planning purposes. 

Commenters added the EPA should also work with states to ensure that the growth factor 

accounts for an individual state's projected increase in electricity use resulting from policies to 

reduce GHG emissions from other sectors through electrification, such as electric vehicles and 

heat pumps.

Commenters added we encourage U.S. EPA to continue to assist states in determining the best 

calculation methodology when converting between these two metrics, and take into account each 

state's unique circumstances. The commenters stated U.S. EPA should ensure that the resulting 

demonstration is fair and equitable, regardless of whether a state chooses to comply with the rule 

using a rate-based or mass-based metric. The commenters said they believed that regardless of 

the metric used to demonstrate compliance, the rule's rigor should be maintained, and ask U.S. 

EPA to ensure that any approvable calculation methodology account for this rigor.

Commenters stated EPA offers the opportunity for states to adopt mass based plans and multistate plans as compliance vehicles. The commenters said single and multi-state mass based plans, 

like RGGI, can provide a means to mitigate the impacts of the perceived ""cliff" in the Interim 

Compliance Period. The commenters suggested that EPA develop guidance and provide 

assistance to states seeking to create mass based plans with a particular focus on preserving the 

stringency of Interim Targets and ensuring compliance with them. The commenters said should 

the Clean Power Plan become subject to protracted legal challenges that delay implementation, 

EPA should apply enforcement discretion with respect to compliance with Interim Targets.

Commenters added if EPA is to accept mass-based conversions from the final rate established by 

EPA, EPA must provide modeling, data sources, default input assumptions, and guidance to the 

states on what would be acceptable methods and data sources to convert the state's rate to an 

equivalent mass of CO2; in addition, EPA must describe to states under what circumstances EPA

would approve a change in a mass-based plan.
76

Commenters added EPA should provide as much support to the states as possible in terms of 

technical and analytical resources, including modeling.

Commenters added EPA has proposed that each state may convert its rate-based CO2 emission 

performance goal to a mass-based emission performance goal; EPA should preserve this option 

in the final rule, and should also allow states to switch between rate-based and mass-based 

emission performance goals as desired. The commenters said EPA provides two TSDs regarding 

how such translations could be made; while the TSDs are less than clear, in one TSD EPA 

appears to be contemplating that states wishing to make a rate-to-mass translation would employ 

IPM or a similar type of model to project compliance with their rate-based limits and pull from 

the model output for each year from 2020 to 2029 the total projected CO2 emissions for the 

universe of affected sources. The commenters said these projected CO2 emissions would be the 

state's equivalent mass-based cap. The commenters said in the other TSD, EPA simply appears 

to use historic generation for existing sources and also offers an alternate method that includes a 

single average annual growth rate if new fossil fuel-fired sources are included; that generation is 

multiplied by the state's rate-based goal to determine the equivalent mass-based goal. The 

commenters said the conversion from a rate-based emission performance goal to a mass-based 

emission performance goal is a desirable option that should be retained for the states, and each 

state should be permitted to determine exactly how such a conversion is made; however, EPA 

should also provide clearer guidance on the criteria for acceptable conversion options. The 

commenters said a helpful step would be for EPA to provide examples of the necessary modeling 

analysis for each state and provide detailed guidance for public review and comment.

Commenters added many states have unique features (transmission constraints, reliability 

requirements, etc.), and these unique features suggest that a relatively simple EPA methodology 

for converting from a rate-based goal to a mass-based goal is not likely to provide enough clarity 

to states that wish to avail themselves of employing the option of a mass-based target. The 

commenters called for strong collaboration between EPA and each state that chooses to employ a 

mass-based emission rate; in developing this collaborative process, EPA should provide as much 

support to the states as possible in terms of technical and analytical resources and in terms of 

modeling.

Commenters supported EPA's proposal to allow states to convert their rate-based goals to massbased goals. The commenters said EPA issued a technical support document, Technical Support 

Document: Projecting EGU CO2 Emission Performance in State Plans, which generally outlines 

a possible methodology for converting each State's CO2 emissions rate goal into a CO2 tonnage 

limitation. The commenters said EPA subsequently released a technical support document, 

Translation of the Clean Power Plan Emission Rate-Based CO2 Goals to Mass-Based 

Equivalents, which includes two proposed approaches for how states could convert from a ratebased to a mass-based goal. The commenters said the first approach describes the mass 

equivalent generation level developed for existing affected sources only and the second approach 

describes the mass equivalent generation level developed for both affected and new fossil fuelfired sources. While the commenters appreciated that EPA has provided this additional guidance, 

the commenters requested that EPA continue to work with states in the determination of their 

appropriate mass equivalents to EPA's rate goals.
77

Commenters stated States need clarity on a range of other issues before beginning work on 

compliance plans; as a preliminary matter, states need further guidance on how to translate the 

emission rate goals into mass-based goals as the form of the goal could be the most important a 

decision a state has to make. The commenters said the recently released TSD by EPA regarding 

the translation for emission rate-based goals to mass-based equivalents did not provide sufficient 

clarity. The commenters said all other state plan considerations will be affected by the form of 

the goal that the state is aiming to achieve. 

Commenters requested that EPA publish an illustrative rate-to-mass conversion calculation 

which demonstrates serving increased load from existing resources. The commenters have a 

strong preference for a successful mass-based program under the Clean Power Plan. The 

commenters said on November 6, EPA released the supplemental documents to illustrate 

translating emission rate goals to mass goals; the two examples are not suited to Colorado, 

because they do not provide for allocating mass to existing units to serve incremental growth. 

The commenters said this issue is of particular concern in Colorado where incremental demand 

for new generation is second only to Arizona. The commenters recommended that states have the 

flexibility to calculate rate-to-mass conversion periodically, based on actual demand or 

population growth. 

Commenters stated EPA's proposal reflects the reductions on a rate-based (carbon intensity) 

approach, but also provides that states can adopt the rate-based form of the goal established by 

EPA or an equivalent mass-based approach. While the mass-based approach may not be a viable 

option for all states, the commenters anticipated that most states will utilize a mass-based 

approach due to the greater flexibility available under such an approach, as well as the ease in 

enforcement and implementation. The commenters said the Proposed Rule contemplates options 

for states to convert the rate-based emission goals into a mass number; in order to ensure that this 

option is meaningful and workable, more detailed guidance to states is helpful on how the 

conversation from rate-based to mass-based would be implemented. The commenters said in 

November TSD, EPA provided "two potential options that implementing authorities may choose 

to adopt if they elect to use a mass-based form of the emission rate-based goal. The 

commenters appreciated EPA's further clarity regarding potential conversion options, as well as 

the agency's acknowledgment that the "mass-based equivalent metrics presented in the TSD are 

not required mass-based emission limits that implementing authorities must meet." The 

commenters said the methodology employed by the states needs to be uniform and consistent, 

and ensure comparability between the two approaches, and while the further guidance on this 

matter is helpful, it is incomplete in several respects. The commenters said the additional 

guidance in the alternate proposals do not adequately address the manner in which the final 

conversion methodology takes into account external factors such as how electrification of the 

transportation and industry sectors would impact EGUs; indeed, as currently drafted, the massbased approach would disadvantage states with aggressive transportation electrification goals, or 

in the alternative, disincentivize the adoption of zero-emission vehicle programs. The 

commenters said without further clarity on this issue and guidance on ways to account for such 

factors, states would be limited in their ability to ascertain the best approach for their own needs, 

and further hampered in the development of regional or multi-state plans. The commenters said 

EPA should acknowledge the inclusion of these external factors in each state's final calculations 

of a mass-based approach.
78

Commenters urged EPA to provide clear and simple guidance for states to use in translating a 

rate-based goal to a mass-based goal; for example, EPA should expressly allow a state, in 

determining its mass cap, the flexibility to use a reasonable estimate of future generation from 

affected units including utilization of the values the EPA assumed in their development of the 

target emission rates. The commenters said EPA should expressly confirm that such a simplified 

and conservative approach would be approved, if selected by a state; if the state desires to take 

other factors into account, EPA's guidance should specify acceptable analytical methods and 

tools, as well as default input assumptions for key parameters that will likely influence 

projections, such as electricity load forecasts and projected fossil fuel prices. The commenters

said States should be allowed to deviate from these default methods and assumptions as long as 

they provide a reasonable justification; following the guidance would provide a streamlined path 

for EPA approval of emissions projections, but would still allow states the flexibility to use other 

approaches, subject to EPA review. The commenters said this guidance should ensure that all 

actions that reduce CO2 emissions are counted under a mass-based program. The commenters

said importantly, EPA should expressly allow states to rely on unit retirements occurring after 

the baseline year(s) to meet Section 111(d) goals and allow the state to include emissions from 

those facilities in the "reference case" regardless of the reason for retirement of those units.

Commenters stated the proposed Clean Power Plan provides states with the flexibility to 

translate rate-based goals (lb CO2/ MWh) to mass-based goals (lb CO2) and explicitly provides 

RGGI states the option to develop a multi-state plan that establishes a regional mass-based 

emission performance level designed to meet the requirements of the proposal. The commenters

said because the RGGI program is already established, approval for RGGI on a regional basis as 

complying with the Clean Power Plan will reduce the cost of achieving state goals and reduce the 

compliance burden for affected EGUs that are regulated by RGGI and already making significant 

strides in reducing regional CO2 mass-based emissions. The commenters encouraged EPA to 

work with individual states and RGGI to develop mass-based regional targets that ensure 

compliance with the state-specific rate-based goals proposed by the rule.

Commenters stated EPA must provide clear and rigorous guidance to ensure that a state plan 

adopting a Mass-based approach is equivalent to the rate-based target.

Comment 10: The EPA should allow states to convert rate-based goals to mass-based 

equivalents.

Response 10: The EPA has converted the rate-based goals to mass-based goals. See section VII 

of the final rule preamble of the CPP and the CO2 Emission Performance Rate and Goal 

Computation TSD for CPP Final Rule supporting the final CPP for the final mass-based goals.

The following are summaries of the specific public comments under this comment:

Commenters stated that EPA should allow states to convert rate-based goals to mass-based 

equivalents. The commenters noted that EPA proposes to allow states to select a mass-based goal 

in place of EPA's proposed rate-based emission targets. 79 FR 34892. The commenters noted 
79

that in addition, EPA has provided additional guidance on two possible approaches to converting 

rate-based goals to mass-based goals. 

The commenters noted that because state agencies are in the best position to evaluate and direct 

the future course of their electricity sector and their economy, EPA should allow states to convert 

their rate-based goals into mass-based equivalents. The commenters suggested that states should 

be authorized to initially identify appropriate factors, assumptions, and inputs for this conversion 

and to calculate interim and final mass-based goals that match the emission performance that 

would be expected under a rate-based approach. The commenters argued that EPA should not 

calculate mass-based equivalents in place of states.

The commenters stated that the two optional approaches for converting rate-based goals to massbased goals that EPA outlines in the Rate-to-Mass TSD are flawed for at least three reasons. First 

and most importantly, the commenters stated that both approaches reflect unreasonable 

assumptions about the effect that incremental RE, EE, and nuclear generation will have on 

affected EGUs' generation and emissions. The commenters noted that both of the Rate-to-Mass 

TSD approaches would adjust 2012 affected unit generation below baseline by assuming that the 

addition of incremental sources of zero-carbon generation will reduce the utilization of affected 

fossil EGUs. The commenters contended that it is incorrect to assume that the addition of an

MWh of incremental RE, EE, or nuclear generation will reduce the output of existing fossil units 

by the same amount. The commenters stated that numerous factors - including future demand 

growth, the attributes of the electric system, and the interconnected nature of the electric grid -

affect the extent to which addition of new generation can displace existing fossil generation.

Second, the commenters stated that the approaches outlined in the Rate-to-Mass TSD are 

inconsistent with the rate-based goal computation approach in the Proposed Rule. The 

commenters noted, under EPA's initial proposal, the addition of incremental RE, EE, and underconstruction nuclear generation would not be assumed to displace existing fossil generation. The 

commenters stated that under the approaches discussed in the Rate-to-Mass TSD, by contrast, the 

addition of this incremental generation is assumed to reduce generation from existing fossil 

EGUs. Because these two methods are inconsistent, the commenters argued that it would be 

arbitrary and capricious for EPA to convert state goals from rates to masses using the 

methodology in the Rate-to-Mass TSD.

Third, the commenters stated that both approaches fail to adequately consider the impact of 

future demand growth on affected units' abilities to reduce emissions. The commenters stated 

that the Rate-to-Mass TSD's first proposal for calculating mass-based equivalents would not 

incorporate any future load growth into the projection of a mass-based equivalent. This result is 

clearly arbitrary according to the commenters. The commenters stated that by failing to 

incorporate any assumptions about how electricity demand may increase in future years, EPA 

would effectively prohibit states from meeting new electricity demand with additional generation 

from existing units, which are some of the most reliable, proven, and low-cost generation sources 

available. The commenters stated that the EPA's second option under the Rate-to-Mass TSD 

incorporates one basic assumption about increased electricity demand, based on EIA regional 

projections. [Rate-to-Mass TSD at 6.] However, the commenters stated that this load growth 

assumption may be unreasonably low in many parts of the country, including South Carolina, if 

economic growth increases substantially beyond current expectations. According to the 
80

commenters, this option, too, could lead to severe implementation and reliability difficulties if 

load growth is greater than a state or EPA projects in calculating the mass-based equivalent.

Rather than effectively prohibiting states from increasing generation from cost-effective, reliable 

existing units to meet new demand, the commenters suggested that EPA should defer to states' 

reasonable projections of future demand in calculating mass-based goals. In addition, the 

commenters suggested that the EPA should revise its guidance to align with its assumption in the 

Proposed Rule that the addition of incremental RE, EE, and nuclear generation does not displace 

historic fossil generation. Finally, because states' initial load growth projections could underestimate the amount of load growth that the state will experience during a compliance period, the 

commenters suggested that EPA should provide a mechanism for a state to revise its mass-based 

goal based upon a showing that these and other assumptions the state may have used to convert 

goals from rates to masses were incorrect.

Commenters stated the methodologies shared in the November 6, 2014 technical support 

document, "Translation of the Clean Power Plan Emission Rate-Based CO2 Goals to MassBased Equivalents," is illustrative and can serve as a guide for considerations states should 

account for when converting between rate- and mass-based goals. The commenters said the first 

option is based solely on historical generation and does not account for increased demand; it also 

does not account for the consumption vs. production inconsistencies. The commenters said the 

second option does account for growth, but incompletely accounts for those inconsistencies. The 

commenters said assuming this fundamental inconsistency is addressed in the Final Rule, EPA 

should clarify that the options presented in all of the technical support documents are not 

exhaustive of the possibilities for appropriate and approvable plans regarding rate to mass 

translations. The commenters said rather, the rule should explicitly allow states to adopt a 

methodology that takes into account the various considerations alluded to in those documents, as 

long as the derivation of the mass-based goals are at least as stringent as the rate-based goals and 

uses a methodology that is transparent and consistent with the goal setting methodology.

Commenters stated EPA's issuance of additional information on November 13, 2014, also 

contributes to the multitude of issues contained in EPA's Proposed Rule; for example, EPA 

identifies two methodologies that may be used when converting a rate-based goal to a massbased form. The commenters said EPA should not tie the States' hands with binding rate-to-mass 

conversion methods and mass-based goals. The commenters said decisions regarding the 

development of goals that take into consideration the historical and future operations of affected 

sources are best left to the States; EPA must provide States the authority and flexibility, as 

required in Section 111(d), to make these determinations.

Commenters stated states need the flexibility to be able to develop both a rate-based or massbased approach for the plants/utilities in their state; this allows states to take into account the 

individual situations of the utilities and their resources in that state. The commenters said it 

shouldn't matter whether different approaches are applied to utilities in the state as long as states 

can demonstrate that the emissions achieved by their state plans would be equal to or less than a 

rate-based or mass-based approach set at the state level. The commenters added in determining 

whether to pursue a multi-state approach and, if so, in developing that approach, it is important 

for states to understand how the different rate-based or mass-based approaches can be work in a 
81

common plan and, whether it will be workable to have both rate- and mass-based approaches in a 

multi-state plan.

Commenters stated EPA should provide "presumptive" translations of rate-based goals to massbased goals for each state; along with detailed guidance, including examples, on their proposed 

method for developing these using a reference case scenario. The commenters said based on their 

review, states should be allowed to either adopt the presumptive translation, or propose an 

alternative mass-based goal as part of the state plan process.

Commenters stated EPA should confirm that states can implement EPA's proposed Clean Power 

Plan through mass-based goals developed based on a reasonable estimate of future generation 

levels to ensure the stringency of the mass-based goals is equivalent to the proposed rate-based 

goals.

Commenters recognized and appreciated that the examples provided in EPA's rate-to-mass 

conversion guidance are merely "illustrations of two potential options that implementing 

authorities may choose," and encourages EPA to further confirm that important flexibility in its 

final rule preamble and response to comments. In particular, the commenters asked EPA to 

expressly confirm that states seeking to apply a growth factor in their rate-to-mass conversion 

calculations need not regulate new sources under Section 111(d) because those sources will 

already be regulated under EPA's Section 111(b) standards of performance. The commenters said 

EPA should also recognize that states are in the best position to identify an appropriate growth 

factor to use in the conversion formula; moreover, EPA should allow states to re-calculate their 

mass-based goals in the event the assumptions underlying that growth factor change over time or 

allow states to index the mass-based goal to actual electricity demand to ensure the mass-based 

goal remains appropriate and consistent with reliable electricity production and distribution. The 

commenters said only by allowing states to include an appropriate and flexible growth factor in 

their rate-to-mass conversions will the mass-based goals truly be equivalent to the rate-based 

goals that EPA has proposed.

Commenters stated the proposed rule allows states to convert their rate-based emission targets to 

mass-based targets (e.g. tons of CO2 per year), however the methods for converting to a massbased target are not clear in the proposed rule language and the November 2014 EPA Technical 

Support Document (TSD) on the translation of CPP rate-based state goals to mass-based does not 

clarify the uncertainty. The commenters said that the proposal suggests three possible methods 

for converting from rate-based targets to mass-based targets, and the November 2014 EPA TSD 

provides a fourth method; each method results in a different mass-based target with significant 

difference between the targets for each method. The commenters said despite EPA's attempt to 

clarify the rate to mass conversion, ambiguity in the conversion methodology remains for states 

to clarify. The commenters said each state will have the responsibility to demonstrate 

equivalency between EPA's rate-based target and an equivalent mass-based target, and then 

choosing whether its compliance plan will be based on rate-based or mass-based targets. The 

commenters said states should be allowed to propose an approvable method to convert from rate 

to mass that is based on state-specific parameters (e.g. demand growth and incremental demand 

for new generation) that may impact the conversion calculation; in addition, the criteria for EPA 

approval of a state's rate to mass conversion should be provided in the final rule, especially since 

the proposal suggests that economic modeling of future generation scenarios may be required to 
82

establish mass based targets for a state. The commenters said economic modeling opens up many 

questions in regards to the assumptions used in developing the models, and states need to be 

assured of EPA's acceptability of these assumptions in developing mass based targets. The 

commenters said EPA must provide flexibility to the states to incorporate appropriate and 

realistic assumptions into the forecast growth model.

Commenters supported mass-based limits but recommended the EPA allow states to adjust their 

mass-based goals based on changes that occur after the demand and generation projections are 

made in order to make the mass-based approach an attractive alternative to a rate-based 

approach. These commenters also noted that allowing adjustments to be made to mass-based 

limits would make mass-based limits comparable to the rate-based limits. 

Commenters suggested that factors such as Gross State Product, the relative price of natural gas 

versus coal, and the national average level of GHG emissions efficiency (CO2/GDP) could be 

used to stipulate how the state's overall cap would be adjust over time. The commenters noted 

that if GSP increases, then the mass-based limit would also be increased. The commenters also 

noted that if gas prices increase significantly, then it would be appropriate to increase the massbased limit but if gas prices stay low or decrease, it may be appropriate to reduce the mass-based 

limit. The commenters believed that any set of predefined adjustments could be made, but 

recommended the adjustment variables should be outside the control of the state to avoid states 

from "gaming the system."

Commenters recommended mass-based goals be adjusted to allow for increased use of electric 

vehicles. Commenters were concerned that without the ability to adjust mass-based goals, the 

rule would discourage the adoption of electric vehicles.

Comment 11: The EPA should provide specific mass-based goals for each state.

Response 11: The EPA agrees with commenters and provides the mass-based goal for each 

state in the final rule along with documentation of the methodology and data used for the setting 

the goal. 

The following are summaries of the specific public comments under this comment:

Commenters requested that EPA provide proposed specific mass-based emission goals similar to 

the rate-based goal. The commenters stated the process of each state that wishes to use a massbased emission goal to formulate and submit its own goal calculations for analysis and approval 

by the EPA places additional burden on the states and puts them at risk of implementing a longterm compliance plan based on an emission goal that may ultimately be disapproved by EPA. 

The commenters stated different states may use different methods for calculating mass-based 

goals, resulting in several different methodologies that would be difficult to compare, analyze, 

and verify. EPA has issued guidance on potential approaches that states may use to calculate 

mass-based goals, however, this guidance is not a substitute for specific EPA-prescribed massbased goals, and does not address the aforementioned perils of relying on individual state 

methodologies or the burden that this places on the states. The commenters stated using EPAprescribed mass-based goals would ensure that a uniform approach is applied to each state; 
83

provide a more stable foundation for state compliance plans; and allow for a straightforward 

comparison between mass-based goals and rate-based goals. The commenters said this will 

enable each state to make a more informed decision as to which compliance option works best 

for them, provide better insight into EPA's assumptions for future generation and energy mix, 

and make the final Clean Power Plan more transparent and less burdensome to the states.

Commenters asked if USEPA can provide states with CO2 reduction interim and final goals in 

terms of mass-based requirements, with detailed calculations showing step by step how the goals 

were arrived at, all assumptions used, and include supporting information and data used. The 

commenters asked if EPA will identify a preferred rate to mass conversion methodology and 

if USEPA is unable to provide states with more guidance on mass-based goals, then why not.

Commenters added EPA should provide states with their CO2 emission reduction goals in terms 

of mass-based requirements, with detailed calculations showing step by step how the goals were 

arrived at, including all assumptions used and all supporting information and data. The 

commenters said this information will assist states in evaluating and comparing state compliance 

approaches and associated impacts. The commenters requested that USEPA provide states with 

the aforementioned data and information for its final rate-based goals; note that Illinois 

appreciates the recent USEPA guidance on rate-based to mass-based conversion.

Commenters stated the EPA is proposing to give states the option to convert its rate-based goal 

to a mass-based goal. The commenters said New York State, the other RGGI states, and other 

affected states should collaborate with the EPA and have input and active participation in the 

calculation process to convert their emission rates to a mass-based approach, so that the EPA 

would accept the outcome of the calculation.

Commenters stated in order to facilitate such discussions amongst states interested in pursuing 

regional approaches, the commenters urged the EPA to publish and release mass-based targets to 

accompany the rates-based targets included in the proposed rule; doing so will reduce the 

uncertainty for state regulators, giving both the RGGI [Regional Greenhouse Gas Initiative] 

states and other state a clearer picture of their mass-based obligations as they weigh compliance 

options and engage in regional conversations.

Commenters stated EPA should provide a comparison of rate-based and mass-based carbon 

reduction numbers and see how those stack up and which one would be better for a state to 

comply with.

Commenters stated that the EPA should include mass-based targets in the final rule and that any 

state plan using a rate-based approach should be evaluated to determine whether rate-based limit 

is equivalent to the mass-based limits in the rule. Such a check is necessary, the commenters

argued, to prevent potential gamesmanship that could occur if states are allowed to choose 

between mass- and rate-based standards because of the potential for states to manipulate its 

calculated emissions rate. Commenters noted that the EPA has published three different 

calculations of the mass-based limits that correspond to each state's rate-based limit. The 

commenters were concerned that states would choose the least stringent emissions goal and as a 

result the 30% reduction target would not be achieved. The commenters recommended the EPA 
84

either incorporate mass-based limits in the rule or assess each state's plan against the mass-based 

limit calculated using the "existing plus new EGU" approach. 

Commenters stated that EPA should either create requirements for translating rate-based targets 

to mass-based targets, or should simply do the calculations itself. According to the commenters, 

many states may choose to take a mass-based approach, so it is important to ensure that the 

calculations are done in a fair and consistent manner across the country. Although the 

"Projecting EGU CO2 Emission Performance in State Plans" Technical Support Document 

sketches out on a high level the procedure for translating the rate-based target to a mass-based 

goal, the commenters contended that the results of the calculation could still vary drastically 

based on the assumptions made in projecting the reference case and policy scenarios. The 

commenters noted that the "Translation of the Clean Power Plan Emission Rate-Based CO2 

Goals to Mass-Based Equivalents" technical support document provides two "potential" methods 

for making the calculations but note that they "should not be viewed as prescriptive." p. 3, n. 5. 

The commenters suggested that EPA should go further and either calculate the mass-based 

targets for states that choose to take that approach, or set out a clear and detailed mandatory 

process for making the calculations.

Commenters stated EPA requested comment on whether it should provide a presumptive 

translation of rate-based goals to mass-based goals for all states, for those who request it, and/or 

for multi-state regions. The commenters said EPA should provide a goal for each state, 

regardless of whether it is requested, and for multi-state regions upon request. The commenters

said further, in the process of setting mass-based goals, the calculations should account for 

projected increase in electrical demand, as a rate-based approach would similarly allow for 

increase in demand. The commenters said EPA should rely on projected demand as determined 

by the agency closest to the electrical industry, which, for Kansas, would be the Kansas 

Corporation Commission. In addition to the NODA, the commenters encouraged EPA to release 

additional rate versus mass calculations prior to the release of the final rule so states would have 

the opportunity to comment on the calculation and EPA the opportunity to make adjustments in 

the process. 

Commenters stated the guidance in both the Proposed Rule and Notice is not clear; in order for 

states to make decisions on which performance goals to use, EPA needs to provide in the Final 

Rule clear mass-based performance goals on a state by state basis that match the rate-based goals 

listed in the Proposed Rule.

Comment 12: The EPA should allow states to take either a rate-based or mass-based goal.

Response 12: The EPA agrees with commenters and provides states the flexibility to choose a 

rate-based or mass-based goal for purposes of demonstrating compliance with the state plan. As 

is mentioned in section VII of the final rule preamble of the CPP and the CO2 Emission 

Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP, 

affected sources and regulating authorities will have the option to use mass-based programs and 

measures to demonstrate compliance with a rate-based goal, as well as rate-based programs and 

measures to meet a mass-based goal. 
85

The following are summaries of the specific public comments under this comment:

Commenters stated allow states to take either a rate-based or mass-based approach to achieving 

state goals.

Commenters supported certain elements of the Proposed Rule and would like to see the option of

Rate-Based or Mass-Based Approach retained in the final rule. The commenters asserted that it 

is appropriate for states to have the option of a rate-based or a mass-based approach; each state's 

situation is unique and it is appropriate to allow states to determine the best way to achieve their 

state goals.

Commenters stated EPA should acknowledge states' authority to set each utility's CO2 goal 

based on the average emission rate of the utility's affected units in the state and the state goal, 

giving utilities the option of either a rate-based or mass-based approach. The commenters said 

under this approach, each state will assign to the individual utility that has (or utilities that have) 

affected unit(s) in their state the CO2 emissions reduction goal established by EPA. The 

commenters said that goal will be stated as both a rate-based goal and a mass-based goal, and the 

utility will have the option to choose which approach it will use for its system compliance in that 

state. The commenters said this goal will be imposed as a limit that must be achieved by the 

utility within the state, and may be accomplished by averaging the goal across each of the 

affected EGUs a utility has located in the state (its utility portfolio within the state). The 

commenters said it also avoids an outcome requiring non-emitting utilities in the state to 

undertake expensive RE or other investments to benefit emitting utilities at the expense of nonemitting utility rate-payers.

Comment 13: The EPA does not provide the flexibility needed to the states. 

Response 13: The EPA has converted the rate-based goals to mass-based goals. See section VII 

of the final rule preamble of the CPP and the CO2 Emission Performance Rate and Goal 

Computation TSD for CPP Final Rule supporting the final CPP for the final mass-based 

equivalents.

The following are summaries of the specific public comments under this comment:

Commenters stated under the Proposed Rule, states must select either a rate-based or mass-based 

emission goal; EPA claims that this mandate provides flexibility to the states, however this is not 

the case given that EPA requires that any mass-based goal must be equivalent to the rates the 

Agency would prescribe.

Commenters stated EPA is suggesting a basis for conversion from emission rate to mass-based 

standards for state level compliance that, as presented, requires assignment of assumed future 

levels of renewables and energy efficiency (EE) deployment. The commenters said renewable 

energy and EE measures are already proposed under EPA's Best System of Emission Reductions 

proposed Blocks 3 and 4 for establishing state emission rate target stringency and compliance, so 

substitution of renewables and customer EE when establishing Block 2 contributions to state 

target stringency negates the compliance flexibility that might otherwise be available. The 
86

commenters said different CPP-affected utility units will experience unique location and 

business structure impacts from conversion of compliance targets between rate-based and massbased equivalent standards, depending on factors such as the nature and degree of state 

regulation or existence of merchant power markets for electricity supply.

Commenters stated the emission rate to mass-based translation proposed by EPA does not 

provide the level of flexibility that EPA touts or is needed by states, due to an overly restrictive 

translation that results in a lower cap than the comparable rate-based runs analyzed by EPA. 

Commenters stated the process for the rate-to-mass translation was originally laid out in the 

Projecting EGU CO2 TSD; this original rate-to-mass translation was confusing and even 

contradictory. The commenters said much of the confusion originated from the fact that the 

BSER rate as determined by EPA is not a rate that can be applied to fossil units alone, but that 

requires obtaining credits from energy efficiency and renewable energy measures; therefore, one 

could not simply take the BSER rate and multiply it by the amount of existing or forecast 

generation from affected (existing and under construction) fossil sources. 

Commenters stated in its subsequent notice of additional information regarding translation of 

emission rate-based CO2 goals to mass-based equivalents, 79 Fed. Reg. 67,406 (Nov. 13, 2014) 

("November 13 Notice"), EPA developed two methods for potential use in making rate-to-mass 

translations; the first is based on historical data and applies to existing EGUs only; the second is 

based on a combination of the first method to calculate the cap for existing units and a second 

method that uses a projection of future forecast electric load to develop a mass-based equivalent 

for new sources, as certain states may want to include new sources under the cap in their state 

plans as well. 

Commenters stated in comparing the translated mass-based caps that EPA identified in its 

document "mass_equivalent_table_-_where_you_live_-_nov_6_2014.xlsx" to the effective massbased emissions for existing EGU's coming out of the tradable rate standard runs that were 

included in the Regulatory Impact Analysis accompanying the CPP proposed rule, it is clear that 

the translated caps that EPA has now proposed are lower than the emissions out of the BSER 

rate-based modeling runs by a factor of approximately 20%. 

Commenters stated it is imperative that EPA reconsider the methodologies outlined in the 

November 13 Notice and continue to work with stakeholders on a reasonable translation 

methodology; additional consideration is critical given the significance to any state that will 

employ a mass-based compliance approach and also given that the November 13 Notice was 

published for comment only 10 business days before the close of the comment period.

Commenters welcomed the flexibility the draft guidelines give states to convert rate-based state 

goals to mass-based state goals. The commenters said in this context: 

• EPA should recognize that a mass-based approach provides a level of environmental 

certainty that a rate-based standard does not. 

• EPA should consider allowing states appropriate flexibility when converting from rate to 

mass-based budget that reflects this environmental benefit over a rate-based approach. 
87

• EPA should not discourage states from converting to a mass-based goal by requiring a 

rate-to-mass conversion that disadvantages states that choose to convert to a mass-based 

goal. 

• States choosing a mass-based approach should be required to evaluate their emissions 

budgets at prescribed intervals and adjust, if necessary, enabling budgets to be increased 

or decreased when significant deviations occur from the assumptions used to create the 

projected budgets. 

• States that choose to proceed with a mass-based approach and make new natural gas 

plants subject to that mass-based approach should be allowed to account for those new 

plants in their rate to mass conversion methodology. 

• In the final guideline, in addition to the rate-based goal, EPA should provide: 

"Presumptive" mass-based budgets for each state and then allow states to propose an 

alternative mass-based budget or to accept either the required rate-based goal or EPA's 

presumptive mass-based budget; and A clearer, step-by-step explanation (including a 

sample calculation) of how a state could come up with a mass-based budget.

Comment 14: The EPA should provide states the flexibility to apply equivalent methods of rateto-mass conversions so long as the annual mass-based compliance "true-up" continues to 

demonstrate compliance with the state's rate-based target each year

Response 14: The EPA has converted the rate-based goals to mass-based goals. See section VII 

of the final rule preamble of the CPP and the CO2 Emission Performance Rate and Goal 

Computation TSD for CPP Final Rule supporting the final CPP for the final mass-based 

equivalents.

The following are summaries of the specific public comments under this comment:

Commenters noted that EPA released a technical support document on November 7, 2014, less 

than one month before the close of the public comment period for the proposed guidelines, 

through which it solicits comment on two approaches that states could use to convert rate-based 

targets to equivalent mass-based goals. The commenters noted that the document included massbased tonnage targets for each of the states under each approach. The commenters reviewed this 

additional information and offered the following observations: 

According to the commenters, EPA states in the document that the mass-based emission targets 

calculated under each approach should not be interpreted as emission caps. The commenters

inquired, if this is the case, does that imply emissions in the state could exceed, for example, the 

mass-based target calculated for 2030 in subsequent years as long as the 2030 rate-based target is 

met, or would a state be required to do such a conversion annually, or would the states actually 

be tied to the mass-based targets every year going forward (that is, the projected mass-based 

tonnage target based on the 2030 emission rate target and included in state plans submitted in the 
88

2016-2018 time frame would in effect cap emissions beginning in 2030 and each year 

thereafter). The commenters requested EPA provide clear guidance on this matter.

According to the commenters, it appears that the "future growth" approach (the second approach)

would capture new generation based on 2013 EIA projections. Under this approach, the

commenters noted, emissions from new units, which are already covered under section 111(b), 

would need to be accounted for in demonstrating compliance with the mass-based target. The 

commenters argued that this approach will be problematic and unworkable in states, such as 

Virginia, where the rate-based target is more stringent than the NSPS established for new 

sources. The commenters noted there would be no incentive for a state like Virginia to set a 

mass-based equivalent goal that factored in future, new generation unless the Virginia rate-based 

target is modified to a level that is no more stringent than the standard for new sources under 

section 111(b). For this reason and reasons previously noted in these comments, the commenters

requested that EPA acknowledge the disadvantage the proposed methods the Agency proposes to 

use to set emission targets creates in states with emission rate targets below the standard set for 

new sources in 111(b) and to adjust state targets accordingly.

According to the commenters, the suggested "future generation" approach also appears to assume 

that future renewable generation and energy efficiency measures will displace a certain amount 

of existing generation. The commenters indicated that this approach, in effect, appears to directly 

apply the methodology for using Building Blocks 3 and 4 to displace existing generation that 

was put forth in the recently-issued NODA. However, it was not clear to the commenters, from 

either the explanation or specific examples provided in the TSD, how much of existing 

generation new renewable and energy efficiency measures are assumed to displace. The 

commenters noted that some renewable resources are not dispatchable due to the intermittent 

nature of these resources and must be backed up with dispatchable capacity from fossil fuel-fired 

sources. The commenters further noted that, although dispatchable, biomass (to the extent it 

would still be considered a renewable resource under EPA guidelines) is a limited resource. The 

commenters noted that energy efficiency measures have similar variability. According to the 

commenters, while they may be based on the installation of increasingly more efficient 

equipment, the use of such equipment by households, businesses and industries will be variable 

and driven by factors other than energy use alone. The commenters therefore requested EPA to 

abandon this approach.

The commenters stated that, since EPA's intent with establishing rate-based targets is to 

presumably factor in future expected growth, the commenters did not believe that mass-based 

targets calculated off of a growth projection to 2030 (or 2025) under state plans developed in the 

2016/2017 time frame should be treated as hard emission caps. The commenters requested that 

EPA provide the states flexibility to apply equivalent methods of rate-to-mass conversions so 

long as the annual mass-based compliance "true-up" continues to demonstrate compliance with 

the state's rate-based target each year.

Comment 15: Regional capacity; mass rates for regions
89

Response 15: The EPA has converted the rate-based goals to mass-based goals. See section VII 

of the final rule preamble of the CPP and the CO2 Emission Performance Rate and Goal 

Computation TSD for CPP Final Rule supporting the final CPP for the final mass-based 

equivalents.

The following are summaries of the specific public comments under this comment:

Commenters stated PJM's analysis of its original interpretation of the rule found substantially a 

higher mass-based regional cap than that reflected in EPA's TSD. The commenters asked if EPA 

has reviewed that analysis, and can the Agency explain the difference in the approach.

Commenters stated under a regional implementation plan, each state's rate-based carbon intensity 

goal will be converted to a mass-based goal based on the state's projected future generation; the 

resulting mass-based emission caps for each state will be aggregated into a total emission cap for 

the region that will be auctioned to affected compliance entities and third-parties. The 

commenters said under this approach, it is critical that a) each state's rate-based goal is a value 

that accurately represents the potential of that state to reduce carbon emissions, and b) each 

state's rate-to-mass conversion is based on a precise projection of future generation within that 

state. 

Commenters stated the EPA issued a Technical Support Document (TSD) to address the 

Translation of the Clean Power Plan Emission Rate-Based CO2 Goals to Mass-Based 

Equivalents in November 2014; this TSD provided states with an example methodology for rateto-mass conversions and the resulting state-specific mass-based CO2 goals for 2030 using this 

methodology. The commenters said it is understood that a rate-based goal allows for future 

growth within a state or region, without additional upfront work to establish the projections of 

future growth. The commenters said it can be challenging, however, to come up with a strategy 

to demonstrate compliance with rate-based goals in future years; conversely, mass-based goals 

are easy to comply with, but present challenges during the planning phases in order to establish a 

goal that is first equivalent to the rate-based goal, but that also accounts for future demand 

increases. 

Commenters agreed with the EPA's most basic explanation of the rate-to-mass conversion, which 

indicates that a state's 2030 CO2 mass-based goal will be the result of the state's 2030 rate-based 

CO2 goal multiplied by the state's generation. The commenters said EPA's method for 

computing the state's generation level is based on historical (i.e., 2012) generation with no 

growth, assuming that future demand in years up to and beyond 2030 will be the same as the 

demand in 2012. The commenters asserted that this generation level should reflect a state's 

forward-projected generation up to and beyond 2030, to account for load growth during that 

period. 

Commenters added the EPA manipulates the state's generation level by applying adjustments 

based on the CPP building blocks; the EPA is selective in its inclusion of building blocks for the 

state's generation level adjustments, applying only a subset of building blocks to the generation 

level and doing so in a manner that is inconsistent with the core methodology used in the original 

rate-based goal-setting formula. The commenters said for example, adjustments based on the 

assumption that new incremental renewable resources and energy efficiency goals will be met 
90

are included, and they displace fossil generation as opposed to being included in addition to 

fossil generation as they are in the rate-based goal-setting formula. In general, the commenters

considered the EPA's aggressive assumptions of generation levels to account for the building 

blocks to be incompatible with the rate-to-mass conversion process, bearing in mind that this 

generation level will be multiplied by a CO2 rate that is already reduced to reflect the application 

of all of the building blocks. 

Commenters anticipated that RGGI will opt to use a more sophisticated and accurate model to 

support the translation of rate- to mass-based goals within the region; however, in lieu of a 

regional approach, it is evident that the mass-based translation provided by the EPA is not a 

realistic or workable approach for use in New England or New Hampshire.

Commenters stated EPA should specifically clarify that, for purposes of the rate-to-mass 

translation, underlying RE and EE state policies should not be included in the baseline given that 

any impact on regional dispatch attributable to these complementary policies is not within the 

appropriate scope of the rate-to-mass translation.

Comment 16: The Proposed Rule does not provide either clarity or incentives for states to 

convert to mass-based standards or to engage in regional compliance

Response 16: The EPA has converted the rate-based goals to mass-based goals. See sections

VII and VIII of the final rule preamble of the CPP and the CO2 Emission Performance Rate and 

Goal Computation TSD for CPP Final Rule supporting the final CPP for the final mass-based 

equivalents and more information about compliance.

The following are summaries of the specific public comments under this comment:

Commenters stated conversion to a mass-based standard is an essential step toward regional 

planning and compliance; if states want to participate in a regional approach, or continue a 

regional approach that is already in place (such as the nine-state Regional Greenhouse Gas 

Initiative), they must be able to convert to a mass-based standard; to attempt regional compliance 

through an averaging of individual state rates is complex and likely infeasible. The commenters

said the Proposed Rule is not clear on what mass-based conversion protocol would be acceptable 

to EPA, and, importantly, how it can provide for load growth. The commenters said when a ratebased standard is used, no explicit provision for load growth is needed; it can be accommodated 

within the rate-based formula; but load growth must be explicitly accounted for as part of a 

mass-based conversion formula, or else the mass-based approach would be materially less 

attractive to pursue; however, the Proposed Rule is not clear on what provisions for load growth 

in a mass-based conversion would be acceptable to EPA, and it appears that the simple approach 

to a mass-based approach of multiplying a state's interim or final standard rate by the MWhs 

from existing generating units in the 2012 base year would make no provision at all for load 

growth. The commenters said this ambiguity disadvantages the mass-based conversion option. 

Commenters added without a clear provision for load-growth, the use of the mass-based 

conversion option becomes very problematic, and this will in turn discourage regional 

planning; EPA must remove this disincentive to regional compliance. The commenters said 
91

regional compliance offers many advantages and, as long as it is a voluntary option, it should be 

encouraged; in fact if the disincentives to regional compliance are not removed in the final rule, 

the results could be highly detrimental to the continued operation of organized electricity 

markets, which have been a proven source of great efficiency and benefit to customers; that 

would be a major and unnecessary step backwards. The commenters said without mass-based 

regional compliance, generators that currently participate in regional (multi-state) economic 

dispatch will have to change their method of participation, reducing dispatch efficiencies and 

possibly constraining the RTO's ability to redispatch to maintain reliability; in contrast, under a 

regional mass-based approach, an RTO can factor environmental adders into the economic 

dispatch, ensuring that the most cost-effective way of meeting the mass-based standard is 

achieved while maintaining reliability. The commenters said EPA's supplemental technical 

support document on rate-to-mass conversion, released November 6, 2014, is not particularly 

helpful; it provides two examples of an approach to rate-based to mass-based conversion, both of 

which are complex and difficult to understand; more importantly, the proposed "opt-in" 

conversion approach appears to require greater emissions reductions in some states than EPA's 

own IPM modeling indicates that the rate-based standard would require. The commenters said 

this inconsistency will likely pose a barrier to regional compliance; for example, EPA's data 

suggests that the rate-based approach would be less stringent than the mass-based standard for 

seven of the fifteen MISO states, and the mass-based approach would be less stringent for the 

remaining eight states. The commenters said gaining support for a regional compliance approach 

will be even more difficult with such conflicting incentives; such a disincentive for mass-based 

conversion, and hence for regional compliance, represents a huge flaw that must be remedied. 

The commenters said there is no basis for requiring more stringent reductions under a massbased approach than under a rate-based standard in any state; the mass-based approach should be 

transparent and of comparable stringency. The commenters said if the mass-based conversion is 

disadvantaged, the result is likely to be not just lack of regional compliance, but significant 

disruptions in regional power markets. 

Commenters supported EPA's commitment to encouraging multi-state GHG reduction programs, 

such as RGGI, the Rule should build upon and reflect the successes of RGGI and other similar 

programs; in particular, the commenters urged EPA to adopt a formula to translate its rate-based 

goal to a mass-based goal to foster the creation of more regional carbon trading programs or 

other multi-state cooperative efforts.

Comment 17: The EPA should provide guidance to the regional the EPA offices. 

Response 17: The EPA has converted the rate-based goals to mass-based goals. See section VII 

of the final rule preamble of the CPP and the CO2 Emission Performance Rate and Goal 

Computation TSD for CPP Final Rule supporting the final CPP for the final mass-based 

equivalents. The EPA will provide guidance to the regional the EPA offices as necessary.

The following are summaries of the specific public comments under this comment:
92

Commenters requested that guidance be provided to the regional EPA offices to ensure that 

approved mass based targets are adequately protective, equitable, reflect the realities of an 

integrated electric power grid.

Comment 18: The EPA should develop a method of conversion that is more comparable to the 

method for computing the existing rate-based goals.

Response 18: The EPA has converted the rate-based goals to mass-based goals. See section VII 

of the final rule preamble of the CPP and the CO2 Emission Performance Rate and Goal 

Computation TSD for CPP Final Rule supporting the final CPP for the final mass-based 

equivalents.

The following are summaries of the specific public comments under this comment:

Commenters recommended that EPA develop a method of conversion that is more comparable to 

the method for computing the existing rate-based goals. The commenters stated Section III of 

EPA's Emission Performance TSD appears to be proposing a method that is based on different 

assumptions than the rate-based goal and based on more extensive analysis than the rate-based 

goal; the degree of flexibility allowed in the method as proposed seems to allow for potential 

wide variability in the resulting mass-based goal determination, whereas EPD believes that 

determination of a compliance goal should be repeatable and uniform. The Goal Computation 

TSD does not "consider treatment of eligible 'on-the-books' state requirements, programs and 

measures included in the state plan" as is discussed in the Emissions Performance TSD for 

determining a mass-based goal; therefore, the Emissions Performance TSD seems to contemplate 

more extensive analysis for determining a mass-based goal than was performed for the ratebased goal. The commenters said the inclusion of "on-the-books state requirements, programs 

and measures" in formulating the "Reference Case Scenario" and the "Goal Policy Scenario" of 

Section III.B of the Emission Performance TSD appears to make the underlying assumptions for 

the mass-based goal more restrictive on emissions than the assumptions for the rate-based goal. 

The commenters added the contemplation of "programs and measures included in the state plan" 

to calculate the mass-based goal implies that the state will already have an approved state plan 

prior to calculating the mass-based goal; this seems to confuse the establishment of a mass-based 

goal with the emissions performance projection (proposed rule section 60.5740(4)) that is 

required to demonstrate that a state plan will meet its goal; obviously, states will need to have an 

established goal before they can put together the state plan programs and measures that will 

project compliance with the goal. 

Commenters added the Translation TSD produces a generation level that is not equivalent to the 

generation used to set the rate-based goal or the generation projected using AEO's demand 

forecast, resulting in a significant under-calculation of Georgia's mass-based goal. The 

commenters stated the goal translation methodology should be corrected to produce a massbased goal that is equivalent to a state's rate-based goal; to accomplish this equivalency, the two 

computations must use the same generation level for the final goal year. 
93

Commenters added a mass-based goal appears to be able to simplify much of the compliance 

work associated with this rule - particularly if states were to choose to implement trading 

programs (single and/or multi state) for compliance; however, we are concerned that the method 

identified by EPA in its November 13 notice seems to increase the stringency of Minnesota's 

final target from the rate-based goal identified in the original proposal. The commenters stated 

they believed that the rate-based target would require an approximately 40% reduction in CO2 

emissions, while the mass-based method identified by EPA would result in a 50% or greater 

reduction. The commenters said if approvability of mass-based targets in state plans is dependent 

upon some level of adherence to EPA's calculation method, we believe that the mass-based 

approach could simply cease to be a viable option for many states - thereby eliminating much of 

the flexibility upon which success of EPA's Clean Power Plan is based. The commenters stated 

EPA should either be very flexible in considering state methodologies for rate-to-mass target 

calculations in its plan review process, or should simplify its methodology and ensure that it 

results in equivalent stringency between the two approaches.

Comment 19: The methods used in TSD are inconsistent with the rate-based calculation used in 

the proposed rule.

Response 19: The EPA has converted the rate-based goals to mass-based goals. See section VII 

of the final rule preamble of the CPP and the CO2 Emission Performance Rate and Goal 

Computation TSD for CPP Final Rule supporting the final CPP for the final mass-based 

equivalents.

The following are summaries of the specific public comments under this comment:

Commenters added many reviewers of the proposed rule have asked how states could convert an 

emissions rate to a mass based rate as an alternative goal; although the EPA recently released a 

notice of data availability (NODA) entitled Additional Information Regarding The Translation of 

Emissions Rate Based CO2 Goals To Mass Based Equivalents on November 13, 2014, the 

commenters have not had adequate time to determine the usefulness of this information prior to 

the comment deadline. From the commenters' preliminary review, the proposed mass-based 

targets for South Carolina (two were provided) appear to be inconsistent with the very 

calculation that was used by EPA in setting the rate-base goal. The commenters said the EPA 

should continue evaluating this approach since a mass based alternative compliance scenario 

may be very useful to states and possible regional compacts.

Commenters added the approaches outlined in the Rate-to-Mass TSD are inconsistent with the 

rate-based goal computation approach in the Proposed Rule. The commenters said under EPA's 

initial proposal, the addition of incremental RE, EE, and under-construction nuclear generation 

would not be assumed to displace existing fossil generation. The commenters said under the 

approaches discussed in the Rate-to-Mass TSD, by contrast, the addition of this incremental 

generation is assumed to reduce generation from existing fossil EGUs. The commenters said 

because these two methods are inconsistent, it would be arbitrary and capricious for EPA to 

convert state goals from rates to masses using the methodology in the Rate-to-Mass TSD.
94

Comment 20: The proposed rate-to-mass conversion formula does not accurately translate a 

state's rate-based emissions goal to an equally-stringent mass-based emissions goal; Maintain 

Equivalent Stringency and Account for Uncertainty when converting from a Rate-Based to a 

Mass-Based Goal

Response 20: The EPA has converted the rate-based goals to mass-based goals. See section VII 

of the final rule preamble of the CPP and the CO2 Emission Performance Rate and Goal 

Computation TSD for CPP Final Rule supporting the final CPP for the final mass-based 

equivalents.

The following are summaries of the specific public comments under this comment:

Commenters stated to set a mass-based emissions goal, a state's projection of generation by 

affected EGUs under a reference case scenario would be multiplied by the state's rate-based goal 

for the applicable compliance period; this method does not accurately translate the rate-based 

goal to an equally-stringent mass-based goal. Commenters added for example a state's existing 

nuclear generation will already be fully accounted for in the reference case scenario.

Commenters stated the nuclear plants will not be able to increase their output by 5.8 percent for 

compliance purposes, as would be presumed by the proposed formula. The commenters said 

similarly, since existing renewables will be included in the reference case scenario, they would 

not be available to offset generation by affected EGUs for compliance purposes, as would also be 

presumed by the proposed calculation. 

Commenters added EPA's Rate-to-Mass TSD proposes an alternative formula for converting 

rate-based goals to mass-based goals. The commenters said in the formula provided in the TSD, 

a state's mass-based goal would be determined by multiplying its rate-based goal by a quantity 

referred to as the "Mass Equivalent Generation Level." The commenters said the Mass 

Equivalent Generation Level, as defined in the TSD, includes at-risk nuclear generation and 

generation by existing renewables, as well as projected generation by affected EGUs. The 

commenters said the use of this formula appears to accurately translate a rate-based goal to an 

equally-stringent mass-based goal; however, since the text of the proposed regulation itself 

specifies the use of the incorrect formula, the proposed regulation must be revised to incorporate 

the corrected conversion formula. The commenters appreciated the guidance provided in the 

Rate-to-Mass TSD, however is concerned that EPA is using this TSD to correct an apparent error 

in the original proposal without a clear indication to commenters and stakeholders that there was 

an error or that the TSD is substantively revising this aspect of the proposal.

Commenters stated that when converting a rate-based goal into a mass-based goal, the goal 

should remain as achievable in its mass-based form as it was in its rate-based form. The 

commenters said from the analyses they have seen, there are a wide variety of approaches to 

converting to a mass-based goal, which yield a wide variety of results. The commenters said 

specifically, the Proposed Rule should create an equal degree of stringency between rate- and 

mass-based approaches when accounting for Building Blocks 3 and 4.
95

Commenters stated the rate-to-mass conversion methodology proposed by the EPA results in a 

mass-based target for New Hampshire that is more stringent than the rate-based goal used to 

derive it.

Commenters stated the EPA issued a Technical Support Document (TSD) to address the 

Translation of the Clean Power Plan Emission Rate-Based CO2 Goals to Mass-Based 

Equivalents in November 2014; this TSD provided states with an example methodology for rateto-mass conversions and the resulting state-specific mass-based CO2 goals for 2030 using this 

methodology. The commenters said it is understood that a rate-based goal allows for future 

growth within a state or region, without additional upfront work to establish the projections of 

future growth; it can be challenging, however, to come up with a strategy to demonstrate 

compliance with rate-based goals in future years. The commenters said conversely, mass-based 

goals are easy to comply with, but present challenges during the planning phases in order to 

establish a goal that is first equivalent to the rate-based goal, but that also accounts for future 

demand increases. Based on the commenters' review of the methodology presented in the rate-tomass conversion TSD, the EPA established a mass-based-goal for New Hampshire that was 

neither equivalent to the rate-based goal nor adjusted to account for future demand increases. 

Commenters supported that EPA's final guidelines maintain either the emissions rate or massbased compliance options; however, additional clarification is necessary beyond that provided in 

the TSD to better define the mass-based approach. The commenters said of primary concern, the 

mass-based approach should not be more stringent than an emission rate approach. The 

commenters said when comparing actual CO2 mass emissions to the presumptive mass caps for 

existing units as listed in the TSD, this results in a larger percentage reduction at the state-level 

than what would be needed on an emissions rate basis; in addition, the mass cap with new units 

is also more stringent for Iowa compared to the emission rate final goal. The commenters

provided Table 9 (titled: “EPA Proposed Clean Power Plan Emission Rate Goals”) and Table 10

(titled: “TSD Calculated Mass Cap Final Goals”).

Commenters supported EPA's decision to allow states to convert their rate-based goals into 

mass-based goals, but disagrees with the illustrative examples that EPA provided in its recently 

released guidance. So long as the option remains available to states for use only in their sole 

discretion, the commenters supported EPA's decision to allow the conversion of its proposed 

rate-based goals into mass-based goals using an appropriate conversion methodology. The 

commenters also generally supported EPA's decision to provide non-binding guidance to assist 

states in determining an appropriate and approvable means of converting the rate-based goals 

into mass-based goals' however, the commenters did not support the approach illustrated in 

EPA's conversion guidance because it uses a different generation level than EPA assumed in its 

original rate-based proposal, which results in far more stringent goals that are not equivalent to 

EPA's original proposal. The commenters said EPA's original proposal relied on an equation that 

determined generation based on the sum of 2012 generation and all incremental renewable 

generation, nuclear generation, and energy efficiency improvements required under the Proposal; 

in contrast, the primary option in EPA's guidance utilizes 2012 generation alone - without any 

incremental changes - to calculate a mass-based goal. The commenters said although EPA's 

guidance contains several complicated formulae, all of the variables in those formulae cancel 

each other out, leaving nothing but 2012 generation in the calculation (EPA allows states with 

under construction nuclear and NGCC units to count that additional generation, but Louisiana is 
96

not one of those states). The commenters said by using a 2012 generation value that does not 

account for any incremental changes, the resulting mass-based goal is far lower than it should be 

to approximate EPA's originally proposed rate-based goals. The commenters did not support this 

illustration in EPA's guidance because it would essentially prohibit any load growth and require 

all new incremental changes in the generation mix to displace fossil generation, and is therefore 

inconsistent with the Proposal. The commenters said EPA's guidance does contain a second 

option that allows for the use of a more appropriate generation level in determining mass-based 

goals by including a growth factor; however, that approach still is not equivalent to the 

generation level utilized in EPA's original proposal, and therefore does not result in "equivalent" 

goals, which EPA claims are necessary for states to employ the mass-based option. The 

commenters added, EPA's guidance seems to suggest that a growth factor would only be 

appropriate if states require newly constructed units to fall under the mass-based goal as well, 

something that the Clean Air Act clearly forbids, as noted above; therefore, even the more 

reasonable second option of EPA's guidance fails to provide an appropriate illustration of how 

states can convert their proposed rate-based goals into mass-based goals. The commenters said 

EPA should withdraw its guidance on develop new guidance that results in mass-based goals that 

are equivalent to EPA's proposed rate-based goals. The commenters asked EPA to confirm that 

the illustrations provided in its recently released rate-to-mass conversion guidance are just that -

illustrations only - and do not represent the only means by which a state may take advantage of 

the flexibility provided by a mass-based approach.

Commenters stated carbon trading systems like RGGI could greatly benefit states in their 

compliance with the CPP and allow for reinvestment in a cleaner, more efficient electricity 

system. The commenters said by establishing a standardized rate-to-mass conversion 

methodology, EPA will facilitate the formation of compliance systems like RGGI throughout the 

country by providing states with certainty and clarity they need to create state-specific and 

regional caps on CO2 emissions. The commenters were encouraged by EPA's Notice of Data 

Availability ("NODA") released on November 6, 2014, which proposed guidance to states on 

rate-to-mass target conversion and urges EPA to include these or similar mass-based targets in its 

final rule.

Comment 21: November 6, 2014 Technical Support Document (TSD) titled "Translation of the 

Clean Power Plan Emission Rate-Based CO2 Goals to Mass-Based Equivalents"; 

Comments/Concerns

Response 21: The EPA has converted the rate-based goals to mass-based goals. See section VII 

of the final rule preamble of the CPP and the CO2 Emission Performance Rate and Goal 

Computation TSD for CPP Final Rule supporting the final CPP for the final mass-based 

equivalents.

The following are summaries of the specific public comments under this comment:

Commenters stated the TSD's first method, based on 2012 data, intended to produce a massbased equivalent metric that applies to existing affected EGU's only. The commenters said for 

Colorado, this method produced a final mass equivalent rate of 25,335 metric tons. The 
97

commenters asserted, after evaluation, that in performing this calculation the EPA mistakenly 

multiplied the 2012 Adjusted Affected Fossil Generation total by the 2020-2029 lb/MWh goals 

to determine the mass rates for these compliance periods, rather than by the Blocks 1 and 2 

adjusted lb/MWh rate for 2012. 

Commenters stated the TSD's second method is based on a combination of the 2012 data and 

projections of future electric demand. The commenters have a number of concerns with this 

method: First, it utilizes future electric demand assumptions that are different from those used in 

the lb/MWh goal determination; Second, the electric demand growth rate assumptions are just 

that - assumptions - from which absolute goals are produced; and, third, the administration of 

this second method will be needlessly controversial and complex.

Commenters added it was beneficial for the EPA to release the technical support document that 

translates rate-based goal to a mass-based equivalent; the calculation is more straightforward 

when the translation method based on the rate- based targets and historic data is used rather than 

requiring multiple model runs to derive a mass-based goal. The commenters were concerned that 

some of the numbers appear to be more stringent and encourage the Agency to ensure the final 

targets are reasonable. The commenters said mass-based regulatory approaches have been shown 

to be highly effective in addressing conventional air pollutants emissions as well as under RGGI 

for carbon emissions, and we think such approaches should be encouraged. The commenters

were in support of EPA offering mass-based equivalents that allow for the inclusion of both new 

and existing sources; like the RGGI program, a more rational and cost-effective market response 

can result if both new and existing sources are subject to the same regulatory program and 

market signals.

Commenters added there were errors in U.S. EPA's Nov. 6, 2014 addendum providing new 

guidance for converting target emissions rates to mass emissions targets; specifically, in 

converting pounds to tons, US EPA relies upon a figure of 2204.62, whereas the original June 2 

Notice of Proposed Rulemaking relied upon a figure of 2,000. The commenters said 

consequently, there is a large rounding differential by using a weighted average emission rate to 

re-dispatch NGCC plants in building block 2. The commenters said by applying a 70 percent 

capacity factor to each NGCC unit individually (as opposed to all generation units at once), there 

is a difference of over 5 million tons of CO2 emissions. The commenters said the mass-based 

calculation also omits EE within the spreadsheet; as a result of this omission, the formula US 

EPA relies upon adds and subtracts the same value for EE in the same equation, i.e. Ohio Final 

Mass Equivalent Generation Level= Historical Effected Fossil Generation (plus) Incremental RE 

(minus) Under Construction Nuclear (minus) Incremental EE (plus) Incremental EE. 

Commenters appreciated EPA providing an example of rate to mass conversion; it is useful to 

have an illustrative calculation, and we appreciate that EPA has noted this is not the only way 

states could create an approvable mass budget. The commenters supported allowing states the 

option to use a simple mass-based approach to developing their emission control plans. The 

commenters said in some circumstances, a mass-based approach may allow states to avoid some 

of the implementation issues described elsewhere in these comments, including our concerns 

related to EPA's role in state energy planning and EM&V under an energy efficiency 

program; however, it is challenging to digest a complex TSD released only 15 business days 

before comments are due. The commenters said EPA should provide more time to review and 
98

comment on the proposed TSD. The commenters said as a preliminary matter, any mass 

conversion approach should provide full credit to the same emission reduction initiatives that 

would help a state meet the rate-based target. The commenters supported EPA's approach of 

providing a pathway rate to mass conversion, while also providing states the ability to suggest 

other reasonable methods to convert their rate-based targets to mass targets. The commenters

said the states may be able to develop and propose other reasonable, and possibly improved, 

methods to translate rate targets to mass targets; this option may alleviate preliminary concerns 

we have with the proposed translation method, such as the assumption that energy efficiency and 

renewables displace only existing generation, and the assumption that new NGCCs ought to 

receive tons under a mass cap based on their state's allowed emissions rate, regardless of whether 

that rate is 500 lb/MWH or 1500 lb/MWH. The commenters said as EPA correctly notes in the 

Projecting EGU CO2 Emission Performance in State Plans TSD, projecting generation and 

emissions over time requires reliance on often uncertain projections of future energy and 

economic conditions, including energy consumption, fuel prices and economic growth. The 

commenters said in the mass conversion, EPA should provide states periodic opportunities to 

revise their generation forecasts and mass budgets in light of changed circumstances; 

furthermore, the method should allow states to employ the degree of modeling sophistication 

they choose based on local conditions and state resources.

Commenters added states, throughout the comment period, have asked for clarity around the 

conversion of the rate-based state goal to a mass-based goal; on November 13th only 9 business 

days prior to the deadline for submitting comments on the proposed guidelines, EPA issued the 

long-requested additional information and required that any comments on the additional 

information be submitted on December 1, 2014. The commenters stated have not had the 

opportunity to evaluate the additional information such that it could provide sufficient comment; 

further, at this point, it is not clear as to how a state would set enforceable CO2 emission limits at 

affected EGU s to accurately reflect measures in building blocks 3 and 4 using a rate-based 

standard and EPA's formula application of BSER to set state goals does not provide any 

guidance. The commenters added EPA indicates, throughout the state plan considerations section 

of the proposed guidelines, that a state could, theoretically, set the emission limits at the affected 

EGUs, but then "credit back" the value of emission reductions provided by other implementing 

measures in the state plan. While the commenters understood how this may be possible to do in a 

state plan for approvability, it is still unclear as to what a state would be required to do, in the 

compliance period, if the other implementing measures were delivering what was projected in 

the state plan, but the affected EGUs were still exceeding the emission limits. The commenters 

asserted this may very likely occur and recommends that EPA provide more detail and guidance 

as to what evaluations the state would be required to do to diagnose the problem, what corrective 

measures may be required and what will be expected of a state and/or utility and/or other entity 

should the state plan's "other implementing measures" deliver as projected in the plan, but the 

affected units emission limits still be exceeded. The commenters also requested additional clarity 

with regard to what the "state commitment" option might look like in a state plan and what it 

would mean in terms of liability for the state. The commenters said EPA indicates that the state 

commitment may open states up to citizen suits, but the commenters asked what about federal 

enforcement from EPA; the commenters asked would EPA exercise this option.

Commenters stated the November 6, 2014 supplement included a Technical Support Document 

to explain how EPA devised the mass-based goals for each state; EPA introduces a complex 
99

calculation that is difficult to interpret. The commenters said the end result is a more stringent 

mass-based goal than what would be logically surmised from the calculation that was used to 

determine the rate-based goal. The commenters said in reaching Step 5 of EPA's calculation for 

South Carolina after applying the four Building Blocks the equation for the final state goal is as 

follows: 30,352,595 tons CO2/78,661,778 MWh = 772 lb CO2/MWh South Carolina rate-based 

goal. The commenters said based on EPA's own formula and calculation above, one would 

expect the mass rate of CO2 for South Carolina to be 30,352,595 tons rather than the 17,433,977 

tons (15,816,000 metric tons) to 24,266,032 tons (22,014,000 metric tons) listed in EPA's 

November 6, 2014 document.

Commenters added the two optional approaches for converting rate-based goals to mass-based 

goals that EPA outlines in the Rate-to-Mass TSD are flawed for at least three reasons. The 

commenters said first and most importantly, both approaches reflect unreasonable assumptions 

about the effect that incremental RE, EE, and nuclear generation will have on affected EGUs' 

generation and emissions. The commenters said both of the Rate-to-Mass TSD approaches 

would adjust 2012 affected unit generation below baseline by assuming that the addition of 

incremental sources of zero-carbon generation will reduce the utilization of affected fossil EGUs. 

The commenters said it is incorrect to assume that the addition of an MWh of incremental RE, 

EE, or nuclear generation will reduce the output of existing fossil units by the same amount. The 

commenters said numerous factors - including future demand growth, the attributes of the 

electric system, and the interconnected nature of the electric grid - affect the extent to which 

addition of new generation can displace existing fossil generation.

First Approach

Commenters added the first approach does not assume any growth in generation occurs at 

existing units, which is an important omission for states like California, whose existing low 

average capacity factor NGCC units may be deployed more in the future. The commenters said 

by failing to reflect potential growth in generation at existing NGCC units, this approach 

establishes mass goals that may not be equivalently stringent with rate goals. The 

commenters recommended that the EPA modify the first approach to assign some of the potential 

increased generation associated with expected load growth to existing units for states such as 

California with relatively low NGCC capacity factors.

Commenters added the first approach does not factor in growth in the conversion process. The 

commenters asserted that EPA should allow states to incorporate state-specific assumptions 

about future policy scenarios that would increase demand in the calculation of their mass-based 

goals.

Commenters stated Option 1 of EPA's recently proposed guidance appears to provide a 

complicated formula for converting a "rate-based" goal into a "mass-based" goal; specifically, 

the guidance recommends that states begin with 2012 fossil generation, subtract incremental 

renewable energy and energy efficiency expected under EPA's Clean Power Plan, and then add 

back all renewable energy and energy efficiency; however, many of the variables included in 

EPA's formula cancel each other out. The commenters said for instance, while one step subtracts 

incremental renewable energy and energy efficiency from 2012 fossil generation, that 

incremental generation is simply added right back in the next step, as part of adding back all 
100

renewable energy and energy efficiency (including incremental); in addition, EPA's starting 

point for the analysis -2012 fossil generation- is little more than total generation minus existing 

renewable generation, but that existing renewable generation is also added right back in the later 

step that adds back all renewable and energy efficiency generation. The commenters said Table 1 

of EPA's guidance confirms that EPA's analysis ends where it begins; in column 1, EPA 

identifies 2012 fossil generation, but that value is nothing more than 2012 total generation minus 

2012 renewable generation, which is found in column 3; thus, adding columns 1 and 3 results in 

total 2012 generation, but that also results in the same value found in column 5 that EPA refers 

to as "Final Mass Equivalent Generation Level" because the values in columns 2 and 4 -

incremental renewable generation and energy efficiency- are subtracted in one step and added 

back in another, cancelling each other out. 

Commenters stated because EPA's "Mass Equivalent Generation" is nothing more than 2012 

total generation, the formula that EPA offers in its guidance can be mathematically reduced to 

the following simple calculation for converting EPA's proposed 2030 goal into a mass-based 

2030 goal using option 1; 2012 total generation x 2030 "rate-based" goal = 2030 mass-based 

goal. The commenters said in doing so, EPA's option 1 illustration fails to allow for any load 

growth -essentially assuming that 2030 generation will be equal to 2012 generation; not only is 

that assumption unrealistic, the practical effect of that assumption is to force incremental 

renewable energy and energy efficiency improvements to displace fossil fuel-fired generation, 

which is inconsistent with the manner in which EPA developed the rate-based goals in its initial 

June 2014 proposal. The commenters said in its original proposal, EPA did not assume that 

incremental renewable and energy efficiency increases (building blocks 3 and 4) will displace 

fossil generation, but instead simply added that generation to the denominator of its goal 

calculation; but EPA's rate-to-mass guidance would require that incremental generation to 

displace fossil generation, and thus result in far more stringent goals than originally proposed. 

The commenters said as such, option 1 of EPA's rate-to-mass guidance does not result in an 

equivalent mass-based goal and is therefore inconsistent with EPA's own requirement that massbased conversions are only authorized "as long as the translated goal achieves the equivalent in 

stringency."

Second Approach

Commenters added the EPA's second proposed approach includes a projection of future 

generation based on regional annual average growth rates from the EIA's 2013 Annual Energy 

Outlook (AEO). The commenters said while this approach better captures some of the key 

exogenous factors, it does not address potential changes in the level of imports. The 

commenters suggested that the EPA explicitly address each of the key exogenous factors that 

will influence the mass goals, including economic growth, transportation electrification, and 

level of electricity imports and exports. The commenters said each of these factors will have a 

meaningful influence on expected mass emissions and so should be incorporated into the 

analysis used to convert from a rate goal to a mass goal in order to maintain equivalent 

stringency. The commenters said for example, in California, and especially in the South Coast 

Air Basin, aggressive implementation of transportation electrification is a major strategy to meet 

federal criteria pollutant standards and Zero Emission Vehicle goals; such expected 

electrification should be incorporated into the analysis used to convert from a rate- to a massbased goal.
101

Other

Commenters added the second approach factors in growth and includes existing affected and 

new sources. The commenters said the proposed second approach includes growth numbers per 

Energy Information Administration's Annual Energy Outlook 2013; however, the document does 

not incorporate California's transportation electrification goals. The commenters said in the State 

of California, aggressive implementation of transportation electrification is a major driver to 

meet federal criteria pollutant standards and meet the State's emission goals for CO2 and other 

GHGs. The commenters asserted that EPA needs to allow for adjustments be made to the massbased goal for any state to account for such major increases in demand growth - particularly 

when the increased electric demand will result in an overall net reduction in GHG emissions 

within the state. The commenters urged EPA to explicitly address efforts such as California's to 

reduce CO2 emissions (with co-benefits of criteria pollutant emissions reductions) through 

transportation electrification in its approval of state emissions projections. 

Commenters stated EPA offers as a second option an alternative approach to converting ratebased goals to mass-based goals that would include a growth factor in the calculation, referred to 

as "incremental demand for new generation." The commenters said the growth factor provided 

for New Mexico of 1.31 percent annually appears appropriate in light of recent growth estimates 

developed by the NMPRC; however, EPA's guidance suggests that states wishing to include a 

growth factor in their mass-based goal conversions would also include any newly constructed 

units in determining compliance with the mass based goal. The commenters said EPA describes 

its option 2 illustration as appropriate for use "in the event that an implementing authority may 

want to include new sources of generation units compliance approach." While the commenters

supported the use of a reasonable growth factor in converting a rate-based goal into an equivalent 

mass-based goal, EPA's suggestion that states may utilize a growth factor "in the event" they 

choose to regulate new sources under Section 111(d) could be misread as a requirement to 

regulate new sources under any mass-based goal that accounts for growth; however, any such 

requirement would exceed EPA's authority under Section 111(d). The commenters said Section 

111(a) defines "new sources" and "existing sources" to be mutually exclusive, and Section 

111(b) only applies to new sources, while Section 111(d) only applies to existing sources; as 

such, EPA cannot require an overlap between those programs that would regulate the same unit 

under both provisions at the same time. 

EPA should provide more time for review and comment on 11/6/14 TSD.

Commenters stated the EPA provided additional information on November 6, 2014 to give more 

insight and guidance on the Translation of the Emission Rate-based CO2 Goal to the Mass-based 

equivalents. The commenters said Arkansas and many other states had been requesting this 

information for months; the late addition of this information left the states without sufficient time 

to fully evaluate this translation and try to determine which approach would be best for the state. 

The commenters said this information and translation will impact our review of the rule and how 

it is implemented. The commenters requested additional time to review and comment on the 

translation and also for flexibility from EPA in converting the rate-based to mass-based goals.

Commenters recommended the EPA use its own "Goal Computation Data File Appendix 1 and 

2" to calculate state by state mass emission caps. The commenters said the EPA released the 
102

carbon dioxide caps, in metric tons, for 2030, Nov. 6, and requested comments on the calculation 

methodology. The commenters said the EPA "translation for existing affected and new sources" 

caps average 19% lower than the caps calculated from the detailed state data file, but range up to 

35% lower. The commenters said just the total metric ton caps were released with the comment 

they were calculated by multiplying emission rates by generation rates in megawatt-hours for 

each state. The commenters said emission rates and generation rates were released in June in a 

technical document titled "Goal Computation Data File Appendix 1 and 2"; it is a spreadsheet 

with data and formulas for each state. The commenters noted that the total carbon emission goal 

from existing power plants in the EPA proposed Clean Power Plan, State Option 1 for 2030, in 

Table 10, page 548, is 1,701 million metric tons. The commenters said caps calculated from the 

data file, which leaves out small exempt power plants, totaled 1,653 million metric tons, and is 

consistent with Table 10; however, the EPA translation totaled only 1,345 million metric tons. 

Comment 22: Interpretations of rate to mass goal conversion.

Response 22: The EPA has converted the rate-based goals to mass-based goals. See section VII 

of the final rule preamble of the CPP and the CO2 Emission Performance Rate and Goal 

Computation TSD for CPP Final Rule supporting the final CPP for the final mass-based 

equivalents.

The following are summaries of the specific public comments under this comment:

Commenters stated the language on constructing mass-based greenhouse gas (GHG) emissions 

reduction targets is ambiguous. 

Commenters added the proposed rule and supporting documents contain language that leave 

open a variety of possible interpretations on how to construct mass-based targets from the 

established rate-based targets. The commenters stated EPRI examined three possible 

interpretations resulting in three different mass targets which can differ by as much as 30% from 

one another implying dramatically different CO2 mitigation paths.

Commenters added the first interpretation is based upon two paragraphs found in the 

"20140602tsd-projecting-eguco2emission- performance.pdf" Technical Support Document: 

"A mass-based CO2 emission performance goal is calculated by projecting the 

tons of CO2 that would be emitted during a state plan performance period (e.g., 

2020-2029, 2030-2032) by affected EGUs in the state if they hypothetically were 

meeting the state rate-based CO2 emission performance goal for affected EGUs 

established in the emission guidelines. The translation of a rate-based goal 

(expressed in lb CO2/MWh of useful energy output from affected EGUs) to tons 

(expressed as total tons of CO2 emissions from affected EGUs over a specified 

time period) is based on a projection of affected EGU utilization and dispatch 

mix." (p13) 

"A Mass-Based CO2 Emission Goal Policy Scenario. This projection scenario is 

used to translate a rate-based goal to a mass-based goal. The scenario applies a 
103

rate-based CO2 emission limit to affected EGUs that is equivalent to the statespecific rate-based lb CO2/MWh emission goal in the EPA emission guidelines. 

The CO2 emissions from affected EGUs projected during the specified plan 

performance period in this scenario represents the translated mass-based CO2 

emission performance goal for the state plan. To construct this scenario, this 

emission limit is added to the underlying reference case scenario described 

above." (P15-16) 

The commenters stated it appears that the mass-based target should be constructed by creating a 

model of the future which projects capacity and generation mix subject to the constraint that 

covered units meet the EPA rate-based target by state; from this model, the CO2 emissions from 

covered units can be calculated, and this would form the mass-based target by state. The 

commenters said this first interpretation has the property of 'equivalence of CO2 emissions from 

covered units', so that covered CO2 emissions (as modeled) would be the same if the state were 

using rate-based compliance or mass-based compliance. (This does not imply that total CO2 

emissions, including emissions from new units, would be the same). The commenters said 

however, the language of the proposal itself seems to imply more support for a second, more 

stringent interpretation.

Commenters added the second interpretation can be inferred from section 60.5770(3) of the 

proposal itself: 

"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 EGUs 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." (Federal 

Register, Vol. 79(117) p34953) 

Given this language, and from the example constructed in page 16 of the '20140602tsdprojecting-eguco2emission- performance.pdf' Technical Support Document, the construction of 

the mass-based target can be interpreted as constructing a reference case, extracting generation 

from covered units, and simply multiplying that generation by the EPA target rate to get massbased target emissions for covered units. The commenters said the second interpretation implies, 

for most states, a mass-based target that is strictly lower than the first interpretation; this is 

because the second interpretation applies the EPA target rate (which is the average of emissions 

from covered units + renewables + some nuclear + energy efficiency) only to generation from 

covered units (and not renewables, nuclear, or energy efficiency). The commenters stated the 

mathematics of this calculation imply that the resulting emissions target must be lower than if the 

target were achieved by running a model with the rate as a constraint (in which case capacity and 

dispatch from covered units and renewables and nuclear and energy efficiency could be modified 

to meet the constraint). The commenters stated the only exceptions would be for states for whom 

the economics are such that they would not build additional renewables or energy efficiency 

under a rate-based target. The commenters provided the following example:

"Consider the hypothetical example of State Z. Assume State Z has been set a 

target of 334 lb/MWh by 2030. Now suppose that the state is projected in the 

reference case to generate 1,000MWh of NGCC generation at 500lb/MWh, and 
104

500MWh of renewables in 2030, due to local RPS policies already on the books. 

The 2030 average emissions rate would then be: (1000*500 / (1000 + 500)) = 333 

lb/MWh which meets the target rate, so State Z is already in compliance with the 

Clean Power Plan. Note that emissions from covered units are 500,000 lbs. Under 

the second interpretation, however, the mass-based target for this state would be 

1,000MWh * 0.334 = 334,000 lbs. In other words, the state meets the rate-based 

target in the reference case but would have to do more to reach compliance with 

the 'equivalent' mass-based target."

The commenters said it is unlikely that any state with significant potential for renewables, 

nuclear, or energy efficiency would consider a mass-based target under this interpretation; the 

differences between mass-based and rate-based compliance are such that EPA's use of the word 

"equivalent" seems incongruous. The commenters said it may be that the second interpretation is 

incorrect due to the definition of 'covered units', and a third interpretation is in order.

Commenters added the third interpretation is identical to the second, except that the term 

"covered units" includes both existing fossil and renewables and covered nuclear and energy 

efficiency. The commenters said the mass-based target would be calculated by taking reference 

generation from covered existing fossil units, renewables, covered nuclear, and energy 

efficiency, and multiplying that by the target rate; this interpretation would resolve the paradox 

arising in the hypothetical example from interpretation 2, as State Z would now be compliant 

under both rate-based and mass-based targets. The commenters said this third interpretation 

would have a stronger claim to equivalence, as the target rate is applied to the same set of units 

as was used to calculate the target rate in the first place. 

The commenters added these three interpretations lead to very different mass-based targets by 

state; given the differences between these three sets of mass-targets and given the uncertainty 

around the context and use of the word 'equivalence' in the proposal, they stated EPRI 

recommends that EPA define a consistent way to calculate 'equivalence' of the rate-based target 

and mass-based target.

Commenters interpreted the proposed rule section 60.5770 as describing the following 

calculation: Mass goal = (emiss. rate based on EGUs + nuclear + RE + EE) x (generation from 

EGUs) [Method 1] the resulting mass goal for Method 1 will be erroneously low. 

Commenters added the calculation should be performed as: Mass goal = (emiss. rate based on 

EGUs + nuclear + RE + EE) x (generation from EGUs + nuclear + RE + EE) [Method 2]

Commenters agreed with the EPA that a mass-based goal should be equivalent to a rate-based 

goal, and should not penalize or reward states that choose one approach over the other; by 

ensuring that rate- and mass-based goals are equivalent, states will have greater flexibility to 

satisfy the objectives of the Clean Power Plan. The commenters said in its simplest form, a ratebased goal can be calculated as: 

Mass / Generation Equivalents = CO2 Emissions Rate 

Commenters stated in this form, "Generation Equivalents" includes electric generation output 

from affected EGUs, new renewables, new energy efficiency, and at risk nuclear generation; in 
105

calculating an equivalent mass-based goal all "Generation Equivalents" should simply be moved 

to the other side of the equation as follows: 

Mass = CO2 Emissions Rate * Generation Equivalents 

Commenters stated if the values for the "CO2 Emissions Rate" and "Generation Equivalents" 

remain the same, then the mass that can be emitted should also remain the same, regardless of 

whether a rate-based or mass-based compliance metric is used; however, the conversion method 

outlined in the EPA's Technical Support Document issued in November 2014, would limit the 

amount of "Generation Equivalents" used to develop the state's rate-based goal, thereby lowering 

the amount of emissions that may be emitted by affected EGUs in the state. Commenters said the 

EPA incorrectly assumes that energy efficiency and renewable generation will reduce EGU 

output on a one-for-one basis. The commenters said for states like New York, where the sites 

most suitable for further development of renewables are geographically removed from the load 

centers, this is not the case; moreover, intermittent renewable resources must be backed up to a 

significant degree by units that can quickly replace their generation output, which are most often 

fossil fuel units. The commenters said EGU output is not replaceable on a one-for-one basis with 

renewables and energy efficiency. Commenters stated most of the existing renewable generation 

resources in New York are north and west of the major load centers in the state, and this is the 

region most suitable for further development of renewable resources; transmission capacity from 

this area to the area of greatest demand in the southeast is limited, and a one-for one offset of 

renewable energy for downstate EGUs cannot be achieved. Commenters added the dependence 

of renewable generation on variable natural forces does not allow it to meet demand all the time; 

its intermittency makes it an unsuitable replacement to the fossil fuel units that provide spinning 

reserves that are needed to maintain reliability across the state and especially in New York City; 

therefore, intermittent renewable resources must be backed up to a large extent by dispatchable 

units, which typically operate on fossil fuel. The commenters said EGU output is not replaceable 

on a one-for-one basis with renewables and energy efficiency. 

Commenters stated the inability of renewable generation or energy efficiency to offset affected 

EGU generation on a one-for-one basis is demonstrated by the NYISO's 2010 wind generation 

study ("NYISO Wind Study"). The commenters said it was found that 8,000 MWs of installed 

wind would produce 21,829.3 GWhs of wind, but would only displace 15,500 GWhs of fossil 

fuel. The commenters said this means that 100 MWhs of wind generation in New York displaces 

only approximately 71 MWhs of fossil fuel generation. The commenters said on a capacity basis, 

the NYISO Wind Study found that 1 MW of wind is equivalent to approximately 0.2 to 0.3 MWs 

of conventional generation. The commenters said this requires that 75% to 80% of the nameplate 

capacity of wind generation be backed up by conventional, dispatchable generation in order to 

maintain reliable electric service. The commenters said while the NYISO Wind Study does not 

directly address the displacement of affected EGUs by the Building Blocks of the Clean Power 

Plan, it shows that New York cannot sustain a one-for-one displacement of EGUs by renewable 

resources; instead of using a one-for-one displacement, the EPA should allow States to use all 

"Generation Equivalents" that are available. 

Commenters stated revising EPA's rate to mass conversion guidance to be consistent with the 

emission tonnages used in EPA's rate-based limitation calculation; currently, the guidance for 

mass calculation excludes incremental renewable energy, the five nuclear power plants under 
106

construction, and EE savings. The commenters said if one corrected the flaws in the building 

block rate calculation and applied the same generation components (affected fossil fuel 

generation+ under construction NGCC +new nuclear+ preserved nuclear+ EE savings), 

Colorado's mass based limitation would be set at 31.889 million metric tons, rather than the 

overstated 25.335 million metric tons in 2030 as is currently set for Colorado. 

Comment 23: The EPA should incorporate a variability adjustment into the mass-based goal 

calculation.

Response 23: The EPA has converted the rate-based goals to mass-based goals. See section VII 

of the final rule preamble of the CPP and the CO2 Emission Performance Rate and Goal 

Computation TSD for CPP Final Rule supporting the final CPP for the final mass-based 

equivalents.

The following are summaries of the specific public comments under this comment:

Commenters stated EPA should adjust for variability in the conversion of rate-based goal to 

mass-based goal to address the stringent mass-based equivalents resulting from EPA's proposed 

approach in the TSD. The commenters added in general, EPA's choice of a 2012 baseline does 

not appear to have a significant impact on the calculation of the rate-based targets, however, on a 

mass basis, the choice of a baseline year can have a significant influence on the resulting goal. 

The commenters recommend that EPA provide a "variability adjustment" in calculating the 

mass-based equivalents, whether it applies to existing sources or both new and existing sources.

Comment 24: Periodic Review/ Mid-course adjustments

Response 24: Under section 111(b) (1) (B), the EPA must review standards of performance for 

new sources every eight years. While there is no requirement that the EPA review standards of 

performance for existing sources under section 111(d), the EPA anticipates that changes to 

performance standards for new sources may prompt the EPA to review standards of performance 

for existing sources as well. Whether such coordination is warranted, however, will depend upon 

the nature of any changes proposed for new sources when the EPA conducts its periodic review.

The following are summaries of the specific public comments under this comment:

Commenters recommended that EPA consider an explicit mechanism for periodic review and 

"reset" of the program to adjust for unanticipated events and opportunities; EPA should 

recognize and allow the currently established reset process used by RGGI as a means of possible 

mid-course corrections for the existing source performance standards to ensure mass-based 

targets remain comparable to the rate-based alternative. 

Commenters stated EPA has proposed that a state could use a mass basis rather than an emission 

rate basis for its state plan and also provided an outline of how to convert the 2030 emission 

standard to annual mass emissions. The commenters stated the outline proposes using a 
107

projection of the 2030 load or generation rate for the state and multiplying that by the emission 

standard; and the EPA has issued a TSD describing translation of this outline. In Washington the 

projections of load growth are typically only reliable for 10 years into the future (and often 

wrong over the last 15 years); a 15 and 20-year projection may be made, but the confidence in 

these are low. The commenters stated to establish the mass limit, EPA is suggesting that states 

project the 2030 load in 2015 using a well educated guess of load 15 years into the future. The 

commenters said the states are then beholden to comply with that mass rate even if the load 

forecast is wrong; as drafted, EPA would not allow the state to modify the plan to match the 

actual load, expecting states to implement additional renewable resources, energy efficiency 

measures and other methods to make up the difference. The commenters recommended that EPA 

allow states to make "mid-course" adjustments to the state plans to accommodate changes in load 

growth between 2016 and 2030.

Commenters stated if a state opts to take the mass-based approach and submits a state plan to 

EPA in 2016, the states should be afforded a technically justified reprieve in the future, should it 

be obvious that the original mass-based goal is no longer reasonable. The commenters were

concerned that continued economic development in the State could result in unanticipated 

demand growth and related emissions, making it difficult to meet mass-based goals; this holds 

true should a state utilize the calculation which relies upon the emissions from both affected 

existing and new sources. In essence, states will be pigeon-holed by a mass-based goal 

developed prior to such unforeseen state growth. The commenters said increased generation 

makes it more difficult to comply with mass-based limits verses rate-based limits; the rule should 

not become just a test of a state's ability to prognosticate future economic conditions; therefore, 

states should be afforded the opportunity to provide to the EPA an alternative/corrected massbased goal. 

Comment 25: Commenters asked if the mass-based goal coldcould be taken as the CO2 

emissions remaining after implementation of BSER Blocks 1 and 2.

Response 25: The EPA has converted the rate-based goals to mass-based goals. See section VII 

of the final rule preamble of the CPP and the CO2 Emission Performance Rate and Goal 

Computation TSD for CPP Final Rule supporting the final CPP for the final mass-based 

equivalents.

The following are summaries of the specific public comments under this comment:

Comment 26: New NGCC in conversion calculation; apply a uniform emission rate for new 

generation 

Response 26: The EPA has converted the rate-based goals to mass-based goals. See section VII 

of the final rule preamble of the CPP and the CO2 Emission Performance Rate and Goal 

Computation TSD for CPP Final Rule supporting the final CPP for the final mass-based 

equivalents.
108

The following are summaries of the specific public comments under this comment:

Commenters stated in its guidance to states on calculating mass-based equivalent targets, EPA 

uses each state's 2029 target as the emission rate to be applied to both existing generation, as 

well as new generation. The commenters said a state with a rate-based goal below the emission 

rate of new natural gas combined cycle (NGCC) units would be penalized by including new 

resources in its mass-based target; conversely, a state with a rate-based target significantly above 

the emission rate of NGCC would benefit from including new resources in its target, because the 

additional emissions added to the target for each MWh of generation would exceed the emission 

rate of new generation. The commenters recommended that EPA require that all states apply a 

uniform emission rate for new generation in converting to a mass-based cap; given that EPA has 

promulgated emission standards for new fossil resources under section 111(b) of the Clean Air 

Act, the emission rate used should be consistent with these standards.

Comment 27: RE & EE

Response 27: The EPA has converted the rate-based goals to mass-based goals. See section VII 

of the final rule preamble of the CPP and the CO2 Emission Performance Rate and Goal 

Computation TSD for CPP Final Rule supporting the final CPP for the final mass-based 

equivalents.

The following are summaries of the specific public comments under this comment:

Commenters identified issues with the displacement of existing fossil generation by RE and EE 

generation in the conversion from rate-based to mass-based standards.

Commenters stated in order to maintain consistency across rate-based and mass-based 

approaches, the displacement of existing fossil generation by incremental RE and EE generation 

should apply only to the computation of the target rates. The commenters stated the EPA should 

provide states opting to pursue a mass-based approach with the opportunity to justify the 

appropriate amount of existing and new fossil generation that should be displaced (rather than 

apply an assumption that all incremental RE and EE will displace existing fossil fuel-fired 

generation). 

Commenters stated in an EPA example of how to convert the rate-based performance 

requirement to an equivalent mass-based standard, the calculations show that EPA's BSER for 

existing EGUs presumes that all growth in renewable generation displaces generation from 

existing EGUs, rather than avoiding new fossil generation. The commenters added this is not a 

realistic assumption for Florida; consequently, EPA overstates the level of future renewable 

generation reasonably attributable to existing affected EGUs. The commenters said if EPA 

continues to include renewable generation in establishing emission standards, then it should 

explicitly set standards for renewable generation that directly displaces existing affected EGU 

generation.

Commenters stated EPA's TSD for "State Plan Considerations" includes a section on 

"Incorporating End-Use Energy Efficiency and Renewable Energy Programs and Measures 
109

under a Rate-Based Approach.” in a footnote for that section, EPA states "the EPA is also 

proposing that RE and demand-side EE measures could be used under a mass-based portfolio 

approach in an approvable state plan. However, the focus of this section is limited to application 

of such measures under a rate-based approach." The commenters asked if the Agency plans to 

provide similar information for a mass-based approach.

Commenters stated in the original proposal, EPA's goal-setting equation adds incremental RE 

and EE to the 2012 baseline generation (in the denominator of the formula) but does not affect 

fossil generation or emissions; in the NODA, EPA proposed two different approaches for 

revising the goal-setting formula in which incremental RE and EE replace 2012 fossil generation. 

The commenters said in the rate-to-mass goal translation TSD, incremental RE and EE 

generation replace historical fossil generation, which is similar to the NODA approaches. The 

commenters asked if EPA's rate-to-mass translation TSD approach intended to be equivalent to 

the rate-based limits established in the original proposal or is it intended to be equivalent to ratebased limits that would be determined using one or both of the approaches included in the 

NODA.

Commenters stated the assumption that 100% of EE and RE directly replace existing fossil 

generation should not be included in the rate to mass conversion as it was in the technical 

support document released on November 6, 2014.

Commenters said EPA states that new resources (incremental RE and EE) under Building Blocks 

3 and 4 are expected to reduce generation from affected fossil EGUs. The commenters said the 

state of Georgia has pointed out to EPA how that approach differs from the approach taken by 

EPA in calculating the BSER rate goals. The commenters have determined, from examining the 

actual spreadsheets developed by EPA, that that approach is not what is happening in the 

calculations; the equation subtracts out both incremental RE and EE; however, it then adds back 

in, what they call, BSER RE and BSER EE. The commenters said per EPA's definition in the 

TSD and what is in the spreadsheets, BSER is existing plus incremental. The commenters

said the equation effectively cancels out incremental RE and EE; one ends up adding only 

existing RE and existing EE (technically); however, since existing EE was never really included 

in EPA's BSER MWhs for EE, the EE terms are equal and completely cancel each other out. The 

commenters said the spreadsheet equation actually looks up the same value twice and subtracts it 

first, then adds it back in. It is not clear if this is intentional or an error. The commenters said 

these errors are carried over into the projection of generation approach because it starts with the 

82,030,617 MWh and adds incremental required generation to it.

Commenters added there are additional errors in the calculation of incremental required 

generation. The commenters said the method uses the incremental increase in sales as a surrogate 

for the incremental increase in generation; the 2012 sales is first increased by 7.51% for 

transmission losses to translate sales into generation; then, it is grown using the regional growth 

rate. The commenters said the difference between 2012 actual generation and the grown value is 

the incremental required generation. The commenters said while, this approach is valid, the value 

for 2012 sales includes both 2012 sales plus 2012 EE MWh; this value also inherently includes 

the existing RE values. The commenters said it is not clear why EPA does not include EE in the 

existing generation approach and does use it in the projection approach. The commenters asked 

what is EPA's intention by first subtracting out incremental RE and EE and then adding back in
110

"BSER RE" and "BSER EE"; this appears to be a relic of the spreadsheet and not a real 

approach. The commenters said EPA needs to clarify when it is appropriate to include existing 

EE and RE and not worry about what the terms are called in the rule or the spreadsheet.

Commenters stated energy efficiency can and should be explicitly credit in both rate and mass 

based compliance systems; either system can work with the appropriate policy design.

Commenters appreciated that EPA responded to the popular request for guidance on the rate to 

mass target conversion calculation by issuing a TSD. The commenters asserted there is an error 

in the approach the TSD takes to ''quantifying a generation level for use in the translation to a 

mass-based equivalent for existing affected sources." The commenters said according to the TSD 

and associated Excel spreadsheet, incremental renewable energy (RE) and generation avoided 

through energy efficiency (EE) are subtracted from a state's fossil generation in each compliance 

year; however, this does not match the approach EPA took in setting each state's target emission 

rate in the Proposal. The commenters said in Appendix 1 of the Goal Computation TSD, target 

emission rates are calculated by dividing 2012 fossil emissions by total generation in the target 

year, which includes 2012 fossil generation, at-risk nuclear, and EE and RE in the target year; 

there is no downward adjustment to fossil generation to account for incremental EE and RE. 

Commenters stated this results in mass targets that are too low because the amount of generation 

in each state for each year is lower than it should be according to the Goal Computation TSD. 

The commenters acknowledged that the NODA suggests adjusting the Proposal such that RE and 

EE are assumed to displace fossil generation rather than supplement it, which seems to be the 

approach taken in the Rate-to-Mass TSD; however, the result is a mélange of one approach to 

setting a rate-based target and an incompatible approach to calculating an amount of generation 

to which that rate based target should apply. The commenters added this approach does not allow 

for existing NGCC capacity to be ramped up to meet growing demand, which could easily 

happen in a state like California where NGCC capacity is projected to be below 70 percent after 

building block 2 is applied according to the Goal Computation TSD. The commenters requested

that EPA ensure consistency across these methodologies. 

Comment 28: Emission Vehicle

Response 28: The EPA has converted the rate-based goals to mass-based goals. See section VII 

of the final rule preamble of the CPP and the CO2 Emission Performance Rate and Goal 

Computation TSD for CPP Final Rule supporting the final CPP for the final mass-based 

equivalents.

The following are summaries of the specific public comments under this comment:

Commenters stated a number of states have programs that promote clean vehicles, and that will 

result in reductions of carbon pollution and other air pollutants; this includes the Zero Emission 

Vehicle (ZEV) regulations - which require that zero-emission vehicles constitute a percentage of 

vehicle sales - and a supporting memorandum of understanding (MOU) that have been adopted 

by eight states. The commenters stated the MOU establishes a collective target of placing 3.3 

million zero emission vehicles on the road by 2025; the majority of the vehicles will be plug-in 
111

electric vehicles. The commenters said shifting to these electric vehicles from conventional 

petroleum-fueled vehicles will significantly reduce overall carbon pollution in our states, but it 

will also affect electricity demand. The commenters urged EPA to work with the MOU states to 

identify a rigorous load-growth projection or methodology that takes into account any projected 

load changes from these regulatory ZEV programs for the purposes of translating from a ratebased state goal to a mass-based emission budget.

Modifying the conversion to mass based goals to Not Discourage Promotion of Electric Vehicles

Commenters asserted that the Proposed Rule should be modified to be "EV neutral" in a state 

that adopts a mass-based goal, neither encouraging nor discouraging state EV policies; the 

objective is to remove the CO2 emissions liability associated with the increased electric load due 

to the adoption of EVs. The commenters recommended that this objective be met by the EPA 

allowing states to adjust their mass-based goals to reflect actual electric vehicle load.

Commenters proposed adjusted mass-based goals would be calculated as follows:

Mt = M + (Eactual) * Ravg

Where:

Mt is the adjusted mass-based emission goal

M is the unadjusted mass-based goal adopted by a state pursuant to the final EPA Rule

Eactual is the incremental actual transportation sector electrification load, subtracting out 

transportation load incorporated into M

Ravg is the state's average target CO2 emissions rate (either the interim or final rate)

The commenters said this approach does not exclude transportation electrification load from the 

compliance demonstration; it simply allows a state's mass-based goals to be adjusted based upon 

the actual electricity consumption of EVs, consistent with the underlying goal of meeting the 

rate-based targets set for the state.

The commenters said under this approach, the EPA will in principle have to adopt a procedure to 

estimate the transportation electrification load contained in each state reference scenario. The 

commenters said for the illustrative approaches described in the November 6 supplemental 

guidance, the electrification load is so small that in practice it may be possible to treat this as di 

minimus; for other approaches that may be adopted by individual states pursuant to the final 

EPA rule, procedures would need to be adopted assuring that assumed transportation 

electrification load is reported.

The commenters said EPA will also need to adopt procedures for how actual transportation 

electrification load will be measured; in the long-term, with the expansion of smart grids and 

communication between vehicles and the grid it may be possible to directly measure this load; 

however, there are reasonable procedures that could be adopted for estimating the load until 

direct measurement is possible. The commenters described one methodology; that is not meant to 

be prescriptive, but rather is illustrative, meant to demonstrate that it is feasible to correct for 

transportation load; other methodologies may also be feasible:
112

• The first step would be for a state to use its vehicle registration database, which includes 

data on make, model and year, to identify all of the light duty battery electric vehicles 

(BEVs) and plug-in hybrid electric vehicles (PHEV) in operation in a particular year.

• For each BEV, the Office of Transportation and Air Quality at the US EPA tracks the 

electricity use per mile; for the 2014 model year, energy use varies from the most 

efficient BEV, a BMW i3 at 0.27 kWh/mile, up to a Toyota Rav4 EV at 0.44 kWh/mile.

• The next step would be for a state to estimate the average number of miles driven per 

vehicle; the average number of miles driven per vehicle can be calculated using data 

available from the American Community Survey or the US FHWA Highway statistics 

database; this could be done using statewide averages, or by using more fine-grained data 

which incorporates different travel behavior in different metropolitan areas across a state.

• Then the formula for calculating the total electricity load of BEVs is as follows:

E = Σ ei x ni x T

Where:

E is the actual light duty BEV load

ei is the efficiency of vehicle i in kWh/mile;

ni is the number of vehicle i registered in the state

T is the annual average number of miles driven per vehicle

The commenters said for PHEVs an analogous calculation would be performed, supplemented 

by use of either survey data or a representative sample of vehicles tracked by onboard telematics 

to determine what percentage of PHEV miles are traveled in all electric mode.

The commenters said heavy duty vehicles would require a different measurement technique; the 

energy consumption of these vehicles will be heavily influenced by how heavily they are loaded; 

because electric trucks and buses will have very specific niches, the use of average vehicle miles 

travelled data would be inappropriate; however, these uses will likely be in areas such as ports, 

urban delivery vehicles, intermodal centers, and urban transit routes, where almost all charging 

will occur at a relatively small number of company owned charging locations, unlike the 

dispersed residential charging that will dominate the light duty sector. The commenters said this 

makes tracking the actual electricity consumed feasible through metering at these locations.

Commenters stated since opting for rate-based goals would not disfavor the adoption of electric 

vehicles or similar technologies, it is appropriate to revise the Proposed Rule to ensure that states 

can opt to implement mass-based goals without creating such disincentives. The commenters

said it should be noted that states adopting mass-based goals could, if inclined to do so, use 

unrealistically high projections for EV adoption as justification for plans incorporating higher 

rates of CO2 emissions than would otherwise be permissible. The commenters recommended

that the Proposed Rule be revised to require that states adopting mass-based goals adjust those 

goals at the end of each compliance period to account for any divergence between projected and 
113

actual levels of adoption of EVs and similar technologies (such as heat pumps) that reduce 

overall CO2 emissions.

Comment 29: Remove the "At-Risk" nuclear generation from the goal setting methodology

Response 29: The EPA has converted the rate-based goals to mass-based goals. See section VII 

of the final rule preamble of the CPP and the CO2 Emission Performance Rate and Goal 

Computation TSD for CPP Final Rule supporting the final CPP for the final mass-based 

equivalents.

The following are summaries of the specific public comments under this comment:

Commenters stated the overall experience of Connecticut (and the other RGGI states) 

demonstrates that a mass-based approach to emission reductions can incentivize economic 

otherwise viable nuclear resources to remain online by increasing the competitiveness of legacy 

nuclear resources with fossil fuel-fired EGUs (which should increasingly reflect a carbon price in 

their offerings).

Comment 30: Firm Builds and Retirements

Response 30: The EPA has converted the rate-based goals to mass-based goals. See section VII 

of the final rule preamble of the CPP and the CO2 Emission Performance Rate and Goal 

Computation TSD for CPP Final Rule supporting the final CPP for the final mass-based 

equivalents.

The following are summaries of the specific public comments under this comment:

Commenters stated the /"Projecting EGU CO2 Emissions Performance in State Plans" TSD 

indicates that firm builds and retirements should be taken into account when converting a ratebased goal to a mass-based goal. The commenters said it is possible at the time of the conversion 

that a utility may have announced plans for a unit to retire by a certain date, and the retirement 

may even be in the utility's integrated resource plan, but there is no legal/enforceable 

requirement for the unit to actually shutdown by that date (if circumstances change it may not). 

The commenters asked if there a trigger that makes an announced/planned retirement "firm" such 

that it would need to be considered when converting a rate-goal to a mass-goal.

Comment 31: Load Growth

Response 31: The EPA has converted the rate-based goals to mass-based goals. See section VII 

of the final rule preamble of the CPP and the CO2 Emission Performance Rate and Goal 

Computation TSD for CPP Final Rule supporting the final CPP for the final mass-based 

equivalents.
114

The following are summaries of the specific public comments under this comment:

Commenters stated in particular, we agree with EPA that where load growth is included, it 

should generally be based on EIA's Annual Energy Outlook; however, instead of using the 2013 

AEO as EPA proposes, we recommend that the final rule be based on the most recent AEO, 

which will be the 2015 version due to be published around the beginning of the year. The 

commenters said if the load forecast overestimates load growth, then the mass-based targets 

could be easier to meet than the rate based targets. The commenters said these types of 

disparities could lead to gaming and provide incentives to use exaggerated forecasts. The 

commenters said forecasting is an imperfect science, therefore we recommend that a state 

forecast of electricity load growth should be considered reasonable if it is no greater than what 

EIA estimates. The commenters said furthermore, to correct for imperfect forecasts, states that 

opt for mass-based targets should periodically revise their mass-based targets to reflect actual 

electric load growth.

Commenters supported EPA's approach to converting rate-based to mass-based limits provided 

in the technical support document "Translation of the State-Specific Rate- Based CO2 Goals to 

Mass-Based Equivalents," because it provides states clarity and flexibility in calculating massbased goals. This commenters also supported the EPA's decision to allow states to develop their 

own alternative methodologies because it account for the diversity among states. However, this 

commenters also recommended the EPA allow states to adjust the mass-based limits to account 

for load growth. Failure to account for load growth, the commenters argued discourages states 

from adopting a mass-based approach.

Commenters stated that federal efficiency standards will reduce electricity use in all states and 

thereby lower CO2 emissions, helping those states which choose mass-based targets to meet their 

targets. However, the commenters indicated it is reasonable to assume that the EPA will base the 

determination of mass-based goals (or give states a methodology to do the calculation) that takes 

into account projected load growth out to 2030.

Commenters stated that the federal efficiency standards will reduce future electricity use in all 

states and thereby lower CO2 emissions, helping those states that choose mass-based targets to 

meet their targets. However, commenters noted the EPA has given states an option for 

determining mass-based goals that takes into account projected load growth out to 2030 in the 

"Translation of the Clean Power Plan Emission Rate-Based CO2 Goals to Mass-Based 

Equivalents" Technical Support Document issued in November. Commenters noted that load 

growth projections made by the EIA and used by the EPA do take into account federal appliance 

efficiency standards that have already been adopted. Commenters also noted that load forecasts 

for 2030 have been reduced due to the effects of federal efficiency standards, leading to lower 

mass-based goals when the rate goal is multiplied by the projection of future electricity 

generation. So, commenters concluded that, in effect, federal appliance and equipment efficiency 

standards will help states meet mass-based goals that have been adjusted downwards to account 

for federal standards, assuming states select this option that includes projected load growth or 

some variation of it. 
115

Comment 32: The EPA should incorporate growth needs into the mass-based goal.

Response 32: The EPA has converted the rate-based goals to mass-based goals. See section VII 

of the final rule preamble of the CPP and the CO2 Emission Performance Rate and Goal 

Computation TSD for CPP Final Rule supporting the final CPP for the final mass-based 

equivalents.

The following are summaries of the specific public comments under this comment:

Commenters stated their main concern with the development of a mass-based goal is the 

recognition by EPA that "growth" needs to be incorporated into a mass-based goal. The 

commenters said the growth assumption for a state like Montana needs to incorporate the fact 

that growth occurs not only within the state but also as growth in the export of electricity to other 

states. The commenters did not feel that one methodology can accurately be described by EPA 

for all states in converting from a rate-based to a mass-based goal. 

Commenters added EPA must understand that the Technical Support Document developed for 

illustrative purposes for rate-to mass-based conversion penalizes states that are net exporters of 

electricity. The commenters said Montana, in developing its own rate-to mass-based tool, fully 

expects that growth will also occur in demand for that portion of the electricity generated in the 

state that is exported; therefore, EPA must maintain flexibility for states to propose approaches 

where all generation in the state increases and not just electricity used for in-state demand. The 

commenters said EPA must also realize that this exported electricity demand could be satisfied 

with Montana generation by either EGU MWhs or by renewable generation and therefore, 

Montana disagrees that new renewable generation necessarily replaces EGU MWhs. The 

commenters said as long as the rate or equivalent mass target is satisfied through the energy mix, 

the state plan should be satisfied.

Commenters added both approaches fail to adequately consider the impact of future demand 

growth on affected units' abilities to reduce emissions. The commenters said the Rate-to-Mass 

TSD's first proposal for calculating mass-based equivalents would not incorporate any future 

load growth into the projection of a mass-based equivalent. The commenters said by failing to 

incorporate any assumptions about how electricity demand may increase in future years, EPA 

would effectively prohibit states from meeting new electricity demand with additional generation 

from existing units, which are some of the most reliable, proven, and low-cost generation sources 

available. The commenters said EPA's second option under the Rate-to-Mass TSD incorporates 

one basic assumption about increased electricity demand, based on EIA regional projections; 

however, this load growth assumption may be unreasonably low in many parts of the country, 

including South Carolina, if economic growth increases substantially beyond current 

expectations; therefore, this option, too, could lead to severe implementation and reliability 

difficulties if load growth is greater than a state or EPA projects in calculating the mass-based 

equivalent.

Commenters added rather than effectively prohibiting states from increasing generation from 

cost-effective, reliable existing units to meet new demand, EPA should defer to states' reasonable 

projections of future demand in calculating mass-based goals. The commenters stated that in 

addition, EPA should revise its guidance to align with its assumption in the Proposed Rule that 
116

the addition of incremental RE, EE, and nuclear generation does not displace historic fossil 

generation. The commenters said because states' initial load growth projections could underestimate the amount of load growth that the state will experience during a compliance period, 

EPA should provide a mechanism for a state to revise its mass-based goal based upon a showing 

that these and other assumptions the state may have used to convert goals from rates to masses 

were incorrect.

Comment 33: Demand growth projection in mass rate goals.

Response 33: The EPA has converted the rate-based goals to mass-based goals. See section VII 

of the final rule preamble of the CPP and the CO2 Emission Performance Rate and Goal 

Computation TSD for CPP Final Rule supporting the final CPP for the final mass-based 

equivalents.

The following are summaries of the specific public comments under this comment:

Commenters stated EPA must define a uniform electricity demand growth projection that can be 

used in a rate-to-mass conversion, the commenters recommended that the Energy Information 

Agency (EIA) projections are the maximum demand growth that can be included. The 

commenters said the level of demand growth must be subject to a uniform methodology 

established by EPA; an excessive projection of demand growth will weaken the target and void 

the required equivalency between the rate-based and mass-based targets. The commenters said 

even states that are not attempting to weaken their target will inevitably face pressure to adopt an 

overly optimistic demand growth projection consistent with the state's aspirations for future 

economic development. 

The commenters commissioned analysis from M.J. Bradley and Associates of past electricity 

demand and energy forecasts from a range of planning entities, including EIA, the California 

Energy Commission (CEC) and some of the ISO/RTOs; they summarize their findings as 

(also presented in Appendix 9A of comment): 

• Generally speaking, EIA, CEC and RTO's all consistently overestimate both demand and 

consumption, although estimates tend to get more accurate the closer the estimate is made 

to the target year. 

• Forecasts made before 2009 tend to be several more percentage points off than later year 

estimates, likely because they do not account for the economic downturn. 

• For all RTOs/ISOs, both peak demand and annual consumption dropped markedly from 

2008-2009. 

• Forecasts for demand four years prior range from an overestimate of 14 percent to an 

underestimate of 1 percent; forecasts one year prior range from an overestimate of 11 

percent to an underestimate of 6 percent. 
117

• Forecasts four years prior overestimate annual consumption by 2 percent to 10 percent; 

forecasts one year prior range from an overestimate of 8 percent to an underestimate of 2 

percent.

The commenters said there are many reasons for utilities and system planners to overestimate 

energy growth including: 1) a desire to ensure peak demand and energy use are easily 

accommodated (reliability) and 2) the opportunity to use demand and energy forecasts to justify 

new generation, transmission and distribution investments that increase a utility's rate base and 

increase earnings for shareholders. The commenters said the use of energy forecasts in setting a 

mass-based target is extremely likely to increase the estimate of emissions in the future and lead 

EPA to establish a target that is inflated and easier to achieve than anticipated by EPA and their 

modelers. The commenters said EPA must adopt a consistent and unbiased demand growth 

projection, and suggests that EPA use current EIA projections. The commenters said EPA should 

describe this forecast as conservative and not allow states and companies to develop alternative 

forecasts, which would provide significant opportunity for gaming and which EPA should 

assume are inflated in their current form. The commenters said they support the EPA's continued 

flexibility in the state emission reduction planning process under section 111(d), but EPA must 

clearly define the method for converting rate-based targets and requirements for existing sourceonly mass-based caps in order to ensure that equivalent emission reductions will be achieved.

Commenters stated EPA states that any mass-based limit must be equivalent to the rate-based 

goals determined by EPA for states. The commenters said in order for this to be true, states must 

be able to project growth in electrical demand when making this conversion. The commenters

said the rate-based form of the goal doesn't place any limits on electrical demand, so this demand 

may continue to grow significantly and may be met by any combination of existing and possibly 

new units, as long as the state can meet its rate goal; therefore, EPA must allow states to project 

demand growth for existing units for the entire compliance period (extending beyond 2030) 

when converting to mass-based limits. 

Commenters stated EPA stated in its June 2014 proposal and accompanying documentation that 

states may project growth when making the rate-to-mass calculation. The commenters asserted

this is an essential part of any equivalent rate-to-mass conversion; however, the language in these 

documents was unclear about how to apply the projected growth in calculating an equivalent 

mass cap. The commenters said EPA's November 13, 2014 TSD on translating state-specific 

rate-based CO2 goals to mass-based equivalents also failed to provide this clarity. The 

commenters said neither of the scenarios discussed in EPA's November TSD allows for growth 

for existing units - one scenario projects no growth for existing units, while the other assumes 

that all growth will be taken up by new units, which will be regulated under the mass cap; neither 

of these scenarios is fully equivalent to the rate-based standard. 

Commenters said states should be allowed to include electricity demand growth when converting 

rate-based limits to mass-based limits. Commenters asserted that states must be able to account 

for electricity growth when converting rate-based goals to mass-based limits for existing power 

plants. Commenters noted that the rate-based goals do not place any limits on electricity 

production and that electrical demand may continue to grow significantly and may be met by any 

combination of existing and new units. These commenters also recommended the EPA allow 

states to project demand growth for existing units for the entire compliance period (extending 
118

beyond 2030) when converting to mass-based limits. The commenters believed growth 

projections to be an essential part of any equivalent rate-to-mass conversion and feel the EPA 

should provide additional guidance on how to apply projected growth when calculating an 

equivalent mass-based limit. Commenters noted that none of the scenarios discussed in EPA's 

November TSD allows for growth for existing units. 

Comment 34: Generation level

Response 34: The EPA has converted the rate-based goals to mass-based goals. See section VII 

of the final rule preamble of the CPP and the CO2 Emission Performance Rate and Goal 

Computation TSD for CPP Final Rule supporting the final CPP for the final mass-based 

equivalents.

The following are summaries of the specific public comments under this comment:

Commenters stated the existing affected source approach from the rate-to-mass goal translation 

TSD produces a generation level (and CO2 mass) for GA that is 28% less than the generation 

(and CO2 mass) used to set the rate-based goal in the original rule proposal. The commenters

asked how can a translated mass-based goal be equivalent to the rate-based goal if it does not use 

the same generation level. 

Commenters stated on November 6, 2014, EPA issued a technical support document offering 

guidance for states to convert EPA's rate-based goals to mass-based goals (EPA's "Conversion 

Guidance"). The commenters said the Conversion Guidance recognizes on page 1 that the 

formula for converting a rate-based goal into a mass-based goal simply requires the 

multiplication of the emission rate goal by a specific generation level to determine mass 

emissions; however, EPA's Conversion Guidance uses a different generation level than EPA 

assumed in its original rate-based proposal, which results in far more stringent goals. 

Commenters stated EPA's original proposal relied on an equation that determined generation by 

adding incremental renewable generation, nuclear generation, and energy efficiency 

improvements to 2012 generation; however, the primary option in EPA's Conversion Guidance 

utilizes 2012 generation alone - without any incremental changes - to calculate a mass-based 

goal. The commenters said although EPA's guidance contains several complicated formulae, the 

variables in those formulae cancel each other out; without the incremental generation changes 

accounted for in EPA's original rate-based proposal, the mass-based goal relies on a lower 

generation value, thus resulting in a lower mass-based goal than would be expected if the goal 

were truly equivalent to EPA's rate-based goal. 

Commenters stated because EPA's Conversion Guidance requires the calculation to be made 

based on 2012 generation alone, instead of the generation relied upon in EPA's original proposal 

(2012 generation plus incremental changes), EPA mass-based interim limitation for the affected 

units is 214,771,000 metric tons more stringent than the tonnage limitation used in the EPA ratebased calculation. The commenters said the final limitation for affected units is also 308,867,000 

metric tons more stringent than the mass emissions used in the final state rate-based calculation; 

as a result, EPA has arbitrarily changed its calculations to set an even lower limit than EPA 
119

calculated as BSER. The commenters provided a chart showing a CO2 mass limits comparison 

for affected units. 

Commenters stated EPA's Conversion Guidance does contain a second option that may be 

intended to allow for the use of a more appropriate generation level in determining mass-based 

goals by including a growth factor; however, that approach still is not equivalent to the 

generation level utilized in EPA's original proposal, and therefore does not result in "equivalent" 

goals, which EPA claims are necessary for states to employ the mass-based option. The 

commenters added, EPA's Conversion Guidance seems to suggest that a growth factor would 

only be appropriate if states require newly constructed units to fall under the mass-based goal as 

well, something that the CAA clearly forbids. The commenters said EPA's growth factors are 

low; if growth is higher than EPA projects, the mass-based limits will again be overly 

stringent; therefore, even the second option of EPA's Conversion Guidance is arbitrary.

Commenters agreed with the EPA's most basic explanation of the rate-to-mass conversion, which 

indicates that a state's 2030 CO2 mass-based goal will be the result of the state's 2030 rate-based 

CO2 goal multiplied by the state's generation. The commenters said EPA's method for 

computing the state's generation level is based on historical (i.e., 2012) generation with no

growth, assuming that future demand in years up to and beyond 2030 will be the same as the 

demand in 2012. The commenters asserted that this generation level should reflect a state's 

forward-projected generation up to and beyond 2030, to account for load growth during that 

period.

Commenters stated the EPA manipulates the state's generation level by applying adjustments 

based on the CPP building blocks; the EPA is selective in its inclusion of building blocks for the 

state's generation level adjustments, applying only a subset of building blocks to the generation 

level and doing so in a manner that is inconsistent with the core methodology used in the original 

rate-based goal-setting formula. The commenters said for example, adjustments based on the 

assumption that new incremental renewable resources and energy efficiency goals will be met 

are included, and they displace fossil generation as opposed to being included in addition to 

fossil generation as they are in the rate-based goal-setting formula. In general, the commenters

considered the EPA's aggressive assumptions of generation levels to account for the building 

blocks to be incompatible with the rate-to-mass conversion process, bearing in mind that this 

generation level will be multiplied by a CO2 rate that is already reduced to reflect the application 

of all of the building blocks.

Commenters stated on November 6, 2014, EPA released a technical support document ("TSD") 

for the CPP titled "Translation of the Clean Power Plan Emission Rate-Based CO2 Goals to 

Mass-Based Equivalents." The commenters said the TSD provided two conceptual examples to 

convert the emission-rate based goals to mass-based equivalents (caps). The commenters said 

EPA's examples were extremely simplified and failed to take into consideration the complexities 

of regional energy markets. The commenters said EPA's analysis is flawed because EPA 

assumes in the Adjusted Affected Fossil Generation equation that incremental RE and EE in a 

state's goal would directly displace that state's in-state generation. The commenters said a large 

portion of the RE component in New Jersey's target using either the RPS or the regional potential 

methodologies comes from out of state resources; therefore, the generation that would be 

displaced is more likely to be located in a state closer to the actual RE source. The commenters
120

added the displacement may include sources that are not "affected units" under the CPP (e.g., 

simple cycle combustion turbines). The commenters said a similar argument can be made for 

displacement through EE programs, especially where a state is a net exporter of electricity. The 

commenters added EPA's examples fail to take into consideration increases to existing fossil 

fuel-fired generation due to pending power plant closures and increases in demand due to other 

environmental objectives (e.g., increased deployment of electric vehicles). The commenters 

asserted that the methodology to convert to a mass-based equivalent should be based on 2012 

historical fossil generation in order to receive credit for fossil plant retirements after the baseline 

period while allowing for future increase fossil generation where necessary (e.g., nuclear plant 

retirements, increased deployment of electric vehicles).

Comment 35: The EPA should be receptive to alternative methods for converting rate-based 

goals to mass-based goals.

Response 35: The EPA has converted the rate-based goals to mass-based goals. See section VII 

of the final rule preamble of the CPP and the CO2 Emission Performance Rate and Goal 

Computation TSD for CPP Final Rule supporting the final CPP for the final mass-based 

equivalents.

The following are summaries of the specific public comments under this comment:

Commenters appreciated EPA's recent Rate to Mass Technical Support Document released on 

November 6, 2014, on converting the rate based targets to annual mass equivalents. The 

commenters encouraged EPA to be receptive to alternative methods - as EPA has indicated in the 

guidance that it would be - provided that such methods provide adequate justification and 

support for the data and assumptions used to develop states' mass based targets.

Commenters stated given the risk of forecast error, the commenters asserted that the EPA should 

revisit its determination of equivalent mass-based targets for new and existing sources. The 

commenters said the Agency should evaluate whether the AEO2013 reference scenario is the 

best approach to generating an equivalent target. The commenters suggested two potential 

alternatives here: 

• Alternative #1: Use observed trends in electricity consumption; one option to reduce 

forecasting error is to use some period of current and/or future trends in electricity 

consumption to establish the equivalent mass-based standard; examples include the trends 

in electricity observed from 2005 to 2012, 2012 to 2020, or some other combination of 

current and/or historical periods. 

• Alternative #2: Wait to forecast future trends; the EPA could also choose to use a 

different forecast generated closer to the time of regulation; the Agency could, for 

example, adopt the reference scenario from a future Annual Energy Outlook issued just 

before 2020; or it could generate its own scenario, if none is available. 

The commenters said both approaches reduce the risk of forecasting error by basing the 

quantification of an equivalent mass-based target on data observed, or forecasts made, closer to 
121

the time of regulation. The commenters said while both approaches introduce a new kind of 

uncertainty - the precise quantification of an equivalent target - these uncertainties may be 

tractable in those states with an interest in pursuing a mass-based target, who presumably have 

studied their expected future electricity sales and emissions trends in greater detail; on the other 

hand, these alternatives could produce an undesirable incentive for states to increase 

consumption in the coming years in order to produce high baseline scenarios. The commenters

said whether these alternatives or others are preferable from the EPA's perspective, the 

commenters suggested that additional analysis is needed in order to be certain that mass-based 

targets under the Clean Power Plan will generate real emission reductions.

Comment 36: Translating Emission Rate Goals to Mass Goals Under the Clean Power Plan

Response 36: The EPA has converted the rate-based goals to mass-based goals. See section VII 

of the final rule preamble of the CPP and the CO2 Emission Performance Rate and Goal 

Computation TSD for CPP Final Rule supporting the final CPP for the final mass-based 

equivalents.

The following are summaries of the specific public comments under this comment:

Commenters submitted a whitepaper to offer several ideas for how the EPA might further help 

states understand the choice between rate and mass goals and facilitate states choosing the mass 

goal option.

Commenters stated this methodology first determines the total demand for generation resources 

in each state in a future year absent the CPP policy; then calculates the mix of energy efficiency 

and generation sources required to satisfy this demand under the CPP policy; finally, the 

resulting mix of fossil generation and carbon emissions from the fossil sources covered under the 

rule determine the mass goal for each state.

Commenters stated initially, 2012 retail sales, grossed up to account for line losses and reflect 

total 2012 generation, are escalated by a business-as-usual (BAU) load growth rate; this produces 

an estimate of total state generation needs for 2030 of approximately 4,587 TWh. The 

commenters said the 2012 retail sales assumptions in these calculations are taken from the EPA's 

GDC and the load growth data are taken from the EPA's Integrated Planning Model cases issued 

as part of its June 2014 Regulatory Impact Analysis; this approach to incorporating load growth 

factors in the goal development process is analogous to the EPA's approach taken in the NOx 

SIP call.

Commenters stated next, demand and supply resources are deployed sequentially to meet total 

state generation needs; all four building blocks, along with generating resources not covered 

under the CPP rule, are represented in this analytical process; in this way, total resources are 

balanced with total energy demands.
122

“First, the total BAU state generation needs in 2030 are reduced by the state's energy efficiency 

(EE) resource potential (Building Block 4) as specified in the GDC. This results in an estimate of 

the total amount of energy demand in each state that is to be met with generating sources. This 

amount is 4,206 TWh. 

Next, total net energy demand is reduced by qualifying renewable energy resources (Building 

Block 3) as specified in the GDC.

Following that, a block of energy from generating sources whose emissions are not covered 

under the rule are deducted. These include nuclear, hydro-electric, uncovered fossil, and net 

interstate imports or exports.

The generation from all of these (except new nuclear) is assumed to remain constant over time. 

The amount of energy from these fixed resources is calculated from GDC data by deducting 

2012 coal, NGCC, oil/gas steam, other covered generation, and existing renewable energy from 

total 2012 sales.

For states with expected new nuclear generation, the amount of generation from these new 

sources is then added to this block of energy.

The last remaining block of demand is met by covered fossil generation (coal steam, NGCC, 

oil/gas steam, and other covered generating units 11). Generation from NGCC capacity is 

deployed first up to a maximum capacity factor of 70% consistent with the EPA's GDC 

methodology. Any remaining energy needs are met from existing coal and oil/gas steam in 

proportion to the 2012 generation levels from these two sources. This process incorporates 

Building Block 2 by dispatching NGCC to its maximum potential before coal.

This analytical process so far has produced estimates of the energy mix required to satisfy 

electric demand in a future year. 

Finally, to create the state's emission budget, the amount of energy produced by each fossil 

source covered under the rule is multiplied by the average state emissions rate for that fossil 

source in 2012. The one exception to this process is the coal emission rate, which is assumed to 

be 6% lower than 2012 levels consistent with Building Block 1 of the GDC.

This results in the estimated covered emissions shown in Figure 3 below. The total U.S. covered 

emission estimate of 1,543 million metric tonnes is a 21 percent reduction relative to 2012 

levels.”

Commenters stated this methodology is a "first principles" approach to mass translation in that it 

starts with the fundamental demand, resource data and building block assumptions used by the 

EPA in the GDC process to determine the EPA's proposed emission rate goals. The commenters

said structured on complete and balanced estimates of electric demand, energy efficiency and 

generation in future policy years, it is simple, intuitive, and fully transparent; because it relies on 

the same assumptions and calculation process used by the EPA, the resulting mass goals are 

consistent with the EPA's definition of Best System of Emission Reduction (BSER) and 

equivalent to the proposed rate goals.
123

National Results

Commenters stated this methodology yields an estimate of total U.S. covered emissions when all 

state budgets are summed across the country of 1,543 million metric tonnes. The commenters

said this aggregate estimate is quite close to the EPA estimates of 2030 covered emissions in its 

June 2014 Regulatory Impact Analysis and November 2014 mass translation TSD; this 

methodology produces an estimate that is 1.2 percent below the EPA's TSD estimate and 3.6 

percent below the EPA's Regulatory Impact Analysis estimate. The commenters said the small 

difference in results between this and the EPA's national estimate from the TSD is caused by 

several factors, most of them quite small. The commenters said the largest is that this 

methodology reduces the amount of fossil generation that may be re-dispatched when 

incremental building block resources (energy efficiency, renewables and new nuclear) exceed 

load growth. The commenters said technical modifications to this methodology could potentially 

further reconcile this estimate with the EPA's TSD and Regulatory Impact Analysis estimates.

State Results - Comparison to Emission Rate Reductions

Commenters stated as a general matter, the percentage reduction in tons tends to be less than the 

percentage reduction in emission rates; some states that have been focused on the magnitude of 

the emission rate reduction implied by the EPA's proposed rate goals issued in June 2014 may 

find this of some interest.

The commenters said the states tend to cluster themselves into three groups that provide some 

insight into the underlying assumptions. Most states, have tonnage reductions that are lower in 

percentage terms than the emission rate reductions, however two groups of other states stand out.

1. The group of states where the percentage reduction in tons in greater than the percentage 

reduction in rates. The states in this group include Connecticut, Massachusetts, Maine, 

New Hampshire, New York, Rhode Island and South Carolina. Importantly, this is due to 

the assumptions underlying the calculations, specifically a low rate of load growth, 

limited coal generation, relatively ambitious building block assumptions or a large 

contribution from new nuclear generation. The large share of gas in the BAU energy mix 

limits the rate reduction, while load growth and relatively large abatement assumptions 

still result in large tonnage reductions.

2. The group of states - California, Idaho, Kentucky and South Dakota - also stands out, but 

for somewhat different reasons; these states all have mass goals that are higher than 2012 

emission levels. The commenters said the reasons for this are also tied to the underlying 

load growth and building block assumptions; these states share a combination of 

relatively high load growth assumptions and/or relatively limited building block 

assumptions (and so relatively limited emission abatement assumptions.)

State Results - Comparison to IPM Modeling Results

Commenters stated another comparison of interest to some stakeholders may be how these mass 

goals compare to the results of IPM modeling. The commenters said a general pattern emerging 

from this comparison is the notably greater variability in tonnage results from the IPM modeling 

than the mass goals; this is likely due, at least in part, to the changes in interstate power flows 
124

and in-state generation expected to occur over time both without the CPP and also due to the 

CPP, and the impact of those changes in state emissions. The commenters said these changes are 

reflected in the IPM modeling results but not the spreadsheet based mass translation 

methodology; one consequence of this is that any disparity in mass goals across states will tend 

to be lower under this type of spreadsheet-based mass translation method than one based on 

fundamental market modeling that captures the impact of interstate power flows on unit dispatch 

and state emissions.

Commenters stated this comparison also illustrates the trade-off between the emissions 

reductions expected from the rule and the flexibility given to states in setting their own mass 

goals. Both options may have merits, yet in a given state there is sometimes a material 

discrepancy between the goals produced by the two methodologies. The commenters said with 

the flexibility to choose a translation methodology, each state would have an incentive to choose 

the methodology that permits the greatest level of emissions and the smallest emission 

reductions. As an example, if all states are permitted to choose a mass goal based on either IPM 

results or this spreadsheet methodology, the mass goal for the Lower 48 states would effectively 

be 1,677 million metric tonnes; this result is higher than if either of the two options were used for 

all states and would achieve a 13 percent reduction from 2012 levels rather than 17 or 20 percent 

under a single approach.

State Results - Comparison to November TSD Goals

Commenters stated consistent with the fact that the total national results were quite similar, the 

results for most states are generally similar as well; there are however a number of states where 

the two goal estimates vary more significantly. The commenters said on a percentage basis, the 

largest of these are South Carolina, New York and New Hampshire. The commenters said this 

methodology reduces the amount of fossil generation re-dispatched when incremental building 

block resources (energy efficiency, renewables and new nuclear) exceed load growth; in contrast, 

the TSD accounts for imbalances in load and resources by effectively reducing the contribution 

of all sources on a pro rata basis; and on an absolute basis, the single largest difference is for 

Texas; this is caused by the same issue, as well as the large size of Texas.

Commenters stated this whitepaper illustrates how a small number of state-specific assumptions, 

primarily the size of each BSER building block and the rate of load growth, drives the mass 

goals; it also highlights the value of focusing policy discussions on these few assumptions as a 

primary means to address concerns regarding the level of state-specific goals and any disparity of 

goals across states; more complex translation methodologies may obscure these fundamental 

factors. The commenters said any changes to the EPA's proposed building block assumptions or 

GDC calculation process made in the final rule could be readily incorporated into this rate to 

mass translation methodology.

The Importance of Building Block and Load Growth Assumptions

Commenters stated it is important to understand the reasons why the mass goals turn out as they 

do; in fact, a small number of state-specific assumptions, primarily the size of each BSER 

building block and the rate of load growth, are the primary drivers of mass goals. The 

commenters said the simplicity and transparency of this methodology highlights this point and 
125

the value of focusing policy discussions on the reasonableness of those assumptions and whether 

they should be modified. The commenters said other more complex translation methodologies 

may obscure these most fundamental assumptions and unnecessarily divert the policy discussion 

away from what most matters; further, this type of translation methodology can be readily 

refined if and when the EPA modifies its building block and other assumptions underlying the 

goal development calculations.

Conclusions

Commenters stated all this points to the importance of facilitating state compliance through mass 

goals rather than rate goals and focusing on mass goals that cover both existing and new sources, 

not just existing sources; relying on a rate to mass translation methodology that is simple, 

intuitive and transparent; and focusing policy discussions regarding the appropriate level of mass 

goals on a small number of key factors including the building blocks and load growth.

Comment 37: The proposed rule requires a state electing to use mass-based goals to commit to a 

projection of future electrical needs too far in advance. 

Response 37: The EPA has converted the rate-based goals to mass-based goals. See section VII 

of the final rule preamble of the CPP and the CO2 Emission Performance Rate and Goal 

Computation TSD for CPP Final Rule supporting the final CPP for the final mass-based 

equivalents.

The following are summaries of the specific public comments under this comment:

Commenters stated the proposed rule requires a state that chooses to use mass-based goals rather 

than rate-based goals to produce a "reference case" forecast of generation by affected EGUs 

through 2030. The commenters said the state would complete this forecast at the time it prepares 

its plan, and this forecast would determine the state's mass-based compliance goals for all 

compliance periods. The commenters said preparing an accurate forecast that far in advance, 

however, would be extremely problematic; for example, a future breakthrough in battery 

technology that markedly increases the adoption of electric vehicles could result in significant 

additional electrical load that could not be anticipated at the time the forecast is prepared. The 

commenters said EPA should allow states to adjust their mass-based goals based on changes that 

occur after the generation projection is originally made; this would make a mass-based approach

more attractive as an alternative to a rate-based approach.

Comment 38: The EPA should provide additional guidance for state that choose to use 

multistate plans for mass-based goals.

Response 38: The EPA has converted the rate-based goals to mass-based goals. See section VII 

of the final rule preamble of the CPP and the CO2 Emission Performance Rate and Goal 

Computation TSD for CPP Final Rule supporting the final CPP for the final mass-based 

equivalents. See section VIII of the final rule preamble of the CPP for more information 
126

regarding multistate plans. The EPA will provide guidance to states using multistate plans for 

mass-based goals as necessary. 

The following are summaries of the specific public comments under this comment:

Commenters stated for those states that do pursue multistate plans that require conversion to a 

mass-based number across states, the commenters recommended that EPA provide additional 

guidance as to how groups of states might approach such a calculation or provide the technical 

assistance to perform the conversion for the states.

Commenters were interested in understanding whether multi-state coordination would reduce 

costs and bring other benefits to their states compared to a single-state approach. The 

commenters sought clarification from EPA on how EPA proposes to calculate mass-based goals. 

The commenters said as states consider the various options for 111(d) compliance, it is essential 

that we have a better sense of what methodologies for calculating mass-based state goals EPA 

would accept. The commenters said the material released by EPA on June 2nd does not provide 

enough information for states to evaluate the consequences of considering a mass-based 

approach. The commenters requested that EPA issue non-binding, illustrative examples of how 

states could convert their rate-based goals to mass, including the underlying calculations and 

assumptions.

Commenters stated to the greatest extent possible, EPA should facilitate and encourage multistate carbon market compliance options; a key component of this facilitation involves 

establishing standardized targets or calculation methods for converting the EPA's proposed ratebased targets into mass-based targets. The commenters said EPA's current proposal contains state 

compliance goals expressed in a rate-based format of pounds of CO2 emissions per megawatthour of electricity generation (lbs/MWh); the EPA allows states to convert this lbs/MWh ratio 

into a mass-based target expressed in millions of metric tons of CO2, but does not provide a 

standardized conversion method. The commenters said this allows for inconsistencies and 

confusion among states that wish to convert to a mass-based target; not providing a standardized 

method may also allow for states or their generating units to game the system and dilute their 

goals during the conversion process. The commenters added states wishing to establish multistate compliance plans and/or carbon trading markets would benefit from standardized rate-tomass conversion instructions; this would provide certainty and consistency, which helps ensure 

that states equally share in the challenges and benefits of participating in multi-state compliance 

and/or carbon markets. The commenters said establishing a mass-based "cap" on CO2 emissions 

is the foundation to creating a carbon market such as a cap-and-trade system.

Commenters suggested that calculating a multi-state, mass-based goal by aggregating individual 

state mass-based goals would be simpler than requiring a methodology that includes modeling 

projected emissions from the entire region. The commenters stated that this would allow the 

multi-state goal to be adjusted more easily if a state joins or leaves the program. The commenters

noted that EPA proposes that a multi-state mass-based goal be based on translation of an 

aggregation of the state-specific rate-based CO2 emission performance goals, and seeks 

comment on options for calculating a weighted average rate-based emission performance goal 

for multiple states. The commenters encouraged EPA to provide states the additional option to 

calculate a multi-state mass-based goal by aggregating individual mass-based state goals.
127

Commenters provided an example of four states working together on a multi-state plan and 

questioned if compliance would be based on the average (or weighted average) goal of the four 

states, or if every state must meet its individual goal through working with the other states.

Commenters stated that regional compliance will require translation of state rate-based targets or 

mass-based targets to multi-state targets to determine compliance on a regional/multi-state basis. 

Commenters noted that the EPA's guidance to states on methods to convert rate-based targets to 

mass-based targets is a helpful step forward. Commenters stated that more guidance will need to 

be provided to states to help them demonstrate equivalence and understand how multi-state 

compliance options would work across rate and mass-based boundaries.

Comment 39: AEO2013 reference scenario for future electricity consumption.

Response 39: The EPA has converted the rate-based goals to mass-based goals. See section VII 

of the final rule preamble of the CPP and the CO2 Emission Performance Rate and Goal 

Computation TSD for CPP Final Rule supporting the final CPP for the final mass-based 

equivalents.

The following are summaries of the specific public comments under this comment:

Commenters are concerned about the use of electricity consumption forecasts from the reference 

scenario in the Annual Energy Outlook 2013 ("AEO2013") from the U.S. Energy Information 

Administration ("EIA"). The commenters said this report is based on output from the National 

Energy Modeling System ("NEMS"), the EIA's primary national forecasting and policy analysis 

model. The commenters said as a general matter, energy models are powerful tools that can 

support informed decision-making; in this case, however, relying on a single forecast to drive 

critical methodologies used in the Clean Power Plan creates significant risks. The commenters

said for over a decade, NEMS has significantly overestimated national electricity sales. 

Commenters stated the AEO2013 reference scenario drives the EPA's determination of 

equivalent mass-based standards for new and existing sources. The commenters said for states 

that elect a mass-based target that includes both new and existing power plants, the EPA 

provides an "illustrative approach" to demonstrating equivalence with the default rate-based 

targets; the EPA selected the corresponding regions in the EMM module of NEMS and applies 

the average regional electricity consumption growth rate from the AEO2013 reference case over 

the period 2012 to 2029 to each state. The commenters said the EPA then calculates incremental 

demand for new generation by subtracting historical 2012 sales from these NEMS-derived 

projections for the year 2029, adjusted for transmission losses and natural gas-fired power plants 

already under construction. The commenters said the Agency then adds this incremental demand 

to existing sources, building block 3 contributions (new renewable energy and avoided nuclear 

retirements), and building block 4 contributions (energy efficiency), generating a total called the 

"Final Mass Equivalent Generation." The commenters said finally, the EPA calculates the 

equivalent mass-based target by multiplying the Final Mass Equivalent Generation (MWh) by 

the default rate-based targets (lbs CO2/MWh) to generate an equivalent mass-based target (lbs 
128

CO2); thus, the EPA's treatment of incremental new generation is based on the AEO2013 

reference scenario projections.

Comment 40: Import/export patterns among states

Response 40: The EPA has converted the rate-based goals to mass-based goals. See section VII 

of the final rule preamble of the CPP and the CO2 Emission Performance Rate and Goal 

Computation TSD for CPP Final Rule supporting the final CPP for the final mass-based 

equivalents.

The following are summaries of the specific public comments under this comment:

Commenters stated when the Clean Power Plan was announced in June 2014, EPA issued 

proposed carbon reduction goals using a rate approach (i.e., in lbs/MWh), but gave states the 

option to convert these rate-based targets to mass-based targets (pounds of CO2). The 

commenters said on November 6, 2014 EPA released further guidance on how states might 

translate the rate-based goals to mass-based equivalents; two agency proposed two approaches: 

one focused on existing units alone, and another that accounts for load growth and includes 

emissions from new or incremental fossil fuel generation. The commenters said the "Existing 

Affected Sources" approach calculates a generation level for each state based on existing 2012 

fossil, renewable, and at-risk nuclear generation, and multiplies this value by the previously 

determined rate-based target to develop a goal in metric tons of CO2. The commenters said the 

"Existing Affected and New Sources" approach is more complicated, accounting for load growth 

and including new fossil-fuel fired sources. This approach projects sales based on region-specific 

load growth rates from the EIA's 2013 Annual Energy Outlook, adjusted for transmission losses, 

and adds these adjusted sales to the generation assumed for the "Existing Affected Sources" 

approach. The commenters said this approach assumes that all new or incremental generation to 

meet load growth comes from new fossil generation within the state in question. Both 

approaches calculate a "mass equivalent generation level" in MWh, and multiply this by the 

EPA's rate-based target to calculate a mass-based target in metric tons of CO2. By 2030, the 

"Existing Affected Sources" approach requires a reduction in 2012 emissions by 608 million 

metric tons nationwide (31 percent of 2012 emissions). The commenters said in contrast, by 

2030, the "Existing Affected and New Sources" approach requires a reduction in 2012 emissions 

by 391 million metric tons nationwide (20 percent of 2012 emissions). The commenters said 

required emission reductions in the "Existing Affected and New Sources" approach are smaller 

because it accounts for new generation required to meet growing load. The commenters said this 

simplified approach does not account for changes in import/export patterns among states, and 

assumes renewable energy and energy efficiency displace generation exclusively within the state 

in question. The commenters said a more accurate approach would use a detailed hourly 

production cost model to assess such changes on a going-forward basis, but this type of analysis 

is time and resource intensive.
129

Comment 41: Who should translate the states' assigned rate-based goals into mass-based goals -

the states or the EPA - and how.

Response 41: The EPA has converted the rate-based goals to mass-based goals. See section VII 

of the final rule preamble of the CPP and the CO2 Emission Performance Rate and Goal 

Computation TSD for CPP Final Rule supporting the final CPP for the final mass-based 

equivalents.

The following are summaries of the specific public comments under this comment:

Commenters stated the translation of a rate-based state goal into a mass-based state goal is 

intended to produce an equivalent value; however, depending on which assumptions and 

methodology are applied, a variety of outcomes is possible. The commenters said these potential 

differences impact the stringency of what is required within each state to implement Section 

111(d); the commenters asked if the stringency can vary based on available methodological 

choices, is there truly an "equivalent" value. The commenters said although conceptually simple 

- Emission Rate (lbs/MWh) * Generation (MWh) = Mass Emissions (tons) - there are at least 

three thorny aspects to the translation from rate to mass in practice. 

1. Future generation is unknown; like equating speed and distance when time is undefined, 

converting an emissions rate to an equivalent mass of emissions for a future year is 

challenging because the amount of future electricity generation is unknown. 

2. Measures that will be enforceable under the state plan are to be excluded from the 

projection scenario; EPA proposes the use of a projected scenario to convert from rate- to 

mass-based goals and proposes that any programs that will be enforceable under the state 

plan should be excluded from the scenario; this sets up a decision making loop, where the 

goal conversion is dependent on decisions to be made in developing a state plan to 

implement the goal. 

3. The state goal is not an emissions rate; the conversion is further complicated because the 

state goal is not in the form of a simple emissions rate; in setting up a mechanism to 

credit what is, in essence, a mass-based quantity (the CO2 emissions avoided through 

various actions that offset generation and emissions from affected fossil-fired generators), 

EPA created a new metric for state goals. 

The commenters said this quasi-emissions rate includes adjustments to account for CO2 

avoidance from renewable energy, a portion of nuclear energy, and end-use energy efficiency 

measures; the quasi-emissions rate means it is not mathematically correct to simply multiply the 

rate times generation to get mass emissions, as suggested in the equation above; this adds another 

twist to an already challenging problem of determining the appropriate generation for converting 

the rate-based goal to a mass-based goal. 

The commenters said such uncertainty has the potential to create confusion, lead to delays, and 

produce inequalities across states; given the tight timing, the importance of state-specific 

analysis to develop an implementation plan that meets state objectives, and the time required for 

potential collaboration with stakeholders, legislatures, and other states, it would be detrimental to 
130

find out years into that effort that EPA did not find the translation to a mass-based goal 

approvable. 

The commenters said states and stakeholders would benefit from upfront clarity regarding an 

acceptable methodology and assumptions, as well as an opportunity to comment on the proposed 

conversion in a transparent way and before all of the detailed work is done to analyze, negotiate, 

and develop a plan; thus, it would be beneficial for EPA to clarify both (a) the proposed 

methodology for converting from rate- to mass-based goals and (b) the result of applying the 

methodology to calculate mass-based state goals, subject to a public notice and comment period.

Comment 42: Who should translate the states' assigned rate-based goals into mass-based goals -

the states or the EPA - and how.

Response 42: The EPA has converted the rate-based goals to mass-based goals. See section VII 

of the final rule preamble of the CPP and the CO2 Emission Performance Rate and Goal 

Computation TSD for CPP Final Rule supporting the final CPP for the final mass-based 

equivalents.

The following are summaries of the specific public comments under this comment:

Commenters stated although EPA recognizes the benefits of market-based mass emissions 

programs, there are many questions that it will need to address to support the use of mass 

emissions targets for 111(d) compliance; while some anticipated that EPA would release a 

mathematical calculation for translating the rate targets to mass emissions targets, EPA instead 

released several technical support documents, including one that discusses potential analytic 

approaches for translating from the rate-based emissions goal to a mass-based goal,[Projecting 

EGU CO2 Emission Performance in State Plans TSD] and projecting the emissions performance 

that would be achieved through state plans. 

Commenters added the modeling described by EPA in the technical support document requires a 

state to develop assumptions and projections for electricity, load growth, cost and performance 

of electric generating technologies, and transmission capability and expansion; electricity system 

modeling is regularly done but is no small task and states would not only be developing 

assumptions for their state, but also other states in their region or power pool. The commenters

said while the state-specific burden is lessened for states developing multi-state plans, 

assumptions still be need to be made for neighboring states to those in the multi-state plan. The 

commenters asked how much will these assumptions vary in different state modeling and how 

could these differences impact the mass emissions translation across states; one thinks EPA will 

want some consistency in modeling approaches, resource and load, and new transmission build 

assumptions. 

Commenters added the modeling process includes a reference case, alternatively called a 

baseline case, and a mass-based emissions policy scenario where the mass emissions target is 

generated by applying the rate-based goals; there is also a state policy plan case. The 

commenters said clarity on which current state policies and plans are included in the reference 

case versus the state plan case is necessary; EPA must provide that clarity in a way that does not 
131

penalize early movers. The commenters said if an early mover's energy efficiency, carbon 

reduction, and renewable energy programs are incorporated into the reference case, it follows 

that all on-the-books programs are taken as part of the baseline introducing a serious first-mover 

penalty.

Commenters stated another area for clarification is the calculation of a regional target from 

individual state rate targets. The commenters asked if modeling is necessary to determine the 

emissions targets, do states model the individual state rate targets, or model a regional target to 

determine the mass emissions; should the regional target be weighted by each state's contribution 

to fossil fuel generation (111[d] affected generation) or total generation; should this be based on 

past generation (e.g., 2012 generation), or projected future generation (e.g., 2030 generation). 

The commenters asked what about 111(b) new sources and the translation to mass emissions; 

where do they fit into the translation to mass if the EPA state rates targets are for 111(d)-affected 

sources; presumably, new sources are excluded unless a state opts to include them, in which 

case, presumably, the new sources would be counted in the rate and mass calculations for those 

111(b) sources a state opts into its 111(d) program. The commenters said while these questions 

need to be addressed, EPA should be commended for developing a rule that raises these issues 

and recognizes the diversity of state energy policies to achieve real and cost-effective carbon 

reductions.

Comment 43: Who should translate the states' assigned rate-based goals into mass-based goals -

the states or the EPA - and how.

Response 43: The EPA has converted the rate-based goals to mass-based goals. See section VII 

of the final rule preamble of the CPP and the CO2 Emission Performance Rate and Goal 

Computation TSD for CPP Final Rule supporting the final CPP for the final mass-based 

equivalents.

The following are summaries of the specific public comments under this comment:

Commenters supported market solutions as the best means to drive emission reductions at the 

lowest cost to the economy; enabling states to convert the proposal's rate-based goal to massbased goals is a necessity if states are going to be able to harness many of the flexibilities the 

proposal contemplates. The commenters said currently, the most effective programs being 

implemented by states are the cap-and-trade programs of California and RGGI, as well as the 

utility planning approaches utilized by Colorado and Minnesota. The commenters said having a 

mass-based goal is an important starting point for other states to be able to contemplate whether 

these types of approaches would be the best method for complying with the Clean Power Plan.

Commenters stated as the proposal's technical support document recognizes, there is not a simple 

method for making the conversion; a state must undergo a very complex and expensive modeling 

exercise to determine the mass-based equivalent to the proposal's goals. The commenters said 

unfortunately, because of the amount of effort and resources a state would have to expend to 

simply determine whether a mass-based goal would be a workable approach, the commenters

are concerned that states will forego that option. The commenters asserted that the lack of mass-
132

based equivalent goals is a major barrier to regional cooperation. The commenters said due to the 

state-specific nature of the proposed goals, it is very difficult for states to discuss a regional 

approach without having a means to make an "apples to apples" comparison of their states' 

reduction requirements. The commenters said the agency should assist states with translating the 

plan's rate-based goal to a mass-based goal by providing a presumptive translation for all states 

or simply providing standardized guidance on the analytical tools and assumptions needed for 

making the conversion. The commenters asserted this information is needed, and has written 

EPA requesting that the agency provide presumptive mass-based standards for each state. The 

commenters asserted this information will inform many states' and businesses' comments on the 

rule, and it should be provided while they have an opportunity to respond during the formal 

commenting process. The commenters recognized that developing this conversion requires 

several specific assumptions to be made as part of the modeling process; this is why the 

information should be provided while the comment period is still open, and why the goals should 

be "presumptive." The commenters said if a state would like to challenge any or all of the 

assumptions that drive the outcome of the conversion, the state should be able to run their own 

numbers and justify why the assumptions should be different; the point is to start the 

conversation for states and regions to utilize all of the cost-saving, flexible options a mass-based

standard can offer.

Comment 44: Tribes & Territories - Support for conversion to mass-based goal.

Response 44: The EPA appreciates the comments of support for conversion to mass-based goal. 

The EPA has converted the rate-based goals to mass-based goals. See section VII of the final 

rule preamble of the CPP and the CO2 Emission Performance Rate and Goal Computation TSD 

for CPP Final Rule supporting the final CPP for the final mass-based equivalents.

The following are summaries of the specific public comments under this comment:

Commenters stated in regards to the supplemental proposed rule, supports the ability to convert 

the Navajo Nation rate-based goal to a mass based goal, and the ability of the Navajo Nation to 

enter into multi-jurisdictional agreements with other jurisdictions, including states, to allow for 

the trading of emission credits.

Commenters asserted that a mass-based cap is appropriate for the Navajo Nation.

Commenters recommended the EPA codify mass-based goals for tribal and territorial goals 

because they believe this approach would facilitate quantifiable, non-duplicative, permanent, 

verifiable, and enforceable CO2 reductions at designated facilities. 

Comment 45: Tribe & Territories - Impacts of mass-based goal conversion.

Response 45: The EPA has converted the rate-based goals to mass-based goals. See section VII 

of the final rule preamble of the CPP and the CO2 Emission Performance Rate and Goal 
133

Computation TSD for CPP Final Rule supporting the final CPP for the final mass-based 

equivalents.

The following are summaries of the specific public comments under this comment:

Commenters said EPA states in the Supplemental Proposal that it expects no additional cost or 

benefit associated with compliance with the emission rate goals on the Navajo Nation. The 

commenters said this is because EPA does not expect any additional emission reductions, as 

"The EGUs in the Navajo Nation's area of Indian country are already expected to meet the 

proposed goals through compliance with other regulations...if the goal is converted to a massbased goal". The commenters pointed out that EPA's assumption that there is no cost associated 

with compliance with the goals is fully dependent on a fair and equitable method of converting 

the rate-based goals to a mass-based goal. The commenters said there would certainly be costs, 

although no benefit, associated with compliance with the rate-based goals as proposed for the 

Navajo Nation.

Comment 46: Tribes & Territories - The Generation output for purpose of converting to a MassBased Standard should reflect a representative five year period of operations

Response 46: The EPA has converted the rate-based goals to mass-based goals. See section VII 

of the final rule preamble of the CPP and the CO2 Emission Performance Rate and Goal 

Computation TSD for CPP Final Rule supporting the final CPP for the final mass-based 

equivalents.

The following are summaries of the specific public comments under this comment:

Commenters stated the Supplemental Proposal anticipates that, instead of a rate-based standard, a 

plan could convert the goals expressed under the Proposed Rule and the Supplemental Proposal 

into a mass based standard. The commenters said one suggested approach for deriving a massbased standard would be to apply the Interim and Final goals (expressed in a rate of lbs/MWh) to 

the historic operating level determined in the baseline period for purpose of establishing the 

proposed carbon dioxide goals. The commenters said in its November 2014 Technical Support 

Document on conversion to mass-based standard, EPA applied the 2012 Bonanza generating 

output of 3,090,432 MWh, the lowest output reported under EIA Form 923 data during any of 

the 10 years 2009-2013. Instead, the commenters urged EPA to apply a representative output 

level reflecting the generation output over a recent five (5) year period in converting a rate-based 

carbon dioxide standard to a mass-based standard for the Uintah-Ouray reservation. The 

commenters said because Bonanza is the only generating unit located in the Uintah-Ouray 

reservation, and because 2012 constituted a very non-representative year for generating output at 

the unit, in converting the rate-based standard to an alternative mass-based standard, EPA should 

use a multi-year average approach; the commenters urged that a representative 5 year average 

output level of generation output be utilized in converting to any mass-based standard.
134

Comment 47: The EPA should allow states to adopt mass-based limits that incorporate 

emissions from new sources

Response 47: The EPA has provided a mass-based goal in the final rule and allows states to 

consider new sources in demonstrating compliance in the following manner described by 

commenters.

The following are summaries of the specific public comments under this comment:

Commenters suggested the EPA should provide an alternative mass-based target that 

incorporates emissions from new sources. Commenters noted that states could then choose to 

submit plans that include new sources if that approach is appropriate to their circumstances. 

4.7 STATE FLEXIBILITIES

Section 4.7 covers public comments related to the state flexibilities related to the final and 

interim goals. 

4.7.1 Opportunities to adjust the goals

Section 4.7.1 covers public comments related to opportunities to adjust the goals in relation to 

state flexibilities.

Commenters have raised a number of issues related to this subsection which are organized by 

topics (comments) below. Responses are provided for these topics.

Comment 1: States should develop interim goals and timetables

Response 1: The EPA has modified the interim goals in response to comments and our further 

consideration. The interim period covers the years 2022-2029 and includes illustrative interim 

emission values for the periods of 2022-2024, 2025-2027, and 2028-2029. States have the 

flexibility to use different steps than those included in the final rule if the state demonstrates in 

its state plan that the values chosen for the 3, 3, and 2 year increments are equivalent to the 

interim goal included in the final rule for the 2022-2029 period. See section VII of the final rule 

preamble for discussion of the statewide goals and section VIII discusses flexibility in 

demonstrating compliance pathways in state plans. 

The following are summaries of the specific public comments under this comment:
135

Commenters indicated that states should be able to develop their own interim 

goals. Commenters stated that the 2020 interim goal doesn't provide enough time for an orderly 

transition to the 2030 target, and that the EPA must allow states to determine the interim 

goal. Commenters indicated this would allow a glide path to the 2030 target in a way that

ensures reliability and reduces rate shock.

Commenters indicated that the EPA should provide flexibility to states to develop their own 

interim targets that are reasonable and cost effective, but will still ensure progress is made during 

the interim period and the final goals are met by 2030. Commenters said that the earliest the 

EPA would approve a Missouri plan is June 2017 which leaves less than three years from the 

date of approved plan and the start of the interim goals. Commenters indicated that they are 

concerned about the long project lead times needed to permit, construct, and begin operating new 

natural gas units and pipeline capacity. Commenters indicated that if new transmission lines or 

natural gas pipelines are needed, these projects can take seven to ten years to 

complete. Commenters said that because each state will have unique circumstances with 

transmission and capacity issues, the EPA must provide states flexibility to modify interim goals, 

especially if new infrastructure is needed to comply with the goals.

Comment 2: Interim goal should be eliminated, won't affect compliance with final goal

Response 2: The EPA has modified the interim goals in response to comments and further 

consideration. The interim period covers the years 2022-2029 and includes illustrative interim 

emission values for the periods of 2022-2024, 2025-2027, and 2028-2029, see sections I.A. and 

VII of the final rule preamble of the CPP for more information.

The following are summaries of the specific public comments under this comment:

Commenters stated that the interim average compliance goal should be eliminated, and indicates 

it would not affect compliance with the final goal.

Commenters indicated eliminating the interim 2020-2029 goal would give states sufficient 

flexibility to design workable compliance plans which establish reasonable compliance glide 

paths consistent with ensuring reliability and protecting consumer interests. Commenters said 

this would allow states to ensure that there is sufficient time to complete needed infrastructure 

development (including electric and/or gas transmission) in order to provide reliable power, and 

would reduce concerns regarding the system impacts of abrupt shifts in dispatch between 

existing coal- and gas-based units. Commenters indicated it would eliminate conflicts between 

the timing of the interim period and legislative calendars, market rules and utility investment 

schedules, and it also would recognize and value reductions achieved since 2012, encouraging 

early action where possible.

Commenters stated that the proposed guidelines already are designed to allow states to develop 

their own compliance plans, and a description of the reduction trajectory to 2030 is a required 

element of state plans. Commenters said the EPA can and should use the proposed approach to 

state plans to ensure that state plans and emission reduction glide paths are designed to meet---

and do actually achieve---the 2030 goals, with the ability to make corrective actions or allow for 
136

alternative compliance paths if new technologies or market conditions change 

requirements. Commenters said the proposed regulation does not specify acceptable corrective 

measures, but suggested that the use of coal ash as a substitute for Portland cement in concrete 

manufacturing is an ideal measure that a state should promote as a "corrective measure".

Commenters stressed that even without the interim average compliance goal, the EPA would be 

able to disapprove proposed plans and glide paths that do not meet the minimum requirements 

and that do not demonstrate satisfactorily how the 2030 goals will be achieved. Commenters

indicated that other elements of the EPA's proposed approach to state plans ensure that states 

make reasonable and verifiable progress toward the 2030 goal, report that progress to EPA and 

take corrective measures if needed. Commenters said that ultimately, if states do not show 

progress toward the 2030 goal, EPA could call for a state to revise its compliance plan or 

implement its own federal plan. 

Comment 3: Interim compliance goal should be eliminated, and states should be allowed to 

determine their own reduction glide paths and milestones to achieve the 2030 goals, subject to 

EPA approval. States should be given the flexibility to modify compliance plans and glide paths 

to address changing technology and the needs of the interconnected power system.

Response 3: The EPA has modified the interim goals in response to comments and further 

consideration. The interim period covers the years 2022-2029 and includes illustrative interim 

emission values for the periods of 2022-2024, 2025-2027, and 2028-2029. States have the 

flexibility to use different steps than those included in the final rule if the state demonstrates in 

its state plan that the values chosen for the 3, 3, and 2 year increments are equivalent to the 

interim goal included in the final rule for the 2022-2029 period. See section VII of the final rule 

preamble for discussion of the statewide goals.

The following are summaries of the specific public comments under this comment:

Commenters said eliminating the interim compliance goal and allowing states to determine their 

own reduction glide paths and milestones to achieve the 2030 goals, subject to EPA approval, 

would provide states with flexibility in designing their state plans to reduce emission rates. 

Commenters said this approach would allow states to determine not only which actions and 

measures to pursue to reduce emission rates, but also to choose a reasonable schedule for 

implementing those measures consistent with providing safe, reliable, affordable, and 

environmentally responsible power to customers. Commenters said once approved by EPA, a 

state's plan, including the emission reduction glide path, would become federally enforceable. 

Commenters said states would demonstrate progress towards the 2030 goal consistent with their 

projected emission reduction glide path through the annual reporting of emission performance to 

EPA, taking corrective measures if needed. Commenters said ultimately, if states could not show 

reasonable progress toward the 2030 goal, EPA would have the authority to call for a state to 

correct its plan or issue a federal plan of its own.

Commenters said this approach may allow states sufficient time to complete infrastructure 

development (including electric and/or gas transmission) in order to provide reliable power, and 
137

would obviate concerns regarding the system impacts of abrupt shifts in dispatch between 

existing coal- and gas-based units. Commenters said it would eliminate conflicts between the 

timing of the interim period and legislative calendars, market rules, and utility investment 

schedules.

Commenters said eliminating the interim compliance average goal does not require a 

fundamental altering of the proposed guidelines. Commenters said instead, the proposed 

guidelines are already designed to allow states to develop their own compliance plans, and a 

description of the reduction trajectory to 2030 is a required element of state plans. Commenters

said the EPA can and should use the proposed approach to state plans to ensure that state plans 

and emission reduction glide paths are designed to meet and achieve the 2030 goals.

Commenters said states should not be limited to modifying plans only to address the failure of a 

plan element to perform as projected. Commenters said states need the flexibility to modify 

compliance plans and emission glide paths to address changing technology and the needs of the 

interconnected power system. Commenters said as EPA notes, as long as states can continue to 

demonstrate that plans are designed to achieve the 2030 goals, states should be able to propose 

modifications. Commenters said the EPA should clarify the proposed regulation accordingly.

Comment 4: The EPA should allow states to tailor compliance timelines to their unique 

circumstances by eliminating interim targets if state can demonstrate sufficient progress towards 

2030 goal. Interconnected electric system is very complex and many aspects of proposal haven't 

fully considered the complexities.

Response 4: The EPA has modified the interim goals in response to comments and further 

consideration. The interim period covers the years 2022-2029 and includes illustrative interim 

emission values for the periods of 2022-2024, 2025-2027, and 2028-2029. States have the 

flexibility to use different steps than those included in the final rule if the state demonstrates in 

its state plan that the values chosen for the 3, 3, and 2 year increments are equivalent to the 

interim goal included in the final rule for the 2022-2029 period. See section VII of the final rule 

preamble for discussion of the statewide goals.

The following are summaries of the specific public comments under this comment:

Commenters said at its most basic level, use of the four building block as a mechanism to 

comply with the emission targets is achievable if EPA provides relief on the interim targets. 

Commenters said if such relief is not provided NC energy believes that implementation of BSER 

must be carefully examined for feasibility. Commenters said though EPA acknowledges and 

discusses the complexity of the interconnected electrical system in its 111(d) proposal, NV 

energy believes many aspect of the proposal have not sufficiently considered fundamental 

principles of wholesale energy markets, resource dispatch and operations, reliability 

requirements, and integrated resource planning. 

Commenters said it is key to the success of this proposal that these issues be addressed in greater 

depth and with greater flexibility in terms of both the time and application of EPA's Building 

Blocks to accommodate the complexity of the interconnected electric system. Commenters said 
138

flexibility in development of state milestones and glide paths to meet the 2030 target would also 

serve to reduce the potential for retirement of assets prior to the end of their remaining useful 

lives, thus minimizing cost and impacts to consumers. 

Comment 5: Interim goal requires very steep reductions in emissions in too short an amount of 

time, and such steep reductions early in the program could preclude opportunities to implement 

more cost effective strategies that require more time to ramp up. Interim goals should be 

eliminated if a state is able to demonstrate sufficient progress towards the 2030 goal.

Response 5: The EPA has modified the interim goals in response to comments and further 

consideration. The interim period covers the years 2022-2029 and includes illustrative interim 

emission values for the periods of 2022-2024, 2025-2027, and 2028-2029. States have the 

flexibility to use different steps than those included in the final rule if the state demonstrates in 

its state plan that the values chosen for the 3, 3, and 2 year increments are equivalent to the 

interim goal included in the final rule for the 2022-2029 period. See section VII of the final rule 

preamble for discussion of the statewide goals.

The following are summaries of the specific public comments under this comment:

Commenters said the interim goal requires too steep a reduction in emissions in too short an 

amount of time, and therefore interim goals should be eliminated if a state is able to demonstrate 

sufficient progress towards the 2030 goal. Commenters said that there are limits to amount RE 

and EE that can be developed in timeframe allotted, and said if RE projects trigger the NEPA 

process (likely as >80% of Nevada is federal land), approval for projects could take years.

Commenters said under the current 111(d) proposal, the methodology for establishing the interim 

emission rate goals requires that emission reductions occur by 2020 in an amount equal to the 

BSER Building Block assumptions for 6% heat rate improvements and increased utilization (redispatch) of existing natural gas resources. Commenters said in states currently using coal or oil 

fired resources, this methodology results in a dramatic reduction in emissions that must be 

implemented by 2020. Commenters said the consequences of these dramatic reductions are 

exacerbated when considering that a state's plan may not be submitted for approval until 2018 

and approved by EPA until 2019. Commenters said Nevada and other states may find it difficult 

to meet their interim goal in 2020 and such steep reductions early in the program could preclude 

opportunities to implement more cost effective strategies that require more time to ramp up.

Commenters said all coal and other steam boiler generation in Nevada is completely displaced by 

2020 as result of EPA's target setting exercise. Commenters said thereafter, additional emission 

reductions needed to achieve the proposed rate are based solely on the BSER assumptions for 

increased renewables and energy efficiency. Commenters said while NV Energy acknowledges 

EPA's suggestion that states have the flexibility to meet the glide path in ways other than the 

immediate displacement of coal/steam generation, doing so is simply not achievable in Nevada 

during the short timeframe allotted. Commenters said there are practical, technical and economic 

limitations to the quantities of renewable energy and energy efficiency that could and would 
139

need to be permitted and developed by 2020 to support the continued operation of coal and steam 

boilers in Nevada. 

Commenters said renewable energy development is further challenged in Nevada because more 

than 80% of the state is comprised of federal land. Commenters said as a result, any new 

generation or transmission projects, including renewable resources, have a high probability of 

triggering the National Environmental Policy Act (NEPA) process directly or through a 

connected action, and once NEPA is triggered, it can take years to complete the process before a 

Record of Decision is obtained and construction begins. 

Commenters said NV Energy recommends that EPA should allow states to tailor their 

compliance timelines to their unique circumstances by eliminating the interim targets if a state is 

able to demonstrate sufficient progress toward the 2030 goal. Commenters said by eliminating 

the proposed interim target, or at a minimum, allowing all Building Blocks to be phased in over 

the full compliance period, states could develop an approvable plan to meet the 2030 emissions 

rate goal on a smoother and less disruptive implementation schedule while still achieving EPA's 

ultimate intent.

Comment 6: Commenters said the state goals should be recalculated to accurately reflect the 

limitations on NGCC redispatch and build up in each state.

Response 6: The EPA has recalculated the proposed goals. See sections V.D., VI, and VII of the 

final rule preamble of the CPP and the CO2 Emission Performance Rate and Goal Computation 

TSD for CPP Final Rule supporting the final CPP for more information about Building Block 2 

and the final goals. 

The following are summaries of the specific public comments under this comment:

Commenters said in the alternative, states should be directed to set emission reduction goals for 

the affected EGUs in their state that would reflect whether re-dispatch or build-out is available. 

Comment 7: Existing EE programs should be recognized and rule should make it easy for such 

programs to scale up if needed and give them credit for early action; should increase flexibility 

of State Plans so after final goals are incorporated can change plan.

Response 7: The EPA has determined that demand-side EE programs (proposed building block 

4) are not a component of the final BSER. See section V.A of the preamble for discussion of this 

issue. 

The following are summaries of the specific public comments under this comment:

Commenters stated that existing state and utility EE programs should be recognized if they 

utilize EPA-approved or equivalent measurement and verification protocols and standards, and 

the rule should make it easy for such programs to scale up if needed and give credit for "early 
140

action." Commenters said these programs may include, but not be limited to: utility demand-side 

management (DSM) (or incremental DSM depending on "credit for early action"), energy 

efficiency (EE) requirements (or incremental EE depending on "credit for early action"), EE 

carve out for ratepayer funded rebates/incentive, other highly efficient energy-efficient 

appliances and equipment upgrades not included in existing programs or in states with no 

programs, and innovative energy savings programs such as tree planting.

Commenters said although the Proposed GHG Rule is clear in that the EPA is not mandating the 

method an individual state must use to reach the proposed CO2 goals, it is clear that the proposed 

Florida State target of a 38% reduction in CO2 emissions, regardless of the method or 

combination of methods chosen by Florida, will impact cost recovery/rate impact, thereby 

impacting Florida's citizens. Commenters said of particular concern to Florida's ratepayers is that 

comments by EPA officials during press conferences indicate that, once a State incorporates the 

Final Goals into an EPA approved State Plan, the resulting targets, and their corresponding costs, 

will be inflexible.

Comment 8: States should be authorized to adapt final plans in future as conditions 

change. Section 111(d) doesn't require "anti-backsliding" restrictions. Should be able to take 

into consideration remaining useful life and electric system reliability.

Response 8: The EPA will allow states, via State Plan submittal or revision, to adjust their state 

wide rate or mass goals per unit inventory changes. If applicability review or formal applicability 

determinations change the status of units in regards to their inclusion or exclusion in the state’s 

affected population, the state may adjust the goal. See section VII of the final rule preamble of 

the CPP for more information.

The EPA recognizes the need for states to be able to revise their plans. Plan modification 

provisions are in section VIII.E.7 of the CPP final preamble.

With respect to the comments on remaining useful life, see the response to comment 2 in section 

4.7.2.

With respect to comments on reliability, see preamble sections II.C and VIII.G.2.

The following are summaries of the specific public comments under this comment:

Commenters said states should be given broad flexibility to adapt their final plans in the future as 

conditions change. Commenters said in particular, because CAA Section 111(d) does not require 

that "anti-backsliding" restrictions be adopted as part of a final rule, EPA should not include such 

a provision, particularly here where EPA offers no support for it. Commenters said not including 

this restriction would increase states' flexibility by removing an unnecessary constraint on their 

broad authority to implement the federal emissions guidelines. Commenters said part of that 

broad authority should be to make pragmatic adjustments as circumstances change so long as 

they achieve the applicable state emission rate goal consistent with the guidelines. 
141

Commenters said among the pragmatic adjustments that CAA Section 111(d) grants states is the 

authority to establish performance standards that take into consideration the remaining useful life 

existing sources. Commenters said another important factor for states and affected stakeholders 

to consider will be the impacts of the proposed CO2 guidelines on the bulk electric system 

reliability. Commenters said providing states with flexibility to adjust their compliance plans to 

meet their targets while assuring reliability is not compromised will reduce costs and potential 

adverse effects on electric customers.

Comment 9: Existing EGU state goals must be periodically reviewed and adjusted

Response 9: The EPA agrees with the commenters that under section 111(b) (1) (B), the EPA 

must review standards of performance for new sources every eight years. While there is no 

requirement that the EPA review standards of performance for existing sources under section 

111(d), the EPA anticipates that changes to performance standards for new sources may prompt 

the EPA to review standards of performance for existing sources as well. Whether such 

coordination is warranted, however, will depend upon the nature of any changes proposed for 

new sources when the EPA conducts its periodic review.

The following are summaries of the specific public comments under this comment:

Commenters stated that the EPA must finalize a commitment to periodically review and adjust 

the CPP State Goals. Commenters indicated that the EPA has ample authority to finalize a 

commitment for periodic review (and adjustment, if needed) of the Clean Power Plan (CPP).

Commenters stated that Section 111(d) does not contain an explicit requirement for periodic 

review of the existing source performance standards - however, the purpose of the statute, its 

relationship to section 111(b) which does require review every eight years, along with its 

reference to a section 110 procedure, and longstanding EPA interpretations requiring periodic 

review, give the Agency ample authority to finalize a commitment for periodic of the CPP.

Commenters said that for new sources, the Administrator must "at least every 8 years, review 

and, if appropriate, revise the [performance standards]." Commenters said that in the CPP 

proposal, EPA recognizes that this "requirement provides for regular updating of performance 

standards as technical advances provide technologies that are cleaner or less costly." 

Commenters stated that this same principle applies to the CPP. Commenters said that all of 

"section 111 was intended to assure the use of available technology and to stimulate the 

development of new technology." Commenters stated that in order to be consistent with the track 

of the new source standards, and continue to promote new technology for pollution control on 

sources as they age, the CPP similarly must be periodically updated. Commenters stated that 

there is support for this idea in section 111(d), which requires the EPA to "prescribe regulations, 

which shall establish a procedure similar to that provided in [section 110] under which each State 

shall submit to the Administrator a plan." Commenters said that this includes a cross reference to 

the requirement to revise state plans "from time to time as may be necessary to take account of 

revisions of such national primary or secondary ambient air quality standard or the availability of 
142

improved or more expeditious methods of attaining such standard." Commenters indicated that 

while CO2 is not a criteria pollutant, the language in CAA section 111(d) requiring a "procedure 

similar to that provided by section [110]" may be read to extend to all section 110 review 

requirements as well. Commenters stated that therefore, state CPP plans must also be subject to 

review when section 111(b) standards are updated and incorporated in state SIPs. 

Commenters contended that this is consistent with EPA's longstanding regulatory framework. 

Commenters said that the general 111(d) regulations require that, when corresponding new 

source standard of performance is proposed an emission guideline must also be proposed. 

Commenters added that the 1975 preamble also states EPA's expectation that there will be 

subsequent plans submitted after the initial emissions guidelines are set.

Existing municipal waste combustion units precedent. Commenters said that the EPA has 

previously concluded that the periodic review associated with some NSPS is also applicable to 

an existing source performance standard promulgated under section 129. Commenters said that 

existing solid waste combustion units are regulated under CAA section 111(d) with emissions 

limits based on CAA section 112 and must comply with all CAA section 129(a) requirements. 

Commenters stated that Section 129 does include an explicit five-year periodic review 

requirement for new sources, but not for existing sources. Commenters added that however, 

when EPA finalized emissions guidelines for existing municipal waste combustors in 1991 under 

CAA sections 111(d) and 129, the Agency committed to review the standard four years from the 

date of promulgation as required by the CAA. Commenters said that this review will include an 

assessment of such factors as the need for integration with other programs, the existence of 

alternative methods, enforceability, improvements in emission control technology, and reporting 

requirements. 

Commenters stated periodic review would ensure emissions controlled to greatest degree 

possible. Commenters said that the procedural reference to CAA section 110 and the regulations 

for adoption and submittal of state plans for existing sources provide the EPA with ample 

authority to require periodic review of the CPP. Commenters said further, the EPA has a history 

of including the CAA section 111(b) periodic review requirement when setting CAA section 

111(d) emissions guidelines. Commenters said that because the CAA is silent regarding the 

periodic review of CAA section 111(d) standards, "the question is whether the agency's answer is 

based on a permissible construction of the statute." Commenters said that an agency's 

interpretation is reasonable if it is not only a logical construction of the specific provision but 

also gives effect to the statute as a whole. Commenters stated that the purpose of the section 111 

is to apply the best system of emission reduction and "assure the use of available technology and 

to stimulate the development of new technology." Commenters contended that a periodic review 

of the CPP would ensure that CO2 from existing power plants are controlled to the greatest 

degree practicable and would spur innovation in pollution control. Commenters urged the EPA to 

commit to a periodic review of these standards.

Comment 10: The EPA must allow states to adjust goals to allow for remaining useful life, 

practical constraints, and technical achievability.
143

Response 10: These guidelines do not provide for states to make additional goal adjustments 

based on remaining useful life and other facility-specific factors because states can fully consider 

these factors in designing their plans. Section 111(d) requires that EPA’s emission guidelines 

permit the states to consider remaining useful life in applying standards of performance to 

particular affected EGUs, and does not call for facility-specific remaining useful life 

considerations to be taken into account in determining the levels of emission performance that 

reflect the BSER. For additional response to concerns about remaining useful life, and about

stranded assets, see the response to comments 1 and 2 in RTC chapter 4.7.2.

The subcategory-specific emission performance rates and state goals in the final emission 

guidelines are achievable. Since proposal, the EPA has significantly modified its approach to 

defining the BSER and its method of calculating emission performance rates that reflect the 

BSER, as explained in final CPP preamble sections V-VII and in VIII.G. The agency has 

modified the interim goals, including changing the start of the interim period from 2020 in the 

proposal to 2022 under the final guidelines, in response to comments and further consideration. 

The interim period covers the years 2022-2029 and includes illustrative interim emission values

for phasing in emissions improvements during the periods of 2022-2024, 2025-2027, and 2028-

2029. States have the flexibility to use different interim step performance levels than those 

included in the final rule if the state demonstrates in its state plan that the values chosen for the 3, 

3, and 2 year increments are equivalent to the interim goal included in the final rule for the 2022-

2029 period.

Regarding adjustments of state goals, see section VII of the final rule preamble for discussion of

potential state plan adjustments of state goals. See section VIII.G for explanation of why goal 

adjustments (which a commenter termed a “safety valve”) are not warranted for facility-specific 

considerations such as remaining useful life. Also, see CPP final preamble section VIII.G for a 

description of a safety valve for addressing electricity reliability concerns under specified 

circumstances that is included in the final guidelines.

We explain our interpretation of remaining useful life in section VIII of the CPP final preamble 

and Section IX of the Legal Memorandum. We explain there that the guidelines do permit states 

to consider remaining useful life and other facility specific factors. The guidelines are designed 

to permit trading and the creation of interstate emission markets. We view the remaining useful 

life consideration as primarily regarding a concern for facilities with relatively short remaining 

useful lives and the potential that they may be required to install prohibitively costly pollution 

control devices (these guidelines to not impose such a requirement). Nonetheless, the agency 

also conducted a “stranded assets” analysis to determine if commenters’ concerns were correct 

that the rule would force widespread retirements of units with relatively long book lives. As 

explained in Section VIII.B.1 of the CPP final preamble, we found that this need not be the case. 

This of course may depend on how states choose to design their state plans, but it cannot be said 

that this rule requires the result. Insofar as this comment asserts that this rule will necessarily 

effectuate a regulatory taking, see the discussion of the Just Compensation Clause in the Legal 

Memorandum accompanying the final rule.

The following are summaries of the specific public comments under this comment:
144

Commenters said the EPA's building block approach to establishing emission rate requirements 

for states is based on incorrect or inadequately tested assumptions regarding the generation and 

distribution of electricity and the ability of particular sources and electric systems to meet the 

Proposed Rule's ambitious goals. Commenters said to address these problems EPA must permit 

states to adjust their goals as necessary given: 1) the remaining useful life of existing high carbon 

emitting sources; 2) practical impossibilities associated with infrastructure, legal or reliability 

constraints; and 3) the technical achievability of a given strategy as applied to a particular source 

or in the context of a particular set of circumstances. Commenters also said states should have 

the ability to modify goals based on actual achievability.

Commenters said the EPA's proposal has no safety valve for states confronted with physical or 

legal impossibilities, or for states confronted with assumed source efficiency gains that are not 

technically feasible. Commenters said states have the statutory right and obligation to consider 

the remaining useful life of existing sources and protect their enormous capital investment from a 

governmental taking, which EPA's Proposed Rule will compel if not amended. Commenters said 

moreover, EPA's proposal is largely built upon assumptions regarding redispatch and the ability 

of states to mandate new infrastructure and generation activities that are not always true. 

Commenters said the EPA is in no position, on a source-by-source basis, to know: 1) the role 

specific sources play in the community and in the local electrical markets; 2) the practical and 

legal constraints that exist in some places to the construction of replacement generation; and 3) 

the presence or absence of the necessary state law to implement the building blocks. 

Commenters said without giving states flexibility to address source-specific concerns, EPA's 

Proposed Rule may unconstitutionally commandeer state laws and work an unconstitutional 

taking by forcing the retirement of assets backed by decades of multi-billion dollar investment.

Commenters also stated that the final rule must specifically allow states to adjust compliance 

dates for individual generating units based on the remaining useful life of the 

facilities. Commenters also stated that the timelines in the proposed regulation should be 

extended in order to provide sufficient time for development of additional natural gas 

distribution infrastructure (e.g., pipelines).

Commenters said the EPA must give a state the flexibility to establish its own standard of 

performance based on, among other things, the remaining useful life of the existing source to 

which the standard applies, and indicated that the EPA cannot make the state goals rigid prior to 

a state completing its evaluation and drafting its Section 111(d) plan.

Commenters stated, throughout their comments is the recurring theme that EPA's proposed 

building blocks are not achievable in practice. Commenters said, for example, Wisconsin argues 

that EPA did not consider what is achievable in practice for the specific units being controlled, 

when the interactions between building blocks are considered, or when applied to individual 

states.

Commenters stated, EPA must consider all factors specifically dictated to EPA by Congress 

under Section 111(d) when setting the BSER and the resulting emission guidelines. Commenters 

said, these include such factors as cost of achieving reductions and impact on energy 

requirements. Commenters said, a specific example for Wisconsin is their comment which 
145

argues that EPA did not consider the remaining life of coal fired EGUs when considering heat 

rate improvement capability. Commenters said, many of Wisconsin's EGUs considered for heat 

rate improvements under the proposed Clean Power Plan have already been converted to natural 

gas fired boilers or are otherwise slated for retirement in advance of the Clean Power Plan 

compliance date.

Comment 11: The EPA should allow the phase-in of compliance tools over the entire 

compliance period, and propose a compliance path to account for their circumstances. This 

would allow states to take into account remaining useful lives and retrofits and established early 

retirement dates on a timeline that works best for their circumstances.

Response 11: The EPA has modified the interim goals in response to comments and further 

consideration. The interim period covers the years 2022-2029 and includes illustrative interim 

emission values for the periods of 2022-2024, 2025-2027, and 2028-2029. States have the 

flexibility to use different steps than those included in the final rule if the state demonstrates in 

its state plan that the values chosen for the 3, 3, and 2 year increments are equivalent to the 

interim goal included in the final rule for the 2022-2029 period. See section VII of the final rule 

preamble for discussion of the statewide goals.

For additional response to this comment, see response to comment 10 immediately above and to 

comments 1 and 2 in section 4.7.2.

The following are summaries of the specific public comments under this comment:

Commenters said if interim goals are adopted, they should take into account the remaining useful 

life of existing facilities, recent environmental retrofits, and established early retirement dates, 

and one way this can be achieved is by allowing the phase-in of compliance tools over the entire 

compliance period.

Commenters said as states contemplate ways to achieve the proposed interim goals, the lack of 

available compliance options may lead them to simply require the retirement of coal resources to 

achieve compliance. Commenters said however, there are several reasons why this approach is 

contrary to Section 111(d) of the Clean Air Act, which requires recognition of the remaining 

useful lives of resources, as well as other provisions of the Clean Air Act which may require the 

installation of major environmental controls or may have resulted in established retirement dates 

for specific resources. Commenters said to remedy this, EPA should allow states to tailor their 

interim goals for their unique circumstances, or, at a minimum allow the phase-in of compliance 

tools over the entire compliance period.

Commenters said in part to address issues related to the interim goals, EPA solicits comment in 

the NODA on two specific adjustments to the interim goal calculations, aimed at allowing a 

more gradual phase-in of building blocks 1 and 2 during the 2020-2029 period. Commenters said 

first, EPA proposes that a phase-in schedule could be developed for building block 2 on the basis 

of whether, and to what extent, additional infrastructure improvements are needed to support 

increased deployment of natural gas-fueled generation. Commenters said second, EPA proposes 

that it could take into account the book life of generation assets, including the book life of major 
146

upgrades to the asset in determining the appropriate glide path. Commenters recommended that 

EPA allow states to phase-in all of the tools it chooses to use for compliance over the entire 

2020-2029 compliance period, and said that EPA should not prescribe nor preclude any of these 

approaches.

Commenters said the EPA should not attempt to develop standard or simplified assumptions to 

account for each state's need for additional natural gas infrastructure or the remaining book life 

of assets in each state. Commenters said rather, EPA should allow states to propose a compliance 

path to account for their circumstances, which may include, among other things, the need for 

natural gas infrastructure development, existing lives of generation assets, and approved 

settlements for coal resource retirements. Commenters said preserving this flexibility would 

allow states to take into account remaining useful lives and retrofits and incorporate compliance 

plans for other environmental programs on a timeline that works best for their circumstances 

while still meeting the 2030 goal.

Comment 12: States should have ability to adjust state goals and determination of acceptable 

performance to account for changes in load characteristics arising from shifts in demographics, 

productivity, and economic growth

Response 12: See response 11 above.

Regarding the comment on the potential for economic growth to increase emissions, the agency 

notes that the emission guidelines allow states to adopt rate-based regulatory approaches that 

limit emissions per unit of generation by affected sources. Also, the agency observes that zeroemitting electricity generation and increases in energy efficiency can meet electricity demand in 

a growing economy without increasing carbon emissions from electricity generation.

The following are summaries of the specific public comments under this comment:

Commenters said states should have the ability to adjust state goals and determination of 

acceptable performance to account for changes in load characteristics arising from shifts in 

demographics, productivity and economic growth. Commenters said for example, for purposes of 

demonstrating achievement, the CPP contemplates fluid year-to-year adjustments to reflect 

measured energy savings attributable to demand-side efficiency efforts, and yet calls for rigid 

adherence to overall reduction goals established at the outset. (See, e.g., Section I (A) (1) (c)). 

Commenters said depending on the interaction of efficiency savings and load growth over time, 

even the successful deployment of planned measures may well produce results that deviate from 

projected reductions. 

Commenters said load growth projections are premised on an array of assumptions regarding 

future conditions that may or may not track the actual course of events. Commenters said in the 

event of stronger than expected industrial production, or greater increases in population, electric 

consumption will outpace projections no matter how well-designed a state plan to limit carbon 

emissions may be or how diligently the measures are implemented. Commenters said conversely, 

even without any planned measures, emissions would be reduced if industrial production 
147

deteriorates, plants close, and state population decreases, but such reductions would be directly 

contrary to the stated goal of supporting a vibrant and growing economy.

Commenters said the EPA requested comment on how the consequences of a deficiency in 

performance should vary depending on the underlying reasons, acknowledging that "a possible 

scenario is that despite successful plan implementation, emissions under the plan turn out to be 

higher than projected at the time of plan approval because actual economic conditions vary from 

economic assumptions used when projecting emission performance." (See Section VIII (B) (2) 

(e)). Commenters said that possibility could arise, for instance, where a mass-based goal is 

established or an emissions approach to measurement is utilized, and actual demand ends up 

exceeding projections due to greater productivity, industrial expansion or new employers 

deciding to locate in the state. Commenters said a state should not be penalized for success in 

achieving better than expected economic growth. Commenters said productivity gains should be 

credited when assessing performance in the same manner and to the same degree that efficiency 

savings are computed.

Commenters said the proposed rule provides no means of modifying the goals to account for 

major new industries or substantial economic development. The commenters said Northwest 

Minnesota may see the development of two large nickel-copper mines and a major steel mill in 

the early 2020s. The commenters said these projects will be going into an economically 

disadvantages area and are sorely needed to maintain a healthy economy in that part of the state. 

The commenters said it would be very difficult, if not impossible, to accommodate these major 

new loads and still achieve the very large reductions in CO2 emissions mandated for Minnesota 

under the rule. The commenters said the rule must provide a mechanism for accommodating the 

effect of substantial new development.

Comment 13: Final rule should allow states to exercise case-by-case flexibility to issue facilityspecific variances and to adjust state targets. States should also have the ability to set emission 

performance standards and develop longer compliance times

Response 13: See Section VII for a discussion of how inventory applicability concerns and state 

goal adjustments may interact. See also response to comment 10 above.

The following are summaries of the specific public comments under this comment:

Commenters said that EPA should give states the ability to adjust not only the emission limits of 

the targets but also the dates for implementation.

Commenters said that the approach of allowing states to exercise their discretion to apply less 

stringent standards and longer compliance schedules to individual facilities or "class of 

facilities," would be permissible under the proposed Clean Power Plan as well as under the 

variance authority of 40 C.P.R. Section 60.24(f). Commenters said further, Birchwood Power 

feels that it is important for EPA to eliminate any confusion by specifically recognizing this 

authority in the final rule or accompanying materials as a viable option to avoid stranding assets. 

Commenters said states are likely to have more comfort adopting such an approach if EPA 

speaks to it directly in the final rule.
148

Commenters said existing IPP coal-fired sources, like the Birchwood facility, are at risk of being 

retired before the end of their useful life, to the detriment of Virginia ratepayers, as well as the 

project's investors, and EPA should use its authority under CAA section 111 (d) and 40 C.F .R. 

60.24(f) to allow states to apply less stringent emissions standards or longer compliance 

schedules due to facility-specific considerations, e.g., unreasonable cost of control resulting from 

plant age, location or basic process design. Commenters said if EPA were to recognize that states 

may utilize the CAA section 111 (d) exemption/variance authority for facility-specific 

considerations and allow the state emission reduction target to be adjusted accordingly, 

reasonable state-specific determinations can be fairly made and single asset entities can be 

protected on a case-by-case basis. Commenters also indicated that in the final rule EPA should 

make it clear that they are not limiting various compliance options, such as emission caps, hours 

of operation limitations or other mechanisms to achieve CO2 reductions.

Commenters said EPA's final rule should allow states to exercise case-by-case flexibility to issue 

facility-specific variances and to adjust their state targets during the variance period accordingly. 

Commenters said states should also have the ability - consistent with CAA section 111(d) and 40 

C.P.R. 60.24(f) - to set emission performance standards and develop longer compliance 

schedules, and indicated that anything other than that would impermissibly encroach upon 

authority the CAA expressly provides the states. 

Commenters said states should be able to make any "case-by-case" exceptions based on factors 

such as: (l) unreasonable costs of control resulting from plant age, location, or basic process 

design; (2) the physical impossibility of installing necessary control equipment; or (3) other 

factors specific to the facility (or class of facilities) that make application of a less stringent 

standard or final compliance time significantly more reasonable.

Comment 14: Final rule should allow states to adjust both emission performance goals and the 

dates those goals would be implemented; in Florida the cost of CPP could be reduced by >50% 

by avoiding stranded assets; Florida

Response 14: The CO2 rates and state goals in the final emission guidelines are achievable. The 

EPA has modified the interim goals in response to comments and our further consideration. The 

interim period covers the years 2022-2029 and includes illustrative interim emission values for 

the periods of 2022-2024, 2025-2027, and 2028-2029. States have the flexibility to use different 

interim step performance levels than those included in the final rule if the state demonstrates in 

its state plan that the values chosen for the 3, 3, and 2 year increments are equivalent to the 

interim goal included in the final rule for the 2022-2029 period.

See section VII, of the final rule preamble for discussion of the statewide goals and potential 

adjustments.

For response to concerns about stranded assets, see the response to comment 1 in RTC chapter

4.7.2.

The following are summaries of the specific public comments under this comment:
149

Commenters said that Florida and other states should be given the flexibility to address stranded 

costs by being allowed to adjust both emission performance goals and the dates those goals 

would be implemented. Commenters said that the costs of the CPP to their consumers could be 

reduced by over 50% by avoiding stranded assets.

Commenters said that to comply with the FUA of 1978, many Florida utilities were forced to 

cancel planned gas-fired units and replace them with coal-fired units. Commenters said that their 

utilities spend over $2 billion to upgrade the units to meet CAIR and CASPR, as well at the 

MATS rule, and the majority of their coal units carry significant debt and will not reach the end 

of their expected useful life before the implementation of the CPP. Commenters said the 

proposed regulation would result in significant stranded costs to their utility customers, which 

will be reflected in increased electric rates.

Commenters said while Florida consumer-owned utilities produce about 20% of the state's 

energy, they produce about 44% of coal-fired energy. Commenters said if EPA allows states to 

delay the implementation of the proposed ESPS to avoid stranded assets, we estimate that the 

costs of the CPP to FMEA utility customers could be reduced by over 50%. Commenters said the 

CPP should provide sufficient flexibility to states to adjust both emission performance goals and 

the dates those goals would be implemented.

Comment 15: States must have flexibility to adjust emission targets to avoid being locked into 

an approach that does not achieve the most desirable emission reductions and that does not 

account for circumstances that will change between now and the ultimate 2030 target date. EPA 

should ensure that procedures for plan modification requests by states are not onerous

Response 15: See section VII of the final rule preamble for discussion of when states may 

change their goals. Also see section VIII for discussion of state plans.

The following are summaries of the specific public comments under this comment:

Commenters said because power generation and distribution in California involve so many 

different moving parts, from weather patterns to complex energy delivery systems, it is 

paramount that California retain its current flexibility to achieve its commitments under the 

proposed EPA Clean Power Plan by responding to changing conditions as it works towards the 

target reductions set by EPA. Commenters said an EPA rule that eliminates such flexibility could 

have the unintended consequence of locking California into an approach that does not achieve 

the most desirable emission reductions and that does not account for circumstances that will 

change between now and the ultimate 2030 target date.

Commenters said states should not be locked into a particular path in their initial submissions 

where circumstances may later warrant a different approach. Commenters said hence, during the 

interim period and after 2030, states should retain the ability to alter their previously-approved 

plans to take new and significant factors into account, subject to showing that the states will 

achieve the necessary CPP targets. Commenters said the EPA appears to adopt this approach in 
150

its proposal, see 79 Fed. Reg. at 34,917, 34954, proposed section 60.5785, but should ensure that 

procedures for plan modification requests by states are not onerous and that the Agency will be 

flexible itself in accommodating those requests. Commenters said for example, EPA should 

expressly recognize that economic conditions may exist in the future which may change 

assumptions and estimates regarding power generation, emissions and costs, just as it has when it 

considers situations where actual emissions performance may not meet state goals. See 79 Fed. 

Reg. at 34,907-908 (recognizing that actual economic conditions may vary from economic 

assumptions used when projecting emissions performance and seeking comment on what 

consequences should follow if actual emissions exceed estimates).

Comment 16: The EPA should allow states to adjust their baseline and goals, especially any 

mass limits, in the future to reflect unexpected changes in the power sector. Without such 

adjustments, regional distortions in dispatch of generation may occur.

Response 16: See response 15 above.

The following are summaries of the specific public comments under this comment:

Commenters said that EPA should allow states to adjust their goals in the future to reflect 

unexpected changes in the power sector. Commenters said state power sectors may undergo 

profound, unexpected changes after state plans are developed, such as reduction in hydropower 

generation due to a major drought, increased electrical demand due to unanticipated economic 

growth, or changes in state laws regarding RE and EE programs. Commenters said the EPA 

should allow states to adjust their baselines and goals to ensure that state goals are as reasonable 

and flexible as possible and take changes to the power sector into consideration. Commenters

said this issue is especially important for states that choose to comply via a mass cap. 

Commenters said given the impossibility of accurately predicting anything a decade into the 

future, it is essential that EPA allows these states the option of adjusting their mass-based goals 

if the projections of energy demand or generation made when crafting the plan prove to be 

inaccurate.

Commenters said in addition to making it more difficult for a state to comply with a no-longerappropriate mass limit, failure to adjust mass limits could lead to serious distortions in dispatch 

of generation within a region and make it challenging for neighboring states to meet their own 

limits. Commenters said this problem would likely be most severe when neighboring states 

comply with different types of goals (i.e., mass- versus rate-based). Commenters said for 

example, if one state has an overly restrictive mass cap and a second state, a neighbor of the first, 

complied via a rate-based standard, dispatch might be diverted to the second state rather than in 

the state who’s EGUs were approaching their mass caps. Commenters explained this would 

require the second state to take additional, unplanned measures (RE, EE, etc.) to balance the 

increased CO2 emissions and comply with their rate-based goal and may not lead to lower CO2 

emissions overall.
151

Commenters said ideally, EPA would allow states to adjust their baseline and goals at any time 

when they can demonstrate a reasonable need to do so. Commenters said however, at a 

minimum, EPA should allow states to either adjust their goals periodically or demonstrate that 

their goals are still appropriate. Commenters said Wisconsin successfully followed a similar 

approach to implementation of NOx allocations under the Clean Air Interstate Rule (CAIR) and 

found that reallocating NOx allowances within our budget every five years provided additional 

certainty to utilities and allowed them to meet more reasonable limits.

Comment 17: State should be able to modify targets and plan to reflect increased usage of 

existing NGCC units that offset permanent closure of out-of-state coal-fired EGUs

Response 17: See section VII of the final rule preamble for discussion of when states may adjust 

their goals. 

EPA took a regional approach to quantifying BSER in this final CPP. The NGCC rate derived 

reflects the expected increase in generation from NGCC block 2. See response 15 regarding 

adjustments.

The following are summaries of the specific public comments under this comment:

Commenters indicated that power plant decisions affecting a coal EGU in another state can affect 

NGCC operations in a given state, and this has implications for state plans and emission 

reduction targets. 

Commenters explained that for instance a major coal fired power plant in Colstrip in Montana 

could potentially partially or completely cease operation over the next 10 years. Commenters

said that because all three of Washington's investor owned utilities own part of the plant, it is 

likely that their share of the generation capacity of this plant would be offset at least partially by 

existing combined cycle power plants located in Washington and Idaho. Commenters explained 

that as existing combined cycle power plants ramp up, they could contribute extra emissions 

resulting in a higher lbs/MWh final emission rate, even though combined emissions from 

Washington and Montana would in fact decrease. Commenters suggested that the EPA allow a 

state to modify its approved state plan and recalculate its emission standard to reflect the 

increased usage of existing NGCC units that offset the permanent closure of out of state coal 

EGUs. Commenters indicated this would minimize the inherent penalty a state would face while 

remaining consistent with the overall goal of the proposal to ensure that greenhouse gases 

nationwide, not just within individual states, are reduced.

Comment 18: The EPA must clarify in the final regulation that states can modify compliance 

plans even if they are meeting goal

Response 18: See section VIII.B. of the final rule preamble of the CPP for the EPA’s response 

to this comment.
152

The following are summaries of the specific public comments under this comment:

Commenters stated that the EPA must clarify that states are not limited to modifying plans only 

to address the failure of a plan element to perform as projected. Although the preamble clearly 

states that States can seek EPA approval for modified plans, the proposed regulation as written 

could be read to limit states' ability to propose modifications only where a modification is 

necessary in order to ensure that the emission performance goals will be met. Commenters

referred to proposed 40 C.F.R. Section 60.5785, 79 Fed. Reg. at 34,954 ("If one (or more) of the 

elements of the state plan set in Section 60.5740 require revision with respect to reaching the 

emission performance goal set in Section 60.5765 a request may be submitted to the 

Administrator indicating the proposed corrections to the state plan to ensure the emission 

performance goal is met.").

Commenters stated that 79 Fed. Reg. 34,917 allows for states to propose modifications to 

approved plans to update or alter existing enforceable measures or add new enforceable 

measures. Commenters stated this is an important state flexibility as it allows states to address 

changing circumstances over the long life of compliance. Commenters stated it is not likely that 

plans developed in 2016 would reflect the emission reduction options available in 2025, nor 

could they. Commenters stated plans developed in 2016 also may not be able to appropriately 

address the requirements of the interconnected power system in the future. Also, commenters 

stated the implementation of the Building Blocks simultaneously will require fundamental 

changes in how the power system is operated and planned---many of these changes cannot be 

anticipated at the time state plans are submitted and before implementation has begun. 

Commenters stated new generation or energy storage technologies that provide a cleaner, more 

reliable or cost effective path to achieve the 2030 goals should be allowed to replace existing 

elements of the state compliance plan. Commenters stated as EPA notes, as long as states can 

continue to demonstrate that plans are designed to achieve the 2030 goals, states should be able 

to propose modifications. [79 Fed. Reg. at 34,917 ("During the course of implementation of an 

approved state plan, a state may wish to update or alter one or more of the enforceable measures 

in the state plan, or replace certain existing measures with new measures. The EPA proposes that 

the state may revise its state plan provided that the revision does not result in reducing the 

required emission performance for affected EGUs specified in the original approved 

plan.")]. Commenters stated the EPA should clarify the proposed regulation accordingly.

Comment 19: Some sort of safety valve should be provided for states unable to fully comply 

with performance requirements

Response 19: See section VIII.G. of the final rule preamble of the CPP for the EPA’s response 

to this comment.

The following are summaries of the specific public comments under this comment:

Commenters stated that State Implementation Plans should be allowed to include some sort of 

off-ramp or safety valve to guard against unforeseen impacts on reliability and 

cost. Commenters stated the safety valve provision would apply to those states that - despite 

their best efforts- cannot fully comply with the performance requirements. Commenters said 

safety valve modifications could take the form of a relaxation of the performance requirements, 
153

exemptions for must run or critically needed units, or extension of time to meet the 2030 

requirement. Commenters stated that because the approach used to develop BSER is untested, 

the rule must contain such flexibility.

Commenters said the IPM model is inadequate to fully assess system reliability impacts, and 

the EPA should include flexibility in the final rule for states and utilities to continue to utilize 

existing resource and transmission planning processes and tools to ensure reliability is not 

compromised as a result of complying with EPA's Clean Power Plan. Commenters said in the 

event impacts to reliability are predicted, states should be allowed the flexibility to incorporate 

mitigation measures, including the time to implement such measures, into their state plans. 

Commenters said if reliability impacts are encountered during implementation of state plans, 

EPA should allow a reliability safety valve or variance process that suspends compliance for 

those states or entities which make adequate demonstrations.

Commenters said that states should be allowed to incorporate safety values into their state plans 

that allow deviations from the state plan to address situations where increases in the cost of 

electricity exceed a certain amount. Commenters indicated that Missouri law requires the Air 

Conservation Commission to consider, among many other factors, the consumer impacts of 

applying an emissions standard and compliance schedule to an affected source, including any 

disproportionate electric rate impacts on low income populations. Commenters indicated the 

regulation should allow States to consider such economic factors and extend deadlines or adjust 

target goals as needed to avoid excessive increases in electricity rates.

Commenters said states should be granted a structured exemption to allow emissions in excess of 

their target levels for a declared emergency period such as 2014 Polar Vortex, a major nature gas 

transmission outage, or a long-term forced outage of a zero-emissions resource.

Comment 20: The EPA should establish an appropriate "safety valve" mechanism to adjust the 

stringency of the program if the assumptions relied upon in setting the goal prove not to be true 

or have changed due to unexpected circumstances. There also needs to be a mechanism to adjust 

for the shutdown of existing nuclear plants when their license extensions expire or other major 

energy development that may increase the carbon intensity of a state's generating fleet.

Response 20: See section VIII.G. of the final rule preamble of the CPP for the EPA’s response 

to this comment.

The following are summaries of the specific public comments under this comment:

Commenters said the Proposed Rule takes the position that the emission goals are binding on the 

states, and that once finalized, states may not adjust the goals to make them less stringent.

Commenters said the number of assumptions made by EPA in calculating state goals, and the 

sensitivity of the goal to these assumptions, as well as the potential for force majeure events, 

dictates the need for an adjustment mechanism.

Commenters said the EPA's state emissions goals are based on numerous assumptions and 

projections about the amount NGCC capacity, RE, nuclear energy, and EE that states and EGUs 
154

could implement in over the next 15 years. These commenters said it is very unlikely that any 

state can make all necessary corrections to these assumptions during the rulemaking process. 

These commenters said in addition, the achievability of the goals is also subject to numerous 

implicit assumptions about new transmission and pipeline capacity, technology improvement, 

and, in the case of mass-based goals, limits on demand growth. These commenters said the sheer 

number of assumptions, and the sensitivity of state emission targets to these assumptions 

virtually guarantees that EPA's projections about what might be achievable for EGUs in any 

given state could be significantly incorrect. These commenters said finally, force majeure events, 

including unanticipated regulatory, weather, or other events outside the control of a state's EGUs 

could significantly disrupt a state's or EGU's ability to meet its emission target. These 

commenters said for example, an earthquake or hurricane could lead to the extended shutdown of 

a large base load nuclear facility; similarly a large, unexpected cold-weather event (similar to last 

winter's Polar Vortex) could constrain natural gas supplies and disrupt a state's plan to redispatch significant generation from coal to NGCC units.

Commenters said the EPA should establish an appropriate "safety valve" mechanism to adjust 

the stringency of the program if the assumptions relied upon in setting the goal prove not to be 

true or have changed due to unexpected circumstances. Commenters also said the final rule 

should establish an adjustment mechanism under which the EPA, on the basis of an application 

from a state, could (without having to reopen the rule) allow states to reflect a change in the 

underlying state goals. Commenters said changes could include decreasing the stringency of the 

emissions rate goal or extending the compliance deadline for a particular state in order to 

mitigate any significant adverse reliability effects or to reflect changed circumstances that cannot 

feasibly be offset by other actions within control of the state.

Commenters stated that EPA proposes to finalize the goal for each state as provided in the 

Proposed rule, but the EPA stated that adjustments to the goal may be appropriate based on 

comments that implementation of the building blocks at the levels envisioned by EPA is 

technically infeasible or too costly. The commenters stated that the state emissions goals are 

based on numerous assumptions and projections on the future levels of NGCC generation, RE, 

and EE states and EGUs could implement in over the next 15 years. They also stated that the 

achievability of the goals is also subject to numerous implicit assumptions about new 

transmission and pipeline capacity, technology improvement, and, in the case of mass-based 

goals, limits on demand growth. The commenters recommended that the EPA establish an 

appropriate mechanism to adjust the stringency of the state emission goals if the assumptions 

relied upon in setting the goal for a particular state prove not to be true or have changed due to 

unexpected circumstances.

Commenters said states should have broad discretion to make any changes to their plans so long 

as they achieve the minimum applicable state emission rate goal - the minimum federal 

requirement. Commenters said providing states with flexibility to adjust their compliance plans 

will allow states to respond to future constraints while minimizing cost and reliability impacts to 

electric customers.

Commenters said in addition, there needs to be a mechanism to adjust for the shutdown of 

existing nuclear plants when their license extensions expire or other major energy development 

that may increase the carbon intensity of a state's generating fleet. Commenters added that 
155

adjustment should also be allowed to account for an order by another federal agency or during 

drought 

Comment 21: States should have the authority to increase emission rates because of new fossil 

fuel fired generation added during the time period January 1, 2012 through January 2014.

Response 21: See section VII of the final rule preamble of the CPP for more information about 

when a state may adjust its goals. The EPA has incorporated fossil fuel units that commenced 

construction prior to January 8, 2014 in its quantification of BSER. These values are also 

incorporated into the conversion to state and mass goals. Therefore, EPA does not believe a state 

would have the need to make any further adjustments on this front.

The following are summaries of the specific public comments under this comment:

Commenters said the draft guidelines appear to create a window between January 1, 2012 and 

January of 2014 where new generation can come on-line and the state not receive recognition for 

higher levels of emissions. Commenters said generation that came on line during that period is 

not fully reflected in the baseline year. Commenters said additional emissions during that period 

because of the plant will have to be fully absorbed by the state and the other generators - those 

conditions could not have been foreseen even two or three years earlier. Commenters suggested 

that the final regulation should allow states to increase emission rates because of new fossil fuel 

fired generation during this unaccounted period.

Comment 22: Goal adjustment should be allowed for more than just demonstration of increased 

cost.

Response 22: See section VII of the final rule preamble for discussion of how states can adjust 

their goals. 

The following are summaries of the specific public comments under this comment:

Commenters indicated that overall achievability, and not just cost, should be allowed to be 

considered in determining the need for target modification. Other commenters suggested that 

goals should be allowed to adjust based on other factors.

Commenters stated that as written, the rule indicates that EPA will only modify a proposed 

target upon a showing that the cost to comply was significantly higher than that proposed by 

EPA. Commenters contended that overall achievability that does not adversely affect reliability 

is perhaps an even greater factor than just increased cost. Commenters stated overall 

achievability can include matters such as: feasibility and effectiveness of a measurement and 

verification protocol for EE; time needed to construct major transmission upgrades, regulatory 

approvals needed to ensure timely cost recovery of efficiency improvements at power plants; 

marketing of EE program, and the deployment and siting of new natural gas infrastructure and 

renewable resources. Commenters stated that the proposed evidentiary burden for target 

modification in the proposed rule is too narrowly drawn and should be expanded to include more 

than just significantly increased costs.
156

Commenters said that as required by the statue and existing regulations, States must be granted 

flexibility in establishing state goals that include goal adjustment based on state-specific or 

unforeseen circumstances as well as consideration of specific facts applicable to designated 

facilities including remaining useful life. Commenters indicated that the EPA allow states an 

opportunity to file for relief and for a change to interim or final goals if necessary, based upon 

changed circumstance or good cause shown.

Commenters recommended that the EPA set guidelines allowing each state the flexibility to 

tailor the requirements to address the unique characteristics of its energy infrastructure and 

maintain fuel diversity. Commenters also said that the guidelines must respect the primacy of 

the states by allowing states to develop plans that establish performance standards and discretion 

and flexibility in establishing compliance mechanisms.

Commenters stated that the EPA should allow states to modify their plans if they wish to do 

so. Commenters indicated that they expected that states may wish to amend their plans so they

can continue achieving the most cost-effective emissions reduction possible, especially if new 

technologies become economically viable during the implementation period.

Commenters indicated that when economic conditions have changed substantially, or if growth 

assumptions have resulted in underestimating CO2 emissions due to robust economic activity, 

states should be eligible to revise state plans to more accurately reflect program costs and

performance, and to reflect current conditions.

Commenters indicated that in the event of a fundamental change in system configuration the 

EPA should allow states to adjust their goals. According to commenters such changes could 

result from unforeseen and unavoidable loss of zero CO2 emitting generation resulting from 

nuclear or RE EGUs shutting down due to circumstances beyond anyone's control such as due to 

earthquake or tornado. Commenters indicated that such adjustments would be necessary due to 

the higher fossil fuel consumption that would be required for some time as the system increases 

generation from existing power plants to continue to ensure reliability in the absence of a 

significant amount of energy and capacity.

Comment 23: The EPA should include an explicit mechanism for updating state goals after rule 

is finalized.

Response 23: See response 22 above. 

The following are summaries of the specific public comments under this comment:

Commenters said that the goals set by the EPA may need to be changed after each state has had 

an opportunity to conduct a state-specific analysis. Commenters stated that EPA should include 

an explicit mechanism for updating state goals after the final rule. The commenters noted that 

EPA's state goals are based on numerous questionable assumptions and projections about the 

amount of heat rate improvements, NGCC capacity, renewable energy, nuclear energy, and 

energy efficiency that states and EGUs could implement in the future. The commenters stated 

that the achievability of the goals is also subject to numerous implicit assumptions about new 
157

transmission and pipeline capacity, technology improvement, and, in the case of mass-based 

goals, limits on demand growth. The commenters stated that the sheer number of assumptions, 

and the sensitivity of state emission targets to these assumptions virtually guarantees that EPA's 

projections about what might be achievable for EGUs in any given state could be significantly 

incorrect. The commenters stated that force majeure events, including unanticipated regulatory, 

weather, or other events outside the control of a state's EGUs could significantly disrupt a state's 

or EGU's ability to meet its emission target. The commenters noted that for example, an 

earthquake, hurricane, or cyber-attack could lead to the extended shutdown of a large baseload 

nuclear facility; similarly a large, unexpected cold weather event (similar to last winter's Polar 

Vortex) could constrain natural gas supplies and disrupt a state's plan to redispatch significant 

generation from coal to NGCC units. The commenters stated that despite the substantial 

likelihood that the assumptions underlying EPA's determination of state goals will turn out to be 

significantly incorrect, EPA has failed to provide an explicit mechanism for adjust state goals to 

address unanticipated difficulties in meeting the goals. The commenters stated that if EPA 

persists in requiring state emission rates to be no less stringent than the EPA guideline, EPA 

should provide an explicit mechanism for states to request a change to their emission target after 

finalization of the Proposed Rule. The commenters stated that EPA should also include a specific 

safe harbor mechanism for states and EGUs that would excuse their failure to meet the federal 

goal in cases of force majeure.

Comment 24: Flexibility for unforeseen circumstances, as it relates to RGGI

Response 24: The EPA maintains that the final rule provides ample flexibilities to states. States 

are allowed to use the BSER measures, or other measures in their state plans to comply with the 

goals; there are flexibilities within the BSER measures and how they are executed; and states 

also have non-BSER measures at their disposal. See sections V.A and VIII.A of the final rule 

preamble of the CPP for more information.

The following are summaries of the specific public comments under this comment:

Commenters said that in several sections of the proposed rule EPA uses the Regional 

Greenhouse Gas Initiative (RGGI) as an example of how a multi-state or mass-based approach to 

reducing emissions can be successful and economically sustainable, and the EPA indicates that 

RGGI participation may be used as a component of a state's or region's compliance 

plan. Commenters stressed that membership in RGGI is voluntary, and is a cooperative effort 

between member states. Commenters said that the EPA has not considered the possibility that a 

member state may withdraw from the group at any time, and thereby alter the effectiveness of 

the compliance plan for the remaining members. Commenters asked "If the actions required of 

members are part of an enforceable compliance plan, and the region or group is thrown out of 

compliance by the action of one member state, would the remaining member states then be 

subject to federal enforcement action, despite the fact that the non-compliance was due to action 

by a different state." 

Commenters indicated that the EPA must incorporate provisions into the final rule to allow states 

the flexibility necessary to respond to unanticipated circumstances. Commenters stated that 
158

flexibility is needed in cases where markets are impacted by extreme weather events, fuel 

shortages or other events beyond the control of states or sources, and that provisions are needed 

to avoid conflicts between a mandate for compliance and the necessity of assuring continued 

reliability of the electric power grid. Commenters indicated that providing a framework for states 

to develop compliance plans that incorporate sufficient flexibility is an essential component of 

the future stability and reliability of power grid operations. Commenters stated that the proposed 

rule must acknowledge that factors beyond a state's control may affect compliance, and must 

provide a mechanism to allow states sufficient flexibility to respond to such circumstances.

Comment 25: To simplify the adoption of Regional Greenhouse Gas Initiative (RGGI) as a 

compliance mechanism for CPP, final rule should contain a reset provision similar to that in 

RGGI program.

Response 25: The EPA is finalizing subcategory-specific emission performance rates, ratebased, and mass-based state goals as explained in sections VI and VII of the final rule preamble.

The following are summaries of the specific public comments under this comment:

Commenters said to simplify the adoption of RGGI as a compliance mechanism, the final rule 

should contain a reset provision similar to that in the RGGI program.

Commenters said the RGGI states constructed the program at the outset with the understanding 

that any pioneering effort could require change over time. These commenters said for this 

purpose, the original agreement among the states called for a program appraisal, or "reset", at 

specific time intervals, and said the reset provision was intended to ensure that the program could 

adjust to changing circumstances and forestall unintended consequences. These commenters said 

in the reset process completed in 2013, for instance, a series of public and transparent studies 

revealed that the original emissions cap (and associated allowance budgets) was no longer 

relevant to the circumstances "on the ground" due to extensive natural gas use, successful energy 

efficiency and renewable energy programs, and economic shifts. These commenters said these 

same studies indicated that in order for the emission allowance price to have an effect on 

generator decision-making, a process for bringing banked allowances into the marketplace was 

needed. These commenters said these and other changes to the program were executed in all the 

participating states during a two-year process.

Commenters said similarly, EPA should recognize in its final rulemaking that there are changes 

in the electric power market that are unforeseen at the present time, and that states that adopt a 

mass-based Existing Source Performance Standard compliance approach should be provided 

with an opportunity to revisit the mass-based cap chosen in their state plans on a periodic basis. 

These commenters said for example, the feasibility of electric transportation may improve 

dramatically with specific advances associated with battery technology, and in such a case, 

electric demand could increase significantly even as economy-wide emissions may plummet. 

These commenters said RGGI states should have an opportunity to revisit their electric sector 

emission caps to respond to such an environmentally-positive development. These commenters 

said in the same manner, sudden changes in natural gas prices, or the unexpected loss of a 
159

significant portion of the nuclear generation fleet may lead to a need to reset the carbon dioxide 

emission cap to avoid unsustainably high power price impacts. These commenters said finally, a 

change in the number of states participating in the RGGI program may trigger a recalibration of 

the program so that it continues to serve as a 111(d) compliance mechanism; the EPA should 

recognize that this outcome is also unforeseen at the present time.

Comment 26: Small electric providers

Response 26: Small electric providers are subject to the same source category rates as all other 

providers if they meet applicability criteria established in Section IV.D. However, states have the 

flexibility to distribute reductions among its EGUs in the manner it best sees fit. Please see 

section XII.C. of the preamble for more information regarding the impact to small entities.

The following are summaries of the specific public comments under this comment:

Commenters indicated small electric providers have special considerations.

Commenters said that in June 2011, EPA convened a Small Entity Representative (SER) panel 

with respect to its rulemaking on NSPS for new and existing units. Commenters indicated that 

this process was held pursuant to the requirements of the Small Business Regulatory

Enforcement and Fairness Act (SBREFA), which is intended to provide small businesses 

flexibility in meeting federal regulations. Commenters said that though this process was not 

completed by EPA in 2011, Commenters filed comments that are relevant in this proceeding. 

According to commenters, more than 90 percent of public power utilities qualify as small 

businesses under SBREFA. Commenters indicated that they also offers these comments for 

review under the Regulatory Flexibility Act (RFA) and calls for consideration by the EPA, as 

well as by state agencies, of the many special governance issues, bond, debt management, and 

local governmental obligations that are to be considered under the RFA.

Commenters stated that the rule must provide the flexibility necessary to ensure that small 

electric providers - most of which are cooperatives or municipal systems that tend to have very 

small generation fleets largely dependent on a single plant - have compliance options that are 

achievable, to avoid putting them at a disadvantage. Commenters suggested that state agencies 

may want to set up subcategories or special practices and other measures to address unit 

concerns, and in particular, those utilities with small single units. Commenters said that these 

should include unit-by-unit determinations by state agencies that factor the size of unit, age, 

remaining useful life, and feasibility of the reduction measures since they cannot easily 

accomplish the reduction goals. Commenters said that in addition to the pollution reduction 

methods, state agencies should allow for reasonable methods of monitoring and verification for 

energy efficiency to avoid measures that are very burdensome and/or expensive for very small 

utilities. Commenters pointed to the analysis provided by Professor Bradford Cornell for FTI 

Consulting that addresses the unique impacts of CO2 reduction measures for public power 

(municipal and electric coop) as well as some other for profit utilities.

Commenters stated that, instead of allowing states to conduct a unit-by-unit analysis to determine 

what they can reasonably achieve in emission reductions, the EPA proposed to establish 
160

statewide goals that assume all sources can achieve the goal. The commenters explained that, if 

the state determines that a cooperative or other utility cannot achieve the prescribed goal, other 

utilities would need to make up the difference, and that this removes any incentive for a state to 

fairly evaluate what an individual utility could achieve and set its requirement accordingly.

Commenters indicated that specifically, the EPA needs to be aware of the fact that there are 

numerous small municipal systems that have only one generation resource under 100 MW today. 

Commenters said that the implications for those communities under the Proposed Rule are 

particularly grave as those municipal systems do not have the flexibility to rely on other units. 

Commenters indicated that since Section 111(d) calls for the consideration of compliance costs, 

the EPA must take into account the unique impacts that any final rule will have on public power 

utilities owning only coal-fired power plants. Commenters also suggested the EPA review 2014 

paper written by Professor Bradford Cornell, for FTI Consulting, regarding the potential impacts 

to public power, rural electric cooperative utilities, and other utilities as a result of a regulatory 

system with no effective control technologies or other options to reduce CO2 economically. 

Commenters indicated that large utilities generally own numerous jurisdictional EGUs, and 

this variety of ownership in their generating fleet presents other advantages that small utilities 

simply cannot employ. Commenters indicated that for example, they can implement both plantwide and fleet-wide measures to achieve emission reduction requirements. Commenters stated 

that moreover, large utilities with multiple plants within their fleet can maintain flexibility to 

meet load from certain resources when output for jurisdictional resources is necessarily reduced 

when achieving required emissions reductions. Commenters indicated that because of these 

difference, states should be permitted and encouraged to shape their respective SIPs in such a 

way that assists small utilities to provide them with flexibility in implementing the Proposed 

Rule that is already inherent in large utilities' ability to implement the Proposed Rule. 

Commenters said that increased flexibility will not soften the requirements of the Proposed Rule, 

but will instead afford the states the authority to revise certain requirements in addressing special 

considerations unique to small utilities.

Commenters said the EPA established four "building blocks" as their interpretation of the BSER 

which will be difficult for the cooperatives to meet. Commenters said that, even though the 

reduction goals vary considerably, the requirements give the states little leeway on how to 

achieve the EPA's goals. Commenters said the rural electric cooperatives' limited generation

portfolio will be unable either cost-effectively implement or technically achieve the building 

blocks because of their reliance on coal-fired generation, and other practical realities limit 

cooperatives. 

Commenters stated that, EPA has significant flaws in each of the building blocks that negate the 

EPA's perceived flexibility. Commenters said that, EPA needs to recalculates the goals for each 

state based on what building blocks each state can achieve. Commenters said this recalculation 

will help mitigate some of the changes faced by cooperatives and other utilities.
161

Comment 27: Unique challenges faced by small municipal utilities warrant adjustments to 

proposed rule – the EPA must recognize states role in establishing targets and must limit BSER 

to the source-specific technological and operational measures that Congress contemplated.

Response 27: Small municipal utilities are subject to the same final goals as all other utilities. 

Please see section XII.C. of the preamble for more information regarding the impact to small 

entities.

The following are summaries of the specific public comments under this comment:

Commenters said the challenges faced by small municipal utilities can be minimized by allowing

states a role in developing emissions targets. Commenters said as a small municipal utility 

whose principal generating resource is a single coal fired unit (Sherco 3) in which it owns only a 

minority stake, Southern Minnesota Municipal Power Agency (SMMPA) faces unique obstacles 

in complying with EPA's proposed Clean Power Plan while still providing its customers an 

affordable supply of energy. Commenters said as drafted, the Proposed Rule will likely result in 

either the curtailment or shutdown of Sherco 3, which has historically provided approximately 

2.5 million MWh of base load generation to SMMPA's members on an annual basis. 

Commenters said the curtailment or shutdown of Sherco 3 would, at best, severely hamper 

SMMPA's ability to provide affordable power to its customer base and, at worst, frustrate that 

ability entirely. Commenters said these outcomes can best be minimized, or possibly avoided 

altogether, by recognizing the States' assigned role in the process of establishing and applying 

standards of performance to existing sources and by limiting BSER to the source-specific 

technological and operational measures that Congress contemplated and EPA has long 

recognized

Comment 28: States must be able to update the mass goal based on the rate-to-mass conversion, 

if demand increases differently than projected

Response 28: The EPA is finalizing mass goals as explained in section VII of the preamble.

The following are summaries of the specific public comments under this comment:

Commenters supported the concept of being able to convert from rate to mass to establish the 

state goal. Commenters said that projecting the demand for electricity in a state 20 years from 

now cannot be done with accuracy - technology and electricity demand can change quite 

dramatically over such a long horizon. Commenters said that for this reason and others, there 

may be hesitation to adopt a rate-to-mass goal conversion. Commenters said that if there is a 

provision for a mass-based goal conversion there must also be an ability to update the mass goal 

based on the conversion, should the demand for electricity increase differently than projected.

Comment 29: Determination of RE potential and ability of states to alter their renewable energy 

goals.

Response 29: The EPA has revised the proposed goals taking into consideration several RE 

adjustments brought up by commenters. See section V.E. of the final rule preamble of the CPP 
162

for more information about the changes to Building Block 3 and the CO2 Emission Performance 

Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP for how the final 

goals were calculated.

The following are summaries of the specific public comments under this comment:

Commenters said that that there are significant logistical issues associated with adding new 

renewable resources which may preclude states from meeting the proposed goals. To address this 

uncertainty Commenters requested that EPA include a provision allowing states to seek 

adjustments to their renewable energy goals in connection with the state plan development and 

approval process upon a demonstration that such goals are technically infeasible. Commenters

said such a provision would protect states and electricity consumers from unintended reliability 

issues or unreasonable costs associated with trying to meet a standard that is technically 

infeasible, while retaining EPA's ultimate authority to determine whether the goal revision is 

appropriate.

Commenters said the EPA should allow states to determine their own renewable potential, 

including transmission availability, and integration schedules based on thorough state specific 

and regional analyses and interest from renewable developers. Commenters said if states are not 

allowed to determine their own RE potential, then the EPA should evaluate the RE potential of 

each state independently.

Commenters said because EPA accounted for hydropower production by including it in setting 

renewable energy and energy efficiency goals, EPA should not penalize states with hydropower 

by not allowing them to use hydropower for compliance. Commenters said instead, EPA should 

give states the flexibility to use existing hydropower to demonstrate compliance with the state 

goal.

Comment 30: States should have the authority and flexibility to adjust EE goals to reflect what 

is realistically achievable. If EPA uses proposed methodology for calculating EE savings, there 

must be a mechanism for adjusting state rate goals if the import/export allocations between states 

change significantly

Response 30: The EPA has determined that demand-side EE programs (proposed building block 

4) are not a component of the final BSER. See section V.A of the preamble for discussion of this 

issue.

The following are summaries of the specific public comments under this comment:

Commenters recommended that the EPA change the proposed rule to give states the authority 

and flexibility to consider regional customer and energy demand profiles and accordingly adjust 

energy efficiency goals included in Building Block 4 to reflect what is realistically achievable.

Commenters said EPA asks if states that are exporters, whether they should have to scale up the 

EE savings to establish BSER in order to ensure all EE is included in BSER goals. Commenters

said this methodology requires that the remaining MWh of avoided generation due to EE be 
163

allocated to the various states from which North Carolina imports. Commenters said using this 

approach to calculate BSER goals, which are fixed once the rule is promulgated, assumes that all 

states will maintain the same in terms of their import/export relationships through 2030. 

Commenters said given the changes in generation, costs, and usage that may develop as a result 

of this significant rule making, this assumption appears highly inaccurate. Commenters said if 

EPA adopts such a methodology, NCDENR recommends providing a mechanism for correcting 

state CO2 rate goals if the import/export allocations between states change significantly.

Commenters believed that states should be able to adjust their EE goals over time. 23541 noted 

that it is impossible to predict what level of EE savings will be achievable on a sustained basis 

over decades. Commenters stated that at some point, states may reach a point of diminishing 

returns where achieving additional energy savings becomes cost-prohibitive. Commenters

suggested that if a state discovers that it is reaching that point and can demonstrate this to EPA, 

EPA should allow the state to adjust our EE goal to be less stringent. Commenters stated that 

having the ability to make this kind of correction would recognize the savings already achieved 

by leading states and make the EE goals more equitable among states.

Comment 31: Commenters said States should retain the flexibility to choose whether RE and 

Energy Efficiency (EE) measures should be subtracted from the numerator or added to the 

denominator. 

Response 31: The EPA has determined that demand-side EE programs (proposed building block 

4) are not a component of the final BSER. See section V.A of the preamble for discussion of this 

issue. Renewable energy remains a component of the final BSER. See the CO2 Emission 

Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP for 

the final goals and more information on how they were calculated.

The following are summaries of the specific public comments under this comment:

Commenters stated the Nevada Agencies favors allowing states the flexibility to choose whether 

RE and EE measures should be subtracted from the numerator or added to the denominator.

Comment 32: State-specific concerns and advances in technology may require goal adjustments

Response 32: The EPA maintains that the final rule provides ample flexibilities to states to 

comply with the goals and that adjustments are not needed. States are allowed to use the BSER 

measures, or other measures in their state plans to comply with the goals; there are flexibilities 

within the BSER measures and how they are executed; and states also have non-BSER measures 

at their disposal. See sections V and VIII.A of the final rule preamble of the CPP for more 

information. With respect to adjustments for hydro intensive states, EPA has incorporated this 

concern into adjusting its baseline levels for hydro intensive state and believes this will 

accommodate fluctuations in hydro generation in those states in future years, as discussed in 

section VII of the final rule preamble.
164

The following are summaries of the specific public comments under this comment:

Commenters indicated that which compliance pathways are available to each state and to what 

degree varies significantly, and emphasized that each Western state has a very different profile 

when it comes to electricity production. Commenters said that some western states rely heavily 

on hydropower and natural gas generation, while others generate electricity mostly from coal,

and these differences translate into differences in appropriate compliance pathways.

Commenters indicated that the EPA must be able to adjust the goals as appropriate under 

warranted circumstances. Commenters indicated that because RE and EE technologies change 

over time, requiring 70 percent utilization of existing NGC under BB2 may not be necessary in 

the future. Commenters said that similarly to assume that 40 year old nuclear plants can 

continue to operate indefinitely is unrealistic and inappropriate. Commenters stated that to 

require permanence of programs of this nature is unreasonable and short-sighted.

Comment 33: Grid reliability concerns

Response 33: The EPA maintains that the final rule provides ample flexibilities to states to 

maintain grid reliability. States are allowed to use the BSER measures, or other measures in their 

state plans to comply with the goals; there are flexibilities within the BSER measures and how 

they are executed; and states also have non-BSER measures at their disposal. See sections V and 

VIII.A of the final rule preamble of the CPP for more information.

The following are summaries of the specific public comments under this comment:

Commenters indicated that the final rule should specifically grant states some level of flexibility 

in achieving compliance if adjustments are needed to maintain grid reliability or respond to 

changes in energy market conditions.

Several commenters stated that the schedule should be extended to allow a reasonable 

opportunity for compliance to allow flexibility for the continued operation of base load 

generation where it is needed to support reliability.

Comment 34: General goal setting, prioritization and adjustment comments

Response 34: See preamble section VIII for a discussion of state flexibility in state plan 

submittal.

The following are summaries of the specific public comments under this comment:

Commenters stated that the EPA should allow states to set less stringent performance standards 

and longer compliance schedules, and states should be given maximum flexibility by the EPA to 

implement CO2 performance standards for fossil-fueled power plants within their jurisdiction.
165

Commenters indicated that states should have a larger role in how the final emission targets are 

established because the goals will require states to make changes in the way they dispatch 

electricity and manage nuclear and renewable power assets. Commenters said that states are in a 

better position to determine the feasibility of some of the EPA assumptions.

Commenters suggested that EPA use a tiered-set of higher-to-lower priorities for approving state 

implementation plans in an expanded set of building blocks for BSER measures. Commenters

indicated the EPA should place a higher priority on energy efficiency and substitution of coal 

and natural gas with clean energy generation sources of wind, polar photovoltaic, biomass, and 

biogas.

Commenters strongly supported the ability, given to states by the proposed rule, to 

administratively adjust the requirements for individual EGUs in their State plan.

Commenters said the EPA should allow states to propose alternative timelines for meeting their

interim targets if, and only if, a preexisting and binding compliance agreement involving an 

existing generating unit is in effect.

Commenters encouraged EPA to move forward with the CPP, but indicated that the state targets 

may have to be adjusted in a few years. Commenters suggested EPA consider strengthening the 

regulation further.

Comment 35: Non-transmission alternatives and tiered set of priorities

Response 35: The EPA is providing the states with ample flexibilities to comply with the final 

goals. States are allowed to use the BSER measures, or other measures in their state plans to 

comply with the goals; there are flexibilities within the BSER measures and how they are 

executed; and states also have non-BSER measures at their disposal. See sections V and VIII.A 

of the final rule preamble of the CPP for more information.

The following are summaries of the specific public comments under this comment:

Commenters suggested the EPA should encourage non-transmission alternatives, and should 

develop a tiered-set of priority steps for states to use in planning.

Non-transmission Alternatives. Commenters suggested that an opportunity may exist for the 

EPA and the Federal Energy Regulatory Commission (FERC) to coordinate with the states 

through the requirement to develop state implementation plans to comply with the Clean Power 

Plan. Commenters said that there may be some crosswalk opportunities with requirements for 

regional transmission planning under the FERC 1000 rule, which requires consideration of nontransmission alternatives (NTAs or Non-Transmission Solutions) during regional transmission 

planning. Commenters indicated that NTAs are resources that can replace the need for additional 

transmission through energy efficiency, demand response, distributed generation, or centralized 

generation sited near load. Commenters said that the additional benefits of NTAs are avoided 

energy costs, reduced wholesale electricity costs, reduced air pollution and water usage, and 

avoided land use and siting issues. Commenters indicated no ready source of funding or cost 
166

allocation methodology exists for non-transmission issues, and suggested that the economic and 

environmental benefits of NTAs could be calculated under research and formulas developed 

during a collaborative step by EPA, FERC and the states. Commenters said a memorandum of 

understanding between EPA and FERC with a linkage to language in the final rules for the Clean 

Power Plan could simultaneously address gaps in grid reliability issues, regional energy planning 

(specifically transmission planning under FERC 1000), add a requirement to develop a 

calculation of costs and environmental benefits of reduced air pollution (including greenhouse 

gas reductions) and reduced water usage from the greater use of NTAs, and some requirement 

for participation of public utility commissions and state air and water quality regulators to 

participate in mutual planning processes. Commenters suggested that perhaps a portion of this 

work encouraging NTAs falls under the EPA creating in the final rule a tier-system to prioritize a 

Best System of Emission Reduction (BSER). 

Tier-set of Priorities. Commenters said the proposed building blocks to create a best system of 

emission reduction for the state implementation plans could recommend a tier-set of priority 

steps as follows:

1. System-wide energy efficiency measures 

2. Increased use of combined heat and power systems 

3. Greater utilization of waste-to-energy generation options 

4. Deeper utility market integration of distributed energy resources (DERs) particularly with 

increased use of microgrids, energy storage, and distributed generation of renewable 

energy sources such as wind, solar, and biomass and biogas. 

5. Demand reduction 

6. Re-dispatch from coal-fired steam and oil/gas fired steam generation by increasing 

generation from existing natural gas combined cycle plants.

Comment 36: Comments specific to Alaska's situation

Response 36: The EPA is not including emission performance goals for Alaska in this final rule. 

See section VII of the preamble for discussion of this issue.

The following are summaries of the specific public comments under this comment:

Commenters contended that EPA should exempt Alaska from the rule and allow the state to 

continue with ongoing energy projects that are tailored to Alaska's unique circumstances focused 

on rural communities and non-affected EGU's. The commenters stated that federal intervention 

would only result in unintended financial consequences. The commenters stated that Alaska's 

energy efficiency programs often focus on improving thermal, rather than electric, efficiency, 

and more than 35% of total renewable energy funding has gone to heat recovery and biomass 

heat projects. The commenters added that thermal energy efficiency measures displace diesel 
167

fuel and reduce carbon emissions and also serves to reduce, rather than increase, costs to 

customers. The commenters stated that in a typical Alaska household, 80% of the energy 

consumed is used for space and water heat and programs tend to be more successful as 

homeowners are more inclined to invest in energy efficiency measures that reduce thermal 

energy consumption. The commenters added that in the arctic and subarctic climate, thermal 

energy has significantly greater import for health and human safety. The commenters also added 

that Alaska's renewable energy and energy efficiency projects also often focus on communities 

with the highest costs, which are rural communities. The commenters stated that Alaskan 

consumers pay among the highest rates for heating and electricity in the country-50% higher than 

the U.S. average, and remote communities face greater challenges in ensuring electric service 

reliability. The commenters stated that to be credited towards compliance with this Proposed 

Rule, energy efficiency measures must relate to electric energy produced at affected EGUs. The 

commenters contended that the rule will likely forcibly refocus state energy efficiency programs 

from thermal energy to electric generation. The commenters added that because many rural 

communities are not connected to the "affected EGUs" the renewable energy and energy 

efficiency measures may not qualify for inclusion in Alaska's State Plan. The commenters

contended that forcing Alaska to focus on reducing carbon emissions within the Rail belt could 

jeopardize funding for existing and future energy programs in rural communities where the state 

is partnering with Village Corporations, Tribal entities and Village Utility Cooperatives. The 

commenters concluded that this result is inconsistent with EPA's environmental justice mandate 

to avoid disproportionately high and adverse human health or environmental effects on minority 

and low income communities. The commenters also explained that Alaska cannot reduce carbon 

emissions from the specific "affected EGUs" in a timely manner without exorbitant cost or 

compromising reliability of electric service. The commenters added that Alaska's existing 

informal energy policy has the impact of reducing carbon emissions and the state supports 

several renewable energy, energy efficiency, and natural gas development programs that will not 

count toward compliance with the Proposed Rule because they impact non-affected EGUs or 

target space heat, rather than electric, efficiency. The commenters described the programs Alaska 

is running. The commenters added that their Rail belt utilities are just completing a substantial 

upgrade of their generation fleet, resulting in substantial heat rate improvements. The 

commenters noted that there are limited carbon emissions from this sector in Alaska.

Comment 37: Commenters asserted that the Rule provides flexibility for states to meet their 

goals.

Response 37: The EPA agrees with the commenters that the final rule provides flexibility for 

states to meet their goals. Please see sections VI and VII of the final rule preamble of the CPP 

and the CO2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule 

supporting the final CPP for the final goals.

The following are summaries of the specific public comments under this comment:

Commenters stated that they do not foresee any issue with small utilities in North Carolina 

unless the one NGCC unit owned/operated by a municipality that the commenters identified 

unless the unit remains in the goal calculation. The commenters noted that this unit actually 

operates as a peaking unit and should be excluded from the rule.
168

Commenters stated that with the variety of compliance options, including energy efficiency and 

renewable energy, New York and other states will be able to meet their targets at low cost, while 

providing new options for consumers. The commenters noted that by driving investment in 

renewable energy and other advanced energy technologies, the Clean Power Plan will further 

accelerate the country's transition to a high- performing grid that is efficient, reliable, resilient, 

flexible, clean, affordable, and consumer- focused and to energy independence. The commenters

stated that the Proposal recognizes the value of advanced energy technologies for reducing 

emissions, especially wind energy, solar power, and hydropower and that the Proposal is flexible 

enough to provide new business opportunities, spur investment, and encourage technologyneutral solutions to allow for competition in the marketplace, depending on how states choose to 

implement it.

Comment 38: The EPA is attempting to restrict the states' ability to challenge the EPA's 

assumptions in developing the state goals by refusing to change a state's goals even if the state 

shows a particular block is not feasible unless the state also proves that additional reductions 

from the other blocks are not feasible. The EPA's interpretation of FCAA section 111(d) is not 

correct. The EPA does not have the legal authority to require a state to go beyond BSER to meet 

a standard of performance in order to account for the EPA erring in its assumptions on one or 

more of the blocks. 

Response 38: See Preamble section VII and VIII.

The following are summaries of the specific public comments under this comment:

Commenters stated, the EPA indicates in the preamble that if a state demonstrates that a 

particular block is not feasible for the state to implement as the EPA assumed, the EPA would 

not adjust the state's goal to reflect that change unless the state also demonstrates that it could not 

get additional reductions from application of other building blocks, or in related, comparable 

measures (79 FR 34893). Commenters said, effectively the EPA is requiring states to reprove 

BSER for all four of its building blocks and beyond before admitting that the EPA has erred in 

its assumptions on any of the building blocks. Commenters said, the EPA attempts to support 

this position by claiming that the building blocks do not represent BSER themselves and only 

represent what the EPA considers to be a reasonable overall level of reductions. Commenters 

said, the building blocks are used to directly determine the state goals. Commenters said, the 

EPA cannot sever the link from the building blocks to EPA's BSER determination in such an 

arbitrary fashion and the EPA's interpretation of FCAA section 111(d) with regard to what 

represents BSER is flawed. Commenters said, the EPA's legal obligation under section 111(d) is 

to establish standards of performance for existing sources through the application of BSER. 

Commenters said, while the TCEQ maintains the EPA does not have the legal authority to 

establish Blocks 2 - 4 as BSER, the clear application of section 111(d) in the context of the 

EPA's proposed rule is that the state goals would represent the standard of performance and the 

building blocks are what the EPA assumes are the application of the technology to achieve that 

standard of performance, i.e., what the EPA considers to be BSER. Commenters said, the EPA 

cannot require a state to go beyond BSER under section 111(d). Commenters stated that 

requiring a state to demonstrate that it cannot achieve additional reductions from the application 

of other building blocks requires states to go beyond BSER, since EPA represents each building 

block as an independent basis for emission reduction, that, when combined, result in an applied 
169

overall state goal. Commenters said, if, as the EPA contends, the building blocks do not 

represent BSER, then the EPA has not met its legal obligation to evaluate and apply BSER to set 

a standard of performance under the FCAA and the proposed rule is invalid and should be 

withdrawn.

Commenters stated, in the proposed rule, EPA suggests that "[a] state may demonstrate during 

the comment period that application of one of the building blocks to that state would not be 

expected to produce the level of emission reduction quantified by EPA because implementation 

of the building block at the levels envisioned by EPA was technically infeasible, or because the 

costs of doing so were significantly higher than projected by EPA." [79 Fed. Reg. 34893 (June 

18, 2014)] Commenters said, EPA then declares it "expects that, for any particular state, even if 

the application of the measures in one building block to that state would not produce the level of 

emission reductions reflected in EPA's quantification for that state, the state will be able to 

reasonably implement measures in other of the building blocks more stringently, so that the state 

would still be able to achieve the proposed goal." Commenters said, this position lacks reason 

and only points to EPA's misguided attempt to base the BSER on achievement of a total 

reduction in emissions rather than an accurate technical analysis. Commenters said, perhaps this 

position does not apply to South Dakota because they argue in these comments that all of the 

building blocks proposed for South Dakota are either technically infeasible or forecasted to be a 

higher cost than EPA projects, however, state goals as determined by BSER in the final rules 

should be based on sound technical analysis, not a sliding scale in order to reach a political 

target.

Comment 39: Commenters argued that the EPA has implied that even if the BSER and state 

goals are not achievable by application of the four building blocks, EPA will not change the 

BSER because there may be other things that can be done to reduce emissions. Commenters

argued that this approach is inconsistent with section 111 for EPA to select a BSER this is 

unachievable because section 111 requires EPA to determine controls that are adequately 

demonstrated and emission limitations that are achievable, meaning controls that a source must 

be able to install and be able to use to meet the resulting emission limitation, according to the 

commenters. Commenters stated, because the emission limitation is representative of what BSER 

can achieve, sources have always been free to select alternate controls that meet the BSER limit, 

but it is contrary to the CAA to set a BSER that is not achievable with any of the controls 

available to the actual source of emissions.

Response 39: EPA is finalizing subcategory-specific emission performance, rate-based state 

goals, and mass-based state goals and believes that all EGUs have compliance options available 

to meet its reduction obligation.

Comment 40: States should hear utility petitions for accepting a unit as delivering adequate 

heat rate performance and change the state’s target.

Response 40: There are no unit-level heat rate requirements in the quantification of BSER. It 

reflects the regional fleet reduction potential through a building block.
170

The following are summaries of the specific public comments under this comment:

Commenters recommended that states be allowed to hear petitions from utilities for accepting a 

unit as delivering adequate heat rate performance, giving consideration to cost effective 

deployment of heat rate improvement measures. Commenters stated that upon state approval of 

the unit's petition, the state's target would be adjusted to reflect the change in the state's Block 1 

stringency. 

4.7.2 Stranded assets/stranded investments

Chapter 4.7.2 covers public comments related to concerns that the proposed state goals would 

result in stranded assets and stranded investments. Many additional comments and responses on 

the topics of stranded assets and remaining useful life are in RTC chapter 5.11; there is 

substantial overlap among comments in chapters 4.7.2 and 5.11. A few additional comments and 

responses on these topics are in the preceding section, RTC chapter 4.7.1.Note that some of these 

comments on stranded assets also discuss BSER issues that are not addressed here. For 

responses to those comments, see RTC chapters 3 and 4, and sections V-VII of the final CPP 

preamble. 

Commenters have raised a number of issues related to this subsection which are organized by 

topics (comments) below. Responses are provided for these topics.

Comment 1: General; CPP will result in stranded assets/costs

Response 1: The EPA shares the goal of minimizing stranded assets. Although nothing in 

section 111(d) explicitly bars a guideline that results in some facilities becoming uneconomic 

before the end of their useful lives, the EPA nonetheless has striven to design the guidelines so as 

to give states flexibility to develop plans that allow power companies to recover their 

investments in generation units.

In response to public comments, the EPA significantly revised its approach to BSER and goalsetting in the final rule, as explained in preamble sections V through VII. These changes, 

including moving the start date of the program from 2020 to 2022 and other important changes, 

ensure that CO2 performance rates and state goals in the final guidelines are achievable 

considering cost. 

The July 2015 docket memo titled “Stranded assets analysis” shows that the CO2 performance 

rates and equivalent state goals in the final guidelines can be met without the retirement of 

affected EGUs before the end of their book life, and without the retirement of affected EGUs 
171

before the end of the book life of capital-intensive pollution control retrofits installed on those 

EGUs. Thus, the emission performance levels in the final guidelines provide state with sufficient 

flexibility to address stranded asset concerns.

See section I.A, II.F-G, V.A-C, VIII.G-H, X.C, XI.C-E, and XII.E of the final rule preamble of 

the CPP for additional response to this comment. 

The following are summaries of the specific public comments under this comment:

Several commenters stated that the proposed rule will result in the stranding of assets.

Commenters stated the Proposed Rule will result in stranded costs of approximately $3 billion; 

the basis for this conclusion is set forth in the Pace Study.

Commenters stated the Fuel Use Act of 1978 made coal-powered generating stations the only 

viable alternative at the time many of the rural cooperatives were constructing power facilities. 

The commenters said the current proposed rule effectively requires a complete shuttering of all 

coal-powered facilities in Arizona. The commenters said this fails to recognize the capital 

investments that were incurred in order to comply with the Fuel Use Act that are still be paid off. 

The commenters said if the proposal is finalized as written, the rural citizens of Arizona will be 

forced to shoulder additional financial burdens to comply with an administrative regulation that 

could change again when political whims shift. The commenters said Arizona's citizens have a 

reliable and balanced portfolio of energy sources, which utilities here have worked diligently to 

create. The commenters said this proposal will cost jobs, create uncertainty, and increase power 

rates across the state; Arizona's economy cannot withstand such an unfunded mandate.

Commenters stated the EPA's goal-setting methodology could result in significant stranded 

investments, which in turn would result in higher electricity rates for Members. The commenters

said NERA's estimates for the costs of the proposed rule are more realistic than those 

significantly underestimated by the EPA. The commenters said NERC has raised serious 

concerns about potential reliability risks.

Commenters stated EPA's goal-setting methodology could result in significant stranded 

investments, which in turn would result in higher electricity rates.

Commenters stated that in spite of this clear congressional intent to regulate air pollution in a 

manner that avoids unreasonable economic impacts on entire industries, EPA's proposed rule 

would lead to significant stranded costs as coal-fired power plants - many of which have recently 

invested in expensive upgrades - are forced to retire under EPA's guidelines. Commenters said 

that EPA's own calculations assume that eleven states will be required to shut down every coalfired power plant in the state in order to comply with the state goal. Commenters said that several 

other states would be required to reduce coal generation by more than 50 percent. Commenters 

said that the state goals in the proposed rule, if adopted as EPA has formulated them, would 

require a reduction in annual electricity generation from existing coal units of more than 376 

TWh, or of 25 percent versus the 2012 baseline. Commenters said that a reduction of this 

magnitude could lead to dozens of shutdowns of plants that have just recently made multimillion dollar investments in new pollution control technology to comply with EPA's MATS 
172

rule. Commenters said utilities that have invested in expensive emissions controls for mercury 

and other hazardous air pollutants will thus be faced with billions of dollars in stranded costs as a 

result of EPA's proposed rule. Commenters said that the imposition of such significant costs on 

owners of coal-fired power plants is neither reasonable nor appropriate in light of the goals of the 

CAA.

Comment 2: States cannot determine remaining useful life, results in stranded assets

Response 2: The flexibility provided to states by the final emission guidelines enables states to 

consider remaining useful life of particular facilities in designing their plans. CPP preamble 

sections VIII(C) and VIII.G.1.(c)-(f), and the “Legal Memorandum Accompanying Clean Power 

Plan for Certain Issues,” highlight that states have many options on how to design their plan 

requirements, and note various ways that states can take into account facility-specific 

considerations in designing their plans.

In response to public comments, the EPA significantly revised its approach to BSER and goalsetting in the final rule, as explained in preamble sections V through VII. These changes, 

including moving the start date of the program from 2020 to 2022 and other important changes, 

ensure that CO2 performance rates and state goals in the final guidelines are achievable 

considering cost, and leave room for states, in practice, to consider facility-specific 

circumstances such as remaining useful life.

The emission guidelines do not provide for states to make additional goal adjustments based on 

remaining useful life and other facility-specific factors because states can fully consider these 

factors in designing their plans. Section 111(d) requires that EPA’s emission guidelines permit 

the states to consider remaining useful life in applying standards of performance to particular 

affected EGUs, and does not call for facility-specific remaining useful life considerations to be 

taken into account in determining the levels of emission performance that reflect the BSER. 

For additional response to this and other comments on remaining useful life, including legal 

interpretation issues, see final CPP preamble section VIII.G.1, the “Legal Memorandum 

Accompanying Clean Power Plan for Certain Issues,” and RTC chapter 5.11. With respect to 

stranded assets, the EPA’s July 15 memorandum titled “Stranded Assets Analysis” shows that 

the national EGU performance rates in the final guidelines can be met without the retirement of 

affected EGUs before the end of their book life, and without the retirement of affected EGUs 

before the end of the book life of capital-intensive pollution control retrofits installed on those 

EGUs. Thus, the final CO2 performance rates and state goals provide state with sufficient 

flexibility to address stranded asset concerns. See also the response to comment 1, CPP final 

preamble section VIII.G and the legal memorandum regarding stranded assets concerns.

The following are summaries of the specific public comments under this comment:
173

Commenters stated EPA notes that "under the proposed guideline, states would have the 

flexibility to adopt a state plan that relies on emission-reducing requirements that do not require 

affected EGUs with a short remaining useful life to make major capital expenditures or incur 

unreasonable costs." The commenters said EPA further states that "of the four building blocks 

considered by the EPA in developing state goals, only the first block, heat rate improvements, 

involves capital investments at the affected EGUs which, if mandated by a state rule, might give 

rise to remaining useful life considerations at a particular facility." The commenters said the 

agency believes that "the issue of remaining useful life will arise infrequently in the development 

of state plans to limit CO2 emissions from affected existing EGUs." The commenters said 

therefore, EPA "purposes that the remaining useful life of affected EGUs, and the other facilityspecific factors identified in the existing implementing regulations, should not be considered as a 

basis for adjusting a state emission performance goal or for relieving a state of its obligation to 

develop and submit an approvable plan that achieves the goal on time."

Commenters disagreed with EPA's factual assertions; for example the commenters have invested 

significant capital to comply with air emission standards; in reliance on the ability to recover the 

costs of complying with those standards; with no consideration of useful life, units may be forced 

to retire, stranding the capital investment made to comply with other EPA rules, and increasing 

the cost to customers to comply with the CPP. 

Commenters stated EPA dismisses the statutory requirement to allow states to consider 

remaining useful life because states can employ Building Blocks 2 (natural gas re-dispatch), 3 

(renewable energy) and 4 (demand-side energy efficiency) rather than Building Block 1, thereby 

- according to EPA - allowing the state to allow EGU owners to avoid capital expenditures. The 

commenters said this decision effectively forces states to adopt specific control measures in 

violation of the "federalism bar." The commenters said a state may want to employ Building 

Block 1, the only at-the-unit measure, but, knowing that EPA has dismissed remaining useful life 

considerations as "unnecessary," believe that it cannot employ Building Block 1 and, instead, 

must employ Building Blocks 2, 3 and 4. The commenters said this determination denies a state 

"real choice" with regard to how it chooses to meet the goal because it cannot choose freely from 

among the BSER building blocks; for this reason, EPA, in dismissing its obligation to allow 

states to consider remaining useful life, is violating principles of cooperative federalism. 

Commenters stated CAA section 111(d)(1)(B) requires that EPA's regulations: [S]hall permit the 

State in applying a standard of performance to any particular source... to take into consideration, 

among other factors, the remaining useful life of the existing source to which such standard 

applies. The commenters said by its own terms, section 111(d) reflects an expectation that the 

application of BSER and standards of performance must reflect a unit-by-unit analysis to 

determine which units can meet the proposed standards. The commenters said despite the 

"remaining useful life" requirement in section 111(d), the Proposal deprives the States of their 

right to consider the various statutory factors when setting the actual standards that are to apply 

to affected sources; instead, EPA proposes statewide, binding, nonnegotiable minimum emission 

targets that allow for at best minimal State consideration of unit-specific factors when 

determining how to apply EPA's guidelines to derive the actual standards that are to apply to the 

affected existing sources. The commenters said the approach taken by EPA in the Proposal does 

not comply with the process required by section 111(d) and its implementing regulations. The 

commenters said EPA should withdraw this Proposal and issue a new one, limiting its actions to: 
174

(i) Defining the procedures under which the States will develop and submit their section 111(d) 

plans; and 

(ii) Identifying the BSER that has been adequately demonstrated. 

Commenters said the guideline should make clear that in setting the actual standards the States 

will be allowed to consider the various source-specific factors referred to in the statute, including 

costs, feasibility and the remaining useful life of each existing source. If that were to occur, per 

the terms of the statute, the States would have a clear indication of the BSER and the requisite 

flexibility to apply that guidance on a case-by-case basis to derive the appropriate standard(s) for 

each affected source. The commenters said without a consideration of unit-specific factors, the 

Proposal could - according to EPA's own State Option 1 IPM modeling - result in premature 

closures (like Plant Scherer Units 1 and 2), or substantially reduced operations (for Plant 

Wansley). 

Commenters stated Building Block 2 does not permit states to adequately take into consideration 

the "remaining useful life" of existing sources and "other factors" in setting performance 

standards as required by Section 111(d). The commenters said implementation of Section 111(d) 

is based on the principle of cooperative federalism that underlies Section 110 and many other 

aspects of the CAA. The commenters said EPA does not and cannot set national emission 

standards or establish the standards of performance for individual sources; instead, EPA is tasked 

only with the assignment to "establish a procedure" that the states can then rely on in setting the 

performance standards. The commenters said the states rely on EPA's emission guidelines in 

preparing a plan submission, but are specifically allowed to consider "among other factors, the 

remaining useful life of the existing source." The commenters said EPA has offered no 

justification that would excuse a state's failure to comply with an express requirement under 

Section 111(d). 

Commenters stated EPA contends that the structure of its rule allows states flexibility to consider 

remaining useful life for individual sources in the context of developing their State 111(d) plans; 

however, to the extent a State makes an adjustment to the standard of performance for an 

individual source, EPA requires states to make "compensating emission reductions" from other 

sources: "Therefore, to the extent that a performance standard that a state may wish to adopt for 

affected EGUs raises facility-specific issues, the state is free to make adjustments to a particular 

facility's requirements on facility-specific grounds, so long as any adjustments are reflected 

(along with any necessary compensating emission reductions) as part of the state's Clean Air Act 

section 111(d) plan submission." The commenters said thus, under the Proposed Rule, states 

would not be able to deviate from the proposed emission rate goals. The commenters said this 

requirement is unprecedented and imposes improper constraints on the authority reserved to the 

states under Section 111(d) of the Act; the practical implication of EPA's "compensation" 

requirement and the accelerated compliance timeline imposed by the proposed "interim goals" is 

that states may be forced to (1) retire generating units ten or more years before the end of their 

remaining useful life, and, as a result, strand millions of dollars of assets that are dispatchreliable, and (2) implement costly short-term solutions in order to meet customers' energy 

requirements. 
175

Commenters stated EPA's continued implementation of Building Block 2 would have significant 

consequences for Montana-Dakota and its customers. The commenters said the Proposed Rule 

may force the premature retirement of the Big Stone Plant in South Dakota; Montana-Dakota 

depends on the plant as a source of low-cost reliable power. The commenters said Big Stone is in 

the middle of installing a $384 million dollar Air Quality Control System (AQCS) required by an 

EPA rule establishing Regional Haze Program requirements for South Dakota. The commenters

said South Dakota determined that the AQCS project was cost-effective for Big Stone 

considering that Big Stone is expected to operate for at least another 30 years; however, because 

Big Stone is the only coal-fired electric generating unit located in South Dakota, it is unlikely 

that the state could make "compensating emission reductions" to account for continued operation 

of Big Stone to allow for amortization of these investments over the remaining useful life of the 

unit. 

Commenters stated given EPA's proposed inclusion of avoided generation from coal-fired EGUs 

as a primary component of its defined BSER, stranded costs from premature closures of coalfired generation must be considered "costs of control" that states can consider in making 

decisions in their state plan submission regarding standards of performance. The commenters

said the impacts of closing these units long before the end of their remaining useful lives are 

sufficiently significant that it would be contrary to Section 111(d) to limit the states' ability to 

consider them. The commenters said states should have the authority to consider whether (1) 

modifications to the timing of compliance or (2) the level of the state goal are necessary to avoid 

unreasonable economic consequences for power generators and their customers.

Commenters stated the EPA's assessment of economic impacts of the Clean Power Plan is 

plainly inaccurate; one of the major shortcomings is the failure of the proposal to account for the 

impact on utilities, consumers and the economy that result from stranded investments. The 

commenters said the proposal anticipates (but underestimates) that it will force the premature 

retirement of "some" coal plants, as well as a reduction in the reliance on existing coal resources 

by shifting generation to natural gas and renewable resources. The commenters said premature 

retirement inescapably results in economic losses because useful life is properly thought of in 

terms of an asset's ability to yield on-going economic value, so shutting down an electric 

generating facility prior to the end of its useful life is sure to result in losses for someone - and 

ultimately the ratepayer. 

Commenters stated the useful life represents the period over which an asset is expected to 

provide value to its owner; in fact, the accounting assumption as to the useful lives of assets 

should be based on economic and engineering studies, on experience, and on any other available 

information about an asset's physical and economic properties. The commenters said in the case 

of public power electric utilities, the generating assets are, in effect, owned by the utility's 

customers, with the utility acting as their agent; so, customers bear the economic costs of 

ownership, but also realize the economic benefits. The commenters said as long as the goingforward variable costs of producing electricity with the coal plant are less than the all-in costs 

(fixed and variable) of viable replacements (market purchases, or resource acquisitions), the 

plant will yield economic benefits for customers. The commenters said if the plant ceases 

operation during its economically useful life, customers will suffer an economic loss from 

electric rates that will be higher than they would have been it if the plant continued to operate. 
176

The commenters said the loss borne by customers will be the same irrespective of the debt 

service schedule. 

Comment 3: During oil embargo Congress said only build coal-fired plants, then federal and 

state regulations required massive investments in pollution control, now CPP will result in 

premature closings at great cost to consumers and decreased electric reliability. Premature 

closings will result in significant stranded assets which must be avoided, states should be able to 

adjust goals and implementation schedule, goal setting analysis must be recalculated imbedding 

into the model full economic return for investments.

Response 3: See response to comments 1 and 2 in this section (4.7.2).

Regarding the comment that EPA could rerun modeled reductions for states in a building block

approach imbedding into the model full economic return for these investments, the agency has 

performed an alternative analysis described in the July 2015 docket memo titled “Stranded assets 

analysis.”

The following are summaries of the specific public comments under this comment:

Commenters said utility specific analysis and the EPA's Regulatory Impact Analysis show that 

the shift to natural gas would result in the premature closing of many coal-fired 

units. Commenters said recently, utilities have spent billions of dollars for "state of the art" air 

pollution control systems to meet the emission limits of the Clean Air Interstate Rule (CAIR) and 

the utility MATS rule, and the EPA’s proposal does not take into account the billions in stranded 

costs for those units that will fall on consumers if those units are forced to prematurely shut 

down. 

Commenters said the EPA's failure to account for, and appropriately adjust states goals to reflect 

these commitments, is especially troubling since EPA provided no guidance to utilities that 

undertook the significant investments required by MATS that it contemplated forcing the closure 

of these plants in the near term. Several commenters said Congress dictated during the oil 

embargo that utilities build coal-fired generating units rather than oil or gas units, and other 

federal and state requirements have required massive investment in pollution controls for these 

same coal plants. Several commenters added the EPA is now proposing a regulation that will 

assure the premature closure of the coal units at great cost to consumers, and in a manner that 

threatens electric reliability. Several commenters indicated the EPA failed to include these 

stranded costs in the national cost assessment developed by EPA. Commenters said failure to 

assess this cost impact is contrary to EPA's own guidelines which require the cost impact of a 

Section 111 proposal be assessed. Commenters said the EPA's nod to the necessity of addressing 

stranded costs in the NODA is limited and fails to provide adequate guidance as to how EPA 

might propose to imbed into a 111(d) program a mechanism to address this critical issue.

Commenters said that although the CAA requires consideration of remaining useful life, and the 

EPA Administrator said the rules would allow states to "avoid stranded costs", the proposed goal 

for South Dakota will likely result in the retirement of the state's single coal plant, resulting in 

stranded assets. 
177

Commenters said the Clean Air Act requires EPA to "permit the State in applying a standard of 

performance...to take into consideration, among other factors, the remaining useful life of the 

existing source to which such standard applies." Commenters said within the proposed rule, EPA 

states, "because of the way state-specific goals have been developed in these proposed 

guidelines, remaining useful life and other facility-specific considerations should not affect the 

determination of a state's rate-based or mass-based emission performance goal." Commenters

said EPA Administrator Gina McCarthy, in her testimony before the U.S. Senate Committee on 

Environment and Public Works, said the rules would allow states to "avoid stranded costs." 

Commenters said despite this statement, the proposed goal for South Dakota will likely result in 

the retirement of the state's single coal plant. Commenters said if the state goal is not set at 

feasible level, the result will be stranded assets in South Dakota, despite Administrator 

McCarthy's statement. 

Commenters said that in addition to not including stranded costs in the assessment, the EPA also 

failed to assess the costs of building new gas pipelines and transmission lines that would be 

required by the closure of so many coal plants.

Commenters said that the EPA must allow states the flexibility to adjust both the emission 

standards and implementation dates to assure that the state standards reflect a BSER that assures 

the reliability and security of the electric system while providing reasonably prices electricity to 

the consumer.

Commenters said even as the EPA is proposing a rule which establishes state-by-state reduction 

goals based on modeled closure of existing coal units, it is, at the same time, requiring emissions 

control projects for plants it presumes will close - this is poor environmental and energy 

policy. Commenters stressed that utilities must be allowed to utilize investments for their full 

economic life in order to pay back financial obligations associated with these facilities and to 

capture appropriate economic return on that investment. Commenters said that it would be 

appropriate for EPA to rerun modeled reductions for states in a BB approach imbedding into the 

model full economic return for these investments.

Comment 4: Rule will result in plant closures and associated stranded assets. Shutting down 

facility prior to end of its useful life will result in a loss, regardless of whether debt has already 

been paid. Their analysis indicates total cumulative losses due to early retirements of coal plants 

could range from $10 to $284 billion, with associated electric rate increases ranging from about 4 

to 32 percent. Rule should be changed to allow states to accurately incorporate their own 

determinations of the remaining useful life of affected facilities into the development and 

implementation of their compliance plans.

Response 4: See response to comments 1 and 2 in this section (4.7.2). See also section I.A, II.FG, V.A-C, VIII.G-H, X.C, XI.C-E, and XII.E of the final rule preamble of the CPP for the EPA’s

response to this comment.

The following are summaries of the specific public comments under this comment:
178

Commenters stated that it is generally expected that compliance with the emission goals 

contained in the Proposal will likely cause the premature retirement of a significant number of 

U.S. coal-fired generating plants. By the term premature, commenters said they mean that the 

plants will be shut down before the end of their useful lives. Commenters said certain 

stakeholders (e.g., electric utilities and their customers and local communities) will suffer 

economic losses as a result. Commenters said these losses include foregone economic value 

because the facility is no longer allowed to operate, as well as paying certain costs now 

"stranded" because the facility no longer produces the revenue to cover those costs. Commenters

said the notion that economic losses will result from premature retirement is inescapable because 

useful life is properly thought of in terms of an asset's ability to yield on-going economic value. 

Commenters said hence, shutting down an electric generating facility prior to the end of its 

useful life is sure to result in losses for someone. Commenters said that the proposed regulation 

would force the retirement or restrict the use of plants, which would result in stranded assets.

Commenters stated that CAA Section 111(d) (1)(B), permits states to take into consideration, 

"among other factors, the remaining useful life of the source" in developing their state 

compliance plan. Commenters indicated however, in its construction of the building blocks and 

the resulting calculation of interim and final emission reduction goals, the EPA has substantially 

encroached on this state discretion, resulting in losses to the remaining useful life of generation 

sources and increased costs to consumers.

Commenters stated that like any long-lived asset, electric generating plants require long-term 

financing. Commenters said it is sometimes mistakenly thought that an asset's useful life is 

directly related to the debt repayment or servicing schedule associated with its financing. 

Commenters said that this in turn might lead some to conclude that retirement of an asset after 

the debt has been repaid somehow mitigates the economic losses attendant with retirement - this 

is not the case.

Commenters indicated that there is no single, unambiguous way to precisely measure the useful 

life of an asset, but the underlying notion is that useful life represents the period over which an 

asset is expected to provide value to its owner. Commenters stated that useful life is an 

economic concept with no necessary relationship to the period of debt service. Commenters said 

that since total debt incurred represents a sunk cost that must be paid whether or not the asset 

remains useful, the loss of economic value resulting from the premature retirement of an asset is 

unaffected by the debt service schedule. Commenters stated that rather, useful life pertains to the 

time horizon over which an asset is expected to provide economic value to the owner.

Commenters said that in the case of public power electric utilities, the generating assets are, in 

effect, owned by the utilities' customers, with the government entity acting as their agent. 

Commenters stated that both the costs and the benefits of asset ownership are conveyed to 

customers through their electric rates. Commenters said that if the plant ceases operation during 

its economically useful life, customers will suffer an economic loss from electric rates that will 

be higher than they would have been it the plant continued to operate. Commenters emphasized 

that the loss borne by customers will be same irrespective of the debt service schedule.

Commenters stated that on average, across the sector, approximately 40 percent of total electric 

output is produced from coal, with much higher percentages in some situations. Commenters
179

stated that this clearly constitutes a significant investment for these public power utilities and 

their customers, undertaken in anticipation of realizing long-term benefits over the useful lives of 

the coal plants. Commenters said that in many cases, unscheduled retirements over the next few 

years, related to the Proposed Rule, will truncate the expected benefit streams while the plants 

are still economically useful and thus result in significant economic losses to public power 

customers.

Commenters said that the useful lives of individual coal facilities will depend on a variety of 

factors, some of which may be unique to specific facilities. Thus, commenters said, it is difficult 

to offer a value that represents the remaining useful life of the combined public power coal fleet, 

but clearly the general expectation is that coal plants have very long useful lives. Commenters

said that a 2007 survey of 10 state utility commissions conducted by the Wyoming Office of 

Consumer Advocate found that respondents generally expected to see useful lives for coal plants 

in the range of 40 to 60 years. Commenters said that similarly, data show that the average 

number of years between the in-service and expected retirement dates for coal plants owned by 

public power utilities is 35 years. Thus, commenters stated, public power electric customers will 

likely suffer significant economic losses from the premature retirement of coal facilities if the 

Proposed Rule is finalized.

Commenters said that these early retirements will lead to higher electric prices related to 

replacement power costs, new capital investments, plant decommissioning costs, and possible 

credit downgrades. Commenters indicated they have conducted some preliminary analysis to 

estimate the range of economic losses, and associated rate increases, faced by public power 

customers as a result of possible premature retirements of coal plans under the Proposed Rule.

Commenters indicated that their analysis indicates that the total, cumulative losses could range 

from about $10 billion to about $284 billion, with associated electric rate increases ranging from 

about 4 to 32 percent. Commenters said that these values represent an indicative range of 

possible outcomes for the composite public power sector.

Commenters said that many factors will affect the results including: the baseline level of electric 

rates before the coal plant retirements; long-term natural gas prices; installed costs of 

replacement generation resources (e.g., NGCCs and gas pipeline and storage facilities); variable 

costs and operating characteristics of replacement facilities (including energy efficiency and 

increased utilization of existing gas plants); the number of coal plants retired and associated 

electric output; long-term coal prices; variable costs and operating characteristics of the coal 

plants subject to retirement; and the time horizon for the analysis, which reflects the remaining 

useful lives of the affected coal plants. Commenters indicated that one cannot predict precise 

outcomes with any degree of confidence, and the wide range of possible outcomes is cause for 

concern. Commenters stated that it is not clear what the final impacts will be, but under some 

plausible assumptions, they could be quite severe. Several commenters recommended that the 

proposed regulation be changed to allow states to truly and accurately incorporate their own 

determinations of the remaining useful life of affected facilities into the development and 

implementation of their compliance plans.

Commenters stated to address stakeholder concern regarding limited cost-effective options and 

stranded investments, U.S. EPA proposes to take into account the book life of the original 
180

generation asset, as well as the book life of any major upgrades to the asset, such as major 

pollution control retrofits. The commenters said Ohio will have a well-controlled coal powered 

EGU fleet as a result of the Mercury Air Toxics Standard (MATS); it is illogical to expect these 

efficient and well-controlled units to not be utilized after significant investments have occurred. 

The commenters said U.S. EPA is seeking comment on how book life may be used to develop an 

alternative glide path to reaching the final goal. The commenters said when legally allowed, it is 

U.S. EPA's role under the CAA to establish the best system of emission reduction (BSER) for 

stationary sources and the states obligation to develop a plan based on BSER that sets a standard 

of performance considering remaining useful life of those sources. The commenters said U.S. 

EPA is again inserting itself into areas that have been governed by the Public Utilities 

Commission of the states by trying to develop a formulation of book life for power plants. The 

commenters said this is another example of U.S. EPA attempting to inject the federal 

government into the area that traditionally has been the states'. The commenters said this 

approach only reinforces the concern of U.S. EPA attempting to use Section 111(d) to usurp state 

authority. 

Comment 5: If a coal-fired generating facility is forced to retire early, there will be stranded 

costs. If improvements were made to the coal-fired plant to comply with regulations such as the 

regional haze regulation, these costs will also be stranded. The costs will be stranded regardless 

of whether any associated debt has been paid off, but stranded debt is most clearly demonstrated 

when facility has been financed with long-term debt that is still being repaid. Generally public 

power utilities raise funds with long-term debt in form of municipal bonds which can have 

maturities as long as 50 years. Due to these long maturities the consequences are more 

significant for public power or municipal utilities (compared to most investor-owned utilities or 

merchant power plants) and therefore states should be allowed to set up subcategories or 

alternative regulatory compliance options for these types of utilities. EPA should give states 

flexibility to adjust both emission reduction goals and implementation dates.

Response 5: See response to comments 1 and 2 in this section (4.7.2). See also section I.A, II.FG, V.A-C, VIII.G-H, X.C, XI.C-E, and XII.E of the final rule preamble of the CPP for the EPA’s

response to this comment. 

The following are summaries of the specific public comments under this comment:

Commenters said if the proposed rule forced the premature retirement of a coal generating 

facility, an electric utility's inability to recover the "legitimate, prudent, and verifiable 

cost" should be considered a stranded cost. Commenters indicated that member companies 

would be providing examples of stranded costs likely to result from the proposed rule, and 

discussed one such example to demonstrate their concerns. 

Commenters stated that if Laramie River Station (LRS), which serves consumers in several 

states, is forced to retire a unit or the entire plant, this will result in significant stranded 

investment. Commenters indicated that currently, LRS is under a mandate from the EPA under 

the Regional Haze Rule to install Selective Catalytic Reduction (SCRs) on all three units at 

LRS, at a cost of $750 million to the project owners. Commenters added that these investments 
181

must be made by 2019, a year before the start of the interim compliance period under the 

Proposed Rule. Commenters said that if a unit at LRS is forced to retire, $250 million of 

consumer-owned investment to meet Regional Haze rules will be stranded, on top of the 

economic value of the remaining useful life of the unit. Commenters said that those costs will no 

longer be spread out over the 20 year remaining life of LRS, but must nonetheless be recovered 

from consumers, a cost for which they will no longer receive any value. Commenters

emphasized that these stranded costs would exist whether the cost of financing a generating

facility has been paid or is still being paid. Commenters indicated that nonetheless, the existence 

of stranded cost is most clearly demonstrated when a facility has been financed with long-term 

debt, intended to roughly match the useful life of the facility, that is still being repaid.

Commenters explained that as state- or locally-owned, not-for-profit entities, public power 

utilities are limited in how they raise funds for long-term infrastructure investments of all sorts, 

including electric power generation facilities and facility modifications - generally public power 

utilities raise these funds with long-term debt in the form of municipal bonds. Commenters said 

that municipal bonds are unique in that they tend to have maturities nearly twice as long as 

corporate bonds and generally are issued as a series of bonds with varying maturities, rather than 

a single maturity. Commenters said that while the typical power-related bond issue is relatively 

small, issuances financing electric generation or transmission projects generally total hundreds of 

millions or even billions of dollars and can have maturities as long as 50 years. Several 

commenters indicated that if a coal generating plant is retired early as a result of the proposed 

regulation, customers will be forced to pay for the cost of financing a new source of power 

generation, while also repaying the debt remaining on the retired plant (which could include debt 

associated with upgrades completed to comply with other EPA regulations such as Regional 

haze). Commenters said that how to accurately account for such stranded assets is something 

that has, so far, not been addressed by the proposed rule, and that needs to be remedied in a way 

that accurately balances the utility's need for financial stability and the customer's need for 

reasonable rates.

Commenters stated that the EPA should finalize a rule with an explicit opportunity for states to 

set up subcategories or alternative regulatory compliance options for public power or municipal 

utilities because municipal bonds tend to have maturities nearly twice as long as corporate bonds. 

Commenters indicated that therefore, the consequences are more significant than for most 

investor-owned utilities or merchant power plants. Commenters contended that Section 111(d) 

expressly allows for state consideration of such factors. 

Commenters stated that the EPA must allow states the flexibility to adjust both the emission 

reduction goals and implementation dates to assure that the requirements on the state reflect a 

BSER that assures the reliability and security of the electric system while providing reasonably 

priced electricity to the consumer.

Comment 6: EPA should take into account book life of original asset and any upgrades as it 

relates to both interim and final goals. EPA should exclude from re-dispatch any coal-fired 

generation with remaining book life as of January 1, 2030. Commenters provided definition of 

book life and examples of significant pollution controls, and identified the states with goals that 
182

would change as a result of such an exclusion. Incorporating this exclusion would translate into 

more reasonable, equitable goals, and still result in substantial emissions reductions.

Response 6: The EPA disagrees that the remaining useful life of particular facilities should be 

reflected in the CO2 emission rates and state goals established in the emission 

guidelines. Section 111(d) requires that EPA’s emission guidelines permit the states to consider 

remaining useful life in applying standards of performance to particular affected EGUs, and does 

not call for facility-specific remaining useful life considerations to be taken into account in 

determining the levels of emission performance that reflect the BSER.

See response to comments 1 and 2 in this section (4.7.2). See also sections I.A, II.F-G, V.A-C, 

VIII.G-H, X.C, XI.C-E, and XII.E of the final rule preamble of the CPP for the EPA’s response 

to this comment.

The following are summaries of the specific public comments under this comment:

Commenters said in the NODA, the EPA acknowledges that "an additional way to address" 

concerns about stranded investments in connection with the interim goal "may be for the agency 

to take account of the book life of the original generation asset, as well as the book life of any 

major upgrades to the asset, such as major pollution control

retrofits."

Commenters supported this alternative, but believes that it should be extended to address the 

final goal, as well as the interim goal, because the potential for stranded investments does not go 

away at the end of the interim period. Commenters said that many EGUs will have remaining 

book life in 2030, and in order to assure that the application of building block 2 does not result in 

premature closure of these plants, the EPA should adjust the redispatch calculation.

Commenters said specifically, they propose that the EPA exclude from re-dispatch any coal-fired 

generation with a remaining book life as of January 1, 2030. Commenters said book life would 

be defined as the period ending on the later of:

• 40 years after initial commencement of operation of the EGU; or

• 20 years after commencement of operation of significant air pollution controls.

Commenters said for most plants, significant air pollution controls would consist of selective 

catalytic reduction systems (SCR), baghouses or flue gas desulfurization (FGD) systems. 

Commenters said that for small utilities, as defined by the Federal Energy Regulatory 

Commission (FERC), significant air pollution controls would also include selective non-catalytic 

reduction systems (SNCR) or electrostatic precipitators (ESP).

Commenters indicated that this stranded investment exclusion would affect only those states 

where the amount of generation with book life remaining in 2030 exceeds the amount of redispatch assumed in building block 2. Commenters said based on their analysis, if coal-fired 

EGUs with remaining book life were excluded from re-dispatch, the goals in eight states 

would increase: Arizona, California, Delaware, Florida, Mississippi, Nevada, New Hampshire 
183

and New Jersey. Commenters indicated they used the Brattle data to calculate the approximate 

impact of the stranded investment exclusion on total CO2 emissions. Commenters stated that in 

terms of the number of states affected and the total amount of CO2 reductions achieved, the 

impact of the proposal would be minimal.

Commenters noted that the Brattle data did not account for small utility EGUs that would be 

excluded from re-dispatch due to the installation of SNCR or ESP. Commenters indicated that 

they are aware, however, that Apache Unit 3 would qualify for the exclusion on that basis and 

took that into account in calculating the impact of the proposal. Commenters indicated that they 

do not believe that excluding small utility EGUs in other affected states would have a substantial 

impact on the CO2 reductions achieved.

Commenters said that under their proposal, Arizona's final goal would be 955 lbs CO2/MWh, 

rather than the 702 lbs CO2/MWh originally proposed in the CPP. Commenters said the 34 % 

reduction in rate required of Arizona would still be substantial and would represent significant 

progress toward reducing greenhouse gas emissions. Commenters added that at the same time, it 

would be much more reasonable and equitable, when compared to the reductions required of 

other states, than the 52 % reduction required in the CPP proposal. Commenters said it would 

also be much more consistent with EPA's stated goal of establishing "reasonable rather than 

maximum possible implementation levels" for each building block.

Comment 7: Reduced use of very efficient coal-fired units will result in these units being 

economically stranded. Instead, these units should be deemed as already meeting BB1 measures, 

and should be exempt from BB2; reduced use of any EGU with remaining life will result in 

stranded assets; one-size-fits-all approach not appropriate

Response 7: The EPA disagrees that the remaining useful life of particular facilities should be 

reflected in the subcategory-specific emission performance rates and state goals established in 

the emission guidelines. Section 111(d) requires that EPA’s emission guidelines permit the 

states to consider remaining useful life in applying standards of performance to particular 

affected EGUs, and does not call for facility-specific remaining useful life considerations to be 

taken into account in determining the levels of emission performance that reflect the BSER. 

Permitting consideration of short remaining useful life by states is not a one-size-fits-all 

approach.

See response to comments 1 and 2 in this section (4.7.2). See also section I.A, II.F-G, V.A-C, 

VIII.G-H, X.C, XI.C-E, and XII.E of the final rule preamble of the CPP for the EPA’s response 

to this comment.

The following are summaries of the specific public comments under this comment:

Commenters said that the EPA states that EGUs have plenty of time to replace older generation 

with new generation, conduct co-firing or fuel switching and conduct heat rate improvements 

and re-dispatch in the meantime - while they doubt that is the case with other EGUs, it certainly 

is not true for their utility. Commenters stated that three of their four units are relatively new, 
184

having operated for less than 4 years, and these units have a projected life of 50 years, which 

means they will not be replaced until long after the target compliance date for this proposed rule. 

Commenters said further, and more significantly, because these units are so new, they already 

operate with optimal heat rates.

Commenters said the efficiency of these units is actually a benefit that the EPA could use, if the 

rule is properly revised, to help the state of Illinois achieve the goals that the EPA has set under 

Block 1. Commenters stated that PSGC 1 and 2 already operate at a CO2 emission rate that 

outperforms the 6% USEPA goal by a significant amount, measured against the state coal-fired 

fleet rate - they are 14% more efficient than the state coal-fired fleet average, as per Illinois EPA. 

Commenters noted that Trimble Unit 2 is similar in terms of its emission rate and that Trimble 1, 

while not supercritical, is also very efficient compared to a fleet average. Commenters said 

therefore, Illinois (and by extension the Commonwealth of Kentucky) can achieve a heat rate 

improvement of their coal fleets under Building Block 1 by simply operating the PSGC and 

Trimble units to their maximum capabilities. Commenters said their units already emit CO2 at a 

rate lower than what would be accomplished by the Block 1 measures, and accordingly, these 

units should be deemed as already meeting Block 1 measures.

Commenters added that this, of course, presupposes that PSGC and the Trimble units will not be 

re-dispatched to lower and less efficient operating levels under the EPA's Block 2 approach. 

Commenters said improving the states' coal-fired resource heat rates requires the continued baseloading of these facilities and those efforts will be significantly impaired if these units are used to 

load-follow other resources, as the EPA anticipates as a result of Block 2. Commenters said 

conversely, providing some type of carve-out for units that can, when base-loaded, improve the 

states' positions in terms of CO2 emission, will not only help the state, but could avoid, to a great 

extent, our real concerns over these assets being economically stranded.

Several commenters indicated that even the reduced use of existing coal-fired EGUs will result 

in stranded assets. Commenters said even the ramping down of an EGU designed to be baseloaded results in a reduction in power sales. Commenters said these sales are used to offset the 

fixed costs needed to operate the plant, and the reduction in sales results in an increase in costs to 

our members as fewer MWhs in sales must support the same amount of fixed costs. Commenters

added that on top of that, we must procure outside energy that would otherwise have been 

provided by the affected EGU. Commenters said further, and more troubling, is the suggestion 

that an affected EGU install natural gas combined cycle ("NGCC") to offset its emissions, which 

creates another layer of financial burden - additional debt to finance and build an NGCC facility 

compounded by the stranded cost that the operation of that new NGCC facility creates at the 

affected EGU.

Commenters expressed grave concerns about the impact this rule will have given our operation 

inside multiple ISO markets. Commenters said IMEA has invested significant economic 

resources into ownership in four EGUs which operate in energy markets regulated by Federal 

Energy Regulatory Commission ("FERC") under the Federal Power Act. Commenters said in 

several instances, FERC has ruled that "one size fits all" is not the best approach for all the 

market regions. Commenters said that the EPA's proposed implementation using Blocks 2 

through Block 4 have taken that "one size fits all" approach without analyzing the practical 
185

limitations of implementing these blocks in the entire country or the disruption the rule's 

approach promises in the operation of the capacity and energy markets operated by the ISOs.

Commenters stated reducing usage of coal-fired EGUs lowers their efficiency and thus their 

cost-effectiveness, while potentially increasing emissions of ozone precursors. The commenters

said this creates pressure for early retirements, raising the risk of stranded assets and higher costs 

for electricity consumers.

Comment 8: CPP will prematurely retire many coal-fired power plants, result in stranded 

investment costs and increased customer costs

Response 8: See response to comments 1 and 2 in this section (4.7.2). See section I.A, II.F-G, 

V.A-C, VIII.G-H, X.C, XI.C-E, and XII.E of the final rule preamble of the CPP for the EPA’s

response to this comment. Additionally, see GHG Mitigation Measures TSD.

The following are summaries of the specific public comments under this comment:

Power purchase agreements. Commenters said the lack of cost recovery certainty will likely lead 

to increased financing costs in the future, increased customer costs, and possibly regulatory 

denial of power purchase agreements (PPAs). Commenters said the problem for jurisdictional 

utilities results from the increased risk associated with recovery of PPA-related expenditures 

through prudency reviews. Commenters said the lack of cost recovery certainty will most likely 

result in less-than-optimal financing arrangements and increased customer costs as compared to 

existing coal-fired electricity generation assets. Commenters said this result could lead to 

regulatory denial of PPAs, giving rise to new regulatory proceedings to determine whether the 

actions of the jurisdictional utilities were prudent, including consideration of the economic 

consequences to customers from prematurely retiring coal plants. Commenters said this 

regulatory dilemma subjects Tucson Electric Power (TEP) and its customers to unnecessary and 

potentially costly economic risk. 

Arizona - ROI. Commenters said TEP has made significant investments in coal-fired plants and 

related equipment in order to provide safe, reliable and cost-effective electric service to its 

customers in Arizona. Commenters said this investment was premised upon TEP's opportunity to 

earn a reasonable return of and on its capital. Commenters said Arizona is a cost of service 

jurisdiction, thus, utility rates are determined after consideration of costs, including capital costs 

required to provide electric service to customers. Commenters said a critical component in 

establishing rates is determination of a reasonable Return on Investment (ROI).

Commenters said although numerous factors are considered in this determination, there can be 

no doubt that certainty of cost recovery is an important component. Commenters said recovery of 

costs associated with generation and transmission assets utilized to provision electric service 

coincides with investor expectations, and the introduction of increased risk and uncertainty 

regarding cost recovery can subject a utility to increased financing costs. Commenters said under 

a cost of service scenario, additional costs are ultimately borne by ratepayers. Commenters said 

increased risk associated with an overreliance on market-based generation can have an adverse 

impact on TEP's ability to earn a reasonable return on its investment. Commenters said the 

unfortunate effect of a lower ROI can be unfavorable financing terms, which result in higher 
186

utility rates. Commenters said these adverse consequences can be avoided by not relying too 

much on a volatile electric generation marketplace. Commenters said prematurely retiring used 

and useful electric generation assets would be an unreasonable and costly consequence of 

the EPA's Proposal.

Minnesota - Sherco 3. Commenters stated the combined impact of Building Blocks 2 and 3 will 

require Sherco 3 (Sherco 3 is pulverized coal power plant with state-of-art air quality controls in 

Minnesota) to run less frequently, under certain operating scenarios, it may become uneconomic 

to run the plant. The commenters said to the extent that Sherco 3 is not dispatched often enough 

to generate a certain revenue stream, it may not make economic sense to continue the plant's 

operations long-term, thereby resulting in Sherco 3's premature retirement. The commenters said 

this outcome would result in millions of dollars in stranded assets for which cost recovery will be 

a significant concern.

Arizona - BB infeasibility leads to early retirement. Commenters stated EPA has proposed a 6% 

heat rate improvement. The commenters said Arizona's coal-fired EGU fleet is the sixth 

youngest in the nation; given the relatively young age of Arizona's coal-fired EGU fleet, the 

efficiency improvements that have already been achieved, and another of other considerations, it 

is infeasible for Arizona utilities to improve coal unit heat rates by 6% under BB1. The 

commenters said prematurely retiring these coal-fired EGUs by forcing ceased operation, before 

they are able reach their remaining useful life, will result in stranded investment costs that will 

be passed directly to Arizona electric customers.

Florida - >90% coal-fired generation must be eliminated. Commenters stated assessments for 

Florida have indicated, that to achieve the emission cap, more than 90 percent of the current 

coal-fired generation in the state, which produce about one-third of the state's electricity, must be 

eliminated. The commenters said the shutdown of those units well before the end of their useful 

life takes away the invest-backed expectation without compensation; to achieve the state's goal, 

some less-efficient gas-fired generation must also be retired. The commenters expected that three 

of its fossil fuel-fired units would be retired prematurely if EPA finalizes the rule as proposed. 

The commenters said to replace the coal-fired and less-efficient generation, utilities must expand 

energy efficiency efforts; improve heat rates; import more power; and build new, lower-carbonemitting natural gas plants, nuclear plants, and renewable energy facilities.

Florida - Gulf Power. Commenters stated EPA’s compliance modeling retires 100% of Gulf 

Power's coal-fired capacity - Crist Units 4-7, Daniel Units 1-2, Scherer Unit 3 and Smith Units 1-

2 - by 2018. The commenters said these units total 2009 MWs net summer capability, represents 

77% of Gulf's owned generation capability. The commenters said for Florida as a whole, EPA's 

compliance modeling retires 6,358 MWs by 2020 of coal due to the Clean Power Plan proposal; 

additionally, 3,395 MWs of oil and gas retire by 2020 in Florida in EPA's modeling. The 

commenters said adding the expected units retiring due to MATS, per EPA modeling, a total of 

12,222 MWs of coal and oil/gas is retired by 2020. The commenters said these retirements 

represent 21% of Florida's 2012 total generation capacity and 80% of Florida's 2012 coal 

capacity. The commenters said the retirements in EPA's modeling would create stranded 

investments and significant replacement generation costs; furthermore, the time schedule of these 

retirements as contemplated by EPA's compliance modeling is unrealistic due to the time 

required to build replacement generation, transmission, and natural gas pipeline infrastructure.
187

Virginia - Birchwood. Commenters stated the Birchwood facility has generated revenues under 

its power purchase contract that obligates Birchwood to be available to deliver electricity. The 

commenters said payments made by Virginia Power under the contract are directly recovered 

from Virginia ratepayers, who are effectively amortizing the cost of building the facility over a 

30-year period. The commenters said if Birchwood cannot be operated profitably under the 

Clean Power Plan program, it will be forced to retire before the end of its useful life, limiting the 

value Virginia ratepayers received for their investment.

Iowa. Commenters stated EPA's reduction requirements for some states are effectively 

unachievable without the forced, premature retirement of some existing coal and natural gasfired units that still have remaining useful life. The commenters said this would result in stranded 

costs that would be borne by consumers through higher electric bills, as well as potential 

negative impacts on local reliability. The commenters said it is unclear how this scenario would 

affect those members of Iowa Association of Municipal Utilities (IAMU) who own minority 

shares in generating plants.

Running coal-fired plant not always economically feasible. Commenters stated forcing changes 

in the operation of coal plants, especially retirements of coal units, will create stranded costs. The 

commenters said because there is no practical way to reduce the heat rate under building block 1, 

the only option remaining at a source is a drastic one: the owners are faced with the requirement 

to run the plant less or shut down one or more units entirely. The commenters said the first

option, running the plant less, will reduce the efficiency of the plant (and the heat rate, contrary 

to EPA's objective) and cause an increase in the operating costs, wholesale cost increases that 

will have to be passed on to our members and their customer-owners. The commenters said 

further, as EPA itself acknowledges, if coal plants are dispatched as load-following units, they 

will have higher heat rates when operated in this fashion and during periods of startup and 

shutdown. The commenters said it is unlikely, however, that simply running the plant less will be 

sufficient to meet the CO2 emission reduction required of units, whether under the rate-based or 

mass-based approach. The commenters said if, instead, the owners are forced to shut down a unit 

prematurely, it will cause significant stranded costs and will run afoul of the directive of 111(d) 

to take into account remaining useful life, an express statutory mandate. 

Arizona - even relatively new plants will be forced to retire. Commenters stated Arizona is home 

to some of the newest coal fired units in the country with the most recent units commencing 

operation as recently as 2009; these investments assume a long and useful life of 40 years or 

more. The commenters said the application of building block 2 would require the retirement of 

virtually all if not all coal generation in the state by 2020, with no consideration to the useful life 

of the existing coal fleet. The commenters said retiring these units far earlier than a reasonable 

planned useful life would result in excessive stranded costs and ratepayers essentially paying 

twice for this generation capacity.

Investment expectations. Commenters stated EPA specifically acknowledges in the Preamble to 

the proposed rule that coal has a place in the U.S. generation mix through 2030 and beyond. The 

commenters said the cooperative owners of clean coal generation facilities in Illinois have 

committed capital resources and taken on long term debt with the reasonable expectation that 

their units would be providing base load, reliable electricity for their members for decades in the 

future. The commenters said they believed that this long term cost stability and reliability to be 
188

in those members' best interests; however, the requirements of the proposed rule may strand 

those assets, especially in light of the failure to address the mis-match between the "integrated 

grid" concept and the state jurisdictional issues. The commenters appreciated that how 

investment expectations in plants are impacted by the proposed rule was raised as an issue in the 

Notice of Data Availability ("NODA") issued on October 28th, as it is hard to overstate the 

significance of this issue. The commenters hoped that EPA will work to avoid cutting short the 

useful life of generation resources that can still provide much needed base load generation well 

into the future and stranding those assets.

National cost assessment shortcomings. Commenters stated the CPP emission reduction goals for 

the states are all based on four compliance building blocks (BBs) that were developed 

considering national and regional assumptions and costs that do not translate to states and 

utilities. The commenters said the four BBs that are the basis of the mandatory standards for the 

states assure that many utilities will have to prematurely shut down capital intensive, low cost 

coal plants, many with long remaining operating lives and unpaid debt, which will cause major 

stranded investment costs to consumers. The commenters said these stranded asset costs were not 

included in the national cost assessment developed by EPA; EPA also failed to assess the costs 

of building new gas pipelines and transmission lines that would be required by the closure of so 

many coal plants. The commenters said the four BBs approach threatens continuing electric 

reliability and assures that many states and utilities cannot meet the mandatory emission limiting 

goals in a cost-effective manner.

Regulatory taking. Commenters stated because the proposal as it stands would likely result in the 

premature closure of existing power plants, the proposal's requirements would appear to be a 

regulatory taking requiring compensation because of the premature closures and uneconomic 

curtailment it will require.

Arizona - severe impacts. Commenters stated the retirement of some or all coal-fired generating 

capacity in Arizona that would be necessary to meet the interim and final goals of the CPP would 

result in significant stranded asset value for utilities in Arizona. The commenters said this 

stranded value is only exacerbated by recent investments in control technology and plant 

upgrades in recent years. The commenters said depending on the treatment, these costs would be 

recovered through higher rates for Arizona customers. The commenters said the stranded asset 

value under the building block scenario is estimated to be $3.8 billion in 2020 ($3.0 billion in 

2013$), resulting from the retirement of all coal generation in the state. The commenters said the 

ultimate treatment of these stranded costs could result in severe rate impacts for Arizona 

customers in or around 2020.

Not just and reasonable result. Commenters stated EPA's proposal will not produce a just and 

reasonable result insofar as the emissions standards will accelerate the closure of coal-fired 

generation.

MRES and Laramie River Station. Commenters stated for MRES, the Clean Power Plan is likely 

to be costly; MRES only has one base load resource which is a coal plant, and no Natural Gas 

Combined Cycle (NGCC) capacity, MRES is left with few options to reduce CO2. The 

commenters said to entirely shut down all three units at Laramie River Station would cause 

MRES alone an increase in wholesale power costs of 65%, and would cause member municipal 
189

utilities on average a 20% increase in retail rates to their customer-owners. (That is not even 

considering what it would do to the costs for the other 5 co-owners of the plant.) The 

commenters said if a less drastic approach were taken and only one unit at LRS were retired, it 

would cost MRES approximately 20% more or $35 million annually to replace the lost base load 

generation with lower emitting natural gas, assuming natural gas prices do not experience a rapid 

escalation. The commenters said these costs are direct costs that would be felt by consumers in 

Iowa, Minnesota, North Dakota and South Dakota. The commenters said if the owners of LRS 

are forced to retire a unit or the entire plant, this will result in significant stranded investment. 

The commenters said LRS has a gross book value of about $1.2 Billion, and the Western 

Minnesota/MRES share of that is about $200 million. The commenters said currently, LRS is 

under a mandate from EPA under the Regional Haze Rule to install Selective Catalytic 

Reduction (SCRs) on all three units at LRS; this will come at a cost of $750 million to the 

project owners. The commenters said for MRES, its share of this cost will be approximately 

$125 million, which will cause an increase in wholesale rates of 10%. The commenters said 

these investments must be made by 2019, a year before the start of the interim compliance period 

of the Clean Power Plan. The commenters said if forced to retire a unit, $250 million of 

consumer-owned investment to meet Regional Haze rules will be stranded, on top of the 

economic value of the remaining useful life of the unit. The commenters said those costs will no 

longer be spread out over the 20-30 year remaining life of LRS, but must nonetheless be 

recovered from ratepayers, a cost for which they will no longer receive any value. 

Miscellaneous. Commenters stated Florida Municipal Electric Association (FMEA) members 

invested billions of dollars on new coal fired generation, because there was no other alternative 

for baseload generation. The commenters said many of the utilities carry considerable debt on 

these coal fired units. The commenters said the utilities recently spent $2 billion for new air 

pollution controls to meet the interstate rule and the utility max rules. The commenters said 

forcing these utilities out of service prematurely, will leave ratepayers with hundreds of millions 

of dollars in stranded costs; these costs do not appear to be taken into consideration in EPA's 

economic analysis.

Commenters stated MEAC members have funded half-a-billion dollars of emissions-controlled 

state-of-the-art controls for Georgia's coal-generating resources based on recent federal and state 

rules. The commenters said the proposal would also require reduced coal unit operations, 

potentially shutting these units down, which would strand the costs of these recent environmental 

investments and again raise the cost of electricity unnecessarily to Georgia's communities.

Commenters stated based on EPA's calculations contained in the proposed rule, Seminole's coalfired generating facilities have been arbitrarily scheduled for retirement well before the end of 

their useful life, with no regard for economic hardship it will cause members and consumers. The 

commenters said in 1978, the U.S. enacted the Power Plant and Industrial Fuel Use Act, which 

restricted new power plants from using oil or natural gas for power generation, and encouraged 

the use of coal; the Seminole's coal-fired facility came online in 1984. The commenters

said Seminole has invested more than $530 million in environmental control technology and 

recycling practices, $260 million of which was placed in service less than 5 years ago. The 

commenters said should the EPA's proposed carbon rule be finalized, these costly investments 

will become stranded assets, and Seminole's coal-fired power plants will be forced to closed, 

leaving 300 hard-working, skilled employees without a job.
190

Comment 9: Plant operating at lower capacity than constructed for; not optimal; costs become 

stranded

Response 9: See section I.A, II.F-G, V.A-C, VIII.G-H, X.C, XI.C-E, and XII.E of the final rule 

preamble of the CPP for the EPA’s response to this comment. Also, see response to comments 1 

and 2 in this section.

In addition to the concern about operating coal less, EPA compliance modeling still anticipates 

that the remaining coal fleet operate at a high utilization level. There is no expection, 

assumption, or requirement that all coal units ramp down operation equally. EPA anticipates 

some of the reduction in fossil steam will come through already scheduled coal retirements, 

while other untis remain online and operate in typical baseline fashion.

The following are summaries of the specific public comments under this comment:

Commenters stated the assumption of simply operating coal less is not necessarily efficient or 

practical. The commenters said unlike most NGCC units, coal units don't use the fuel to operate 

the turbines that produce the electricity; rather, coal units use the coal to super-heat water to 

create steam which is then used to operate the turbines and produce electricity. The commenters

said large conversions of water to steam cannot vary quickly throughout the day or "back-off" 

when a certain emissions limitation is reached. The commenters said this complex process 

requires planning a significant fuel to steam conversion, for a significant amount of power, for an 

extended period of time. The commenters said the complex process to bring the water to the 

appropriate level of steam for production is the same process whether the plant is to operate for 

the next 25 hours or the next 2500 hours. The commenters said the direction to simply operate a 

coal-fired plant less, means that the plant would incur the same costs, start-up time and wear and 

tear for less generation output as it would if it ran at full capacity; this means a higher cost to 

operate the plant and a less efficient use of the plant (i.e., a lower heat rate). The commenters

said if a plant is operating at a lower capacity than what it was constructed for, it is not running 

at optimal capability and is therefore not recovering the cost to construct, operate, and maintain 

it; these costs then become stranded; and for customer-owned utilities like municipals and 

cooperatives, the stranded costs become an additional and direct expense for the rate-payer. 

Comment 10: Rapid forced retirement of coal-fired units will cause significant stranded assets 

and may result in increased ratepayer rates

Response 10: See responses to comments 1 and 2 in this section (4.7.2), including the reference 

to the July 2015 docket memo titled “Stranded assets analysis.” See section I.A, II.F-G, V.A-C, 

VIII.G-H, X.C, XI.C-E, and XII.E of the final rule preamble of the CPP for the EPA’s response 

to this comment. 

The following are summaries of the specific public comments under this comment:
191

Commenters stated that if EPA does not modify the assumptions of Building Block 1 in the 

proposed BSER, the rapid retirement of coal-fired generation due to the re-dispatch envisioned in 

Building Block 2 would cause significant costs for Florida and its ratepayers in terms of stranded 

assets. Commenters said such rapid changes in the electricity mix raise the potential for 

significant stranded costs, which may have energy cost implications for California 

ratepayers. Commenters added that due to the interrelated nature of the electricity grid, it is 

impossible for states such as California to implement the Proposed Rule in a vacuum; 

compliance challenges and constraints faced by neighboring or regional partners will also have a 

profound impact on California and the California utilities.

Commenters indicated that the forced early retirements of four coal-fired generating facilities in 

Wyoming would result in serious threats to regional reliability and a financial catastrophe for 

ratepayers. Commenters said as explained in our December 16, 2013, letter to Assistant 

Administrator McCabe, in 2020 the stranded investment for Dave Johnston will be 

$393,632,687; for Naughton, $326,213,892; for Jim Bridger, $524,351,740; for Wyodak, 

$248,714,883. Commenters indicated that in addition to the amounts listed at that time, Jim 

Bridger is undergoing investments in regional haze compliance which will add about $800 

million of invested capital. Commenters stated that these investments should have a depreciable 

life of at least 20 years. Commenters stated the four plants are system assets, so Wyoming 

ratepayers would bear about 15.7% of those amounts. However, commenters said since we 

believe such closures would have a wide economic impact and be accompanied by a broad 

impact on the coal industry, we also anticipate that there will be fewer ratepayers to shoulder 

these burdens, sending rates higher than the 15.7% would suggest. Commenters clarified that 

none of these calculations include the cost of constructing replacement generation or purchasing 

replacement power.

Commenters expressed concerns regarding possible stranded costs from early retirement of 

baseload units that have been substantially retrofitted within the last decade. The commenters

explained that of the remaining affected coal-fired facilities in Minnesota, most, if not all, have 

had emissions reductions equipment installed within the previous ten years. The commenters

added that given the stringency of Minnesota' rate-based standard, some coal-fired resources 

would need to be curtailed too soon to recover their fixed operations and maintenance costs. The 

commenters stated that since these changes were made to fully comply with existing EPA rules, 

and took into account the costs and useful life of the retrofits, early replacement will shift extra 

costs to ratepayers that can be avoided by careful, long-term planning. The commenters

requested EPA clarify the rate impact methodology for facilities that have had major equipment 

installations to comply with mercury, regional haze, and interstate air quality rules. The 

commenters noted that to properly estimate the rate impacts of early retirement, capital budgets 

for retired assets need-to be modified to reflect a shorter operating life, and capital depreciation 

schedules changed to match the modeled retirement date. The commenters added that the 

recovery of decommissioning costs would need to be adjusted so that sufficient funds would be 

available to remove and remediate the sites. The commenters stated that this is unit-specific 

information that does not appear to exist in EPA's technical support documents. The commenters

also stated that it will be easier to manage stranded costs if the interim goal is eliminated. The 

commenters stated that alternatively, the final rule could provide states with the flexibility and 

authority to conduct its own unit-level evaluations through IRP and rate cases so that state 
192

commissions could take depreciation adjustments and rate impacts into account when submitting 

a state compliance plan.

Commenters stated the proposed rule is inconsistent with changes made in response to other EPA 

actions and risks stranding those investments. The commenters said under the EPA's building 

block methodology, the commenters would have to retire all of the coal-fired resources covered 

by the EPA's plan for Arizona in order to comply with both the interim and final goals; under 

this scenario, The commenters stated their reliance on natural gas would increase from 28 

percent to 70 percent by 2020. The commenters said the remaining 15 percent reflects the 

commenters’ ownership in the Navajo Generating Station and the Four Corners Power Plant, 

both located on Native American land and covered under a separate rulemaking.

Stranded assets

Commenters stated EPA's CPP proposes that one of the coal fired plants in Missouri, built four 

years ago is projected to be closed permanently by 2020 while it still has significant useful life, 

and long before the bonds used to build the plant are paid off. The commenters said this plant 

operates at emission levels significantly lower than that normally projected for the U.S. Coal 

fleet. The commenters stated have a significant fiduciary responsibility for the continued 

operation of these plants and believes it is essential that certain specific issues are fully explained 

and communicated within the docket governing this set of proposed guidelines.

Comment 11: Re-dispatch will lead to forced early retirement of coal-fired EGUs which will 

result in significant stranded costs resulting in FL ratepayers facing 25-50% rate increases which 

will be stifling to economic development; value of recent environmental upgrades will be lost; 

EPA's treatment of Georgia nuclear plants under construction is punitive; discussion of 

reasonableness of each of BB for JEA

Response 11: See response to comments 1 and 2 in this section (4.7.2). See section I.A, II.F-G, 

V.A-C, VIII.G-H, X.C, XI.C-E, and XII.E of the final rule preamble of the CPP for the EPA’s

response to this comment. EPA no longer includes the Georgia nuclear plants in its 

quantification of BSER. See section V.A of the final rule preamble for discussion of nuclear 

generation and the BSER.

The following are summaries of the specific public comments under this comment:

Re-dispatch will lead to early retirement. Commenters said that as proposed, the CO2 reduction 

requirements would effectively require JEA and other Florida utilities to retire generation assets 

prior to the end of their useful lives. Commenters said their solid fuel facilities were designed 

and constructed to run as base load energy supply, meaning they perform at very high capacity 

factors. Commenters said when the base load units are operated as designed, they achieve heat 

rate efficiency and low dispatch cost. Commenters said by requiring significant re-dispatch away 

from these base load units, the rule prevents them from running as designed, further degrading 

efficiency and ultimately making continued operation of these units non-economic. Commenters

said the rule forces early retirement in practice, even if it does not do so explicitly.
193

Commenters said they have more than $1.5 billion in debt outstanding on solid fuel generating 

assets, amortizing over the expected useful life of those facilities to 2039. Commenters said by 

forcing re-dispatch and retirement of the units beginning in 2020 - the practical consequence of 

having to meet even the interim goal - the EPA will leave JEA's customers holding a bill for 

$795 million in stranded costs. 

Recent environmental upgrades and GA under-construction nuclear. Commenters said their 

unique geographic position results in a double penalization under the rule: not only will we be 

forced to comply with the Florida state plan for generating assets, but we also will be forced to 

comply with Georgia's state plan. Commenters said two of JEA's key generating resources -

Plant Scherer and Plant Vogtle - are located in the state of Georgia, but supply or will supply 

substantial load in northeast Florida. Commenters said Georgia's goal is all but impossible to 

meet with the continued operation of Plant Scherer, jeopardizing JEA's lowest-cost generating 

unit despite the installation of more than $597 million in state-of-the-art pollution control 

investments for Scherer Unit 4 between 2007 and 2012, with JEA's share being $141 million. 

Commenters said Georgia faces the further penalty of including new nuclear plants under 

construction in EPA's formula for setting Georgia's goal rather than as investments to help meet 

the goal, thereby eliminating the future zero carbon benefit of Plant Vogtle when it comes online 

later this decade. Commenters said given the remaining risks inherent in a construction project of 

this magnitude and the uncertainty around ultimate schedule and cost, including these units as if 

they are already on-line is punitive in a state that took proactive steps to reduce its carbon 

footprint ahead of any federal requirements. Commenters indicated JEA entered a purchase 

power agreement for future Vogtle energy to increase fuel diversity and help reduce its 

environmental impacts.

Stranded cost recovery/rate increases/economic impacts. Commenters said they optimistically 

assume that Florida's state plan would include a stranded cost recovery mechanism that would 

fairly apportion these extraordinary costs across all Florida ratepayers. Commenters said with 

such a mechanism in place, and considering investments in replacement generating resources 

that would necessarily accompany the retirement of solid fuel resources, Florida ratepayers are 

facing average across the board rate increases of 25 to 50 percent which will be stifling to 

economic development in our state. Commenters said while some states can comply with the 

EPA's proposed rule at very low cost, simply by retiring a single generating resource that was 

already slated for retirement (Washington), or continuing to operate substantially all solid fuel 

units with only heat rate improvements imposed (Kentucky), Florida and other states face a true 

and extraordinarily expensive transformation in generating resources. Commenters said the 

resulting rate impact will make the entire state uncompetitive from an economic development 

perspective. Commenters said as large projects compete for location sites in the U.S., states with 

non-disruptive compliance costs will be clear winners in economic development at the expense 

of those with very high compliance costs. Commenters said given the importance of attracting 

new business to Florida for its overall economic growth, this paints a bleak picture for the 

foreseeable future, potentially increasing unemployment and handicapping economic prosperity 

for citizens of our state.

Applicability of Building Blocks. Commenters discussed the applicability of each of the four 

building blocks to their facilities.
194

Building Block 1: All possible cost effective heat rate efficiency improvements have been made -

additional investment would not be economic and would result in 1.5% HRI at best. Investing 

additional capital in units that under BB2 may only run at 10% of capacity, or be subject to early 

retirement, would be truly noneconomic.

Building Block 2: JEA currently utilizes optimal economic dispatch for the generating fleet -

therefore any change in current dispatch decisions will result in more expensive power 

generation

Building Block 3: Renewables practical for FL have much higher cost per MWh than traditional 

units and do not provide base load capacity. Therefore, replacing solid fuel generation with RE 

would increase cost and decrease reliability.

Building Block 4. JEA has embraced EE over past decade and has achieved a cumulative 3.3% 

reduction in energy sales (2004 to 2013). Each JEA residential customer, on average, is using 

13% less than 10 years ago, and commercial customers are using 19% less electricity, on 

average. By using base year of 2012 the CPP gives no credit for EE improvements already 

made. Because their EE/DSM program is mature, significant additional investment in demand 

side EE will likely not economically achieve results.

Comment 12: Building Block 2 redispatch will cause shutdown of coal units that APCD have 

been recently put on for other regulations; causes stranded costs; EPA did not account for

Response 12: See response to comments 1 and 2 in this section (4.7.2). See also section I.A, 

II.F-G, V.A-C, VIII.G-H, X.C, XI.C-E, and XII.E of the final rule preamble of the CPP for the 

EPA’s response to this comment. Additionally, see section V.D. of the preamble and the GHG 

Mitigation Measures TSD.

The following are summaries of the specific public comments under this comment:

Commenters stated BB No. 2 is designed to force load shifting from coal to gas-fired generation 

for compliance and most of the reductions are front-loaded to the 2020-2022 time period. The 

commenters said such a proposal creates winners (gas plant owners) and losers (coal plant 

owners) without regard to the real cost borne by consumers. The commenters said utility specific 

analysis shows that the shift to natural gas would result in the premature closing of many coalfired units; recently, utilities have spent billions of dollars for "state of the art'' air pollution 

control systems to meet the emission limits of the Clean Air Interstate Rule (CAIR) and the 

utility MATS rule. The commenters said EPA's proposal does not take into account the billions 

in stranded costs for those units that will fall on consumers if those units are forced to 

prematurely shut down. 

Commenters stated EPA's failure to account for, and appropriately adjust states goals to reflect 

these commitments, is especially troubling since EPA provided no guidance to utilities that 

undertook the significant investments required by UMATs that it contemplated forcing the 

closure of these plants in the near term. The commenters said the Federal government, which 

dictated that utilities build coal-fired generating units and recently adopted rules that required 
195

massive investment in pollution controls for these plants, is now proposing a regulation that will 

assure their premature closure at great cost to consumers in a manner that threatens electric 

reliability. The commenters said failure to assess this cost impact is contrary to EPA's own 

guidelines which require the cost impact of a Section 111 proposal be assessed. 

Commenters stated EPA recognizes in the NODA released October 28, 2014, that stranded costs

associated with existing fossil fuel electric generation projects is an appropriate and necessary 

component of a rational transition toward a lower carbon electric generation fleet. The 

commenters said unfortunately, EPA's nod to this issue in the NODA is limited and fails to 

provide adequate guidance as to how EPA might propose to imbed into a 111 (d) program a 

mechanism to address this critical issue. 

Commenters stated even as EPA is proposing a rule which establishes a state-by-state reduction 

goals based on modeled closure of existing coal units, it is, at the same time, approving 

emissions control projects for plants it presumes will close. The commenters said EPA cannot 

have it both ways; Utilities must be allowed to utilize investments for their full economic life in 

order to pay back financial obligations associated with these facilities and to capture appropriate 

economic return on that investment. The commenters said given the massive investment 

occurring nationally to meet new, stringent emissions limits for EPA regulations, it would be 

appropriate for EPA to rerun modeled reductions for states in a building block approach 

imbedding into the model economic return for these investments. 

Commenters rejected the illusory flexibility EPA touts States have in this Proposed Rule. The 

commenters said after extensive analyses, discussions with state regulators, and participation in a 

variety of industry group discussions, the commenters have concluded the real effect of this rule 

is a shift in generation away from the one and only coal-fired plant that the commenters own and 

operate to natural gas combined cycle ("NGCC") units. The commenters said this inevitable shift 

in dispatch will result in a dramatically decreased capacity factor at the Charles R. Lowman Plant 

("Lowman"). The commenters said as a result, additional capital investment at Lowman (to meet 

other capital-intensive mandates such as the anticipated Effluent Guidelines and Coal 

Combustion Residuals rules, as well as normal investment in the upkeep and reliability of any 

power facility) would not be economically feasible or justifiable. The commenters said the 

prospect of abandoning a well-maintained electric generating resource featuring state-of-the-art 

air pollution control equipment as a result of a rule that will not have any effect on the global 

climate is nonsensical. The commenters said ruining the viability of a well-controlled, wellmaintained coal plant under the auspice of setting guidelines for existing sources is certainly 

reason enough to abandon the rule.

Commenters stated KMU's largest member, Kansas City BPU, is currently committed to a $250 

million emission control project at its baseload coal-fired power plant; similarly, the other five 

largest coal-fired power plants in Kansas have made and continue to make huge investments in 

criteria pollutant emission reduction equipment over the last several years. The commenters said 

the investments have largely been made to comply with a variety of other EPA regulations such 

as the Cross State Air Pollution Rule, the Mercury and Air Toxics Rule, and Kansas City ozone 

maintenance plans; more than three billion dollars has either already been or will be spent. The 

commenters said due to the fact that investments of this scale are made over long periods of time, 

there exists a significant risk of stranded costs due to redispatch to non-coal power supply 
196

sources under the Clean Power Plan. The commenters said this change in redispatch would result 

in the under-utilization of power plants that have recently undergone costly updates. The 

commenters said the proposed 111(d) rule would force upon utilities, wholesale customers, and 

Kansas citizens the burden of these stranded investments. The commenters said municipal 

utilities are entirely consumer owned; as such, any stranded investments of a municipal utility 

come 100% out of the pockets of the utility customers and not from shareholders. The 

commenters said in addition, stranded costs are a huge issue for smaller municipal utilities. The 

commenters said if existing units cannot operate, it will no longer be cost effective to customers 

to keep the machinery; municipal utility customers invest millions every year to guarantee 

reliability and quality service. 

Commenters stated if a utility chooses to retrofit a coal plant to burn natural gas, the associated 

reduction in CO2 emissions should count towards meeting the EPA's proposed regulations; for 

example the City of Ames Electric Service is converting its 109 MW coal fired power plant to 

burn natural gas to comply with other EPA regulations, including the Mercury and Air Toxics 

Standards rule. The commenters said as acknowledged by the EPA, the cost of this conversion is 

considerable; if the City of Ames does not receive credit for the associated reduction in CO2 

emissions, the utility would be forced to seek additional carbon reductions elsewhere, thus 

making the existing plant a stranded asset. The commenters said this would place a significant 

burden on the utility's rate payers. The commenters said Cedar Falls Utilities' Streeter Station 

Unit 7 has been a dual fuel, natural gas and coal, generator; however, in early 2014 Cedar Falls 

Utilities declared the unit a natural gas unit to comply with the EPA's Mercury and Air Toxics 

Standards rule.

Commenters stated re-dispatching Mississippi's natural gas, combined cycle fleet of 70 percent, 

would force the shut down of Mississippi's existing coal fleet. The commenters said this would 

severely restrict fuel diversity and leave customers at the mercy of ever-volatile natural gas 

prices. The commenters said it would force the retirement of the two large coal units at Plant 

Daniel in Jackson County, which is currently undergoing $660 million in investments to comply 

with the recently finalized mercury rules. The commenters said stranding these assets, would 

only further increase the cost for customers.

Comment 13: Investments made in coal-fired EGU and environmental compliance projects, 

would result in stranded assets; customers punished

Response 13: See response to comments 1 and 2 in this section (4.7.2). See section I.A, II.F-G, 

V.A-C, VIII.G-H, X.C, XI.C-E, and XII.E of the final rule preamble of the CPP for the EPA’s

response to this comment. 

The following are summaries of the specific public comments under this comment:

Commenters said that as a municipal utility, JEA is tasked with the need to provide the 

community with the least cost electrical supply possible while still meeting all environmental 

regulations, and to that end, JEA has slowly and methodically updated its generating fleet, 

transitioning from oil fired steam units to gas conversions, to its first (modern) coal-fired units, 
197

to gas fired CTs and one NGCC unit, and to (modern) petroleum coke (petcoke) and coal-fired 

circulating fluidized bed (CFB) units.

Northside 1, Jacksonville, FL upgrades. Commenters said in good faith JEA's customers invested 

$630M to re-power two oil-and-gas fired units to coal and petcoke-fired CFB boilers, including 

modifications to meet EPA rules. Commenters said JEA's total investment in Northside 1 and 2 

is currently almost one billion dollars. Commenters said this project, which entered commercial 

operation in 2002, was a DOE sponsored Clean Coal project which demonstrated the first large 

scale CFBs and set a new standard for BACT. Commenters indicated that the project resulted in 

a 170% increase in electricity production, while reducing total emissions of NOx, SO2 and 

PM. Commenters said the DOE established the technical requirements for this project, and 

supplied $72M toward construction, and the EPA has now drafted a rule that will prevent JEA 

from operating these units and receiving the value of the money that our customers (and Federal 

taxpayers) invested in good faith.

St. Johns River Power Park, Jacksonville, FL upgrades. Commenters said furthermore, to comply 

with the Clean Air Interstate Rule (CAIR) regulations JEA and FPL invested $278 million to 

install Selective Catalytic Reduction (SCR) systems at St. Johns River Power Park (SJRPP), the 

largest local coal units (these SCR systems became operational in 2010). Commenters said CAIR 

and the Clean Air Mercury Rule (CAMR) were later replaced with CSAPR and MATS, and it 

was ultimately determined that with these upgrades the units were expected to be capable of

CSAPR and MATS compliance. Commenters said the EPA has now drafted a rule that will 

prevent JEA from operating these units and receiving the value of the money that our customers 

invested in good faith to meet other environmental rules.

Schere 4, Juliette, GA upgrades. Commenters said for the same reasons as above, between 2007 

and 2012, JEA participated in comprehensive environmental control upgrades to the Scherer 4 

coal-fired generating unit, co-owned by JEA (23.64%) and FPL (76.36%). Commenters said the 

unit is located within Georgia Power service territory, and operated by Georgia 

Power. Commenters said the scope of these upgrades, at a total cost of over $597 

million, included installation of a wet scrubber, an SCR system, a fabric filter, and PAC injection 

for mercury control. Commenters said the EPA has now drafted a rule that will prevent JEA 

from operating these units and receiving the value of the money that our customers invested in 

good faith. 

Commenters said in all three cases above, JEA has proceeded in good faith to implement costly 

upgrades to its fleet, including Northside 2 repowering, partially funded by the DOE, in order to 

comply with new EPA regulations. Commenters said now, in a case of extreme over-reach, EPA 

is proposing regulations that will void these capital investments that recent EPA regulations 

required, and render five fully modern clean coal-fired generating units totaling 2,700 MW 4

capacity to be stranded assets. Commenters said that in 2020 JEA and its customers will have 

$795 million in debt outstanding on these three projects, and that debt will have to be repaid 

without the benefit of use of the underlying assets due to BB 2 and the interim goal date. 

Commenters said the CPP unnecessarily makes JEA customers' investments in costly 

environmental rules obsolete, exceeds EPA's authority, and requires JEA's customers to bear a 

disproportionate burden of the cost of compliance.
198

Missouri. Commenters stated that own portions of three coal fired power plants, all of which 

were built in the last three years at a cost of approximately $1.5 billion, and which comprise well 

over 50% of its generation capability. The commenters said the process to build these plants was 

begun in 2004, well before the current regulations were first proposed; further the bonds sold to 

finance the construction will not be paid off until well after 2040. The commenters said these 

electric plants are among some the low emitting power plants in the entire U.S. fleet; prohibiting 

the use of these plants as contemplated in this rule, will force Missouri's municipal electric utility 

customers into the financially untenable position of having to pay for unusable plants for over 30 

years while having to compete in the open marketplace for increasingly unavailable electric 

power. The commenters said essentially EPA's proposed guidelines force this class of customer 

to pay for electricity twice during a period when the agency predicts that rates will increase 

anyway. The commenters said the ultimate impact is a death spiral for small-town middle 

America as small manufacturers are forced to flee escalating electric power bills, and as 

residential customers have fewer and fewer dollars to spend at local stores to keep them solvent. 

The commenters suggested to allow existing plants with bonded indebtedness to continue to 

operate for the life of the plant or 40 years whichever comes first.

Florida- Gulf Power Crist. Commenters stated in 2009, a $600 million scrubber system began 

operation at Gulf Power Plant Crist in Pensacola, Florida. The commenters said EPA's modeling 

shows Crist units 4 and 5 retiring in the base case, and Crist units 6 and 7 retiring in the main 

compliance case. The commenters said the unrecovered cost of Plant Crist's scrubber system are 

thus stranded, negatively impacting Gulf Power's customers. The commenters said EPA must 

reassess its stringent proposal to specifically avoid stranded investments and existing generation 

assets.

Georgia. Commenters stated the proposal assumes that existing generation units will be retired. 

The commenters said Georgia has already certified the retirement of over 3,000 megawatts of 

coal resources, largely in response to environmental requirements. The commenters said the 

proposal assumes that Georgia will retire another 3,900 megawatts by 2025. The commenters

said retiring these additional megawatts will strand the significant investment Georgia has 

already made in the existing coal fleet, billions of dollars to reduce environment footprint.

Commenters stated over the past two decades, Georgia Power and Southern Company have gone 

to extreme measures to upgrade and implement environmentally friendly components to their 

existing facilities; these are goals that are important to them and ensure a fair, better quality of 

life for all here in the South.

Mississippi. Commenters stated this rule is very flawed when it looks at states like Mississippi 

and doesn't take into account the investments that people have already made and the life 

expectancy of plants that have already been environmentally controlled because the rules 

continue to shift. The commenters said for one set of rules $600 million were spent to comply 

with it and now the rules change.

Comment 14: Nebraska is only state in US with wholly publicly owned utility power sector, this 

means the CPP presents unique challenges to their power sector, and makes Nebraska public 

power districts more susceptible to hardships associated with stranded assets
199

Response 14: See response to comments 1 and 2 in this section (4.7.2). To elaborate further, the 

flexibilities that the emission guidelines provide for all states to choose different plan designs 

help address the unique attributes of the Nebraska power system. Nebraska public power 

representatives were among the stakeholders and state representatives who expressed interest in 

the possibility of power companies engaging in interstate trading -- without Nebraska joining 

with other states in a multi-state plan. The final emission guidelines provide for mass-based and 

rate-based interstate trading for states that would prefer to develop individual state plans., See 

also section VIII.H and section I.A, II.F-G, V.A-C, VIII.G, X.C, XI.C-E, and XII.E of the final 

rule preamble of the CPP for the EPA’s response to this comment. 

The following are summaries of the specific public comments under this comment:

Commenters stated that Nebraska is the only state in the U.S. with a wholly publicly owned 

utility power sector. Commenters said while this allows Nebraska to deliver efficient, low-cost, 

reliable electricity to over 1.8 million people, it also means that the Clean Power Plan presents 

unique challenges to Nebraska’s power sector. Commenters said Nebraska’s non-profit public 

power utilities are statutorily-created entities with limited control and authority, and are required 

by law to provide least-cost electricity generation. Commenters said as a result, Nebraska public 

power utilities have less financial flexibility than private entities, relying solely on bonds and 

ratepayer fees to finance investments in new facilities, retrofits to existing facilities, operating 

and maintenance costs, and other expenses. Commenters said this makes Nebraska public power 

districts more susceptible to the hardships associated with stranded assets. 

Commenters said Nebraska public power districts have already invested millions of dollars in 

upgrades and retrofits to bring existing units into compliance with other air quality regulations 

such as the Mercury and Air Toxics Rule, Regional Haze, Cross State Air Pollution Rule, and the 

sulfur dioxide (SO2) National Ambient Air Quality Standard regulations. Commenters said the 

Clean Power Plan puts these investments made for compliance in other air regulations at risk, 

forcing utilities to choose between investing in additional capital improvements and shutting 

down existing units prematurely, resulting in stranded assets. Commenters said due to the public 

power structure of Nebraska’s utilities, the only way to address the escalation in costs is to raise 

electricity rates on customers – the 1.8 million citizens of Nebraska – and these increases may be 

significant for those public power utilities with smaller service areas.

Comment 15: Significant investments have been made to upgrade coal-fired EGUs to comply 

with federal and state regulations, and these assets would be lost if units are forced to retire or 

operate less. Proposed regulation could force facility currently undergoing $384 million upgrade 

to retire. Rule does not consider time and money required for infrastructure upgrades. Extensive 

plant retirements as result of MATS and CPP are expected to exacerbate resource adequacy 

concerns unless additional replacement capacity can be built in timely fashion; G&T impacts 

will disproportionately impact rural cooperative customers.

Response 15: See sections VIII.G.1, VIII.H, I.A, II.F-G, V.A-C, VIII.G, X.C, XI.C-E, and XII.E 

of the final rule preamble of the CPP for the EPA’s response to this comment. See the “Stranded 

Assets Analysis” MEMO in the docket from July 2015.

The following are summaries of the specific public comments under this comment:
200

Several commenters indicated that the proposed rule will cause significant stranded costs from 

previous investments made to upgrade coal-fired EGUs for environmental compliance. 

Georgia. Commenters said that Georgia Power has invested $4.3 billion through 2013 to install 

environmental controls mandated by prior EPA rules in order to limit other pollutants with $1.1 

billion still slated for future improvements including $543 million in 2014 alone. Commenters

said that approximately $2.5 billion has already been invested in environmental control 

equipment at one of Georgia’s coal facilities, Plant Scherer, in addition to several other coal 

plants.

Big Stone Plant. Commenters said they have made significant investments in environmental

control upgrades and efficiency improvements at their various plants, and are approximately 

80% through a $384 million air quality control system (AQCS) upgrade at Big Stone plant to 

reduce emissions to comply with the Regional Haze Rule and Mercury and Air Toxics 

Standards. Commenters said before the AQCS project began, the EPA reviewed it through the 

promulgation of the State of South Dakota’s Regional Haze State Implementation Plant, and it 

was reviewed and unanimously approved by public utility commissioners in Minnesota and 

North Dakota, the states in which most of their customers are located. Commenters said the 

project represents the largest single investment their company has ever made. Commenters said 

that if the proposed rule is finalized as written, it would likely force retirement of Big Stone Plant 

shortly after the installation of the $384 million air quality control system that will make it one of 

less than 10% of coal-fired units nationwide to use similar state-of-the-art technology to control 

SO2, NOx, and particulate matter emissions. Commenters said that if the plant is forced to retire 

early, rates for Otter Tail’s rural, low-income and elderly customers would increase by as much 

as 20%.

Virginia. Commenters said that the proposed rule unfairly strands and penalizes those states and 

coal-fired power plants that invested in costly environmental upgrades. Commenters said for 

example, the Virginia State Corporation Commission (“VSCC”) recently commented that 

Virginia may need to retire coal plants prematurely in order to reach its emissions target, which 

would result in the loss of many recent coal-related investments, including: the Virginia City 

Hybrid Energy Center, opened in 2012 at a cost of $1.8 billion; the Chesterfield Power Station 

scrubbers, installed in 2011 at a cost of $275 million; and the Clover Power Station, opened in 

1996 at a cost of $1.2 billion, and with a planned service life of over 50 years.93 The VSCC also 

noted that “Virginia and West Virginia ratepayers have only recently begun paying for more than 

$2 billion in environmental controls necessary for Appalachian Power Company to comply with 

a 2007 EPA Consent Decree.”

Florida – Seminole. Commenters described past and on-going upgrades that have been made to 

the Seminole Generating Station (SGS). Commenters discussed various environmental control 

upgrades that have been added to the facility at a cost of more than $530 million. Commenters

indicated that additional environmental control projects are planned in 2015. Commenters

indicated that Seminole Electric Cooperative is a not-for-profit cooperative, and its costs are 

directly reflected in its rates. Commenters said if SGS were to be decommissioned prior to the 

end of its useful life, the net book value will have to be retired, written off, and collected from 

our Members, along with the interest expense on debt that was borrowed to match the expected 

useful life.
201

Wisconsin. Commenters said they estimate a cost of compliance for the proposed regulation to 

be $3.3 to $13.4 billion for Wisconsin alone. Commenters said that this cost estimate does not 

include any costs related to additional infrastructure needs associated with the rule, such as 

natural gas infrastructure necessitated by increased gas use contemplated under the proposal, or 

the need for new transmission lines. Commenters said Wisconsin currently does not have the 

infrastructure in place for this conversion, and it would take years to build. Commenters said 

furthermore, the EPA’s plan does not consider “stranded costs,”, which are those investments 

that have been made in coal-fired power plants that may need to be retire earlier than anticipated 

due to rule requirements.

HRI investments would be stranded. Commenters indicated that any investments made to 

improve heat rate (BB1) would be stranded to the degree that the coal sector capacity factor is 

diminished due to the forced increase of NGCC sector capacity factor (BB2). Commenters

stated that an unintended consequence would be that the lowest cost tons of CO2 reduction will 

have been displaced by the highest (among the building blocks), thus highly compromising the 

BSER cost effectiveness criterion.

Kentucky Cooperative. Commenters indicated that they rely on rate revenue from the high 

capacity factor operation of its 1,400 megawatt Spurlock Generating Station to service its 

substantial RUS debt, maintain infrastructure, pay for increasing maintenance expenses, expand 

its natural gas generation while struggling to maintain low rates. Commenters indicated they 

have invested well over a billion dollars to install state of the art emissions controls to comply 

with numerous other regulations issued by EPA under the CAA: its New Source Review (NSR) 

Consent Decree, Title IV, NAAQS, CAIR, CSAPR, NSR, MATS, the Clean Water Act, and 

various solid waste regulations. Commenters said their coal-fired units are among the lowest 

emitting units in the country. Commenters said now the EPA is proposing to restrict the ability of 

these well-controlled units from operating and will leave these investments as stranded assets 

and result in dramatic, unprecedented and dangerous increases in electricity rates. Commenters

said one of their EGU’s (Spurlock) potential stranded cost is nearly $1.4 Billion. Commenters

indicated this amount will potentially be even higher as they continue to invest in projects to 

meet additional non-CPP environmental regulations and other operating enhancements.

G&T Cooperatives. Commenters stated that the CPP imposes extraordinary costs on the 

operation of Generation & Transmission Cooperatives (G&Ts) which will disproportionately 

impact rural cooperative customers. Commenters said most G&Ts rely on high capacity factor 

operation of coal generation, and reducing this energy source will result in some G&Ts 

potentially having difficulty remaining financially viable and servicing debt, which will also 

adversely impact reliability. Commenters indicated that G&Ts have invested billions of dollars 

to install state of the art emissions controls to comply with numerous other regulations issued by 

EPA under the CAA: Title IV, NAAQS, CAIR, CSAPR, NSR, Regional Haze Rules and MATS. 

Commenters said now the EPA is proposing to restrict or eliminate the ability of these wellcontrolled units from operating which will leave these investments as stranded assets and result 

in dramatic, unprecedented and dangerous increases in electricity rates.

General. Commenters said that across the country MATS is forcing the retirement of 

approximately 47-75 GWs of coal units, and the CPP is estimated to force the retirement of an 

additional approximately 40-48 GWs of coal capacity. Commenters said these extensive 
202

retirements are expected to exacerbate resource adequacy concerns unless additional replacement 

capacity can be built in a timely fashion.

Commenters said that the EPA does not include provisions to avoid stranded costs and it is not 

clear that the EPA considered stranded costs when determining the cost and impact of the 

rule. Commenters said that prior to finalization, the EPA should analyze this issue, estimate the 

potential costs, and provide provisions for states to avoid stranded assets when complying with 

this rule. Commenters said that some sort of cost recovery mechanism should be provided to 

ensure electricity customers or utility investors are not left servicing the cost of investments 

stranded by the EPA and state regulatory measures. Commenters said the EPA should give 

consideration in its CPP target setting for states to delay CPP requirement implementation until 

after the costs for these EPA-mandated investments have been recovered.

Commenters indicated the stranded asset costs would most likely be imposed on consumers in 

addition to the higher cost of natural gas generation. Commenters said that for merchant 

generating companies, the forced retirement of coal-fired generation likely would mean 

bankruptcy and dissolution, since the coal-fired asset would have no salvage value. Commenters

said that the EPA must consider these costs before finalizing the Proposed Rule. Commenters

said utilities are currently investing significant amounts of money in coal-fired EGUs to comply 

with EPA regulations, and if these investments are prematurely lost due to forced retirement or 

reduced operation, there will be a public outcry.

Comment 16: Investment made by utilities to comply with other EPA regulations; result in 

stranded assets

Response 16: See response to comments 1 and 2 in this section (4.7.2), including especially the 

reference to the July 2015 docket memo titled “Stranded Assets Analysis.” See also section 

VIII.H and sections I.A, II.F-G, V.A-C, VIII.G, X.C, XI.C-E, and XII.E of the final rule 

preamble of the CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:

Commenters stated the CPP did not consider the investment made by utilities to comply with 

other EPA regulations including the Mercury and Air Toxics Standard (MATS), National 

Ambient Air Quality Standards (NAAQS), Cross State Air Pollution Rule (CSAPR) and that 

impact on the remaining useful life of a plant.

Several commenters stated approximately $2.5 billion of state-of-the-art environmental control 

equipment has been installed at Plant Scherer to control emissions of NOx, SO2 and mercury in 

response to various EPA and State of Georgia regulations. The commenters said this extensive, 

ten year effort was only just completed in 2013; however, based on EPA's own State Option 1 

IPM modeling, which shows Scherer Units 1 and 2 shutting down before 2020, this significant 

investment in clean energy in fact becomes a stranded investment. 

Several commenters stated in addition to the closing of Plant Scherer, EPA's IPM modeling also 

projects that Plant Wansley - located in Heard County, Georgia - will operate at a capacity factor 
203

significantly reduced from historical levels. The commenters said similar to Plant Scherer, 

significant capital has been invested in control equipment at Plant Wansley - selective catalytic 

reduction, flue gas desulfurization and activated carbon injection - for a total cost of about $800 

million. The commenters said given other EPA rulemakings under way - like the Steam Effluent 

Limitations Guidelines and the Coal Combustion Residuals Proposal, significant additional 

expenses for continued operation of coal-fired power plants may be incurred, potentially 

increasing the amount of stranded investment due to curtailed or halted operations. 

Commenters stated EPA noted that prior to release of its proposal, stakeholders expressed 

concerns that the proposed GHG existing source guidelines could potentially result in stranded 

investments in existing generation assets to comply with other EPA rules. The commenters said 

EPA states that the proposal includes features that are intended to avoid the creation of stranded 

assets. The commenters said based on its own modeling, EPA's attempt to avoid creating such 

stranded assets is insufficient. The commenters said for example, in 2009, a $600 million 

scrubber system began operation at Gulf Power's Plant Crist in Pensacola, Florida; EPA's 

modeling shows Crist Units 4 and 5 retiring in the base case scenario and Crist Units 6 and 7 

retiring in the Option 1 - State compliance scenario. The commenters said Gulf's investment in 

the scrubber is therefore clearly stranded in EPA's modeling. The commenters said since 2000, 

Gulf Power has invested over $1 billion in environmental controls; these environmental controls 

would be retired under the EPA's Option 1 - State compliance scenario. The commenters were

very concerned about these stranded investments and the associated negative customer impacts.

Commenters stated a concern is the potential stranding of costs (those which the company is 

unable to recoup because of changes in regulations) incurred to satisfy other environmental 

regulatory requirements.

Commenters stated these rules, as proposed, have a detrimental effect to Mississippians as they 

stand today; based on several investments that Mississippi has made to try to, one, comply with 

existing rules of the Environmental Protection Agency and also to bring about diversity to 

Mississippi's electric mix and electric generation mix. The commenters said as of today, the State 

of Mississippi has invested in just two projects alone, well over $850 million in increased 

projects and generation; one is to comply with EPA regulations at Plant Daniel for Mississippi 

Power. The commenters said the Public Service Commission approved $600 million in cost to 

clean up the environmental controls on Plant Daniel that serve the Gulf Coast region of 

Mississippi, which caused a rate increase for those customers, and based on the rules as they are 

presented today, that $600 million isn't worth a penny; that $600 million is lost. The commenters

said that doesn't count into the fact that that Plant Daniel and the upgrades that were done there 

have a 25 year life expectancy that can provide good electricity to the people of South 

Mississippi who have been faced not only with Hurricane Katrina but with the BP oil spill and 

with an economy that is struggling to get up and running in Mississippi. The commenters said 

that $600 million, it's lost because these rules use a 2012 benchmark, so that is the first problem 

and error that just jumps out with this.

Commenters stated with $2.7 billion already spent over the last decade by the largest utility 

company in Alabama and another billion dollars in projects already underway to comply with 

current federal mandates, the commenters were opposed any new mandates coming out of 

Washington. 
204

Commenters stated a primary concern relates to the potential for stranded costs from early 

investments made to comply with EPA's Clean Air Interstate Rule and Clean Air Mercury Rule. 

The commenters said the ESPS's proposed depends primarily on load shifting from coal to 

natural gas generation for compliance. The commenters said the shift in natural gas would likely 

result in premature closing of the ESPS's coal unit. The commenters said while EPA recognizes 

the increased cost to consumers with load shifting to natural gas, it does not consider the 

stranded cost for those units that still carry considerable debt.

Commenters stated EPA's rule for existing power plants assumes that the coal-fired Plant 

Morrow, located in Purvis, Mississippi would no longer dispatch due to economics. The 

commenters said since 2010 alone, $65 million has been spent in pollution control equipment at 

Plant Morrow to address previous EPA regulations, and additional pollution control equipment 

tests are currently in process to comply with the MATS rule. The commenters said if coal is 

eliminated from the resource mix, as proposed by the Clean Power Plan, these investments will 

become stranded costs, borne by Mississippi residents without any corresponding benefit.

Commenters stated Kansas is in the midst of a period of great transition for its large coal-fired 

electrical generating units; the six largest coal fired units in Kansas have made and continue to 

make significant investments in criteria pollutant emission reduction equipment in the last three 

to four years to comply with the regional haze program. The commenters said in addition, the 

Cross State Air Pollution Rule, Kansas City ozone maintenance plan rules, and the Mercury and 

Air Toxics rule have also contributed to massive investments in pollution control equipment at 

Kansas' largest coal plants in recent years. The commenters said more than three billion dollars is 

earmarked for these projects that have either just been completed or are still under construction. 

The commenters said paying off the bonds and other credit instruments used to fund controls 

installed in 2015 cannot be expected to be completed by the early compliance period starting in 

2020. The commenters said investments of such magnitude are typically financed for much 

longer periods of time; the result is a large potential for stranded investments in the State of 

Kansas as a result of re-dispatch to non-coal generating units. The commenters said although not 

new facilities, the investments made in pollution control equipment are significant and should be 

allowed to be amortized over a greater time period than allowed under the proposal. 

Commenters stated this is a fundamental issue that EPA must address at the front end of the 111 

(d) process by incorporating adjustments for plants with recently installed or to be installed 

controls into the state goal calculations or in the compliance periods. The commenters said the 

solution should take into consideration the amount of funds spent on controls as a proportion of 

the value of the generating unit and the generally accepted time frame used by utilities to retire 

the financial instruments used to fund the control devices installed. The commenters said 

facilities that have recently installed or are installing new scrubbers comprise 84% of Kansas' 

2012 generation; this is a far greater impact than the flexibility contained in the Ill (d) process 

can reasonably be expected to account for in the short time between the plan submittal deadline 

and the first year of the compliance period. 

Commenters stated that little thought was given to how the Proposed Guidelines interact with 

other CAA rules. The commenters stated that, for example, Arizona will have to close all coal 

units to achieve its interim and final targets under the Proposed Guidelines, but utilities in the 

state recently invested $500 million to comply with the Regional Haze Program. The 
205

commenters stated that the Proposed Guidelines will require the ramping up of units located in 

nonattainment areas, which would violate NAAQS requirements. The commenters stated that 

section 111(d) explicitly requires that consideration of the remaining useful life of sources be 

considered when designing performance standards for existing sources and that contrary to that 

requirement, the Proposed Guidelines will lead to the stranding of assets if finalized, especially 

given its interaction with other CAA rules. 

Commenters stated that the pollution control upgrades required by MATS and other rules are in 

many cases substantially lowering the operating efficiencies of existing units that are covered by 

the Proposal. The commenters stated that in some cases, significant investments that have been 

recently made due to MATS and other rules will become stranded by the Proposed Guidelines if 

they are finalized. The commenters stated that under EPA's analysis, the Proposed Guidelines 

will result in the closure of all coal-fired power plants in Mississippi. According to the 

commenters, TVA has the right to purchase all of the output of the 440 MW lignite-fired Red 

Hills Power Plant in Choctaw County, Mississippi, through a power purchase agreement and has 

historically purchased most of the facility's output. The commenters stated that the plant began 

operating in 2002, is currently installing dry-sorbent injection in order to comply with MATS 

and, if Red Hills is required to be shut down due to the Proposed Guidelines, the cost of this 

injection system would be stranded. 

Commenters stated that EPA has not adequately considered how implementation of the Proposed 

Rule will impact sources that are already complying with other federal requirements, including 

EPA rules. The commenters stated that, for instance, EPA projects that that the Proposed Rule 

will require Arizona to shut down all coal-fired generation by 2020 to achieve the state's interim 

target and the final target in 2030 even though EPA's regional haze rule is resulting in three 

utilities investing hundreds of millions of dollars to install controls that limit emissions of NOx 

at units that would have to cease operation less than three years after those projects must be 

completed. 

The commenters stated that, in addition, the Proposed Rule will require ramping up generation 

from facilities that are located in current nonattainment areas, which would violate NAAQS 

requirements and as EPA revises the NAAQS, the number of nonattainment areas will grow, 

causing even greater problems.

Commenters stated that investments well in excess of $100 billion dollars have already been 

made to comply with previous requirements to reduce sulfur dioxide, nitrogen oxides, and 

particulate matter, and that these primary emissions have been reduced by approximately 90 

percent since 1970; furthermore, tens of billions of dollars of additional investments are being 

made to comply with EPA's MATS and other regulations. The commenters stated that these new 

air quality investments may, in fact, become stranded investments if EPA's proposed new rule is 

implemented and coal units are shut down prematurely.

Commenters stated some sort of cost recovery mechanism should be provided to help assure that 

Minnesota electricity customers or utility investors are not left servicing the cost of investments 

stranded by EPA and state regulatory measures. The commenters stated that EPA should give 

consideration in its CPP target setting for states to delay CPP requirement implementation until 

after the costs for these EPA-mandated investments have been recovered.
206

Comment 17: RTOs take market-based approach to direct construction of new capacity, and 

when existing efficient units with remaining book life are available doesn't support building 

NGCCs. Deregulated states like IL have no authority to require such construction. EPA should 

allow continued base-load operation of EGUs with supercritical technology - such units should 

be exempt from re-dispatch

Response 17: The EPA maintains that the final emission guidelines provide ample flexibilities to 

states to design plans that fit special state circumstances and achieve the subcategory-specific

emission performance rates or state goals. See sections V and VIII of the final CPP preamble for 

more information. EPA does not require or assume re-dispatch from any particular unit, and 

believes the final CPP rule provides significant flexibility for any source to comply with BSER 

without curtailing operation. See GHG Mitigatin Measures TSD.

The following are summaries of the specific public comments under this comment:

Commenters discussed the market-based approach that regional transmission organizations 

(RTOs) take in terms of incenting the construction of new capacity. Commenters said for the 

sake of clarity, let us say here that the one-year forward voluntary capacity market in MISO and 

the three-year forward mandatory capacity market in PJM do not provide sufficient economic 

incentive to construct dispatchable resources in the state. Commenters said and, as a deregulated 

state, Illinois itself has no authority to intercede and require sufficient levels of generation to 

meet native load.

As a real world example of the issues facing the use of Block 2 as a compliance tool and the 

interaction of Block 2 and the lack of generation incentives in the RTOs markets, commenters

described their attempts to build a natural gas-fired generator as a part of its dedicated resource 

mix. Commenters said they conducted an exhaustive and expensive study with the goal of 

building a new natural gas-fired power plant inside the PJM RTO. Commenters said the first two 

steps of the three-step generation interconnection study itself, which is a requirement of PJM, 

took over 4.5 years; adding an additional 3 years to finance and construct would bring the 

effective start date well beyond 2020. Commenters said the interconnection study process, 

consisting of a feasibility study, system impact study and facilities study, is intended to show 

what improvements may be needed to the transmission system to accommodate the proposed 

generation project, and how those improvements will be funded. Commenters said that parallel 

with, and in support of this study effort, IMEA spent approximately $1 million to develop 

preliminary plant design, secure a purchase option on the site and conduct an extensive 

feasibility assessment that included consideration of the adequacy and access to natural gas and 

groundwater supply, environmental impacts on air and water quality, and sound attenuation and 

other local government zoning requirements.

Commenters said that in the end, the three-year forward capacity market in PJM did not provide 

sufficient revenue for IMEA to build and operate this facility and the interconnection study 

process itself was burdensome and slow. Commenters said in light of this real-world experience, 

the EPA should seriously consider how it expects Illinois, which has no mechanism in place to 

order or incent new generation, to meet the aggressive schedule of its Block 2 goals as provided 

in the proposed rule, given the failure of PJM to provide by itself sufficient incentives for such 
207

development and provide timely response to interconnection study requests for new gas-fired 

generation.

Commenters said given these realities, the EPA should provide for the continued base-load 

operation of units with supercritical technology (or which operate at an equivalent emission rate) 

and exempt such units from re-dispatch under Block 2. Commenters said this will maximize the 

value of these units under Block 1 and avoid issues related to stranding these units' outstanding 

economic investments. These new supercritical units already have the most strict environmental 

compliance permit obligations and can and will provide significant environmental benefits for 

the long term vs. other resources.

Comment 18: Premature retirement of Healy units would result in rate increases equal to 

roughly six times greater than the rest of the nation.

Response 18: The EPA is not including emission performance goals for Alaska in this final rule. 

See section VII of the preamble for discussion of this issue.

The following are summaries of the specific public comments under this comment:

Commenters said that in any scenario requiring Golden Valley Electric Association (GVEA) to 

generate or purchase power from a source other than the Healy Power Plant would increase the 

cost of electricity. Commenters said first, retiring the Healy units prematurely would involve 

nearly $450 million in stranded capital costs and remaining loan principal payments. 

Commenters said second, because coal is GVEA's least expensive power, replacing Healy coalfueled generation would also result in significant additional annual variable costs between $47.4 

and $60.7 million per year. Commenters said upgrading the Alaska lntertie to transport more 

natural gas generation north would also result in approximately $30.2 - $41.4 million of 

additional annual costs to consumers.

Commenters said that GVEA residential ratepayers rates are already much higher than anywhere 

else in the nation, except other parts of Alaska and Hawaii. Commenters said just the annual cost 

increases of $90.9 million related to shutting down the Healy units identified above would result 

in rate increases for GVEA consumers of between $0.05 and $0.07/kWh. Commenters said the 

EPA indicates that implementation of the Proposed Rule will result in rate increases of 

approximately $0.01/kWh nationwide. Commenters said that there is no justification for making 

Fairbanks consumers bear a burden roughly six times greater than the rest of the nation, 

particularly when the carbon emissions at issue are minimal.

Comment 19: Because the decision to construct nuclear electric generating stations in SC and 

GA were made prior to the proposal, the EPA is viewing the incremental cost associated with the 

emissions reduction available from completion of these units as zero, even though construction is 

on-going
208

Response 19: See section XI.D of the final rule preamble of the CPP for the EPA’s response to 

this comment.EPA is not including the nuclear generation from these units in its final 

quantification of BSER.

The following are summaries of the specific public comments under this comment:

Commenters said the EPA's proposed rule and computation of the state goal does not recognize 

the significant investment which is continuing to be made by the rate payers and utilities in South 

Carolina and our neighboring state of Georgia, in zero carbon nuclear electric generation. 

Commenters said the estimated cost for completion of the 2 units at the V.C. Summer Station is 

$ 11 billion and the estimated cost for the 2 units in Georgia is $ 14 billion. Commenters said in 

South Carolina, the Base Load Review Act allows South Carolina Electric & Gas Company 

(SCE&G) to recover the financing costs for the V.C. Summer Station units through filing with 

the South Carolina Public Service Commission (PSC), and as recently as May 30, 2014, SCE&G 

filed a request of $70 million for this reason.

Commenters said the EPA states in the preamble, "The EPA believes that since the decisions to 

construct these units were made prior to this proposal, it is reasonable to view the incremental 

cost associated with the CO2 emissions reduction available from completion of these units as 

zero..." Commenters said to date, less than one half of the cost of the UCN units in South 

Carolina has been incurred, so a significant cost remains to support the completion of these units. 

Commenters added further, only the financing costs are currently being paid and the principal 

will be paid over the estimated 60 year lifetime of the new nuclear units - there is clearly an 

incremental cost that continues to be incurred for this construction.

Comment 20: Rule will result in stranded assets; change in operation (not just retirement) causes 

stranded assets; debt service on loans will continue after facilities are retired early, and many 

loans contain significant prepayment interest penalties; advanced retirements and curtailed 

operations should be avoided, EPA failed to consider competitive impacts of CPP

Response 20: See response to comments 1 and 2 in this section (4.7.2), including the reference 

to the July 2015 docket memo titled “Stranded assets analysis.” See also section I.A, II.F-G, 

V.A-C, VIII.G-H, X.C, XI.C-E, and XII.E of the final rule preamble of the CPP for the EPA’s

response to this comment..

The following are summaries of the specific public comments under this comment:

Several commenters said there is potential for stranded assets under this plan and the EPA did 

not consider these costs. Commenters said the EPA failed to take the remaining useful life of 

existing facilities into reasonable account. Commenters said that the EPA has improperly 

conflated the legislative history related to technology forcing under section 111(b) of the CAA 

with the facility preserving useful life requirements of 111(d).

Commenters noted that forcing changes in the operation of coal plants will create stranded costs. 

Commenters said for example, at Laramie River Station (LRS) in Wyoming, because there is no 

practical way to reduce the heat rate under building block 1, the only option remaining at the 
209

source is a drastic one: the owners are faced with the requirement to run the plant less or shut 

down one or more units. Commenters stated that the first option, running the plant less, will 

reduce the efficiency of the plant (and the heat rate, contrary to EPA's objective) and cause an 

increase in the operating costs - wholesale cost increases that will have to be passed on to their 

customer-owners. Commenters added that it is unlikely, however, that simply running the plant 

less will be sufficient to meet the CO2 emission reduction required of LRS, whether under the 

rate-based or mass-based approach. Commenters indicated that if, instead, the owners are forced 

to shut down a unit prematurely, it will cause significant stranded costs and will run afoul of the 

directive of 111(d) to take into account remaining useful life. Commenters said that in EPA's 

NODA, it asks if it should consider such issues in adjusting timeline and compliance 

requirements. Commenters stated that at a minimum, the EPA should allow all stranded costs to 

be considered in adjusting timelines and targets accordingly to allow recovery of costs.

Commenters stressed that the guidelines should support cost-effective, achievable reductions that 

do not advance retirements, strand assets, or curtail operations of the current fleet.

Commenters said Seminole, as a rural generation and transmission cooperative, has primarily 

relied on capital borrowed from the Federal Financing Bank and loan guarantees from the Rural 

Utilities Service ("RUS") for the construction of its generation fleet and capital improvements to 

its facilities, primarily involving environmental controls. Commenters said currently, loans 

related to SGS account for more than 75 percent of Seminole's total outstanding debt, and these 

loans are secured by Seminole's Trust Indenture. Commenters said if SGS were to be retired 

prior to the end of its useful life in order to comply with EPA's Existing-Source Proposal, the 

debt service related to these loans would continue to impact the electricity rates paid by our 

Members. Commenters stated most of Seminole's loans also contain significant prepayment 

interest penalties, so a strategy to prepay the debt would only further increase the cost paid by 

our Members.

Commenters said the EPA also fails to consider the competitive impacts of its proposed rule. 

Commenters said in Florida, some utilities have a far greater dependence on coal-fired plants 

than natural gas plants. Commenters said that those utilities that would be required to 

prematurely shut down viable coal plants with years of remaining operating life, and given the 

limited time period for re-dispatch, would be forced to purchase energy from other utilities. 

Commenters said their consumers would lose the investment in the capital intensive coal plants 

and at the same time be forced to pay for new transmission lines and pipelines to other utilities to 

buy electricity from gas generation plants they do not own while their own generating units sit 

idle.

Comment 21: Stranded Cost & Replacement Cost

Response 21: See section I.A, II.F-G, V.A-C, VIII.G-H, X.C, XI.C-E, and XII.E of the final rule 

preamble of the CPP for the EPA’s response to this comment. See the “Stranded Assets 

Analysis” MEMO in the docket from July 2015.

The following are summaries of the specific public comments under this comment:
210

Commenters stated the Proposed Rule and the application of additional requirements on existing 

generation resources will result in a number of serious cost and compliance issues, particularly as 

it relates to stranded assets and obtaining financing for replacement power. The commenters

said the cost impacts resulting from the Proposed Rule will ultimately be borne by the 

cooperatives' end use retail members; unlike investor-owned utilities, due to the not-for-profit 

nature of cooperatives, cooperatives cannot shift costs to shareholders or reduce profit margins as 

a means to mitigate the final rate impacts of the rule. 

Commenters stated cooperatives, their member cooperatives, and ultimately the retail consumers 

will be hit particularly hard by stranded costs. The commenters said the EPA's model anticipates 

shutting down baseload generation; there is uncertainty about biomass and whether it will be 

viewed as carbon neutral; if it is not viewed as carbon neutral, it will likely be retired resulting in 

stranded costs. The commenters said cooperatives will then have to expend additional money to 

replace the plants that will be shut down.

Commenters stated the rule will result in the closure of some of the cleanest base load generation 

facilities in operation today; for example the Plum Point Energy Station located in Mississippi 

County, Arkansas ("Plum Point"). The commenters said this project became commercially 

operational in August, 2010; as one of the newest coal generation facilities in the country, it was 

constructed using state-of the-art emissions control technology-a fact the EPA either did not 

consider important or ignored. The commenters said although the Plum Point facility is one of 

the cleanest coal plants generating power today, it would be shut down if the Proposed Rule is 

implemented in accordance with EPA's IPM model. The commenters said the proposed standards 

would require Plum Point to reduce its output to a level such that the operation of the facility is 

no longer economically viable. The commenters said the Plum Point facility was financed in 

2011 with two thirty-year-term loans, both having substantial prepayment penalties in the event 

prepayment is required as a result of the closure. The commenters said the closure of generation 

facilities such as Plum Point will cost the cooperatives and their members millions of dollars in 

prepayment penalties in addition to the cost of accelerating payment of remaining principal. The 

commenters said rural Americans will see substantial increases in their energy costs as the 

cooperatives must recover funds to pay the costs associated with these stranded assets. The 

commenters said cooperatives will encounter decommissioning costs associated with projected 

coal retirements. The commenters said on top of the stranded cost issue, cooperatives will need 

to acquire replacement power for the lost generation. 

Commenters added the combination of stranded costs coupled with further expenditures 

necessary to replace the lost generation could have devastating consequences on the ability of 

cooperatives, to meet certain financial covenants contained in their existing loan documents - the 

failure of which would trigger defaults under those documents. The commenters said this could 

potentially result in the acceleration of outstanding loan facilities which would only serve to 

compound the financial crisis and, in a worse case scenario, could lead to the ultimate 

bankruptcy of the cooperative. In the least populated and poorest service territories, no other 

electric utility would be expected to step-in and provide electric service. 
211

Comment 22: Use of glide path and/or phasing in of BB1 and BB2 does not prevent stranded 

assets

Response 22: The EPA is revised the timing of building block 2 to be gradually phased in over 

the interim period. See section V.D. of the final rule preamble of the CPP for more information 

about Building Block 2. See the “Stranded Assets Analysis” MEMO in the docket from July 

2015.

The following are summaries of the specific public comments under this comment:

Commenters stated that the glide path discussions in the NODA do not prevent the potential for 

stranded assets. Commenters said that even phasing in of Building Blocks 1 and 2 during the 

interim period of 2020-2029 is not adequate to prevent stranded assets.

Commenters indicated that the use of "book life" of 40 years discussed in the NODA does not 

reflect reality of the actual life of coal-fired power plants, and that 65 years is a much more 

realistic time frame. Commenters also noted that the assumed "book life" of retrofits of 15 years 

is also not reflective of the reality of the estimated life of these capital intensive projects. 

Commenters indicated that a more realistic assumption for retrofit book life is on the order of 30 

years. Commenters said therefore, application of book life is inadequate for consideration in 

determining the impact on stranded assets.

Commenters indicated that utilities have made investments in power plants to meet other EPA 

regulations, and these investments will cost ratepayers billions of dollars. Commenters warned 

that stranding these assets will lead to higher electricity rates as new generation resources are 

built to replace those prematurely retired power plants.

Comment 23: Interim goals and 10 year glide path creates stranded assets

Response 23: In the final guidelines, the EPA has postponed the start of the interim goal period 

from 2020 to 2022, and has revised its goal-setting methodology and goals. The CO2 emission 

performance rates and state goals in the final emission guidelines, including the emission 

performance levels for the interim period, are achievable considering cost. The EPA is allowing 

states to define their own emission improvement trajectory, or glide path, to meet the interim 

goal for 2022-2029 and the final goal starting in 2030. The EPA also is defining illustrative 

emission performance levels for three interim step periods -- 2022-2024, 2025-2027, and 2028-

2029 – and a state may choose to use these levels in its plan.

Additional response to this comment is provided in comments 1 and 2 in this section (4.7.2), 

including especially the reference to the July 2015 docket memo titled “Stranded assets 

analysis.” 

The following are summaries of the specific public comments under this comment:

Commenters stated the proposed compliance period beginning in 2020 will burden rate payers 

with unnecessary costs. The commenters said the interim requirement as proposed requires too 

high of a compliance burden by 2020. The commenters said EPA should remove the interim 

requirements and the 10 year glide path; at a minimum, the states should be free to develop a 
212

compliance path that is the most efficient and cost effective for their state. The commenters said 

the potential 2020 "cliff" could require the commenters to retire one or both of its coal fired units 

which would result in the stranded costs for these units to be paid by the ratepayers. The 

commenters’ analysis shows that ESGS Unit 2 existing coal fired unit is the most economical 

option for our ratepayers for the next 20 years. The commenters said ESGS Unit 1 remains the 

most cost effective option for at least another ten (10) years. The commenters said this proposed 

rule could force premature retirement of these units while they have significant remaining useful 

life. The commenters stated their customers bear the economic costs of ownership, but also 

realize the economic benefits; as long as the going-forward variable costs of producing 

electricity with the coal plant are less than the all-in costs (fixed and variable) of viable 

replacements (market purchases, or resource acquisitions), the plant will yield economic benefits 

for customers. The commenters said if the plant ceases operation during its economically useful 

life, customers will suffer an economic loss from electric rates that will higher than they would 

have been had the plant continued to operate. 

Commenters stated compliance with interim goals by 2020 is not technically feasible for the 

commenters; it may well require the retirement of the ESGS units and the purchase of power 

from the open market; however, market participants are not willing to provide firm pricing of 

electric energy and capacity in 2020 and beyond due to regulatory uncertainty. It is imprudent to 

the commenters to rely on the markets and thus self-build or contract with asset backed energy 

and capacity. The commenters said such "clean" capacity and energy does not exist in Kentucky 

and must be constructed. Commenters sais that to the extent that the commenters must build 

replacement generation capacity for the ESGS units prior to maturation of the current long-term 

bond debt and the incremental capital required to maintain the units in a reliable manner, 

ratepayers will be burdened with payment of debt and interest expense associated with new 

generation as well as stranded debt on ESGS. The commenters said a longer compliance period 

would allow the commenters to plan routine and capital maintenance in a manner to minimize 

the amount of stranded investment to be required from ratepayers, thus lowering the economic 

cost of compliance with the proposed rule. 

Comment 24: By forcing significant reductions in operation and retirements, the CPP is a 

regulatory taking of these units requiring government compensation.

Response 24: See section VIII.G. of the final rule preamble of the CPP for the EPA’s response 

to this comment. See the “Stranded Assets Analysis” MEMO in the docket from July 2015.

The following are summaries of the specific public comments under this comment:

Commenters said without relief for remaining useful life, many older EGU's will be forced to 

significantly reduce operations or retire. Commenters said by forcing significant reductions in 

operation and retirements, the CPP is a clear regulatory taking of these units requiring 

government compensation. Commenters stated that the test for a regulatory taking is easily met -

when determining if a regulatory taking has occurred, courts consider (1) the economic impact 

of the regulation on the property owner, (2) the extent to which the regulation interferes with 

distinct investment-backed expectations, and (3) the character of the government's invasion of 
213

the property interest. Commenters stated the proposed rule violates the Fifth Amendment 

because uncompensated takings of property will result.

Commenters said that the CPP would require that customers pay both for the stranded cost of 

retired coal-fired power plants as well as their replacements, including new capital investment 

and/or increased market power costs. Commenters said this is harsh, avoidable and unnecessary 

in light of other available options, including structural flexibility and timing options, both of 

which could service to mitigate the adverse impacts associated with the rule and avert what is 

potentially a regulatory taking.

Commenters stated that Rule 111(d) mandates the move from least-cost generation dispatch to 

carbon dioxide-based dispatch, drastically diminishing the value of many coal plants and 

rendering many of them uneconomic to run during all but the peak summer months. Commenters

indicated that because coal plant owners built their plants under one regulatory construct, only to 

have those plants rendered uneconomic by the federal imposition of a different construct 

(command and control resulting from Rule 111(d)), they may credibly argue for compensation 

for the value of their lost investment or stranded cost. Commenters said it is therefore possible 

that both state and federal takings laws may be implicated by Rule 111(d), and the EPA has 

failed to address this potential cost of implementing Rule 111(d).

Commenters stated that as part of the legislation creating the competitive retail electric market in 

ERCOT, the Texas Legislature allowed investor-owned electric utilities (IOUs) to recover "all of 

[their] net, verifiable, non-mitigable stranded costs incurred in purchasing power and providing 

electric generation service." Commenters stated that stranded cost claims from coal plant owners 

resulting from Rule 111(d) are not addressed in the proposed rule. Commenters indicated that if 

Rule 111(d) is adopted as proposed, the Texas Legislature would need to determine whether to 

change Texas law to allow recovery of stranded costs resulting from the rule, and if recovery of 

such costs were allowed by the Texas Legislature, these costs would ultimately be borne by all 

Texas electricity customers.

Commenters said that if as EPA's IPM compliance model predicted, the EPA's proposal forces 

SGS to completely shut down before its useful life has run, Seminole's enormous, undepreciated 

investment in SGS will be rendered worthless. Commenters said that result will leave Seminole 

and its Members with a "stranded asset", with significant remaining economic value and debt, 

and Seminole and its Members arguably will be legally entitled to recover the costs incurred 

under this proposed government regulation. Commenters said if EPA finalizes the existing 

proposal as currently written, it effectively amounts to a regulatory taking, entitling Seminole to 

recover the hundreds of millions of dollars of remaining value of SGS from the total loss of the 

remaining economic value of these units. Commenters said yet, the EPA's economic impact 

analysis fails to consider the real costs associated with the forced closure of existing, useful 

power plants resulting directly from its proposal and how these costs must be recovered 

following the adoption of any final rule. Commenters said pursuant to the regulatory takings 

provision in Article V of the United States Constitution, Seminole arguably will be entitled to 

recover the value of its investment-backed expectations. Commenters said the EPA should 

carefully consider this issue as it finalizes the proposal and its effects on the future cost and 

reliability to generate and transmit electricity.
214

Commenters stated because the proposal as it stands would likely result in the premature closure 

of existing power plants, the proposal's requirements amount to a regulatory taking requiring 

compensation because of the premature closures and uneconomic curtailment it will require.

Commenters stated as issued, the Proposal may be subjecting companies to one or more 

regulatory takings, in the form of forced retirements or diminished operating capacities of stateof-the-art units. The commenters said courts consider three factors in determining whether the 

effects of a government regulation constitute a regulatory taking in violation of the Takings 

Clause: (1) the character of the government's invasion of the property owner's property interest; 

(2) the economic impact of the regulation on the particular property and property owner; and (3) 

the extent to which the regulation interferes with the property owner's distinct investment-backed 

expectations with respect to the property. See Penn. Central Transp. Co. v. New York City, 438 

U.S. 104 (1978); see also Tahoe-Sierra Pres. Council v. Tahoe Reg'l Planning Agency, 535 U.S. 

302 (2002); Palazzolo v. Rhode Island, 533 U.S. 606 (2001). The commenters said courts have 

applied these factors in relation to the nature and extent of a regulation's interference with an 

owner's rights in a whole property, rather than a specific part of the property. The commenters

said based on these standards, the effects of EPA's proposed rule would meet the definition of a 

regulatory taking in regard to Plant Scherer and possibly Plant Wansley. 

Comment 25: States should have the flexibility to allow multi-state electrical systems to 

demonstrate compliance. Restricting compliance to a state-by-state basis significant increases 

compliance costs and results in additional stranded assets.

Response 25: The final rule provides ample flexibilities to states to design their plans, which in 

turn allows states to establish flexible requirements for affected EGUs. Although the emission 

guidelines call for state plans and include state goals, they do not “restrict compliance to a state 

by state basis.” The guidelines take into account interstate effects as explained in final CPP 

preamble section VIII.L. The guidelines also provide for multi-state plans, and for individual 

state plans that allow rate-based and mass-based emission trading across state lines. Regarding 

the means of reducing emissions, states are allowed to use the BSER measures, or other 

measures in their state plans to comply with the goals; there are flexibilities within the BSER 

measures and how they are executed; and states also have non-BSER measures at their disposal. 

Regarding the form of regulation, states have a broad range of options under different plan 

designs. See, for example, sections V., VIII.A. and VIII.C. of the final rule preamble of the CPP 

for more information.

For additional response on the flexibility provided on state plan design by the guidelines and 

stranded assets concerns, see the response to comments 1 and 2 in this section (4.7.2), including 

the reference to the July 2015 docket memo titled “Stranded assets analysis.” 

The following are summaries of the specific public comments under this comment:

Commenters support the EPA's intention to grant states flexibility on methods to allow multistate electrical systems to demonstrate compliance. Commenters indicated this should include a 
215

broad suite of options including bi-lateral agreements, trading of clean energy, renewable energy 

and avoided CO2 tons from EE.

Commenters said TVA plans and dispatches its generating assets on a system basis across seven 

states to minimize cost and maintain reliability. Commenters said restricting compliance to a 

state by state basis significantly increases compliance costs and results in additional stranded 

assets. Commenters indicated that under EPA's analysis, the proposed guidelines will result in 

the closure of all coal-fired power plants in Mississippi. Commenters said that the TVA has the

right to purchase all of the output of the 440 MW lignite-fired Red Hills Power Plant in Choctaw 

County, Mississippi through a power purchase agreement, and has historically purchased most of 

the facility's output. Commenters said the plant began operation in 2002 and is currently 

installing dry-sorbent injection in order to comply with MATS. Commenters indicated that if 

Red Hills is required to be shut down as a result of this rulemaking, the cost of this injection 

system would be stranded. Commenters said that to avoid situations like Red Hills, TVA 

supports EPA's intention to grant states flexibility on methods to allow multi-state electrical 

systems to demonstrate compliance.

Comment 26: Binding plant closures could allow emission reductions to be counted 

immediately, while delaying the actual closure until the end of the remaining useful life

Response 26: The commenters’ suggestion is creative but it would have the effect of increasing 

emissions. The final CPP, which allows facilities to purchase and sell emissions allowances or 

ERCS, can achieve the stated objective of the commenters without have the effect of increasing 

CO2 emissions.

See responses 1 and 2 in this RTC Chapter (4.7.2) for more explanation of the agency’s view that 

the final emission guidelines enable states to take into account stranded asset concerns and the 

remaining useful life of particular affected EGUs in designing their state plans.

The following are summaries of the specific public comments under this comment:

Commenters suggested the use of binding plant closure orders would alleviate the impact of 

early closure on ratepayers and would facilitate planning for the grid and state agencies.

Commenters indicated the October 27 NODA requested comment on how book value may be 

used to address stranded investment concerns. Commenters suggested that a binding plant 

closure order be deemed to count immediately toward a state target, but closure would be 

deferred until the end of a remaining useful life established by the closure order. Commenters

explained that if a binding closure order were issued for Dave Johnston in 2019, the compliance 

calculation for 2020 would eliminate that plant's emissions and megawatts, but the plant could 

continue to operate until the plant was fully depreciated in 2027 as provided in the closure order. 

Commenters said such a process incents a state to seek closure orders earlier rather than later, 

alleviates the devastating impact of premature closure on ratepayers, eliminates near term 
216

investment uncertainty, and facilitates planning for the benefit of the grid. Commenters said that 

the EPA's proposed rule does none of those important things.

Comment 27: Need adequate time for transition to avoid stranded assets. Should subcategorize 

and develop separate standards for facilities that have made significant investments in pollution 

control equipment since 2010, and should reaffirm State's established variance authority and 

expressly identify variance mechanisms states can use. Recommended variance-based options 

are presented

Response 27: In the final guidelines, the EPA has postponed the start of the interim goal period 

from 2020 to 2022, and has revised its goal-setting methodology and goals. The subcategoryspecific emission performance rates and state goals in the final emission guidelines, including the 

emission performance levels for the interim period, are achievable considering cost. The EPA is 

allowing states to define their own emission improvement trajectory, or glide path, to meet the 

interim goal for 2022-2029 and the final goal starting in 2030. The EPA also is providing

illustrative emission performance levels for three interim step periods -- 2022-2024, 2025-2027, 

and 2028-2029 – and a state may choose to use these levels in its plan. See section VII of the 

preamble for further information.

The CO2 performance rates and state goals in the final guidelines are achievable considering 

cost, and give states the flexibility in practice to consider facility-specific factors such as 

remaining useful life and stranded assets in designing their plans. As a result, the national 

emission guidelines do not need to include special provisions for facilities that have recently 

invested in pollution control projects, variances, or alternative compliance schedules. Among the 

state plan options that are permissible under the guidelines are mass-based federally enforceable 

standards on EGUs, which could encompass the commenters’ suggestion for facility-specific 

emissions caps, if properly designed. The EPA believes that the agency’s approach to 

subcategorization, -- distinguishing between -- fossil steam generation and gas-fired combustion 

turbines – is appropriate for these final guidelines.

Additional response to this comment is provided in comments 1 and 2 in this section (4.7.2), 

including especially the reference to the July 2015 docket memo titled “Stranded assets 

analysis.” 

The following are summaries of the specific public comments under this comment:

Relief needed for facilities that have recently invested in pollution control projects. Commenters

said that an essential element for a reasonable and cost-effective climate program is an adequate 

time period for the transition to a lower carbon economy, and the EPA must make every 

reasonable effort to avoid stranding assets. Commenters said they believe that provision must be 

made in the final rule to address the issue of stranded assets, particularly with respect to coalfired units that have recently installed expensive pollution control equipment to meet other 

environmental requirements such as the Mercury MATS and CSAPR. Commenters believed that 

Section 111(d) of the Clean Air Act requires the EPA to provide relief for such facilities either 

directly in its guidelines or indirectly by authorize states to do so in state implementation 
217

plans. Commenters said allowing such relief will also help lessen the costs of this program on 

consumers of electric power in regions served by such facilities.

Alternatives to avoid stranded assets. Commenters said that in the NODA the EPA discusses and 

requests comment on potential alternative options to enable coal-fired facilities to recoup their 

pollution control investments. Commenters said GE echoes comments of its Homer City 

subsidiary and strongly urge the EPA to consider subcategorizing and creating separate standards 

for sources that have made recent capital investments to comply with MATS and CSAPR, and

reaffirm states' established variance authority and expressly identify variance mechanisms by 

which facilities that have made substantial investments to comply with the EPA's recently 

promulgated MATS or CSAPR requirements may obtain the relief they need.

Commenters said:1) the EPA could use its authority under CAA section 11 to "distinguish 

among classes, types, and sizes" and to consider costs when establishing standards of 

performance, to develop separate 111(d) standards for existing facilities that since 2010 have 

made substantial investments in pollution control technologies to comply with CSAPR and 

MATS. Commenters indicated standards for this subcategory of sources could take several 

different forms. Commenters said the EPA could adopt an emission rate standard that it 

determined sources within the subcategory could reasonably achieve, or, consistent with one of 

the variance options discussed below (cap-based variance), the agency could establish an annual 

CO2 emissions cap for such facilities, or criteria for states to use to develop such a cap, that 

reflects a reduction (e.g., 20%) from 2005 levels. Commenters said this type of an approach 

would balance the EPA's dual goals of reducing CO2 emissions and not prematurely stranding 

assets, particularly those just recently installed to comply with other EPA programs.

Variances - General. Commenters strongly recommended that the EPA acknowledge and/or 

endorse variances, and emphasized that at the same time, states must be given the ability to 

adjust its emission target to account for any variances issued. Commenters said that Homer City 

strongly recommends that the EPA acknowledge and, in certain scenarios endorse, states' 

authority to issue variances from the EPA emission guidelines and to adopt alternative 

compliance standards and deadlines for facilities meeting certain conditions. Commenters said 

CAA section 111(d) (1) provides that EPA "shall permit the State in applying a standard - to take 

into consideration, among other factors, the remaining useful life of the existing source." 

Commenters said similarly, 40 C.F.R. Section 60.24(f) provides that states may apply less 

stringent standards and longer compliance schedules to individual facilities or "class of facilities" 

if the state demonstrates:

• Unreasonable cost of control, 

• Physical impossibility, or

• "Other factors specific to the facility (or class of facilities) that make application of a less 

stringent standard or final compliance time significantly more reasonable." 

Commenters said it is worth noting that the variance authorized by 40 C.F.R. Section 60.24(f) (3) 

is distinct from and broader than the other two categories, including the concept of a facility's 

remaining useful life. Commenters said they believe that the EPA and Pennsylvania should 
218

readily rely on this specific regulatory variance authority to allow facilities that have recently 

made substantial capital investments time to recoup their investments before being subject to the 

entirety of a state 111(d) plan.

Commenters said the EPA should embrace this authority, not shunt it aside. Commenters said in 

the preamble to the proposal, EPA takes the position that "no relief for individual facilities would 

be needed" because EPA's proposed emission guidelines happen to take the form of "state 

emission performance goals for the collective group of affected EGUs in a state," rather than a 

"presumptive standard of performance that must be fully and directly implemented by each 

individual existing source within a specified source category." Commenters disagreed with the 

EPA's conclusion.

Commenters said however, the form of the emission goal has nothing to do with the ability of a 

state, under CAA section 111(d)(1) to grant variances which "take into consideration, among 

other factors, the remaining useful life of the existing source to which such standard applies." 

Commenters said the EPA cannot circumvent this statutory provision merely by changing how it 

may choose to prescribe state guidelines. Commenters said moreover, we cannot accept the 

premise that the claimed flexibilities in EPA's portfolio approach obviate a state's need to adjust 

its emission target in account for any source-specific variances granted. Commenters said unless 

states have the ability to adjust their emission targets, variances would be of little utility, since 

any relief granted to one source would have to be made up by another. Commenters said to 

provide meaningful relief and to help address the stranded asset issue, states must have the 

ability to grant variances and to adjust state emission targets commensurately. Commenters said 

for its part, the EPA could codify criteria for when it would be appropriate for state targets to be 

adjusted to reflect a variance. Commenters said for example, the EPA could make clear that it 

supports the issuance of variances to avoid stranding assets and the adjustment of state emission 

targets to such variances. Commenters said states could grant general variances to other sources, 

but they would not be able to adjust their emission limits in response to variances that do not 

satisfy the EPA's criteria (e.g., when a source has not made a capital expenditure since 2010).

Specific Variance-based Options. Commenters set forth two specific variance-based options that 

the EPA should authorize and endorse:

Option 1: Alternative Compliance Schedule

Commenters said the EPA should specify in the final rule that states should grant variances 

pursuant to 40 C.F.R. Section 60.24(f) to coal-fired facilities that made substantial investments in 

pollution control technology since 2010 to comply with CSAPR or MATS. Commenters said a 

variance under this option would exempt the facility from a state's base 111(d) program for 20 

years from the start of the program. Commenters indicated that during the variance period, the 

EPA could adjust their applicable emissions target to exclude emissions from those sources 

operating under the variance, then at the conclusion of the variance period, the state would have 

to readjust its emission target to account for the source and the facility would be required to meet 

all applicable state plan requirements.

Commenters said that such an alternative compliance schedule is consistent with discussion of 

potential ways to consider of the "book life" of major upgrades to a facility in EPA's recent 
219

NODA. Commenters said the assumed book life for large environmental retrofits, such as the dry 

scrubbers being installed at Homer City, has traditionally been 30 years. Commenters said 

regulatory analysis underlying both CAIR and CSAPR used a 30 year life for FGDs, as did the 

MATS Rule. Commenters said while the EPA has more recently used 15 years for evaluating 

book life under CAA section 111(d), the EPA can certainly consider the "book life" of major 

pollution control equipment to be 30 years given the large capital outlays required and 

substantial operation and maintenance costs.

Commenters said the EPA's endorsement of a 20-year alternative compliance schedule for 

qualifying sources like Homer City is plainly consistent with the statute and EPA regulations. 

Commenters said as discussed above, states may implement alternative compliance schedules 

pursuant to their Section 60.24(f) variance authority, as supplemented by EPA guidance setting 

forth specific eligibility criteria. Commenters added that moreover, allowing variances for those 

facilities that meet reasonable eligibility criteria is consistent with the EPA's own authority to 

"distinguish among classes, types, and sizes within categories of new sources for the purposes of 

establishing such standards." Commenters said although there is not an explicit corollary to this 

language in CAA section 111(d), such may be fairly implied in light of the EPA's express power 

to make such distinctions in establishing standards of performance under section 111(b). 

Commenters said accordingly, the EPA should consider such an alternative compliance option 

and expressly allow states to (1) grant eligible facilities 20-year variances, and (2) implement 

corresponding adjustments in their state emission targets over the variance period.

Option 2: Emission Caps

Commenters said a second option would be for the EPA to authorize and endorse states to use 

their variance authority to subject sources to site-specific, annual CO2 caps in lieu of the base 

111(d) program. Commenters said under this option, facilities would be subject to a CO2 

emissions cap that reflects a 20% reduction off of the source's 2005 emissions. Commenters said 

qualifying facilities would again be those facilities that have made substantial capital investments 

since 2010 and need time to recoup those investments. Commenters said since many coal plants 

have and will retire after 2005, the emission reductions from those plants is 100 percent. 

Commenters said therefore, coal plants as a group will contribute significant CO2 reductions to 

achieving supportable reduction targets. Commenters said the capped facility could operate 

pursuant to whatever schedule it chooses, provided it stays below the cap. Commenters added the 

facility would also be able to run under a cap in any year and utilize the "headroom" under the 

emission cap in subsequent years. Commenters said the obvious benefit to the source is that it 

would have the flexibility to comply with state plan requirements through a permit and operate at 

full load (when the plant has the lowest heat rate) during select periods of time, as opposed to 

being subject to a rate. Commenters said the benefit to the state is that it would obtain a 

guaranteed mass reduction of CO2 and would maintain the viability of EGUs within the state.

Commenters said they believe that this approach would be permissible under the CPP as 

proposed, as well as under the variance authority of 40 C.F.R. Section 60.24(f). Commenters said 

however, we believe it important for the EPA to eliminate any confusion by specifically 

recognizing this in the final rule or accompanying materials as a viable option to avoid stranding 

assets. Commenters said states are likely to have more comfort adopting such a measure if 

the EPA speaks to it directly in the final rule.
220

Commenters stated that to provide relief and to avoid stranding assets prior to the end of their 

normal useful life, EPA has two options: (1) EPA could use its CAA authority to create a 

separate subcategory consisting of existing coal-fired facilities that have recently made sizable 

capital expenditures, and then develop standards for those sources that balance CO2 reductions 

and the ability recoup recent investments; (2) EPA and states could exercise variance authority 

provided by the CAA and EPA's 111(d) implementing regulations to establish alternative 

compliance standards and deadlines for qualifying facilities. The commenters provided details on 

each of the options and described two specific variance-based options (alternative compliance 

schedule and emission caps) that EPA should adopt.

Comment 28: The Proposed Regulation fails to recognize significant and recent investments that 

have substantially reduced carbon dioxide and other emissions; which if stranded, will contribute 

to higher rates and higher bills for customers.

Response 28: See response 1 of this section (4.7.2), including the reference to the July 2015 

docket memo titled “Stranded assets analysis”. See also section VIII.H and section I.A, II.F-G, 

V.A-C, VIII.G, X.C, XI.C-E, and XII.E of the final rule preamble of the CPP for the EPA’s

response to this comment. 

The following are summaries of the specific public comments under this comment:

Commenters stated EPA appears to recognize that the Proposed Regulation is likely to result in 

"stranded costs," but fails to offer any quantification of such costs. The commenters said the 

Proposed Regulation does not provide states with "the flexibility to make exactly the kind of 

judgments necessary to avoid requirements that would result in stranded assets." 

Commenters stated in regulated States like Virginia, costs of such stranded investments or 

"stranded assets," as EPA characterizes them, are often ultimately borne by customers. The 

commenters said the Proposed Regulation fails to recognize this basic concept by inexplicably 

asserting that impacts on electricity prices "would likely be less" if a State were to implement 

new resources "on a more aggressive time-frame." The commenters said a more aggressive 

displacement of existing resources will increase stranded costs, which is almost certain to 

contribute to increased, not decreased, electricity prices in regulated States.

Commenters stated a compliance strategy of replacing all coal-fired generation facilities in 

Virginia with comparable amounts of state-of-the-art natural gas combined cycle facilities would 

not satisfy EPA's Mandatory Goals for Virginia, many recent investments in power plants, 

including significant expenditures for environmental controls, are at risk of being stranded. 

Investments in the coal-fired fleet located in Virginia, which is used to provide Virginians with 

reliable service at just and reasonable rates, include: 

• Virginia City Hybrid Energy Center ("VCHEC"), placed in-service in 2012, at an initial 

capital cost of $1.8 billion; 
221

• Chesterfield Power Station scrubbers placed in-service in 2011 and 2008, at an initial 

capital cost of $275 million; and 

• The Clover Power Station constructed and placed in-service in 1995 and1996, at an initial 

capital cost of $1.2 billion, and with a planned service life of over 50 years. 

The commenters also recognized that the Virginia ratepayers served by Appalachian Power 

Company, whose generation facilities are located primarily in West Virginia, face stranded costs 

associated with the carbon emission rates that the EPA proposes for West Virginia. The 

commenters said Virginia and West Virginia ratepayers have only recently begun paying for 

more than $2 billion in environmental controls necessary for Appalachian Power Company to 

comply with a 2007 EPA Consent Decree; these recent environmental compliance projects 

include flue gas desulfurization ("FGD") systems, for all four units at the Amos and Mountaineer 

Power Stations, which were placed into service between 2007 and 2011. The commenters said 

other recent environmental investments for West Virginia facilities funded by Virginia 

ratepayers include scrubbers and FGD systems at Dominion's Mount Storm generating facility. 

Commenters stated Virginia is unable to take advantage of the 10-year averaging allowed by the 

Proposed Regulation to meet the Interim Mandatory Goal, which may provide some flexibility 

for States with coal-fired fleets expected to retire "after 2020 but before 2029." The commenters

said only the VCHEC, Chesterfield, Clover, Amos, or Mountaineer - has an estimated retirement 

date before 2030, and none before 2020; thus, a Mandatory Interim Goal of 884 pounds/MWh 

beginning in 2020, and a Mandatory Final Goal of 810 pounds/MWh beginning in 2030, means 

that billions of dollars of useful plant in Virginia (and West Virginia) are likely to be stranded, 

with a cost to Virginia residents and businesses that is not accounted for by the Proposed 

Regulation. For this reason, the commenters urged the EPA to reconsider its proposal "that the 

remaining useful life of affected EGUs, and the other facility-specific factors identified in the 

existing implementing regulations, should not be considered as a basis for adjusting a state 

emission performance goal...." 

Commenters stated in Arizona the closure of coal plants means the state utilities will be closing 

plants before the end of their usable life; however they must continue to pay the remaining debt 

all the while investing in new generation. The commenters said according to Ruben McBride, a 

member of the Graham County Electric Cooperative Board of Directors, the Proposed Rule will 

mandate they serve the same number of customers with twice if not three times the amount of 

debt. ("EPA Carbon Plan Detrimental to Arizona,")

Commenters stated this ruling is a little too aggressive and that it's going to drive up costs in 

South Carolina disproportionately for Berkeley Electric Cooperative members. The commenters

said by restricting the use of coal, this rule will change the power supply infrastructure 

that members have already paid for, for the coal plants that are there for the past decades.

Comment 29: Closures on units that have debt obligations; loan obligations; allow unit to 

operate for remaining useful life.
222

Response 29: See response 1 of this section (4.7.2). See also section IX.D. of the CPP final 

preamble for the EPA’s response to this comment. See also the responses to comments 1 and 2 in 

this RTC chapter (4.7.2), including the reference to the July 2015 docket memo titled “Stranded 

assets analysis.” 

The following are summaries of the specific public comments under this comment:

Commenters stated many electric cooperatives finance fossil generation projects using capital 

from the U.S. Department of Agriculture-Rural Utility Service (RUS). The commenters said the 

CPP in the proposed plan will force the closure or de-rating of coal units that currently have debt 

obligations. The commenters said to assist electric cooperatives to meet these loan obligations 

we propose allowing units with RUS financing to continue to operate for the remaining useful 

life to ensure the fulfillment of the RUS debt obligation.

Commenters stated recently, Dairyland made substantial investments to the existing coal fleet to 

reduce air emissions; these investments were also in accordance with government regulatory 

policies, but now are potentially significant stranded costs going forward with the CPP. The 

commenters said the CPP will mean a major and expensive transition to other generation 

resources, while simultaneously paying the debt associated with recently installed pollution 

control equipment. The commenters supported a diverse mix of generation fuel sources and 

technologies which will reduce emissions and believes it is wise to avoid any policy or 

regulatory mandate which could result in an overdependence on any single fuel source for power 

generation. 

Commenters stated because of the rural nature of the service territory, Dairyland qualifies for 

construction loans from the U.S. Department of Agriculture's Rural Utilities Service (RUS). The 

commenters said RUS is a credit agency that finances and administers loan and grant programs 

which assist rural electric utilities to improve the quality of life and promote economic 

development in rural America, made under authority granted by the Rural Electrification Act. 

The commenters said Dairyland has relied on these low-interest, long-term loans to construct the 

generation and transmission facilities necessary to provide affordable and reliable power to rural 

consumers. The commenters said at present, nearly all loans for Dairyland are made through the 

Federal Financing Bank and are guaranteed by RUS; they carry a loan term of up to 35 years, 

depending on the projects, and the remaining useful life of the facility involved. The commenters

said the loans are made for specific projects; when a loan is approved for a generation project, 

the term of the loan generally reflects the remaining useful life of the facility. The commenters

said if the generating facility is prematurely retired, as could potentially happen due to the CPP, 

the debt on those facilities still remains and still requires payment over the remaining life of the 

loan. The commenters said the shuttered plant will no longer generate revenue that would be 

used to pay that plant's debt. 

Comment 30: The EPA should provide guidance for managing stranded asset debt in the 

proposed rule
223

Response 30: The EPA is not including emission performance goals for Alaska in this final rule. 

See section VII of the preamble for discussion of this issue.

The following are summaries of the specific public comments under this comment:

Commenters stated the proposed rule includes no provisions that address stranded assets. The 

commenters stated they are currently investing $187,000,000 in Healy Unit 1 and Healy Unit 2 

based on successfully executing the Consent Decree with EPA; given this investment and the 

lack of affordable generating alternatives, the commenters intended to operate Healy Unit 2 

beyond 2030. The commenters said depending on future energy availability, the commenters

may need to operate Unit 1 beyond 2030 as well. The commenters said as a practical matter, any 

plan to meet the proposed Alaska CO2 Performance Goals will likely include the shutdown of 

Healy Unit 1 and Healy Unit 2 because these two EGUs are the only Subpart UUUU-affected 

coal-fired EGUs in Alaska; if so, then the investment in these two units will become stranded 

assets that would be an unreasonable liability for the commenters to absorb. The commenters

said customers simply could not afford to pay for this liability while, at the same time, pay for 

the cost of whatever generation could replace Healy Unit 1 and Healy Unit 2, if available. The 

commenters said to avoid this situation, EPA should provide guidance for managing stranded 

asset debt in the proposed rule, including a provision for full compensation for utilities that 

would face absorbing the sunk costs for bringing Healy Unit 2 out of warm layup in reliance on 

the Consent Decree, the costs of retiring the base-load coal plants, and the costs of acquiring 

reliable replacement power. The commenters said if not already done, EPA should also include 

stranded asset debt in the economic impact analysis for this proposed rule.

Comment 31: Coal-fired EGUs are at a disadvantage; have made investments; but re-dispatch 

will leave stranded

Response 31: See response 1 of this RTC chapter (4.7.2) regarding stranded assets concerns. In 

addition, see section I.A, II.F-G, V.A-C, VIII.G-H, X.C, XI.C-E, and XII.E of the final rule 

preamble of the CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:

Commenters stated EPA's proposed "building blocks" put coal-fired EGUs at a distinct economic 

disadvantage, asking for heat rate efficiency improvements while at the same time driving 

dispatch away from coal and towards NGCC and renewable energy generation. The 

commenters have made significant environmental investments in its FPP coal fired EGUs, 

adding scrubbers at the cost of approximately $400 million and adding mercury emissions 

control technology in order to meet the MATS rule. The commenters said EPA does not consider 

the economic harm caused to FPP by the potential re-dispatch, which, would strand these 

significant investments at the expense of the owner and its wholesale power customers.

Comment 32: To avoid increased stranded assets, the EPA should not allow any upgrades to 

coal-powered EGUs. Because utilities should have known climate change regulation was 
224

coming they should not be able to recover full cost of their investment in new coal powered 

power plants.

Response 32: See response 1 of this RTC chapter (4.7.2) and section I.A, II.F-G, V.A-C, VIII.GH, X.C, XI.C-E, and XII.E of the final rule preamble of the CPP for the EPA’s response to this 

comment.

In addition, the agency observes that the emission guidelines give states flexibility regarding the 

mix of emission reduction methods to require or incentivize through their state plans. States may 

choose a different mix of emission reduction methods than the EPA assumed in calculating CO2 

performance rates and state goals, and may achieve reductions through non-BSER strategies.

Thus, states can take into account concerns about locking in investments in fossil generation as 

they design their plans, and design their plans with incentives that they think appropriate.

The EPA is determining in this rulemaking that heat rate upgrades at coal-fired affected EGUs 

are part of the BSER. The commenter does not provide a legal rationale for barring efficiency 

upgrades that reduce the emission rate at an affected source.

The agency and others have observed that a growing number of electric utilities include 

projections of the expected costs associated with greenhouse gas emissions in their resource 

planning. The likelihood of future carbon regulation has been publicly recognized by many in 

the U.S. power sector for many years.

This rule does not make decisions about cost recovery by utilities for particular investments; 

these typically are matters considered by public utility commissions.

The following are summaries of the specific public comments under this comment:

Commenters submitted the report "Pathways to Deep Decarbonization in the United States" as a 

different way to think about how to reach carbon emission reductions. Commenters said the 

report talks about stock lifetimes and replacement opportunities of various technologies. 

Fuel switching locks in emissions for many years. Commenters said the graph illustrates a very 

important point - that in order to cut carbon emissions now and put the US onto a decreasing 

curve of carbon emissions, we must be very careful about making the right investments now. 

Commenters said if we prioritize natural gas now then we decrease emissions when the 

technology is installed but then we are locked in to that level of carbon emissions. Commenters

said switching fuels, i.e., coal to natural gas, locks in natural gas emissions for the next 40-50 

years. Commenters said the report states, "For some kind of long-lived infrastructure - for 

instance, power plants - there is likely to be only one opportunity for replacement in the time 

period. Commenters said adding new high carbon generation creates infrastructure inertia . . . 

that puts investments at risk - otherwise known as stranded costs/assets.

Stranded costs. Commenters said in Louisiana, stranded costs have been a significant part of the 

conversation. Commenters said they define stranded costs in this context as utility costs that are 

currently part of the Utility's revenue requirement and are authorized to recover through their 

rates, but whose recovery may be impeded or prevented by the new EPA regulations. 
225

Commenters said as an example, take a 20 year-old coal plant with a 30-year depreciation 

schedule. Commenters said assuming the plant will not be able to meet emission reduction 

targets and is decommissioned, the Utility would have 10 years of stranded costs. Commenters

said in this example, it seems prudent to allow a rider to the utility to recover those costs that 

were authorized but will no longer be able to collect. Commenters indicated coal plant capital 

upgrades would also fall under this definition. 

Commenters said that utilities may try to claim book value or fair market value of the coal plants 

in their portfolio but this should be discouraged if the power plants have been fully depreciated. 

EPA should not allow coal plant upgrades and new coal plants should not be allowed to recover 

full cost of investment. Commenters said because of the stranded cost issue, the Alliance 

strongly advises that the EPA not allow for coal plant upgrades. Commenters said admittedly, 

this will not lower emissions in the short term but will guarantee emission reductions over the 

long term and decrease the start-up cost of implementing the Plan. 

Commenters said for new coal plants, they do not believe that utilities should be allowed to 

recover the full cost of the investment because of a lack of prudency. Commenters said that U.S. 

utilities have had the same access to climate science information and carbon emission data as the 

rest of the country and should have better predicted the need to safeguard the climate system. 

Commenters said it begs the question that any new coal or natural gas plant is actually 

prudent. Commenters said experts from Clemson University stressed that "Scientific economic 

analysis cannot be used to make the call on whether [stranded costs] should or should not be 

recovered because if they are not recovered, there will be no economic efficiency effect. 

However, if the process decides that stranded cost recovery is to be the rule of the day, then these 

costs should be recovered efficiently via a two-part, access-charge tariff or a general tax levy and 

subsidy that does not disturb the relation between the price of electricity and its marginal cost of 

production."

Comment 33: The EPA's Specific Authorization of State Options to Conditionally Exempt, 

Subcategorize by Utility Type, or Allow Alternative Compliance Mechanisms

Response 33: The EPA recognizes that each state has differing policy considerations – including 

varying emission reduction opportunities and existing state programs and measures – and that the 

characteristics of the electricity system in each state (e.g., utility regulatory structure, generation 

mix and electricity demand) also differ. The final rule gives states the flexibility to implement a 

broad range of approaches that recognize that the power sector is made up of a diverse range of 

companies that own and operate fossil fuel-fired EGUs, including vertically integrated 

companies in regulated markets, independent power producers, rural cooperatives and 

municipally-owned utilities, all of which are likely to have different ranges of opportunities to 

reduce GHG emissions while facing different challenges in meeting these reductions. By 

expressing the application of the final BSER as a source-specific performance standard, and by 

providing a translation of that to statewide rate- and mass-based CO2 goals based on each state’s 

particular mix of sources, the rule allows states the flexibility to determine how to achieve the 
226

CO2 reductions (i.e., greater reductions from one building block and less from another, as well as 

the adoption of other measures that lower carbon intensity), and to adjust the timing in which 

reductions are achieved, in order to address key issues such as cost to consumers, electricity 

system reliability and the remaining useful life of existing generation assets.

Regarding stranded assets, see the response to comments 1 and 2 in this RTC chapter (4.7.2) 

including its reference to the July 2015 docket memo titled “Stranded assets analysis.” For 

additional information see section I.A, II.F-G, V.A-C, VIII.G-H, X.C, XI.C-E, and XII.E of the 

final rule preamble of the CPP.

The following are summaries of the specific public comments under this comment:

Commenters stated CWLP is the only municipal utility with generation in Illinois and is vital to 

the City's economic health, employing over 600 employees, many of whose jobs may be at stake 

with the GHG Rule. The commenters said due to the economic downtown, CWLP has over 130 

fewer employees today than in 2010; further, with such small stand-alone units, generation 

flexibility is limited, while the early investment by citizens in APCs has been substantial, 

undertaken to meet or exceed the environmental regulations in place at that time, well before a 

GHG Rule was contemplated; the debt service on these investments will continue into the future. 

Commenters stated CWLP faces obligations to pay debt service on investments made to improve 

efficiency at existing plants, to implement pollution control projects to meet EPA standards and 

to add additional generation necessary to assure sufficient capacity through 2037. The 

commenters said based on analysis of the current proposal, the commenters fear the citizen's 

sunk costs will become stranded investments, with little or no opportunity to generate revenue to 

pay back the debt, unless appropriate adjustments are made to the rule. The commenters said 

given that CWLP's four (4) coal-fired units burn less than 3% of the coal burned in Illinois for 

fuel, that CWLP meets existing emission limits for traditional pollutants (including Illinois' 

mercury emission standard, a more stringent mercury emission limit than the USEPA's Mercury 

Air Toxics Standard, or MATS), that the four (4) "affected units" emit less than 2.6% of the total 

carbon emitted by Illinois' fossil-fuel EGU's, that have (and have had) and expect to continue to 

have aggressive renewable energy and energy efficiency programs, and so as to avoid stranded 

investments by the citizens of the City of Springfield, Illinois, the commenters requested the 

USEPA adjust its GHG Rule to provide guidance to states for the provision for small not-forprofit municipal utilities like CWLP, which meet the unique factors that distinguish them from 

other affected entities subject to the plan. 

Commenters stated the Missouri River Energy Services (MRES), a regional utility, is unique in 

many ways. The commenters said MRES relies on a single, base load coal plant located in 

Wheatland, Wyoming called the Laramie River Station (LRS). The commenters said the three 

units of LRS began commercial operations in 1980, 1981 and 1982, and produce 1,710 

megawatts (MW). The commenters said MRES, through its financing affiliate Western 

Minnesota Municipal Power Agency (Western Minnesota), owns 16.5% of LRS, and is entitled 

to approximately 282 MW. The commenters said LRS has six owners, all of which are 

consumer-owned entities located throughout the region. The commenters said LRS is the only 

MRES resource that qualifies as an "affected unit" under this rule that emits CO2; however, 

MRES has no sales in Wyoming. Commenters stated LRS provides 70% of the energy that 
227

MRES supplies to its members; most members of MRES have allocations of federal hydropower 

that supply a portion of their needs, and MRES serves the balance of their community's need 

over and above the allocation; as a result, on average, MRES member communities rely on LRS 

for 40% of their power. Commenters stated LRS is presently subject to an order of EPA 

regarding Regional Haze which requires the installation of Selective Catalytic Reduction (SCR) 

technology on all three units of LRS by 2019; the remaining life of LRS is about 20-30 years; the 

cost to install the three SCRs at LRS is approximately $750 million in total, $125 million for 

MRES and Western Minnesota alone. The commenters said when EPA's Regional Haze order is 

considered in light of EPA's Clean Power Plan under 111(d), this newest proposal will cause 

stranded costs and force 61 member municipal utilities and their consumer-owners to pay for air 

quality control measures for which there is no value. The commenters said the 111(d) proposal is 

premised on an assumption that all utilities own multiple and diverse plants and can shift 

generation within their portfolios to lower emitting generation; however, that option is not 

available to most small utilities, like MRES, that rely on a single base load coal plant to meet 

their needs. 

Comment 34: Clean Power Plan threatens to strand interests in renewable and nuclear resources

Response 34: EPA’s approach to determining the subcategory-specific emission performance 

rates and state goals that are achievable considering cost is a forward-looking approach that starts 

from the state of the electricity system in 2012. Under the final emission guidelines, zeroemitting generation that existed in 2012 is not included either in the BSER or as an eligible 

measure for credit in rate-based state plans. However, new capacity and incremental generation 

after 2012 can contribute toward meeting the CO2 emission rates and state goals. With respect 

to recent and future investments, we expect that the treatment of interstate effects in the BSER 

and state plan accounting in the final guidelines will help to address the types of concerns raised 

by the commenter.

For purposes of state plan accounting, in the final rule, to the extent qualifying RE generation 

measures and nuclear, are tied to a state plan, the MWh impacts of the measures may be used by 

an affected EGU or state to adjust a CO2 emission rate, regardless of whether the RE generation 

occurs inside or outside the state or territory. For more information about specific methods to 

adjust the CO2 emission rate of an affected EGU to reflect RE and the eligibility requirements 

renewable resources must meet, see section VIII.K.1 of the final rule preamble.

Under the final guidelines, additions in nuclear capacity are treated in similar fashion to the 

addition of new RE. As described in Section VIII.K of the preamble to the final rule, new nuclear 

power generating capacity installed after 2012 and incremental generation resulting from nuclear 

uprates after 2012 also are measures eligible for adjusting a CO2 emission rate. However, 

existing nuclear units (i.e., those that originally commenced operation in 2012 or earlier years) 

that receive operating license extensions are not eligible for use in adjusting a CO2 emission rate, 

except where such units receive a capacity uprate as a result of the relicensing process. Only the 

incremental capacity from the uprate is eligible for use to adjust a CO2 emission rate. The final 

rule allows for multi-state coordination among states retaining individual state goals under rate-
228

based and mass-based emission trading programs. Details can be found under section VIII.C of 

the final rule preamble. 

See also the response to comments 1 and 2 in this RTC chapter (4.7.2) including its reference to 

the July 2015 docket memo titled “Stranded assets analysis.” Additional information relevant to 

these concerns is in section I.A, II.F-G, V.A-C, VIII.G-H, VIII.L, X.C, XI.C-E, and XII.E of the 

final rule preamble of the CPP.

The following are summaries of the specific public comments under this comment:

Commenters stated the Clean Power Plan threatens to strand MRES contractual interests in 

renewable and nuclear resources. The commenters said MRES has contracts for the output of 

over 117 MW of clean, non-emitting resources located in Iowa, Minnesota, North Dakota and 

Wisconsin. The commenters said MREW is also in the process of constructing a 36 MW 

hydroelectric power plant at the Red Rock Dam in central Iowa. The commenters said together, 

this totals more than 153 MW of clean power that should be available to MRES for use in 

offsetting emissions from its only coal plant in Wyoming; however, the way the Clean Power 

Plan is detailed in the preamble and the technical support documents, there is no assurance that 

these assets will not become stranded investments. 

Commenters said the proposal does not clearly acknowledge the fact that non-emitting resources 

are the property of the utility that owns it or has the rights to the output and environmental 

attributes. The commenters said under building block 3, the Clean Power Plan provides that 

states are free to develop state plans that give to the states themselves - not the utility owners -

the right to count RE located within the state's borders or even located in another state if the RE 

can be said to have been built to comply with the RE policy of the first state. The commenters

added such plans are not required to honor the non-emitting energy or credits generated in 

another state. The commenters said this approach threatens to strand MRES non-emitting 

generation and related credits; these investments have an established value under each of the 

respective contracts, and that value is likely to increase substantially under a regulatory regime 

where those resources can be used to offset CO2 generation. The commenters said a regulatory 

scheme which restricts the interstate use of this energy and credits will prevent MRES from 

effectively managing its resources to reduce its carbon footprint, and will strand those assets. The 

commenters said the stranding of both coal and clean energy resources creates a direct cost 

impact on MRES and its member municipal utilities. 

Comment 35: CPP results in opting for energy sources outside of economic dispatch and 

increase energy prices

Response 35: The EPA acknowledges the comments regarding Georgia’s nuclear and renewable 

resources. The agency has determined that the BSER for the final rule will not include the 

provisions we had proposed for under-construction units in the setting of state goals, and will 

allow incremental generation from new nuclear units to be applied towards compliance. Please 

see section V.A of the preamble for further discussion of the treatment of new nuclear plants, and 

section VIII.K and VIII.L of the preamble for further discussion of provisions in state plans of 

allowable actions that result in an adjusted CO2 emission rate of an affected EGU, the 
229

accounting approach for incremental generation, and how states can address interstate effects in 

their plans. We appreciate commenters’ concern regarding crediting issues. We believe that 

changes made in the final rule resolve these issues.

The following are summaries of the specific public comments under this comment:

Commenters stated historically, Georgia has had lower than average electricity prices, because 

GA relied on a diverse generation mix to provide fuel flexibility and reliability to achieve 

consistent low prices. The commenters said simply by responding to market conditions and 

Public Service Commission-directed adjustments, Georgia has reduced its carbon dioxide 

emissions by more than 33 percent in the last decade. The commenters said Georgia has been 

proactive in adopting nuclear and other renewable energy sources, including one of the first 

nuclear plant expansions in the nation since the 80s. The commenters said GA has invested tens 

of billions of dollars to expand Plant Vogtle nuclear plan, to produce new carbon-free energy;

however, the timeline chosen in the proposed rules does not appropriately credit Georgia for 

these proactive actions; rather, EPA's guidelines would force Georgia to make further 

investments. The commenters said it will make Georgia opt for energy sources that are outside of 

the economic dispatch and again increase energy prices in the state.

Comment 36: Early reductions; stranded assets

Response 36: The EPA appreciates the importance of early actions by states and utilities to 

reduce fossil electricity use and CO2 emissions. EPA’s approach to determining the CO2 

emission performance rates and state goals that are achievable considering cost is a forwardlooking approach that starts from the state of the electricity system in 2012. In part to maintain 

incentives for near-term actions that will continue to reduce emissions in 2022 and beyond, the 

agency has significantly revised the proposal with respect to the eligibility date for emission 

reduction measures -- such as incremental renewable energy generation and demand-side energy 

efficiency measures -- that can be used to adjust the CO2 emission rate under a rate-based state 

plan. States adopting rate-based plans may award ERCs to qualified providers that implement 

any eligible projects from 2013 onward for the quantified and verified MWh of generation or 

savings those projects provide in 2022 and subsequent years. See section VIII.K for an 

explanation of the final rule provisions and rationale. In addition, the removal of building block 4 

from the BSER calculation helps to concerns that commenters raised about treatment of states 

that had been leaders on state energy efficiency requirements.

The EPA has also developed the Clean Energy Incentive Program, an optional program designed 

to reward investment in certain RE and demand-side EE projects that commence construction 

after the effective date of this rule and that generate MWh or reduce end-use energy demand 

during 2020 and 2021. For more details on this program, see section VIII.B of the preamble to 

the final rule.
230

With respect to stranded assets, see the response to comment 1 in this RTC chapter (4.7.2). See

also section I.A, II.F-G, V.A-C, VI, VIII.B., C, G-H, X.C, XI.C-E, and XII.E of the final rule 

preamble of the CPP.

The following are summaries of the specific public comments under this comment:

Commenters stated TECO and their customers have made a substantial investments to make 

early reductions; EPA's proposal for existing sources neglects to account for this bold and early 

action. The commenters said “if Florida limits outlined in this proposal are finalized in their 

current form, our customers will be paying twice for the same reductions many other companies 

deferred until now. Projects that are part of the billion-dollar reductions we recently completed 

are amortized over the remaining life of the coal plant beyond 2030”. The commenters said to 

minimize the impact of the customers' bills in this proposal would create stranded assets; the 

benefits of these reductions, 5 million tons of CO2 per year, have been realized for each of the 

last 10 years.

Commenters stated EPA's proposal also directly penalizes Tampa Electric Company customers; 

in addition to paying for substantial emission reductions, they've been participating in energy 

efficiency programs that TECO has incentivized since 1979. The commenters said indeed, 

participation in the programs has been diminishing as the energy efficiency opportunities have 

been depleted in the 35 years of this already-successful program. The commenters said the EPA 

proposal penalizes these proactive and forward-thinking customers who are now benefiting from 

a lower bill, because these customers would undoubtedly see a substantially higher bill due to the 

additional costs this proposal would bring. The commenters said EPA should recognize that the 

decades of early action, as well as new appliance and building codes, are already reducing load 

demand, and EPA should work with states to adjust the goal if the remaining reductions are 

found to be too expensive or simply not practical.

Comment 37: The EPA should take remaining useful life into consideration of this flexibility.

Response 37: See the response to comments 1 and 2 in this RTC chapter (4.7.2) for the response 

to this comment. States have the flexibility under the emission guidelines to consider remaining 

useful life of individual affected EGUs, for example, through emissions trading systems that 

enable a facility to comply through purchasing credits or allowances, or through differentiating

requirements for individual EGUs or classes of EGUs. For reasons explained in VIII.G.1.d, the 

required CO2 emission rates or equivalent state goal would not be changed based on remaining 

useful life or other facility-specific considerations.

With respect to concerns about stranded assets, see the response to comment 1 in this RTC 

chapter (4.7.2), including the reference to the July 2015 docket memo titled “Stranded assets 

analysis.”

The following are summaries of the specific public comments under this comment:

Commenters stated that EPA should take remaining useful life into consideration of this 

flexibility. The commenters noted that they have had two studies performed by highly respected 
231

engineering firms to assess remaining useful life at their plant, and both studies indicated the 

plant should be able to operate reliably through 2037. The commenters noted that EPA's IPM 

indicates the plant will be retired prior to 2020, which is well before the end of its useful life. 

The commenters stated that if the Clean Power Plan becomes finalized and the EPA IPM is 

correct, their plant will be prematurely retired, and these costly investments will become 

stranded assets and leave over 350 power plant and coal miners without jobs. The commenters

stated that considerations such as remaining useful life and stranded assets with units are 

precisely the types of factors that Congress expected States to be able to consider in determining 

what standard of performance to apply to each specific facility within their individual borders, 

yet the Proposed Rule deprives States of that ability.

The commenters requested flexibility for small business entities and cooperatives - which may 

be in the form of allowing the State flexibility in smaller emission reductions to small business 

without punishing the larger entities by increasing their reductions. The commenters noted that 

this would lead to a minor slippage in the State's goal and could take the form of a set percentage 

decrease in CO2 emissions from the generating station - an example would be, a 10% reduction 

in CO2 mass emissions based on the average over the high five year emissions during the period 

between 2005 and 2012. The commenters stated that this reduction could be made by either 

reducing the megawatt output and/or improvements in efficiency and could be incorporated with 

a specific time frame based on the useful life of the generating station. The commenters noted 

that this would allow the small entity to continue to operate and pay off its debt over the 

remaining life of the unit - not become a stranded asset, resulting in a significant cost increase to 

its members.

Comment 38: The EPA asked for comment about whether generating units that have been 

retrofit with emission controls should be allowed time for cost recovery of those controls before 

the EPA CPP provisions are assigned against the unit.

Response 38: The agency appreciates the input of commenters on this issue. The guidelines do 

not dictate that states use a particular definition of “remaining useful life.” The EPA interprets 

the provision as primarily concerned with facilities that have short remaining useful lives, and 

with retrofit costs. States also are free to consider stranded assets concerns in designing their 

plans. The EPA will consider the reasonableness of the way in which a state considers remaining 

useful life and other factors in applying a standard of performance to a particular EGU in the 

context of evaluating state plans to determine whether they are satisfactory, i.e., whether they 

meet the requirements of the guidelines.

With respect to concerns about stranded assets, see the response to comment 1 in this RTC 

chapter (4.7.2), including the reference to the July 2015 docket memo titled “Stranded assets 

analysis.” See also sections I.A, II.F-G, V.A-C, VIII.G-H, X.C, XI.C-E, and XII.E of the final 

preamble of the CPP.

The following are summaries of the specific public comments under this comment:
232

Commenters agreed with EPA's notion that EPA CPP targets should not be rendering as stranded 

investment the recently deployed environmental control retrofits that EPA has stipulated as being 

both suitable and required for compliance with EPA regulations. The commenters said it is 

noteworthy that EPA's own cost and feasibility analysis when establishing stringency of these 

environmental regulations now in force gave consideration to factors such as the technology 

performance achieved by EPA examination of the best performing units and other measures as 

appropriate for the regulation. 

Commenters noted that cost recovery measures for Minnesota electric utilities are regulated by 

the Minnesota Public Utilities Commission, who gives consideration to how the environmental 

measure is satisfying applicable regulatory requirements and gives consideration to tax and 

accounting regulations and standard practices. The commenters also acknowledged that the CPP 

targets being considered by EPA can have the function of negating state regulatory authority 

decisions for cost recovery of measures that EPA compelled for deployment to comply with new 

EPA regulations such as the CSAPR and MATS that have pending compliance dates between 

2015 and 2017. The commenters said new CPP target requirements imposed by 2020 or even 

2030 (just five to fifteen years from EPA's CPP proposed rule comment input timing) might 

compel a unit with recently deployed significant and expensive environmental controls to curtail 

or cease operations. The commenters said in addition to Federal regulations, Minnesota has also 

provided for control retrofit and cost recovery for compliance with the Minnesota Mercury 

Emission Reduction Agreement (MERA), the Arrowhead Regional Emissions Abatement 

Program (AREA), the Metropolitan Emission Reduction Program and measures like the 

Minnesota Renewable Portfolio Standard, the stringency of which was set with consideration to 

how existing generation resources can serve to provide for system reliability as intermittent 

renewable energy and energy efficiency improvements are deployed. The commenters said 

ideally, some sort of cost recovery mechanism would be provided to help assure that Minnesota 

electricity customers or utility investors are not left servicing the cost of investments stranded by 

EPA and state regulatory measures. The commenters said EPA should give consideration in its 

CPP target setting for states to delay CPP requirement implementation until after the costs for 

these EPA-mandated investments have been recovered. 

Comment 39: T&T - Besides the costs directly related to the existing coal-fired EGUs that will 

be retired (as a consequence of complying with other regulations), Navajo Nation also made 

investment in purchasing Navajo Mine, and there have been significant job losses and decreased 

revenue.

Response 39: The EPA acknowledges the economic concerns of the Navajo Nation. In designing 

the final emission guidelines the agency has revised its approach to establishing CO2 

performance rates and state goals, and has provided broad flexibility for states and eligible tribes, 

if they choose, to design plans that address their unique circumstances. See sections I.A, II.F-G, 

V.A-C, VIII.G-H, X.C, XI.C-E, and XII.E of the final rule preamble of the CPP for the EPA’s

response to this comment. See comments 1 and 2 in this RTC section (4.7.2), including 

reference to July 2015 docket memo titled “Stranded assets analysis.” 
233

In addition, we would like to call the commenters’ attention to the POWER Initiative. The 

initiative is a coordinated federal multi-agency effort to assist communities negatively impacted 

by changes in the coal industry and power sector.

The following are summaries of the specific public comments under this comment:

Commenters said that in the Proposed Supplemental Rule the EPA sated that it does not expect 

any additional emission reductions from areas of Indian country with affected EGUs because the 

EGUs in the Navajo Nation's area of Indian country are already expected to meet the proposed 

goals through compliance with other regulations (BART). Commenters said that the EPA 

correctly recognized that the participants in NGS and FCPP have made significant investments to 

achieve emission reductions under other EPA rules.

Commenters said the Navajo Nation has also made investments to assure future operation of the 

plants, including purchasing the Navajo Mine to ensure a continued supply of coal to FCPP. 

Commenters said additionally, these other EPA rules have negatively affected the Navajo Nation 

in terms of job losses and decreased revenue to the Navajo Nation government. Commenters said 

annual losses to the Navajo Nation due to the three-unit shutdown at FCPP will be $86 

million. Commenters said NGS and its associated mine (Kayenta Mine) were estimated to 

contribute $13 billion to the Navajo Nation economy between 2020 and 2044. Commenters said 

however, that contribution will be significantly diminished as a result of EPA's Regional Haze 

Rule for NGS.

Comment 40: Concerns describing stranded assets and costs and early retirements

Response 40: With respect to concerns about stranded assets, see the response to comment 1 in 

this RTC chapter (4.7.2), including the reference to the July 2015 docket memo titled “Stranded 

assets analysis.” See also sections I.A, II.F-G, V.A-C, VIII.G-H, X.C, XI.C-E, and XII.E of the 

final rule preamble of the CPP for the EPA’s response to this comment. In response to the 

comment that retirements should count toward the state goal, the baseline inventory relies on 

historical data and does not incorporate anticipated future retirements. Therefore, planned 

retirements have the potential to assist the state in meeting its state goal. See VIII.C for 

discussion of planned retirements under rate-based or mass-based plans.

The following are summaries of the specific public comments under this comment:

Commenters cited that "concurrent increases in the operating costs of coal plants are often 

related to the required installation of environmental control technologies. The commenters stated 

that before these capital investments are made, plant owners must consider the future life of the 

unit(s), current and future fuel costs and revenues compared to other fuel types, and the impacts 

of additional environmental regulations. Accordingly, 20.2 GW of mostly smaller coal-fired 

units were retired between 2011 and 2013, while an additional 20.8 GW are projected to retire by 

2024." 
234

The commenters cited that "according to the 2014 LTRA reference case, an additional 44.2 GW 

of fossil-fired and nuclear capacity is projected to retire between 2014 and 2024 ...... The 

commenters stated that these projections are based on the assumption that current environmental 

regulations will remain unchanged; it does not include potential impacts of EPA's recently 

proposed Clean Power Plan (section 111(d) of the Clean Air Act)." 

The commenters stated that in the currently proposed CPP, the glide path required to meet the 

interim goal will drive large CO2 reductions by many western states by 2020. The commenters

stated that this is premised on EPA's assumptions that there will be numerous coal plant 

retirements in addition to the large-scale retirements identified in NERC's assessments cited 

above. The commenters stated that the changes to the generation mix expected to occur by 2020 

are illustrated by Figure 6. Commenters provided a Figure 6 showing Cumulative Fossil Fuel and 

Nuclear Retirements between 2011 and 2024 Total 83 GW 17. The commenters stated that in 

fact, the generation mix will have to change substantially between the date of the final CPP rule 

and the start of program compliance in January 2020. The commenters stated that the CPP does 

not give adequate consideration of the CO2 emission reductions expected to be achieved during 

this time period. The commenters stated that the proposed CPP also does not adequately consider 

the increased complexity of making further shifts in the generation mix beyond those already 

"sunk" by start of the plan compliance in 2020. 

Commenters asked EPA to recognize that while consideration of RUL of newer or upgraded 

assets is critical to some western states, to other western states it is just as critical that EPA 

provide the flexibility to fully recognize coal plant retirements in state plans, consistent with 

EPA's approach to compliance in other CAA programs. The commenters stated that CAA 

programs with a federal-state policymaking process similar to what is required under section 

111(d) include the regional haze program and related BART emission standards. 

Commenters stated that the Western U.S. fleet has numerous affected power plants that have 

multiple, joint owners. The commenters stated that decisions regarding pollution control 

investments, operational changes or retirements of jointly owned plants are complicated and 

time-consuming efforts. The commenters stated that the Western U.S. fleet has many units that 

were built after CAA Best Available Control Technology (BACT) requirements were in place 

and have newer and more pollution controls than coal-based generation built before BACT and 

the Fuel Use Act. The commenters stated that in addition, numerous units in the Western U.S. 

have recently completed, or committed to, significant new pollution controls or fuel conversions 

in response to other EPA regulations. 

Commenters stated that a key aspect of EPA's Clean Power Plan proposal is that it will exert 

regulatory pressure in the same direction toward which the utility sector is already swiftly 

moving. The commenters stated that indeed, it is difficult to overstate the transformation that 

U.S. energy markets have undergone in recent years. The commenters stated that most 

significantly, the U.S. is decisively shifting away from coal as the primary generation source of 

base-load electricity, a trend that is evident in the most recent data. The commenters stated that 

the U.S. has seen older and less-efficient existing coal-fired power plants continuing to retire 

since 2012 due to increased competition with other generating resources and impending 

environmental regulations. The commenters stated that between 2008 and 2013, U.S. utilities 

retired approximately 20 GW of coal-fired capacity, with approximately 11.3 GW retired in 2012 

alone. The commenters stated that as of November, 2014, utilities had announced firm plans to 
235

retire some 75 GW of coal-fired generating capacity (or to convert it to natural gas) by 2021. The 

commenters stated that according to a recent market study, a further 17 GW is "at risk" of 

retirement due to competition with low-cost natural gas. The commenters stated that as coal-fired 

capacity has declined, so has generation from the coal-fired fleet: in 2013, coal-fired EGUs 

accounted for 39.1 percent of U.S. generating output - slightly higher than the low of 37.4 

percent reached in 2012, but still representing a 20 percent decline in market share since 2006.

Commenters stated that looking ahead, forecasts indicate that the shift from coal to cleaner 

sources of energy will continue. The commenters stated that for example, EIA predicts in its 

Annual Energy Outlook 2014 Early Release Overview that total domestic coal-fired capacity will 

decrease by over 15 percent from 2012 to 2040. The commenters stated that EIA attributes this 

trend to slower growth in electricity demand, competition from zero- and low-carbon resources, 

and economic changes resulting from more stringent environmental regulations. Similarly, 

commenters stated NERC anticipates that 31.5 GW of net coal-fired capacity will retire by 2023.

Commenters stated that it is well documented that the U.S. coal-fired EGU fleet is aging and 

faces continued economic competition from renewable sources and gas-fired generation, as well 

as increasing public opposition to the use of high-emitting fossil fuels for energy. The 

commenters stated that there is little doubt that the sector will continue to experience a large 

number of retirements and declining capacity factors for those units that remain in the near 

future. The commenters stated that due to a number of factors, including the changing economics 

of the energy sector, a large wave of coal retirements will occur in the coming years. The 

commenters stated that the Energy Information Agency ("EIA") projects 60GW of retirements in 

the next few years. The commenters provided Figure 15, titled: “Age of U.S. Coal-fired EGUs as 

of 2015”. The commenters stated that as illustrated, the median age of a coal-fired unit in 2025 

(assuming no retirements) will be 52 years, whereas the average design life assumed at the time 

of these units' construction was 30 to 40 years. The commenters stated that a review of 

approximately 300 coal units that retired between 1993 and 2012 indicates that the average age 

at the time of its retirement is 53 years. The commenters stated that this figure is comparable to 

the coal fleet that the Sierra Club's Beyond Coal Campaign has actively tracked since 2010. The 

commenters stated that the average age of retirement for units tracked by the Sierra Club that 

have already retired is 54 years. 

The commenters stated that this estimate of average retirement age is consistent with the 

prevailing engineering analysis. The commenters stated that the highly respected engineering 

text Steam, Its Generation and Use by Babcock &Wilcox notes that unit availability sharply 

declines after 25 years and assigns a typical life of 25 years for the superheater, 30 years for the 

reheater, 35 years for the economizer, and 40 years for the lower furnace. The commenters stated 

that "Life extension" of a unit by replacing these major components is sometimes feasible, but is 

not "routine maintenance" and normally will (and should) trigger the application of more 

rigorous environmental requirements. The commenters stated that U.S. coal-fired generation is 

expected to decline even more dramatically in the following decade, since there will be relatively 

few coal-fired units under 40 years old by 2025. The commenters provided a Figure 16, titled: 

“Age of U.S. Coal-Fired EGUs as of 2025 vs. Generation in 2012” and a Table 3, titled: “Age of 

U.S. Coal-Fired EGUs as of 2025 vs. Generation in 2012”. The commenters stated that Fig. 16 

and Table 3 show that by 2025, the units responsible for 758 GWh in 2012 (47 percent of the 
236

coal-fired generation that year) will have retired or will be over 50 years old and nearing 

retirement. The commenters stated that this assessment is consistent with several analyses by the 

Brattle Group154 and others. 

Commenters stated that CWLP currently operates four (4) coal-combustion units; 3 of the units 

were placed into service in 1968, 1972 and 1978 for a total nameplate capacity under the U.S. 

EPA's Clean Air Markets of 388 megawatts (MW), which is comparatively small, and a fourth, 

virtually brand new unit. While many smaller units in the country have been targeted for closure, 

CWLP has maintained a continuous commitment to plant maintenance and an aggressive 

program of plant investment to assure the most efficient combustion of fuel economically 

justified while maintaining and exceeding current emissions control requirements. The 

commenters stated that as a result, these plants are cost effective and clean units that have 

substantial remaining economic value. The commenters stated that this commitment to 

environmental end efficiency excellence required the community to make significant capital 

commitments that are at unnecessarily and inappropriately at risk under the CPP as proposed. 

The commenters stated that CWLP's commitment to environmental excellence is demonstrated 

by its history. The commenters stated that as early as 1980, CWLP installed one of the first wet 

flue-gas desulfurization (WFGD) systems in the country to reduce SO2 emissions by more than 

90%. CWLP recently completed an upgrade of the original 1980's WFGD at the cost of nearly 

$30 million and now all 3 WFGDs remove 98% or better of SO2. The commenters stated that 

Selective Catalytic Reduction systems for NOx removal were installed in 2003. The commenters

stated that in 2009, the SCR's began year-round operation to assist in control of other emissions. 

The commenters stated that the WFGD and SCR projects were funded through bonds, with a 

payback period through 2037 for our citizens. The commenters stated that additionally, these 

units utilize electrostatic precipitators, which capture approximately 99% of particulates. The 

commenters stated that these investments in air pollution controls (APCs) demonstrate CWLP's 

commitment to meeting strict emission limits at the source, rather than paying to pollute through 

the purchase of emission allowances; these investments now may become stranded costs, 

depending upon the final GHG Rule. The commenters stated that even our two smallest units, 31 

and 32, have APCs beyond most of our larger neighboring investor-owned EGUs, but are still 

"affected units" under the GHG Rule as proposed. The commenters stated that these two units 

provide critical support during peak loads. The commenters stated that CWLP also operates a 

small natural gas turbine and two smaller black start capable diesel-fired turbines, used primarily 

for peak demand 

The commenters stated that in 2009, CWLP began commercial operation of a new coal-fired 

unit, Dallman Unit 4, with a nameplate capacity of 230.1 MW, replacing our Lakeside units, 

which lacked modern pollution controls and were retired in 2009. The commenters stated that 

Dallman Unit 4 won accolades from engineering and environmental groups alike. The 

commenters stated that it was constructed with a dry ash handling system, and has some of the 

most advanced APCs of any power plant in the country, exceeding the controls of much larger 

neighboring investor-owned utilities. The commenters stated that as one of the cleanest burning 

units in the country, Dallman Unit 4 is of the type new, efficient solid fuel plant USEPA should 

want dispatched before others.
237

Commenters stated that while CWLP's units 31 and 32 may be smaller than the average unit, 

these units have APCs beyond most units their size and larger, for which the citizens of 

Springfield are still paying the debt service for these upgrades. The commenters stated that 

therefore, while many units under 100MW capacity will likely retire due to other air pollution

regulations being implemented, CWLP has no plans to retire units 31 and 32 at this time since 

CWLP has already invested to comply. The commenters stated that these units provide critical 

support for the intermittency of our wind farms, operating during peak loads when our wind farm 

outputs are near or at zero. 

The commenters referred to a graph that indicated that CWLP's substantial investment in 

renewable energy and energy efficiency (EE) cannot be counted on during periods of peak 

demand for the utility. The commenters stated that CWLP faces summer and winter peak 

periods. The commenters pointed to a graph that overlays annual electric load against the 

availability of our renewable resources and as the graph demonstrates, during the summer, when 

our average load peaks, wind resources average very low capacity factors. The commenters

stated that as result, CWLP has continued to rely on our smaller coal units to fill the gap in the 

summer months when wind generation is not available. 

The commenters stated that while renewables are an important component of the GHG rule to 

reduce carbon emissions, coal-fired units such as units 31 and 32 are necessary for reliability, 

especially in high load periods (summer and recent winter load), as our data demonstrates. The 

commenters stated that the benefit of these units to the community is outsized and their impact 

on GHG emissions is negligible. Commenters provided a Figure showing CWLP On-Peak Avg 

Hourly Load vs Hancock Wind Farm Hourly Capacity Factors. 

The commenters stated that as a vertically integrated municipal utility, providing not only 

generation, but also transmission and distribution to its customers, CWLP owns and operates 64 

miles of 138kV and 66 miles of 69 kV transmission lines for the 80 square miles of its service 

territory. The commenters stated that CWLP's original system and substations were all built on 

the 69kV transmission line, from which the majority of the CWLP load is served. The 

commenters stated that as part of the engineering and economic assessment of options to make 

APC and EE upgrades, CWLP concluded the cost to retire these units was disproportionate to 

any gain. The commenters stated that one notable concern is the impact early retirement will 

have on the CWLP transmission system. The commenters stated that analysis of removal of 31 

and 32 generation concludes reliability consequences of sufficient magnitude to require 

significant transmission upgrades. The commenters stated that to mitigate these reliability issues, 

CWLP would be required to install multiple new connections between the 69 kV to 138 kV 

system. The commenters stated that two engineering alternatives are available but costly. The 

commenters stated that the least expensive option that is deemed necessary but adequate is 

estimated to cost approximately $8,900,000 for upgrades that include new transformers and a 

new 138 kV line. The commenters stated that the other option, which provides greater benefits, is 

estimated to cost more ($12,216,800 in 2012 dollars). The commenters stated that additional 

facility study would be necessary to determine a more accurate cost estimate, which would 

include a short-circuit analysis and stability analysis, and would also require a very coordinated 

outage schedule to complete any upgrades. The commenters stated that additionally, these 

investments would have to be proposed analyzed and approved by the MISO, a time consuming 

and expensive process. 
238

The commenters stated that other logistical and financial issues arise with the concept of closing 

units 31 and 32. The commenters stated that in addition to the transmission voltage step down 

costs, the building that serves units 31 and 32 also houses unit 33. The commenters stated that 

during a unit 33 outage, heat that is currently provided by units 31 and 32 boilers to the building 

and would no longer be available. The commenters stated that while this may seem 

inconsequential, the estimate to install building heat is $1.5 million. The commenters stated that 

closing the plant is estimated to cost an additional $1M, to address closure issues such as 

hydrogen and oil removal and other closure expenses. The commenters stated that sales 

associated with units 31 and 32 provide significant income to the City's general fund by 

contributing 30% of revenue of sales from these units. The commenters stated that revenue from 

sales associated with units 31 and 32 are also directed to fund CWLP's energy efficiency 

programs. The commenters stated that therefore, early retirement of units 31 and 32 would 

require the City to determine not only how to pay for the transmission voltage step down, heating 

and closure costs, but also how to raise funds for the City services and CWLP energy efficiency 

programs. 

Commenters stated that taking a relatively lower cost means of production, i.e., existing coal 

resources, out of utility's resource mix and still having to pay for stranded costs due to the 

unrecovered assets only exacerbates the problem of trying to recruit industry to one of the 

poorest states in the union and that happens to rank last or close to last in almost every category 

of well-being. 

4.7.3 Other

Section 4.7.3 covers all other public comments related to state flexibilities associated with the 

proposed goals.

Commenters have raised a number of issues related to this subsection which are organized by 

topics (comments) below. Responses are provided for these topics.

Comment 1: Flexibility is very important and must be maintained by the rule. The EPA must 

address disparities in final rule

Response 1: The EPA agrees with the commenters that flexibility is important and must be 

maintained by the rule. 

The following are summaries of the specific public comments under this comment:

Several commenters stressed the need for flexibility on the part of the states to develop plans 

appropriate to their regional situations. Several commenters emphasized the need to be able to 

incorporate and build on existing programs, and several emphasized the need for flexibility to 

develop individual state or regional plans (such as RGGI). Commenters strongly supported the 
239

flexibility to use any number of building blocks, as well as other measures such as renewable 

energy credits or emission credit trading with other states, system operator, or regions as 

necessary and appropriate to achieve compliance. Commenters indicated the rule should allow 

states the flexibility to integrate a variety of tools and compliance methods at their disposal and 

the flexibility to promote creative and effective methods of emission reductions, and develop 

new means of achieving the EPA requirements. Commenters emphasized that the rule show 

allow both the necessary flexibility and time so that all states can craft effective implementation 

plans. Additional concerns were also expressed, as described below.

Commenters stated that states should be allowed to meet the target goals using the same flexible 

strategies they have historically used to control criteria pollutants under section 110 of the CAA, 

and stressed that states should be able to design compliance plans that minimize disruption to 

existing successful states programs (including, in California, the state's Cap-and-Trade Program, 

renewable portfolio standard, and energy efficiency programs). Commenters said that state 

planners must be given the discretion to capture cost effective reductions across the grid and 

continue to efficiently implement existing programs that can deliver reductions into the future. 

Commenters strongly encouraged the EPA to allow states to choose among several compliance 

options, including a rigorous alternative version of the state commitment approach on which it 

requests comment.

Commenters stated that EPA must develop CAA 111(d) guidelines that foster both regional 

coordination and the option for states to submit individual plans. Commenters said that the EPA 

also must provide states multiple options for capturing the benefits of state energy efficiency and 

renewable energy programs. Commenters stated that the EPA must provide a workable 

mechanism for states to adopt either a rate-based or mass-based approach to achieving state 

goals, as well as to modify their plans - such as to continue achieving reductions cost-effectively 

by incorporating new technologies that become available. Commenters emphasized that the rule 

and the EPA's manner of implementation and approval must recognize that regional plans could 

appropriately take many different forms. Commenters said that the EPA must allow states

flexibility to allocate credit for zero-carbon resources and to reach agreements allocating carbon 

liabilities.

Commenters emphasized that the EPA also should support the dialogue and standardization 

needed to promote state flexibility. Commenters said, for example, the EPA should work with 

states to ensure states receive proper credit for energy efficiency programs. Commenters said that 

the guidelines must account for the need for both accountability and flexibility in developing 

Estimation, Measurement and Verification protocols that work across states and will meet 

federal standards.

Commenters stated that the Clean Power Rule guidelines must recognize the primacy of States 

and rely on both State utility and environmental regulators to lead the creation of emission 

performance system that reflect the policies, energy needs, resource mix, and economic 

conditions of each State and region. Commenters stressed that the guidelines must also be 

flexible enough to allow states individually or regionally to take into account the different 

makeup of existing power generation in each state and region. Commenters said further, the 

guidelines must allow States to avoid GHG emissions reductions that are not feasible, and must 
240

provide sufficiently flexible compliance pathways or mechanisms that recognize State and 

regional variations to achieve the most cost-effective emissions reduction in each State.

Commenters said it is essential that states have the flexibility to employ emissions rate goals in 

lieu of mass based goals and that East Kentucky Power Cooperative must be permitted to 

substitute new NGCC units in place of retired coal units in its emission rate

calculations. Commenters said the CPP will only have the potential of being achievable if states 

are provided with this flexibility in developing their plans.

Commenters said each state should have the opportunity to determine for itself which carbon 

reduction mechanisms make the most sense for its citizens, its workers and its economy, or for 

states to band together to submit regional implementation plans. Commenters said as a result, the 

final rule must permit each state to focus on ensuring power reliability, fostering community 

stability, and encouraging economic growth-all while reducing carbon dioxide pollution.

Several commenters said the EPA should preserve as many options for state compliance as 

possible, and address any inconsistencies leading to disparity. Several commenters said that 

flexibility is the strongest aspect of the proposed rule, even though it creates many 

complications. Several commenters said that the EPA's efforts at consistency, while laudable, are 

not complete, leading to unintended disparities, and these disparities must be addresses 

appropriately in the final rule.

Commenters argued that states should have flexibility and discretion with regard to state plan 

development and source compliance. In comments submitted prior to the proposal in April 2014, 

and resubmitted following proposal, the commenters offered the following as part of their 

response to the question, "What requirements should state plans meet, and what flexibility should 

be provided to states in developing their plans," in EPA's "Considerations in the Design of a 

Program to Reduce Carbon Pollution from Existing Power Plants." The commenters explained 

that states should be afforded maximum flexibility and discretion in developing their plans and 

determining how each EGU within the state may comply, taking into account remaining useful 

life. The commenters explained that each state is different with all EGUs is not feasible, but state 

plans could justify source-specific standards and a best management practice approach, including 

heat rate improvements through operations optimization and best available technology 

economically achievable.

The commenters stated that it is important to highlight that 40 CFR 60.24(f) authorizes states, 

under certain circumstances and on a case-by-case basis, to allow individual sources longer 

compliance schedules and to apply less stringent emissions standards than otherwise required by 

EPA's emissions guidelines. The commenters suggested that once the state has set achievable 

standards for each existing EGU, the state should maintain discretion to enable source 

compliance through a variety of flexible mechanisms that may vary from state-to-state.

Commenters stated that as noted by U.S. EPA, Section 111(d) gives states "the primary 

responsibility for designing their own state plans." Commenters said it appears U.S. EPA is 

taking every opportunity to limit this role. Commenters said Ohio EPA reiterates that states 

should have the flexibility to determine the best approach given their specific abilities. 

Commenters said U.S. EPA should not be limiting options under this proposal. Commenters said
241

RE and EE should not be components of BSER; however, Ohio EPA continues to believe states 

should have the flexibility to choose what measures apply to an affected EGU.

Comment 2: Rule is intrinsically inflexible

Response 2: The EPA maintains that the final rule provides ample flexibilities to states. States 

are allowed to use the BSER measures, or other measures in their state plans to comply with the 

goals; there are flexibilities within the BSER measures and how they are executed; and states 

also have non-BSER measures at their disposal. See sections V.A.2., V.A.5., V.A.6. and VIII.A. 

of the final rule preamble of the CPP for more information. 

The following are summaries of the specific public comments under this comment:

Several commenters stated that the proposed rule is intrinsically inflexible.

Several commenters indicated that the EPA has stated repeatedly that there is flexibility in the 

proposed Clean Power Rule in that it allows states to develop their own compliance plans, and 

that those compliance plans may, but are not required to, utilize any combination of the four 

"building blocks" identified in the proposed rule. Several commenters indicated, however, that 

the EPA established state CO2 emission goals based on aggressive assumptions about what each 

of the four building blocks can achieve. Several commenters said that although the EPA claims 

that states retain the flexibility not to implement each of the building blocks in the manner EPA 

assumed when developing state goals, in reality it would be difficult for a state to achieve the 

emission targets set by EPA without implementing all of the building blocks. Several 

commenters indicated that accordingly, states do not have the option of not implementing a 

building block or substantially deviating from EPA's assumptions. Commenters added that even 

if states could manage to get more emission reductions from one building block to offset fewer 

reductions from another that would be considerably less flexibility than states must be afforded 

under Section 111(d).

Commenters said that despite the claim that the proposal offers "maximum flexibility" to ensure 

the "best set of cost-effective reductions", the proposed rule contains elements that do not 

provide the flexibility needed to ensure cost-effective emission reductions that represent a state's 

preferred approach to meeting its 2030 target. Commenters said these elements of the proposed 

rule include, but are not necessarily limited to, the timing for submittal of state implementation 

plans (SIPs), the estimation and enforceability of the interim target (i.e., the so-called "glide 

path"), the lack of appropriate credit for early action, and the possibility of employing a massbased limit over a rate-based limit for the 2030 target.

Several commenters stated that the proposed Clean Power Plan provides no actual flexibility for 

Arkansas. Commenters said that Arkansas Electric Energy Consumers (AEEC), and Arkansas as 

a whole, will more than likely be unable to achieve compliance with any of the four building 

blocks in their own rights. Commenters said that as a result, there is no real possibility that 

shortfalls in one building block can be satisfied or negated by overachieving in other building 

blocks, and therefore no real flexibility is provided for Arkansas or AECC. Several commenters 

said that for states with a high amount of coal generation, the proposed emission reductions must 
242

be accomplished primarily be reducing coal-fired energy generation if such states can hope to 

meet the stringent requirements, and thus, in actuality, the CPP's "flexibility" is non-existent 

when it comes to states that rely heavily on coal generation.

Commenters said that the EPA has indicated that even if a state can demonstrate that a particular 

building block is not feasible, the EPA will not adjust a state's emissions goal unless the state can 

demonstrate that additional controls on the other building blocks are not feasible. Commenters

said this is a flawed interpretation of CAA Section 111(d) regarding what constitutes BSER and 

should be rejected.

Commenters indicated that the Proposed Rule states that its interim and final goals provide states 

with flexibility to design plans over the long term. Commenters indicated, however, that because 

the interim goals are so stringent, many states will have to take significant actions by 2020 in 

order to comply, limiting flexibility. Commenters stated that due to the inflexibility of the 

proposed regulation, it would shut down the Arizona Electric Power Cooperative Apache 

Generating Station and potentially other small cooperative power plants. Commenters indicated 

that in the case of Arizona, the "flexibility" provided by the proposed regulation is 

illusory. Commenters said Arizona's target assumes that all coal-fired EGUs are shut down; 

therefore, there is no gain that can occur from Building Block #1. Commenters said that if 

Arizona increases the allocation to Building Blocks #3 and #4, Arizona cannot comply with the 

interim goal. Commenters said that similarly, Arizona cannot increase Building Block #2 

because there is no "OG Gen" capacity left that has not already been redispatched to NGCC. 

Accordingly, it appears that under the Clean Power Plan as proposed, effective January 1, 2020, 

AEPCO must shut down all of its affected EGUs.

Commenters felt the proposed rule is unlawful because the EPA proposes to establish emission 

goals that it says states have no authority to modify. Commenters said that because the EPA has 

simply assumed each Building Block can be implemented fully without ascertaining whether that 

is in fact the case, the touted flexibility of the rule is illusory. Commenters indicated that 

in many cases, states cannot realistically implement one or more Building Blocks and do not 

have the flexibility to increase the stringency of other Building Blocks or measures to achieve 

their mandated goals. Commenters indicated that the EPA analysis has already demonstrated 

that Pennsylvania will need to use all four building blocks to achieve the required emissions 

reductions, and states that these goals cannot be achieved solely by inside the fence line 

improvements at existing fossil fuel fired EGUs, which is the only legal method to achieve these 

CO2 emission reductions.

Commenters indicated that the rule provides limited flexibility because the proposal states 

that "once the final goals have been promulgated, a state would no longer have an opportunity to 

request that the EPA adjust its CO2 goal." Commenters indicated the final state goals "would 

reflect any adjustments as appropriate based on comments provided to the EPA to address any 

data errors in the analysis for the proposed goals", and said that these statements contradict the 

assertion that the EPA has granted the states flexibility within the Clean Power Plan. 

Commenters stated that the state goals have been set without input from the individual states on 

the front end of determining state specific BSER potential, although the role of the states 

according to Section 111(d) of the Clean Air Act (CAA) is to establish and apply standards of 

performance. Commenters said that the proposal also claims that states are given the "flexibility" 
243

to choose between rate-based and mass-based performance levels for each performance. 

Commenters stated that there essentially is no "flexibility because the EPA sets the target goals 

have already been set - rate-based state goals in this original proposal and in its November 6, 

2014 supplement to the rule EPA has set the mass-based state goals as well.

Commenters stated that rule does not give flexibility suggested by EPA.

Commenters stated that they are very cognizant of the fact that the flexibility U.S. EPA 

advocates is limited to choosing the methods of emission reduction and timeframe of plan 

development and implementation. Commenters said no flexibility is given in determining the 

total emission reduction figure.

Comment 3: Rule is not flexible due to the stringency of the building block targets

Response 3: The EPA maintains that the final rule provides ample flexibilities to states. States 

are allowed to use the BSER measures, or other measures in their state plans to comply with the 

goals; there are flexibilities within the BSER measures and how they are executed; and states 

also have non-BSER measures at their disposal. See sections V.A and VIII.A. of the final rule 

preamble of the CPP for more information. 

The following are summaries of the specific public comments under this comment:

Several commenters said that the proposed rule does not offer states flexibility due to the 

stringency of the targets.

Commenters said the flexibilities that the EPA insists the states have under the proposed rule are 

illusory given the stringency of the standards, practical impediments, and the EPA's decision to 

disallow exceptions or a modification to the standards. Commenters stated that the "guidelines" 

proposed by the EPA are mandatory, extraordinarily stringent and, once established in the final 

rule, will not be subject to modification. Commenters said that the proposed "anti-backsliding 

provision" specifically prevents modifications to a state goal after finalization of the rule that 

increases emissions under any circumstance. Commenters stated that such a provision, if 

retained, serves as a constraint to addressing unanticipated developments and increases the 

potential for negative economic impacts from the rule.

Commenters indicated that although the EPA has repeatedly emphasized the flexibility provided 

in the proposed Clean Power Plan, the "portfolio of options" (aka "building blocks") that 

comprise the foundation of the proposal are clearly designed to increase the stringency of the 

rule, rather than assist states and affected sources' compliance efforts. Commenters indicated 

that by incorporating reduction measures beyond affected sources, the EPA was able to tighten 

individual state targets substantially. Commenters said that while the EPA's "mix and match" 

messaging implies otherwise, if the emissions reductions called for from one individual building 

block are not met, they must be made up for through even greater reductions in another building 

block (or by alternative measures that EPA does not specify). Commenters stated that because 

individual building block targets were set at aggressive levels, there is little to no "wiggle room" 
244

between options and as a result, unless EPA incorporates true flexibility into the rule, they expect 

states will face major compliance challenges.

Several commenters said that the stringency of the targets remove any flexibility that may have 

been intended. Several commenters said, for example, the EPA's assumptions for replacement of 

coal generation with natural gas generation under building block 2 constrain the state's ability to 

rely on building block 1 (heat rate efficiency in coal plants) for any movement towards the state's 

interim or final goals. Several commenters said additionally, Arizona's goals represent an 

emissions rate for existing natural gas that is much lower than what the Agency says is 

achievable for brand new natural gas units. Several commenters said consequently, Arizona is 

forced to construct new renewable generation sources on unrealistic timelines and accelerate 

energy efficiency without the time to rationally consider what programs are most cost-effective 

and achievable within the state.

Commenters said the EPA must provide true flexibility to the states by allowing them to consider 

unit specific realities, including the remaining useful life of the source, when assessing the 

reasonableness of the standard and the compliance schedule as applied to any single facility.

Commenters said although EPA claims that state have flexibility to determine how to meet 

EPA's goals, the magnitude of the emission reductions in the proposal leaves most states little 

alternative but to follow EPA's mandates laid out through building blocks 1 through 4. The 

commenters said EPA has proposed to substitute its judgment for that of public utility 

commissions, utility companies, grid operators, and consumers across the nation by presuming 

the appropriate amounts of electricity from coal, natural gas, nuclear, and renewables, as well as 

presuming how much electricity consumers should use in each state.

Commenters said the EPA attempts to address the 2020 interim limit by requesting comment in 

the NODA on two proposals designed to provide sufficient flexibility, but the EPA's proposed 

fixes won't solve the problem. Commenters said the EPA provides the option of meeting the 

deadline by 2020 while receiving credit for "certain pre-2020 reductions" (without further 

elaboration on what those might be), or implementing the goal earlier than 2020 by taking into 

consideration reductions currently under development. (79 Fed. Reg. at 64,545-46). Commenters

said neither of these options change the unrealistic nature of the 2020 goals, nor do they provide 

states with true flexibility in determining how to structure the reductions needed by 2030. 

Commenters said the EPA should (1) eliminate the mandatory nature of the interim emission 

limit, and (2) allow states to assess a reasonable performance standard for individual units, or at a 

minimum allow states to determine how to structure their own glide path to meet the 2030 goal.

Comment 4: Rule is not as flexible as EPA claims because all of the individual building blocks 

reflect relatively stringent assumptions. EPA should re-evaluate its assumptions to ensure each 

one of its building blocks is achievable, rather than relying on assumption that any flaws in one 

BB can be offset by the flexibility associated with another BB. BB2 may not be achievable in 

New England due to early action

Response 4: The EPA maintains that the final rule provides ample flexibilities to states. States 

are allowed to use the BSER measures, or other measures in their state plans to comply with the 

goals; there are flexibilities within the BSER measures and how they are executed; and states 
245

also have non-BSER measures at their disposal. See sections V.A and VIII.A. of the final rule 

preamble of the CPP for more information. 

The following are summaries of the specific public comments under this comment:

Commenters said EPA claims that any errors in the calculation for only one building block will 

not warrant a change in the goals because of the additional flexibility provided by other building 

blocks. Commenters said for example, EPA claims that "a state's inability to meet the level of 

emission reductions anticipated through use of one building block may free up resources that the 

state could then devote to more stringent implementation of another building block." 79 Fed. 

Reg. at 34,893. Commenters said as such, EPA asks states that have concerns about one or more 

building blocks to "explain why the application of the other building blocks would not result in 

greater emission reductions than are reflected in the EPA's quantification for that state." 

Commenters said however, since all of the building blocks are based on relatively stringent 

assumptions, the flexibility EPA may intend to provide is simply not available. Commenters said 

the inability to achieve one building block will not necessarily "free up" resources because the 

state will likely have already expended those resources even if, in the end, the desired level of 

improvement cannot be fully achieved. Commenters said the EPA also incorrectly assumes that 

the building blocks are fungible because each compliance option will result in different costs in 

different states-even if a trade-off is possible, it could also be far more expensive than EPA 

assumes. Commenters said in addition, the generation resources covered by the building blocks 

are not fungible in a practical sense because different resources provide different services to the 

electric power grid that must be considered in determining the potential impact of a trade-off 

between energy resources, such as frequency and transmission support. Commenters said 

however, EPA's analysis does not appear to take those ancillary grid services into account in 

assuming that efforts under one building block can substitute for another. Commenters said the 

timing of the building block assumptions also renders the proposal inflexible, since EPA assumes 

some building blocks will be achieved by 2020 while others can only be achieved over the entire 

compliance period ending in 2030. Commenters said as a result, states may be forced to employ 

more expensive options if the cheaper options are simply impossible to achieve at the levels EPA 

assumes in its nationwide analysis by the deadline required.

Commenters said that the proposed regulation does not actually provide flexibility because the 

states are provided with a narrow range of costly policy choices, which most of the state did not 

choose for themselves. The commenters said this does not provide any actual flexibility and still 

produces the same outcome, higher electricity prices and decreased generation.

Commenters asked EPA to re-evaluate its assumptions to ensure each one of its building blocks 

is achievable, rather than relying on the unsupported assumption that any flaws in one building 

block can be offset by the flexibility associated with another building block.

Commenters also said the EPA's claim that a state has the ability to increase remaining building 

blocks to make up for a state's inability to implement a particular building block is misleading. 

Commenters said for example, if a state cannot meet its goal for re-dispatch to new renewable 
246

generation (presumed zero-carbon) under Building Block 3, an increase in re-dispatch to NGCC 

under Building Block 2 would not offset the state's shortage under Building Block 3. 

Commenters said since the building blocks are fundamentally different, states have very little 

room to deviate from the exact combination and level of intensity prescribed by the EPA in the 

goal-setting formula to achieve compliance.

Commenters said by design, the magnitude of the carbon intensity reductions varies significantly 

across the building blocks. Commenters said while it may be theoretically feasible for New 

Hampshire to increase implementation slightly across other building blocks to account for an 

inability to meet demand-side energy efficiency goals, the same cannot be said if New 

Hampshire is incapable of meeting re-dispatch goals since they account for the bulk of the 

carbon intensity reductions required in the state. Commenters said for example, New England as 

a whole - and specifically New Hampshire, has already implemented Building Block 2 to the 

maximum extent possible prior to the 2012 reference year given the natural gas availability 

constraints of the region. Commenters said this is evidenced by the shift of coal- and oil-fired 

EGUs to targeted operation primarily during times of elevated demand. Commenters stressed 

that for this reason, additional re-dispatch under Building Block 2 is not feasible for New 

Hampshire - which renders the state goal entirely unattainable due to the unrealistic magnitude of 

carbon intensity reduction that would be required of the remaining building blocks that are 

unequipped to handle such increases.

Commenters stated, EPA established state emission rate goals in the Proposal by considering 

CO2 emissions reductions available through four building blocks that EPA found make up the 

best "system" of emissions reductions or BSER. Commenters said, EPA claims that, by not 

mandating that states adopt any of the measures considered in the building blocks, EPA is 

providing states with "flexibility" in how they achieve their goals. Commenters said, however, 

the unrealistic assumptions that EPA used in each building block are unreasonable and not 

achievable for many states. Commenters said, as a result, the state goals are so stringent that 

states will have little to no flexibility in the programs and limits they must adopt to meet both the 

interim and final emission rate goals. Commenters said, many states will be able to do so only 

through the precise adoption of the measures that the IPM assumed would result in compliance. 

Commenters said, other states will not even be able to meet the state goals using the IPM 

modeling results due to the limits of the modeling and the failure of the model to take into 

account reliability constraints, permit limits, transmission constraints, infrastructure needs and 

other factors that will restrict a state's ability to comply with its goals; particularly the interim 

goals that will apply beginning in just five years. Commenters said, EPA's use of unreasonable 

assumptions, its failure to consider numerous constraints that impact EPA's conclusions in each 

building block, and its reliance on measures that EPA does not have the authority to mandate 

render the BSER determination arbitrary and capricious. Commenters said, EPA must eliminate 

consideration of Building Blocks Two, Three and Four in determining BSER and must revise its 

analysis of Building Block One.

Comment 5: In reality, the proposed regulation does not provide states with the flexibility to 

maintain additional coal-fired generating capacity because of the unrealistic levels of RE and EE 

that would be required to offset the emissions.
247

Response 5: The EPA maintains that the final rule provides ample flexibilities to states. States 

are allowed to use the BSER measures, or other measures in their state plans to comply with the 

goals; there are flexibilities within the BSER measures and how they are executed; and states 

also have non-BSER measures at their disposal. See sections V.A and VIII.A. of the final rule 

preamble of the CPP for more information. 

The following are summaries of the specific public comments under this comment:

Commenters stated that the EPA must provide states with the flexibility to address reliability, 

cost, and remaining useful life. But commenters said that in reality states cannot preserve sources 

that Building Block 2 otherwise would retire through greater implementation of other building 

blocks or other measures. Commenters said, however, that under the Clean Power Plan, states 

cannot preserve power plants for reliability purposes, cost, or remaining useful life because the 

EE or RE required to offset the emissions of a single preserved power plant are wholly 

unrealistic. Commenters said that for many Southeastern states, it will be impossible to meet 

even the projected level of RE under the Proposed Rule, let alone tripling or quadrupling that 

would be required to avoid massive coal unit retirements.

Commenters provided a scenario in Arkansas to demonstrate the unrealistic growth in RE and/or 

EE that would be required to maintain coal-fired generating capacity. Commenters indicated that 

the EPA IPM modeling projects that four of Arkansas' seven coal-fired EGUs would retire or 

cease operating by 2020. According to commenters, retaining either the White Bluff or 

Independence generating stations would require a 322 percent increase in EE from the amount 

assumed in BB4 and the IPM analysis, or a 335 percent increase from BB3-assumed RE levels 

(i.e., an additional 5,000 NW wind or 9,000 MW solar). Commenters noted that the IPM did not 

project compliance through wind or solar generation in Arkansas because of the complete lack of 

RE potential in the state.

Commenters also provided an example using Arizona's goals. Commenters said that in Arizona, 

the EPA's Goal Computation TSD and the IPM predict that meeting the state's interim emissions 

goal will require the retirement of all Arizona coal-fired capacity by 2020. Commenters stated 

that if Arizona does not, or is unable to, retire even 1,000 MW of coal generation (approximately 

the size of the Cholla power plant), meeting Arizona's CO2 emission rate goal would be 

impossible. Commenters indicated that under EPA's theory Arizona could make up for retaining 

the coal-fired capacity by expanding RE and EE. Commenters indicated that this would require 

a 489 percent increase in RE from IPM projected levels or a 140 percent increase in EE from the 

level assumed in building block 4 and the IPM analysis. Commenters indicated that this equates 

to an additional 4,000 MW of wind or 7,000 MW of solar. Commenters added that utilizing 

existing NGCC generation at higher levels also would not help with compliance because 

Arizona's 735 lb/MWh interim goal is more stringent than the state's average NGCC emissions 

rate.

Comment 6: Interim goal makes rule inflexible. The EPA should eliminate, or adopt a different 

approach to, the interim goal
248

Response 6: The EPA has modified the interim goals in response to comments and our further 

consideration. The interim period covers the years 2022-2029 and includes illustrative interim 

emission values for the periods of 2022-2024, 2025-2027, and 2028-2029. States have the 

flexibility to use different steps than those included in the final rule if the state demonstrates in 

its state plan that the values chosen for the 3, 3, and 2 year increments are equivalent to the 

interim goal included in the final rule for the 2022-2029 period. See section VII of the final rule 

preamble for discussion of the statewide goals.

The following are summaries of the specific public comments under this comment:

Commenters said that throughout the Notice of Proposed Rulemaking and technical support 

documents and in discussions with stakeholders, if any potential impediment to implementation 

of the proposal is raised, the EPA's answer is, almost inevitably, flexibility. Several commenters 

said however, the interim goal limits the flexibility available to states. Commenters said 

incorporation of the assumed 2020 implementation date for BB2 into the interim goal calculation 

will have the opposite effect and will interfere with a state's ability to shift from BB2 to 

measures, such as BB3 and BB4, whose effectiveness tends to grow over time. Commenters said 

because the interim goal reflects an average of annual values from 2020 to 2029, states cannot 

shift reductions in generation on an MWh-for-MWh basis from BB2 to BB3 or BB4 without 

violating the interim goal.

Commenters attached the spreadsheet that the Arizona Department of Environmental Quality 

mentioned on the August 14, 2014 conference call between Region 9 states and EPA. 

Commenters said the spreadsheet illustrates the fundamental inconsistency between the proposed 

interim goal and the EPA's stated objective of allowing states flexibility in choosing how to 

comply with the guidelines. Commenters said the following table provides a summary of the 

results of our calculations.

Commenters stated that as the table shows, the more Arizona relies on Building Blocks 3 and 4 

to achieve compliance with the final goal, the farther it gets from compliance with the interim 

goal (scenarios 2-4). Commenters added conversely, if Arizona designs its program to comply 

with the interim goal, it ends up with a final rate that is far lower than necessary to comply with 

the final standard and ends up preserving a much smaller portion of its existing coal-fired 

generation resources (scenario 5).

Commenters said that in fact, Arizona has no flexibility to shift from one Building Block to 

another to meet its rate-based goal under the program as proposed. Commenters indicated that 

the state cannot increase reliance on Building Block 1, because the rate-based goal assumes zero 

coal generation, and the interim goal, as explained above, prevents Arizona from increasing 

reliance on Building Block 3 or 4 to preserve coal generation. Commenters said that if no coal 

generation remains in 2020, increasing the efficiency of coal units will obviously have no effect 

on Arizona's rate. Commenters added that Arizona cannot increase reliance on Building Block 2, 

because the interim goal effectively requires the maximum re-dispatch possible.

Commenters said that Arizona is not the only state in this predicament. Commenters said that the 

EPA's goal calculation spreadsheet makes it clear that a number of other states have goals that 

presume re-dispatch of all or a substantial portion of coal and OG generation to NGCC by 2020. 
249

Commenters added that moreover, for some states, the presumption of 2020 implementation of 

Building Block 1 may present a similar impediment to flexibility.

Commenters said therefore the EPA should eliminate, or adopt a different approach to, the 

interim goal. Commenters said that if an interim goal is included in the final rule, it should 

provide a reasonable phase-in period for all Building Blocks - otherwise the EPA will deny 

Arizona and many other states the flexibility it intended to include in the program.

Commenters noted that the scenarios presented in the spreadsheet are offered solely to illustrate 

the problems with the EPA's proposed interim goal, and that ADEQ has not evaluated the 

technical or economic feasibility of any of the RE or EE alternatives included.

Comment 7: The interim goal stringency and timing deprives Oklahoma of any flexibility to 

implement alternative compliance measures, and effectively mandates the closure of coal-fired 

power plants.

Response 7: The EPA has modified the interim goals in response to comments and our further 

consideration. The interim period covers the years 2022-2029 and includes illustrative interim 

emission values for the periods of 2022-2024, 2025-2027, and 2028-2029. States have the 

flexibility to use different steps than those included in the final rule if the state demonstrates in 

its state plan that the values chosen for the 3, 3, and 2 year increments are equivalent to the 

interim goal included in the final rule for the 2022-2029 period. See section VII of the final rule 

preamble for discussion of the statewide goals.

The following are summaries of the specific public comments under this comment:

Commenters said the interim goals require such significant emission decreases in such a short 

amount of time that they effectively mandate the closure of coal-fired power 

plants. Commenters said in additional to overestimating the emission reductions achievable 

through re-dispatch, EPA also assumed that all "available" emission rate reductions from redispatch could be achieved at the start of the ten-year interim goal compliance period. 

Commenters said as a result, the interim goals in states with electric generating companies that 

have invested in low-emitting NGCC, like Western Farmers, are so stringent that almost all of 

the emission rate reductions required by the Proposed Rule must be achieved in the first year in 

the ten-year compliance period. Commenters said the EPA assumes that by 2020, Oklahoma can 

achieve 80 percent of the total emission rate reductions required in 2030.

Commenters said Oklahoma cannot comply with the proposed interim emission rate goal without 

making drastic changes to generation very early in the compliance period. Commenters graphed 

the proposed emission rate reduction trajectory for Oklahoma and said it resembles a cliff: 

emissions decrease sharply early in the compliance period and then remain largely unchanged 

through 2030. Commenters said as a result, Oklahoma will have no choice but to prematurely 

close existing coal-fired generating units early in the compliance period. Commenters said the 

stringency and timing of the proposed interim goals deprives Oklahoma of any flexibility to 

implement alternative compliance measures and effectively mandates the closure of coal-fired 

power plants.
250

 

Comment 8: The EPA's claims of state flexibility and control are a false promise; states should 

be given flexibility to develop the elements of a plan that works best for the state, should be 

allowed extensions, should be allowed to change plans based on changed circumstances, and 

should be allowed to adopt a "rate of progress" approach.

Response 8: The EPA maintains that the final rule provides ample flexibilities to states. States 

are allowed to use the BSER measures, or other measures in their state plans to comply with the 

goals; there are flexibilities within the BSER measures and how they are executed; and states 

also have non-BSER measures at their disposal. See sections V.A and VIII.A. of the final rule 

preamble of the CPP for more information. 

The following are summaries of the specific public comments under this comment:

States have broad authority. Commenters said that the state goal is the standard of performance 

and the means to achieve that end should be left to the states. Commenters said states have 

broad authority to develop a state plan for existing sources, and EPA only has authority to deem 

that a plan is satisfactory or not. Commenters said as long as the state plan is "satisfactory" and 

demonstrates that the state will attain, maintain, and enforce the emission guideline (42 U.S.C. 

section 7410(a) (1)), EPA should not be allowed to second-guess the state's means of achieving

the objective. Commenters said in the proposed regulation, the EPA has taken away much of the 

flexibility by establishing its rigid Interim Goal.

EPA should allow states flexibility including extended target date as appropriate. Commenters

said that in developing a plan, a state may choose the measures it will include to achieve its goal, 

and the EPA should allow states the flexibility to choose elements that work best for the state. 

Commenters emphasized that only the final state goal needs to be federally enforceable, and said 

that planning and reporting already required by the CPP allow for correction and "penalty" if a 

state fails to be on course. Commenters said in addition, EPA should allow states to extend the 

2030 target date upon a showing of a plan, like the Ameren Missouri IRP, that will cost 

effectively achieve comparable reductions within a reasonable time frame.

Several commenters said despite all the preamble discussion of flexibility for states, in reality 

states have no discretion. These commenters said the proposal sets emission rate goals that 

cannot be adjusted by states, and all of the requirements imposed on state plans allow states no 

discretion. These commenters said the EPA must revise the proposal to allow states to submit 

plans to establish the performance standards consistent with CAA Section 111.

Selling EE credits. Commenters said states should not be forced to implement a portfolio 

approach that would place a compliance obligation on transmission and distribution utilities like

Ameren Illinois. Commenters said such utilities should be able to sell energy efficiency "credits" 

to EGUs to assist with low cost compliance.

Change plans based on changed circumstances. Commenters said states should be given the 

flexibility to change their plans based on changed circumstances. Commenters said for example, 

a breakthrough technology (like hydrofracturing) may change the whole energy system.
251

Adjust goals based on state-specific circumstances. Commenters said the EPA should give the 

states the flexibility to propose adjustments to state emission goals based on what is achievable 

in each state.

Rate of progress approach. Commenters said the EPA should allow states to adopt a "rate of 

progress" approach in their state plans. Commenters said elements needed to implement a "rate 

of progress" approach are well-known to EPA and states alike. Commenters said because the 

CPP proposes "beyond the fence line" measures, the state plans will require a unique level of 

cooperation among state legislators, administrators and regulators, and the EPA must provide 

sufficient time for the planning processes to be authorized by state legislators. Commenters said 

states must then be allowed the time to communicate and explore existing state policies and 

programs to determine what GHG-reducing mechanisms are already authorized and how those 

reductions can be converted to verifiable reductions

attributable to the "affected EGUs."

Commenters said options to be considered include:

• Building codes, 

• Energy efficiency changes, 

• Appliance standards and rebates and policies to encourage such changes; 

• Offset programs; 

• Policies to encourage energy technology innovation for an "all of the above" strategy that 

includes

nuclear, clean coal, renewables, and natural gas; 

• Policies to encourage upgrades to transmission systems, including low loss transmission 

lines and smart grid; 

• Tax policies to encourage efficiencies and new technology development

Commenters said while the innovation possibilities are endless, the CPP must allow states the 

time to develop a state plan, and one year to do so is simply insufficient. Commenters suggested 

that upon conclusion of the planning processes, a complete plan with timelines for achieving 

reductions can be presented to EPA for approval.

Comment 9: Proposed rule does not provide flexibility; BB2, BB3, and BB4 are outside the 

EPA's authority and cannot be remedied by the approaches suggested by the EPA.

Response 9: The EPA maintains that the final rule provides ample flexibilities to states. States 

are allowed to use the BSER measures, or other measures in their state plans to comply with the 

goals; there are flexibilities within the BSER measures and how they are executed; and states 
252

also have non-BSER measures at their disposal. See sections V.A and VIII.A. of the final rule 

preamble of the CPP for more information. 

The following are summaries of the specific public comments under this comment:

Stringency of goals limits flexibility. Commenters said that the four building blocks in the 

proposed regulation take away state flexibility rather than provide flexibility. Commenters said 

the Proposed Guidelines lack flexibility because the state goals that are its centerpiece are set 

assuming significant emission reductions resulting from the application of all four Building 

Blocks. Commenters said the EPA claims that its "reasonable rather than maximum" approach 

to implementing the Building Blocks means that there is room for states to trade emission

reductions among Building Block policies (and policies that were not included in the Building 

Blocks) to achieve each state's goal. Commenters said that the EPA's Building Block 

assumptions used to set state goals are so stringent that there is no true flexibility in the proposed 

emission guideline.

Rule would encroach on areas that fall under exclusive jurisdiction of states. Commenters said 

another reason the proposed emission guideline would limit rather than enhance flexibility for 

states is that it would encroach on areas that fall under the exclusive jurisdiction of the 

states. Commenters said most - if not all - of the programs in Building Blocks 2, 3, and 4 are the 

quintessential purview of state electricity regulators - not state environmental agencies. 

Commenters said these programs have been developed pursuant to well-established state 

sovereign powers over matters relating to electricity regulation, including determining the 

appropriate mix of generating resources within a state. Commenters said the EPA is barred by 

the Constitution and U.S. Supreme Court precedent from infringing upon a traditional state 

sovereign function unless Congress has adopted clear statutory language expressly authorizing 

the Agency to do so, and nothing in the CAA expressly authorizes the EPA to regulate the 

generation of electricity or other such energy regulatory matters traditionally reserved to 

states. Commenters said further, the EPA's attempt to regulate electricity generation will 

adversely and inequitably harm the owners, investors and rate-paying customers of individual 

electric generating facilities by setting mandatory emissions guidelines which the EPA 

acknowledges are based primarily on regulating the production of electricity, not based on the 

technological ability to control CO2 emissions from the affected source category. Commenters

said the rule creates winners and losers within a state as well as among states, and the disparities 

are unrelated to the relative ability of a regulated facility to control its emissions. Commenters

said such a program is clearly an expansion of the EPA's authority, in addition to the inequity, 

since nothing in the CAA or the Subpart B rules contemplates such an expansive program of 

regulating the generation of electricity within a state's borders or beyond. Commenters said the 

Proposed Guideline acknowledges that interference with the sphere of exclusive state jurisdiction 

is a considerable concern.

EPA proposal - not include RE and EE in state plans. Commenters said the EPA seeks comment 

on a proposal to remedy this situation by essentially creating a technical loophole. Commenters

said the EPA suggests that it can avoid entanglement in areas over which the states are sovereign 

simply by not including things such as RE and EE in state plans, preventing such requirements 

from becoming federally enforceable, while states impose the requirements directly to allow 

compliance with what would be otherwise unachievable emission limits contained in state plans. 
253

Commenters said this proposal mistakes formal federal enforceability with the problem of 

federal interference in areas that are exclusively the states' domain. Commenters said the EPA's 

proposed solution, however, does not mitigate that problem. Commenters said the same problem 

exists even if the EPA were to adopt only Building Blocks 1 and 2, because the rule sets 

emissions guidelines that can only be met by regulating how electricity production is managed 

within the state (or within a multi-state region if the state enters into such an 

agreement). Commenters said building block 2 is not based on achieving CO2 emissions 

reduction, but on requiring changes in how electricity is produced.

EPA proposal - state commitment approach. Commenters said the EPA also proposes what it 

calls the "state commitment approach." Commenters said this approach would not make 

requirements for non-EGUs part of a federally enforceable state plan: "Instead, the state plan 

would include an enforceable commitment by the state itself to implement state- enforceable (but 

not federally enforceable) measures that would achieve a specified portion of the required 

emission performance level on behalf of affected EGUs." Commenters said this approach clearly 

does not avoid the EPA's interference in areas that are traditionally regulated only by the states -

it merely seeks to avoid the appearance of such interference. Commenters said in attempting to 

do so, it also creates state plans that otherwise would not meet the requirement of federal 

enforceability.

Commenters said therefore, Duke Energy's response to the EPA's request for comment is that 

Building Blocks 2, 3 and 4 are all outside the authority of what the EPA can do within section 

111(d) and Subpart B, and those serious flaws cannot be remedied by the approaches the EPA 

has suggested to sidestep the legal requirements of the CAA.

Comment 10: States have little to no flexibility in their ability to meet the proposed state goals; 

the proposed guidelines are unlawful because the EPA doesn't have authority to establish 

emission standards for states.

Response 10: See section IV of the final rule preamble of the CPP for the EPA’s response to this 

comment.

The following are summaries of the specific public comments under this comment:

One-size fits all approach taken to establish goals. Commenters said in calculating the state 

goals, the EPA applied all four Building Blocks to each state's 2012 electric generation to 

determine the extent to which the state could reduce its CO2 emissions rate by 2030. 

Commenters said the EPA says that it will consider adjusting state goals if a state comments that 

one of the Building Blocks is technically infeasible or its costs "were significantly higher than 

that projected by EPA". Commenters indicated that this implicitly acknowledges that the Agency 

adopted a one-size-fits-all approach to establishing state-specific goals without adequately 

considering individual state characteristics. Commenters said however, the EPA also states that 

because it believes it is imposing "reasonable" levels of each Building Block ("rather than the 

maximum") a state should be able to increase its use of another Building Block to compensate 

for a limited (or lack of) use of another Building Block. 
254

EPA doesn't have authority to establish emission standards for the states. Commenters said 

Section 111(d) provides that states are to develop performance standards for individual sources 

as part of state plans, after considering state and local factors unique to individual emitting units, 

including the remaining useful life of individual units. Commenters said the Proposed Guidelines 

are unlawful because the EPA is establishing the emission goals rather than allowing the states to 

do so, noting in the process that states have no authority to modify. 

Stringency of goals limits states' flexibility. Commenters said even if the EPA had authority to 

establish emission standards for the states, because the EPA has simply assumed each Building 

Block can be implemented fully without ascertaining whether that is in fact the case, the 

flexibility the EPA claims to be providing is, in fact, illusory. Commenters said in many cases, 

states cannot realistically implement one or more Building Blocks at the level the EPA has 

assumed and they do not have the flexibility to increase the stringency of other Building Blocks 

or measures to achieve their mandated goals because contrary to the EPA claims, the level of 

stringency assumed by the EPA for each Building Block is, in many cases, unrealistic and 

unachievable. Commenters said this leaves the retirement of coal-fired EGUs as one of the only 

options available to achieve the goals the EPA has proposed, and a standard that forces this 

outcome cannot be described as flexible.

Multiple SIP submittals should be allowed. Commenters said that states must have more than 

one chance to develop and acceptable SIP. Commenters said considering the complexity of this 

rule, the large number of uncertainties, and the potential impact on electric utilities and 

consumers within each state, the EPA must provide a vehicle that allows for states to have more 

than one chance at getting the SIP correct.

Comment 11: Flexibility is overstated. As proposal is written, application of the practical 

effects test proves that BB3 and BB4 are mandatory, the use of BB3 and BB4 is a rule within the 

meaning of the APA, and reliance on those building blocks is improper.

Response 11: The EPA maintains that the final rule provides ample flexibilities to states. States 

are allowed to use the BSER measures, or other measures in their state plans to comply with the 

goals; there are flexibilities within the BSER measures and how they are executed; and states 

also have non-BSER measures at their disposal. See sections V.A and VIII.A. of the final rule 

preamble of the CPP for more information. 

The following are summaries of the specific public comments under this comment:

Commenters said the flexibility of the rule is overstated because the use of building blocks 3 and 

4 are essentially mandatory and therefore the use of BB3 and BB4 is a rule within the meaning of 

the Administrative Procedures Act (APA), and reliance on those building blocks is improper.

Commenters said that the proposal sets state goals that EPA claims are based on achievable 

emissions reductions by applying all four building blocks. Commenters said the EPA also 

proposed alternative, less stringent state goals based on applying only Building Blocks 1 and 2: 

"We are also soliciting comment on application of only the first two building blocks as the basis 

for the BSER, while noting that application of only the first two building blocks achieves fewer 
255

CO2 reductions at a higher cost." (79 Fed. Reg. at 34,836). Commenters said because the state 

goals are premised on a BSER that reduces emissions from all four building blocks and actions at 

the affected EGUs would, alone, never achieve the state goal, reliance on Building Blocks 3 and 

4 is essentially binding.

Commenters said Federal case law interpreting the Administrative Procedure Act ("APA"), 5 

U.S.C. Section 551 et seq., demonstrates how courts determine whether policies contained in 

EPA documents such as policy memoranda are considered binding rules. Commenters discussed 

one case, Appalachian Power Co. v. EPA, in which the court did not rely solely on the Agency's 

characterization of the documents, but looked to the language of the document and how it was 

practically applied in holding that:

[I]f an agency acts as if a document issued at headquarters is controlling in the 

field, if it treats the document in the same manner as it treats a legislative [formal] 

rule, if it bases enforcement actions on the policies or interpretations formulated

in the document, if it leads private parties or State permitting authorities to believe 

that it will declare permits invalid unless they comply with the terms of the 

document, then the agency's document is for all practical purposes 'binding.' (208 

F.3d at 1021)

Commenters said relying on Building Blocks 3 and 4 is really an obligation for states, not a 

flexible option. Commenters said the proposal as written leads stakeholders to believe that state 

plans will not be approved unless they rely on emissions reductions achieved by relying on all 

four building blocks. Commenters referred EPA to See National Mining Ass'n v. Jackson, 856 

F.Supp.2d 150, 156 (D.D.C. 2012) (rejecting the agencies' stated position that guidance was not 

binding and imposed no obligations, the court found that the guidance had "caused EPA field 

offices and the state permitting authorities to believe that permits should and will be denied if its 

'suggestions' and 'recommendations' are not satisfied."). Commenters said moreover, if states 

cannot meet their goals, legal consequences will flow. 

Commenters said if allowed to go final as written, application of the practical effects test proves 

that Building Blocks 3 and 4 are, contrary to EPA's characterization, mandatory. Commenters

said the use of Building Blocks 3 and 4 is a rule within the meaning of the APA, and reliance on 

those building blocks is improper.

Comment 12: The EPA has overstated the degree of implementation flexibility available to 

states

Response 12: The EPA maintains that the final rule provides ample flexibilities to states. States 

are allowed to use the BSER measures, or other measures in their state plans to comply with the 

goals; there are flexibilities within the BSER measures and how they are executed; and states 

also have non-BSER measures at their disposal. See sections V.A and VIII.A. of the final rule 

preamble of the CPP for more information. 

The following are summaries of the specific public comments under this comment:
256

Several commenters indicated that the flexibility the EPA claims is overstated.

Several commenters said that the EPA set each state's goal assuming that each state completely 

adopts all four building blocks. Several commenters said that for Florida each building block is 

unachievable and there is no margin to make-up under one building block the amount to which 

the state falls short on another. Several commenters said that absent this ability, Florida cannot 

meet the proposed goal. Several commenters also indicated that the EPA's proposed state goals 

would be unachievable under a federal plan, since the EPA lacks the legal authority to implement 

at least Building Blocks 2 through 4.

Commenters said that the EPA has overstated the degree of implementation "flexibility" 

available to states. Commenters said that in reality, the purported flexibility is insufficient for 

developing any workable compliance solution and indicated additional guidance on how 

alternative measures will be 'credited" if they are relied on is needed.

Commenters said that significant flaws have been identified in EPA's assumptions and goal 

calculations for both blocks 1 and 2. Commenters said that correcting these assumptions should 

reduce the stringency of the state goals, as there are significantly fewer opportunities for heat rate 

improvements available, and significantly less NGCC capacity is available for re-dispatch. 

Commenters stated that similarly, the EPA's evaluation of the opportunities for increasing RE 

and EE are seriously flawed, and as a result, states ultimately have very little flexibility in 

developing plans, and no guidance on how alternative measures will be "credited" if they are 

relied on. Commenters said that these omissions must be addressed if states are to be equipped to 

investigate and adopt alternative measures as part of their state plans.

Commenters also said that the flexibility relied on by EPA is illusory. Commenters said the EPA 

speaks of flexibility as if having eliminated one building block as unworkable, a state could 

simply increase its use of another block - this kind of flexibility could only be realized if each 

building block of the proposal had unrealized and unlimited potential (which they do not). 

Commenters said that because there are serious overestimates of what can be achieved in each of 

the four building blocks, meeting the goal in Texas would force significantly more coal 

retirements than the EPA suggests. Commenters said shutting down coal-fuel powered plants is 

not BSER, and fundamentally, the EPA's interpretation of 111(d) is untenable. 

Commenters expressed concern regarding the EPA's overall restriction of state 

flexibility. Commenters said despite EPA's claim that it provides state's "broad discretion," states 

must factor several overbearing considerations into the development of their state plans (four 

state plan "approvability criteria" and twelve "components"). Commenters said just as for the 

approval of SIPs under Section 110, the EPA must defer to a states' plan under Section 111(d) so 

long as the state develops a satisfactory plan in light of its unique attributes. Commenters

stressed it is important that EPA not limit the states' authority, flexibility, or discretion in their 

development of state plans.

Commenters also said the flexibility in the proposed regulation is illusory. Commenters said 

given the building block approach employed by EPA, this imaginary flexibility is akin to telling 

a person to drive a car from point A to point B, using whatever route the person so chooses, as 

long as the person only uses the amount of gasoline required for a single, pre-prescribed route.
257

Comment 13: Proposed rule offers limited flexibility because no other emission guideline 

promulgated pursuant to Section 111(d) has included such prescriptive plan elements and rate of 

progress determinations.

Response 13: The EPA maintains that the final rule provides ample flexibilities to states. States 

are allowed to use the BSER measures, or other measures in their state plans to comply with the 

goals; there are flexibilities within the BSER measures and how they are executed; and states 

also have non-BSER measures at their disposal. See sections V.A and VIII.A. of the final rule 

preamble of the CPP for more information. 

The following are summaries of the specific public comments under this comment:

Commenters said that the proposed emission guideline is so prescriptive that it offers states little 

flexibility and does not fulfill the legal requirements of the CAA. 

Commenters said while EPA has stressed that states may choose their own program elements, 

the goals are so restrictive that most states will need a combination of direct emission controls, 

generator fuel favoritism, and end user incentives to reach both the interim goals and the final 

goal. Commenters said while EPA admits that this is the desired outcome, such policy goals do 

not fulfill the legal requirements of the CAA. Commenters said states have discretion to choose 

the measures to come into compliance with Section 110 to attain NAAQS and the same 

discretion applies in the Section 111(d) context. (Train v. Natural Res. Def. Council, 421 U.S. 60 

(1975)).

Commenters said moreover, the previously enacted emission guidelines make the standard of 

performance very clear while allowing states discretion to implement the standard in various 

ways. Commenters said the EPA should do no more than to allow states to set forth the 

compliance plan that makes sense for the state's unique circumstances.

Commenters said that despite EPA's claim that its proposal provides states with broad discretion, 

EPA in fact severely limits state flexibility by constructing several factors and criteria that states 

must satisfy in developing their state plans. Commenters listed EPA's four proposed 

approvability criteria (79 Fed. Reg. at 34,852), and indicated that EPA has no basis to impose 

such criteria. Commenters said the CAA explicitly provides states with the ability to consider, 

among other factors, the remaining useful life of the existing source to which such standard 

applies. (42 U.S.C. Section 7411(D) (1)). Commenters also indicated the proposed rule 

trespasses on the states' ability to consider the necessary factors and to provide for the 

application of less stringent emissions standards or longer compliance schedules than those 

otherwise required...provided that the state demonstrate the necessity.

Comment 14: The EPA's assertion of flexibility is based on the false premise that each BB is 

attainable up to and above the amount established in setting the goal - analysis suggests that is 

not true. The EPA has failed to take into account state specifics by modeling the costs on a 

national basis and for RE, on a regional basis.
258

Response 14: The EPA maintains that the final rule provides ample flexibilities to states. States 

are allowed to use the BSER measures, or other measures in their state plans to comply with the 

goals; there are flexibilities within the BSER measures and how they are executed; and states 

also have non-BSER measures at their disposal. See sections V.A and VIII.A. of the final rule 

preamble of the CPP for more information. 

The following are summaries of the specific public comments under this comment:

Several commenters said that the EPA's assertion of flexibility is based on the false premise that 

each BB is attainable up to and above the amount established in setting the goal, but analysis 

suggests that reality is far different than expected by EPA.

Several commenters said that each of EPA's BBs contains a significant limitation that has both 

general and very specific applicability. Several commenters said for states with newer coal fleets 

BB#1 cannot be attained as those fleets generally already are more efficient than the national 

average. Several commenters said many states are identifying serious constraints to increased 

dispatch of natural gas, such as limited pipeline capacity or the need for new transmission lines, 

that calls into question the ability to meet the BB#2 earliest goals set by EPA. Several 

commenters said for states with limited renewable resource capabilities BB#3 cannot be 

adequately met, and for states that have already undertaken aggressive EE programs, BB#4 

presents a problem.

Several commenters said for each state that encounters a problem with any one of the BBs, EPA 

expects that the state must make up for that shortfall by increasing the usage of another 

BB. These commenters said while each state will have unique problems, the most significant 

problems are likely to occur in those states that are expected to make the majority of reductions 

through BB#2. These commenters said if BB#2 compliance options are limited, states will have 

to find reductions through demand-side energy efficiency, heat rate improvements at existing 

plants or increased renewable energy generation. These commenters said given that the interim 

goal occurs as soon as 18 months after the state plan is filed, even these options would seem 

unavailable as they could never be implemented in time to meet the interim goal.

Several commenters said it is critical that the proposed rule take into consideration each state's 

unique energy and economic situation as well as the technological feasibility and most 

importantly, the cost of EPA's compliance BBs for each state. These commenters contended that 

the EPA has failed to do this by modeling the costs on a national basis and, for renewable 

energy, on a regional basis. These commenters added that each state should have a far greater 

role in the design of the standards than has been afforded by EPA, particularly since EPA has 

designed standards for many states that are simply unachievable in the allotted timeframe. These 

commenters said further, EPA needs to allow states to exempt certain facilities on a case by case 

basis as provided by the statute. 

Comment 15: The proposal conflicts with applicable regulations, and EPA is proposing to 

impose an emission standard rather than a guideline, and has eliminated the states' ability to 

minimize the effects on its fleet of EGUs
259

Response 15: The EPA maintains that the final rule provides ample flexibilities to states. States 

are allowed to use the BSER measures, or other measures in their state plans to comply with the 

goals; there are flexibilities within the BSER measures and how they are executed; and states 

also have non-BSER measures at their disposal. See sections V.A and VIII.A. of the final rule 

preamble of the CPP for more information. See section III of the final rule preamble of the CPP 

for more information regarding the legality of the final rule. 

The following are summaries of the specific public comments under this comment:

Commenters said that the EPA's proposal conflicts with applicable regulations, and indicated that 

EPA is proposing to impose an emission standard rather than a guideline, and has eliminated the 

states' ability to minimize the effects on its fleet of EGUs.

Beyond the plant considerations. Commenters said the EPA states in the 1975 preamble to its 

rule implementing CAA Section 111(d) that guideline documents must include "information 

pertinent to control of the same pollutant from designated (i.e., existing) facilities..." [40 Fed. 

Reg. 53340 (Nov. 17, 1975)]. Commenters said no discussion of reaching beyond the plant to 

take into consideration other factors and then impose reductions on the designated facilities 

based on those factors is mentioned in the rule or in the preamble.

Minimizing effect of regulation. Commenters said the EPA's 1975 preamble also acknowledges 

that "States may apply less stringent standards to sources (or classes of sources) when economic 

factors or physical limitations specific to particular sources (or classes of sources) make such 

application significantly more reasonable " (40 Fed. Reg. at 53341; see 40 C.F.R. Section 

60.24(f)) Commenters said although EPA's new proposed regulatory language does not preclude 

use of 40 C.F.R. Section 60.24(f), it is clear EPA intends the 30% emission reduction to be 

binding on all EGUs and "no relief" will be afforded under 40 C.F.R. Section 60.24(f). 79 Fed. 

Reg. at 34925. Commenters said the Proposed Rule therefore effectively prohibits a state from 

minimizing the effect of the emission rate set by EPA on its fleet of EGUs. 

Subcategorization. Commenters said the EPA's proposal does not acknowledge, despite 

its protestations to the contrary, the differing impact of its proposal on states and facilities. 

Commenters said the 1975 preamble provides that the Administrator will specify different 

emission guidelines for different sizes, types, and classes of designated facilities when costs of 

control, physical limitations, geographical location, and similar factors make subcategorization 

appropriate. Commenters said thus, while there may be only one standard of performance for 

new sources of designated pollutants, there may be several emission guidelines specified for 

designated facilities based on plant configuration, size, and other factors peculiar to existing 

facilities.(40 Fed. Reg. at 53341). Commenters said the EPA should take this approach, rather 

than combining all EGUs and applying an overall emission rate for CO2.

Emission Standard versus Emission Guideline. Commenters said the EPA stated in the 1975 

preamble that it did not intend to impose a "legally enforceable national emission standard." (40 

Fed. Reg. at 53341). Commenters said instead, EPA explained that it would only issue 

"guidelines" for existing sources, so that its direction would not be binding on the states. 

Commenters said "Emission guideline" is defined by EPA as a guideline that "reflects the degree 

of emission reduction achievable through the application of the best system of emission 
260

reduction which (taking into account the cost of such reduction) the Administrator has 

determined has been adequately demonstrated for designated facilities." (40 C.F.R. Section 

60.21(e)). Commenters said "Emission standard," on the other hand, is defined as a "legally 

enforceable regulation setting forth an allowable rate of emissions into the atmosphere,

establishing an allowance system, or prescribing equipment specifications for control of air 

pollution emissions." (40 C.F.R. Section 60.21(f)).

Commenters said in the proposed regulation, EPA is proposing to impose an emission standard 

rather than a guideline, by mandating a 30% reduction in emissions from all fossil fuel existing 

sources by 2030 by setting state emission rate requirements that cannot be changed, and by 

prohibiting states from using 40 C.F.R. Section 60.24(f) when necessary. Commenters said the 

EPA expressly emphasizes that the state emission limit is not a goal but a minimum mandate that 

cannot be changed once the rule is finalized. (See e.g. 79 Fed. Reg. at 34898). Commenters said 

rather than provide a "guideline," as required by the rule, therefore, EPA is proposing to establish 

a legally enforceable emission standard and has eliminated the states' ability to minimize the 

effects on its fleet of EGUs.

Commenters said the EPA's calculation of the state goals impermissibly limits the states' 

discretion and is error-ridden.

Comment 16: Flexibility is critical. Rule is not as flexible as the EPA implies (building block 

by building block discussion)

Response 16: The EPA maintains that the final rule provides ample flexibilities to states. States 

are allowed to use the BSER measures, or other measures in their state plans to comply with the 

goals; there are flexibilities within the BSER measures and how they are executed; and states 

also have non-BSER measures at their disposal. See sections V.A and VIII.A. of the final rule 

preamble of the CPP for more information. 

The following are summaries of the specific public comments under this comment:

Commenters stressed the importance of state flexibility in the rule, and indicated that based on an 

examination of each of the building blocks as they relate to Colorado, the rule does not offer the 

degree of flexibility EPA implies. Commenters said that increasing performance in one building 

block may have the unintended consequence of decreasing performance in another block.

Commenters said that it is critical that a final rule maintain and not further dilute state flexibility. 

Commenters said that among other considerations, uncertainties associated with the calculations 

utilized to derive the proposed goals, and ambiguity surrounding the distinctions between these 

plans and traditional State Implementation Plans (SIPs), support affording states maximum 

flexibility in plan development and implementation.

Commenters said that in establishing the four building blocks, the EPA recognized the 

operational differences between EGUs and explained that while states may not be able to achieve 

projected reductions in any given building block, states may be able to make up that difference 

by securing more reductions in another building block. Commenters said that Colorado closely 
261

evaluated the state goal calculation methodology and the reductions that would be needed for 

Colorado to meet its proposed 2030 goal. Commenters said that as a result of that analysis, 

Colorado is concerned that there may be less flexibility for Colorado than the EPA believes. 

Commenters noted that for example, increasing performance in one building block may have the 

unintended consequence of decreasing performance in another building block.

Building Block 1 - due to past efforts difficult to attain, re-dispatch makes investment risky, 

parasitic load decreasing efficiency. Commenters said that under Building Block 1 - Coal-Fired 

Steam EGUs' Heat Rate Improvement (HRI), the EPA sets a national average of 6% efficiency 

improvements, and cites technologies and work practices that can be used to realize this goal. 

Commenters said that on the whole, Colorado coal-fired EGUs have already implemented a 

number of these technologies and work practices to realize energy efficiency. Commenters said 

that while there may be additional projects to pursue, these would likely occur at some of our 

smaller units. Commenters said that the implication is that the larger units cannot secure 6% 

reductions on top of those already implemented prior to 2012, and any projects at smaller units 

would not be enough to achieve an overall average of 6%. Commenters noted that considering 

the drive to re-dispatch to lower carbon intensity generation by 2020 (or even 2030), coal-fired 

EGUs may not realize a reasonable return on such investments - this would make it difficult to 

financially justify additional HRI investments. Commenters noted that further, several coal 

EGUs will be installing additional pollution controls associated with the CACJA and Regional 

Haze requirements, and this will increase the parasitic load that reduces net generation at the 

EGU, which will work against HRI efforts.

Most decisions regarding additional resource through interim goal have already been made.

Commenters indicated that the Public Utility Commission (PUC) in Colorado has exclusive 

statutory authority to evaluate and approve additional generation and decommissioning of 

existing power plants through the resource planning process for Colorado's two investor-owned 

utilities, or about 60% of our state's electricity load. Commenters said that the PUC also has 

authority over demand side management (DSM), renewable energy standard (RES), 

transmission, and distribution. Commenters noted that decisions regarding additional resources 

through the interim goal of 2020 have already been made. Commenters said that in the recently 

completed Electric Resource Plan (ERP), the PUC approved an additional 450 megawatts of 

wind and 170 megawatts of utility scale solar to the existing generation of the state's largest 

investor owned utility, and established DSM goals through 2020. Therefore, commenters said, 

decisions about acquisition of zero-carbon sources, decommissioning of coal units, use of natural 

gas units, and energy efficiency for as the majority of resources have been made through 2020. 

Commenters said however, Blocks 2, 3, and 4 could interfere with PUC authority, and interrupt 

the carefully constructed CO2 reduction trajectory of Colorado's IOUs.

Building Block 2. Commenters said that under Building Block 2 - Re-Dispatch to Lower Carbon 

Intensity Generation, the EPA applies a national average capacity factor of 70%, to realize a shift 

from more carbon intensive coal-fired generation to less carbon intensive natural gas-generation. 

Commenters said Colorado has concerns relating to both the nameplate capacities used to 

determine the actual generation capacity, and the 70% capacity factor itself.

Shouldn't use nameplate capacity. Commenters said that first, the capacity factors reported via 

the Energy Information Agency's Form 860 with respect to natural gas combined cycle turbines 
262

may not be representative of their actual operating capacity. Commenters said that the 

instructions for this form apparently require the reporting of the highest nameplate capacity, and 

not the maximum operating capacity given operational limiting factors, such as the maximum 

output of equipment feeding steam turbines. Commenters noted that it also appears that EGU's 

may have inconsistently reported these numbers to the EIA. Commenters said that this leads to 

an overestimation of the potential generating capacity from the start. Commenters said that to 

address this issue and ensure that more realistic and accurate information is used, Colorado 

suggests that the EPA use the average of the reported summer and winter generation reported on 

the same Form 860 to determine actual generating capacity.

70% re-dispatch is unrealistic. Commenters said that second, 70% re-dispatch may be overly 

ambitious and not be technically feasible. Commenters said that the growth of natural gas 

capacity has been necessitated in part by the growth of renewable energy. Commenters stated 

that many existing turbines operate in standby mode to backup intermittent renewable energy 

sources when the wind dies down, or the sun is obscured. Commenters stressed that these 

turbines are critical to electric reliability. Commenters noted that many existing turbines were 

never designed to operate continuously under load, as proposed in the EPA's rule, and this 

directly affects the remaining useful life of those existing turbines. Commenters said that in 

Colorado, many of these turbines were generally installed in proximity to current transmission 

lines. Commenters said, however, there are transmission line capacity limitations that may not 

support the power generated simultaneously from efforts to re-dispatch to natural gas turbines 

and increase renewable energy generation. Commenters stated that this may be an issue in 

supporting re-dispatch from existing units as well as transmission needs for new units post 2020. 

Commenters noted that installing additional transmission lines is a resource intensive process 

that involves getting approval from multiple authorities and can take years, and noted that recent 

efforts to expand transmission in the West have been limited by Endangered Species Act 

requirements. Commenters stated that without the proper transmission lines, increased operation 

of turbines could cause reliability issues.

Non-attainment area operational limits. Commenters indicated that many of Colorado's existing 

turbines are located in an 8-hour Ozone Nonattainment Area, and as such have accepted 

operational limits far below the maximum generating capacity. Commenters noted that 

renegotiating those permit limits or installing new turbines to increase operating limits may not 

be feasible. Commenters added that these challenges will only increase if, as expected, EPA 

lowers the ozone standard. Commenters said that in those cases where the operator was able to 

renegotiate the permit limits, the modified permit would likely have to demonstrate compliance 

with the recent 1-hour NOx standard, which could involve complex and stringent modeling. 

Commenters indicated that for all of these reasons, it appears that it is not technically feasible for 

all existing turbines to be ramped up to 70% capacity factor, or to be significantly ramped up by 

2020. Commenters said that to help address these concerns, Colorado supports the glide path 

approach discussed in EPA's NODA to phase in dispatch changes over time, including those that 

occur prior to 2020. Commenters said that Colorado could also support a reasonable, "minimum 

floor" for natural gas dispatch as proposed in the NODA, in order to address equity issues 

amongst the states.
263

Commenters said that if Colorado cannot meet the proposed national average of 6% heat rate 

improvement and 70% re-dispatch to natural gas turbines, it becomes more difficult to make up 

those differences by means of Building Block 3 - Re-Dispatch to Renewable Sources, and 

Building Block 4 - DSM/Energy Efficiency.

Use of regional average of RE effectively requires states that have invested heavily in RE to 

invest more. Commenters said Building Block 3 - Colorado implemented a RES beginning in 

2005, which increased Colorado's annual generation from non-hydropower renewable sources 

from 811,000 MWh to 6,192,082 MWh in 2012. Commenters stated that renewable energy has 

grown in Colorado at a faster rate than many other states in the region. Commenters added that in 

terms of capacity, Colorado increased utility-scale renewable generation from 250 MW to 2,415 

MW during that period. Commenters said, however, Colorado is precluded from taking full 

credit for these reductions under the proposal. Commenters said that the EPA has stated that 

those reductions that have already or will occur prior to 2020 have been factored into the state 

goal computation. Commenters said however, the EPA uses a regional average of renewable 

generation in the West (a region already high in renewable generation) to arrive at an elevated 

renewable generation goal for western states. Commenters stated that again, this approach 

effectively requires states that have already made significant investments in renewable 

generation to invest more. Commenters noted that moreover, the significant CO2 emission 

reductions Colorado has realized through renewable sources may not be enough to offset the 

very real limitations of meeting other building blocks.

Don't get credit for early demand-side management projects; rate of return on newer projects is 

lower. Commenters said that under Building Block 4 - Colorado's EGUs have been and will 

continue implementing energy efficiency and DSM projects that reduce electric demand. 

Commenters said that investor-owned utilities (IOUs) in Colorado have a statutory mandate 

through 2018 to conduct DSM with PUC oversight which has resulted in 1.7 million MWh of 

savings annually. Commenters said however, the EPA's calculations do not provide credit for 

DSM programs until 2014, even though IOUs began ramping up DSM programs as early as 

2007. Commenters added that moreover, early efforts securing demand reductions may establish 

a de facto standard by 2020. Commenters said that Colorado's IOUs have noted that energy 

efficiency programs implemented since 2007 are maturing such that the avoided energy per 

dollar appears to be declining. Commenters said that in response, the Colorado PUC recently 

flattened the energy efficiency targets for the state's largest IOU, establishing a 400 GWh per 

year goal for 2015 through 2018. Commenters said that in addition, Colorado's IOUs are 

projecting lower retail sales growth than is assumed by EPA's model, and by 2020, this may 

make it more difficult to achieve the projected 1.5% .annual reduction.

The EPA should provide flexibility to states to be able to take credit for voluntary EE programs 

and other measures outside traditional utility DSM projects. Commenters stated many of 

Colorado's municipal and electric coops have DSM programs that are not mandated by state 

statute. Commenters stated these programs, as well as other statewide offerings, provide 

significant reductions in energy usage while outside of the traditional regulatory structure. For 

example, commenters added, Tri-State Generation and Transmission saved an estimated 580,174 

MWh of energy in Colorado implementing DSM between 2005 and 2013. Commenters stated, 

the Colorado Energy Office also offers statewide energy efficiency programs, including 

managing a portfolio of energy performance contracts that produce energy savings of 141,779 
264

MWh/yr. Commenters stated Colorado encourages EPA to provide necessary flexibility to 

account for these and other voluntary DSM projects, including a broad range of efficiency 

measures outside of traditional utility DSM projects, such as locally adopted building codes, 

federal appliance standards, demand response, and distribution system improvements.

Commenters said that collectively, the foregoing issues call into question whether or not the state 

goals may be overly ambitious. Commenters added that regardless, there are undeniable 

constraints on the flexibility afforded Colorado in meeting the state goal. Commenters said that 

therefore, it is imperative that a final rule increase the flexibility afforded states in EPA's 

proposal.

Comment 17: The EPA should not include additional building blocks as BSER - this would 

make the goals more stringent and reduce state compliance flexibility.

Response 17: The EPA maintains that the final rule provides ample flexibilities to states. States 

are allowed to use the BSER measures, or other measures in their state plans to comply with the 

goals; there are flexibilities within the BSER measures and how they are executed; and states 

also have non-BSER measures at their disposal. See sections V.A and VIII.A. of the final rule 

preamble of the CPP for more information. 

The following are summaries of the specific public comments under this comment:

Commenters said while not every element of the proposed BSER is reasonable for a given state, 

the amount of flexibility offered in compliance plans may allow states to meet the overall goals 

by either over-achieving on other Building Blocks or adding new elements not considered as 

BSER. Commenters said if EPA considers additional elements in defining the BSER, significant 

new analysis would be required regarding costs and benefits. Commenters said while it may be 

appropriate for a state to substitute one of the suggested additional components for one of the 

original Building Blocks, it would not be appropriate for EPA to do so if the result is a more 

stringent goal than states had the opportunity to comment upon. Commenters said the EPA 

correctly noted that carbon capture and storage is too costly to consider on a retrofit basis and 

should not be considered as BSER for existing facilities, as control cost must be considered when 

determining BSER, in accordance with CAA section 111(a).

Comment 18: State regulatory reform will require plan flexibility

Response 18: The EPA maintains that the final rule provides ample flexibilities to states. States 

are allowed to use the BSER measures, or other measures in their state plans to comply with the 

goals; there are flexibilities within the BSER measures and how they are executed; and states 

also have non-BSER measures at their disposal. See sections V.A and VIII.A. of the final rule 

preamble of the CPP for more information. 

The following are summaries of the specific public comments under this comment:

Commenters indicated that the EPA should learn from some states that are already reinventing 

their utility sector. Commenters said that at the forefront is the New York state effort called 
265

Reforming the Energy Vision (REV) creating regulatory changes that promote more efficient use 

of energy, increase renewable energy generation from wind and solar, wider deployment of 

DERs such as microgrids, on-site power sources and storage. Commenters said that following 

close behind New York are other Northeastern states redoing their regulatory framework for 

electric utilities. Commenters indicated these state reforms may require greater flexibility and 

ability to quickly modify utility operations while the EPA rules might be less nimble and ready 

for change. Commenters suggested that the federal government could learn a lesson from these 

eastern states that have been clear that the new energy system must unlock markets, spur 

innovation, modernize the grid, empower customers, and have forward looking and outcome 

based regulation and rate structures. Commenters said the critical bottom line is that the federal 

rules not be an impediment to electrical utility energy sector reform.

Commenters said the proposed rule must allow broad flexibility in compliance measures allowed 

to achieve goals as well as enable states and utilities to develop plans that best complement 

established regional energy market systems. Commenters said another flexibility that EPA 

should provide to affected sources is the ability to update state plans with changes with respect to 

the mix and amount of various compliance measures applied. Commenters said this will 

encourage technological innovation and creativity in pursuing solutions that likely would result 

in more cost effective and/or efficient carbon reductions.

Comment 19: North Carolina illustrates how states could benefit from the flexibility proposed in 

the CPP

Response 19: The EPA agrees with the comments that the final rule provides flexibilities to 

states. States are allowed to use the BSER measures, or other measures in their state plans to 

comply with the goals; there are flexibilities within the BSER measures and how they are 

executed; and states also have non-BSER measures at their disposal. See sections V.A and 

VIII.A. of the final rule preamble of the CPP for more information. 

The following are summaries of the specific public comments under this comment:

Commenters said North Carolina, home to the country's largest electric utility, illustrates how 

states could benefit from the flexibility proposed in the Clean Power Plan. The commenters said 

the plan would allow North Carolina to get credit for steps it already has taken to grow clean 

energy and invest in energy efficiency. 

Commenters said North Carolina has an energy efficiency policy that allows utilities to earn a 

fair return when they make energy efficiency investments, rather than build new traditional 

power plants. The commenters said North Carolina also has a renewables portfolio standard that 

requires investor-owned utilities to increase their mix of clean energy and energy efficiency 

resources to 12.5 percent by 2021.

Commenters said the proposed rule will give states the flexibility to design a plan that takes into 

account its unique strengths and challenges, and describes the options available to North 

Carolina to illustrate. Commenters said for the state of North Carolina, the Congressional 

Research Service has calculated that an increased use of existing natural gas units, energy 
266

efficiency improvements and increases in renewable energy generation, respectively, will result 

in the greatest emission rate reductions. Commenters said while some commenters may argue 

that difficulties in achieving emissions reductions particular to one specific building block will 

render the proposed rule flawed, the ability for states to design plans based on any measure or 

combination of measures provides the flexibility for states and utilities to meet emission 

reduction goals in the most efficient and cost-effective manner.

Commenters said for example, any difficulty in achieving reductions through efficiency 

improvements at fossil fuel-fired power plants can be mitigated by planning for and achieving 

greater reductions in the other building blocks or alternative programs. Commenters said 

efficiency improvements at fossil fuel-fired units in North Carolina are estimated to result in a 

five percent emission rate reduction - less than each of the remaining three building blocks. 

Commenters said under the proposed rule, North Carolina would have the flexibility to consider 

this and other information and shift the focus of its implementation plan to the three remaining 

building blocks. Commenters said North Carolina has great potential for gains in renewable 

energy generation and energy efficiency, and allowing the state to incorporate that potential into 

its implementation plan will provide the flexibility needed to readily achieve, and likely exceed,

the state-specific goal established in the proposed rule.

Comment 20: The EPA must clarify in the final rule that states can satisfy their respective 

carbon emission reduction or target standards by securing methane emission reductions from 

natural gas distribution facilities

Response 20: The EPA maintains that the final rule provides ample flexibilities to states. States 

are allowed to use the BSER measures, or other measures in their state plans to comply with the 

goals; there are flexibilities within the BSER measures and how they are executed; and states 

also have non-BSER measures at their disposal. See sections V.A and VIII.A. of the final rule 

preamble of the CPP for more information.

The following are summaries of the specific public comments under this comment:

Compliance measures can be outside BSER. Commenters said the EPA has repeatedly stated in 

the context of the development and publication of the proposed CPP that states are not required 

to implement the four building blocks to satisfy the GHG performance goals. (See, e.g., 79 Fed. 

Reg. at 34835 (states may "choose to include measures (in their state plans) that were not part of 

the EPA's BSER determination, as long as the state achieves the CO2 reductions at affected 

EGUs necessary to meet the goal that EPA has defined as representing the BSER." (emphasis 

added))) Commenters said these statements properly distinguish between the factors considered 

by EPA in determining BSER for the source category and the alternative compliance 

methodologies available to the states in ensuring the application of BSER-equivalent 

performance by the regulated sources.

Natural gas distribution system methane reductions to satisfy goals. Commenters said Section 

111(d) allows the flexibility afforded to states in developing compliance plans to include 

measures that satisfy the performance standards reflective of EPA's BSER determination, and 
267

this includes reducing methane emissions from natural gas distribution systems. Commenters

said to the extent that a state can ensure that reductions in GHG emissions (in this case, methane) 

accomplished through an aggressive program to limit leaks from natural gas distribution for onsite energy generation can meet all regulatory standards for creditable emission reductions, state 

plans must include provisions which authorize affected EGU sources to secure GHG reductions 

through such efforts. Commenters said in such case, the affected EGUs would be obligated to 

ensure that methane emission reductions achieved in this manner, including by third party 

entities not subject to the Emission Guidelines, satisfy criteria for permanent, enforceable, 

surplus and quantifiable emission reductions.

Commenters said additionally, natural gas distribution facilities have a significant nexus to the 

regulated source category under this rulemaking - EGUs - as utilities in many states own or 

operate local distribution companies ("LDCs") and are, therefore, in a position to implement 

GHG emission reduction measures from such sources.

Emissions and emissions reductions from natural gas distribution systems. Commenters said 

controlling methane emissions from the natural gas distribution sector could result in significant 

reductions in GHG emissions. Commenters said methane emissions associated with natural gas 

transportation and storage accounted for about 130 million metric tons of U.S. GHG emissions in 

2012, or roughly 2% of all U.S. GHG emissions. (See EPA, Inventory of U.S. Greenhouse Gas 

Emissions and Sinks: 1990-2012). Commenters said natural gas distribution systems alone were 

responsible for nearly 26 million metric tons of GHG emissions. (Id). Commenters said the 

number of customers using natural gas has grown steadily since 1990, with 600,000 miles of 

additional piping added since that time to accommodate increased demand. Commenters said 

methane emissions from natural gas distribution systems are likely to increase, as consumer 

demand for natural gas is expected to continue to rise as North American natural gas reserves are 

further developed. Commenters said further, the CPP itself will likely lead to greater demand for 

natural gas, thereby adding to the length of piping comprising the natural gas distribution system, 

and increasing the potential for methane emissions. Commenters said given the significant global 

warming properties of methane, the reduction in emissions from natural gas distribution systems 

may materially contribute to the reduction in GHG emissions sought through this rulemaking.

Commenters said PSEG's experience in reducing methane emissions from its LDC demonstrates 

the potential positive climate impacts of reducing GHG emissions from natural gas distribution 

systems. Commenters said PSEG has reduced its LDC methane emissions by 31% since 2000. 

Commenters said in 2013 alone, PSEG's efforts resulted in a reduction of roughly 14,294 tons of 

CO2e from the PSEG-owned gas distribution pipeline network. Commenters said additional 

methane reduction opportunities exist within PSEG's distribution system, as methane emissions 

accounted for roughly five percent of PSEG's calculated 2013 GHG emissions. 

EPA action required. Commenters said for the foregoing reasons, EPA should clarify in the final 

rule that states may include in their compliance plans opportunities for affected EGUs to satisfy 

their respective carbon emission reduction or target standards by securing methane emission 

reductions from natural gas distribution facilities, where such emission reductions can be 

demonstrated to be permanent, surplus, quantifiable and enforceable
268

Comment 21: The EPA must provide more guidance to States on specific emission reduction 

options and various issues and flexibility

Response 21: The EPA maintains that the final rule provides ample flexibilities to states. States 

are allowed to use the BSER measures, or other measures in their state plans to comply with the 

goals; there are flexibilities within the BSER measures and how they are executed; and states 

also have non-BSER measures at their disposal. See sections V.A and VIII.A. of the final rule 

preamble of the CPP for more information. The EPA will work with the States and provide as 

much guidance in the state plan development as necessary. 

The following are summaries of the specific public comments under this comment:

Several commenters requested additional guidance from the EPA regarding specific emission 

reduction options and issues as well as flexibility.

Commenters indicated that some state policies to encourage advanced energy, such as RPS and 

energy efficiency resource standards, are familiar to many states, and the Proposed Rule provides 

a clear signal that they will be approved if incorporated into state compliance plans. Commenters

said, however, that without additional guidance from EPA, states may be reluctant to adopt other 

creative, cost effective emission reduction policies that take full advantage of advanced energy 

technologies. Commenters were concerned that without specific guidance as to how to 

incorporate these technologies, states may not do so. Commenters also stressed it is important 

that the EPA provide guidance to ensure that regulatory uncertainty does not inhibit 

incorporation of combined heat and power into State plans.

Therefore, commenters indicated that to balance the need for flexibility with the benefits of 

certainty, EPA should provide as much specific guidance as possible on approvable measures 

and policies, while reiterating and making clear that additional measures and policies can be 

approved even if not specifically named in the Clean Power Plan. Commenters stated this 

guidance should contain as many default approvable policies as possible and criteria on which 

additional state policies will be evaluated. In addition, commenters requested additional EPA 

guidance on how states may account for the emission reduction benefits of advanced 

technologies.

Commenters also stated that the EPA should give some indication as to what would qualify as 

allowable compliance methods in addition to BB1 through BB4. Commenters suggested that as 

an example, transmission and distribution projects that reduce system losses should be allowed 

as an option for compliance, and the EPA should include this flexibility as part of the final rule.

Commenters stated that there are many readily-available clean energy technologies, resources, 

and practices that can be used by states to reduce GHG emissions. Commenters stated that the 

EPA should affirmatively indicate that technologies, resources, and practices that are not 

included in the Building Blocks can be eligible as compliance options for states. Commenters

said that this is essential to ensure that all viable clean energy technology options are considered.

Commenters supported the flexibility that would allow states to "include measures in their plans 

beyond those that the EPA included in its determination of the BSER", and indicated the final 

rule should retain this flexibility for states. Commenters indicated that many states are 
269

experiencing increased implementation of Distributed Generation ("DG") resources, particularly 

adoption of roof top solar installations in residential markets. Commenters stated that the EPA 

should explicitly recognize DG and other emerging technologies as eligible resources for 

demonstrating compliance with state plans and targets.

Commenters indicated that the EPA should clarify that states may choose to include new NGCC 

units in their 111(d) compliance plans. Commenters supported the EPA's indications that new 

NGCC units, constructed in compliance with Section 111(b), may also be included in states' 

Section 111(d) compliance plans. Commenters said that the EPA should confirm in the final rule 

that states have the flexibility to include new NGCC units in their compliance plans. 

Commenters said the EPA should also clarify when, if ever, NGCC units built after the effective 

date of the 111(d) rule, but not immediately included in 111(d) compliance plans may be subject 

to that rule rather than 111(b) and how the emissions from those units will be treated within the 

state goals. Commenters said these clarifications are necessary in order for states to adequately

develop Section 111(d) compliance plans.

Commenters supported the proposed rule's flexibility, but indicated that the extraordinary 

amount of deference provided to states under the proposed rule is likely to create uncertainty 

with state regulators. Commenters said that waste-to-energy (WTE) is a valuable renewable 

energy resource that may be used as a compliance tool, and that to provide clear guidance, the 

EPA should clarify that every megawatt hour generated by WTE facilities can be used toward 

reducing emissions from affected electric generating units in a state plan. Commenters said that 

by taking this step, the EPA will provide clarity that the treatment of WTE in state plans can 

continue to reflect federal and state renewable programs and policies, while providing states with 

greater compliance flexibility and ensuring a robust mix of renewable energy technologies. 

Commenters added that because WTE prevents the generation of methane from waste otherwise 

destined for landfills, the co-benefit of reducing methane is also captured. Commenters indicated 

that the EPA has previously concluded that every ton of waste managed at a WTE facility 

actually reduces overall GHG emissions by one ton of carbon dioxide equivalents.

Commenters said the flexibility afforded to states must be better defined. Commenters said in

order for the proposed rule to be fully evaluated, even the framework of flexibility afforded to 

the states must be defined. Commenters said leaving the SIP requirements open does help with 

flexibility, but also carries with it uncertainty. Commenters said that specificity in defining SIP 

"bookends" will not lessen flexibility, but will give more meaning to it, with a clearer 

understanding of expectations for SIP approval. 

Comment 22: The EPA should specify minimum criteria or requirements for each policy 

approach (rate based vs. mass based, source-based vs. state commitment approach, etc.) in order 

to ensure consistent enforceability. The EPA should provide one or even several model plans, or 

components of model plans that states could adopt.

Response 22: The final rule provides flexibilities to states to comply with the mass-based or 

rate-based goals. The EPA will work with the states to provide any guidance necessary during 

the state plan development. The EPA has converted the rate-based goals to mass-based goals. 
270

See section VII of the final rule preamble of the CPP and the CO2 Emission Performance Rate 

and Goal Computation TSD for CPP Final Rule supporting the final CPP for the final massbased goals.

The following are summaries of the specific public comments under this comment:

Flexibility can cause difficulties with verifiability and enforceability. Commenters applauded the 

flexibility that the proposed regulation gives states, and in particular expressed support for EPA's 

decision to allow states to convert from rate-based targets to mass-based targets. Commenters

said however, the flexibility given to each state in developing its own plan does create some 

potential difficulties with respect to the verifiability and enforceability. Commenters said it will 

be difficult to ensure that conversions are done in a way that is accurate and is consistent from 

state to state, so the EPA's final rule must provide a clear discussion of how it will ensure 

consistency and enforceability in the instance of rate to mass conversions.

Rate-based approach. Commenters said in states that choose to adopt a rate-based approach, 

enforcement and verification can be done by ensuring that each power plant keeps its emissions 

below the target rate, or purchases the necessary credits, or holds sufficient emission allowances 

if the state adopts a mass-based system. Commenters said the final rule should include a robust 

discussion of how the states could implement these types of systems and ensure that, along with 

each source meeting its emissions targets, the state achieves the overall reductions required on 

the specified time-frame.

Mass-based approach. Commenters said alternatively, states that take a mass-based approach 

must incorporate into their plans an enforceable mechanism that applies to the regulated sources 

and ensures that any shortfall in emissions reductions will ultimately be remedied, again within 

the specified time-frame. Commenters said in both cases (rate-based approach or mass-based 

approach) the EPA should define minimum requirements that will ensure verifiable and 

enforceable emission reductions.

Model plans and minimum criteria or requirements. Commenters urged the EPA to provide one 

or even several model plans, or components of model plans that states could adopt. Commenters

said further, the EPA should specify minimum criteria or requirements for each policy approach 

(rate based vs. mass based, source-based vs. state commitment approach, etc.) in order to ensure 

consistent enforceability. Commenters encouraged the EPA to emphasize model plans or model 

components of plans that most facilitate the use of renewable energy and energy efficiency 

measures to achieve reduction targets. Commenters said finally, the EPA should also provide a 

model plan or model plan components for states that wish to cooperate with other states or enter 

into multistate agreements in order to meet their targets.

Comment 23: The EPA should not write guidance which restricts flexibility, and should broaden 

its scope of sequestering carbon dioxide

Response 23: The EPA maintains that the final rule provides ample flexibilities to states. States 

are allowed to use the BSER measures, or other measures in their state plans to comply with the 

goals; there are flexibilities within the BSER measures and how they are executed; and states 
271

also have non-BSER measures at their disposal. See sections V.A and VIII.A. of the final rule 

preamble of the CPP for more information. See sections VIII for more information about the 

application of carbon capture and sequestration.

The following are summaries of the specific public comments under this comment:

EPA should not write guidance which restricts flexibility. Commenters said the EPA repeatedly 

states in the preamble that EPA will allow states to use different tools to demonstrate 

compliance. Commenters said in some cases, EPA solicits comments on whether it should 

restrict that flexibility and write guidance that limits states. Commenters said for example, on 

page 34921, EPA solicits comments on whether EPA should allow a broad range of renewable 

energy and demand-side energy efficiency measures and programs in demonstrating compliance 

or write guidance to limit it to certain well-established programs. Commenters said because 

South Dakota is already on a path of increasing renewable energy without EPA mandates, we 

strongly suggest that EPA give states flexibility and not write guidance which restricts flexibility.

EPA should broaden scope of sequestering CO2. Commenters said on page 34897 of the 

preamble, EPA requests comments on whether carbon dioxide emission reductions associated 

with other measures not currently included in any of the four proposed building blocks be 

included in the state goals. Commenters said South Dakota recommends EPA broaden its scope 

of sequestering carbon dioxide. Commenters said for example, EPA should allow states to use 

distributed generation, which is power generated at the point of consumption and reduces power 

demand from electric utilities and cooperatives, and certain farming practices along with 

wetland, grassland, and forest preservation practices in meeting the state's goal. Commenters said 

although the farming practices are not directly related to the production of electricity, these 

practices reduce carbon dioxide, which is the goal of EPA's proposal

Comment 24: Each state's goal reflects its unique conditions

Response 24: The EPA agrees with the comment that each state’s goal reflects its unique 

conditions and that the final rule provides flexibility to the states to comply with the rule. 

The following are summaries of the specific public comments under this comment:

Commenters said the proposed rule provides flexibility and the goals reflect the unique 

conditions of each state. Commenters said the proposed rule provides states the flexibility to 

consider a broad range of compliance options that recognize that the power sector is made up of 

a diverse range of companies that own and operate fossil fuel-fired EGUs, including vertically 

integrated companies in regulated markets, independent power producers, rural cooperatives and 

municipally-owned utilities, all of which are likely to have different ranges of opportunities to 

reduce GHG emissions while facing different challenges in meeting these reductions. 

Commenters said in addition, in calculating each state's CO2 goal, EPA took into consideration 

the state's fuel mix, its electricity market and numerous other factors, and thus, each state's goal 

reflects its unique conditions. Commenters said each state will have the flexibility to design a 

program to meet its emissions goal in a manner that reflects its particular circumstances and 

energy and environmental policy objectives. Commenters said States will be able to address the 
272

economic interests of their utilities and ratepayers by using the flexibilities in this proposed rule 

to reduce costs to consumers, minimize stranded assets, and spur private investments in 

renewable energy and energy efficiency technologies and businesses.

Comment 25: Need guidance regarding how to deal with deregulated electric sectors using a 

mass-based plan

Response 25: See section VIII of the final rule preamble of the CPP for a discussion of a state’s 

flexibility in submitting state plans and assigning emision rates or mass limits to sources.

The following are summaries of the specific public comments under this comment:

Commenters said that the USEPA should be aware that in some states, like Michigan, there are 

elements of the electric industry that are unregulated and therefore a number of load-serving 

entities (LSEs) or independent power producers (IPPs) do not fall under the jurisdiction of the 

Commission. Commenters said that the Commission cannot use its regulatory authority to bring 

the operations and cost recovery of these entities into alignment with a state plan that uses a 

mass-based approach. Commenters said that in fact, it is unclear how such entities could be 

included in a mass-based state plan. Commenters indicated that the MDEQ can put some CO2 

emissions stipulations into permits that would influence the LSEs' plant operations in a ratebased plan. Commenters said that the USEPA should provide guidance for states that have 

partially or fully deregulated electric sectors on how such states could comply with their Section 

111(d) emission reduction obligations in a mass-based plan. Commenters added that a similar 

situation occurs with municipal utilities, which run primarily coal-fired plants. Commenters

noted that the Commission has no regulatory authority over their operations or cost recovery; 

therefore, it is difficult to envision how such utilities could be included in a mass-based state 

plan.

Comment 26: Deregulated market concerns - the EPA should work with states to encourage 

market reform as part of compliance with the CPP

Response 26: This final rule is consistent with both regulated and de-regulated markets. Market 

structure is a choice for individual states made well outside the confines of this final rule.

The following are summaries of the specific public comments under this comment:

Commenters said the proposed CPP would potentially reach the entire spectrum of energy 

policy. Commenters said before proceeding with a proposal that seeks to transform the electric 

generation system, EPA must more carefully and thoroughly evaluate its proposed CPP in light 

of the numerous, complex electricity market design considerations that are implicated by the 

proposal.

Commenters said Dynegy, as an independent power producer, operates solely in the deregulated 

markets, with no captive customers or rate base from which to recover the costs of compliance 
273

with environmental or other requirements. Commenters said therefore, the markets in which 

Dynegy operates must be appropriately designed to provide a level playing field and prevent 

interference that undermines the markets. 

Commenters said for example, Illinois is one of the few multi-independent system operator 

("ISO") states in the country (i.e., Illinois is served by both MISO and PJM), and no other state is 

split so dramatically on a geographic or generation basis. Commenters said without significant 

capacity market design changes in the MISO market regions (southern and central Illinois), it is 

unlikely that sufficient revenue will be generated for power plants to make the necessary 

investments in equipment upgrades that would help the state achieve its CO2 targets. 

Commenters said the market disconnect between MISO and PJM in how the two RTOs 

compensate generators for capacity is substantial - in the last PJM capacity auction, a 500 MW 

power plant in PJM would have received $22 million in capacity payments. Commenters said in 

contrast, under the last MISO capacity auction, a similarly-situated plant in the MISO region of 

Illinois would have received only $3 million in capacity payments, or approximately 14% of 

what the similarly-situated plant located in PJM received. Commenters said this disconnect 

means that investment required for heat rate improvements and other carbon-reduction 

approaches will not be economically justifiable in southern/central Illinois and, as a result, the 

only compliance option will be plant retirements. Commenters said therefore, EPA should work 

with the states, including Illinois, to encourage market reform as part of compliance with the 

CPP.

Commenters stated that to ensure fairness and accuracy, EPA should reconstruct BSER 

calculations based on the differing market dynamics in each state. Commenters said setting an 

accurate state specific rate requires such attention to detail.

Commenters stated as a general comment, that FE believes that the rule is faulty in that while 

EPA relied on the fact the electric system is an inter-connected system and thus requires an 

interdependent approach laid out in the proposal, EPA then developed specific BSER building 

blocks as independent silos without calculating their interconnectivity.

Comment 27: Rule should not limit diversity of technologies; misc.

Response 27: This final rule does not limit diversity of generation technologies. The final rule 

RIA suggests the technology diversity in the generation portfolio will become more diverse in 

response to the policy. Moreover, states/sources have the flexibility to discuss a variety of 

abatement technologies to achieve emission reductions and demonstrate compliance with the 

111(d) requirements as discussed in section VIII of the final rule preamble of the CPP.

The following are summaries of the specific public comments under this comment:

Maintain diversity. Commenters stated that the final rule should not place a limit on the diversity 

of technologies, as future advancements cannot be predicted, and should be applied to all sources 

of emissions in order to ensure that climate change goals are achieved in the most cost effective, 

timely and efficient manner for each state.
274

Commenters said the final rule should be constructed to give states sufficient flexibility to foster 

a diverse power supply, including continued use of coal-fired power plants. The commenters said 

a diverse power supply can shield electricity consumers from fuel disruptions and price spikes. 

Commenters said this can be achieved by permitting states to develop provisions that recognize 

the inherent differences between different kinds of electric generating units, including the 

difference between coal-fired power plants and natural gas-fired power plants.

Commenters supported the broad flexibility that EPA proposes to grant states to develop 

emission performance standards on either a rate basis or to convert that rate-based goal to a 

mass-based equivalent.

Comment 28: Proposed regulation provides flexibility to the states.

Response 28: The EPA agrees with the commenters that the final rule provides flexibility to 

states. See sections V.A and VIII.A. of the final rule preamble of the CPP for more information. 

The following are summaries of the specific public comments under this comment:

Several commenters stated that under the proposed rule states have substantial flexibility in 

developing their compliance plans.

Commenters stated that the EPA has taken a technology neutral stance to compliance, and that 

the flexibility of the rule allows states to choose among the full range of advanced energy 

technologies in order to meet their targets. Commenters commended the EPA for providing

states broad flexibility in crafting compliance plans that work for their particular circumstances. 

Commenters said with a wide range of advanced energy technologies and services at their 

disposal, states can develop plans to meet EPA's carbon emission standards that will be vehicles 

for creating a higher performing electric power system for all customers. Commenters said 

deploying advanced energy technologies and services will create jobs and stimulate economic 

growth from investments in modernizing the electric power system. Commenters said new 

consumer value will be created in a long-stagnant electricity sector by introducing competition, 

choice, and innovation for new products and services, both known today and not yet imagined. 

Commenters said and because advanced energy technological development continues at a rapid 

pace, flexibility will allow states to utilize new technologies and mechanisms as they are 

developed over the course of the next 16 years. Commenters also commended EPA for allowing 

a range of readily available market-tested "beyond the fence line" measures for compliance.

Commenters also supported the flexibility the EPA proposes to provide states in crafting plans to 

achieve compliance with the targets, which they indicate is consistent with key principles of 

cooperative federalism and the successful history of the CAA. Commenters said the EPA 

correctly proposed state-specific emission targets under CAA Section 111(d), while, at the same 

time, recognizing that states and regions with the experience and authority to regulate energy 

markets and implement clean energy and energy efficiency programs are in the best position to 

determine the most cost-effective way to achieve the required emission reductions. Commenters

said moreover, states and regions have the ability to coordinate across state agencies, work with 
275

independent system operators/regional transmission organizations (ISOs/RTOs), and solicit input 

from stakeholders.

Several commenters said the proposed regulation provides substantial flexibility to states to 

determine the most cost-effective means to meet the applicable target based on the specific 

resources and opportunities in a state. Commenters said as long as a state can demonstrate that 

its compliance choices can achieve its applicable emission reduction level, the EPA 

appropriately proposes to recognize those measures as compliance options. Commenters urged 

the EPA to encourage market-based programs such as the Regional Greenhouse Gas Initiative or 

the California Global Warming Solutions Act program. Commenters said the electric power 

sector is the most capital-intensive industry in the U.S., and experience has shown that flexible, 

market-based solutions have been highly effective and cost-effective in transitioning to cleaner 

energy technologies.

Commenters said that in the proposed regulation the EPA appropriately defers to the states to 

design plans that meet the Agency's goals, and emphasized that only states truly understand their 

own energy systems, and said the EPA has appropriately given states broad latitude to use all the 

tools available to them to reduce emissions.

Commenters said the proposal gives states wide latitude to identify their overall compliance 

strategies in response to their local circumstances, and incentivizes state participation in multistate approaches by offering an additional year for compliance to states that elect to adopt a 

multi-state approach. Commenters added affected power plants also have a decade to comply 

with the new standard.

Commenters said the rule permits each state to craft a compliance plan that is tailored to the 

specifics of its local and regional economy that will protect existing jobs while reducing 

emissions, and that can create opportunities to grow new jobs, encourage investment, and jump 

start new technologies. The commenters also said the proposed rule allows a state with multiple 

coal plants to encourage improvements in both supply and demand. The commenters said 

technological changes can increase the supply of power produced by each ton of coal, and 

boosting end use energy efficient tools will reduce demand for electricity during peak hours.

Commenters said the CPP offer a common sense, flexible, and achievable way to protect the 

health of our communities and address the impact of climate on our world. The commenters also 

said there is evidence showing that it's a good investment, and the CPP allows state to design 

plans that best fit our regional economies, and mixes of energy sources.

Commenters discussed the flexibility the proposed regulation offers states regarding Building 

Block 1. Commenters indicated that the proposal doesn't mandate that every state or every coalfired EGU engage the 6 percent HRI as a compliance strategy and rather allows the states to 

forgo this building block altogether. Commenters indicated that because the Clean Power Plan 

allows a state to demonstrate compliance through any number of pathways, which may not even 

include and HRI investment strategy, the 6 percent HRI assumption should be retained in the 

final Clean Power Plan.
276

Comment 29: Flexibility of regulation allows states to choose most economical approach, and 

such flexibility encourages innovation and makes industry more competitive.

Response 29: The EPA appreciates the supportive comments and agrees that the final rule 

provides flexibility to states and affected EGUs.

The following are summaries of the specific public comments under this comment:

Commenters said the Clean Power Plan is flexible, giving states many opportunities to meet their 

goals. The commenters said each state gets a target based on its existing resources and progress 

to date, but can comply by selecting from many of various different options. The commenters

said this flexibility lets each state choose the most economical approach for its electricity 

customers considering available resources, economic potential, and more human impacts such as 

jobs, environmental justice, and the enormous public health benefits of reducing carbon and 

other air pollutants.

Commenters said although they trust in the power of technology, they have learned that it is 

actually policy and regulations that drive innovation. The commenters said studies have found 

that flexible standards like the Clean Power Plan will drive businesses to be more competitive 

globally and at home. The commenters said the Industry Studies Association found that strict car 

pollution standards for carbon monoxide and hydrocarbons in the 70s incentivized US auto 

makers to innovate, making them more competitive than many overseas manufacturers.

Commenters said giving states flexibility allows them to determine how best to reduce emissions 

in ways that are tailored to the interests of the local regional economies to protect existing jobs 

while reducing emissions to create opportunities to grow good new jobs, to encourage 

investment, and to catalyze innovation.

Commenters urged EPA to maintain the flexibility for states to achieve the required emission 

reductions in the most economic means possible. Commenters said this flexibility will unleash 

innovation through technological advancement and smart policies.

Comment 30: Plan does provide flexibility, but flexibility can be abused and can be a 

disincentive for real action

Response 30: The EPA believes that providing flexibility to states/source provides significant 

benefit in terms of least cost reductions. Section VIII of the final rule preamble of the CPP

outlines a robust set of standards for state plans and how they must demonstrate compliance with 

the rule’s BSER while utilizing alternative compliance measures and the flexibility afforded 

them.

The following are summaries of the specific public comments under this comment:

Commenters stressed that although some degree of flexibility in the rule is good, flexibility 

should not override strong incentives for states to step up their game. Commenters worried that 

the CPP may give states too much flexibility. 
277

Commenters expressed concern that the flexibility built into the rule may create problems. The 

commenters said if the individual jurisdictions are going to have the authority and the 

responsibility for achieving the goals there's going to have to be an enforcement mechanism with 

teeth because we can expect some of the jurisdictions to be less than enthusiastic about pursuing 

this goal. 

Commenters said the CPP gives states the flexibility to craft the best solution for their particular 

situation, which is often better than a one-size-fits-all federal directive, but cautioned that with 

flexibility comes the need for fair standards and careful oversight. The commenters said that it is 

an unfortunate reality that the weaker the oversight, the more politicized the decision-making is 

likely to be. The commenters said since no state wants to be subject to a federal implementation 

plan, the fact that the EPA is committed to implementing such a plan if states are unable to is one 

of the best ways to ensure meaningful state action.

Commenters said state flexibility is good, but cautioned that the EPA oversight is needed to keep 

states on tract. The commenters said OH recently scaled back its alternative energy standards 

and strengthened wind power siting requirements, and as a result two large wind energy 

producers scaled back plans for development in Ohio. The commenters said they fear if the 

states are left without standards or oversight, clean energy production is doomed.

Commenters supported the proposed regulation but expressed concern that the states are being 

given way too much flexibility, and cannot be trusted to enforce the regulation, and offered 

Pennsylvania as a case in point. Commenters said Pennsylvania Department of Environmental 

Resources has given the state over to the natural gas industry for the development of fracking, 

and is not protecting their environment. Commenters said Pennsylvania has seen reductions in 

carbon emissions over the past several years as a result of significant development of the state's 

shale gas resources. Commenters said recent experience indicates that Pennsylvania will need 

close oversight to ensure a good job is done developing and enforcing a compliance plan.

Commenters said Kentucky's Assistant Secretary for Climate Policy, John Lyons, recently stated 

that the average carbon emissions of Kentucky's fleet of coal fired power plants should meet the 

new standard by 2020 - because 11 coal boilers are already scheduled to be shut down because of 

EPA's air quality regulations. Commenters said so, in other words, Kentucky can meet the Clean 

Power Plan standards simply by continuing their present course, with little incentives for 

additional innovation. 

Commenters said while the EPA standards call for 30 percent reduction in the nation's carbon 

emissions, Kentucky's specific goal is only 18.3 percent. Commenters said they are already at the 

bottom, and our regulators don't want to do more - the flexibility is a disincentive for real action. 

Commenters said Kentucky's progress to date allows it to remain at the very bottom of every 

indicator, from efficiency to clean power to protection of human health. Commenters said the 

Clean Power Plan continues the subsidization of obsolete coal fired and nuclear power, making it 

more difficult to move our state forward and to cleaner resources.

Commenters said that the state-specific plans may be too flexible. Commenters said BSER is an 

ambiguous term with no precedent on how to interpret this provision. Commenters said the 
278

ultimate interpretation is problematic because it is sufficiently broad to include actions and 

restrictions that go beyond the fence line of existing power plants. Commenters said as such, 

states can include provisions in their plans to reduce carbon dioxide emissions from existing 

power plants, energy consumers, and other potential sources of carbon dioxide emissions such as 

combustion units at metalcasting facilities. 

Comment 31: The EPA should establish an emissions trading bank

Response 31: States have the flexibility to coordinate establish interstate systems if they so 

choose as discussed in section VIII of the final rule preamble of the CPP.

The following are summaries of the specific public comments under this comment:

Several commenters supported the use of emissions trading to reach targets.

Commenters said that Massachusetts intends to rely primarily on the most well-tested and 

economically efficient strategy for reducing power plant emissions - the RGGI allowance trading 

program. Commenters highly recommended a similar approach in other states. Commenters said 

that in fact, they recommend that EPA explore the possibility of hosting or funding a third-party 

emissions trading bank that can allow interested states to "plug-and-play" in to a wider, more 

cost-effective market. Commenters said however, we also applaud EPA's recognition of other 

strategies that more directly target energy efficiency and clean energy, and urge EPA to ensure 

that the final CPP allow states to take full advantage of these strategies. Commenters said that 

while accommodating a variety of flexible approaches, we urge EPA to ensure consistency 

between target setting and compliance formulas and measures throughout the rule to maintain the 

stringency of the rule as a whole.

Commenters encouraged the EPA to establish a bank for RE to recognize early action and to ease 

planning in later years. Commenters said that leading RE states have received more stringent, 

more expensive state emissions mandates under the Proposed Rule, and that the proposed 

structure tends to punish states that have passed renewable standards, built RE, and used NGCC 

plants to integrate RE. To fix this problem, commenters proposed that the EPA incorporate a 

banking concept to credit early and ongoing RE development. 

Commenters stated that the design set forth in these comments is only one among several 

possible designs for RE banking. Commenters indicated that under their concept, the EPA would 

first set a floor for banking eligibility of 1.5 times the national average renewable generation in 

2012. Commenters said that the national average in 2012 was 5.6%, so this floor would be 8.4%, 

and that only states that had renewable generation above that level would qualify for banking. 

Commenters said these states would be allowed to bank all renewable generation that is above 

the 2012 leadership floor percentage for the years of 2017-2019.

Commenters said that States would be able to realize the value of the bank in later years of the 

program. Commenters proposed that, working in conjunction with the state-determined interim 

target period concept discussed elsewhere in their comments, states would have the option to 

"spend" their bank in the form of adding the banked renewable MWh into the denominator of 
279

their final targets from 2030-2034. Commenters said that after the bank is depleted, or by 2035, 

states would then be required to achieve the final target established in the Clean Power Plan. 

Commenters said that banking rewards renewable leadership by deferring investments in the last 

increment of emissions reductions necessary to meet the final goal, but states would ultimately 

still be required to meet the same final goal. (Commenters said, however, if the EPA does not 

allow states to propose their own glide path to the 2030 target, banking becomes still more 

important as a means to alleviate some of the cost and other impacts of the interim targets.)

Commenters said the renewable banking concept offers many benefits. Commenters said first, it 

would restore the message to states that early action on renewables will not be ignored - in fact, 

it would do so in a way that explicitly recognizes that the early reductions made by RE long 

before 2020 have real value under the program. Commenters said that second, it would more 

fairly treat the utility customers who have funded proactive RE development. Commenters said 

third, the banking concept would create a new incentive for implementation of new renewables 

prior to 2020, which may be critical for ongoing renewable development, especially if the current 

set of federal tax subsidies for solar and wind is not renewed. Commenters said that banking 

accomplishes these objectives while maintaining the same total carbon loading to the atmosphere 

as required under the proposed rule; it provides relief only to the extent that equivalent 

reductions occurred prior to the commencement of the program. Commenters said that it 

recognizes early reduction actions taken long before the proposed rule would become binding. 

Commenters stated that the general concept of early reduction banking, and renewable banking 

in particular, enjoys the support of a broad set of stakeholders across the utility industry, 

environmental advocates, and renewable trade groups, and is raised by the EPA as an alternative 

in the proposed rule (79 Fed. Reg. at 34918-19).

Comment 32: Crediting early action

Response 32: See sections VI and VIII of the final rule preamble of the CPP for the EPA’s

response to this comment.

The following are summaries of the specific public comments under this comment:

Credit if go beyond target. Commenters indicated that under the Clean Power Plan, states and 

companies that have already transitioned towards lower carbon and zero carbon energy and 

energy efficiency are closer to the full deployment of the BSER than others - and EPA should 

consider clarifying that states that go beyond their targets under the Clean Power Plan would 

receive credit for those actions under future updating of the carbon pollution standards for power 

plants. Commenters noted that in addition, the standard only applies to fossil generators, so 

those states with less fossil generation in their system mix will bear less cost.

Emission reductions in 2012-2020 timeframe. Several commenters said that the years between 

2012 and 2020 present a distinct challenge. These commenters said that the EPA uses 2012 data 

on power sector infrastructure in assessing the potential for emission reductions to be secured 

under the best system of emission reduction during the 2020-2029 compliance period. These 

commenters suggested that crediting emission reductions secured between 2012 and 2020 would 
280

encourage states and companies to act earlier, moving emission reductions forward in 

time. These commenters noted that the potential to reduce carbon pollution during 2012 to 2020 

was not taken into account in setting the state targets. These commenters said that as such, giving 

compliance credit to those actions taken during this time that would have happened regardless of 

the Clean Power Plan - take, for example, renewable energy deployed by a renewable energy 

standard in a state strongly committed to clean energy - creates a bank of compliance credits that 

will be used by that state during the compliance period in the place of other, beyond business-asusual emission reducing actions, and the overall emission reductions achieved by the Clean 

Power Plan will be reduced by the same amount.

Several commenters suggested that states and companies can take advantage of the 5 years 

between the finalization of the standards and the beginning of the compliance period to gradually 

build out renewable generation and build up energy efficiency programs so that these resources 

are ready to deliver carbon reductions.

Crediting. Commenters said that if the EPA does decide to provide early action credit, we urge 

the Agency to ensure that such crediting does not erode the environmental integrity of the Clean 

Power Plan by crediting business-as-usual actions. Commenters further said, crediting for early 

action should take place in the context of strengthened state targets that better reflect the full 

potential for emission reductions under the best system of emission reduction, as discussed above 

with respect to each of the building blocks and the formula change.

Commenters said that it is naturally difficult to determine what electricity generation is avoided 

as a result of early actions that commence before the start of the interim compliance period. 

Therefore, Commenters recommended that the EPA credit such actions in a manner that does not 

over-reward such actions and undermine the benefits of the Clean Power Plan. Commenters

suggested that one possible approach that the EPA may wish to consider is comparing early 

action in states employing rate or mass based programs against the emissions standard for new 

natural gas plants under section 111(b), or the state's GHG emissions rate for the interim control 

period, whichever is lower. Commenters said that another possible approach that could be used 

in conjunction with or in place of the first approach would be to credit states adopting massbased programs based on how much they reduce emissions below their approved cap for the 

interim compliance period.

Comment 33: Flexibility to use measures not defined within the BSER building blocks is 

critical; use of existing programs and measures should be available to count towards compliance; 

rule should explicitly acknowledge application of reductions from existing state plans beginning 

in 2013 to ensure early action is not penalized.

Response 33: See sections VI and VIII.B of the final rule preamble of the CPP for the EPA’s

response to this comment.

The following are summaries of the specific public comments under this comment:
281

Commenters said as proposed, the regulation allows states to include measures in the State Plans 

beyond those the EPA included in its determination of the BSER, and maintains that this 

flexibility is critical. Commenters said in the proposed rule, states may identify technologies or 

strategies that are not explicitly mentioned in any of the four building blocks and may use those 

technologies or strategies as part of their overall plans (e.g., market-based trading programs or 

construction of new natural combined cycle units or nuclear plants)." (79 Fed. Reg. at 34,837) 

Commenters said this acknowledgement of measures not defined within the BSER building 

blocks is critical to maximizing the flexibility of states to achieve their reduction targets. 

Commenters also agreed that use of existing programs and measures should be available to 

reduce CO2 emissions from EGUs and help states meet their state targets. Commenters said the 

Proposed Rule should explicitly acknowledge the application of reductions from existing state 

plans beginning in 2013, because this would ensure that states already employing GHG reduction 

strategies are not penalized by their early actions.

Commenters said the EPA proposes that states may submit compliance plans that include 

measures not specifically identified in EPA's BSER determination, and maintained that the use 

of non-BSER compliance options is an important flexibility mechanism that allows states to 

design compliance plans that reflect the reduction opportunities available in a state.

Commenters said the CPP should allow states to comply with the proposed Section 111(d) 

guidelines by continuing to participate in RGGI.

Commenters said while in the proposed Guidelines EPA explicitly listed CHP and cogeneration 

approaches as examples of non-BSER measures that could be included as compliance 

alternatives in a state plan, states should not be limited to those non-BSER measures explicitly 

spelled out in EPA's proposal. Commenters said other GHG reduction strategies could include 

• Methane leak reduction programs currently being undertaken by local distribution 

companies, 

• Programs incentivizing the direct use of natural gas in home heating;

• Programs incentivizing the capture of fugitive methane from municipal waste landfills 

and in bio-gas digesters at agricultural facilities;

• Improved utility infrastructure (reduces line losses and thus improves efficiency of the 

utility transmission and distribution systems);

• Commenters said Indiana is a heavy manufacturing state, and such states should be 

allowed to:

• Count savings from EE and DSM programs at manufacturing facilities, 

• Count savings from the conversion of coal -fired industrial boilers to combined heat and 

power (CHP) systems at industrial facilities
282

• Count the energy efficiency savings of the large customers that may have already opted 

out of EE programs per the SEA 340 opt-out provision.

Commenters stated the final guidelines should allow states to include non-BSER measures - both 

those identified by EPA in the proposal and those not specifically included - in state compliance 

plans submitted under the final guidelines for approval.

Comment 34: States need maximum flexibility to use existing state-initiated programs to meet 

goals, and states need broad compliance flexibility in part because significant changes to other 

sectors of the economy could affect the emission rate of the electric sector.

Response 34: As discussed in sections VI, VII, and VIII, of the final rule preamble of the CPP 

the EPA is finalizing a rule that continues the state flexibility from proposal and builds onto that 

by more clearly establishing alternative compliance metrics.

The following are summaries of the specific public comments under this comment:

Use existing programs for compliance with CPP. Commenters strongly supported the EPA's 

proposal to provide states with substantial flexibility in how they achieve the Clean Power Plan's 

emission targets because states are in the best position to balance the numerous competing legal, 

environmental, economic, geographic, and equity issues that will arise as they attempt to reduce 

CO2 emissions from their existing fossil fuel-fired generation fleet. Commenters said further, 

many states have already begun to implement multi-year programs to reduce CO2 emissions 

from existing power plants and other sources. California's Cap-and-Trade, Emission 

Performance Standard (EPS), Energy Efficiency Resource Standard (EERS), 

and Renewable Portfolio Standard (RPS) programs are just four examples of the kinds of 

multiyear policies that California is implementing to reduce its GHG emissions. Commenters

agreed with the EPA that the Proposed Rule should provide California and other states with 

maximum flexibility to use such existing state-initiated programs to meet the federal guidelines 

and support federal goals.

Changes to economy affect electric sector emissions. Commenters said another reason for 

providing states with broad compliance flexibility is that many states could experience 

significant changes to other sectors of their economies that could affect the emission rate of their 

electric sector. Commenters said for example, California already provides numerous

incentives to encourage deployment of electric vehicles and public transportation. Commenters

said in addition, the Port of Los Angeles has been pursuing a number of strategies to reduce 

GHG emissions from port traffic and operations. Commenters said one of these strategies 

involves installing "alternative maritime power" (AMP) facilities to allow docked vessels to 

reduce their emissions by relying on the electric grid for power while in port. Commenters said 

as with vehicle electrification initiatives, the Port's AMP initiative could increase demand and 

emissions from the electric power sector even as it greatly reduces overall GHG emissions from 

the Port. Commenters said both state and local governmental entities are currently contemplating 

additional initiatives to increase the electrification of the transportation and other sectors as a 

means of reducing emissions of both conventional and GHG pollutants.
283

Commenters said these changes, many of which are already in progress, could potentially 

increase demand for electricity from fossil-fueled power plants even as they reduce the overall 

level of emissions across all sectors in the state. Commenters said implementation of these 

initiatives will also require careful coordination between the state and local entities to ensure 

continued emission reductions while maintaining a reliable, cost-effective supply of electricity. 

Commenters said consequently, substantial flexibility is essential for allowing states to achieve 

their federal emission targets in the most cost-effective and efficient manner possible, in light of 

both existing state programs and future state goals.

Other points. Commenters expressed support for several additional policies including:

In general, the EPA should allow states to meet their emission targets in any way they choose, so 

long as the states can demonstrate that their policies and programs can meet the targets. 

SCPPA strongly supports the EPA's proposal to allow states to demonstrate compliance by 

meeting a mass-based target in lieu of a rate-based target (although they have concerns with the 

EPA's proposed approach to quantifying the mass-based goal). 

SCPPA also supports the EPA's proposal that states could adopt a "portfolio" or "state 

commitment" approach that would assign responsibility for attaining emission reductions to 

entities other than affected EGUs.

Comment 35: Rule must give states the flexibility to design their state programs in a manner 

that best allows the states to address the socioeconomic and other impacts that the rule will have 

on some sectors of state economies, especially those in coal producing states.

Response 35: The EPA maintains that the final rule provides ample flexibilities to states. States 

are allowed to use the BSER measures, or other measures in their state plans to comply with the 

goals; there are flexibilities within the BSER measures and how they are executed; and states 

also have non-BSER measures at their disposal. See sections V.A and VIII.A. of the final rule 

preamble of the CPP for more information. 

The following are summaries of the specific public comments under this comment:

Commenters said although the Clean Power Plan is an essential step forward for the U.S. in the 

fight against climate change, the proposed rule has the potential to have significant and 

disproportionate negative impacts on some parts of the country - particularly coal producing 

states, such as West Virginia. Commenters said therefore, it is essential that EPA's final rule 

provide states the flexibility to design their state programs in a manner that best allows the states 

to address the socioeconomic and other impacts that the rule will have on some sectors of state 

economies. 

Commenters said as EPA moves toward finalizing the Clean Power Plan rule, EPA should 

consider the broader socio-economic challenges that West Virginia and other coal producing 

states face with respect to compliance with this rule, in addition to the economic development 

challenges associated with declining demand for coal. Commenters said while EPA is limited in 

its ability to address many of these issues directly, it should retain those provisions of the 

proposed rule that allow flexibility for states to achieve emission reductions across the electric 
284

power system - both inside and outside the fence-line measures - through the use of market based 

mechanisms and multi-state and regional compliance pathways.

Commenters said such flexibility will give states the best opportunity to reduce compliance costs 

and enhance their ability to support the sectors of their economies that are positively affected by 

the rule, and mitigate impacts in those sectors that are negatively affected.

Comment 36: Rule should allow alternative compliance payment if state is unable to meet

interim and/or final goal

Response 36: The EPA believes that states have a variety of flexibilities, including the 

trading/purchasing of credits that will enable them to comply with the BSER requirements.

The following are summaries of the specific public comments under this comment:

Commenters suggested that the USEPA should consider allowing an "alternative compliance 

payment" if a state will be unable to meet its interim and final goals. Commenters said that this 

payment could be made if a state adequately demonstrates that meeting the final goal is 

technically infeasible, given the circumstances and characteristics of the state's electric industry. 

Commenters said the USEPA could use these payments to fund clean energy projects throughout 

the country to offset the retained emissions in the states making the alternative compliance 

payments.

Comment 37: On a case-by-case basis, the rule should allow states to apply less stringent 

emissions standards or longer compliance schedules than those otherwise required

Response 37: While this rule does provide flexibility on demonstrating compliance over a period 

of time, meaning annual rates and emission levels may vary, compliance levels still must be 

demonstrated over the course of the period. States have the flexibility to assign rates and 

reduction incentives to affected sources, but at the aggregate level would still need to 

demonstrate compliance with BSER. 

The following are summaries of the specific public comments under this comment:

Several commenters said that EPA should provide an exemption or allow for a deviation from 

the goals in select instances.

Commenters stated that a Force Majeure-type provision that allows states to deviate from the 

goals in unforeseen circumstances is necessary. Commenters said there are numerous 

circumstances over which states have no control that must be factored into the ability to meet the 

proposed goals of the Clean Power Plan. Commenters said that for example, the Western States 

are experiencing severe drought conditions, and dropping water levels may result in a significant 

decrease of available hydropower, and states like Nevada would have to make up the difference 

by relying on existing fossil-fuel fired facilities. Commenters said that other examples of force 
285

majeure events include, but are not limited to conflicting orders from the United States 

Department of Energy or the FERC requiring continued EGU operations to ensure reliability, 

and overarching requirements of U.S. military bases within state boundaries as to the parameters 

of nearby RE projects. Commenters said that these issues may interfere with Nevada's ability to 

timely meet the goals, and said that the EPA should include an exemption or allow for a 

deviation from the goals to mitigate states' risk for failure to comply in such circumstances.

Several commenters said the EPA must also maintain a state's authority to "on a case-by-case 

basis for particular designated facilities or classes of facilities . . . provide for the application of 

less stringent emissions standards or longer compliance schedules than those otherwise required . 

. . provided that the State demonstrates with respect to each such facility (or class of facilities):

• Unreasonable cost of control resulting from plant age, location, or basic process design;

• Physical impossibility of installing necessary control equipment; or

• Other factors specific to the facility (or class of facilities) that make application of a less 

stringent standard or final compliance time significantly more reasonable."

Comment 38: The EPA must allow revisions to emission target after rule is finalized. Existence 

of flexibility depends on specific circumstances; Alaska's circumstances restrict compliance 

options. Alternative mass-based emission target should be allowed

Response 38: The EPA is not including emission performance goals for Alaska in this final rule. 

See section VII of the preamble for discussion of this issue.

The following are summaries of the specific public comments under this comment:

Proposed rule prohibits changes after finalization. Commenters said that it is essential that the 

final rule allow flexibility in the assigned target emission rate. Commenters said currently, EPA 

proposes that "once the final goals have been promulgated, a state would no longer have an 

opportunity to request that the EPA adjust its CO2 goal." Commenters said the EPA also 

proposes to remove flexibility that is generally permitted in implementing EPA regulations to 

deviate from a standard of performance based on facility specific considerations. Commenters

said this proposal takes the rule in the wrong direction. Commenters said in Alaska, there are a 

limited number of affected EGUs, a limited transmission system, and a small ratepayer base. 

Commenters indicated said we have serious reservations about our ability to implement this rule 

in the first instance. Commenters said further, EPA has not evaluated the feasibility of impact of 

the rule here and the data provided by EPA contained errors and imprecise data. Commenters

stressed that if Alaska is not exempted, there must be a mechanism to re-evaluate the target rate 

after the rule is finalized.

Flexibility depends on specific circumstances. Commenters said the existence of flexibility 

depends on specific circumstances; Alaska's circumstances restrict compliance options. 

Commenters said the flexibility available to Alaska is limited by: 
286

• The number of EGUs at issue, 

• The role of those EGUs in the generation mix, 

• The number of ratepayers to bear compliance costs, 

• Transmission constraints, 

• Climate and geography, as well as 

• Other factors.

Commenters said their review of available data during the comment period suggests that 

achieving the mandated emission rate will require retiring one of the Healy coal units - in fact, 

EPA's goal calculation presumed that neither of the Healy units would operate. Commenters said 

given the importance of maintaining reliability of electric service for the Fairbanks load center, 

EPA should not promulgate a rule that would require such a result.

Mass-based emission target. Commenters supported EPA's proposal to allow an alternative

mass-based emission target. Commenters said this provision introduces a degree of flexibility 

that may avoid penalizing states for reducing total CO2 emissions from affected EGUs when the 

same event increases the per megawatt hour emission rate because of a shift in the proportion of 

fuel sources.

Comment 39: Regulation should allow for phased implementation

Response 39: The EPA describes the flexibilities available to states in Section VIII of the final 

rule preamble of the CPP.

The following are summaries of the specific public comments under this comment:

Commenters said that the EPA needs to provide policy flexibility to state regulators as they 

develop their state plans under 111(d), and in particular, the EPA should allow and encourage 

state plans to provide for phased implementation, with a Phase I policy, Phase II policy, etc. as 

needed. 

Commenters indicated that a true emission reduction glide path would allow state regulators to 

adopt a relatively simple and bulk electric system (BES) - compatible set of policies to achieve 

the relatively minor emission reductions and "low hanging fruit" in the early years of the next 

decade, and to subsequently develop a more comprehensive and integrated set of polices to 

achieve the deeper emission reductions in the latter part of the decade. Commenters said that this 

more comprehensive, subsequent set of policies can better be identified and realized in the early 

part of the next decade than it can today, because there will be far more insight into the 

commercial viability, cost and system implications of emerging clean energy technologies, and 

more ability to integrate the state policy with the more complex system of federal, regional and 

other stakeholder policies and practices described above. 
287

Commenters said that for example, Phase I could consist of what the EPA terms a "portfolio 

approach" to incent the deployment and integration of clean energy resources in both the grid 

and the distributed energy markets, coupled perhaps with a moderate mass-based budget and a 

generation- and consumer- friendly allowance allocation framework to minimize stranded costs. 

Commenters said this would allow states to achieve the moderate emission reductions under the 

front end of their glide paths, with lower impact to the BSE, while also supporting the initial 

integration of cleaner resources. 

Commenters said that Phase II could consist of a more stringent budget, rate and "portfolio" 

objectives designed to propel the evolving system to achieve the 2030 goals and continue to 

achieve greater emission reductions after 2030. Commenters argued that Phase II, however, 

would be best designed after 2020, based on the greater information about the economics of 

remaining coal plants, the cost, performance and availability of low carbon solutions, and their 

integration with the BES. 

Commenters stated that this approach would also have great practical value in a number of states, 

which would require legislative approval or modification of existing statutes even to implement 

the BSER elements EPA bases its emission targets on. Commenters said that it would be far 

easier to achieve such approval for a simple Phase I plan to meet modest emission reductions in 

2020 through 2025, than for the potentially drastic plans needed to achieve the EPA's current 

2020 emission reduction requirements - much less to deal with the need to protect reliability, 

prevent market distortions, and keep prices reasonable for consumers during such a dramatic 

sudden reduction in emissions.

Comment 40: The EPA must allow states to consider the remaining useful life of existing 

affected EGU when developing 111(d) plans.

Response 40: See section VIII of the final rule preamble of the CPP for the EPA’s response to 

this comment.

The following are summaries of the specific public comments under this comment:

Commenters said that states must be able to consider the remaining useful life of an affected 

existing EGU when developing 111(d) plans. Commenters said on page 34926 of the preamble, 

EPA solicits comments on its position that states may not include the remaining useful life of 

affected electric generating units, and other facility-specific factors identified in the existing 

implementing regulations, as a basis for adjusting a state emission performance goal or for 

relieving a state of its obligation to develop and submit an approvable plan that achieves the goal 

on time. Commenters said Section 111(d) (1) (B) of the Clean Air Act explicitly states, 

"Regulations of the Administrator under this paragraph shall permit the State in applying a 

standard of performance to any particular source under a plan submitted under this paragraph to 

take into consideration, among other factors, the remaining useful life of the existing source to 

which such standard applies.” Commenters said therefore, EPA has no choice but to give the 

states flexibility in considering the remaining useful life of the existing affected electric 

generating unit when developing 111(d) plans.
288

Comment 41: The EPA must recognize the substantial variability in hydro generation when 

assessing compliance to avoid penalizing states for spikes in fossil-fuel generation caused by 

unfavorable hydro conditions, either through compliance exemption for use of normalization or 

some other adjustment method during demonstrated periods of low hydro generation.

Response 41: See section VIII of the final rule preamble of the CPP for the EPA’s response to 

this comment.

The following are summaries of the specific public comments under this comment:

Commenters said the EPA must recognize the substantial variability in hydro generation when 

assessing compliance to avoid penalizing states for spikes in fossil-fuel generation caused by 

unfavorable hydro conditions. Commenters said the EPA's proposed use of a rolling three-year 

average to measure compliance with performance goals is not adequate to account for the effects 

of variability in hydro generation.

Commenters provided a figure (Figure 1), which depicts Idaho Power's total system hydro 

generation from 1975 through 2013. Commenters said the rolling averages plotted in Figure 1 

further show that using a five-year, or even a ten-year, rolling average is not sufficient to even 

out the effects of the historic hydro variability. Commenters said use of at least a fifteen-year 

rolling average would be necessary to even out the effects of hydro variability in measuring 

compliance with performance goals.

Commenters said the EPA must allow states flexibility to account for this inevitable hydro

generation variability in demonstrating compliance with interim and final performance goals, 

either through a compliance exception or use of normalization or some other adjustment method 

during demonstrated periods of unfavorable water conditions and low hydro generation. 

Commenters said in the absence of meaningful adjustments, hydro-dependent states, and 

particularly Idaho given its extremely low state performance goal, simply will not be able to 

demonstrate compliance during such periods.

Comment 42: The EPA has no authority to dictate arbitrary "interim" goals. Plans should avoid 

forced early retirement.

Response 42: The EPA has modified the interim goals in response to comments and our further 

consideration. The interim period covers the years 2022-2029 and includes illustrative interim 

emission values for the periods of 2022-2024, 2025-2027, and 2028-2029. States have the 

flexibility to use different steps than those included in the final rule if the state demonstrates in 

its state plan that the values chosen for the 3, 3, and 2 year increments are equivalent to the 

interim goal included in the final rule for the 2022-2029 period. See section VII of the final rule 

preamble for discussion of the statewide goals. Please see section IV of the final rule preamble 

for discussion of the EPA’s authority.

The following are summaries of the specific public comments under this comment:
289

Commenters stated that the EPA has no authority to dictate arbitrary "interim 

goals. Commenters suggested that because future emission reductions will occur through the 

natural aging of the existing fleet, plans could be established based on the remaining useful life 

of existing units consistent with the express language of section 111(d). Commenters indicated 

that the EPA should allow states to examine the emission reductions that will occur within the 

existing fleet as units near and reach the ends of their useful lives, and establish a glide path to 

lower total mass emissions from the existing fossil fleet. Commenters said the EPA should allow 

states to calculate the "degree of emission reduction" achieved through such a procedure, and to 

develop the path for reductions that is consistent with the energy and economic needs of the 

states.

Commenters stressed the need for reasonable decommission schedules to avoid excessive rate 

increases. Commenters said that to reach its emission goals the Clean Power Plan must be 

viewed as cost effective by the public, and the best way to accomplish this is to establish realistic 

goals and allow the states to craft credible and cost-effective plans, which include reasonable 

decommission schedules for existing units in a manner that avoids rate shock. Commenters said 

that the final rule should provide states the flexibility contemplated by the language and 

legislative intent of Section 111(d).

Comment 43: The proposed regulation would result in nonsensical consequences, such as a 

newer, cleaner coal-fired plant being forced to retire in one state, while an older, dirtier coal-fired 

plant in a neighboring state remains operating.

Response 43: The EPA maintains that the final rule provides ample flexibilities to states. States 

are allowed to use the BSER measures, or other measures in their state plans to comply with the 

goals; there are flexibilities within the BSER measures and how they are executed; and states 

also have non-BSER measures at their disposal. See sections V.A and VIII.A. of the final rule 

preamble of the CPP for more information.

The following are summaries of the specific public comments under this comment:

Commenters said as the Supreme Court recently reminded EPA, nothing in the CAA authorizes 

the Agency to regulate GHGs "in any way that would be 'extreme,' 'counterintuitive,' or contrary 

to 'common sense.'" Commenters said yet even a cursory examination of the Proposal reveals 

that it is rife with extreme, counterintuitive, and nonsensical consequences. 

Commenters said perhaps the most bizarre consequence is the arbitrary way that statewide redispatch under Building Block 2 affects different EGUs based on the state in which they are 

located. Commenters said as an example, imagine that two states - State A and State B - have 

equal amounts of generation from existing coal-fired EGUs, but State A's coal-fired units are 

newer, more efficient, and operate state-of-art environmental controls, while State B's coal-fired 

units are older, degraded, and operate older environmental controls. Commenters said if State A 

happens to contain more unused NGCC generating capacity than State B, then under Building 

Block 2, State A will be forced to curtail its coal-fired generation more severely than State B -

even though its EGUs are newer and emit air pollutants at a lower rate. Commenters said indeed, 
290

if the unused NGCC capacity in State A is great enough, Building Block 2 may eliminate its 

coal-fired generation entirely, while the older coal-fired EGUs in State B continue to operate.

Commenters said this is precisely the scenario that would take place in Arizona under EPA's 

Proposal with respect to the Springerville Generating Station, which is owned in part by TriState. Commenters said the 418 MW Unit 3 at Springerville, which achieved commercial 

operation in the summer of 2006, is Tri-State's newest and most efficient coal-fired unit and has 

state-of-the-art controls, and represents a significant investment by Tri-State, both in the 

generating facility itself and in the long-term transmission, water, and land rights necessary to 

operate the facility.

Commenters said yet under the Proposal, EPA's "best system of emission reduction" for EGUs 

located in Arizona involves eliminating all generation from coal-fired EGUs - including all 4 

units of the Springerville facility. Although EPA claims that the proposed emission guidelines 

provide states with "flexibility" to adopt plans that do not strictly follow the Building Blocks, the

State of Arizona has performed its own analysis and determined that the proposed state goal for 

Arizona is so stringent that it actually provides no implementation flexibility as a practical 

matter. Commenters said thus, the Proposal would effectively force the premature retirement of 

the Springerville facility.

Commenters said Tri-State owns several other, older coal-fired EGUs in different states where 

the proposed state goals do not require eliminating all coal-fired generation. Commenters said 

accordingly, the Proposal would have the bizarre consequence of forcing Tri-State to retire its 

newest, most efficient, best-controlled coal-fired EGU, which has already been the subject of 

significant capital investments. Commenters noted that if the Springerville facility had been 

located just 10 miles to the east in New Mexico, it would be saved from forced retirement.

Commenters said shutting down Springerville Unit 3 would strand a significant investment made 

by Tri-State less than 10 years ago. Commenters added that the decommissioning and write-off 

costs for Unit 3, in conjunction with any measures needed to replace that power supply, would 

harm Tri-State, its 44 member cooperatives, and the retail consumers of those cooperatives 

through higher rates to compensate for the loss of this valuable asset in Tri-State's generation 

portfolio. Commenters said equally important, eliminating Springerville Unit 3 would shut down 

a baseload facility that Tri-States uses to serve firm load, leading to potential disruption in loadserving reliability. Commenters said baseload capacity is a key component of a reliable 

generating system and provides value particularly during the peak hours of a utility's peak 

season. Commenters said if Unit 3 is shut down, Tri-State will not have sufficient capacity to 

serve firm load, and will be required to construct new generation to replace that capacity, further 

increasing costs to its member systems.

Comment 44: The EPA should take steps to foster consumer and labor oversight and 

participation

Response 44: See the EPA’s Regulatory Impact Analysis for the Clean Power Plan Final Rule, 

EPA-452/R-15-003 (RIA) for the final CPP for a discussion of consumer impacts
291

The following are summaries of the specific public comments under this comment:

Commenters said the EPA should take steps to foster consumer oversight by making key 

information readily accessible on its website and should require states to provide consumer voice 

and oversight in the development and execution of implementation plans. Commenters said 

consumers will benefit from sound policies and bear the brunt of poor policies, and as a matter of 

fairness, they deserve a strong role in the formulation and execution of state plans. Commenters

said consumer participation and oversight is valuable for another reason as well - there is 

substantial overlap between the policies that are best for reducing emissions and those that are 

best for consumers. Commenters said consumer participation will substantially increase the 

likelihood that states will adopt sound, least-cost plans that are likely to yield their projected 

carbon-reduction goals.

Commenters said that when customers are involved in their energy solutions, such as with 

community solar, they are much more tied to the decisions they are making. The commenters

said in such situations consumers recognize the impacts they have, and how much it really 

affects their bottom line.

Commenters said that states must be encouraged to include labor voices in the development of 

their compliance plans.

Comment 45: The EPA should provide a comparative analysis of the costs of action versus the 

costs of inaction

Response 45: The EPA’s Regulatory Impact Analysis for the Clean Power Plan Final Rule, 

EPA-452/R-15-003 (RIA) analysis discusses the cost and benefits of this final CPP rule.

The following are summaries of the specific public comments under this comment:

Commenters said in the analysis for the proposed rule, the EPA has yet to compare the costs of 

business as usual. Commenters said it would be very helpful if the EPA would provide a 

comparative analysis of the costs of action versus the costs of inaction. 

Comment 46: Commenters said EPA should encourage the states to implement least cost 

approaches by indicating that the selection of resources that deviate significantly from this 

principle will be subject to close scrutiny.

Response 46: The EPA uses least-cost modeling tool when assessing compliance scenarios. A 

State may use this to inform their thinking about least cost approaches.
292

Comment 47: Diverse fleet of generating resources is optimal but renewable energy resources 

and energy efficiency can be dispatched and thus cannot be considered replacements for existing 

fossil fuel-fire generation, but rather additive in nature

Response 47: The EPA discusses abatement potential through renewable energy in section V.A

of the final rule preamble of the CPP. Holding load assumptions constant for a given future year, 

as renewable generation increases it will likely replace fossil sources. The collective regional 

fossil generation of the fleet with more RE generating resources is expected to be less than one 

with fewer RE resources.

The following are summaries of the specific public comments under this comment:

Commenters said the EPA should encourage the maintenance of fuel diversity with each states' 

generation portfolio, rather than choosing winners and losers to the effect of decreased system 

reliability. Commenters said that maintaining a diverse fleet of generating resources is optimal 

because it gives utilities the ability to capitalize on the lowest cost fuel options over the long 

term and ensure low cost electricity to customers. Commenters said that a fleet that is overly 

reliant on one particular generating resource would cause customers to bear significant risk with 

respect to the cost of that particular generating source. Commenters indicated that as part of 

Georgia Power's maintenance of a diverse fuel mix, the Georgia PSC has approved additional 

renewable generating resources, including solar generating capacity. Commenters stressed that to 

meet their purpose of maintaining fuel flexibility and diversity, however, these generating 

resources cannot be considered as replacements for existing fossil fuel-fired generation, but 

rather are additive in nature.

Commenters indicated that it is important to note that neither renewable energy resources nor 

demand-side energy efficiency (DSEE) can be dispatched, i.e., they cannot be called upon to 

serve electricity load at any time. Commenters noted that most renewable energy resources are 

dependent on weather conditions and DSEE is dependent on customer behavior; neither is 

guaranteed. Commenters concluded that as a result, they serve a different purpose than existing 

fossil fuel-fired generation, which is capable of being called upon to meet customer demand. 

Commenters said that the EPA's proposal to lower states' goals by assuming the replacement of 

existing dispatch-able generation with intermittent renewable resources and DSEE that relies on 

customer behavior similarly would significantly impact the reliability and cost-effectiveness of 

the electric grid and is directly inconsistent with the purpose of these resources and the decisions 

of state PSCs to approve the addition of these resources to utilities' generation (or avoided 

generation) mixes to ensure fuel diversity and cost-effective electricity.

Comment 48: The EPA should treat renewable energy from Canadian sources in the same 

manner as renewable energy from domestic sources. Explicitly including Canadian hydropower 

as a resource that can be used to comply with the CPP obligations would give states the 

flexibility they need to meet goals.

Response 48: See section VIII.K. of the final rule preamble of the CPP for the EPA’s response 

to this comment.
293

The following are summaries of the specific public comments under this comment:

Commenters fully supported the EPA's position that states should be given maximum flexibility 

in determining how best to meet the targets set forth in the Clean Power Plan, and said inclusion 

of Canadian hydropower in the Clean Power Plan would be consistent with state RPS 

requirements and would also allow states the flexibility they will require to meet SIP goals in the 

future. 

Commenters said even prior to the release of the proposed Clean Power Plan, many states had 

already begun requiring utilities to increase their reliance on renewable generation through 

renewable portfolio standards (RPS). The commenters said this has included recognizing 

Canadian hydropower as a resource that can help states meet their renewable energy and climate 

change goals. Commenters said as the EPA notes in the Clean Power Plan's supporting technical 

documents, "most states allow use of eligible renewable resources located in other states to 

satisfy the state RPS requirements," and this "may also include Canadian hydroelectric and wind 

energy resources."

Commenters said in recent years, California, Connecticut, Minnesota, Rhode Island, Vermont, 

and Wisconsin have all adopted legislation or regulations that allow local utilities to use 

Canadian hydropower in meeting their respective RPS targets. Commenters said New England 

States are also exploring ways to increase hydropower imports in the region to help meet their 

GHG reduction goals. Commenters said in the MISO region, which includes Manitoba, 

Wisconsin adopted legislation in July 2011 that grants renewable credit to imports from new 

hydropower facilities under development in Manitoba. Commenters added similarly, in March 

2011, Minnesota's Public Utilities Commission ruled that Minnesota Power could apply a portion 

of hydroelectricity purchases from Manitoba Hydro to meet its state renewable energy standard 

requirements.

Commenters said as the examples noted above demonstrate, states and utilities have been 

proactive in seeking out renewable energy sources to supply the current and future needs of their 

residents and businesses. Commenters said explicitly including Canadian hydropower as a 

resource that can be used to comply with Clean Power Plan obligations would give many states 

the flexibility they will need to meet their SIP goals and emission reduction targets in the future.

Comment 49: States can most cost-effectively achieve Clean Power Plan 2030 carbon emission 

reductions through deployment of greater levels of renewable power generation and 

EE. Flexibility and effective state policies are essential.

Response 49: The EPA agrees with the comments that flexibility for state plans is essential. The 

EPA maintains that the final rule provides ample flexibilities to states. States are allowed to use 

the BSER measures, or other measures in their state plans to comply with the goals; there are 

flexibilities within the BSER measures and how they are executed; and states also have nonBSER measures at their disposal. See sections V.A and VIII.A. of the final rule preamble of the 

CPP for more information.

The following are summaries of the specific public comments under this comment:
294

Commenters said states can most cost-effectively achieve Clean Power Plan 2030 carbon 

emission reductions through deployment of greater levels of renewable power generation. 

Commenters said renewable energy is virtually emissions-free, the least expensive option 

resource in many markets today and, as with most maturing but technologically enabled 

industries, and costs continue their downward trend. Commenters said states can achieve their 

Clean Power Plan targets while also realizing a host of additional benefits, including a 21st 

Century modern grid, a more modern diverse power supply, greater energy independence, more 

secure energy supply, new private sector investment, economic growth, and a growing mix of 

quality jobs. Commenters said effective state policies are essential to deploy greater levels of 

renewable energy and leverage the capital and ingenuity of the renewable energy industry.

Commenters said RE and EE are the key to reducing carbon pollution, and also drive job growth 

and reduce energy bills. The commenters stated they think these resources can contribute even 

more to the CPP.

Commenters said it is appropriate that the CPP places emphasis on expanding renewable energy 

and energy efficiency efforts. Commenters said over the next 40 years Pennsylvania can 

transition to 100% renewable power generation, and the CPP will also inspire investment in 

infrastructure to protect communities from climate change impacts they are already experiencing, 

spur the kind of innovation that will power American with clean energy in the 21st century, and 

improve resiliency and give states flexibility to implement plans that increase efficiency.

Commenters said the EPA should provide additional guidance to state about how to integrate 

high levels of RE.

Commenters encouraged EPA to clearly signal to that that the flexibility built into the CPP 

should be met through increased capacity for renewable energy projects.

Commenters supported the CPP's inclusion of demand side energy efficiency as one of the four 

major pollution reducing tools available to states.

Comment 50: The U.S. needs an "all-of-the-above" energy strategy that encourages 

development of all energy source options, without favoring one specific source over another.

Response 50: The flexibility afforded to states as described in Sections V and VIII of the final 

rule preamble of the CPP maximizes the breadth of compliance options and allows states/source 

to keep any of the “all-of-the-above” generation technologies that it chooses. 

The following are summaries of the specific public comments under this comment:

Commenters said the U.S. truly needs an "all-of-the-above" energy strategy to ensure we are 

responsibly developing energy sources while meeting consumer demands, protecting the 

environment and modernizing extraction and refining processes through market-led efficiencies. 

Commenters said this means adopting policies that encourage development of all energy source 

options, without favoring one specific source over another. Commenters said by allowing 

businesses and consumers to self-select, we encourage energy-efficiency by allowing consumers, 
295

not the EPA or the federal government, to choose preferred sources. Commenters said allowing 

consumer choice prevents the inefficiencies that inevitably come with government-led, command 

and control regulation.

Commenters said all consumers of energy, whether they are large manufacturers or individual 

households, benefit most from an all-of-the-above energy strategy. Commenters said diversity of 

energy supply is not only critical in keeping energy costs reasonable, it is essential in ensuring 

steady and reliable streams of energy to power our factories and heat our homes. Commenters

said for many Georgia businesses and industries that compete in a global economy, energy

represents a major input cost that can ultimately determine viability. Right now, energy is an 

advantage for many Georgia industries in large part because of the abundant and diverse supplies 

of affordable energy resources that are collectively keeping energy costs reasonable and supply 

reliable. Commenters said with the current diversity of generating resources, Georgia continued 

its trend of maintaining below-national average electricity prices, which is crucial to the 

continued growth and success of Georgia's economy. Commenters said however, if regulations 

such as the EPA's CPP force energy options off the table, energy prices will be more volatile, 

costs will increase, reliability will be threatened and ultimately Georgia's businesses and other 

U.S. firms will be less competitive in the global economy.

Commenters said the stringency of the building blocks makes compliance costly, risky for 

system reliability, and implausible if not impossible. The commenters said the real flexibility 

states need is the flexibility to maintain a diverse, low-cost, and reliable generation mix for their 

citizens, economic, and energy security. The commenters said that the value of generation 

diversity to stability in power supplies and prices is missing in this proposal.

Comment 51: The EPA should encourage states to use carbon capture mechanisms as a 

compliance tool.

Response 51: The final rule provides ample flexibilities to the states to use the BSER measures, 

or other non-BSER measures to comply with the goals. See sections V.A and VIII.A. of the final 

rule preamble of the CPP for more information.

The following are summaries of the specific public comments under this comment:

Commenters said the proposal offers maximum flexibility for compliance, and said a state can 

authorize carbon capture and storage mechanisms to reduce emissions from existing coal plants. 

The commenters said this technology recently announced the Department of Energy is actually 

helping to fund construction of the largest post combustion carbon capture project in the world, 

the Petra Nova Project in Texas, which was just announced a few weeks ago. The commenters

said this is projected to capture 90 percent of the carbon dioxide emissions from one of the 

plant's generators. The commenters urged the EPA to include in the final rule language, 

encouraging states to use carbon capture mechanisms as a compliance tool.
296

Comment 52: States should be allowed to decide how the distribution of responsibility to meet 

goals is allocated, whether a rate-based or mass-based approach is used, and should be able to 

establish the compliance timeline.

Response 52: The final rule provides ample flexibilities to the states to use the BSER measures, 

or other non-BSER measures to comply with the goals. See sections V.A and VIII.A. of the final 

rule preamble of the CPP for more information. The states also have the flexibility to choose 

whether a rate-based or mass-based approach is used, however the EPA has converted the ratebased goals to mass-based goals. See section VII of the final rule preamble of the CPP and the 

CO2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the 

final CPP for the final rate-based and mass-based goals. The timing for compliance remains as 

2030 for the final goals. The EPA has modified the interim goals in response to comments and 

our further consideration. The interim period covers the years 2022-2029 and includes 

illustrative interim emission values for the periods of 2022-2024, 2025-2027, and 2028-2029.

The following are summaries of the specific public comments under this comment:

In response to the EPA's request for comments, commenters supported permitting states to 

decide how the distribution of responsibility to meet goals is allocated as well as the compliance 

timeline. Commenters said in part, this is a practical solution as the affected EGUs will require 

some time to implement in-boundary changes while the state can implement programs under 

Building Block 3 and Building Block 4 that could possibly affect immediate reduction in 

#CO2/kWh. Commenters suggested the implemented programs could, in fact, be implemented 

by the private capital market and private businesses, thus creating both system cash flow and 

increased employment. Commenters said in turn this will reduce the total generation 

requirements, and reduction in generation requirements results in less of a capital burden on the 

EGUs and ultimately less of a burden on the utilities rate-payer. Commenters said in addition, 

the Rural Electric Providers who are least able to afford modifications to EGUs will have time to 

secure capital. Commenters said that two heating and cooling technologies, Ground Source Heat 

Pumps (GSHP) and Waste Energy Recovery (WER) systems, are excellent examples of 

technologies that compliment this approach.

Several other commenters also said that the EPA should allow states the flexibility to allocate 

responsibility for meeting a state's emission reduction goal among that state's affected entities as 

it sees fit. Several commenters said as described in the State Plan Considerations TSD, EPA 

proposes to "give states broad discretion to develop state plans that best suit their circumstances 

and policy objectives." Several commenters said this should include the recognition that affected 

entities within a state will not begin at the same starting point regarding carbon-reducing actions 

that are already in effect. Several commenters said individual utilities - and their customers - may 

have implemented a number of measures which have already reduced carbon emissions, and 

under the Clean Power Plan, states are able to incorporate these actions into their compliance 

plans so long as emissions reductions achieved post-2020 can be attributed to these measures. 

Several commenters said in the final rule, EPA should specifically allow states to determine how 

their compliance obligations will be allocated among all affected entities, thus allowing states to 

conclude that entities which implemented early actions that will achieve ongoing and long-term 

emission reductions will not be required to contribute further towards a state's emissions 

reduction goal.
297

Several commenters said the EPA should continue to allow states the flexibility to select a ratebased approach or a mass-based approach to emissions reductions for inclusion in state 

compliance plans. Several commenters said they have reviewed EPA's Notice of Additional 

Information Regarding the Translation of Emission Rate-Based CO2 Goals to Mass-Based 

Equivalents issued November 6, 2014, but cannot yet determine if this approach provides 

significant benefits over the previously proposed rate-based mechanism. Several commenters 

said in fact, it appears that the two standards do not correlate well. Several commenters said as a 

general observation, MidAmerican notes that implementation of the guidance on rate to mass 

conversion results in a greater reduction in emissions. Several commenters said where the ratebased reduction from 2012 levels would be 24%, a mass-based conversion would result in a 

reduction of 31% from 2012 levels by 2030. Several commenters requested that EPA's final rule 

retain the flexibility for states to select which emissions standard best suits their circumstances.

Comment 53: Rule implementation at the state level is subject to political influence

Response 53: As demonstrated in the GHG Mitigation Measures TSD and discussed in Section 

V of the final rule preamble of the CPP, the quantification of building blocks and BSER is a 

bottom-up technology cost and performance assessment.

The following are summaries of the specific public comments under this comment:

Commenters said the flexibility provided to the states, and much lauded cooperative federalism 

approach, is in some ways a double-edged sword because it creates the potential to affect how 

the rule is implemented based on political ("policy") preferences. Commenters said for instance, 

the rule could end up being implemented through a mass-based limit whereby allowances are 

distributed resulting in a situation where Florida utilities are competing amongst themselves for 

their fair-share of a limited pool of allowances. Commenters said ultimately, those smaller 

utilities with little or no political influence may be penalized despite their good intentions, early 

investments, and realized reductions. Commenters said for example, EPA should ensure that any 

approved state plan does not unfairly penalize those early adopters such as the City of 

Tallahassee.

Comment 54: States should be allowed to use non-affected EGUs to achieve compliance with 

111(d) targets, and should have ultimate flexibility in building their state programs and 

determining what activities can be included for compliance (partial list of activities provided)

Response 54: See sections V and VIII of the final rule preamble for discussion of the flexibilities 

available to states and affected EGUs.

The following are summaries of the specific public comments under this comment:

Commenters said the EPA must provide the maximum flexibility for states to use non-affected 

EGUs to achieve compliance with 111(d) targets. Commenters said states should be permitted to 
298

determine what the least cost methods are for achieving the emission rate reduction targets set by 

the EPA.

Commenters said CAA section 111(d) require states, not EPA, to set standards of performance 

for sources and not only do states have the authority to set the standards, but they also have the 

authority to determine how the sources within each state will meet those standards. Commenters

said therefore, states should have ultimate flexibility in building their state programs and 

determining what activities can be included for compliance. Commenters said these activities 

include, but are not limited to, the following areas:

1. A state should have authorization to deem that a current state program qualifies as BSER 

for that state

2. The states should have sole discretion on how to reach the 2030 compliance target 

including timing, glide path, interim targets, etc..., without any requirements from EPA 

during that interim period

3. Enforcement of a state plan should be the sole responsibility of the state 

4. States should have the discretion to include new Section 111(b) affected NGCC units in 

their compliance plans

5. States should have the ability to control what activities count towards compliance and 

when these activities can count towards compliance including, but is not limited to, plant 

retirements, treatment of nuclear and hydro, energy efficiency measures, renewable 

energy, and new 111(b) NGCC units

6. States should have the ability to count any emission reductions that occur after the 

baseline year including retirement of fossil-fired generation

7. States should have sole authority over whether or not the state uses a mass-based or rate 

based approach towards compliance and how that translation is calculated

8. States should have definitive oversight and control over any multi-state approach or plan 

Comment 55: States must be given sufficient flexibility in determining how to incorporate 

biomass energy into their implementation plans, and biomass feedstocks should be evaluated at a 

national level, not using a state or regional-level approach that incorporates chain-of-custody 

accounting for biomass feedstocks which would add complexity and cost to the program without 

added benefit.

Response 55: A discussion regarding the use of some biomass feedstocks for compliance 

purposes can be found in Section VIII.I and Section VIII.K of the preamble.
299

The following are summaries of the specific public comments under this comment:

Commenters emphasized that it is essential that states be given sufficient flexibility in 

determining how to incorporate biomass energy into their implementation plans. Commenters

said given the number of existing state programs addressing biomass and biomass energy, it is 

imperative that States be able to design Section 111(d) implementation plans that are consistent 

with those programs and avoid subjecting forest owners and biomass energy facilities to 

duplicative or inconsistent regulatory programs. Commenters said further, giving States broad 

latitude to incorporate biomass energy into their implementation plans is consistent with the 

cooperative federalism principles that are embodied in Section 111(d) and give States primary 

authority to establish standards of performance and implementation plans to achieve those 

standards.

Commenters said that it is critical from a policy perspective that the EPA and States adopt GHG 

regulations that avoid unnecessary complexity and are capable of implementation. Commenters

said evaluating changes in forest carbon stocks at an appropriate scale, such as at the national 

level, captures essential information about the sustainability of forestry practices from a carbon 

perspective consistent with established international norms and supporting science. Commenters

said in contrast, a narrowly focused stand, state or regional-based approach that incorporates 

chain-of-custody accounting for biomass feedstocks would add significant complexity and cost 

to the regulatory program at the risk of making biomass utilization uneconomic without 

providing additional useful information with respect to sustainability from a carbon perspective.

Comment 56: Small generators have special concerns

Response 56: As discussed in section V of the final rule preamble of the CPP, the EPA believes 

the BSER approach provides compliance options (including ERC credits) that are available to 

every affected source. Moreover, states have the flexibility to assign emission rate or emission 

limits as it best sees fit, and therefore can accommodate concerns of a particular units. The final 

CPP BSER does not prescribe any specific utilization for individual units.

The following are summaries of the specific public comments under this comment:

Commenters indicated that municipal generators face additional challenges. Commenters

indicated that three of Nebraska's six utilities affected by the Clean Power Plan are municipal 

generators, and these utilities each serve communities of approximately 50,000 or fewer using 

only one or two power plants with units of 100 megawatt capacity or less. Commenters said that 

in addition to facing the challenges to public power utilities, the small scale of these municipal 

generators further restricts their ability to find flexibility under each of the building blocks of the 

EPA's proposed Clean Power Plan.

Commenters indicated that smaller generating facilities mean smaller efficiency gains per dollar 

spent on heat rate improvements described under Building Block 1 or demand-side energy 

efficiency measures described under Building Block 4. Commenters said that in addition, limited 

natural gas electric generation and a lack of access to robust natural gas supplies and 
300

infrastructure effectively rule out re-dispatch to natural gas facilities described under Building 

Block 2. 

Commenters also expressed concern about the proposal's treatment of smaller electric 

cooperatives. Commenters said that in the proposal the EPA notes that "the power sector is 

made up of a diverse range of companies that own and operate fossil fuel-fired EGUs, including 

vertically integrated companies in regulated markets, independent power producers, rural electric 

cooperatives and municipally-owned utilities, all of which are likely to have different ranges of 

opportunities to reduce [greenhouse gas (GHG)] emissions while facing different challenges in 

meeting these reductions." Commenters said that indeed, it is difficult for an electric cooperative 

such as Tri-State to comply with the Proposal because it is not vertically integrated. Commenters

said that the EPA acknowledges that cooperatives with smaller fleets may have a more difficult 

time because they do not have as much of an ability to re-dispatch among their own units. 

Commenters said that the EPA asserts, however, that the Proposal provides enough flexibility 

that this should not be much of an issue - the EPA is incorrect. Commenters said that in reality, 

the state targets are so stringent that all flexibility is removed and that the EPA assumptions in 

applying the four Building Blocks are so unreasonable that there is no way for a state to meet its 

goal without adopting all four Building Blocks and implementing them largely in line with the 

EPA's assumptions.

Comment 57: Small utilities that are minority co-owners of EGUs have no ability to make 

decisions about or exercise control over new projects, and should therefore be given some 

accommodation in meeting the standard set forth in the proposed rule.

Response 57: As described in section V of the final rule preamble of the CPP, the EPA believes 

its BSER provides for compliance options that are available to all units.

The following are summaries of the specific public comments under this comment:

Commenters said small utilities that are minority co-owners of EGUs have no ability to make 

decisions about or exercise control over new projects, and should therefore, be given some 

accommodation in meeting the standard set forth in the Proposed Rule. Commenters said states 

should be permitted and encouraged to use their discretion to address special considerations 

towards small utilities in order to equalize the playing field against their large utility 

counterparts.

Commenters are a minority owner, non-operating joint participant in at least one affected EGU -

the Hunter 2 Unit operated by PacifiCorp. Commenters said small utilities that are minority coowners of EGUs are strictly bound by contract as to what rights, if any, they may exercise in 

major decisions affecting those units. Commenters said in these circumstances, minority owners 

have no ability to initiate measures that would be required to implement actions necessary to 

complying with the requirements set forth in the Proposed Rule. Commenters said voting rights 

in such relationships typically vest in the majority owner(s) the ability to initiate - or not initiate -

large-scale capital projects. 
301

Commenters said HRI projects certainly fall into this category. Commenters said when small 

utilities have no ability to force HRI projects, they risk not being able to meet compliance 

deadlines, which ultimately brings into questions those small utilities' ability to maintain 

compliance with applicable rules. Commenters said small utilities' inability to institute HRI 

projects also highlights the potential for varying motivations between large, majority owners and 

their small, co-owner counterparts. 

Commenters said small utilities will have far fewer resources to satisfy regulatory 

obligations. Commenters said in addition, large operating utilities may not share in the same 

motivation that small utilities have to achieve the relevant emission reduction levels, which will 

require significant capital expenditures. Commenters said larger utilities managing their fleet of 

EGUs will be competing for capital dollars with other EGUs. 

Commenters said moreover, larger utilities, or interest-controlling co-owners typically have at 

their disposal other options to meeting the requirements that are not available to small utilities. 

Commenters said for example, large utilities may have interstate carbon trading programs in 

which to satisfy emissions reductions requirements contemplated in the Proposed Rule. 

Commenters said larger utilities that are also operators have the ability to operate EGUs in such 

ways to meet compliance requirements, such as by using different dispatching techniques, where 

small utilities have no such ability.

Commenters emphasized that states should be permitted and encouraged to exercise their 

discretion to address special considerations towards small utilities in order to equalize the 

playing field against their large utility counterparts. 

Comment 58: Flexibility must be combined with accountability. The EPA should be careful not 

to create the expectation that the CPP's targets are all that can be asked of the electric utilities. 

Additional reductions should be required.

Response 58: The EPA is establishing a Best System of Emission Reductions consistent with the 

111(d) requirements and considerations.

The following are summaries of the specific public comments under this comment:

Commenters said the CPP provides flexibility, and allowing flexibility in achieving the goals can 

have significant benefits to stakeholders. The commenters said however, the final plan must be 

crafted in a way that ensures environmental results, marrying flexibility with accountability. The 

commenters said because an effective response to climate change may require additional 

emissions reductions from the power sector, the EPA should be careful not to create the 

expectation that the Clean Power Plan's targets are all that can be asked of the electricity 

utilities.

Commenters said the rule could be a little more aggressive and include additional elements that 

will serve both to the goals of reducing greenhouse gases while giving state more flexibility. 

Commenters expressed support for the CPP, but said they don't go far enough.
302

Comment 59: Greater flexibility is need for Interstate Cooperative efforts, including flexible 

frameworks within plans will be approved and market-based options that do not require an 

interstate agreement. In addition to flexible options, the states need adequate time to meet, 

discuss, and create multi-state plans.

Response 59: See section VIII of the final rule preamble of the CPP for the EPA’s response to 

this comment.

The following are summaries of the specific public comments under this comment:

Multi-state plans. Commenters said there is a compelling rationale for states to enter into multistate plans, including increased flexibility and cost-savings opportunities. Commenters said that 

while there are advantages to this type of arrangement, the Proposed Rule fails to take into 

consideration the arrangement from a regulatory standpoint and the time involved in reaching an 

enforceable interstate agreement. Commenters said to be binding or obligatory upon any state, 

Congress must approve any agreements or compacts regarding the control of air pollution. 

Commenters said additionally, not all states will be able to enter into joint plans covering every 

aspect of their EPA-mandated plan.

Commenters indicated that the rule must contain maximum flexibility and more time to design 

interstate plans and interstate carbon trading programs.

Market-based emissions trading. Commenters said the EPA needs to provide additional 

flexibility regarding emissions trading mechanisms that are market-based and do not require an 

interstate agreement. Commenters said the EPA should clarify that states can cooperate 

regionally without blending state goals, whether rate-based or mass-based, into a regional goal 

for which all cooperating states are jointly liable. Commenters emphasized that this should 

include ensuring that only the state that fails to meet its obligation is penalized under a multistate approach and not the other states participating in the program. 

Carbon credit and liabilities. Commenters said the EPA should support approaches that allow 

states to allocate credit for zero-carbon resources, along with approaches that allow states to 

reach agreements on the allocation of carbon liabilities. Commenters said this includes ensuring 

that existing tracking mechanisms for renewable energy, such as the Western Renewable Energy 

Generation Information System (WREGIS), are compatible with the final rule. 

Extensions. Commenters said the final rule should make it clear that a state qualifies for the 

available extension as long as it is committed to coordinating action with other states. 

Commenters said this should include allowing states to pursue a dual-track approach -continuing 

to evaluate both multi-state options and single-state options. 

Additional guidance. Commenters said the EPA should also provide greater clarity on the 

documentation requirements and compliance options for multi-state and regional plans, including 

the option for states to participate in more than one multi-state program. 
303

Commenters said for a multi-state plan to be a feasible option under the Proposed Rules, the 

EPA needs to provide flexible frameworks within which plans will be approved and marketbased options that do not require an interstate agreement. Commenters said in addition to flexible 

options, the states need adequate time to meet, discuss, and create multi-state plans.

Comment 60: T&T Supplemental - The building blocks were created to give the states 

flexibility in meeting emission reduction goals. Similar flexibility was not given to the Navajo 

Nation.

Response 60: See sections V, VI, VII, and VIII of the final rule preamble for the EPA’s response 

to this comment. 

The following are summaries of the specific public comments under this comment:

Commenters said the Building Blocks were created to give the states flexibility in meeting 

emission reduction goals. Similar flexibility was not given to the Navajo Nation. A Navajo 

Nation plant adopted under the proposed supplemental rule will not contribute to a "vibrant and 

growing economy"

Comment 61: Flexibilities to States

Response 61: We disagree with these comments. We describe in the preamble the flexibilities 

available to the states, including the additional flexibilities afforded by the final rule, compared 

to the proposal. See sections V and VIII of the final rule preamble for more discussion of state 

flexibilities.

The following are summaries of the specific public comments under this comment:

The commenters stated that, in prior rule makings, EPA has provided a target(s) for compliance 

and the goal for reduction, and each state was responsible for determining the best method of 

implementation. However, the commenters stated that in this rule making, EPA mandates a 

target for 2030 (the overall goal) and then interim targets for 2020 and every two years 

thereafter, thus usurping the state's autonomy to determine what is necessary to insure safe, 

reliable, cost effective electricity for their citizens. The commenters stated that in 44 years of the 

CAA, the EPA did not micromanage the states, effectively eradicating their autonomy. The 

commenters encouraged the EPA to establish the goal and allow the states to determine the glide 

path and technical solutions necessary to achieve the goal thus insuring safe, reliable, 

environmentally sound, low cost electricity.

The commenters stated that the stringency of the proposed rule usurps states authority because 

states cannot exercise the flexibility in establishing the performance standard allowed by section 

111(d). Commenters stated that the proposed rule dictates all key policy choices that should have 

been left to the states. The commenters stated that EPA has claimed a high degree of flexibility 

afforded to states under the proposed rule, but the rule is not flexible. Commenters stated Section 
304

111(d) is intended to provide a framework for States to establish regulations on affected sources; 

states are afforded a number of mechanisms to make such standards feasible and effective. 

Commenters stated that this is clearly not the case and the EPA is proposing binding emission 

reduction targets that each State would be legally obligated to meet. See 79 Fed. Reg. at 34,892; 

see also proposed 40 C.F.R. 60, Subpart UUUU; Section 60.5740(a3ii).

Commenters said that the only flexibility allowed under the standard is to determine where to 

require even more stringent standards within certain building blocks should one block not be 

achievable, and that the mere shifting of targets within building blocks does not really provide 

flexibility to states. 

Comment 62: Proposed Rule does not provide states' flexibility to establish the performance 

standard – states cannot take into account "remaining useful life" and other factors

Response 62: The EPA maintains that the final rule provides ample flexibilities to states. States 

are allowed to use the BSER measures, or other measures in their state plans to comply with the 

goals; there are flexibilities within the BSER measures and how they are executed; and states 

also have non-BSER measures at their disposal. See sections V.A and VIII.A. of the final rule 

preamble of the CPP for more information.

The following are summaries of the specific public comments under this comment:

Commenters argued by proposing binding, inflexible State emission reductions targets without 

the site-by-site analysis provided for in the CAA and regulations, the EPA is violating Congress' 

intent to allow States to adjust standards and emissions controls to fit the fleet of existing 

sources. Commenters also argued that the EPA did not consider the investments made by 

consumers to maximize benefits throughout a generating facility's useful life.

Commenters noted that state flexibility is specifically addressed in section 111(d)(1), EPA must 

permit a state to consider, "among other factors, the remaining useful life" of existing sources 

when applying performance standards. Commenters provided examples of factors that can be 

considered, including costs, non-air quality health and environmental impacts, energy 

requirements, physical impossibility, technical feasibility, the costs and feasibility of installing 

controls considering the plant age, location, and process design. Commenters said that the 

proposed rule does not adhere to the statute's requirement that states be given maximum 

flexibility in applying BSER in setting standards of performance for existing sources based on 

the unique circumstances of their states. Commenters stated that the statute gives states the 

flexibility to establish the stringency of performance standards, the form that standards must 

take, the types of compliance measures EGUs may use to meet state performance standards, and 

the schedule under which EGUs must comply. For example, the commenters noted that states 

should be free to develop their own "glide paths" to achieving the emission reduction goals for 

the first compliance period.

Commenters believed the EPA structured the Proposed Rule in a way that would prevent 

individual states from considering "the remaining useful life of the existing source" and other 

factors in applying a state-established performance standard. The commenters argued the 

proposed rule infringed upon states' rights and ability to consider remaining useful life and other 
305

factors. Commenters felt the "Agency's overreach" would result in the stranding of assets, which 

would impact rural electric cooperatives due to their relative small size, limited portfolio of 

resources, and recent significant capital investments.

Commenters pointed to the 1977 Amendments and stated that the Amendments expressly 

provided that states determine the standard for existing sources, and that states have the authority 

when regulating existing sources to take into consideration the costs of compliance and other 

nonair quality impacts and energy requirements. (Pub. L. No. 95-95, 91 Stat. 700 (1977)). The 

commenters stated that the House Report of the Legislative History confirms congressional 

intent to continue state primacy and protect the investment backed expectations represented by 

existing sources, and noted the language that, "the State would be responsible for determining 

the applicability of such guidelines to any particular source or sources" and "Unless the State 

decides to adopt and enforce more stringent standards, the State plan would be expected to take 

into account the remaining useful life of the source (or sources)." 

Commenters argued that the duty Congress imposed on EPA to allow states to consider the 

remaining useful life of the individual sources is further expanded in EPA's 1975 regulation at 40 

C.F.R. 60.24(f). That regulation provides:

"States may provide for the application of less stringent emissions standards or longer 

compliance schedules than those otherwise required by paragraph (c) of this section, provided 

that the State demonstrates with respect to each such facility (or class of facilities): (1) 

Unreasonable cost of control resulting from plant age, location, or basic process design; (2) 

Physical impossibility of installing necessary control equipment; or (3) Other factors specific to 

the facility (or class of facilities) that make application of a less stringent standard or final 

compliance time significantly more reasonable."

Commenters said EPA rejected the case-by-case exceptions described in the federal 

implementing guidelines (40 C.F.R. 60.24(f)) in its proposed rule.

Commenters noted that in the implementing regulations for Section 111(d) (Subpart B), EPA 

expressly acknowledged states' authority to establish performance standards. Commenters

quoted Subpart B "States will have primary responsibility for developing and enforcing control 

plans under Section 111 (d)" and "will also have authority to grant variances in cases of 

economic hardship ...." and commenters cited Subpart B: "Given the variety of circumstances 

that may be encountered in controlling existing as opposed to new sources, it makes sense to 

have the States develop plans based on technical information provided by EPA and make 

judgments, subject to EPA review, concerning the extent to which less stringent requirements are 

appropriate." 

Commenters stated that the EPA guidelines do not allow the state to set less stringent goals or 

longer compliance schedules or consider the remaining useful life or other factors and thus the 

proposal is contrary to the CAA. Commenters asserted that states have unique site-specific 

knowledge that allows them to design more effective emission standards. 

Comment 63: State Flexibilities
306

Response 63: The EPA maintains that the final rule provides ample flexibilities to states. States 

are allowed to use the BSER measures, or other measures in their state plans to comply with the 

goals; there are flexibilities within the BSER measures and how they are executed; and states 

also have non-BSER measures at their disposal. See sections V.A and VIII.A. of the final rule 

preamble of the CPP for more information.

The following are summaries of the specific public comments under this comment:

The commenters said the binding emission goals proposed for each state are sufficiently 

stringent that states will be unable to meet them unless they: go beyond the traditional insidethe-fenceline first block and significantly altering their energy and resource policies; or retire 

units or drastically curtail production from existing coal-fired power plants. Commenters stated 

that this comes at a heavy price - for individual sources that may be required to shut down before 

the end of their useful lives, with the potential for huge stranded investments, or at the massive 

cost of adding otherwise unnecessary renewable energy. 

Comment 64: State Goals

Response 64: The EPA has converted the rate-based goals to mass-based goals. See section VII 

of the final rule preamble of the CPP and the CO2 Emission Performance Rate and Goal 

Computation TSD for CPP Final Rule supporting the final CPP for the final mass-based goals.

The following are summaries of the specific public comments under this comment:

Commenters stated that while states might technically be free to vary from the BSER level of 

control of each building block, the practical effect is that because of the magnitude of the 

proposed BSER emission reductions, EPA has established the level of control that each state 

must meet and states do not have the ability to set their own standards of performance. 

Commenters stated that the State may convert the EPA-set state goal into a rate- or mass-based 

goal but cannot change the number, and the State has leeway to "assign the emission 

performance obligations to its affected EGUs, "but only", as long as, the required emission 

performance level is met.

Commenters stated even if a State were to determine that the emissions reduction targets set by 

the EPA was inappropriate and could not reasonably be achieved, then states have no power 

under the proposed rule to change the emission reduction goal EPA has set for it based on that 

inability and would still be required to submit a plan that satisfies the EPA's binding targets, or 

risk the imposition of a federal implementation plan administered by the EPA. 

The commenters concluded that EPA must modify its proposed rule to allow states to adjust their 

goals as necessary to preserve state authority "to adopt whatever mix of emission limitations it 

deems best suited to its particular situation." Train v. NRDC, 421 U.S. at 79 (1975), see also 

Union Elec. Co. v. EPA, 427 U.S. 246, 267 (1976) (noting that "the State has virtually absolute 

power in allocating emission limitations so long as national standards are met . . ."). 

Comment 65: State Flexibilities
307

Response 65: The EPA maintains that the final rule provides ample flexibilities to states. States 

are allowed to use the BSER measures, or other measures in their state plans to comply with the 

goals; there are flexibilities within the BSER measures and how they are executed; and states 

also have non-BSER measures at their disposal. See sections V.A and VIII.A. of the final rule 

preamble of the CPP for more information. 

The following are summaries of the specific public comments under this comment:

Commenter argued that the EPA has not done a source-by-source analysis of each source in the 

state that would be subject to the proposed guidelines, and noted that is the job of the states in 

setting the standards and developing its plan. The commenters argued that the express language 

in Section 111(d) for consideration of remaining useful life and other factors suggests that the 

guidelines BSER proposed by EPA needs to be presumptive so state specific analyses can 

consider remaining useful life and/or stranded assets in developing state plans.

Commenters said that this rule has less compliance flexibility than what is typically allotted to 

states under section 111 (d). Commenters said, section 111 (d) grants states the authority, in 

applying a standard of performance to particular sources, to take into account the source's 

remaining useful life or other factors. Commenters said, EPA suggest that, given the degree of 

flexibility in the BSER approach, the statutory allowance for source specific considerations will 

not be allowed. Commenters said, the statutory directive to allow states to take those factors into 

consideration should not be ignored in any context, but especially here where our options are so 

limited already.

Comment 66: Commenters stated that there is no specific language in section 111(d) or 

elsewhere in the act that prohibits states from including measures other than performance 

standards, implementation, and enforcement measures, provided that they reduce emissions from 

affected EGUs.

Response 66: We agree that there is no such explicit prohibition. In particular, as stated in the 

proposal, the terms of CAA section 111(d) (1) do not explicitly address whether, in addition to 

emission limits on affected EGUs, state plans may include other measures for achieving the 

emission performance level. 79 FR at 34902. The proposed portfolio approach would have 

allowed states to include such other measures, such as demand-side efficiency mechanisms, in 

their state plans. See 79 FR at 34902–03. But as explained in section VIII, after considering 

comments on the proposed portfolio approach, EPA is not finalizing that approach. Instead, EPA 

is finalizing an option to submit a “state measures” plan type, under which a mass CO2 emission 

goal may be partially or entirely achieved through state measures that impose requirements on 

entities other than affected EGUs and that are not included in the federally enforceable 111(d) 

state plan, provided the state submits standards of performance for CO2 emissions from affected 

EGUs in the form of a federally enforceable “backstop” that would be triggered if the state 

measures fail to achieve the required CO2 emission performance level. See section VIII. Thus, 

the state measures approach provides the flexibility that the commenters favored while ensuring 

that federally enforceable standards will be in place if needed.

Comment 67: Comments in support of the level of flexibility provided in the rule
308

Response 67: We appreciate the support and we note that the final rule differs from the proposed 

rule that the commenters commented on in certain respects. However, the final rule still provides 

the type of flexibilities suggested by the commenters.

The following are summaries of the specific public comments under this comment:

• Commenters commended EPA for the level of flexibility provided in the rule, 

specifically:

• The commenters supported different goals for each state to reflect existing policies and 

resource availability.

• The commenters supported option for states to select a mass-based standard.

• The commenters supported allowing states to decide how to achieve the emissions target.

• The commenters supported states’ ability to deploy the system or systems of emission 

reduction most appropriate for the emission sources in their state (23140).

Commenters stated that this flexibility will assist Arizona in achieving its emissions reduction 

target through greater reliance on renewable energy and energy efficiency measures than in 

EPA's goal assumptions.

Commenters stated that the procedures "similar to that provided by Section 110" allow states 

sufficient flexibility in meeting the state goal set thereunder to include in their compliance plans 

other measures (i.e., measures that are neither performance standards nor measures that enforce 

or implement performance standards). 

Comment 68: Goal Design 

Response 68: Please see section VII of the final rule preamble of the CPP for more information

regarding state goals. The EPA has also converted the rate-based goals to mass-based goals. See 

section VII of the final rule preamble of the CPP and the CO2 Emission Performance Rate and 

Goal Computation TSD for CPP Final Rule supporting the final CPP for the final mass-based 

goals.

The following are summaries of the specific public comments under this comment:

Commenters stated, U.S. EPA's general section 111 (d) implementing regulations reinforce the 

range of approvable plan designs that U.S. EPA and the states may jointly develop. Commenters 

said, the general regulations track the statute's language, directing that state plans are to 

"establish emission standards for designated pollutants from designated facilities and provide for 

the implementation and enforcement of such emission standards." 40 C.F.R. section 60.21 (c) 

(emphasis added). Commenters said, although the standards "shall apply to all designated 

facilities within the State," the precise way in which the standards are applied is to be defined in 

the state plans themselves. See id. At section 60.24(b) (3). Commenters said, though careful 

monitoring and reporting are required to ensure that facility emissions decline as required, see 

id.at section 60.25, states may chart a range of paths towards the BSER emission levels. 
309

Commenters said, U.S. EPA maintains authority over the timing of this process via a 

requirement that plans include compliance schedules with "legally enforceable increments of 

progress" for "each designated facility or category of facilities." Id. at section 60.24(e) (1). 

Commenters said, thus, the regulations, appropriately, allow for state creativity while 

maintaining close U.S. EPA oversight to ensure that states stay on track.

Commenters stated, accordingly, the general regulations provide only limited constraints on just

how emission standards themselves are to be designed. Commenters said, they do set broad 

terms, providing that "[e]mission standards shall either be based on an allowance system or 

prescribe allowance rates of emissions except when it is clearly impracticable"- if so, other 

methods are presumably allowed. See id. At section 60.24(b) (1). Commenters said, mass-based 

trading programs qualify as allowance systems, and these are plainly allowed (and if they were 

not now permitted, U.S. EPA would still be free to specifically allow them, or other mass-based 

programs, in this instance, via notice-and-comment rulemaking, as it proposes to do). 

Commenters said, in sum, just as the statute does, the regulations leave a wide array of emissionstandards designs open to the states. 

4.8 OTHER GOAL-SETTING APPROACHES

Section 4.8 covers public comments related to other goal-stetting approaches to the final and 

interim goals. 

Commenters have raised a number of issues related to this subsection which are organized by 

topics (comments) below. Responses are provided for these topics.

Comment 1: Commenters offered an alternate plan from New York State.

Response 1: See section V of the final rule preamble of the CPP for the EPA’s response to this 

comment.

The following are summaries of the specific public comments under this comment:

Commenters noted that an "alternate plan has been outlined in detail for New York State. 

Commenters noted that "Even though New York is distant from the U.S. sites that are the most 

advantageous for harnessing wind and solar energy, a peer- reviewed report by scientists from 

leading universities have described and justified a plan that fulfills the State's energy needs, 

virtually without exception, by 2020 (the exception being air transport)."

According to commenters, “The plan relies on solar energy, wind energy, and energy derived 

from a small number of water turbines" and accomplishes the following:
310

• "Reduces demand by about 37% through various efficiencies" 

• "Creates more jobs than jobs lost (aided by the fact that most energy will be produced instate)" 

• "Improves price stability since energy costs from wind and the sun will be virtually zero" 

• "Decreases the number of deaths per year due to air pollution by 4,000."

Comment 2: The Dynamic Distribution System

Response 2: See section VIII of the final rule preamble of the CPP for the EPA’s response to 

this comment.

The following are summaries of the specific public comments under this comment:

Commenters recommended "The Dynamic Distribution System: Encouraging competitive 

markets forces to complement compliance goals will move the U.S. toward steady and sustained 

greenhouse gas reduction goals; redesigning the energy distribution market throughout the U.S. 

to allow for new energy generation market entrants and even individual businesses and homeowners to sell excess self-generation energy in a fair, open, and transparent dynamic distribution 

system marketplace is the recommended path."

Comment 3: The EPA should not compel the creation of multi-state collaborations, but should 

support multi-state collaboration when states request it

Response 3: See section VIII of the final rule preamble of the CPP for the EPA’s response to 

this comment.

The following are summaries of the specific public comments under this comment:

Commenters said each state has its own unique energy supply, distribution and customer end use 

infrastructure that they weigh when determining the cost of compliance and level of hardship to 

electricity consumers in the state under the EPA's CPP targets. Commenters said the EPA should 

not compel the creation of multi-state collaborations, but should allow states to voluntarily 

provide for cooperative agreements for CPP compliance if they determine it is mutually 

agreeable and EPA determines that equivalent environmental performance is delivered. 

Commenters said that the EPA should not establish CPP targets that are not economic or feasible 

within each state or based on an assumption of state collaborations.

Comment 4: Regional versus state specific goals
311

Response 4: See section VIII of the final rule preamble of the CPP for the EPA’s response to 

this comment.

The following are summaries of the specific public comments under this comment:

Several commenters said the EPA's proposal suggests that states that coordinate implementation 

of their compliance plans would need to combine all of their state goals in a multi-state group 

and implement the same multi-state goal. Several commenters said that the combining of state 

goals to create a multistate goal represents only one possible approach to multistate coordination 

and the EPA should enable multistate approaches under which individual states keep their state 

goals and nevertheless allow for cooperative activities between states. 

The commenters said enabling regional approached to compliance may have implications for 

how the EPA determines the extent of available renewable energy in constructing each state's 

goals. The commenters said the regional approach to state goal-setting described in the EPA's 

NODA is one such way that the state goal methodology can be better aligned with the principle 

of interstate trading of renewable power and associated attributes.

Comment 5: The best approach to achieve the goals set forth by the CPP is a regional approach, 

and not a state-by-state approach

Response 5: See section VIII of the final rule preamble of the CPP for the EPA’s response to 

this comment.

The following are summaries of the specific public comments under this comment:

Several commenters said they believe that the best approach to achieve the goals set forth by the 

Clean Power Plan is a regional approach - and not a state-by-state approach. Commenters said if 

the approach to Clean Power Plan was a regional approach, then many of the compliance hurdles 

and constraints would be alleviated. Commenters said this is particularly true given the vast 

majority of electricity is bought and sold within an RTO region, all of which (save Texas) have a 

multi-state footprint. Commenters said in addition, studies by RTOs indicate costs are minimized 

using a regional approach, and in fact, MISO has demonstrated through detailed analysis that 

regional approaches are more economic. Commenters said the electricity industry already 

operates on a regional basis, and electrons flow without regard to geographic conventions: What 

matters in the electric transmission business are the boundaries between transmission operators. 

Commenters were very supportive of allowing for mass-based, regional plans amongst state to 

achieve compliance and create region-wide solutions like the successful Regional Greenhouse 

Gas Initiative.

Commenters stated EPA should select Regional Approach as its primary model for the BSER. 

The commenters acknowledged that there is a great deal of flexibility for states or regional 

groupings of states to develop compliance options for the proposed rule, even outside the direct 

framework of the BSER. The commenters said this flexibility no doubt will help mitigate some 

of the severe job impacts that could be a consequence of the proposed rule. The commenters said 
312

even so, these impacts are expected to be substantial; the 46-50 gigawatts of capacity EPA 

expects to be taken out of service under the more stringent proposed Option 1 represents (by 

commenters estimate) at least 7,200 direct jobs at power plants with a substantial number of 

indirect jobs, perhaps as many as 60,000, from companies that supply the power plants and from 

businesses that cater to the operations' employees. The commenters said Option 2 would reduce 

the amount of capacity expected to be taken out of service by about one-third, and would 

substantially mitigate the harsh impact to workers and communities, with only very moderate 

impacts on the carbon dioxide emissions reduction expected. The commenters said in context, 

EPA states clearly that the expected carbon reduction from the proposed rule is less than that for 

either of the two light duty vehicle rules it has promulgated. The commenters said EPA should 

encourage states to combine their compliance efforts via regional approaches; substantial 

efficiencies and potential cost-savings are likely if states are allowed to work together, with little 

or no impact on the effectiveness of the rule, and those efficiencies could further ensure grid 

reliability and preserve jobs and communities. 

Comment 6: Regional approaches are most cost effective mechanisms for compliance - role of 

RTOs

Response 6: See section VIII of the final rule preamble of the CPP for the EPA’s response to 

this comment.

The following are summaries of the specific public comments under this comment:

Commenters said regional approaches to compliance provide the easiest mechanism for handling 

the interstate effects of state plans and recent analyses, including one from MISO and one from 

the Brattle Group, show that regional approaches are the most cost effective mechanisms for 

compliance. Commenters said although EPA has not defined an exact approach to creating a 

regional plan, EPA notes that Regional Transmission Operators, such as PJM Interconnection, 

could have a role in implementing, or at least logistically facilitating, multi-state efforts. 

Commenters stated that a regional approach would help Ohio overcome technical challenges 

such as cross-state power flow and crediting and, more importantly, would lower implementation 

costs. Commenters added that at the same time, it would facilitate the work of the region's 

business community responsible for carrying out emission reductions by reducing the number of 

markets and variability between them.

Commenters said in addition to the role that PJM could play in meeting a regional compliance 

target that included Ohio, Ohio AEE believes that PJM could help Ohio realize renewable and 

energy efficiency resource gains. Commenters said PJM already has a system in place to utilize 

demand response resources, and according to PJM, these demand response resources are 

competitive with wholesale electricity generation in some load areas. Commenters said as Ohio 

increases its energy efficiency resources, PJM could integrate these into its existing system. 
313

Comment 7: "Regionalizing" the RE goal computation is technically unsupportable. The EPA 

must revisit any computation method for RE and apply it based on state-specific factors and 

abilities

Response 7: See section V.E. of the final rule preamble of the CPP for the EPA’s response to 

this comment.

The following are summaries of the specific public comments under this comment:

Commenters said regionalizing the RE goal computation is technically

unsupportable. Commenters said they understand that Ohio was grouped with other states based 

in part on "regional similarities" that can be inferred from the state-level technical potential 

reported in an NREL GIS-based analysis. Although commenters didn't dispute the quality of the 

NREL study cited, they noted that there is significant variation in the various renewable 

technology potentials amongst the states grouped with Ohio. Commenters said although it is 

unclear from the available information, it appears that the East-Central region was grouped based 

on the technical potential of rooftop solar - however, in no IPM modeling study did solar 

generation demonstrate significant growth in Ohio.

Commenters urged EPA to clarify the methodology of grouping states together, with emphasis 

on those renewable potentials that are demonstrated to be similar amongst the various regions. 

Commenters said it is clear that if EPA is to pursue setting of renewable goals based on regional 

potential, more reasonable groupings must be used. Commenters said in setting BSER, U.S. EPA 

must examine what is demonstrably achievable, supported by technically sound projections, and 

cost effective. Commenters said the rational for grouping states based on a wide range of 

technical potentials is unclear, and said if U.S. EPA insists on continuing with this approach U.S. 

EPA must consider what renewables are currently in use and being developed in each state. 

Commenters said undoubtedly, renewable potential can be very different from state-to-state, 

even those within certain presumed regions. Commenters said the EPA has derived unrealistic 

RE goals, and has ignored the fact that many state RE portfolios have a cost safety valve to 

protect rate-payers from exorbitantly high RE costs. Commenters said however, U.S. EPA 

assumes when setting BSER that a state can achieve its entire RPS goal thereby artificially 

inflating RE potential and ultimately assumed reductions. Commenters said the EPA must 

analyze each states RPS programs in more specificity to truly inform a cost-effective and 

technically feasible BSER for RE.

Commenters offered several instances which clearly demonstrate that the EPA's "regional" 

approach to determining a state's RE goal is not appropriate and the EPA should be determining 

this ability on a state-by-state basis. 

Commenters stated the EPA notes that for some states interim and final targets never reach the 

level they actually achieved in 2012. Commenters said clearly in these cases the "best practices" 

is not computed accurately if a state does not even have to achieve in 2030 what they were 

capable of achieving in 2012. 

Commenters stated the EPA notes Alaska and Hawaii are not grouped with other states given 

their unique locations, and the EPA developed RE generation targets for each of those states 
314

based on the lowest values for the six regions evaluated. Commenters said the EPA is giving 

consideration to unique location but ignores with all other states uniqueness actually related to 

RE potential. 

The EPA acknowledges the approach to quantification of a state's RE generation target does not 

explicitly account for the amount of fossil fuel-fired generation in that state and therefore, the 

application of their approach could yield, for a given state, an increase in RE generation that 

exceeds the state's reported 2012 fossil fuel-fired generation. [79 FR 34868] Commenters

wondered, what would that additional RE displace.

Commenters said fundamentally, this approach, in some instances will either drive a state's final 

goals up or down, inequitably compared to other states, and this cannot possibly be considered a 

best practices scenario. Commenters said the EPA must revisit any computation method for RE 

and apply it based on state-specific factors and abilities.

Comment 8: States need more time to develop multi-state plans - the two years for coordinating 

with other governments may not be sufficient. The EPA should do more to facilitate 

development and implementation of regional plans or arrangements, and one way is for the rule 

to recognize "modular" plans like those discussed by CARB.

Response 8: See section I.A., III.A. and VIII of the final rule preamble of the CPP for the EPA’s

response to this comment.

The following are summaries of the specific public comments under this comment:

Need more time for plan development. Commenters said while EPA affords states more time to 

develop multi-state plans (two years, rather than the one year allotted for an individual state 

plan), two years to coordinate with other governments may not be sufficient. Commenters said 

the additional time allowed for multi-state coordination is further muted by interim filings and 

target deadlines that must include specific implementation details. Commenters said as proposed, 

the timeline for submitting plans and for implementation of those plans does not contemplate the 

time need for inter-state coordination (even in the absence of a multi-state plan), nor for 

development of necessary infrastructure improvements needed to execute the mandated 

reductions.

Enforcement waivers and extended deadlines. Commenters said furthermore, EPA should do 

more to recognize the interrelated nature of the electricity grid in various regions and provide 

more robust measures and provisions that facilitate the development and implementation of 

regional plans or arrangements, including recognition of measures that address enforcement 

waivers or extended deadlines if warranted. Commenters said indeed, as EPA itself noted, 

"system operators have offered suggestions in using regional approaches to implement CAA 

section 111(d) while maintaining reliable, affordable electricity." (79 Fed. Reg. at 34,846) 

Commenters indicated such regional approaches cannot be successfully implemented within the 

time-lines set forth in the Proposed Rule.
315

Modular Plans. Commenters said one way to facilitate multi-state agreements is for EPA's rule to 

recognize "modular" plans, like those that have been discussed by the California Air Resources 

Board. Commenters said these individualized plans would allow states that are in accord on 

specific matters to enter into compliance agreements where a comprehensive multi-state plan 

(where all of the parties agree to all of the necessary terms and conditions that would be required 

for a comprehensive multi-state plan) may be infeasible. Commenters said not all states are 

similarly situated with regard to meeting their state targets, or the measures that would most 

likely be employed to get there. Commenters said issue-specific agreements with another state or 

groups of states could be utilized to advance a single objective and facilitate attaining the states' 

targets. Commenters stated these types of arrangements would also allow better alignment of 

individual issues, such as the treatment of energy efficiency and renewable energy, and would 

facilitate regional coordination regarding critical electric-grid related considerations.

Comment 9: Additional clarity is needed regarding some issues related to multi-state/regional 

compliance, and EPA must provide additional assistance and infrastructure related to multistate/regional compliance

Response 9: See sections VIII of the final rule preamble of the CPP for the EPA’s response to 

this comment.

The following are summaries of the specific public comments under this comment:

Commenters stated that to support multi-state approaches to 111(d) implementation, the EPA 

should:

“Provide greater clarity on requirements for states to qualify for the 2-year extension to submit 

state plans when coordinating action with other states.

Clarify that states can cooperate without blending state goals into a multi-state goal (which is in 

accordance with best emissions tracking and accounting practices to ensure appropriate crediting 

and to avoid double counting). Indeed, multi-state cooperation is most likely to arise among 

states that have individual state plans that recognize reductions or credits from other states - this 

approach should qualify as a multi-state approach eligible for an additional year extension. 

Provide the necessary assistance and infrastructure for states to accomplish multistate 

approaches. For example, EPA should provide or approve the use of credit tracking systems for 

states that wish to implement trading programs and accept reductions or credits from other states 

as valid compliance currency. 

For rate-based trading between states, EPA would need to assist states on Evaluation, 

Measurement and Verification (EM&V), tracking and minimum requirements for crediting to 

enable a tradable credit system, and clarify how states could take advantage of emissions 

reductions driven by shifts in utilization that occur across state lines. EPA should also assist 

states with a tracking system or enable states and regions to build existing renewable energy 

tracking systems for this purpose. 
316

Clarify several steps involved in developing a regional plan including (a) conversion to a massbased goal in a manner that does not disadvantage states that choose this option, and (b) the 

development of state 111(d) plans in states that are "split," with part of their generation in one 

regional transmission organization ("RTO") and the remainder in a different or no RTO.”

Commenters stated EPA should provide states with detailed directions, equations, and examples 

explaining how a rate-based multi-state goal can be calculated by states that agree to participate 

together in a multi-state plan. The commenters said this guidance should also include directions 

on how to convert a multi-state rate-based goal to a multi-state mass-based goal.

Comment 10: For states choosing multi-state compliance option, the EPA should retain the 

approach of developing state-specific goals, rather than requiring multi-state or regional goals, 

the EPA or a third party should provide credit tracking system, and the EPA should allow for 

extension of plan submittals

Response 10: See section VIII of the final rule preamble of the CPP for the EPA’s response to 

this comment.

The following are summaries of the specific public comments under this comment:

Several commenters said that the EPA should retain its approach of developing state-specific 

goals and should not require multi-state or regional goals for states choosing multi-state 

compliance options. Commenters said the EPA's proposal suggests the development of joint 

performance standards for states wishing to coordinate their compliance plans. Commenters

noted that this would likely involve the development of a single emissions rate target for multiple 

states. Several commenters said there is little reason to expect that states with goals less stringent 

than an average single goal would be willing to accept a more stringent regional average goal.

Commenters said given the timeframe available for such multi-state plan development, including 

the likely inability of states to agree on a single emissions rate target and develop a program to 

implement such a mechanism in a timely fashion, it will be extremely difficult to achieve.

Commenters said that given the complexity of the rule, states will likely need several years to 

fully examine their options for regional cooperation and to compare these approaches with statespecific compliance options, and at the end of this time consuming process, states may still 

decide to comply via strategies they can apply within their state boundaries. Commenters said 

however, states that have seriously examined regional compliance options should still qualify for 

the extension for completion of their state plans so long as they demonstrate that they are 

actively engaged in a process with other jurisdictions to consider multi-state coordination and 

that they are developing multi-state or individual state plans that contemplate such 

coordination. Commenters said that multi-state plans should provide for trading between states 

of credits representing tons of emissions or megawatt-hours of generation, and the EPA or 

another third part entity should provide a credit tracking system to be used by states wishing to 

participate.

Commenters said that the EPA points to RGGI as an example of a regional program with a single 

emission target, but said it is important to note that RGGI is made up of a group of similarly 
317

situated, like-minded states, all of whom had the same overall emission reduction goal - a 10 

percent reduction in carbon dioxide emissions - and required each state to agree to and pass 

model legislation. Commenters said on the other hand, the Western United States is an area that 

is very diverse in its generation resource mix and access to fuel supplies, whether they are minemouth coal supplies, wind resources, or rivers that supply an abundance of hydroelectric 

resources. Commenters said the application of BSER results in dramatically different emission 

rates to be achieved in the Western United States, which includes one of the highest emission 

rate goals (1,771 lb CO2/MWh in Montana) and the lowest emission rate goal (215 lb 

CO2/MWh in Washington). Commenters said this diversity creates potentially insurmountable 

hurdles for Western states to agree on a single emission rate target, and such a single target may 

not be appealing even to likeminded states given the complexities, including how states may be 

penalized for noncompliance, of enforcing a multi-state program with a single emission rate 

target on a state by state basis. Commenters therefore recommended that EPA retain its approach 

for developing state-specific emission rate targets, but allow states to develop creative and 

innovative multi-state compliance solutions.

Comment 11: The choice of which option to use for calculating a weighted average, rate-based 

CO2 emission performance goal for multiple states should be left to the states forming the multistate group. States should have the option of either relying on its modeling capabilities, or if 

state defers to its ISO, the ISOs modeling capabilities when establishing the state's goals.

Response 11: See section VIII of the final rule preamble of the CPP for the EPA’s response to 

this comment.

The following are summaries of the specific public comments under this comment:

Several commenters provided input regarding which of the two proposed approaches for joint 

demonstration of emission performance in multi-state plans should be used. Several commenters 

said the EPA proposed two alternative methods to calculate the weighted average emission rate 

goal for a group of participating states, and indicated that states should have the discretion to 

decide which approach makes the most sense for their multi-state jurisdiction. Commenters said 

that if only one option can be used, the second option (using projected quantity of electrical 

generation by affected EGUs each year in each of the states) is preferred because it 

acknowledges that different states within a multi-state grouping will grow at different 

rates. Commenters said if however, the first option is required (uses electricity generation by 

affected EGUs in each of the states during the 2012 base year), a multi-year baseline should be 

used instead of the unrepresentative (due to abnormally low natural gas prices) 2012.

Commenters said to assure that state goals are set which ensure reliability, manage cost and 

recognize the need to balance the interactions between the four building blocks on an hourly 

basis taking into account the regional market impacts, the state should be able to either rely on its 

modeling capabilities, or if the state defers to its ISO, the ISO's modeling capabilities when 

establishing the state's goals. Commenters said regional models will incorporate greater 

consideration of regional impacts on a state's goals by accounting for impacts and interactions 

between the region's electric resources.
318

Comment 12: Multi-state approaches

Response 12: See section VIII of the final rule preamble of the CPP for the EPA’s response to 

this comment.

The following are summaries of the specific public comments under this comment:

Several commenters argued that EPA lacks the expertise to properly assess costs savings 

associated with multi-state approaches. Commenters indicated it should be left to the 

participating states to make the economic determination that such an agreement is in the interest 

of the ratepayers. Commenters said that while the CAA does leave discretion to the 

Administrator, such economic consequences are so state-specific that it is beyond the EPA's 

ability to make those decisions, and therefore, the requirements should be limited to meeting the 

required emission reduction goals. Commenters said that even if EPA did have the expertise to 

properly assess costs savings associated with multistate approaches, it would be inappropriate to 

penalize states that are willing to and can reduce program costs by utilizing multi-state options or 

to gauge the reasonableness of the costs of state-specific goals by surmising potential economic 

benefits associated with theoretical multi-state approaches.

Commenters posed several questions regarding modeling for potential multi-state 

targets. Commenters asked:

If modeling is required for potential multi-state targets, should states model the individual state 

rate targets or a regional target.

Should the regional target be weighted by state fossil generation or some other metric

Should it be based on 2012 generation or projected generation

Comment 13: The EPA should impose a minimum gas generation share target by state. This 

could increase true flexibility, enhance opportunities for coordinated state action, and decrease 

overall economic burden of the CPP

Response 13: The EPA has revised its building block two assessment and determination of 

subcategory-specific rates. The regionalized building blocks help share some of the natural gas 

abatement potential across every state relative to proposal that limited building block two 

reduction potential within state. See section V.D for discussion of building block two.

The following are summaries of the specific public comments under this comment:

Commenters said that Building Block 2's re-dispatch step effectively displaces all coal 

generation in Mississippi, making the rule very inflexible. Commenters said that states and their 

utilities must plan based on the state-specific goals the EPA has derived. Commenters said that 

even if multi-state compliance and/or trading mechanisms could enhance flexibility in theory, the 
319

proposed goals and compliance schedule will in practice force states and utilities into actions that 

will increase costs and risk reliability impacts. Commenters said that several of these issues 

could be addressed by requiring a minimum share of gas by state, and then adjusting other state 

requirements to provide actual flexibility in developing compliance plans.

Commenters said a modified goal setting methodology with minimum state gas generation shares 

or alternatively, maximum coal generation shares or maximum average emissions rates - would 

also provide real flexibility to states such as Mississippi to maintain some generation diversity 

and would help to minimize overall compliance costs because states would not be forced into 

potentially irreversible actions to ensure compliance on a single-state basis. Commenters

indicated they have not evaluated what minimum share level could be appropriate, but believes 

such modification could increase true flexibility, enhance opportunities for coordinated state 

action, and decrease the overall economic burden of the Clean Power Plan, while maintaining 

overall emissions reduction goals.

Comment 14: The EPA should evaluate the merits of a uniform rate-based national performance 

goal. It would be simpler, could achieve the same 30% national reduction, would address early 

action, increase reliability, and provide flexibility.

Response 14: See sections V of the final rule preamble of the CPP for the EPA’s response to this 

comment.

The following are summaries of the specific public comments under this comment:

Commenters said the EPA should evaluate the merits of a straightforward, uniform, rate-based, 

national performance goal that considers all applicable electric generating units (EGU), as 

opposed to EPA setting individual, state-specific goals. Commenters said a single national goal 

could achieve the same 30% national emission reduction and be based on a national performance 

limit in the range of the proposed Section 111(b) standards applied to the collective power sector 

for each state. Commenters said that additional time and alternative voluntary strategies for 

compliance could be provided to states that require the greatest emission reductions.

Commenters said a national performance goal would equitably address past emissions reductions 

(early action) and could be designed to provide flexibility for achieving compliance. 

Commenters performed a variety of calculations and concluded that a national performance 

standard of 1,030 lb/MWh would achieve similar emission reductions sought by the EPA under 

its proposed rule and would appropriately credit past actions and broaden compliance

options. Commenters said that the 1,030 lb/MWh goal is within the range of the EPA's proposed 

Section 111(b) new source performance standards for coal boilers and NGCC units, which is 

appropriate over the long term, as existing units are replaced with new units.

Commenters said as an alternative to a suggested 1,030 lb/MWh standard, the EPA could apply 

the proposed Section 111(b) standards to each affected existing unit under Section 111(d), and 

compute a weighted average based upon a formula to be determined. Commenters said under this 

scenario the national performance goal would be set within the range of 1,000 lb/MWh and 

1,100 lb/MWh, using Section 111(b) standards for new coal boilers and natural gas combined 
320

cycle power plants (NGCC). Commenters added that while New Jersey has not developed a 

methodology for this approach, the EPA could perform a weighted average approach by either 

using historic unit generation or projected unit generation.

Commenters added that a uniform national goal would improve the reliability of the electric grid 

by enabling states like New Jersey to maintain some fuel diversity, which is important for 

addressing price volatility and weather events.

Comment 15: The proposed CPP RE targets are too low; UCS's "demonstrated growth" 

approach should be used to set more aggressive targets for RE

Response 15: See section V.E. of the final rule preamble of the CPP for the EPA’s response to 

this comment.

The following are summaries of the specific public comments under this comment:

The commenters said to drive the kind of renewable energy gains necessary to have meaningful 

impact on U.S. carbon emissions, the EPA should adopt the Union of Concerned Scientists' 

("UCS") recommendations for strengthening the CPP. The commenters said the UCS's 

"Demonstrated Growth" approach uses "the latest available market data, demonstrated rates of 

growth in renewable energy, and existing state commitments to deploy renewables." 

The commenters said the UCS analysis showed that the levels of renewables reached through 

compliance with the CPP are lower in 2020 than what the EIA predicts would occur under a 

business-as-usual approach, and the CPP's 2030 results are only marginally higher than the EIA's 

projections.

The commenters said the UCS Demonstrated Growth approach uses baseline renewable energy 

generation for each state and adds a reasonable incremental level of growth. The commenters

said in Texas, for example, the UCS Demonstrated Growth approach assumes that Texas will 

maintain the 1.1% annual growth rate in renewable energy deployment that the state achieved 

during the baseline period - 2009 through 2013. The commenters indicated that UCS estimates 

that a demonstrated growth approach would result in 40% renewable generation in Texas by 

2030, compared to just 20% under EPA's proposal, with improvements in every region of the 

country.

Comment 16: Regulation must account for remaining useful life of EGUs; states should have 

lead role in developing targets; targets for existing sources cannot be more stringent than 

corresponding standards for new sources under Section 111(b)

Response 16: See sections V and VIII of the final rule preamble of the CPP for the EPA’s

response to this comment.
321

The following are summaries of the specific public comments under this comment:

Background. Commenters explained that UNS subsidiaries TEP and UNSE are members of the 

Arizona Utility Group (AUG), which also is filing comments on the Proposal. Commenters said 

the AUG comments present details of a joint proposal (AUG Proposal) that would achieve a 

substantial CO2 emission rate reduction while mitigating other adverse impacts that would result 

from the EPA's Proposal. 

Commenters said the fundamental tenet behind the AUG Proposal is that the EPA is compelled 

both statutorily, and by common-sense public policy to recognize and account for the "remaining 

useful life" of coal-fired power plants that are serving Arizona residents at a cost already 

incorporated in customers' approved rates. Commenter said in addition, the AUG Proposal 

emphasizes the lead role that states are afforded in establishing "standards of performance" under 

Sec. 111(d), and clarifies that "standards of performance" for existing sources under Sec. 111(d) 

cannot be more stringent than corresponding standards for new sources under Sec. 111(b).

Suggested specific changes to methodology. Commenters offered specific language 

incorporating these concepts as presented below:

1. For purposes of goal setting under BB2:

a. Redispatch from coal-fired EGUs to natural gas combined cycle (NGCC) EGUs 

should occur upon the later of any of the following:

i. January 1, 2020;

ii. 40 years after initial commencement of operation; or

iii.20 years after commencement of operation of major pollution control 

retrofit, such as selective catalytic reduction (SCR), flue gas 

desulfurization (FGD), or baghouses at any EGU if installation occurred 

prior to issuance of the final 111(d) rule, or after commencement of 

operation of selective non-catalytic reduction (SNCR) or electrostatic 

precipitators (ESPs) at an EGU owned by a small utility as defined by the 

Federal Energy Regulatory Commission (FERC) if installation occurred 

prior to the first year of the compliance period (i.e., 2020).

b. For coal-fired EGUs that either shutdown or convert to natural gas-fired 

operation, re-dispatch would occur as specified in an applicable implementation 

plan or enforceable Title V permit, provided that such commitment is entered 

prior to the effective date of the final rule and the date of shutdown or natural gas 

conversion is prior to January 1, 2030.

c. Coal-fired EGUs that do not re-dispatch prior to January 1, 2030 under 

paragraphs 1.a or 1.b remain coal-fired EGUs for purposes of calculating the 

Interim and Final Goals.
322

2. For purposes of goal setting, when re-dispatching to NGCC, a rate of 1,000 lbs 

CO2/MWh should be used, consistent with the most stringent standard in the EPA's 

proposed New Source Performance Standard for EGUs.

3. The State should establish the Interim Goal in its State Plan based upon EPA's 

building block approach as modified by paragraphs 1 and 2 above.

Effect of suggested changes. Commenters said incorporating these changes, Arizona's interim 

goal emission rate is determined through the state planning process, and the final 2030 goal 

emission rate becomes 963 lbs CO2/MWh.

Commenters said Salt River Project Agricultural Improvement and Power District (Salt River 

Project or SRP) conducted an analysis of the impact the AUG Proposal would have on each state 

using a database developed and maintained by The Brattle Group. Commenters said SRP's 

analysis concluded that, although these changes would result in later re-dispatch of coal-fired 

units in a limited number of additional states, the overall impact across the entire universe of 

affected units is small.

Commenters said UNS believes that the AUG Proposal satisfies the intent of Clean Air Act 

Section 111(d) while avoiding the EPA Proposal's significant threats to reliability, affordability 

and Arizona's economy. Commenters strongly encouraged the EPA to incorporate these changes 

in the final rule.

Comment 17: Proposed methodology using existing RPS requirements as a foundation 

significantly underestimates renewable energy potential in many states

Response 17: See sections V and VI of the final rule preamble of the CPP for the EPA’s

response to this comment

The following are summaries of the specific public comments under this comment:

Commenters indicated that the methodology EPA proposes to estimate renewable energy 

potential available to states significantly underestimates the potential. Commenters asserted that 

an approach that incorporates all renewable energy resources and takes into account established 

trends in market growth would provide a better basis for determining feasible renewable 

generation growth in each state as part of building block 3. 

Commenters said to estimate the carbon emission reductions from affected EGUs achievable 

based on increases in renewable generation, EPA has developed a "best practices" scenario for 

renewable energy generation based upon RPS requirements already established by a majority of 

states. Commenters stated that this methodology, however, represents a significant 

understatement of the renewable energy potential available to states for the reduction of 

greenhouse gas emissions. 

For instance, according to commenters, seven states had more renewables in 2013 than EPA's 

2030 targets for those very states, and 17 states would develop less renewable generation under 
323

EPA's target than under their existing mandatory RPSs. Commenters said under EPA's proposed 

method, 25 states also would not reach the proposed regional target by 2030. Commenters said 

EPA's approach effectively assumes that renewable generation grows at 0.65 percent of total 

electric sector market share per year, well below the recent market share growth rate of 1 percent 

per year. Commenters said as such, the proposed approach's renewables targets fail to meet the 

CAA standard for "best" system of emissions reductions.

Comment 18: The proposed RPS approach is flawed because state RPSs are not necessarily 

based on the amount of cost-effective, achievable RE within a given state's or region's borders.

Response 18: See sections V and VI of the final rule preamble of the CPP for the EPA’s

response to this comment

The following are summaries of the specific public comments under this comment:

Commenters stated that although the TSD and NODA approaches are indeed an improvement 

over the RPS-based approach, they still significantly underestimate the actual RE potential for 

states today. The proposed RPS approach is flawed, according to commenters, because state 

RPSs, which are policy commitments, are not necessarily based on the amount of cost-effective, 

achievable renewable energy within a given state's or region's borders.

Commenters said the Clean Power Plan assumes that state RPS programs are set based on an 

assessment of the costs and feasibility of target percentages of renewable energy. Commenters

said however, the establishment of the BSER, including evaluations of cost and feasibility, is the 

responsibility of the EPA and not the states. Commenters said by resting the justification for the 

level of achievable renewable energy generation on the fact that "states have already had the 

opportunity to assess those requirements against a range of policy objectives including both 

feasibility and costs", EPA's Proposed RPS Approach does not directly demonstrate that the 

Administrator has determined that building block 3 meets the standard for BSER, as Section 

111(d) requires.

Commenters agreed that the recognition of regions to cost-effectively support renewable 

generation is an important insight that should be used in establishing the BSER. However, 

Commenters argued, this conclusion does not mean that the responsibility to determine BSER for 

each region should be left to the political decisions reflected in some state policies, which may 

have been developed for purposes other than reducing carbon emissions at affected EGUs. 

Commenters said it is unlikely that state RPS were set based on the same criteria that the EPA is 

required to use when determining BSER.

Commenters said in addition, RPS requirements developed by the states do not necessarily 

reflect consideration of regional achievability. Commenters said for instance, many of the 

existing state RPSs do not take into consideration renewable energy trading markets, 

achievability of regional emission reduction goals, and the full extent to which renewable 

generation may be implemented within a particular region. Commenters said further, by only 

examining the impact of one policy framework, the analysis is inherently conservative, as many 
324

other policy options are available in addition to RPS frameworks for EPA to establish best 

practices for renewable generation expansion.

Comment 19: Regional growth factor should not be applied to each state; instead the EPA 

should assume that each state can meet the average of existing RPSs in the region

Response 19: See section V.E. of the final rule preamble of the CPP for the EPA’s response to 

this comment

The following are summaries of the specific public comments under this comment:

Commenters disagreed with the proposed RFS approach which only expects a state to meet a 

regional average rate of renewable energy generation, even if the state's renewable generation 

already is above that average. Commenters recommended that EPA not apply the regional 

growth factor to each state and instead assume that each state can meet the average of the 

existing RPSs in the region. 

The commenters said under the EPA's proposal, states with renewable generation below the 

regional targets make pre-determined incremental annual progress; however, once a state reaches 

that goal, renewable generation remains flat through 2030. Commenters said this results in 

markedly slower growth in renewable generation than is achievable to best reduce carbon 

emissions and is not consistent with statutory mandate to create "best practices". Commenters

said in addition, using the proposed regional approach to establish generation targets, the EPA 

would effectively be giving some states renewable generation targets lower than the state's actual 

reported generation amounts for 2012. 

Commenters said under the EPA's Proposed RPS Approach, if a state's renewable generation in 

2012 has already exceeded the regional renewable target, its annual renewable generation levels 

are held to the regional target for the entirety of the compliance duration, 2017 to 2029. 

Commenters said this would result in an unintended outcome whereby a number of states would 

not need to reduce carbon emissions below their 2012 levels under building block three, and the 

same regional renewable generation target in percentage (share of total generation) terms is 

imposed on all states in a given region. 

Commenters said in addition, because of the application of the regional growth factor to the 2012 

renewable generation in a state, the absolute megawatt-hour target would be smaller for states 

starting with a lower amount of renewable generation, and larger for a state starting with a higher 

absolute amount of renewable generation. Commenters said as such, some states would 

effectively be rewarded for not pursuing cleaner energy portfolios before 2012. EPA's final rule 

should reflect a more equitable solution.

Comment 20: The EPA should not assign RE goals based on regional averages and 2012 

generation, but instead should conduct rigorous state-specific RE integration analyses.
325

Response 20: See section V.E. of the final rule preamble of the CPP for the EPA’s response to 

this comment

The following are summaries of the specific public comments under this comment:

Commenters said assigning renewable goals informed by regional averages and 2012 generation 

does not ensure realistic goals based on transmission constraints and grid reliability. Commenters

said EPA should conduct rigorous state-specific renewable energy integration analyses, factoring 

in:

• Existing transmission capacity and reliability issues, 

• Environmental siting requirements, 

• Land use requirements and restrictions, 

• Endangered and species of special concern habitat, and 

• Other factors 

To inform the renewable goals set for states, commenters said EPA should also consider the 

impact of neighboring states and regions attempting to significantly increase renewables 

integration within the same timeframe, which will also compound reliability and constructability 

related challenges

Comment 21: States, not the EPA, should determine key, state-specific elements of BSER, such 

as renewable energy potential, as part of their state plans.

Response 21: See section VIII of the final rule preamble of the CPP for the EPA’s response to 

this comment

The following are summaries of the specific public comments under this comment:

Commenters suggested EPA consider allowing states to determine key, state-specific elements of 

the BSER, such as renewable energy potential, as part of their state plans in the phased approach 

recommended above under "policy flexibility". Commenters said this is especially important for 

states with extensive renewable programs already underway, as well as in other states where 

breakthroughs in renewable energy technologies and business models have the potential to 

unlock much more competitively priced renewable energy in the future than is apparent today. 
326

Comment 22: The EPA should consider an incremental approach to BB1 so that there would be 

no reductions associated with coal plant heat rate improvements for states that generated less 

than roughly 10 percent of their total annual energy from coal as of the end of 2012

Response 22: See sections VI and VIII of the final rule preamble of the CPP for the EPA’s

response to this comment regarding credit for early actions. The EPA is not implementing an 

incremental approach to Building Block 1 in the final rule.

The following are summaries of the specific public comments under this comment:

Commenters said that the adjusted emission rate for New York is overly stringent and penalized 

New York for its early actions. Commenters suggested an incremental approach to BB1 which 

includes no reductions associated with coal plant heat rate improvements for states that generated 

< 10% of their total annual energy from coal as of the end of 2012.

Commenters said New York has invested in a wide-variety of energy reduction programs that 

(when coupled with the energy efficiency inherent in urban systems) have led to relatively low 

carbon dioxide emissions when compared with other states. Commenters said New York's low 

carbon dioxide density is also a reflection of the fuel mix of the power sector. Commenters said 

New York has historically invested in the use of hydroelectricity from in-state hydroelectric 

plants and high-voltage transmission links to hydroelectric facilities in Canada. Commenters said 

when combined with nuclear capacity, more than 53 percent of the electricity used in New York 

is generated by zero-emissions resources, with less than 3 percent generated by coal in 2013.

Commenters said in states that have taken early action to reduce their dependence on coal, 

increase the amount of natural gas capacity, and integrate zero-emissions resources, EPA's four 

Building Blocks combine to create stringent targets and challenging conditions on the power 

system.

Commenters said in establishing its targets for coal generation heat rate improvements, EPA 

repeatedly highlights the range of practices, technologies, and measures adopted by the various 

EGU's that make up the nation's coal generation fleet. Commenters said the EPA's finding of 

technical feasibility relies on fleet-wide averages, recognizing that "some EGU's may have 

already implemented some upgrades," and best practices associated with heat rate improvements. 

Commenters said in so doing, EPA declines to set plant-specific targets. 

Commenters said in New York, attainment of EPA's targets is based on the existing technology 

and practices at a small cohort of plants. Commenters said only seven coal-fired plants operated 

in New York in 2012, for a total nameplate capacity of roughly 1,350 MW. Commenters said 

since that time, one plant has retired, a second co-fires natural gas, and a third is being closed 

and re-powered to burn natural gas, and two of the remaining plants are required to operate under 

reliability-must-run orders. Commenters said this calls into question the technical feasibility of 

using a "fleet-wide average" to implement EPA's targets.

Commenters said to resolve this technical feasibility concern resulting from "fleet-wide" 

assumptions being applied to a small cohort of units, the Alliance recommends EPA consider an 

incremental approach to Building Block #1 so that there would be no reductions associated with 

coal plant heat rate improvements for states that generated less than roughly 10 percent of their 
327

total annual energy from coal as of the end of 2012. Commenters said such an incremental 

approach could be applied fairly across all states and would support EPA's intention to avoid 

setting emission standards on a plant-by-plant basis.

Comment 23: Each state's RPS goals should be used as a floor for achievable RE generation in 

that state, not for establishing a ceiling.

Response 23: See section V.E. of the final rule preamble of the CPP for the EPA’s response to 

this comment

The following are summaries of the specific public comments under this comment:

Commenters argued that the proposed RPS approach should use each state's RPS goals as a floor 

for achievable renewable generation in that state, not for establishing a ceiling. The commenters

said under the proposed RPS approach, if a state's own RPS is more ambitious than its regional 

average, the regional average is nevertheless used. The commenters said by failing to 

incorporate a state's own RPS commitments in its BSER determination, the EPA undermines its 

own justification for the proposed RPS approach.

According to commenters, this analytical error is particularly acute for the five states that already 

generate as much or more renewable electricity than their regionally calculated average for 2030. 

The commenters said oddly, such a state could increase affected EGU use as a proportion of 

generation and still meet its BSER targets for renewable energy.

Commenters said the EPA is taking comment on whether the level of 2012 renewable energy 

generation in each state should serve as a floor for the amount of renewable energy generation 

expected for that state under building block 3. Commenters strongly supported such a floor; 

however, to more accurately reflect the level of renewable generation a state has actually 

achieved, they recommend that the floor be set at a state's renewable energy generation when the 

Clean Power Plan is finalized in 2015. Commenters said further, the Clean Power Plan should 

determine that for states with an RPS policy more ambitious than the regional average, the BSER 

should require that renewable energy targets are at least as high as the state RPS requirement. 

Commenters said this approach is consistent with the EPA's general "no backsliding" policy 

approach.

Comment 24: The EPA approach should not assume no renewable energy growth during the 

period 2012-2017, and rather than using 2012 renewable energy as a starting point, the EPA 

should use renewable energy at the time the regulation is finalized

Response 24: See section V.E. of the final rule preamble of the CPP for the EPA’s response to 

this comment.

The following are summaries of the specific public comments under this comment:
328

Commenters disagreed with EPA's assumption that there will be no renewable energy growth 

between 2012 and 2017. The commenters also asserted that the proposed RPS approach should 

use a state's renewable energy generation rate at the time the Clean Power Plan is finalized as the 

starting point from which its renewable generation is expected to grow, rather than 2012.

Commenters stated under the Proposed RPS Approach, state level renewable energy targets 

begin in 2017 and continue to ramp up through 2030, even though compliance would not be 

required until 2020. However, commenters stated, the methodology assumes the increase starts 

to occur only after 2017. Commenters stated to determine a state's 2017 baseline generation 

levels, EPA takes 2012 renewable generation and assumes that as the starting point in 2017. 

Commenters felt that this approach inadequately assesses renewable potential as it assumes no 

growth in renewable generation from 2012 through 2017, even though significant renewable 

capacity that was not generating in 2012 (including a large amount of renewable capacity added 

during 2012 that contributed less than a full year's output to 2012 generation) has been installed, 

is currently under construction, or is under advanced stages of development and will be online by 

2017.

Commenters stated the Clean Power Plan should assume each state's renewable energy 

generation is able to grow beginning in 2012 until it meets the regional target, rather than 

expecting zero growth from 2012 to 2017. The commenters said in particular, if EPA adopts the 

Proposed RPS approach, the growth factor assumption should be adjusted to reflect growth 

throughout those years. The commenters said if this modification is not made, the best practices 

scenario for renewable energy expansion will be based on an underestimation of the growth 

factor used for each state in that region. The commenters said there should be an established 

trend from 2012-2029 using data that yields an annual growth factor unique to each region and 

based upon each region's current and target renewable generation levels.

Comment 25: In the final rule, the EPA should clarify that credit for off-the-grid renewable 

generation will be allowed in plan compliance.

Response 25: See sections V.E. and VIII of the final rule preamble of the CPP for the EPA’s

response to this comment.

The following are summaries of the specific public comments under this comment:

Commenters stated that the EPA should clarify in the final rule that credit for off-the-grid 

renewable generation will be allowed in plan compliance. Commenters said that some states, 

such as New Mexico, have many rural areas where costs for connection to the grid make 

distributed generation with storage capacity (off-the-grid) the most economic option for both 

residential and some commercial facilities. Commenters said these resources, while small, still 

reduce the usage of fossil generation that otherwise would have been necessary without the 

installations, and with proper evaluation, monitoring and verification, these should be valid 

resources for crediting in a state plan.
329

Comment 26: The EPA should add a national benchmark to better reflect demonstrated growth 

of renewable energy

Response 26: See section V of the final rule preamble of the CPP for a discussion of changes 

made to building block three in this final rule, and supporting analysis in the GHG Mitigation 

Measures TSD.

The following are summaries of the specific public comments under this comment:

Commenters recommended that the EPA revise the proposed RPS approach to ensure that state 

emissions rate reduction targets and, in particular, renewable growth rates, better reflect 

deployment rates already being achieved by many states (what has been adequately 

demonstrated) and reasonable projections of deployment (what is achievable). The commenters

said to that end, the EPA should revise its preferred alternative to ensure that a "demonstrated 

growth approach" for setting renewable energy targets is used.

Commenters stated that to calculate state renewable energy targets, the EPA should use EIA data 

to calculate each state's renewable energy growth rate over the five-year period from 2009 to 

2013. The commenters said that EIA data show that states, on average, have increased the share 

of their total generation coming from renewable energy by 1 percentage point annually over this 

time period .The commenters said this demonstrated growth rate should be used to set the future 

renewable generation targets. Commenters stated that this is a reasonable target to use as a 

national benchmark, since 11 of the 15 leading states that have achieved annual growth rates at 

or above one percentage point annual growth have maintained this over the past ten years. The 

commenters said establishing a national benchmark accounts for recent rapid growth in wind and 

solar generation and captures much of the historic development spurred by state RPSs.

Commenters suggested that for states below the one percentage point national benchmark growth 

rate, 2017 to 2020 would function as a period for states to ramp up deployment, allowing states 

that have not been active in renewable development to catch up to the national benchmark. The 

commenters said after 2020, it would be assumed that renewable energy within these states 

would grow at the one percentage point national benchmark growth rate through 2030. For the 

15 leading states that have deployed renewable energy at or above the national benchmark, 

Commenters suggested that the EPA increase their respective renewable energy targets from 

2017 to 2030 at each state's average annual percentage point growth rate during the 2009-2013 

benchmark period, up to 1.5 percentage points annually. Commenters stated that this is a 

reasonable upper limit that is capable of being sustained over time, and a 1.5 percentage point 

growth rate is consistent with renewable energy targets set by many leading state RPSs.

Commenters indicated that to account for full compliance with mandatory state RPS laws, states 

should be required to achieve the greater of two measures: either the generation projected by this 

growth rate approach, or the level needed to meet states' respective RPS targets for each year 

from 2017 to 2030, as projected by the Department of Energy's Lawrence Berkeley National 

Laboratory (LBNL 2013). The commenters said to ensure reasonably achievable renewable 

energy penetration rates during the compliance period, the EPA could cap the total share of 

renewable generation for any state at not less than 40 percent of total state electricity sales, a 
330

level that several studies by grid operators, utilities, and government agencies have shown can be 

achieved at the state and regional level in this timeframe while maintaining reliability.

Commenters acknowledged that this approach places constraints upon renewable developments, 

such as a 1.5 percentage point annual growth cap and a 40 percent overall target cap, but 

observed that these restrictions are reflective of current conditions and should remain flexible. 

The commenters said as the EPA undertakes regular reviews of the Clean Power Plan, these 

constraints could be adjusted upward or eliminated entirely to account for new renewable 

technologies, grid integration techniques, other changes in the generation mix, and falling costs 

over the compliance period.

Comment 27: The EPA should remove the provision requiring that states that are net importers 

of power discount any reductions that may be achieved by end-use energy efficiency programs. 

If discount requirement is not eliminated, it should be based on the percentage of imported 

generation for the compliance year itself, not a factor calculated based on 2012 baseline data.

Response 27: As described in section V.A of the final rule preamble, the EPA is no longer 

including demand-side energy efficiency in its BSER quantification. However, states/sources 

still have the ability to use demand-side energy efficiency measures as part of their compliance 

strategy. The EPA discusses the EM&V procedures for demand-side energy efficiency 

approaches in section VIII of the final rule preamble of the CPP.

The following are summaries of the specific public comments under this comment:

Commenters said in states that import electricity, the EPA notes that states must discount the 

CO2 emission reductions associated with EE to reflect the level of electricity imports. 

Commenters said the EPA is proposing this be done through modeling or use of a proxy net 

import factor. Commenters said if states are responsible for all the emissions generated by instate resources, regardless of where the power is actually consumed, then states should not have 

to discount end-use energy efficiency reductions to account for power imports. Commenters said 

in addition, it is logical that a state be given full credit for avoided emissions from stateimplemented EE programs since the rate payers within the state are paying the program costs. 

Commenters said that for these reasons, we request that the EPA remove the provision requiring 

that states that are net importers of power discount any reductions that may be achieved by enduse energy efficiency programs.

Realizing that the EPA may not eliminate the discount requirement, commenters said to the 

extent that a proxy net importer factor is used, we request it be based on the percentage of 

imported generation for the compliance year itself, not a factor calculated based on 2012 baseline 

data. Commenters said that as encouraged by Virginia law, Dominion has begun a program of 

building in-state generation to reduce the amount of imported power. Commenters explained 

therefore, a requirement to use the 2012 import data as the basis for an EE credit adjustment 

factor would disadvantage Virginia and discredit meaningful EE measures implemented in the 

state.
331

Comment 28: The EPA should assume that incremental renewable and energy efficiency 

resources have the effect of displacing fossil generation. Using that assumption, analysis by 

Commenters indicated Alabama can reach the remaining 55% of its target through renewable 

energy and energy efficiency, with only minimal gas re-dispatch

Response 28: In both proposal and final the EPA assumed that incremental RE generation had 

the ability to replace existing fossil generation. In this final rule, per this comment and others, 

the EPA captures that replacement by reducing the baseline level of generation from fossil 

sources in amounts equal to the incremental RE generation. See sections V and VI of the final 

rule preamble for further discussion. 

The following are summaries of the specific public comments under this comment:

Commenters indicated their analysis shows that Alabama can achieve its remaining reductions 

through a combination of renewable resource additions and increased energy efficiency 

investments, along with minimal natural gas re-dispatch. Commenters said for the purposes of 

this analysis, we ignored the potential reductions from the heat rate improvements of Building 

Block 1, which some utilities have cited as unfeasible or impractical. 

Commenters said in our analysis, we make an assumption that the EPA did not make: that 

incremental renewable and energy efficiency resources have the effect of displacing fossil 

generation. Commenters said as the EPA appears to recognize in its recent Notice of Data 

Availability [See 79 Fed. Reg. at 64,543.], to assume otherwise is inconsistent with EPA's 

application of BSER for Building Block 2 and nonsensical as a practical matter: utilities will 

dispatch resources having no fuel costs in lieu of those that do.

Commenters said they show that if renewable energy and efficiency measures are assumed to 

displace fossil generation, Alabama need not pursue natural gas re-dispatch all the way to 70 

percent. Commenters said instead, Alabama could achieve its target by increasing to a capacity 

factor of 64 percent, just 5 percentage points higher than current utilization. Commenters said 

moreover, Alabama can achieve its target without pursuing renewable and energy efficiency 

resource additions to the extent EPA assumed in its target-setting. Commenters said instead, 

Alabama could reach its target with just 80 percent of the levels of each measure that EPA 

assumed in its calculations.

Comment 29: The EPA solicited comments regarding whether it should change its formula 

regarding building blocks 3 and 4 not only add to resources, but also to remove 2012 fossil fuel 

generation. Commenters warned analyzing effect of adding one type of resource on other 

resources is difficult and complex

Response 29: The EPA does assess the effect of its BSER quantification in a power sector 

modeling tool that informs of the collective impacts of the building blocks and BSER 

quantification.

The following are summaries of the specific public comments under this comment:

Commenters said the EPA solicited comments regarding whether it should change its formula 

regarding building blocks 3 and 4 to not only add resources, but also to remove 2012 fossil 
332

generation. Commenters cautioned that when adding one type of resource, the effects on other 

resources is a difficult and complicated determination. Commenters said that if the EPA wishes 

to subtract existing generation in its goal setting, then it should carefully model any changes to 

make it more likely that these generation changes will actually occur in the way suggested in the 

formula.

Comment 30: The EPA's proposed approach is overly restrictive in that it has potential to render 

a portion of energy efficiency measures stranded. To remedy this, the EPA should allow states 

to take credit for energy efficiency measures.

Response 30: See section V.A for a discussion of demand-side energy efficiency. The EPA is 

not including demand-side energy efficiency in the final BSER. See section V.A for a discussion 

of demand-side energy efficiency. Also see section VIII for discussion of how demand-side 

energy efficiency can be used for compliance in state plans. 

The following are summaries of the specific public comments under this comment:

Commenters said in developing the energy efficiency target, EPA did not incorporate 

assumptions regarding emissions reductions associated with energy efficiency or demand side 

measures. Commenters said however, in the preamble EPA states that it is "proposing that, for 

demand-side EE measures, consistent with the approach that the EPA used in determining the 

BSER, a state could take into account in its plan only those CO2 emission reductions occurring 

(or projected to occur) in the state that result from demand-side EE measures implemented in the 

state." Commenters said in addition, in the State Plan Considerations TSD, EPA presents a 

number of options for calculating emissions reductions associated with energy efficiency 

measures - which may only be applied to affected resources in the state where the energy 

efficiency measures were implemented. Commenters noted that due to the interstate nature of the 

interconnected electric system, the emissions reductions associated with energy efficiency may 

often occur in a different state from where the energy efficiency measures were implemented, 

and therefore the EPA's proposed approach is overly restrictive in that it has the potential to 

render a portion of energy efficiency measures stranded. Commenters said to remedy this, EPA 

should allow states to take credit for energy efficiency measures. Commenters said the EPA 

should allow states the flexibility to allocate energy efficiency across their system(s) via resource 

planning and compliance reporting mechanisms to be developed under state plans.

Comment 31: 2030 Regional targets should be based on 2030 RPS targets, not 2020 targets

Response 31: See section V.E. of the final rule preamble of the CPP for the EPA’s response to 

this comment.

The following are summaries of the specific public comments under this comment:

Commenters suggested that using 2020 RPS goals to set 2030 targets for a region is 

inappropriate. Commenters stated that instead, 2030 regional targets should be based on 2030 

RPS targets.
333

Commenters said while it is true many RPSs have deadlines in 2015 or 2020-well before the 

2030 compliance deadlines set forth within the Section 111(d) proposed guidelines-the Clean 

Power Plan includes no justification as to why states should only be expected to meet 2020 

targets by 2030, rather than 2020. The commenters said this approach is not consistent with 

EPA's justification for using state RPS policies in the first place. The commenters said the 

Proposed RPS Approach should, at a minimum, use the target in the final year of a state RPS 

requirement to set 2030 targets, rather than using 2020 RPS requirements to set 2030 targets. The 

commenters said in that way, the calculation of achievable renewable generation as part of 

building block 3 would not ignore the commitment by policymakers in some states to add 

renewable generation after 2020. For states with requirements that do not continue to increase 

through 2030, commenters suggested that the Proposed RPS Approach should determine a 

reasonable growth rate based on historical market trends or the historical rate at which that state 

RPS increased to estimate an achievable level of renewable energy growth between the last year 

in which a state has an increasing requirement and 2030.

Comment 32: Proposed alternate set of state goals reflect an overly conservative approach

Response 32: The EPA is not finalizing the alternative approach that had final goals in 2025. 

See section V of the final rule preamble for information regarding our final BSER determination. 

Also see sections VI and VII of the final preamble for subcategory-specific emission 

performance rates and state goals, respectively.

The following are summaries of the specific public comments under this comment:

Commenters stated that the EPA's proposed set of alternate goals, which call for a different level 

of emissions reductions to be achieved by 2025 instead of 2030, reflect a less stringent 

application of the building blocks and a shorter implementation period, ultimately reflecting an 

overly conservative approach. The commenters said in particular, the alternate goals 

underestimate the extent to which the key elements of the four building blocks - including 

penetration of renewable resources - can be achieved rapidly while preserving reliability and 

remaining reasonable in cost. The commenters said in addition, the alternate approach proposal 

for a less stringent program with a 2025 goal year is overly conservative with respect to 

achievability by that time.

Comment 33: Final rule requiring 50% carbon emissions reduction from today's levels appears 

achievable, so final rule should have more aggressive emission reduction target by 2030, and 

should signal an intent to require further reductions.

Response 33: See the Regulatory Impact Analysis for final CPP Rule, EPA-452/R-15-003. The 

EPA has quantified BSER in this final rule, and expects slightly more reduction than expected at 

proposal. The EPA’s statutory obligation is to determine a best system of emission reductions as 

described in section V of the final rule preamble of the CPP.

The following are summaries of the specific public comments under this comment:
334

Commenters suggested that in addition to setting a more aggressive emission reduction target by 

2030, the EPA should also set a target emission reduction level envisioned for 2050, to indicate 

that further reductions are expected beyond 2030.

Commenters said the final rule will likely result in significant investment in new power 

generation and transmission assets through 2030, and these assets have useful lives that can 

extend over 50 years from initial construction. Commenters said selection of generation 

technologies in which to invest will depend on a view of emissions targets not only prior to 2030 

but through the useful life of the generating plant. Commenters said that signaling the trajectory 

of emissions reduction targets expected post 2030 will limit investment in projects that would 

become stranded as emission reductions are strengthened.

Comment 34: State-specific emission goals should not be adjusted after the final rule is issued, 

absent extraordinary circumstances

Response 34: The EPA will allow states, via State Plan submittal or revision, to adjust their state 

wide rate or mass goals per unit inventory changes. If applicability review or formal applicability 

determinations change the status of units in regards to their inclusion or exclusion in the state’s 

affected population, the state may adjust the goal. See section VII.E. of the final rule preamble of 

the CPP for more information.

The following are summaries of the specific public comments under this comment:

Commenters agreed that once the final goals have been promulgated, a state should no longer 

have an opportunity to request that the EPA adjust its carbon target to reflect a change in any one 

building block analysis (unless the state also demonstrates that it could not get additional 

reductions from application of any other of the blocks, or comparable measures). The 

commenters said to make such a demonstration, states should be required to show that they 

availed themselves of all reasonable and flexible compliance options, including from out-of-state 

sources.

Comment 35: BSER should be based on more than what is merely "reasonably achievable"

Response 35: See section V.A. of the final rule preamble of the CPP for the EPA’s response to 

this comment.

The following are summaries of the specific public comments under this comment:

Commenters stated that in the draft proposal, in developing state emissions reduction goals, only 

estimates of what is reasonably achievable were calculated and considered for each building 

block. Instead, commenters indicated that the EPA should base BSER on more than what is 

merely reasonably achievable.

Commenters indicated that courts have recognized that identification of BSER is an expansive, 

flexible endeavor. The commenters said in the service of securing the maximum emissions 

reductions, the D.C. Circuit Court has held that EPA may weigh "cost, energy, and 
335

environmental impacts in the broadest sense at the national and regional levels." The 

commenters said while the costs of implementing the BSER may not be unduly burdensome or 

exorbitant, this certainly does not mean the standard must only achieve the minimally reasonable 

reduction goals. The commenters said rather, EPA should assess the technically feasible amount 

of emissions reductions possible within a region when considering emissions reductions goals.

Comment 36: GHG emissions are emitted from various sectors of the economy; reductions from 

other sectors of the economy besides EGUs should be considered

Response 36: See section V.A. of the final rule preamble of the CPP for the EPA’s response to 

this comment.

The following are summaries of the specific public comments under this comment:

Commenters indicated that because GHG emissions occur from various sectors of the economy, 

emissions reductions from all sectors should be considered/required, not just from the EGU 

sector. Commenters expressed concern that the proposed rule would establish a 

mitigation approach that does not adequately recognize alternative methods of reducing 

emissions in an efficient and cost-effective manner across the U.S. economy. 

Commenters noted that in the proposed rule, the EPA cites the 2009 Endangerment Finding, the 

recent Intergovernmental Panel on Climate Change report, and the recently released National 

Climate Assessment to establish impacts from GHGs and the reason for regulatory action on 

CO2. The commenters said according to the EPA, all GHGs "cause and contribute" to the EPA 

identified impacts -- not only CO2. The commenters said further, CO2 is emitted from various 

sectors of the economy, not only from the electric sector. The commenters said in terms of U.S. 

GHG emissions, the electric sector comprises 32% of total anthropogenic emissions (excluding 

land use); the transport sector about 28%; and the combination of the commercial, industrial, and 

residential sectors comprises about 30%. 

Comment 37: Achieving meaningful, cost-effective emission reductions across the power grid 

requires taking a grid-level perspective, as states' experience demonstrates

Response 37: See section V.A. of the final rule preamble of the CPP for the EPA’s response to 

this comment.

The following are summaries of the specific public comments under this comment:

Commenters emphasized that the EPA should draw on the experience of states in identifying 

BSER and setting the emission goals by using a system-wide approach. The commenters

indicated that meaningful, cost-effective emission reductions are best achieved through a systemwide approach that draws from three primary strategies 
336

Commenters indicated that states are achieving very significant carbon pollution reductions 

through a variety of state programs, including emission budget and trading programs, renewable 

portfolio standards, energy efficiency programs, state statutes that require or promote planned 

electricity resource changes, and others.

Commenters emphasized that as EPA designs its Section 111(d) carbon pollution emission 

guideline for states on the basis of the "best system of emission reduction," it should take into 

account all of these types of demonstrated successes and the carbon pollution reductions 

achievable by them. The commenters said that only by considering reductions from all of these 

types of approaches will EPA be able to establish a standard that achieves the most meaningful, 

cost-effective reductions.

Commenters indicated the state programs can be grouped into three categories of approaches (as 

identified by EPA in its questions), each of which can secure a distinct pool of emission 

reductions: 

• changes at individual covered sources to reduce carbon emission intensity (market-based 

programs can help drive these types of improvements; programs and incentive for 

combined heat and power generation can increase overall efficiency, carbon capture and 

sequestration can reduce emissions, other potential on-site improvements to reduce 

emissions include using RE to provide supplemental steam heating, using waste heat to 

remove moisture, implementing advanced systems for combustion and dispatch 

optimization, or oxy-combustion systems)

• shifts in generation from higher carbon emitting sources to lower emitting sources 

(market-based state programs demonstrating effectiveness of these types of shifts, 

state new source performance standards have also driven such improvements), and 

• Reduction of emissions through displacement by zero carbon generation or reduction in 

electricity demand (adding wind and solar energy resources as well as nuclear power46, 

market-based programs, renewable energy standards, and state demand-side energy 

efficiency standards and programs)

Commenters indicated meaningful, cost-effective emission reductions are best achieved through 

a system-wide approach that draws from all three of these strategies. The commenters said that in 

particular, state experience has demonstrated that the most cost-effective strategies resulting in 

meaningful reductions are those that promote shifts away from high-emission fossil sources, 

displace emissions with zero-carbon generation, or reduce electricity use through demand-side 

efficiency programs. 

Commenters stated that in contrast, more limited emission reductions are available from plantlevel efficiency improvements, as demonstrated by the extensive technical analysis in EPA's 

proposed new source standards for the sector. The commenters indicated that meaningful 

reductions could be achieved at a reasonable cost if the full range of available on-site systems, 

including efficiency upgrades and other improvements, were applied to each source, except those 

nearing the end of their remaining useful life. However, the commenters stated that such an 

approach is less cost-effective, and less effective in promoting long-term improvements in the 
337

electricity system, than a system-wide approach as described above and as demonstrated in our 

states.

Commenters stated that the best emission reduction systems focus on shifting the grid as a whole 

away from high carbon sources because individual generating units do not operate 

independently. The commenters said instead, they are part of a system of highly interdependent 

sources whose aggregate emissions are dependent on system management. The commenters said 

that as state experience has shown, reducing demand for fossil generation or providing 

alternative, cleaner, sources of supply achieves emissions reductions far beyond the level that 

can be achieved by improving the operations of individual fossil plants.

Commenters indicated such grid-level programs have major economic benefits along with 

environmental improvements, and stated that state efforts to add renewable power have 

improved the fuel diversity and system performance of the grid, while supporting a national 

boom in clean energy jobs. The commenters noted that the EPA's Acid Rain Program achieved 

significant pollution reductions through a grid-level approach, rather than focusing narrowly on 

individual sources. The commenters noted that the EPA's recently developed "roadmap" also 

outlines system-level approaches to reducing fossil fleet emissions to maintain compliance with 

standards for pollutants like ozone and soot.

Comment 38: The EPA should put all states on a trajectory to meet goals, while allowing 

varying compliance times

Response 38: The EPA uses reasonable deployment schedules for its building block assumptions 

when quantifying BSER. This results in a glide path of increasing compliance responsibility 

moving from earlier years to later years. See sections VI, VII, and VIII of the final preamble for 

information related to the interim subcategory-specific emission performance rates, interim state 

goals, and state plans. 

The following are summaries of the specific public comments under this comment:

Commenters stressed that the emission guideline should equitably recognize states' different 

starting points and circumstances (because they begin with widely differing power fleets and 

existing regulatory initiatives). The commenters indicated that EPA should account for these 

differences by placing all states on a trajectory to achieve a uniformly rigorous target, while 

allowing varying compliance times (recognizing that this period of time may extend beyond an 

initial phase covered by the rulemaking).

Commenters suggested one approach that EPA should consider is setting a single emission 

intensity target that would apply to each state, individually or as part of a region, representing net 

improvements to the carbon intensity of a state's electricity system that could be achieved 

through the system-wide approaches described above. The commenters suggested that this target 

could be expressed as an aggregate emission rate of pounds per megawatt-hour or potentially as 

a rate of emissions per gross domestic product.
338

Commenters said that states that would have further to go to meet the target could have longer 

compliance times to meet the common goal. The commenters said this approach would require 

all states to reduce emissions while being equitable to states that have already made progress 

toward meeting the emission intensity target. The commenters said the same goal would be 

achieved by establishing a mass-based emission budget for each state that reflects a level of 

aggregate emissions from covered sources commensurate with full use of the best system of 

emission reductions.

Commenters said that approaches like these would automatically recognize the substantial 

emission reductions achieve by first-mover states while providing other states the time they need 

to pursue these opportunities. The commenters said that the EPA would ensure that each state 

has designed its program to put regulated sources on an achievable glide path to reach its target 

as soon as practicable, thereby maintaining a clear regulatory incentive to reduce carbon dioxide 

emissions over the compliance period. To support their argument, the commenters said that the 

EPA has taken these approaches in the past: other Clean Air Act programs allow states time to 

comply, with the time period depending on the degree of pollution reduction required and a 

showing of "reasonable progress" towards final standards. The commenters stated that the EPA's 

Section 111(d) general regulations likewise support this approach, as they anticipate that state 

plans will set compliance schedules that include regular progress reports.

Commenters stated that this approach, which focuses on moving states toward a shared endpoint, 

is substantially better than one based on requiring percentage reductions (either in tons or rates) 

from a particular baseline year. The commenters said that setting an equitable baseline across the 

states, which have varying economic and emissions histories, would be difficult and timeconsuming. The commenters added that because states have very different emissions levels now, 

requiring all states to reduce emissions by the same percentage across the board, regardless of 

starting circumstances, would not treat the states equitably, or be the most cost-effective way of 

achieving reductions.

Commenters indicated they recognize that other equity issues will arise as the EPA considers 

how to move the states towards a common target - including the fact that states may be net 

importers or exporters of power, and so their emissions may be affected by actions in other states 

that they cannot directly control. The commenters added that on a related point, some states may 

have relatively smaller in-state power systems, and so may have limited opportunity for systemwide improvements within the state.

Comment 39: The EPA could recognize a minimum target level that was considered sufficiently 

low enough for any such state that additional reductions would not be required

Response 39: See section V.A. of the final rule preamble of the CPP for the EPA’s response to 

this comment.

The following are summaries of the specific public comments under this comment:

Basic Concept. The commenters said separate from the performance goals set for states on an 

individual basis, the EPA could recognize a minimum target level that was considered 

sufficiently low enough for any such state that additional reductions would not be required. The 
339

commenters said states that achieve a minimum target would not be required to comply with the 

full state performance plan requirements contemplated in the rule, but rather, they only would 

need to submit a limited state plan that provides for continued compliance with the minimum 

threshold. The commenters said establishing an appropriate minimum CO2 target would achieve 

the EPA's desired result without requiring significant federal oversight or time and expense of 

detailing compliance. The commenters said additionally, it would incentivize states to meet the 

minimum CO2 target by allowing them to avoid the larger administrative costs of complying 

with a full plan. 

EPA Precedent. The commenters said a minimum CO2 target approach is consistent with the 

EPA's other regulatory schemes and the sub-categorization principles applicable to 

implementation of Section 111(d). The commenters said using its discretion to create 

subcategories on a state-wide basis, the EPA could create another subcategory that covers all 

generation sources in states like Idaho that have no coal generation, low emissions, or similar 

characteristics that provide assurance that carbon emissions will remain low. The commenters

said for those states, the EPA then could determine a separate BSER and related emission 

guideline based on a minimum CO2 emission threshold or target that could not be exceeded, 

rather than state-specific emissions goals based upon application of the four building blocks. 

Proposed Minimum Level. The commenters proposed a minimum target of 550 pounds of 

CO2/MWh for Idaho. The commenters said other states could potentially hit this threshold target 

by 2020, or later in the compliance period, and could modify their state planning requirements 

then, which would incentivize those states to accelerate emissions reductions. 

The commenters said if the EPA does not withdraw its proposed emissions goal for Idaho (which 

is Idaho's preferred outcome), then the EPA should adopt the "limited plan" system described 

above. The commenters said this system is consistent with the EPA's overall goals and creates a 

more equitable and efficient result for states like Idaho that already have very low emissions and 

no in-state coal generation.

Comment 40: Guidelines should allow states to use effective current programs as the basis of 

compliance

Response 40: See sections I.A., V, and VIII of the final rule preamble of the CPP for the EPA’s

response to this comment.

The following are summaries of the specific public comments under this comment:

Commenters stated that the EPA should incorporate into the BSER determination all of the 

approaches that states are already demonstrating achieve cost-effective emissions reductions, 

including reductions from onsite improvements, shifts in generation among covered sources, and 

displacement from zero-carbon generation increases or demand-side efficiency. The 

commenters stated that even if the EPA doesn't explicitly base BSER on state programs, it 

should allow states with any effective existing programs the option of using these programs as 

the basis of compliance, as long as states can demonstrate through a rigorous, consistent 
340

methodology (to be identified by the EPA) that those programs will achieve the required 

reductions.

Commenters suggested using the programs because states managing greenhouse gas reduction, 

energy efficiency, and renewable energy programs have built these programs through their own 

democratic and stakeholder processes, and with a deep understanding of conditions within their 

power grids. The commenters stated that to the extent that those programs are delivering a 

substantial portion of the reductions needed to comply with Section 111(d) guidelines, the EPA 

should ensure that its federal framework provides states with the option of incorporating their 

current programs with minimal change or burden as long as they achieve equivalent reductions. 

The commenters said that as its governing regulations require, the EPA has regularly invited the 

states to propose a range of approaches to meet federal standards, in whole or in part, and they 

expect it to follow the same course here.

Comment 41: The EPA has not been sufficiently clear about its intention to allow states to rely 

on compliance options that were not included in the "building blocks" the EPA used to calculate 

state emission reduction goals. This must be clarified in final rule.

Response 41: See section V.A. of the final rule preamble of the CPP for the EPA’s response to 

this comment.

The following are summaries of the specific public comments under this comment:

Commenters said that the EPA has not been sufficiently clear about its intention to allow states 

to rely on compliance options that were not included in the "building blocks" the EPA used to 

calculate state emission reduction goals. Commenters said it is obvious that the EPA has failed to 

communicate this principle clearly, because there is still confusion in public statements by states 

and others on this point. Commenters said there are only two statements in the preamble to the 

Clean Power Proposal that we could find, and both are buried deep within the text of the 

preamble, and the proposed regulatory text is silent on this point. Commenters said under the 

caption, "VII. State Goals - D. State Flexibilities" the preamble says: 

"States can also choose to include in their plans other measures that reduce CO2 

emissions at affected EGUs but that are not included in the building blocks."

Commenters said under Section "F. State Plan Considerations - 8. Potential Emission Reduction 

Measures Not Used To Set Proposed Goals," the preamble explains that:

"States may include measures in their plans beyond those that the EPA included 

in its determination of the BSER. In general, any measures that meet the proposed 

criteria for approvable state plans could be employed in a state plan. Beyond that, 

under a mass-based approach, any measure that reduces affected EGU emissions -

even if not included in the state plan - will, if implemented during a plan 

performance period, help to achieve actual emissions performance that meets the 

required level... Although the emission reduction methods discussed in this 
341

section are not proposed to be part of the BSER, the agency anticipates that some 

states may be interested in using these approaches in their state plans."

Commenters said it is understandable that the EPA believed this would be sufficient, but there is 

still considerable confusion and debate among stakeholders. Commenters said accordingly, to 

ensure that states are able to benefit from the flexibility that the EPA intended to include in the 

Clean Power Proposal, AGA urges EPA to make it clear and obvious -- in the preamble, final 

rule regulatory text and any fact sheet or other outreach materials -- that states are allowed and 

encouraged to include compliance methods in addition to those that EPA used in its 

determination of BSER. 

Commenters stated as states work to develop their utility-driven portfolio plans, EPA should 

direct them to make available the building blocks, and any additional state measures, as optional 

tools available to the utility to select from in finding the most effective way to achieve its final 

CO2 reduction goal. The commenters said states should be made to understand that the building 

blocks are not required to be imposed as mandates on any entity, and a mandate is not required, 

for example, in order for renewable energy to be available under block 3. The commenters said 

instead, because only utilities with affected EGUs in the state are regulated, mandates are 

unnecessary to achieve compliance. The commenters said the obligation of the utility to achieve 

its mandatory CO2 reduction creates the only incentive necessary to ensure the further 

development of non-emitting resources and energy efficiency. The commenters said as long as 

the state plan allows utilities to use these building blocks for compliance, and the credits are 

freely transferable in interstate commerce, their inherent value to the utility is assured, and no 

mandate is required. The commenters said this eliminates much of the uncertainty surrounding 

the ability to obtain legislative approval and to do so in a limited time frame.

Comment 42: The EPA should include clear language in the final rules allowing the use of outof-sector offsets by states (such as no-till, converting marginal croplands to grasslands, tree 

planting, fly ash recycling) to meet emission targets

Response 42: See sections V and VIII of the final rule preamble of the CPP for the EPA’s

response to this comment.

The following are summaries of the specific public comments under this comment:

Commenters encouraged the EPA to include clear language in the rules allowing the use of outof-sector offsets by states to meet their emission performance targets, and to ensure that carbon 

offsets are included as reduction mechanisms. Commenters said over the years, traditional tillage 

has released much of the stored carbon from fields, which is why there is so much potential now 

for carbon storage from practices such as no-till and converting marginal croplands to grasslands. 

Commenters said these practices leave the soil undisturbed and the plant residue in the field, 

which allows the carbon to be stored instead of released. 

Commenters said Dynegy strongly supports the use of out-of-sector offsets and has been a leader 

in pursuing GHG emissions reductions through offsets. Commenters said specifically, Dynegy 

has planted over 8 million trees in 73 locations across 8 states in the Mississippi River 
342

Valley. Commenters said Dynegy also recycles fly ash from coal combustion for beneficial reuse, including as a substitute for Portland cement in concrete. Commenters said in addition to 

safely re-using coal fly ash in lieu of landfilling, the re-use of fly ash reduces the amount of 

Portland cement produced, and the reduction of cement production directly offsets the amount of 

CO2 generated by the cement manufacturing process.

Commenters said Dynegy has taken on these projects voluntarily and has invested significant 

capital in these projects, but investing in such programs faces an uncertain future if they will not 

be provided any credit for compliance with the CPP. Commenters said by discounting unique 

and impactful programs like the ones Dynegy has taken on, EPA stifles innovative GHG 

reduction projects., which is bad public policy, bad business and, ultimately, bad for the 

environment.

Comment 43: The EPA should set regional RE targets, grouping states by NERC region.

Response 43: See Section V.A of the final rule preamble of the CPP for the EPA’s response to 

this comment.

The following are summaries of the specific public comments under this comment:

Commenters responded to specific questions the EPA raises in the recently published Notice of 

Data Availability ("NODA") that accompanies the Clean Power Plan proposal issued June 2, 

2014. The commenters reiterated support for setting regional RE targets, and suggested that the 

EPA should group states by NERC [North American Electric Reliability Corporation] region 

because these regions most realistically encompass what RE potential is available to serve load 

for a particular group of states. The commenters said these regions also largely conform to 

existing RE credit trading system boundaries. The commenters stated that while certain trading 

systems will overlap multiple NERC regions and some state boundaries may not seamlessly 

conform, this basic structure could be used with modifications to deal with anomalies. The 

commenters said that for example, confusion may arise where a state's boundaries straddle more 

than one NERC region. The commenters said that in such an instance, to alleviate such 

confusion, EPA could associate the entire physical area of the state with the NERC region where 

the majority of the state's load is served for purposes of estimating renewable generation 

potential. The commenters indicated that this modification would ensure that the NERC region 

that has access to that RE generation potential is also assigned those potential emission 

reductions for goal setting.

Comment 44: Regional RE market concept has several flaws

Response 44: See section V.E. of the final rule preamble of the CPP for the EPA’s response to 

this comment.

The following are summaries of the specific public comments under this comment:
343

Commenters said that the EPA's use of regional RE markets has several flaws. Commenters

indicated the most glaring mistake is to assume that one regional state's portfolio requirements 

reflect energy development opportunities in neighboring states -that defies logic. Commenters

said that such a portfolio recognizes unique state resources and the economics needed to 

competitively bring those resources to market, and to imply that all regional states have 

homogeneity in their RE resources and market potential is false.

Commenters also said the EPA's regional approach is flawed because it imposes the same target 

percentage to all states in a given region, regardless of their actual RE technical 

capabilities. Commenters said the regional definition for the EPA's South Central region is 

dominated by states that have considerable opportunities for onshore wind development and are 

already some of the larger wind developers in the country. Commenters said that although 

Louisiana is in the South Central region is does not have any wind generation and doesn't have 

the technical capabilities for any meaningful grid-scale wind generation, so grouping it with high 

wind-generation states is unreasonable. 

Comment 45: The EPA should allow states to demonstrate compliance on a multi-year basis and 

allow carry-over of early reductions

Response 45: See section VIII of the final rule preamble of the CPP for the EPA’s response to 

this comment.

The following are summaries of the specific public comments under this comment:

Commenters stated that the EPA should permit states to demonstrate compliance on a multi-year 

basis and allows states to carry over early reductions.

Commenters said that emissions across an electricity system can vary from year to year 

depending on factors such as weather, economic conditions, and unexpected shutdowns, which 

are all outside the ability of plant operators to influence. The commenters stated that the EPA 

can require a more substantial level of cost-effective reductions if it allows states to average 

emissions over a multi-year period and enables states to bank, or carry-over, early reductions. 

The commenters stated that unlike other pollutants that may have short-term impacts, the 

environmental harm caused by CO2 and other GHG pollutants have much longer periods of 

impact. Therefore, the commenters said, allowing compliance on a multi-year basis would not 

reduce the environmental benefits of the program. 

Commenters said that the RGGI [Regional Greenhouse Gas Initiative] program uses a three-year 

compliance approach. According to the commenter, the RGGI states' experience is that this 

approach has the benefit of allowing sources to take advantage of multi-year compliance 

strategies. The commenters indicated that by allowing sources three years, the regulated units 

have flexibility to address variations in emissions, unexpected shutdowns, or uneconomic 

dispatch orders, without impacting the enforceability or environmental effectiveness of the 

program's requirements.
344

Comment 46: The EPA should recognize state discretion to adopt different approaches to goal 

conversion provided states provide a reasonable explanation

Response 46: See section VIII of the final rule preamble of the CPP for the EPA’s response to 

this comment.

The following are summaries of the specific public comments under this comment:

Commenters stated that the methodologies for rate-to-mass goal conversions contained in the 

proposed guidelines and the Translation TSD cannot be reconciled, yet the EPA appears to 

believe that either approach could lead to accurate and satisfactory mass-based goals. The 

commenters indicated that the EPA should therefore adopt the approach to mass-based goal 

conversion suggested by the language in the preamble to the Proposed Guidelines: EPA should 

recognize state discretion to adopt different approaches to goal conversion provided states 

provide a reasonable explanation for the choices they have made.

Commenters stated that under the proposed guidelines states decide the "emission performance 

level" to include in their plans, but under the proposed guidelines states are empowered only 

to select a rate-based or mass-based goal. The commenters indicated that although this choice is 

presented as providing flexibility to the states, in reality it does not. The commenters said that 

EPA is merely affording states a choice between accepting an EPA-prescribed and inflexible 

rate-based state goal, or translating that rate-based goal into an equivalent mass-based goal.

Commenters stated that under the Proposed Guidelines, states are invited to attempt to calculate 

a mass-based rate. (Id. at 34,897). The commenters stated that the preamble to the Proposed 

Guidelines states that: "[i]f the plan adopts a mass-based goal, the plan must include a 

description of the analytic process, tools, methods, and assumptions used to translate from the 

rate-based goal to the mass-based goal." (Id. at 34,911). The commenters indicated that 

similarly, section III of EPA's "Projecting EGU CO2 Emission Performance in State Plans" TSD 

(June 2014), Docket ID No. EPA-HQ-OAR-2013-0602-0462 ("Projections TSD"), which was 

released with the Proposed Guidelines, purports to provide guidance to states on how to make 

such a goal translation. According to the commenters, that guidance, however, does little more 

than direct states to project the CO2 emissions that would result from application of EPA's ratebased limit. The commenters said that these statements suggest that states have broad leeway to 

calculate mass-based goals. 

According to commenters, Proposed 40 C.F.R. Sec. 60.5770 includes an additional requirement, 

however: 

"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 EGUs were to perform at an average lb CO2/MWh rate equal 

to the rate-based goal for the state identified in Table 1 of [the Proposed 

Guidelines]." (79 Fed. Reg. at 34,953, Proposed 40 C.F.R. Sec. 60.5770). The

commenters indicated that although this roughly sketched methodology might 

produce rate-to-mass goal conversions that are equivalent, other approaches might 

prove better fits for some states, and EPA should provide states with flexibility to 
345

demonstrate that differing methods are appropriate, as the Agency suggests in the 

preamble language."

Commenters suggested that other state approaches might be valid is seemingly confirmed by 

EPA's November 2014 TSD, entitled "Translation of the Clean Power Plan Emission Rate-Based 

CO2 Goals to Mass-Based Equivalents, Docket ID No. EPA-HQ-OAR-2013-0602-22187 

("Translation TSD"). The commenters said that unlike the Proposed Guidelines, which require a 

protection of emissions "in the absence of emission standards contained in the plan," 79 Fed. 

Reg. at 34,953, Proposed 40 C.F.R. Sec. 60.5770, i.e., in the absence of application of the 

Building Block, the Translation TSD directs states to adjust their 2012 emissions to "reflect the 

deployment of incremental building block three and four resources." (Translation TSD at 5).

Comment 47: The proposed rule does not appear to give full opportunity to Canadian electric 

utilities to provide electricity to the U.S.

Response 47: See section VIII.K. of the final rule preamble of the CPP for the EPA’s response 

to this comment.

The following are summaries of the specific public comments under this comment:

Commenters emphasized that the final EPA rule should respect the importance of U.S. -

Canadian electricity generation resources for both countries. The commenters said the rule 

should address importing electricity from Canada, and should address whether Canadian exports 

of hydro or nuclear energy can be used to meet state goals.

Commenters said that electricity plays an integral role in the strong U.S.-Canada energy 

relationship - there are more than 35 electric transmission interconnections between the U.S. and 

Canada, which together make a very integrated North American grid.

Commenters said that the Proposed Rule does not appear to give full opportunity to Canadian 

electric utilities to provide electricity across the border to U.S. states for these purposes. 

Commenters said that the EPA should address this issue in its rulemaking and provide full 

opportunity for Canada to continue to be eligible to sell its electricity across the border. 

Commenters said that there is also a question as to whether Canadian exports of hydro or nuclear 

electricity to U.S. states can be used to meet state goals. Commenters stated that between five 

and ten percent of Canada's total electric generation is exported to the U.S. and most of it is 

either hydro- or nuclear-based. Commenters said that the states of California, Minnesota, 

Vermont and Wisconsin have accepted imported electricity from Canada to meet their various 

"renewable" energy definitions. Commenters recommended that imports of all non-CO2 emitting 

sources imported from Canada be eligible for compliance in a state plan under the Proposal.

Commenters stated that further, the Canadian government has its own version of NSPS for new 

and existing coal-fired power plants. Commenters stated that any final rule from the EPA should 

address this issue in a manner that recognizes the interconnected nature of the North American 

grid and that is consistent with the U.S.-Canadian trade policies set by both the General 

Agreement on Tariffs and Trade (GATT) and the North American Free Trade Agreement 

(NAFTA). Commenters provided the Canadian Electricity Association's "Reducing GHG 
346

Emissions Under EPA's Section 111(d) Guidelines" (January 2014) paper to explain the 

complexity of this trade issue.

Comment 48: Counting out-of-state resources towards compliance goals. The EPA should 

provide clearer guidance on the crediting of emission reductions from out-of-state generation to 

ensure that the customers that are paying for a carbon-reducing investment receive the benefit of 

the investment, even if it's located in another state. Utilities should be able to move MW-h and 

associated emission rates generated by their facilities between states.

Response 48: See section VIII.L. of the final rule preamble of the CPP for the EPA’s response to 

this comment.

The following are summaries of the specific public comments under this comment:

Commenters said the EPA should ensure that customers will receive the benefit of the utility's 

carbon-reducing investments that they paid for, even if investment is located in another state. 

Commenters said energy markets now cover multi-state regions, and to provide our customers 

with clean and affordable power, electric utilities make investment decisions to meet energy and 

environmental objectives, and site facilities in the most-optimal locations. Commenters said in 

the case of renewable resources, such as wind generation, this may mean investing across state 

lines. Commenters said in order to provide citizens with clean and affordable power and to not 

restrain this efficient energy market, the final rule should recognize that credit for carbonreducing investments stays with the utility whose customers are paying for the investment and 

not be stranded inside a state's geographic boundaries.

Commenters said they agreed with the EPA's proposal that a state should be able take into 

account all of the carbon emission reductions from renewable energy measures implemented by 

the state, whether they occur in the state or in other states. Commenters said however, we 

encourage the EPA to provide further guidance in the final rule on the crediting of the interstate 

effects of emission reductions. Commenters said in particular, clarification should be provided 

on how states should avoid double counting in instances in which one state claims credit for 

renewable generation and another state that holds the environmental attributes of the same 

energy also claims credit. Commenters said to that end, they recommend that the Clean Power 

Plan encourage states to develop or participate in an environmental crediting accounting system 

for renewable energy. Commenters said if a state chooses not to do so, the EPA should only 

allow a state to include renewable energy MWhs in its compliance plan if it can demonstrate 

entities in the state have submitted environmental attributes (i.e., credits) for those MWhs.

The commenters said the EPA should approve the development of plans that allow utilities to 

move megawatt-hours and associated emission rates generated by their facilities between states.

Comment 49: Multi-State plans - General
347

Response 49: See section VIII of the final rule preamble of the CPP for the EPA’s response to 

this comment.

The following are summaries of the specific public comments under this comment:

Against

The commenters said application of the proposed rule to individual states, constructed to try to 

meet the intent of 111(d), does not consider interstate Electric Generating Unit (EGU) ownership 

or purchase power agreements (PPA). The commenters said the option of multi-state plans is not 

a viable solution to dealing with interstate ownership or contracts.

For

Commenters stated the EPA should recognize that for some states, a regional budgeting approach 

will make more sense than using RECs for compliance; therefore, states should also be allowed 

to enter into multi-state agreements that allow for emissions budgeting so long as the emission 

reductions are real, verifiable, and are not being claimed by another entity or state. 

Commenters supported flexibility in implementation strategies through multi-state partnerships; 

there is an opportunity for states to collaborate across state-lines to create cost-effective 

solutions.

Comment 50: For multi-state plans using a rate-based approach, the final rule should include an 

option for the multi-state rate-based goal to change each year based on the amount of generation 

in each respective state

Response 50: See section VIII of the final rule preamble of the CPP for the EPA’s response to 

this comment.

The following are summaries of the specific public comments under this comment:

Commenters developed a "Rate-based Multi-State Trading Program" Commenters suggested that 

for multi-state plans using a rate-based approach, the final rule should include an option for the 

multi-state rate-based goal to change each year based on the amount of generation in each 

respective state. Commenters said this approach would not alter the amount of credit states 

receive per MW-h generated, but it would allow for trading credits/allowances across state lines 

while ensuring that each state would either meet its rate-based goal or that excess emissions in 

one state would be offset by a partnering state that over-complied with their rate-based goal.

Comment 51: The EPA should allow utilities (particularly multi-state utilities like Otter Tail) to 

apply the BSER on a unit-by-unit basis to determine a Section 111(d) target that is specific to the 

capabilities and limitations of their existing generation portfolios.
348

Response 51: See section V of the final rule preamble of the CPP for the EPA’s response to this 

comment.

The following are summaries of the specific public comments under this comment:

Commenters said EPA should allow utilities (particularly multi-state utilities like Otter Tail) to 

apply the BSER on a unit-by-unit basis to determine a Section 111(d) target that is specific to the 

capabilities and limitations of their existing generation portfolios. Commenters said this would 

enable utilities to meet a BSER target by managing the generation resources and energyefficiency programs they control, instead of penalizing them based on the misfortune of 

operating in the same State as a different generating resource owned by an unrelated company.

Commenters said as EPA is no doubt aware, South Dakota is a national leader in the production 

of zero-carbon energy generation. Commenters said wind energy accounted for more than 24% 

of South Dakota's total energy production, and hydropower nearly 50%. Commenters said yet, 

the proposed rule's inconsistent treatment of South Dakota's energy resources penalizes the state 

for its proactive and successful use of its abundant clean power resources.

Commenters said the proposed rule would require Otter Tail to reduce operation of Big Stone 

Plant to a level that condemns this significant asset to premature retirement and replacement 

simply because it is located in the same state as Basin Electric's Deer Creek Station. Commenters

said the rule should instead allow Otter Tail to determine an appropriate, utility-specific BSER 

based on a determination of the extent to which each of the four Building Blocks can feasibly 

and reasonably be applied to its specific portfolio of owned generation and its retail load. 

Commenters said although such an approach would still place a substantial burden on Otter Tail, 

it would allow Otter Tail and other companies to use the "tools in their toolbox" to achieve 

required emissions reductions rather than forcing premature retirements or inequitably 

transferring emission reduction burdens to neighboring utilities and their customers.

Comment 52: States should be allowed to consider utility-specific regional plans

Response 52: See section VIII of the final rule preamble of the CPP for the EPA’s response to 

this comment.

The following are summaries of the specific public comments under this comment:

Commenters said in order to give maximum flexibility to utility companies that operate in more 

than one state, rate or mass based regional plans that are specific to one company should be 

allowed if the state has the legal authority for the regional plan. Commenters said the regional 

goal for a utility could be a goal based on the goal for each state covered by the regional plan and 

the company's fossil fuel generation during the baseline in each state. Commenters said the 

utility would be allowed to determine compliance with the regional goal considering all 

generation and emissions reductions in the region, and compliance with the regional goal would 

be considered compliance with each state's goal. 
349

Commenters stated that under such a plan, if a utility "over complies" with the regional goal, 

each state would be allowed to use that over compliance in their state average. Commenters said 

other forms of utility specific regional plans may provide viable options, after development by a 

state and consultation with the EPA before any final plan is submitted. 

Commenters said in addition, the Department believes the EPA must accept state plans that 

include standards that are based on either rate or mass within the same plan; doing so enables 

compliance flexibility and cost minimization.

Comment 53: Company-based Multi-State plans could be considered an additional "best system 

of emission reductions". Under such a plan, companies that generate and distribute power over 

multiple states would be able to apply their zero and certain low CO2 emission electricity 

generation to meet Section 111(d) emission rate limits anywhere within their electric generation 

system, and there would be several advantages to this approach.

Response 53: See section VIII of the final rule preamble of the CPP for the EPA’s response to 

this comment.

The following are summaries of the specific public comments under this comment:

Commenters said that the EPA should revise the proposed rule to better mesh with the manner in 

which the power industry is already organized: across state lines with dispatch by Regional 

Transmission Organizations (RTOs) seeking to assure system reliability. Commenters said they 

believe that this can best be done by expressly providing that company-based multi-state plans 

are an additional "best system of emission reductions" under CAA section 111(d). Commenters

said that under such a plan, companies that generate and distribute power over multiple states 

would be able to apply their zero and certain low CO2 emission electricity generation to meet 

CAA section 111(d) emission rate limits anywhere within their electric generation system, rather 

than being restricted to using those strategies in the state where the generation occurs. 

Commenters indicated there are several advantages to this approach.

1. Time to action and generators determine how to reduce emissions. First, it is impossible 

under EPA's proposal for companies to anticipate how states will respond within their 

boundaries and how system dispatch will be reorganized. As a result, no action can be 

taken by affected companies until multiple plans are proposed, approved, litigated, etc., 

making it impossible to meet EPA's interim goals. Allowing companies to immediately 

begin addressing their own energy portfolios to demonstrate compliance with EPA's 

emission targets and individual state emission limits helps mitigate this problem and 

allows the parties that actually generate the emissions determine how to best reduce them.

2. Additional Flexibility. Second, approving company portfolio management programs to 

qualify as BSER across state lines will provide states with additional flexibility in 

developing and adopting plans to meet their emission rate requirements under the final 

rule.
350

3. Maximize Efficiency and minimize waste. Third, allowing companies to manage their 

portfolios across state lines allows resources to be built where most efficient and without 

undue waste. Companies can manage their portfolios without regard to state boundaries 

or constraints in the transmission infrastructure. This would allow companies to reduce 

their reliance on high carbon emitting sources by supplanting those sources with low 

carbon emitting sources where they make the most economic and technical sense, not 

constrained by state boundaries.

Commenters said they can address the EPA's goals under a company-based multi-state plan 

approach and can do so without exceeding the individual state emission limits. Commenters said 

that implementing such an approach would eliminate many of the structural limitations

associated with a strict state-by-state system, avoid disruption of the existing RTO structure, and 

limit conflicts with FERC and state regulatory bodies. Commenters said forcing the regulation of 

electric generation and dispatch into a state boundary model provides no environmental benefit 

and creates unnecessary problems, complexities, and inefficiencies that will increase the cost of 

compliance and undermine grid reliability

Comment 54: Multi-state generation and transmission companies should not be artificially 

constrained by state boundaries in developing and implementing the most cost-effective, 

technically sound CO2 emission reduction strategies. Absent this flexibility assets will be 

stranded and unnecessary renewable and gas generation will be constructed. Therefore, Basin 

Electric requests that the EPA clarify that this company-based multi-state approach can be 

utilized as BSER to demonstrate compliance under the final rule.

Response 54: See section VIII of the final rule preamble of the CPP for the EPA’s response to 

this comment.

The following are summaries of the specific public comments under this comment:

Commenters said the EPA premises its CAA section 111(d) proposal on the idea that the 

interconnected nature of the electric grid provides additional opportunities to reduce overall CO2 

emissions from the power generation sector in the most cost-effective manner. Commenters said 

to fully harness these opportunities, however, multi-state generation and transmission companies 

should not be artificially constrained by state boundaries in developing and implementing the 

most cost-effective, technically sound CO2 emission reduction strategies. Commenters said 

instead, these companies should be allowed to apply zero and low carbon resources where they 

make the most economic and technical sense, and then use the emission reduction benefits 

achieved from the use of these resources in meeting their obligations in any of the states where 

they operate. Commenters said if the EPA amends its Proposed Rule to expressly permit 

companies to pursue this methodology, and if states are allowed to treat these plans as BSER, 

much of the disruption to existing systems potentially caused by EPA's proposal may be avoided.

Commenters said that absent this flexibility, companies will be forced to rely on less costeffective and less technically sound reduction strategies in order to meet individual state 

requirements. Commenters said in many cases this will result in the stranding of existing assets 
351

in states where utilization of such assets is not necessary to demonstrate compliance and the 

construction of new renewable and gas resources that are completely unnecessary from an 

electricity production standpoint but are required to demonstrate compliance within the confines 

of a particular state. Commenters said in different circumstances companies may even forego 

cost-effective CO2 emission reduction opportunities altogether because the opportunities exist in 

states where there is no need to achieve further reductions under the Proposed Rule.

Commenters said these can be avoided if the final rule allows companies to allocate zero and low 

CO2 emitting resources to any state where they operate. Commenters said this simple 

clarification will allow companies to develop and use zero and low carbon generation based on 

technical and economic considerations and eliminate the need to build redundant and 

unnecessary generation in a particular state for the sole purpose of demonstrating compliance 

with the rule. Commenters said that additionally, providing flexibility to allow out of state 

allocation of zero and low CO2 emitting resources is a prerequisite to the establishment of any 

robust market for CO2 credits outside the narrow context of a full-blown, state-based multi-state 

plan.

Commenters said allowing companies to allocate zero and certain low emitting resources across 

the states where they operate is fully consistent with the provisions of the Proposed Rule. 

Commenters said moreover, providing companies flexibility will neither impair states' ability to 

comply with emission limits established in the final rule nor restrict their flexibility in crafting 

state plans. Commenters said this is because companies that utilize a multi-state allocation 

approach will still be required to meet all of their obligations in each state where they operate, 

just like they would in the absence of a company-based multi-state plan. Commenters said 

accordingly, Basin Electric requests that the EPA clarify that this company-based multi-state 

approach can be utilized as BSER to demonstrate compliance under the final rule.

Comment 55: Overview of how a company-based multi-state plan would work, and some 

guidance regarding allocation

Response 55: See section VIII of the final rule preamble of the CPP for the EPA’s response to 

this comment.

The following are summaries of the specific public comments under this comment:

Basic Concept. Commenters said the basic concept underlying a company-based multi-state plan 

is very simple. Commenters said under such a plan, companies that generate and distribute power 

over multiple states would be able to apply their zero and certain low CO2 emission electricity 

generation to meet CAA section 111(d) emission rate limits anywhere within their electric 

generation system, rather than being restricted to using those strategies in the state where the 

generation occurs. Commenters said for example, if Basin Electric generated 1,000,000 MWh 

net of wind energy in South Dakota in 2030, it would be able to allocate that wind energy to 

meet its CAA section 111(d) obligations in another state, such as Wyoming, or in multiple other 

states, such as South Dakota, Wyoming and North Dakota. Commenters said this flexibility 

would allow multi-state companies the ability to reduce CO2 emissions and demonstrate 
352

compliance with the requirements of the final rule in much the same manner that they currently 

generate electricity, namely through the operation of their integrated multi-state generation 

systems.

Limitations Regarding Allocations. Commenters said that while Basin Electric believes that 

providing flexibility to multi-state operators to allocate reduction strategies across their 

generation system is crucial to the development of the most cost-effective strategies to reduce 

CO2 emissions under an emission rate-based approach, it acknowledges that certain limitations 

on what can be allocated may be appropriate. Commenters said specifically, allocations should 

not interfere with the integrity of the proposed state-by-state approach, or where agreed upon, 

multi-state approach, by altering states' responsibilities under the rule. Commenters said 

additionally, allocations should not be allowed that have the practical effect of reducing the 

stringency of established state emission limits. Commenters said for example, companies should 

not be allowed to allocate existing coal generation from a state with a lower emission limit to a 

state with a higher limit. Commenters said such an allocation would undermine the established 

state-by-state compliance scheme by shifting responsibility for that affected EGU from one state 

to another. Commenters said in addition, and perhaps more importantly, such an allocation 

would result in less stringent compliance requirements for that facility, and for the company as a 

whole.

Generating Resources to be Allocated Freely. Commenters said to avoid these problems, Basin 

Electric proposes that there should be two categories of generating resources that a multi-state 

company could allocate freely across its generation network: 1) new and existing non-CO2 

emitting resources; and 2) new natural gas resources that commence construction after January 8, 

2014. Commenters said neither of these resources fit within the definition of affected EGU under 

the Proposed Rule. 79 Fed. Reg. at 34956. Commenters said accordingly, the Proposed Rule 

does not require that these resources be accounted for in any state plan, and therefore allocation 

of these resources within a multi-state area will not alter states' responsibilities under the final 

rule. Commenters said additionally, because these resources are not required to be addressed 

under the rule, allocating them to another state will not lessen the stringency of the established 

state emission limits.

Fundamental Requirements. Commenters said under the rule as proposed, there is a multitude of 

ways that states could structure their CAA section 111(d) plans in the context of meeting a ratebased requirement, and in light of this the exact methodology for allocating zero and low carbon 

generation across a multi-state system will vary. Commenters said however, regardless of the 

allocation methodology, Basin Electric, or any other company using a multi-state plan, would 

need to comply with two fundamental requirements. 

Low or zero CO2 emitting electricity could only be used once to demonstrate compliance within 

the multi-state system. Therefore, the total amount allocated within the multi-state system could 

not exceed the total amount that the company produced or had rights to distribute. To ensure that 

there is no double counting, the multi-state plan would need to include a mechanism to 

accurately track both the amount of zero and low CO2 electricity generated and where that 

generation is allocated within the overall multi-state area. 
353

While companies would be able to freely allocate zero and certain low carbon resources across 

the multi-state area, they would need to demonstrate compliance with each individual state plan 

on a state-by-state basis. Accordingly, a company could not establish its own multi-state 

emission rate or average emissions across multiple states to show compliance. In other words, 

companies using a multi-state plan approach would be required to meet their obligations to each 

state where they operate just like they would in the absence of a multi-state plan. The only 

substantive difference would be that a company would have the additional flexibility to use zero 

and certain low carbon generation from anywhere within its generating system to demonstrate 

compliance with the various applicable state requirements. 

Commenters said this approach retains both the integrity of the state-by-state limits and the 

flexibility afforded individual states in adopting plans to meet these limits, while providing 

companies operating across multiple states flexibility in complying with these state plans.

Comment 56: Consumption-based Targets and All-generation Certificate Tracking present 

advantages.

Response 56: See section V.A. of the final rule preamble of the CPP for the EPA’s response to 

this comment.

The following are summaries of the specific public comments under this comment:

Commenters said the EPA recognizes many of the advantages of using regional evaluations and 

approaches to setting emissions goals, has considered these approaches, and calls for comment 

on "on whether, and if so how, the EPA should incorporate greater consideration of multi-state 

approaches into the goal-setting process" (Proposed Rule, Sec. VII.E, pg. 34899). Commenters

said from our perspective, the advantages of consumption-based targets and compliance for 

states include the following.

1. Consumption-based compliance includes imports and exports and accommodates interstate 

trading of electricity.

Commenters said electricity trading, purchasing, and use across state borders is a reality of the 

U.S. market. Commenters said consumption-based compliance will reflect states' imports and 

exports of electricity and demand for emissions from affected EGUs. Commenters said the 

integrated grid should be reflected in state goals and compliance to achieve efficient emissions 

reductions according to BSER and to avoid inconsistent compliance that could result in double 

counting and underreporting. Commenters noted that the EPA acknowledges throughout the 

Proposed Rule that it, "believes that the BSER for CO2 emissions from existing EGUs should

reflect this integrated character" (Proposed Rule, Sec. VI.E.3, pg. 34881), but it argues that, "this 

state-wide approach [...] harnesses the efficiencies of emission reduction opportunities in the 

interconnected electricity system" (Proposed Rule, Sec. IV.B, pg. 34853 and Sec. VI.E.9, pg. 

34891). Commenters said they disagree that the state-wide approach harnesses the full 

effectiveness of demand-side measures and efficiencies of emissions reduction opportunities in 

the interconnected electricity system precisely where the electricity system and market is 
354

interstate or regional. Commenters said it limits efficiencies unless state goals are based on 

consumed electricity.

2. Harmony with BSER and increased options for reductions for states.

Commenters said building blocks 2-4 - re-dispatching, RE generation and demand-side EE 

measures - affect regional reductions, reductions from both in-state and out-of-state generation. 

Commenters said the EPA recognizes that, "the electricity system is physically interconnected or 

networked and operated on an integrated basis across large regions. System operators routinely 

increase or decrease the electricity output of individual EGUs to respond to changes in electricity 

demand" (Proposed Rule, Sec. VI.B.3, pg. 34857), and that "instituting measures in building 

blocks 2, 3, and 4, due to the interconnected and integrated nature of the grid, would elicit the 

response of reducing generation at some or all affected EGUs" (Proposed Rule, Sec. VI.E.3, pg. 

3488. As such, affecting generation without changing consumption will be difficult for states, 

while changing consumption leads to changes in generation; emissions from consumed 

generation are emissions that states can control and influence: "dispatch decisions are based on 

electricity demand at a given point in time" (Proposed Rule, Sec. VI.C.2.a, pg. 34862) and 

"reduced utilization of the higher-emitting affected EGUs" is a "component" of BSER (Proposed 

Rule, Sec. VI.B.1, pg. 34856). Commenters said in other words, states can affect construction 

and use of electric generation, but use is what causes emissions, and emissions reductions in the 

case of RE, and use also affects construction.

Commenters said under the Proposed Rule, demand-side reduction efforts associated with 

building blocks 2-4 (e.g. efforts to use more natural gas-derived electricity, more RE, or 

undertake more demand-side EE) will do less to achieve compliance in states where there is 

significant importing and exporting of electricity: "For states that are net importers of electricity, 

the estimated reduction in the generation by the state's affected EGUs was scaled down to reflect 

an expectation that a portion of the generation avoided by the demand-side energy efficiency 

would occur at EGUs in other states" (Proposed Rule, Sec. VII.C, pg. 34896). Commenters said 

the EPA has created a difference between state goals and the pool of regulated emissions (instate only), on the one hand, and BSER and the pool of emission reductions (could be either or 

both in state and out-of-state), on the other. Commenters said this difference limits the ability of 

states to comply and reveals that state goals are not aligned with the intent of regulation, which is 

to reduce emissions from power plants in accordance with BSER, as easily and cheaply as 

possible.

3. More accurate and complete state goal calculations.

Commenters said with respect to building block 4, demand side EE, the EPA has invited 

comment on an alternative to, "(scale) up the estimated reduction in the generation by affected 

EGUs in net electricity-exporting states to reflect an expectation that a portion of the generation 

avoided in conjunction with the demand-side energy efficiency efforts of other, net electricityimporting states would occur at those EGUs, analogous to the proposed adjustment for net 

electricity-importing states described in Step 5. We also request comment on the alternative of 

making no adjustment in Step 5 for either net electricity-importing or net electricity-exporting 

states" (Proposed Rule, Sec. VII.C, pg. 34897). Commenters said this again recognizes the 

interstate nature of reductions achieve through demand-side measures. Commenters said but 
355

under the Proposed Rule, there is no reason to expect states to help other states meet targets, so 

we do not recommend that the EPA adjust exporting and importing states' goals anticipating this. 

Commenters said rather, the EPA can make each state responsible for its own consumption with 

consumption-based targets.

Commenters said the EPA also invites comment, "on whether the regional or state scenarios 

should be given greater weight in establishing the appropriate degree of re-dispatch to 

incorporate into the state goals for CO2 emission reductions, and in assessing costs" (Proposed 

Rule, Sec. VI.C.2.c, pg. 34865). Commenters said again, regional scenarios are likely more 

accurate in terms of actual effects of re-dispatching, but since state targets under the Proposed 

Rule are for in-state generation only, the EPA should not anticipate in state goal calculations that 

states will pursue policies that achieve regional reductions without significant in-state reductions. 

Commenters said state goals and compliance are ideally consumption-based, which 

accommodates regional reduction scenarios and which better reflects the effect that states may 

have using building blocks 2-4.

4. Market efficiencies for RE.

Commenters said to the extent that generation-based compliance incentivizes more development 

of RE in state and less development of RE out of state, which could potentially be claimed for 

111(d) compliance in that other state, this could result in an inefficient distribution of resources 

to serve regional electricity markets as renewable energy is no longer being built where it makes 

the most sense. Commenters said as a result, RE development and 111(d) compliance is likely 

more expensive under the current proposed rule than it would be with consumption-based 

targets, which more strongly incentivize regional approaches.

5. Fairness.

Commenters said all imports displace in-state generation or allow for in-state generation not to 

be built, and if the in-state generation is or would have been emitting, then imports displace instate emissions as well. Commenters said states should be responsible for what they pay for and 

consume, regardless of whether that is in or out of state. Commenters said states should be held 

accountable for what they do. Commenters said a consumption-based compliance system will 

allocate responsibly for emissions by what states do about what resources they use and not only 

what resources they have. Commenters said in so doing, consumption-based targets would also 

give states more control over their own compliance.

Commenters said for example, "The EPA has not developed goals for Vermont and the District 

of Columbia because current information indicates those jurisdictions have no affected EGUs" 

(Proposed Rule, Sec. VII.C, pg. 34895). Commenters said consumption-based goals and 

compliance would solve this problem. Commenters said Vermont and Washington DC consume 

electricity and are therefore responsible for emissions from power plants and can affect 

reductions from power plants through demand-side measures. Commenters said yet neither state 

must take any action under the Proposed Rule.
356

Comment 57: There is a potential for double counting if a mix of generation- and consumptionbased compliance is used

Response 57: See sections VII and VIII of the final rule preamble of the CPP for the EPA’s

response to this comment.

The following are summaries of the specific public comments under this comment:

Commenters said states must not have flexibility to choose which generation to include, or to 

select either a generation-based or a consumption-based target. Commenters said all states must 

use either generation- or consumption-based goals and compliance, otherwise tracking of 

emissions with generation will be necessary for all states to avoid double counting. 

Comment 58: Discusses all-generation certificate tracking systems to be used for compliance 

with consumption-based targets, and provides Wyoming as an example

Response 58: See section VIII of the final rule preamble of the CPP for the EPA’s response to 

this comment.

The following are summaries of the specific public comments under this comment:

Commenters said consumption-based compliance would require tracking MWh from affected 

EGUs and emissions with those MWh to the point of consumption in order to avoid double 

counting and underreporting. Commenters said regional all-generation certificate tracking 

systems - which issue a certificate for each MWh of generation in a region from all sources (as 

opposed to only RE sources) - can satisfy this need where states and compliance entities are 

required to report emissions based on the certificates that they had acquired and retired. 

Commenters said such systems are already being used in the Northeast for fuel source disclosure 

requirements: PJM-GATS and NEPOOL GIS are both all-generation tracking systems. 

Commenters said as explained by the Environmental Tracking Network of North America 

(ETNNA) in a 2010 white paper:

"Utilities purchase these certificates to substantiate use of electricity from the 

facility specified on the certificate. At the end of each reporting period the 

certificates in a utility's account are tallied to determine the mix of resources that

utility used for the year. Any electricity used by a utility in the region in excess of 

the number of certificates held by all utilities is assigned an average emissions 

figure, which is based on the total number and type of certificates that are left unpurchased by load serving entities ["residual mix"]. Regional system mix

calculations can then be applied to any MWh purchased by a utility that do not 

have the attributes of generation [certificate] associated with them, allowing the 

utility to factor the regional system mix into their particular overall system mix 

along with MWh from identifiable [specified] facilities."

Commenters said this would allow states and the EPA in this case to calculate emissions based 

on the direct emissions of each certificate and the residual mix of unused certificates.
357

Commenters said existing RE-only tracking systems covering the rest of the country could be 

modified to be all-generation tracking systems, or at least systems that track both RE and MWh 

from affected EGUs for this purpose. Commenters said if consumption-based targets were 

adopted, the EPA should ensure that this technology is available to all states. Commenters said 

tracking systems could include a flag for 111(d) to identify which subset of instruments and 

generators could be used for compliance (e.g. existing rather than new generators, to reflect 

vintage requirements, etc.). Commenters said there should also be coordination between tracking 

systems around imports and exports.

Commenters used Wyoming as an example to demonstrate how an all-generation 

certificate tracking system could work. Commenters said according to the Energy 

Information Administration (EIA), "Wyoming sends nearly two-thirds of the 

electricity it produces to nearby states. High-voltage transmission lines carrying 

electricity from Wyoming are often operating at maximum capacity, and the state 

government is encouraging transmission expansion. Six major interstate projects 

are under way to transmit more power out of Wyoming to western population 

centers." Commenters said in addition, "Coal-fired power plants dominate 

Wyoming electricity generation, producing about 8 of every 9 kilowatt-hours of 

net generation. Wind energy's share has increased rapidly, to nearly one-tenth of 

net electricity generation."

Commenters said consumption-based targets and compliance for Wyoming and its neighboring 

states that import its coal-fired electricity would look very different than the proposed state 

goals, but would more accurately reflect each state's responsibility for emissions from existing 

power plants. Commenters said it would also afford Wyoming more control over its compliance 

(as it would only be responsible for emissions from the subset of in-state generators that serve 

load in the state) and its neighboring states would have more options and a greater ability to 

reduce emissions through demand-side measures. 

Commenters said in Wyoming's case, the WREGIS tracking system could be modified to track 

MWh from affected EGUs. Commenters said the EPA would calculate Wyoming's emissions 

performance based on the direct emissions of each certificate acquired and retired by compliance 

entities in the state and the residual mix of unclaimed certificates for any electricity used in 

excess of the number of certificates held.

Comment 59: Economic modeling can show that a carbon excise tax is at least as stringent as 

the EPA's emissions guideline. With the EPA's help, states can develop carbon tax programs and 

show the programs are likely to achieve the emission targets.

Response 59: Thank you for the comment, state flexibility in state plan is discussed in section 

VIII of the final rule preamble of the CPP.

The following are summaries of the specific public comments under this comment:

Commenters described how a state carbon tax approach can be used to meet the proposed 

emissions guidelines. Commenters said a state can demonstrate through economic modeling that 

its carbon tax program is likely to achieve the emissions standard set by EPA. Commenters said 
358

to demonstrate equivalence, states can employ the EPA's regional air pollution methodology, 

which the Supreme Court recently upheld in EPA v. EME Homer City Generation, L.P. with a 6-

2 majority. Commenters said States' authority to use economic modeling is even stronger in the 

section 111(d) context than it is under section 110, as Section 111(d) explicitly gives states the 

authority to consider economic conditions. Commenters said moreover, in the section 111(d) 

context, the EPA has endorsed "open market concepts," like carbon taxes, when they are 

designed to "achieve environmental limits," "minimize costs," and facilitate monitoring. 

Commenters said in EME Homer, the Supreme Court upheld an EPA program that set emissions 

limits based on the power sector's simulated response to cost thresholds, hailing the approach as 

a cost-effective way to solve a complex problem. Commenters said the EPA's economic model 

assumed that regulated entities would reduce emissions in response to emissions pricing. The 

commenters said to set the emissions price level, EPA modeled emissions reductions at different 

emissions pricing thresholds and then identified the price points at which emissions fell 

significantly. Commenters said as the Court explained, these price points reflected the threshold 

at which "a certain type of emissions control strategy bec[ame] cost-effective." Commenters said 

accordingly, the EPA used these cost thresholds to allocate emissions budgets to states; evidence 

showed that the emissions pricing-based budgets would compel regulated entities to reduce 

emissions. Commenters said each budget represented the "quantity of pollution" a state would 

produce in a year "if its in-state sources implemented all pollution controls available at the 

chosen cost thresholds." 

Commenters said the EPA process for designing a cap-and-trade program reviewed in EME 

Homer shows that states can demonstrate that carbon taxes, which are in essence cost thresholds, 

will achieve the EPA's emissions guideline. Commenters said to do so, they need only develop a 

model similar to that used by the EPA in EME Homer and in the EPA proposal. Commenters

said states can do this regardless of the formula for emissions guideline, including rate-based and 

mass-based standards. Commenters said states can work with the EPA to vet economic modeling 

approaches and tax options. Commenters said finally, just as for any other state implementation 

strategy, if a carbon tax for some reason failed to produce the forecast emission reductions, a 

state must increase the stringency of its policies, for example by increasing the tax trajectory. 

Commenters said in any case, there exists longstanding EPA precedent for the idea that a tax or 

other cost-based threshold can be used to show that power sector emissions will fall to a 

predetermined level. 

Comment 60: Final regulation should allow a cap and trade program based on mass emissions 

with compliance based either on a lb/MW rate basis, a mass basis, or a combination of both, at 

election of utility.

Response 60: The final CPP rule establishes both rate and mass options. These are discussed in 

section VI and VII of the final rule preamble of the CPP. Sections V and VIII of the final rule 

preamble of the CPP describe state flexibilities.

The following are summaries of the specific public comments under this comment:

The commenters requested that the EPA allow states to have the option for a cap and trade 

program based on mass emissions with compliance based either a pound per MW rate basis, a 
359

mass basis, or a combination of both, at the election of the utility. The commenters said that with 

further analysis, it may be appropriate to include other industry sectors and perhaps mobile 

sources as part of a cap and trade program.

Comment 61: RGGI is an adequate compliance mechanism. Commenter's analysis indicated 

RGGI-driven CO emissions reductions were greater than emission reductions that would result 

from the Existing Source Performance Standard, supporting the contention that RGGI can be an 

adequate compliance mechanism.

Response 61: States have the flexibility to use existing programs to demonstrate compliance. 

See section VIII of the final rule preamble of the CPP.

The following are summaries of the specific public comments under this comment:

Commenters expressed their general support for the EPA's efforts to curb greenhouse gas 

emissions, and support the nation's first cap-and-trade program for CO, emissions, the Regional 

Greenhouse Gas Initiative (RGGI) and stated that the RGGI is an adequate compliance 

mechanism for the Existing EGU standard. 

Commenters said the attached technical support document compares the RGGI-driven CO, 

emission reductions to the emission reductions that would result from the Existing Source 

Performance Standard. Commenters said the calculations show that the RGGI reductions are the 

greater of the two supporting the contention that RGGI can be an adequate compliance 

mechanism. 

Commenters said to construct the table, the methodology used in the EPA June 2014 Goal 

Computation Technical Support Document and the EPA "tsd-state-goalcomputation" spreadsheet 

was adapted to calculate a nationwide difference between the initial unadjusted 2012 state fossil

emission rate for covered sources and a final emission rate to determine a percentage reduction. 

Commenters said the nationwide Existing Source Performance Standard reduction of 42.9 

percent was calculated by summing all the state values and using the sums in the goal calculation 

methodology. Commenters said RGGI uses a pre-compliance period of the average of 2006-2008 

for its analyses of RGGI effectiveness and reductions. Commenters said the RGGI states lowered 

the overall allowable CO, emission level starting in 2014 and as the EPA notes the revised 

program reduced emissions by 45 percent. Commenters said subsequent to 2020 the RGGI cap 

will be 78,000,000 tons and that represents a 45.2 percent reduction from the 2006-2008 

baseline. Commenters said because that reduction is greater than the nation-wide reduction, 

RGGI is an appropriate compliance mechanism.

Comment 62: Although the EPA identifies them as "state-specific goals", they do not in reality 

take into account specifics of the states as they are based on regional or national averages

Response 62: See section VIII of the final rule preamble of the CPP for the EPA’s response to 

this comment.

The following are summaries of the specific public comments under this comment:
360

Commenters said that although EPA states that they have developed "state-specific goals" using 

data specific to each states' EGUs and other attributes of its electricity system, in reality BSER 

for each of the building blocks has been based on some method of averaging whether at a 

regional or national level, and therefore the EPA is forcing a regional approach.

Commenters said in no way is EPA proposing a goal or standard that is state-specific or allows 

for the states to apply the standard in a state plan based on what has been and can be achieved in 

the state itself. Commenters said justifying this averaging for all affected EGUs rather than a 

national uniform rate is in consideration of Section 111(d)'s requirement for standards of 

performance to be on a state rather than national basis is actually counterintuitive to what 

actually is intended. Commenters said states are charged with developing a standard of 

performance, taking into account remaining useful life, for their individual units based on U.S. 

EPA's determination of a cost-effective and technically feasible BSER for those unit types. 

Commenters said states have the ability to a make adjustments based on remaining useful life 

and apply a standard of performance to each unit rather than an average across units, yet EPA 

has failed to give consideration to this very specific element of the CAA.

Comment 63: The EPA has proposed that if any section of proposed rule is deemed beyond 

authority of CAA, that the rule would stay in effect and be based on the provisions of the rule 

that remain - this is not an appropriate or realistic scenario

Response 63: Severability is discussed in section V.A of the final rule preamble of the CPP.

The following are summaries of the specific public comments under this comment:

Commenters said the EPA has proposed that if any section of this Proposed Rule is deemed 

beyond the authority of the CAA by the courts, that the rule would stay in effect and be based on 

the provisions of the Rule that remain. Commenters said this cannot be an appropriate method 

for dealing with the highly legally speculative nature of this rule, and indicated from a practical 

standpoint the inter-connected nature of the plans means it is probably not workable.

Commenters said the EPA has proposed state specific goals that are based on a systemic 

approach that takes into account the totality of the energy delivery system. Commenters said 

states, as they develop state plans, are anticipated to incorporate into their plans compliance 

mechanisms that will necessarily be integrated, and affected entity compliance strategies may be 

completely upset should a BB be determined illegal. Commenters said the elimination of one 

component can reasonably be anticipated to directly impact another to a degree that will 

necessitate EPA's reconsideration of, at minimum, state goals and affected entity compliance 

obligations.

Commenters urged the EPA to consider a scenario where a state chooses to meet the obligation 

of all four BBs by transitioning from existing coal to new NGCC generation. Commenters said 

should BB2 be determined to be illegal but the other BBs are maintained, then the state's 

compliance with the existing goals is highly unlikely - the EPA must be prepared to address this.
361

Commenters said along these lines, EPA contemplates a regulatory structure where compliance 

obligations can only be applied 'inside the fence.' Commenters said the EPA proposes that in 

such a scenario, it would be appropriate for EPA to utilize 'beyond the fence line' measures to 

develop a calculation of BSER that would apply to affected units on the grounds that reduced 

generation remains BSER, but such an approach cannot withstand scrutiny. Commenters said 

activities that lie outside the control of the affected unit cannot possibly be proven "technically 

feasible." Commenters said additionally, because EPA is relying on BB measures (such as RES 

or EE mandates) that have not been adopted in many states, it is arguable whether these 

measures are "adequately demonstrated."

Comment 64: The EPA should consider excluding under construction NGCC units for purposes 

of goal computation.

Response 64: The EPA has included under construction units in its quantification of BSER as 

described in sections V and VI of the final rule preamble of the CPP. These units are both likely 

affected sources and have the cost-effective potential to reduce CO2 emissions. 

The following are summaries of the specific public comments under this comment:

Commenters said that the EPA should consider excluding under construction NGCC units for the 

purposes of goal calculation, to result in calculations that better reflect reality. Commenters said 

the decision to build a new NGCC plant does not happen in isolation and is generally motivated 

by another change within the system (such as an increase in electric demand, the retirement of 

another resource, or the addition of variable resources). Commenters argued that the EPA's 

failure to account for future unit closures, while simultaneously including under construction 

units, potentially overestimates the size of the NGCC fleet, as new NGCCs could be replacing 

older units scheduled to retire. Commenters said the fact that EPA was forced to make 

production assumptions about new NGCCs further illustrates the unnecessary difficulty of 

including plants not fully in operation, as well as the inevitability of erroneous analytical 

outcomes. Commenters said removing units that were not operational by January 1, 2012, will 

result in calculations that better reflect reality.

Comment 65: Commenters are a generation and transmission cooperative and states that a small 

or not-for-profit utility exemption or a provision for less stringent standards or longer 

compliance schedules should be available for small public and cooperative EGUs

Response 65: States have the flexibility to accommodate unit-specific concerns by assigning 

separate emission rate or reduction requirements for units. As described in section V of the final 

rule preamble of the CPP, the EPA believes its BSER provides compliance options that are 

available to every source.

The following are summaries of the specific public comments under this comment:

Commenters said on September 29, 2014, Arizona Electric Power Cooperative, Inc. (AEPCO) 

filed comments on the CPP requesting that the EPA consider creating a separate category for 

"small public and cooperative electric generating units" within the framework of the larger rule. 
362

Commenters said that Dairyland Power Cooperative agrees with AEPCO that a small or not-forprofit utility exemption or a provision for less stringent standards or longer compliance schedules 

should be available to address the unique difficulties such utilities will have complying with the 

proposed rule. Commenters said as noted in the NRECA comments on this proposed rule, 

Section 111(d) of the CAA instructs EPA to allow states to "take into consideration, among other 

factors, the remaining useful life of the existing source to which the standard applies." (42 U.S.C. 

Section 7411(d) (1)). Commenters said furthermore, NRECA noted that EPA regulations (40 

C.F.R. 60.24(f)) state that: 

"States may provide for the application of less stringent emissions standards or 

longer compliance schedules than those otherwise required [under the paragraph 

setting emissions standards for designated pollutants the Administrator determines 

may cause or contribute to endangerment of public health], provided that the State

demonstrates with respect to such facility (or class of facilities): (1) Unreasonable 

cost of control resulting from plant age, location, or basic process design, (2) 

Physical impossibility of installing necessary control equipment, or (3) Other 

factors specific to the facility (or class of facilities) that make application of a less 

stringent standard or final compliance time significantly more reasonable." 

Commenters said electric cooperative consumers, such as the rural electric members served by 

the member cooperatives of Dairyland, cannot afford the high cost of electricity and capital 

required if Dairyland must replace its existing coal-fired generation before its remaining useful 

life and build new transmission and gas pipeline infrastructure to support that new generation. 

Commenters said our unique non-stock, not-for-profit structure does not lend itself to the sort of 

flexibility the CPP requires. 

Commenters said small, not-for-profit utilities, in practice, have fewer resources and therefore 

fewer options to comply with the CPP. Commenters said a large utility with many power plants 

will likely have numerous avenues to adapt to and address the CPP rules resulting in a smaller 

impact on affordability and reliability for their customers. Commenters said they own two coal 

plants and a portion of a third plant; they have two natural gas combustion simple-cycle turbines, 

with operating time restrictions. Commenters said therefore, their options for response to the rule 

are extremely limited. 

Commenters said that due to the unique challenges faced by them, the EPA should exempt small 

and/or not-for-profit utilities from the CPP or offer modified compliance pathways taking special 

regard for the unique challenges of such utilities. 

Comment 66: Proposal does not provide credit for emissions reductions achieved prior to the 

2012 baseline or for any reductions that could be achieved between the 2012 baseline and initial 

compliance (2020) timeline

Response 66: See sections V, VI, and VIII of the final rule preamble of the CPP for the EPA’s

response to this comment.

The following are summaries of the specific public comments under this comment:
363

Commenters said that the proposal does not provide credit for emission reductions achieved prior 

to the 2012 baseline or for any reductions that could be achieved between the 2012 baseline and 

initial compliance (2020) timeline.

a. Pre-2012 Reductions

Commenters said the EPA should recognize and allow states to provide credit for unit efficiency 

improvements (uprates), including nuclear uprates, made prior to 2012. Commenters said in the 

period leading up to EPA's 2012 baseline year, companies have undertaken a variety of 

initiatives that directly or indirectly reduce the carbon intensity of the electric generating system. 

Commenters said these actions include: upgrades at existing fossil- fired power plants, uprates at 

nuclear power plants, new plant construction, including NGCC facilities and renewable energy 

projects, and energy efficiency investments. Commenters said these "early actions" should not be 

penalized in the goal computation, nor should they be penalized in the state compliance 

plans. Commenters requested that the EPA develop a process where a state can evaluate these 

efficiency improvements and include these avoided emissions in a state compliance plan.

b. 2012- 2019 Reductions

Commenters said as proposed, EPA's Clean Power Plan would not allow any CO2 emission 

reductions occurring between now and the end of 2019 to be eligible for compliance with the 

state emission performance standards. Commenters said the EPA should encourage entities to 

make investments in reductions prior to 2020 by providing an opportunity to use these emission 

reductions and avoided emissions in state compliance plans, which will spur early 

investments. Commenters requested that the EPA allow for "early action" credit for emission 

reductions achieved through any additional unit efficiency improvements and new energy 

efficiency programs as well as unit retirements prior to 2020.

Commenters said creditable early reductions should include any activities within the four BSER 

building blocks or any other measures identified in the state plans, such as deployment of electric 

vehicles or distribution efficiency from deployment of smart grid technology for example. 

Commenters said furthermore, if states are allowed to demonstrate compliance with a final target 

(whether 2030 or the alternative 2025 emission rate goal), without reference to the interim 

average goal, they can include the reduction benefits of activities that occur after 2012. 

Commenters said this provides incentives for states to implement pre-2020 reduction measures, 

particularly new renewable, end-use and supply-side efficiency programs, which would provide 

additional environmental benefits more quickly.

Commenters recommended that EPA should allow states to tailor their compliance timelines to 

their unique circumstances, and should be able to apply early emissions reductions resulting from 

existing laws and regulations towards compliance. Commenters said Nevada Senate Bill 123 

(SB123) will result in the early retirement of a coal-fueled EGU (starting in 2014 and final unit 

retirement in 2017), and SB123 has also resulted in the addition of incremental gas and 

renewable resources being added to the utility portfolio. Commenters said thus, SB123 will 

allow Nevada to realize emission reductions apart from BB 1 and BB2 prior to the beginning of 

the interim compliance period, and states like Nevada should be allowed the flexibility to 
364

implement existing laws and regulations aimed at reducing emissions on the state-specified 

schedule, thereby demonstrating progress toward the final goal in an alternative manner.

Comment 67: As an incentive to engage in carbon reduction measures prior to the beginning of 

the plan performance period (2020) and get a jump on achieving final goals, the EPA should 

allow credit for new carbon reduction actions and provide limited banking for carbon reduction 

actions taken in 2017-2020 timeframe.

Response 67: See section VIII of the final rule preamble of the CPP for the EPA’s response to 

this comment.

The following are summaries of the specific public comments under this comment:

Commenters said in order for states to fully leverage renewable energy as a compliance tool, the 

EPA should provide limited banking for carbon reduction actions taken after January 1, 2017, 

and before the plan performance period begins.

Commenters said the EPA should allow credit for new carbon reduction actions (i.e., increasing 

existing policies, enacting new programs and/or adding new qualifying facilities) taken after 

January 1, 2017, and before the beginning of the plan performance period (2020), to count 

toward achievement of the state's emissions goals. Commenters said this would help ensure that 

states have an incentive to engage in carbon reduction measures prior to that period and get a 

jump on being better positioned to achieve their final compliance goals.

Comment 68: Proposed rule should be based on an "all-of-the-above" energy supply based on 

maintenance of a diverse energy supply

Response 68: The EPA RIA analysis suggest the generation diversity will increase in response 

to the CPP.

The following are summaries of the specific public comments under this comment:

Several commenters said that energy consumers benefit most from an "all-of-the-above" energy 

strategy, and that diversity of energy supply is not only critical in keeping energy costs 

reasonable, it is essential in ensuring steady and reliable streams of energy and is vital to the 

country's economic survival.

Comment 69: The EPA should utilize marginal analyses in constructing its targets, both for the 

nation and for the individual states, to ensure that the people of the United States receive 

emissions reductions benefits commensurate with the costs to achieve them.
365

Response 69: The EPA’s BSER quantification relies on the average emission profile for a 

generating technology that is replacing and/or being replaced. It does not attempt to conduct a 

replacement calculation based on identifying the marginal source. However, the EPA 

compliance modeling does operate on a least-cost linear programing framework that takes these 

considerations into account, and states have the ability to take this into account when 

determining a compliance pathway.

The following are summaries of the specific public comments under this comment:

Commenters said that the proposed rule does not adequately address policy alternatives such as a 

70% reduction, or a 48% reduction, and said that the question of CO2 emissions is sufficiently 

complex that the marginal cost and marginal benefit curves may not be enough to characterize an 

optimum.

Commenters said since emissions abatement carries costs to the consumer, it is important 

to ensure that those costs are commensurate with the benefits that consumers are receiving from 

this abatement policy. Commenters said by not considering the relationship between the 

marginal costs and marginal benefits of abatement for each state, the EPA's methodology cannot 

be considered sufficient for determining the optimal level of CO2 reduction for 

society. Commenters encouraged the EPA to utilize marginal analyses in constructing its targets, 

both for the nation and for the individual states, to ensure that the people of the United States 

receive emissions reductions benefits commensurate with the costs to achieve them.

Comment 70: To encourage nuclear generation to operate at peak performance, the EPA should 

allow the energy from any nuclear power plant in excess of the 81.6 % average lifetime capacity 

factor for all current nuclear plants to be used for compliance with the states' carbon emission 

rate goals, and because this is meant to be an incentive for peak performance of the nuclear fleet, 

none of the nuclear generation should be used to calculate the states' goals.

Response 70: The EPA has revised the goal calculation to exclude nuclear generation, however, 

some nuclear generation can be included in the state plan for compliance with the final goals. 

See section VIII of the final rule preamble of the CPP for more information about nuclear 

generation in the state plan.

The following are summaries of the specific public comments under this comment:

Commenters said in the proposal, EPA stated "Increasing the nuclear capability relative to the 

amount that would otherwise be available to operate is therefore a technically viable approach to 

support reducing CO2 emissions from affected fossil fuel-fired EGUs." Commenters said while 

EPA states in the proposal that it estimated a 90 percent average utilization rate for U.S. nuclear 

units, APS, which operates the Palo Verde station, has different information. Commenters said 

based on industry data, the average lifetime capacity factor of the 100 nuclear plants currently 

operating is 81.6 percent. Commenters said of these, based on the three year average between 
366

2011 to 2013, the plants in the fourth quartile only operated at an average capacity factor of 70.8 

percent.

Commenters said therefore, to encourage nuclear generation to operate a peak performance, EPA 

should allow the energy from any nuclear power plant in excess of the 81.6 percent average 

lifetime capacity factor for all current nuclear plants to be used for compliance with the states' 

carbon emission rate goals. Commenters said because this is meant to be an incentive for peak 

performance of the U.S. nuclear fleet, none of the nuclear generation should be used to calculate 

the states' goals. Commenters said this nuclear generation, like renewables, is a zero carbonemitting generation resource, and added this approach adds flexibility to the program and assists 

the states that have nuclear capability in achieving their final carbon emission rate goals. 

Comment 71: Proposed rule includes performance standards that are completely inconsistent 

with the Standards of Performance proposed for new sources, and instead adopts an approach 

that relies primarily on other, unrelated sources within each state.

Response 71: See section VIII of the final rule preamble of the CPP for the EPA’s response to 

this comment.

The following are summaries of the specific public comments under this comment:

Commenters said that the proposed rule includes performance standards that are completely 

inconsistent with the Standards of Performance proposed for new sources, and should be 

modified to be consistent. Commenters said the proposed rule ignores the EPA's past approach 

to Section 111(d), which mandated that the BSER analysis conducted for new sources under 

Section 111(b) be followed for sources to be regulated under Section 111(d). (40 Fed. Reg. at 53, 

342). Commenters said instead, the BSER analysis in the Proposed Rule impermissibly relies on 

reductions outside the fence line, effectively making entire states into emissions "sources" 

through regulation of the entire energy sector.

Comment 72: The EPA should create a dynamic distribution system that includes a Distribution 

System Operator as the local balancing authority.

Response 72: See section VIII of the final rule preamble for discussion of state plans.

The following are summaries of the specific public comments under this comment:

Commenters stated that more electrical power is being generated in homes, businesses, and 

commercial buildings and used locally, and this jump in power production at the distribution 

level presents a challenge to the traditional electrical transmission and distribution system based 

on centralized power generation and control. Commenters said the centralized system operated 

by utilities was not designed for the flexible load tracking required by renewables or the control 

of large numbers of distributed electrical energy resources. Commenters suggested an alternative 
367

approach that holds promise is a dynamic distribution system that includes a Distribution System 

Operator as the local balancing authority.

Commenters said as conceived, the dynamic distribution system uses local sources to track loads, 

stabilize voltage and frequency, and smooth intermittent renewable energy generation providing 

a predictable, constant load profile to the utility. Commenters said this new dynamic distribution 

system connects central and local electricity generation, storage, microgrids, and loads with a 

marketplace that enables energy transactions, such as payments passing between buyers and 

sellers of energy at the local distribution level. Commenters said this new system provides a 

promising framework for distributed energy resources to deliver the same services at a better 

price, with decreased power losses, decreased emissions, and better reliability. 

Commenters said a dynamic distribution system, based on a new balance in structure and 

function between centralized and decentralized architecture, requires a new market model which 

combines a regional and locally tailored market model. 

Comment 73: Create a "better than BSER" option with a longer compliance period

Response 73: The EPA is retaining the 2030 final goal compliance date, however the EPA has 

modified the interim goals in response to comments and our further consideration. The interim

period covers the years 2022-2029 and includes illustrative interim emission values for the 

periods of 2022-2024, 2025-2027, and 2028-2029. States have the flexibility to use different 

steps than those included in the final rule if the state demonstrates in its state plan that the values 

chosen for the 3, 3, and 2 year increments are equivalent to the interim goal included in the final 

rule for the 2022-2029 period. See sections V and VII of the final rule preamble for discussion of 

the BSER and statewide goals.

The following are summaries of the specific public comments under this comment:

Commenters stated in practice, the "better than BSER" approach would provide a State with the 

flexibility to work with utilities to develop long range resource planning that would allow a true 

glide path for affected EGUs in exchange for less carbon intensive resources replacing those 

higher intensity resources at times that could account for particular situations in a State. The 

commenters said for example, a State would be allowed to work with a utility for a guaranteed 

shutdown of a coal plant that would occur in 2032 and up until 2032 the State would not be in 

compliance with its State goal; but, after shutting down the coal plant, the State would be well 

beneath its compliance goal and its cumulative CO2 emissions over the 20 year compliance 

period (2020-2040) would be significantly lower than what would occur if the coal plant 

continued to run thru 2040 with reduced output to comply with the State's proposed goal. The 

commenters said there is precedent for EPA accepting a cumulative approach to a reduction in 

pollution emissions over a period of time; EPA relied on such a cumulative approach to 

accounting for emission reductions that would be achieved by the Navajo Generating Station 

(NGS) when approving the shutdown of the three units at NGS and deferring the installation of 

pollution controls by recognizing the cumulative pollutant reductions would be greater if the 

pollution controls were required in the near term on all three units without a guaranteed 
368

shutdown for the units. The commenters encouraged EPA to permit more creative approaches for 

States to employ, such as UAMPS' "better than BSER" approach in order for States to work with 

affected EGUs to afford these sources with true compliance glide paths.

Comment 74: The EPA Should Expressly Allow States To Use A Hybrid Approach that can 

include both mass-based and rate-based standards

Response 74: The EPA is giving states the flexibility to choose to comply with rate-based goals 

or mass-based goals. See section VIII of the final rule preamble for more information regarding 

state plans. 

The following are summaries of the specific public comments under this comment:

Commenters stated EPA should clearly and expressly allow states to use a hybrid approach that 

can include both mass-based and rate-based standards, in addition to allowing states to use new 

natural gas capacity in compliance demonstrations; an example of this approach could be as 

follows: 

• In Step One, a mass-based cap-and-trade program could be developed for existing fossilfueled plants. The commenters said the cap for this program could be based on annual 

average emissions from existing fossil-fueled plants from 2007 through 2012 reduced by 

an amount that reflects BSER for those plants, taking into account any heat rate 

improvements available to them (considering the cost of making such improvements, the 

remaining life of the plant, etc.). The commenters said the cap-and-trade approach would 

allow those plant owners/operators to decide whether to make the heat rate improvements 

or simply run less (or shut down) if doing so would make an equivalent level of reduction 

at a lower rate. 

• In Step 2, the state would calculate an emission rate (in pounds per megawatt-hour) that 

the state would commit to achieve starting in 2030. The commenters said the rate would 

be established by calculating the numerator to be the annual CO2 cap discussed above 

plus the projected annual emissions from new natural gas plants starting in 2030 and the 

denominator would be the projected annual megawatt-hours of generation in the state 

from all of these plants. The commenters said when making its compliance 

demonstration, the state would also be allowed to include all forms of carbon-free 

generation (i.e. wind, solar, hydropower, and nuclear) in the denominator as an incentive 

to encourage investments. The commenters said such an approach would provide states 

with an incentive to move to cleaner generation without either EPA or the state running 

afoul of the jurisdictional limitations. 

Comment 75: Include all GHGs, including all reductions since 2005
369

Response 75: The final rule goals are based on emission reductions of only CO2. The EPA is not 

using 2005 as the baseline year, see section VI of the final rule preamble of the CPP for more 

information about the baseline year.

The following are summaries of the specific public comments under this comment:

Commenters stated in judging whether a state has achieved the GHG reductions, the EPA should 

be required to take into consideration all reductions in greenhouse gases in each state, including 

those from power plant retirements that have occurred since 2005. The commenters said 

President Obama has publicly called for the reduction of greenhouse gases by 17% from the 

2005 level by 2020. The commenters said in calculating whether states have met their 

requirements to help achieve that federal objective, all reductions in GHG since 2005 should be 

included.

Comment 76: T&T supplementary rule - EPA takes comment on the issue of RE across 

international borders, and specifically in Canada, in the supplemental proposal. The commenters 

are affected by this issue since they have current and possible future power purchase agreements 

with hydroelectric facilities in Canada - Incremental or new hydro capacity installed any time 

after the base year, not just after the proposal date, should be eligible for compliance.

Response 76: See section VIII of the final rule preamble of the CPP for the EPA’s response to 

this comment more information about RE measures that occur outside the U.S.

The following are summaries of the specific public comments under this comment:

Commenters said incremental or new hydro capacity installed any time after the base year of 

2012 (or other base year/range of years used in the final rule) - not only after the date of proposal 

- should be eligible for compliance. Commenters said the emissions benefits of such investments 

should be counted not only beginning in 2020, but beginning in the year that hydro capacity goes 

into service and therefore begins displacing emissions from 111(d)-affected EGUs. Commenters

said for facilities that go into service before 2020, EPA should allow banking of these MWh for 

use after compliance begins, as EPA suggested in the October 30,2014 Notice of Data 

Availability (79 Fed. Reg. at 64,545- 64546).

4.9 CHOICE OF BASELINE OTHER THAN 2012

Section 4.9 covers public comments related to the choice of baseline other than 2012. 

Commenters have raised a number of issues related to this subsection which are organized by 

topics (comments) below. Responses are provided for these topics.
370

Comment 1: 2012 does not represent typical year; multi-year approach should be used for 

baseline; 3 or 5 year period suggested as baseline; the EPA has used multi-year averages in other 

programs; support for NODA 3-year average.

Response 1: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment. EPA had made adjustments to fossil generation in the NorthWest to reflect a more 

representative generation profile.

The following are summaries of the specific public comments under this comment:

2012 Not A Representative Year. Several commenters stated that 2012 should not be used as 

baseline year because it was not a typical, representative year for the industry. Commenters 

stated that 2012 does not accurately represent GHG emissions because in 2012 GHG emissions 

rates from coal-fired generation were atypically low due to: above average hydropower 

electricity generation, mild weather, historically low natural gas prices, and a changing portfolio 

(additions and retirements) of available units for dispatch. Commenters stated that single-unit 

issues present in 2012 also significantly affected state baseline emissions, including extended 

outage periods for major sources of CO2 and partial year operation of new NGCCs, and the EPA 

did not adjust for any of these events. Supporting their argument that 2012 was not a 

representative year for gas prices, Commenters indicated that natural gas prices are historically 

very volatile and are expected to rise faster than coal prices relative to 2012. Commenters said 

that 2012 is not representative for the Northeastern states because due to Super Storm Sandy, 

energy consumption was atypical.

Commenters stated the selection of 2012 as the base year is also non-representative of the current 

energy markets in that natural gas prices were unsustainably low due to the mild weather and the 

significant growth in the new gas drilling regions.

Commenters stated EPA chose a baseline year of 2012; in that year, the price of natural gas 

hovered at historically low rates. The commenters said the price differential between coal and 

gas was very nearly zero; and some coal units with dual fuel capability actually elected to burn 

gas for much of the summer generating season. The commenters said other coal units were laid 

up as NGCC units dominated the market; yet even under these most favorable market conditions, 

EPA data indicate that NGCC units in the Midwest operated only at about 30% capacity factor 

(28% in Missouri). The commenters said there may be some price signal that would further 

augment NGCC gains and produce the desired 70% capacity factor, but EPA hasn't demonstrated 

that it exists, nor given any indication of what it might be; and added, this is an important factor 

because a large portion of the imputed benefits of the proposal flow from this market 

displacement.

Several commenters supported using a multi-year average rather than any single year, but 

indicated that if the EPA does choose to use a single year they must, at a minimum, correct for 

the types of anomalies discussed above. Commenters indicated that for example, to adjust for 

variable hydropower production, the EPA could employ a common regulatory practice among 

investor-owned electric utilities in the Pacific Northwest region that involves "normalizing," or 
371

"averaging", hydroelectricity generation across periods and scenarios. Commenters said that 

ratemaking processes assume average hydroelectricity generation, irrespective of actual 

hydrological conditions. Commenters said that if the baseline had been established on the basis 

of a "normalized" year, instead of raw emissions data from 2012, Washington's baseline would 

have been 5.7 million tons higher, or approximately 36.2 million tons. Commenters said that the 

EPA should defer to states that have a long history of normalizing for hydrogenation, since the 

EPA has no experience or authority with respect to normalizing for hydroelectricity generation in 

different markets across the country.

Commenters stated EGU's operations will vary greatly over the course of any given year 

and EPA must correct for those anomalies.

Single Year Not Representative. Commenters stated using a single year as the basis for the 

calculations is inconsistent with the way the industry operates. The commenters said electric 

generating units require regular maintenance and must be taken out of service for extended 

periods of time to complete maintenance and upgrades. The commenters said for example, 

Laramie River Station, which is comprised of three generating units, is on a three-year 

maintenance schedule, with each unit being shut down for maintenance on a rotating basis. The 

commenters said many utilities in the industry adhere to a three-year maintenance schedule and, 

regardless of the specific schedule, selecting any single year is likely to fail to reflect the actual 

capability of the generating fleet. The commenters added variations in weather have a significant 

impact on not only the demand for electricity, but also the type of electricity generated in a given 

year. The commenters said for example, the amount of fossil generation in the Upper Great 

Plains region is significantly affected by the amount of hydropower generation: In high water 

years there is more hydro and less fossil generation, and likewise in low water years, there is less 

hydro and more fossil generation. The commenters said averaging the baseline will tend to 

reduce the impact of weather anomalies as well as unit outages.

Commenters stated EPA should start with a baseline period that is reasonably representative of 

actual generation and carbon emission levels. The commenters said specific to the Pacific 

Northwest, a single year is unlikely to be representative of a fair "starting point" because of when 

some plants began operation and hydroelectric variability. The commenters did not believe that 

the baseline should be the same for all states; rather the states should have, within their authority, 

the ability to determine the appropriate baseline period.

Multi-year Baseline. Several commenters indicated that using a single year as the baseline is 

inappropriate, and that instead a multi-year approach should be used. Several commenters stated 

that using a single year will produce anomalies, many of which could be ameliorated by the use 

of a multi-year baseline. 

Several commenters indicated using a single year for baseline is inappropriate because variations 

in weather have a significant impact on not only the demand for electricity, but also the type of 

electricity generated in a given year. Commenters said that for example, the amount of fossil 

generation in the Upper Great Plains and the Pacific Northwest regions is significantly affected 

by the amount of hydropower generation: during high water years, there is more hydro and less 

fossil generation, and likewise in low water years, there is less hydro and more fossil 

generation. Several commenters indicated that because of historically high hydropower 
372

availability in 2012, Oregon's only coal-fired power plant ran at an unusually low capacity factor 

of approximately 50 percent. Several commenters indicated that across the region, hydropower 

generation was 110 percent of average in 2012. Several commenters stated that in Washington 

specifically, hydropower production ran at 127.7 percent in 2012, as compared to long-term 

average hydropower generation rates.

Commenters stated that the EPA noted in the proposal that using a four-year average instead of a 

single year average would not alter the national baseline operating and emission rates 

significantly. Commenters countered that at the national level relying on a single year may not 

strongly influence the baseline, but for individual states a single year may deviate substantially 

from normal or average conditions.

Commenters stated that EGUs require regular maintenance and must be taken out of service for 

extended periods of time to complete maintenance and upgrades, potentially making a one year 

average non-representative. Commenters also indicated that a single year would not be 

representative because in a particular year units may be running for only part of the year due to 

unplanned outages such as those resulting from storms or floods.

Suggested Multi-year Periods. Several commenters offered suggestions regarding how many 

years should be used to establish baseline. Commenters suggested 3-year, 3 to 5 year, or 5-year 

multi-year baselines. 

3-year baseline. Commenters suggested the EPA should allow a state to choose any three years 

within the most recent ten-year period for which emissions data is available and then average 

those three years to establish a baseline for its emission reductions and compliance plan. 

Commenters stated the EPA should allow states to use as their baseline the average of any three 

consecutive years from 2008 through 2013.

Commenters recommended that EPA use at least the average of the last three available years as a 

baseline period, rather than using the baseline year of 2012. Several commenters agreed that a 3-

year average would be reasonable, but cautioned that states should not be allowed to pick which 

three year period is used, and suggested the most up-to-date data available should be used. 

Commenters further indicated that using the average of the three most recent years would also 

align the baseline with the rolling three year average EPA is proposing for compliance.

Several commenters suggested that the EPA use a 3-year average when using historical data to 

determine a baseline. Commenters specifically suggested using an average of total generation 

from 2003-2005 to calculate individual state emission budgets. Commenters said that U.S. policy 

statements for domestic and international carbon reduction goals are all measured from a 2005 

baseline. Commenters suggested that the EPA should also use 2005 as a baseline in this 

rulemaking and allow reductions that have been made since 2005 to be excluded from goalsetting but available for use in demonstrating compliance.

Commenters recommended using a 3-year average of data between 2005 and 2012 to calculate 

baseline emissions.
373

Commenters suggested a baseline average of years 2002-2005 should be utilized to best capture 

early reduction efforts.

Commenters suggested a baseline average of years 2010 through 2012 should be used.

3-5 year and 5-year baseline. Commenters stated that a multi-year average of three to five years 

should be used to establish baseline. Commenters indicated that three-year averages are better 

baseline proxies than the single year of 2012, but still may not represent a "typical" year. A fiveyear average provides a better representation of a typical year, and therefore, commenters

recommended establishing a baseline period for all states of between three to five years (using 

the most recent period for which complete data can be acquired).

Several commenters felt EPA should expand the baseline period from one year to five years in 

order to minimize the impact of anomalies that inevitably arise during a one-year 

period. Commenters suggested a 5-year baseline period of 2008-2012, and indicated that 

reaching back to 2008 would reduce somewhat the penalty imposed on early acting states that 

implemented aggressive RE policies.

EPA's Use of Multi-year Averages. Several commenters stated that in other programs, EPA uses 

multiple years of data to establish baseline and demonstrate compliance. Commenters indicated 

that EPA uses multiple years for baselines in other programs and for compliance purposes 

because of the variability issues associated with the use of a single year.

Commenters stated that modeling for regional haze program analyses typically use three or more 

years of meteorological data, as does stationary source modeling done by Washington. Several 

commenters noted that in the Notice of Data Availability (NODA) published October 30, 2014, 

EPA provides data for calendar years 2010 and 2011, suggesting the use of a three-year average 

of 2010-2012. Commenters recommended that EPA review the discussion in 40 CFR Part 51, 

Subpart W [Determining Conformity of General Federal Actions to State or Federal

Implementation Plans] when evaluating the appropriate number of years to include in 

establishing the baseline for this rule proposal.

Several commenters stated that the EPA has noted in previous rulemakings that an EGU's 

operations (and consequently, its GHG emissions) will vary greatly over the course of any given 

year. Several commenters indicated that as a result, under the New Source Review program, the 

EPA applies a presumption that any 24-month period in the five years preceding a project is 

representative of normal operations. Several commenters stated that a multi-year baseline period 

also would be consistent with how the EPA expects states to demonstrate compliance under the 

Proposed Rule. Several commenters noted that the EPA is proposing that during the final 

performance period, 2030 and thereafter, states must meet the final emission performance level 

on a three-calendar year rolling average starting January 1, 2030. (Proposed 40 CFR 60.5775(d)). 

Several commenters stated that a three-year rolling average accounts for the natural variation that 

occurs within a single-year period, and further noted that a multi-year baseline period is 

consistent other existing EPA programs and guidance. Several commenters indicated as an 

example, the Cross-State Air Pollution Rule ("CSAPR") used an eight-year (2003-2010) historic 

emissions baseline period established for SO2, NOx, and ozone-season NOx. 
374

2012 was an atypical year - multi-year baseline preferred. Commenters stated EPA has proposed 

that state plan reductions be based on a single year, 2012, of reported emissions and electric 

generation data from affected EGUs. The commenters asserted states should be given the 

flexibility to consider other baseline years that more accurately reflect each state's specific 

circumstances or averaging over several years to address the concern that 2012 was an unusual 

year for electric generation for a number of reasons. 

Commenters stated in 2012 dispatch of the electric generation fleet was atypical. The 

commenters said while electric demand remained low after suffering a significant decline in 

2008 as a result of the economic recession, natural gas prices dipped to a historic low (April 

2012: $1.95) close to 70% below the December 2014 ($6) average price and 50% lower than the 

2014 low price (July: $4.05). The commenters said the 2012 annual average price of natural gas 

of $2.75 was nearly $6 less than the 2005 average of $8.69. The commenters said each of these 

disparate data points identifies a weakness in picking one single year (2012) for analysis: it 

builds into the model an emissions bias resulting from low gas prices in 2012. The commenters 

asserted the decision to choose a single year imbeds into the program an operational bias which 

can create a programmatic disparity in impact among affected entities. The commenters said by 

selecting a single base year, EPA creates winners and losers based on individual operating 

characteristics from that one year. The commenters said utilities with major base load coal units 

off line for retrofit or repair would see a disproportionately negative impact on base case 

emissions compared with utilities that were operating plants at maximum capacity for 2012. The 

commenters said EPA should allow states and utilities to offer alternative baseline years that 

includes averaging of multiple years or identifying years where operation accurately reflects 

maximum fleet capacity for the purposes of setting a baseline. 

Three-year baseline. Commenters supported the suggestion raised in EPA's ESPS NODA 27 that 

the Agency use three years of data for averaging a baseline (2010-2012) or allow the states to 

develop an average baseline that works best for the state for any three years from 2005 to 2013. 

2012 was atypical year - multi-year baseline preferred. Commenters stated EPA's proposal 

establishes a single year - 2012 - as the baseline for calculating a state's CO2 performance goals. 

The commenters stated Dynegy has made significant investments and undertaken a series of 

steps prior to the baseline year that must be considered; for example, Dynegy has upgraded 

turbines on numerous units, at a significant capital cost, resulting in efficiency improvements -

all prior to 2012. The commenters added Dynegy previously retired 10 EGUs in Illinois during 

the period October 2011 to January 2013. The commenters said the CPP should recognize these 

previous reductions, which have helped the state reduce its carbon emissions. 

Commenters asserted the baseline should be at least a two- or three-year period to ensure that the 

baseline is representative and does not arbitrarily penalize a state and generators due to inherent 

variabilities that impact electric generation emissions in any single year (e.g., weather, 

equipment outages, fuel prices, the overall economy). The commenters said a multi-year 

emissions baseline period would be consistent with other EPA air regulatory programs that 

recognize the inherent variability in EGU emissions from year to year, including NSR (40 C.F.R. 

Section 52.21(r)(21) defines "actual emissions" in terms of emissions during any consecutive 24-

month period), CSAPR (allowance allocations methodology for existing units utilizes baseline 

periods ranging from three years to eight years to reduce the likelihood that any single year's 
375

operations determine allocations), and the Acid Rain Program (allowance allocations based on a 

unit's average fossil fuel consumed from 1985 through 1987). 

Commenters stated a single year 2012 emissions baseline is not representative of coal-fired EGU 

CO2 emissions; among other reasons, year 2012 is not representative given historically low gas 

prices, which reduced capacity factors of coal-fired plants. The commenters added using only 

2012 fails to recognize significant coal plant shutdowns that occurred in the immediately 

preceding years. The commenters said by limiting the emissions baseline to the single year 2012, 

EPA skews the state targets and increases both the unrealistic nature of those targets and the 

burden on states and emitters to comply. The commenters said a multi-year emission baseline 

period would help to smooth out the inherent variabilities in any one year and help ensure that 

reduction targets are more realistic. The commenters said a multi-year emissions baseline period 

would be consistent with EPA's proposed requirements for a state's demonstration of compliance 

with the proposed emission targets, which would be based on a three-calendar year average. 

Proposed Section 60.5775(d). 

3-year baseline. Commenters stated with this proposal, EPA has determined that if the reductions 

are made using 2012 data as a baseline, the mass emissions of GHG from EGUs will be 

approximately 30% less than emissions in 2005. The commenters said this estimation takes into 

account the measured effects of all actions that have reduced CO2 emissions from EGUs 

between 2005 through 2012; however, the use of a single year in establishing the baseline does 

not account for unusual operational situations and conditions driven by the economy. The 

commenters said a single year baseline might occur in a year where there were unusually high or 

low amounts of rainfall impacting hydroelectric production; likewise, abnormally low or high 

natural gas prices can skew the normal dispatch order of EGUs. The commenters said in 2012, 

due to low natural gas prices for the LG&E and KU fleet, simple cycle combustion turbines were 

called into service at almost twice the average run time as the previous 10-year average rate. The 

commenters said EPA should allow states to use a three-year average period to set the baseline 

rate for calculating the goal (e.g. a consecutive 3-year period between 2005 and 2012 or perhaps 

the period from 2010 - 2012) to help alleviate any anomalies that may result from specifying a 

single year baseline period. The commenters said EPA should permit the state plans to begin 

counting reductions immediately following the end of the baseline period; also, EPA should 

allow states to count reductions from any actions that occur after the baseline period which 

support meeting the final 2030 goal.

Commenters stated it is surprising that U.S. EPA chose to use just one calendar year of data as 

the baseline, effectively ignoring variables such as weather, unplanned and planned outages, fuel 

price variability and other factors that result in shifts among generation sources. The commenters

said in 2012 natural gas prices were at historical lows and NG-fired EGUs ran at higher capacity 

factors than would otherwise have been the case. The commenters said using a year that is not 

representative of generation patterns results in compliance with emissions targets appear more 

achievable. The commenters said because no single year can be representative of electricity 

generating patterns, the commenters recommended that U.S. EPA use at least the average of the 

last three years as the baseline period. The commenters said this approach would allow use of the 

most current data while at the same time developing a baseline that recognizes annual variations 

in generation source and emissions, as well as aligning with the proposed rolling three year 

average compliance period in the proposal. The commenters appreciated the fact that U.S. EPA, 
376

while originally taking the position that any potential changes to state goals using a multi-year 

base year would be minimal, has noted the concerns of states and regulated entities and has 

requested comment on a multi-year approach in the recent NODA. The commenters recognized

that each baseline approach presents its own advantages and disadvantages, but final state 

baselines should be representative and not penalize states or entities and its members who have 

taken responsible early actions. The commenters said if U.S. EPA maintains its approach of 

using 2012 as the baseline, the rule should be drafted such that the baseline can be adjusted for 

individual states where it can be demonstrated that certain anomalies may have had an undue 

influence on the baseline.

Commenters stated EPA should set emission rate goals based on a multi-year baseline period, 

rather than historic generation in a single year. The commenters said as EPA has noted in 

previous rulemakings, electric demand and resultant utility operations fluctuate greatly within a 

single year. The commenters said in 2012, Lewis & Clark Station had a major outage year 

resulting in much lower generation from the unit than routinely occurs. The commenters said 

using this lower generation value arbitrarily and capriciously lowers the State of Montana 

emission rate goal. The commenters said utilizing a multi-year baseline would correct for 

scheduled maintenance outages and similar anomalies. The commenters recommended that EPA 

use an average of emissions between 2003 and 2006, as this time period also would provide 

consideration to utilities that have invested in renewable energy.

Commenters stated 2012 was an anomal year for generation and EPA should average three (3) 

years of data to establish a base.

Commenters stated it is inappropriate to use any single year as a baseline to represent the electric 

power sector; sources and amounts of electricity generation can and do vary from year to year. 

The commenters said the variability is due to many factors that include economic conditions, 

weather variability, year-to-year fluctuations in fuel prices, and significant unplanned and 

planned unit outages. The commenters said with regard to fuel prices, natural gas prices in 2012 

were at their lowest level since before 2000 (the 2012 annual average Henry Hub price was 

$2.75 per mmBtu), lower than today's price, and lower than any natural gas price the EIA 

projects into the future; this one fact alone disqualifies 2012 as a single baseline year to represent 

the electric power sector. The commenters said the EPA clearly recognizes that there is year-toyear variability in the electric power sector, and has taken steps in previous power sector 

rulemakings to address it. The commenters asserted the failure of EPA to address power sector 

variability in its selection of a baseline period is a gross oversight that must be corrected. 

Commenters stated the use of 2012 as the single-year baseline also limits the ability of states to 

receive credit for early actions that reduce CO2 emissions, such as the retirement of coal-fired 

EGUs. The commenters said coal-fired EGUs that retired during the period 2009 - 2011, for 

example, would not be recognized under the EPA's proposed 2012 baseline; a multi-year 

baseline would allow states to capture and get credit for more early actions in their 

implementation plans than using 2012 as a single year. The commenters said the EPA made 2010 

and 2011 eGRID data available as part of its October 30, 2014 Carbon Pollution Emission 

Guidelines for Existing Stationary Sources: Electric Generating Units Notice of Data 

Availability. The commenters used that data to calculate CO2 emission rates for each year for the 

states in which it operates, using the same methodology the EPA used to calculate 2012 CO2 
377

emission rates for each state. The commenters found that the use of either 2010 or 2011 would in 

fact produce significant changes to state baselines that would be carried through to significant 

changes in some state goals. The commenters recommended that the EPA use a multi-year 

baseline consisting of 2009 through 2012. The commenters said specifically, the EPA should 

calculate state's baselines for each of these years and select for each state's baseline the average 

of their highest three of four years. The commenters said this will produce a far more 

representative baseline for the utility sector than any single year. The commenters said all the 

EPA has offered with respect to a multi-year baseline is that it "also considered the possibility of 

using average fossil generation and emission rate values over a baseline period (e.g., 2009 -

2012), but determined that there would be little variation in results compared to a 2012 base year 

data set due to the rate-based nature of the goal." The commenters said this one statement, 

unsupported by any data or analysis, is hardly justification for the EPA to not use a multiple year 

baseline period and it makes the EPA's selection of 2012 as the baseline arbitrary and capricious. 

Commenters stated to set realistic and equitable state goals, EPA must start with a baseline 

period that is representative of actual generation and CO2 emission levels. The commenters said 

the 2012 baseline period in the Proposed Rule is not representative, in part because EPA did not 

correct for anomalous events that impacted total CO2 emissions in that single year. The 

commenters said EPA should consider alternative multi-year baseline periods to minimize the 

impact of anomalies in 2012; at minimum, EPA should address certain anomalies to 2012 data 

that unfairly penalize some states and/or companies. 

Commenters stated numerous anomalous events can occur during any single year, as 

demonstrated by 2012; these anomalies include increased utilization of certain affected EGUs 

due to extreme weather events, atypically low CO2 emissions from coal-fired generation due to 

historically low natural gas prices, a changing portfolio (additions and retirements) of available 

units for dispatch, abnormally high levels of hydroelectric generation, and unit outages for repair 

or retrofits. The commenters said for example, in Arizona, one affected EGU, Springerville Unit 

3, operated at a reduced capacity factor of approximately 54% in 2012 due to unplanned outages 

for steam turbine work; this much lower capacity factor should not be deemed to be 

representative of typical operations for this baseload unit. 

Commenters stated another example is the unusually high hydroelectric production experienced 

in the Pacific Northwest during 2012 resulted in unusually low fossil power generation; in that 

region, fossil resources dispatch only after all hydroelectric and wind resources have been fully 

allocated. The commenters said because of historically high hydroelectric availability in 2012, 

Oregon's only coal-fired power plant ran at an unusually low capacity factor of approximately 

50%. The commenters said across the region, hydroelectric generation was 110% in 2012, as 

compared with average levels; this equates to 14.3 gigawatt-hours of carbon-free energy 

generation above an average water year, which lowered Pacific Northwest emissions by 5.7 

million tons, or 22%. The commenters said in Washington, hydroelectric production ran at 

127.7% in 2012, as compared to long-term average hydropower generation rates. The 

commenters said by mandating emission reductions from the 2012 baseline, EPA has proposed 

goals for states in the Pacific Northwest that are artificially skewed relative to states that rely 

more on thermal generation. The commenters said around the country, there are other examples 

of such anomalies in 2012, as would be the case for any single-year baseline. 
378

Commenters stated as EPA has noted in previous rulemakings, an EGU's operations (and, 

consequently, its CO2 emissions) will vary greatly over the course of any given year. "A cold 

winter or hot summer will result in high levels of 'normal' operations while a relatively mild year 

will produce lower 'normal' operations... [E]lectricity demand and resultant utility operations 

fluctuate in response to various factors such as annual variability in climatic or economic 

conditions that affect demand, or changes at other plants in the utility system that affect the 

dispatch of a particular plant." The commenters said as a result, under the New Source Review 

program, EPA applies a presumption that any 24-month period in the 5 years preceding a project 

is representative of normal operations. 

Commenters stated a multi-year baseline period would smooth out the anomalies associated with 

2012 and more accurately represent the natural variations inherent in the electric industry. The 

commenters said while anomalous events occur every year, these events do not all have the same 

impact on operations and emissions; as a result, any single-year baseline period will not 

accurately represent normal operations of the energy industry. The commenters said a multi-year 

baseline would better represent the natural yearly variation and, thus, better depict normal 

operations. The commenters said in the NODA published on October 30, EPA acknowledged 

stakeholder concerns about use of 2012 as the baseline year for state goal calculation and asked 

for comment on whether the agency should use a different single data year or the average of a 

combination of years, such as 2010, 2011, and 2012. The commenters supported the use of an 

alternative multi-year baseline for purposes of goal setting. 

Commenters stated EPA chose 2012 as the baseline year for its emission reduction goal 

calculations, but that year was not representative for New Mexico, resulting in unnecessarily 

stringent goals that may be unachievable and result in risks to reliability. The commenters said as 

proposed in its recent Notice of Data Availability, EPA should allow states to choose a baseline 

using an average of several years to ensure the baseline for the goal calculations is representative 

and results in appropriately stringent emission reduction goals. 

Commenters stated variability of the generating levels for fossil generation in New Mexico is 

much more significant than EPA suggests -the average variation in generation on an individual 

unit basis is nearly 100 percent; more importantly, however, the analysis above confirms that 

2012 was not a representative year for New Mexico for several reasons. The commenters said 

first, 2012 was the second lowest year for total generation, which means 2012 is a poor 

representation of peak demand; second, 2012 was the lowest year for coal generation because 

Escalante was operating at an unusually low capacity factor during that year (49.7 percent), even 

though Escalante is expected to return to capacity factors as high as 88 percent in the future. The 

commenters said accordingly, EPA's goal calculation relies on an already depressed value before 

applying building blocks 1 and 2, which lowers New Mexico's interim and final goals unfairly. 

Commenters stated unfortunately, any single year that EPA might select as a baseline for the 

entire country will likely result in an unrepresentative analysis for at least some states; relying on 

a single-year baseline also fails to reflect the variability in dispatch of individual generating units 

from year to year within the same state. The commenters said because maintaining sufficient 

generating resources capable of serving a wide range of possible demand levels and respond to 

any unexpected variations in demand is critical to grid reliability, EPA should at least account for 

historical variability in establishing its goals. The commenters recommended EPA reevaluate 
379

whether an average of several years might help avoid unrepresentative values for individual 

states and better reflect the variability in individual generating unit operating levels from year to 

year. 

Commenters recognized that a 2010-2012 baseline, as suggested by the NODA, may not be 

representative for all states. The commenters encouraged EPA to provide as much flexibility to 

states as possible on selecting an appropriate and representative baseline, particularly since states 

are responsible for establishing the "standards of performance" for existing units under Section 

111(d). 

Commenters stated EPA chose the year 2012 as the baseline year as it represented the most 

recent year for " ... which complete data were available at the time of the analysis." The 

commenters said EPA did not attempt to determine whether 2012 was representative of normal 

operations for power plants across the U.S. The commenters said individual states and regions 

like Utah are more likely to have experienced anomalous years in the operations of their power 

system and this can impact the states' emissions rates and EPA's calculation of the goals. The 

commenters said consideration of a multi-year base period is likely to smooth out the anomalies 

arising from the use of 2012 as a base year by providing a more realistic average, or normal, 

baseline from which to develop the proposed Utah state emission rate goals. The commenters

said to ensure a more representative baseline period and provide some partial credit for early 

actions, EPA should set the baseline levels for computing the state goals based on a multi-year 

period prior to 2012. 

Commenters stated a single-year baseline period will not accurately represent normal operations 

of the electric generation industry; numerous operational and system anomalies can occur during 

any one-year period. The commenters said these anomalies include increased utilization of 

affected units due to extreme weather events, unexpected plant shutdowns, atypically low 

Greenhouse Gas (GHG) emissions rates from coal-fired generation due to historically low 

natural gas prices, a changing portfolio (additions and retirements) of available units for 

dispatch, and abnormally high levels of hydropower generation. The commenters said in order to 

set realistic state goals and avoid inequities that a single year base year creates between states, 

EPA should expand the baseline period from one year to five years. The commenters said a 

multi-year baseline period would smooth out anomalies and accurately represent the natural 

variations inherent in the operations of coal-fired generation. 

Commenters stated in 2012, the largest coal-fired generation plant located in Utah, the 

Intermountain Power Plant, had a mechanical failure that reduced its capacity factor to 46.7%, 

far below its average capacity factor of 85.3% for the years 2008-2011; this is a clear example of 

how 2012 was not a typical or average energy generation year. The commenters said as EPA has 

noted in previous rulemakings, an electric generating unit's operation and GHG emissions will 

vary over the course of any given year; "A cold winter or hot summer will result in high levels of 

'normal' operations while a relatively mild year will produce lower 'normal' operations 

...[E]lectricity demand and resultant utility operations fluctuate in response to various factors 

such as annual variability in climatic or economic conditions that affect demand or changes at 

other plants in the utility system that affect the dispatch of a particular plant." The commenters

said under the New Source Review program, EPA applies a presumption that any 24-month 

period in the five years preceding a project is representative of normal operations. 
380

Commenters stated EPA should allow Utah the flexibility to select the average of the five years 

from 2008-2012 or the three years 2010-2012 as its baseline. The commenters said for Utah, 

using a three-year or a five-year baseline to calculate the 2030 emissions rate goal creates a less 

stringent goal than using the 2012 baseline. The commenters said changing Utah's base period to 

a five-year period (2008 - 2012) would change the 2030 emissions rate goal 43 lbs/MWH to 

1,365 lbs/MWH and a three-year base period would change the 2030 emission rate goal 7 

lbs/MWH to 1,329 lbs/MWH. The commenters said if the EPA is going to establish an emission 

target, the commenters asserted states should be given the opportunity and flexibility to set 

baseline years that are representative of normal operations of electricity generation in the state. 

Commenters stated the base year for EPA's proposal is 2012; however, the existing electric 

generation system in the U.S. is much too complex to be adequately represented by one calendar 

year. The commenters said variables such as fuel prices, equipment outages and de-rates, 

weather, and demand changes due to industry or residential fluctuations can significantly impact 

generation and the dispatch of specific units with varying emission profiles. The commenters

said variables impacting one region of the nation may not impact others. The commenters said 

the use of 2012 to establish baseline carbon dioxide (CO2) emissions is especially problematic 

for the State of Michigan as 2012 was both a mild year in terms of temperature and Michigan 

experienced the lowest natural gas pricing in the last decade. The commenters said the 

combination of these variables led to significant CO2 emission reductions in comparison to 

preceding as well as subsequent years. The commenters said using U.S. Energy Information 

Administration (EIA) data for Michigan's electric power sector generation, the 2012 Total Net 

Generation for Michigan was 105.8 million megawatt hours (MWhs). The commenters said the 

average yearly Total Net Generation data from the ten year preceding period (2002 to 2011) was 

113.8 million MWhs and ranged from a high value of 121.6 million MWhs (2005, a year of 

economic growth that we hope to see again in the future) to a low of 101.2 million MWhs (2009, 

a year significantly impacted by the deep national recession). The commenters said similarly, 

67,877 thousand metric tons of CO2 were emitted in 2012, whereas the ten year average 

preceding 2012 was 76,000 thousand metric tons. The commenters said a high value of 80,228 

thousand metric tons was experienced in 2007 (a year of significant economic growth); and a 

low value of 69,301 thousand metric tons occurred in 2011 (also a year impacted by the 

recession). The commenters said the EIA data quoted above proves that use of a single calendar 

year is not representative; an appropriate and fair method to develop a baseline would include 

multiple years to account for the numerous variables associated with different states and regions. 

The commenters requested that EPA bracket calendar year 2005 (the year quoted as the baseline 

in EPA's press releases) through and including calendar year 2012 (the baseline year actually 

used by EPA), and allow each state or multi-state compact to choose from 12 to up to 60 

consecutive months (a total no greater than 5-years) within this bracket to develop its own 

baseline for the state's compliance plan percent reduction target. The commenters said such an 

approach is far more equitable and truly representative of the dynamic situation encompassing 

CO2 emissions in the U.S.

Commenters stated numerous anomalous events can occur during any one-year period as was the 

case in 2012. The commenters said these anomalies include increased utilization of affected units 

due to extreme weather events, atypically low GHG emissions rates from coal-fired generation 

due to historically low natural gas prices, a changing portfolio (additions and retirements) of 
381

available units for dispatch, unit outages, and above normal levels of hydropower 

generation; following are some examples: 

• The unusually high hydropower production experienced in the Pacific Northwest during 

2012 resulted in unusually low fossil power generation; across the region, hydropower 

generation was 110 % of average in 2012. The commenters said by mandating emission 

reductions from the 2012 baseline, EPA has proposed goals for states in the Pacific 

Northwest that are artificially skewed relative to states that rely more on thermal 

generation. The commenters said South Dakota's total energy production in 2012 was one 

of the highest on record; therefore, the mandate to increase renewable energy generation 

and decrease usage through energy efficiency mechanisms (goals that are tied to the 

state's total generation in 2012) is more onerous than it otherwise would be had a 

multiyear approach been used or had another year been selected as the baseline. 

• South Dakota's one natural gas combined cycle plant was undergoing test firing in 2012. 

EPA considered it an existing unit under its proposal. Using data from an earlier year 

would reduce its impact on South Dakota's state goal or eliminate it from being 

considered as an operational unit depending on what year is selected 

• Wind generation in South Dakota increased significantly between 2008 and 2012 and, by 

EPA using 2012 as the baseline, is receiving no credit for this increase. 

• The Colstrip Plant in Montana ran 23% less than what would be expected during a 

representative normal year. 

Commenters said in order to set realistic and equitable state goals, EPA must start with a 

baseline period that is statistically representative of generation and GHG emission levels. The 

commenters said EPA must address certain anomalies that arose in 2012 to avoid the unfair and 

arbitrary impacts that penalize some states and/or companies. The commenters said EPA uses 

multiple years for baselines in other programs and for compliance purposes because of the 

variability issues associated with use of a single year. The commenters said at a minimum, EPA 

must address corrections related to other data anomalies, such as affected units that were off-line 

for most or all of the baseline year.

Commenters stated using 2012 or any single year as a baseline does not capture the variability of 

operating conditions and emission rates that are experienced as a part of operating and 

maintaining a reliable electric system from year to year. The commenters said specifically, use of 

2012 as the baseline is inappropriate because during that year Gulf Power had very low CO2 

emissions. The commenters said 2012 had the lowest CO2 rate (pounds per net MWh) and the 

lowest mass (tons) emitted by the Gulf Power Florida-units in any year since 1990, which is the 

last year of readily available data. The commenters said the low 2012 CO2 emissions were due 

to historically low natural gas prices resulting in economic dispatch increasing natural gas 

generation while lowering coal-fired generation.

Commenters stated EPA's Proposed Rule uses a single calendar year - 2012 - as the default base 

year for calculating a state's emission rate and the corresponding CO2 reduction goals. The 

commenters said in 2012, CO2 emissions were uncharacteristically low due to three factors: (1) a 
382

fuel mix for electrical generation based on historically low natural gas prices, (2) low economic 

activity due to a slow recovery from the 2007-2008 financial crisis, and (3) abnormally moderate 

weather throughout that year. The commenters said those circumstances are unlikely to be 

repeated individually, much less in combination. The commenters said Virginia's CO2 reduction 

goal of 810 lbs/MWh is particularly onerous and does not appear to accurately reflect Virginia's 

normal generating conditions. The commenters recommended that EPA use a representative 

period as the basis for calculating the CO2 emission reduction goals. The commenters said one 

alternative would be to follow the approach that EPA has used in other EPA programs such as 

the Prevention of Significant Deterioration program where an average annual emission rate based 

on any consecutive 24 months in the past 5 years is used to calculate a baseline for past actual 

emissions from EGUs.

Commenters stated the EPA should also allow the States flexibility in developing baseline 

emissions to include variability of individual unit operations from year to year. The commenters 

recommended that the average of three years around 2005, or another year demonstrated as being 

more representative by the entity to the State agency, be considered.

Commenters EPA should abandon its use of 2012 as the baseline year for the Clean Power Plan's 

emission reduction goals in favor of a five-year average (2008-2012) to better reflect average 

baseline emissions; EPA should also adopt a rolling multiyear average for compliance with the 

final emissions targets.

Commenters stated EPA should consider using a multi-year average baseline rather than the 

single year 2012 to account for the fact that some generating units may have been out of service 

for lengthy periods in 2012 thereby skewing the baseline data.

Commenters asserted that consideration of a longer baseline period may have merit given the 

anomalies that can arise through use of a single baseline year; however, before a longer baseline 

period can be used to calculate emission rate requirements for the final rule, EPA must analyze 

the data from this longer period to determine new baseline emission rates and apply the building 

block analysis to these new baseline rates to calculate new proposed emission rates for each 

state. The commenters said EPA must also conduct the requisite technical and economic analyses 

necessary to adequately demonstrate that the new proposed rates represent BSER. The 

commenters said this cannot be done in the context of a final rule, but rather EPA must delay 

issuance of the final rule and issue a revised proposed rule. The commenters suggested that as an 

alternative to issuing a new proposed rule, EPA could include a provision in the final rule 

allowing states to adjust the emission rate requirements to account for any anomalies that 

resulted from using non-representative 2012 data. 

Commenters recognized that choosing any single year for the baseline in the Proposed Rule is 

problematic; various anomalies and unanticipated events occur in any single year that render that 

year unrepresentative of the performance of generating units within a state, and often within a 

single utility. The commenters said at the extreme, there are situations where a plant was out of 

service for the entire year - such as the case with Minnesota's newest and most efficient coal 

plant, Sherburne County Plant #3 (Sherco 3), a unit jointly owned by Xcel Energy and Southern 

Minnesota Municipal Power Agency (SMMPA). The commenters said in other cases plants were 

only running for part of the year due to both planned outages, such as for maintenance, and for 
383

unplanned outages due to weather anomalies such as storms or floods, equipment failures, or 

other unanticipated contingencies. The commenters added changes in electricity demand, such as 

the loss of an industrial or large commercial customer, can result in reduced output from a 

generating unit, even though it is still operational. 

Commenters stated the final rule should allow states to establish a baseline that the state believes 

correctly represents its circumstances, utility generation, and related emissions. The commenters

said in the Notice of Data Availability (NODA), comments are requested on allowing states to 

average 2010, 2011 and 2012, to determine a baseline; but this method would still undercount 

the emissions from Minnesota's Sherco 3 plant, since the plant was off-line for all of 2012. The 

commenters said the Final Rule should allow a state to choose any three years within the most 

recent ten-year period for which emissions data is available and then average those three years to 

establish its baseline for its compliance plan. The commenters said an acceptable alternative 

would be to allow a state to choose a single year that accurately represents its circumstances, 

utility generation, and related emissions. 

Commenters stated basing state goals on a single year cannot capture all sorts of variability of 

outages (both planned and unplanned), fuel prices, weather, and other factors that may affect 

generation and emissions. The commenters said in its NODA, EPA has solicited comments on 

whether it should consider a multi-year baseline period as the starting point for goal 

computation. The commenters agreed with the suggestion that the base year should be an 

average of three representative years, such as 2009, 2010, and 2011. The commenters said 

adopting this approach would take into account coal generation from the Pella Municipal Power 

Plant, allowing that retirement to be meaningfully reflected in the calculations, would more 

accurately reflect the output of LRS as well as Sherco, and could correct the issue with Deer 

Creek, as well as account for maintenance outage schedules and weather variations that affect 

generation; this will result in more accurate calculation of state goals.

Commenters asserted it would be totally arbitrary to base the entire future performance 

requirements of an entire industry on any single baseline year. The commenters said if that 

particular year were abnormally hot or dry (as was 2012) or dry (as was 2012) or if the relative 

price of fossil fuels were abnormally skewed (as they were in 2012), then any extrapolations 

derived from that year would result in unattainable targets in the future. The commenters said 

EPA should base future reductions on a baseline extending over at least a five-year period.

Commenters stated in the proposed Clean Power Plan, EPA inappropriately uses a single-year 

baseline of 2012. The commenters said a number of events can happen during any given oneyear period that results in misrepresentation of actual generation and emissions levels. The 

commenters said factors that should be taken into account include unit operation variances due to 

extreme weather or maintenance, fluctuating natural gas prices, and changes in the types of units 

available for dispatch. The commenters said in Kansas, several large electric generating units 

(EGUs) experienced lengthy outages in 2012 for maintenance and installation of pollution 

control equipment to ensure compliance with other Clean Air Act obligations. The commenters 

suggested that using a three-year averaging methodology would smooth out the various 

anomalies and would be more appropriate for setting state CO2 emissions reductions goals. 
384

Commenters stated a three-year baseline period would be consistent with how EPA expects 

states to demonstrate compliance under the proposed Clean Power Plan. The commenters said as 

currently proposed, the rule would require states to meet the final emission performance level on 

a three-calendar-year rolling average starting January 1, 2030. The commenters said EPA even 

states that "[t]he rolling three-year performance periods for measuring actual plan performance 

against the final goal performance level are proposed in light of year-to-year variability in 

economic and other factors, such as weather, that influence power system operation and affect 

EGU CO2 emissions." The commenters said furthermore, a three-year baseline methodology 

would be consistent with how EPA has developed and implemented other existing programs 

using multiple years (e.g., Acid Rain Program, Clean Air Interstate Rule, Cross State Air 

Pollution Rule, and permitting and modeling requirements). 

Commenters stated selection of a representative baseline year or period is an important first step 

in the process to calculate state emission rate and reduction goals. The commenters said the

Proposed Emission Guidelines rely on a single calendar year of 2012 as the default base year for 

this purpose; however, reliance on one year can overly influence the resulting calculations when 

the year in question is not representative of the normal generating conditions. The commenters

said this method also does not account for the normal variation that occurs in both generation and 

emissions from year to year. 

Commenters stated for example, 2012 was the highest year on record for electricity generation

from natural gas sources in Virginia due to increased generation capacity and low natural gas 

prices. The commenters said in fact, the generation from natural gas units was 46% higher than 

the next highest year on record in Virginia. The commenters asserted that the selection of this 

year misrepresents the normal generation profile for Virginia and may result in a more stringent 

goal. 

Commenters stated in many other EPA programs such as the Clean Air Interstate Rule and the 

Cross-State Air Pollution Rule, a period of five years was considered when establishing a 

generation baseline; then the two or three highest generation and emissions years within the five 

year period are identified and averaged to determine individual unit and collective emissions 

targets. The commenters recommended that EPA adopt a similar approach for setting the 

emissions rate goal in the final rule; in this way, the yearly variation and the impact of unusual 

years can be better addressed. 

Commenters stated the Final Rule should allow states to choose a baseline that accurately 

reflects their unique circumstances, possibly a 3-5 year average; this would allow for years 

where a plant may have been out of service, which would skew the baseline. The commenters

said a plant may have been out of service for planned maintenance, or for unplanned reasons 

resulting from generator failures, storms, or floods; the result is that the emissions for that year 

would have been lower than a normal, average operating year. The commenters said using a 

multi-year average rather than a single year baseline provides correction for such operating 

anomalies. 

Commenters stated the Final Rule should also provide full credit for investments already made 

that reduce or offset CO2 emissions. The commenters have added a number of renewable energy 

resources in recent years and has provided significant financial incentives through its Sustainable 
385

Energy Program to promote energy efficiency in the community; the commenters should receive 

full credit for these investments to the extent that they reduce or offset the utility's CO2 

emissions. 

Comment 2: Multi-year baseline recommended; not enough time between release of NODA and 

close of comment period

Response 2: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year.

The following are summaries of the specific public comments under this comment:

Several commenters said that 2012 should not be used as the baseline year. Commenters said that 

choosing 2012 as the baseline year skews the calculation of baseline emissions given the unusual 

deviation from the average in 2011 and 2012 due to extremely low natural gas prices and backto-back good water years. Commenters indicated that changes in economic conditions, weather, 

and relative prices of energy feedstocks can all affect the amount of electricity that is generated 

in a given year, as well as the allocation among different energy sources. Several commenters 

indicated that one year of data doesn't take into account random, unplanned EGU outages, 

variability in fuel pricing, anomalous weather patterns, and host of other factors that determine 

which generation is used at any given time or that may shift generation of electricity from one 

fuel source to another. Commenters said that because natural gas prices were near all-time lows 

in 2012, NGCC units in Arkansas generated more than 25 percent more megawatts in 2012 than 

they did in 2010, 2011, or 2013. Similarly, commenters said because of the stark reduction in 

natural gas prices in 2012, there was uncharacteristically low usage of coal and 

uncharacteristically higher use of natural gas. Commenters indicated, however, that while 2012 

represented a dip in goal generation from 2011, coal generation largely returned to pre-2012 

levels in 2013 and the price of gas rose closer to recent historical levels. Several commenters 

said that adopting a multi-year baseline would smooth out some of the year-to-year variability 

that occurs in the electricity sector. Several commenters indicated that the EPA should use a 3-

year average (2010-2012). Commenters suggested that a two or three year average (e.g., 2010, 

2011, 2012) should be used for baseline, and emphasized that in any event, the baseline year 

should not include calendar year 2013 or later, as this would exclude credit for 2013 CO2 

reduction measures that have occurred after the proposal's release in June 2013. Commenters

noted that use of multiple years of data for regulatory baselines by the EPA and state agencies 

has longstanding precedent.

Several commenters said that the EPA's selection of 2012 as the base year is arbitrary, and said 

that given the dynamic nature of the electricity system and the national economy, no one year, or 

even several years combined is representative of current conditions in an individual state for the 

purpose of establishing a baseline. Commenters noted that nothing in Section 111 of the CAA 

mandates a particular year be used for baseline. Commenters stated that Standard-ofperformance determinations historically have not been based on historic emissions on any 

particular date, but instead have been based on standards achievable considering the relevant 

statutory factors. Commenters stated that for this proposal the EPA has completely departed 
386

from this process and has incorporated one that is flatly illegal. Commenters indicated that states 

should be able to appropriately credit CO2 mitigation activities both concurrent with and 

backdated before the plan towards state goal accomplishment or allow appropriately adjustment 

of state goals

Commenters stated that the use of 2012 data (which had higher than average natural gas usage at 

EGUs) for a baseline has the potential to result in lower goal projections and higher costs of 

compliance than would otherwise be estimated with a more representative starting year. 

Commenters therefore recommended a three-year average of data between 2005 and 2012 as 

being more appropriate for goal computation. Commenters said that this would not only assist in 

eliminating fluctuations in energy demand and production but would also give credit for actions 

taken prior to the 2012 baseline. Commenters also indicated 2012 was an anomalous year 

because of the low price of natural gas, and indicated that natural gas prices have historically 

been highly volatile. Commenters stated it would be more appropriate to establish states' goals 

using a five-year or three-year average, rather than a single year.

Commenters said the use of a single year for baseline establishment verses a multiyear baseline 

is inconsistent with current U.S. EPA practice and is inappropriate for the energy 

market. Commenters said some Indiana units, such as NIPSCO's R.M Schahfer Generating 

Facility's Units 14 and 15, were involved in major construction projects to install FGD units to 

comply with MATS and SCAPR, and many base load coal-fired units id not operate at their 

highest capacity during 2012 because of low natural gas prices. Commenters recommended that 

the EPA use a 3-year average baseline for emissions, generation, and capacity factors, as 

opposed to relying on only 2012 data.

Commenters said using any single base year may result in anomalies due to unplanned 

shutdowns, among other things, and indicated the EPA should carefully consider comments from 

states documenting any anomalies or consider replacing a single year baseline with a three year 

baseline.

Commenters suggested that the EPA allow states to select either a single year or average taken 

from a group of consecutive years between 2005 and 2012 for purposes of determining targets 

and measure compliance credit. Commenters said that allowing reference year flexibility allows 

states to receive credit for early actions taken. Commenters said that if EPA does not provide for 

reference year flexibility in this manner, the EPA should accept technical corrections that 

provide for recognition of unusual operating circumstances for affects EGUs and the recognition 

of early action measures for satisfying state target-setting and compliance. Commenters said if 

the EPA elects to not use a multi-year baseline approach, they recommend that the EPA define a 

mechanism for obtaining credit towards meeting Building Block 1 targets for early 

actions. Commenters recommended using a baseline timeframe of the average of calendar years 

2005 through 2012, as this would take into account years with both high natural gas prices and 

low natural gas prices as well as other factors such as weather variability and forced unit outages.

Several commenters supported greater flexibility in determining the emissions baselines for the 

proposed rule. Several commenters said the use of an average of several years to establish a 

baseline has been employed by the EPA in previous rulemakings (i.e. NSR and CAIR) and is 

superior to a single 2012 baseline year. Commenters indicated that if a single year is used for 
387

baseline, 2010 or 2011 would be more appropriate than 2012. Commenters also supported a 

multi-year baseline period, and indicated it would maintain consistency with historical practices, 

smooth out year-to-year variability, and provide a more level playing field for states and affected 

sources. Commenters suggested the use of a representative three-year average out of 10 years 

(2002 to 2012) would be reasonable. Commenters added that if a single year is used to establish 

baseline, 2005 should be considered since it is the baseline for the much-publicized 30 percent 

emission reduction for both the Clean Power Plan and the Climate Action Plan. Commenters

suggested states should be able to use an average of two years out of five or ten recent years to 

calculate baseline. 

Commenters indicated that in 2012 dispatch of the electric generation fleet was atypical because 

while electric demand remained low after suffering a significant decline in 2008 as a result of the 

economic recession, natural gas prices dipped to a historic low. Commenters stated that the 

states should be given the flexibility to consider other baseline years or even averaging over 

several years to address the concern that 2012 was an usual year for electric

generation. Commenters indicated that a multi-year baseline would be preferable, because by 

selecting any single base year, the EPA creates winners and losers based on individual operating 

characteristics from that one year. Commenters said that utilizes with major base load coal units 

off line for retrofit or repair would see a disproportionately negative impact on base case 

emissions than utilities that were operating plants at maximum capacity for 2012. Commenters

said that the EPA should allow utilities to offer alternative baseline years that includes averaging 

of multiple years or identifying years where operation accurately reflect maximum fleet capacity 

for the purposes of setting a baseline.

Several commenters also indicated the EPA should use a multi-year average as the baseline in its 

goal setting methodology, and commenters suggested a 3-year average be used, and Commenters

suggested either a 3-year or 5-year multi-year baseline period. Commenters analyzed various 

scenarios and found if a multi-year baseline is used Utah's emission rate targets increased. 

Commenters said that the EPA should allow Wyoming to select as their baseline the average of 

the 5-years for 2008-2012, and indicated this correction alone would result in a 5% adjustment of 

the EPA's proposed Wyoming compliance rate. Commenters said that given that the compliance 

period extends to 2030, it is more prudent to use a multi-year historical average emissions and 

generation timeframe to mitigate bias any one year may have in establishing baselines and state 

goals. Commenters emphasized that this is especially relevant due to the effect that the recent 

recession had on general economic activity and subsequent emissions from the power sector. 

Commenters added that furthermore, it is not without precedent for EPA to consider a broader 

look-back period to determine actual emissions from the electric generating sector.

Commenters also suggested that the EPA should use a 3-year average to calculate baseline, and 

suggested that data for 2010-2012 be used for the calculation. Commenters said that using any

single year can result in emissions and generation that are not typical or representative, and 

indicated that in other rules, such as the Clean Air Interstate Rule and the Cross-State Air 

Pollution Rule, the EPA has considered a range of years and has used an average instead of a 

single year.

Commenters supported the EPA's decision in the NODA to release additional data for 2010 and 

2011. Commenters did indicate, however, that because of the limited time between the release of 
388

the NODA and the close of the comment period, they have not been able to fully evaluate the 

new data or make a recommendation with respect to an appropriate baseline. Commenters

therefore urged the EPA to consider reopening the comment period or issuing a supplemental 

rulemaking as necessary to ensure that interested stakeholders have sufficient time to evaluate 

and comment on the appropriate baseline for this rulemaking.

Commenters stated EPA should not have chosen a single year to calculate state goals (2012). The 

commenters said EPA should recalculate state goals based on an average of several years to 

account for year-to-year variations in the economy and weather which both significantly impact 

electricity generation and demand.

Comment 3: Support for three (3) year average

Response 3: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year.

The following are summaries of the specific public comments under this comment:

Commenters supported using a three-year (2010-2012) average of generation and emissions as 

the starting point for the EPA's goal calculations. The commenters said using a three year 

average is a more accurate reflection of operating conditions, maintenance cycles/outages, 

economic conditions and weather.

Commenters stated despite a severe drought in the Midwest in 2012, data shows that energy use 

was down in 2012, in part due to a mild winter; for example, in review of all the Illinois affected 

Acid Rain Units' heat input from 2009-2011, compared to 2012 data, 2012 heat input is 

approximately 10% lower than the average of 2009 through 2011. The commenters said applying 

the same analysis for EIA Illinois generation data from coal units, 2012 generation data is 

approximately 11% lower than the average of 2009 through 2011. The commenters said this is 

especially important as the reduction target provides the floor for each building block of each 

plan, especially if the state proceeds with a mass based goal (CO2 tonnage) as the GHG Rule 

allows a state the option to do. The commenters said utilizing data from a year that is already 

significantly lower than the norm to set a "target" from which carbon emissions are to be reliably 

and affordably reduced is not credible. The commenters said EGUs operate variably from yearto-year due to variable factors such as weather and the economy, which influence demand, and 

planned maintenance outages. The commenters said a credible carbon reduction target for each 

state would average at least three (3) years of data, such as the USEPA did in recent air rules for 

EGUs. The commenters said another credible option would be to utilize the highest three (3) 

years of the last five (5) years of data, as the USEPA has done before. The commenters can recall 

no recent USEPA air emission rule applicable to EGUs in which it utilized only one (1) year of 

data, nor where it utilized data from a year that was demonstrably below the norm to set an even 

lower emission limit. 

Commenters stated a three year (2010-2012) average of generation and emissions should be used 

as the starting point for the EPA's goal calculations. The commenters said a multi-year averaging 

period is appropriate because of yearly variation in wind, solar, and hydrological conditions; 
389

maintenance cycles for affected and nuclear units; weather variations; economic conditions; and 

fuel prices; all of which can affect the dispatch of fossil and carbon free resources from year to 

year.

Comment 4: 2012 should not be used as baseline, multi-year baseline going back to 2005 (in 

some instances to 2000) would be better and would allow credit for early action; support 

NODA's multiyear suggestion

Response 4: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year.

The following are summaries of the specific public comments under this comment:

Commenters said that rather than using a single year (2012) to establish the baseline year for 

emissions reductions, the EPA should instead use a multi-year baseline that is more 

representative of normal system operation, addresses the considerable year-to-year variability in 

the power sector, and is more reflective of early actions to reduce CO2 emissions. Commenters

indicated that use of a multi-year baseline would be consistent with EPA precedent.

2012 was Unusual Year for Power Industry. Commenters are inappropriate because this was a 

highly unusual year for the power system - because natural gas prices were at a record low in 

2012, that year is not representative of past operating conditions for the power system. 

Commenters said that in 2012 natural gas EGUs were dispatched much more than usual in 2012, 

and coal units operated at lower capacity, which reduced their efficiency and increased their 

emissions rates. Commenters said as a result, the average CO2 emissions rate at Wisconsin 

power plants was 4-6% lower in 2012 than it was in either 2011 or 2013. Commenters said 

however, emissions rates at coal units in the state were 2% higher in 2012 than they were in 

either 2011 or 2013 because these units ran less efficiently with decreased usage. Commenters

said that if the EPA will not extend the baseline back to 2005, the EPA should at least include the 

most recent year of available data in their calculation of state goals, which would be a more 

moderate year than 2012.

Commenters said that 2012 was not a representative year for Wisconsin or the power 

industry. Commenters said that in Wisconsin during the period between 2005 and 2013, 2012 

had the lowest natural gas prices and the greatest percentage of electric generation from natural 

gas, and the highest level of renewable generation.

Significant year-to-year variability in Power Industry. Commenters said the use of a single year 

as a baseline is inappropriate because there is significant year-to-year variability in power system 

characteristics (EGU operation, renewable electricity generation, weather variability, etc.) that 

cannot be represented in a baseline based on a single year. Commenters provided Table 1 which 

showed changes in Wisconsin's interim and final goals using three different 

baselines. Commenters said that Wisconsin's final rate-based goal would increase 5 % using a 

2011 baseline, and if the goal was calculated based on a three year baseline including 2010-2012, 

our goals would be between those calculated using either 2011 or 2012, and would be more 
390

representative of the power sector in the state. Commenters said the use of a multiyear baseline 

would average out much of the inter-annual variability in the power sector.

Using 2012 does not allow credit for early action. Several commenters said using 2012 fails to 

credit states, like Wisconsin, that took action before that year to reduce their CO2 emissions via 

measures such as plant closures, fuel switching to natural gas, installation of renewable 

electricity capacity, etc. Several commenters said by using 2012 as a baseline, these early actions 

are included in the starting point, and for many of the building blocks, this results in the perverse 

outcome that states that have already acted to reduce CO2 emissions are required to do even 

more going forward than are states that have not taken similar steps. Commenters said that 

another consequence of the failure to give credit for early action is the creation of inequity 

between the states. Commenters said that the proposed rule often requires deeper cuts by states 

that took early action to reduce GHG emissions than states that took little or no such action, 

disproportionately distributing responsibility for what should be a shared goal.

Commenters said that power sector CO2 emissions peaked in 2007 nationwide and in 2005 for 

Wisconsin, largely because many of these emission-reducing measures and programs were 

initiated or expanded after these years. Commenters said use of a multiyear baseline that includes 

2005 would therefore credit much of the early action taken by states and utilities. Commenters

indicated that the EPA should allow states to adjust their baseline to account for specific actions 

back to 2000. Commenters said that to give credit for pre-2012 emission reduction measures, 

using a baseline using 2005 data would be the best approach. Commenters said, however, that 

they could also support the use of 2010-2012 as described in the NODA, although they prefer the 

incorporation of earlier years into the baseline.

There is precedent for the EPA using a multi-year baseline. Commenters said that in its 

rulemakings, the EPA routinely uses a range of years to determine representative operating levels 

for EGUs (e.g., the use of the highest three years out of five used for the Clean Air Interstate 

Rule, CAIR). Commenters said that the EPA specifically does this to address variability due to 

EGUs that are offline for maintenance or installation of operating or pollution control equipment 

and other variations in loads and fuel use. Commenters said accordingly, the EPA's current 

argument that these issues are not important and that one year is adequate to represent EGU 

operation is inconsistent with the EPA's past actions. Several commenters said further, the EPA 

is requiring compliance demonstrations in 2030 and beyond based on a rolling 3-year average, 

demonstrating further that the use of a single year baseline is not consistent with compliance for 

this rule.

Re-dispatch already occurring. Commenters stated current fuel prices are already driving the redispatch from coal to existing NGCC. The commenters said in North Carolina, this transition 

occurred starting in 2010 through the beginning of 2014. The commenters said North Carolina 

has replaced 27 coal units with large NGCC plants operating at over 60% capacity in both 2012 

and 2013. The commenters said these plants are newer and were designed to function as base 

load units. The commenters said North Carolina has essentially completed most of Building 

Block 2 in 2014; however, EPA's selection of the 2012 base year penalizes early action states. 

The commenters said North Carolina is unable to take credit for pre-2012 reductions and are 

expected to do more than states that took no action. The commenters requested that EPA modify 
391

its one-year, 2012 baseline reference to a three-year baseline in order to allow credit for the pre2012 coal EGU retirements.

Earlier, 3-year baseline recommended. Commenters stated EPA developed the proposed 

guidelines using 2012 emissions and generation data. The commenters said based on a review of 

data from the U.S. Energy Information Administration (EIA), the commenters do not believe 

2012 is representative for establishing a baseline. The commenters said between 2005 and 2013, 

2012 had the lowest natural gas prices, the greatest percentage of electric generation from natural 

gas, and reflects the highest level of renewable generation and energy efficiency savings in 

Wisconsin. The commenters said to address some of these concerns, it would be a better 

approach to use a multi-year average baseline. The commenters said an earlier alternate baseline 

period would allow some credit for early emission reductions. The commenters asserted that an 

alternative multi-year baseline such as 2010-2012, or earlier, could be developed; this would be 

consistent with the final goal, which is measured on a three-year rolling average basis (i.e., 2030-

32, 2031-33, 2032-34, etc.). The commenters added a three-year baseline period reduces the 

impact of abnormal conditions during any one particular year, such as low natural gas prices or 

atypical weather. The commenters said to the extent that a state decides to develop its plan using 

the same methodology as EPA, the use of a single year could also skew the distribution of a 

state's goal between covered utilities, if for example, one utility had an unusually large number 

of outages during the single year.

Commenters stated the emission rate goals in the proposed rule were developed using 2012 

emissions and generation data as a baseline; the use of a 2012 baseline for the purpose of setting 

state goals fails to recognize emission-reducing actions taken by states and utilities prior to 2012. 

The commenters said 2012 was not a representative year for Wisconsin and does not fairly 

reflect typical operations. The commenters said between 2005 and 2013, 2012 had the lowest 

natural gas prices, the greatest percentage of electric generation from natural gas, and the highest 

level of renewable generation and the highest level of energy efficiency savings, as shown in the 

tables below. The commenters said a baseline period earlier than 2012 would allow some credit 

for early emission reductions. The commenters supported EPA's approach proposed in the Notice 

of Data Availability (79 Fed. Reg. 64,543) to use a multi-year baseline such as 2010-2012, or 

alternatively for states to be able to elect this option. The commenters said the use of a three-year 

average for the baseline would be consistent with the final goal, which is measured on a threeyear rolling average basis (i.e., 2030-32, 2031-33, 2032-34, etc.); furthermore, a three-year 

baseline period reduces the impact of abnormal conditions during any one particular year. 

Commenters stated the EPA's use of a 2012 baseline for the purpose of setting state goals 

generally fails to recognize emission-reducing actions taken by states, utilities and energy users

prior to 2012. The commenters said an earlier alternate baseline period would allow some credit 

for early emission reductions. At a minimum, the commenters asserted that an alternative multiyear baseline such as 2010-2012, or earlier, could be developed. The commenters said this would 

be consistent with the final goal, which is measured on a three-year rolling average basis (i.e., 

2030-32, 2031-33, 2032-34, etc.). The commenters said a three-year baseline period reduces the 

impact of abnormal conditions during any one year, such as low natural gas prices. 

Commenters are not aware of a legal requirement that the EPA must use 2012 as a 

baseline; EPA's explanation for why it chose 2012 is basically that this was the most recent year 
392

for which it had complete data. The commenters said as part of that explanation EPA also states: 

"The EPA also considered the possibility of using average fossil generation and emission rate 

values over a baseline period (e.g., 2009 - 2012), but determined that there would be little 

variation in results compared to a 2012 base year data set due to the rate-based nature of the 

goal." The commenters said for at least Wisconsin, EPA's statement is incorrect, since using 

2012 only versus a 2010-2012 baseline period for Wisconsin results in an interim goal and a final 

2030 goal that are 4 percent and 3 percent more stringent, respectively. 

Commenters stated 2012 is not representative for establishing a baseline. The commenters said 

for example, in Wisconsin, between 2005 and 2013, 2012 had the lowest natural gas prices, the 

greatest percentage of electric generation from natural gas and reflects the highest level of 

renewable generation and energy efficiency savings. The commenters said to address some of 

these concerns, it would be potentially a better approach to use a 3-year average baseline from 

2010 - 2012. 

2005 baseline year. Commenters stated states should be given discretion in meeting the 

technically and economically achievable CO2 emissions reduction goals based upon 2005 

emissions levels, in lieu of the proposed 2012 baseline year. The commenters said establishing 

2012 as the baseline year fails to recognize factors that may have impacted generation and 

resulting emissions as a result of anomalous conditions. The commenters said 2012 as the 

baseline year would not provide a representative picture of a typical year for Black Hills 

operations. The commenters said state compliance plans should tie reductions to goals based 

upon 2005 as the baseline year. 

Commenters recommended EPA pursue evaluation of using a different data year as proposed in 

the notice of data availability (NODA) released on October 30, 2014; generally, EPA will likely 

find that less renewable energy and less NGCC resources existed in the early years, thus, 

increasing each state's goal and reducing overall CO2 emission reductions. The commenters said 

this approach will alleviate a small portion of the impacts this proposed rule may have on large, 

complex generation asset states, but will most likely have a profound effect on small generation 

asset states, like South Dakota. The commenters said EPA's close review of data year could 

eliminate "problematic" micro-situation states without significant impacts to the overall proposed 

rule. The commenters encouraged this analysis on a national basis, but emphatically encourage 

EPA to allow this data year shift on a state by state basis where dramatic goal changes occur. 

Multi-year baseline (of at least 3 years) recommended. Commenters stated in the proposed rule, 

EPA calculated state goals by applying all four Building Blocks to each state's 2012 electric 

generation to determine the extent to which the state could - according to EPA - reduce its 

carbon dioxide emissions rate by 2020. The commenters said EPA states that it chose the year 

2012 because it represented the most recent year for which complete data were available at the 

time of its analysis. The commenters said EPA considered the possibility of using average fossil 

generation and emission rate values over a 4-year baseline period, such as 2009 - 2012, but 

determined that there would be little variation in results compared to the single year (2012) 

approach. Commenters added EPA's proposed rule does not adequately credit states for taking 

early action to reduce carbon emissions. The commenters said though EPA claims that early 

emission reductions (e.g., reductions from 2005-2012) are reflected in the 2012 baseline, this 

notion is not reflected when comparing Georgia's pre-2012 reductions in CO2 emissions (30%) 
393

with the additional amount of reductions required by the Proposal (48%). The commenters said 

while part of this problem is the improper inclusion of under construction nuclear units in

Georgia's state goals, the problem also stems from EPA's sole use of 2012 data as a baseline. The 

commenters urged EPA to use a multi-year baseline of at least 3 years or to otherwise make 

adjustments to the 2012 data, to make the data more accurately reflect typical operating 

conditions in Georgia. The commenters added EPA should make clear that each state has the 

discretion to use those data years that best reflect historical operations and that are most 

appropriate - in the state's view - for use in the development of the section 111(d) plan. The 

commenters said for other rulemakings, EPA has provided a range of years within which each 

state has the flexibility to pick the specific year (or years) that best represents the state and that 

addresses specific state concerns. The commenters said this Proposal would seem to be ideal for 

that type of approach.

2012 not representative. Baseline of 2005-2009 recommended. Commenters stated the EPA's 

use of 2012 data to establish baselines for affected EGUs is problematic for a number of reasons; 

EGUs demonstrate considerable variability in capacity factor and emissions rate from year to 

year due to a variety of factors, including planned and unplanned shutdowns and maintenance. 

The commenters said selecting one year in most cases will not accurately reflect an EGU's actual 

average capacity factor and emissions. The commenters said 2012 happened to be an "off" year 

for a coal plant in UAMPS' portfolio resulting in a 69% capacity factor in the proposed rule 

when the plant has run at an average capacity factor of 77% for the past decade. The commenters

said another coal plant in UAMPS' portfolio experienced a forced outage due to an equipment 

failure, resulting in significantly fewer MWh and CO2 emissions from this resource in 2012. The 

commenters said using 2012 as the baseline year also skews emissions rate data for this plant as 

artificially low, with the end result being excessively stringent guidelines for the State (Utah) in 

which the EGU is located. 

Commenters stated the selection of 2012 as the baseline year effectively ignores the significant 

emissions reductions achieved by the power sector in recent years. The commenters said between 

2005 and 2012 energy-related CO2 emissions in the U.S. were reduced by a total of 13.2%, 

declining in 5 of the past 7 years. The commenters said the EPA should recognize the efforts the 

electric utility industry has proactively taken to reduce carbon emissions as part of the emissions 

rate calculations in the proposed rule. The commenters suggested a more equitable approach by 

utilizing an average of EGU data from 2005-2009 to establish more accurate values for capacity 

factor and emissions and to recognize in part the CO2 reductions achieved during that time 

frame. The commenters did not believe using an average of 2010, 2011, and 2012 emission data 

is the best approach for determining baseline emission data for affected EGUs subject to the 

CPP. 

Commenters stated in the Notice of Data Availability (NODA) released October 28, 2014, EPA 

acknowledges stakeholder concerns surrounding the selection of 2012 as a single baseline year 

and published additional emissions data for 2010 and 2011. The commenters said in reviewing 

emissions data for UAMPS' coal resources over the past decade (2003 through 2013) one plant's 

emissions ranged from a low of 2.7 million tons of CO2 to a high of nearly 4.4 million tons for a 

range in variation of 1.7 million tons. The commenters said another coal-fired plant in UAMPS' 

portfolio saw a range in variation of 930,000 tons CO2 in the same time period. The commenters

said this wide range in emissions illustrates the extreme variability in EGU CO2 emissions from 
394

year to year and the need for a different methodology for determining reduction targets. The 

commenters said adding emissions data for 2010 and 2011 for consideration, in addition to 2012 

data, is still inadequate and arbitrary. The commenters said utilizing this data fails to credit the 

significant reduction in emissions the electric industry has made since 2005. The 

commenter's proposed approach of using an average of EGU data from 2005-2009 would more 

accurately reflect actual emissions of each EGU, partially crediting CO2 reductions achieved 

over this time period, and would resolve the problem of artificially low emissions targets driven 

by outside factors such as unplanned outages. 

5-year baseline recommended. Commenters stated EPA should change the methodology for 

calculating carbon intensity in the proposed rule and expand the baseline period (e.g. from one 

year to five years) in order to minimize the impact and disparities associated with basing 

emissions targets on a single year. The commenters said EPA should also start with an earlier 

year (e.g., 2005) to address the punitive impact of the proposed rule on states and companies that 

have taken early action to reduce GHG emissions and address climate change.

States should be able to select from at least 2 or 3 years. Commenters stated rather than using 

2012 emissions data to establish the baseline as in the proposal, the commenters suggested that 

EPA allow utilities to select from at least two or three different years to establish a representative 

baseline for each of its units. The commenters said because an individual unit could have been 

down for maintenance or had a lower-than-normal operating rate during the 2012 baseline year 

selected by EPA, the baseline could be artificially low. The commenters added if a utility took 

measures to reduce its greenhouse gas emissions early, before 2012, the proposed program 

would not provide any credit. The commenters said Florida installed most of its renewable 

energy capacity before 2012, including the increased use of biomass as well as rooftop and utility 

scale solar; the City of Lakeland, for example, initiated a solar project in 2008. The commenters

said because the goal of the proposed guidelines is to reduce greenhouse gas emissions, early 

action reductions and carbon-free nuclear generation coming online after the 2012 baseline 

should all be treated the same.

Multi-year average of years before 2012. Commenters stated choosing a baseline emission start 

date of 2012 punishes early efforts of states such as Colorado. The commenters said EPA should 

allow states with RES mandates to choose a start date prior to the implementation of the RES 

mandates; alternatively, the Plan should allow for an average of years prior to 2012 to account 

for early emission reductions.

Multi-year baseline. Commenters stated EPA should set emission rate goals based on a multiyear baseline period, rather than historic generation in a single year. The commenters said the 

2012 baseline period in the Proposed Rule is not representative of normal operation for the 

electric generating industry. The commenters said natural gas prices were at a record and 

unprecedented low in 2012, which resulted in greatly reduced generation from coal-fired 

generating units; the commenters said the U.S. economy was still in a tough economic recovery. 

The commenters said as EPA has noted in previous rulemakings, electric demand and resultant 

utility operations fluctuate greatly within a single year; utilizing a multi-year baseline, such as 

2010, 2011 and 2012, would correct for anomalies, and provide some credit to early actors.
395

Commenters stated many utilities and states have taken steps to curb carbon emissions well 

before 2012. The commenters said that the EPA should give some recognition for early movers 

in the Plan; possible fixes could include allowing states to pick a year earlier than 2012 for a 

starting value or some averaging of prior years to calculate the starting point.

Commenters stated as the last year of available data, the year 2012 appears to be an appropriate 

starting point for CO2 reductions from EGUs for most states; however one of IPP's generating 

units was off-line for an extended period in 2012 resulting in the generation data used to develop 

Utah's state goal being non-representative of IPP's operations. The commenters suggested that 

EPA set the baseline levels for computing the state goals based on multi-year periods. The 

commenters said following the approach used in these other CAA regulatory programs, the 

Agency should allow affected EGUs to select as their baseline the average of any 3-year 

consecutive years from 2008 through 2013; such an approach will ensure a more representative 

baseline period and provide some partial credit for early actions.

Comment 5: 2005 should be used as baseline, to account for reductions already achieved

Response 5: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year.

The following are summaries of the specific public comments under this comment:

Commenters stated the rule talks about achievement of a 30% reduction from 2005 CO2 

emissions nationwide; however, the state goals are calculated using the actual emissions data 

from 2012. The commenters said the consequence is that this methodology completely ignores 

what a state has already achieved in reducing its carbon emissions. The commenters said in 

South Carolina, the statewide CO2 emission reduction from EGUs has been 31% since 2005 for 

which the proposed rule gives no credit. The commenters said this not only creates a disincentive 

for the states that had a plan to implement a carbon reduction strategy but it also places a 

disproportionate burden on the people within that state that are already paying for the carbon 

reductions achieved to date and who must now pay again for the additional resources necessary 

to achieve the EPA prescribed carbon intensity state goal. The commenters said in South 

Carolina, the state goal requires another 51% reduction from the 2012 baseline which is also a 

decrease of 815 pounds of CO2 per megawatt hour; the largest in the nation. Commenters stated 

in order to be fair, any goals that are ultimately put in place need to give credit for the CO2 

emission reductions that have already been achieved by retirements, conversions, and other 

utility industry responses in anticipation of GHG regulation; to that end, the baseline average 

annual CO2 emissions should be tied to the annual emissions of 2005, as referenced by the 

President's Climate Action Plan, or an appropriate statistical average of annual emissions during 

the preceding years. 

Commenters stated considering certain states such as Texas have made substantial investments in 

renewable energy since 2005, the final emission goals for 2030 should be adjusted upward to 

account for these projects. The commenters said Texas Public Utility Commissioner Kenneth W. 

Anderson, Jr. states in his written testimony before the House Energy and Power Subcommittee 
396

that: "The EPA's proposed Clean Energy Plan rule ignores the significant renewable energy 

development that has occurred in Texas during the preceding decade. Even with the extreme 

variations in wind generation that can occur over the course of the year, in 2013 Texas wind 

generation produced 35.917 million MWh (16.24% of the nation's non-hydro renewable 

generation). However, the 2012 base year selected by the EPA for the proposed Clean Power 

Plan rule does not give Texas credit for the societal and financial commitments to facilitate 

renewable energy. From 2005 through 2011 Texas added over 8,500 MW of wind capacity, of 

which 8,300 MW were built within ERCOT."

Commenters stated the manner in which EPA calculated Nevada's emission limit front-loaded 

the emission reductions. The commenters said EPA uses a 2012 baseline to calculate the state 

emission limits, despite public statements referring to reductions from the 2005 emission 

baseline. The commenters said the use of a 2005 baseline would more accurately account for the 

substantial reductions in CO2 emissions in Nevada over the last 10 years. The commenters said 

since 2005, Nevada has experienced over a 30% decrease in energy-related CO2 emissions - the 

largest percentage decrease in the country. The commenters said this is due to the shutdown of 

the Mojave Plant (two 800 MW units) in Laughlin, Nevada as well the deployment of a 

significant portfolio of renewable generation. The commenters said by relying on a 2012 

baseline, EPA gives the State no credit for any of these reductions. The commenters said EPA 

should instead use a 2005 baseline to give full credit to states that have taken a proactive 

approach to reducing carbon emissions.

Commenters stated EPA's Section 111(d) proposal relies primarily on 2012 data to set state 

emission reduction targets for Pennsylvania generation including coal and gas-fired facilities and 

nuclear generation. The commenters said by establishing a 2012 base-line period, EPA ignores 

the emission reduction benefits achieved by generation resources prior to that period; however, 

the EPA has indicated that, under its plan, carbon dioxide emissions will be reduced by 30% 

from 2005 levels. The commenters urged the EPA to re-examine the appropriate baseline for its 

proposed emissions standards for fossil fuel generation and utilize 2005 as the baseline instead of 

2012. The commenters said a 2005 baseline would properly capture all of the benefits achieved 

by: (i) Pennsylvania fossil-fuel generation achieving emission reductions through investments 

made in coal plant retrofits and environmental compliance activities; (ii) increased deployment 

of gas-fired generation utilizing domestic natural gas resources; and (iii) uprates of nuclear 

facilities.

Commenters stated the EPA has selected 2012 as the baseline year for implementation of the 

emissions standards as opposed to an earlier baseline year, such as 2005; PA also states that the 

goal of its CAA Section 111(d) proposal is to achieve a 30% reduction of CO2 below 2005 

levels. The commenters said by setting 2012 as the base year for its emission reduction 

calculations, EPA fails to account for and credit PA for the emissions reductions achieved by PA 

generation facilities from 2005 forward during which time PA-based generation facilities 

invested heavily in environmental compliance retrofits that achieved significant emissions 

reductions. The commenters said EPA should consider resetting the base year for establishing 

emissions standards from 2012 to 2005.

Commenters stated existing sources in the state of Georgia, including MEAG generation, have 

actually already achieved a 33% reduction in carbon dioxide emissions, in tons, in 2012 
397

compared with 2005. The commenters said while this emission reduction between 2005 and 

2012 is significant, the proposal would require an additional 44% reduction in the carbon dioxide 

emission rate (lb/MWH) by 2030 compared with 2012 - or about a 45% reduction in tons of 

carbon dioxide from affected units in 2030 compared with 2005. The commenters said EPA's 

mass-based equivalent goal would require an even greater emission reduction in tons for affected 

units in Georgia - 63% below the 2005 level. 

Commenters stated EPA requests comment on the option of selecting a baseline date starting 

from a specified date prior to the initial plan performance period. The commenters said EPA 

states a number of options including 2005. The commenters recognized that EPA has stated that 

its proposed plan will achieve GHG emissions reductions of 30% below the 2005 level by 2030 

if implemented as proposed; however, EPA utilizes the baseline date of 2012 throughout its BB 

approach. The commenters said EPA's analysis for BB1 relies on a review of 2012 data for 900 

coal generation facilities. The commenters said selecting 2012 as a baseline unnecessarily 

penalizes states, such as PA, that have benefitted from emission reductions from environmental 

compliance measures taken by coal plant operators since 2005. The commenters said these 

measures include addition of SO2 and NO2 scrubbers and other upgrades that were designed to 

improve heat rate and general operating efficiency. The commenters urged the EPA to consider 

utilizing a 2005 baseline year for the calculation of emissions reductions to be consistent with its 

stated objective for 30% emissions reductions from a 2005 level by 2030 and to recognize 

benefits in emissions reductions already achieved by PA generators.

Commenters stated it is imperative that Minnesota receive full credit for the costs of all early 

action in order for the Minnesota economy to remain competitive both nationally and 

internationally. The commenters said it is also imperative that the EPA considers the cost of any 

supplementary action when setting Minnesota's CPP targets. The commenters said the Minnesota 

Next Generation Energy Act of 2007 ("NGEA") established a statewide renewable energy 

standard. The commenters said Minnesota's early action by adoption of legislation such as the 

NGEA led to significant repowering and emission reduction requirements which continue to 

successfully reduce statewide CO2 emissions. The commenters said Minnesota regulators also 

require all utilities in the state to file an Integrated Resource Plan ("IRP") that includes 

consideration of CO2 environmental externalities. The commenters said all Minnesota filed IRPs 

must demonstrate that recently deployed and proposed environmental control retrofits deliver 

emission reductions that comply with recent environmental regulations addressing regional haze, 

fine particulates, ozone and mercury as well as including a range of CO2 emission costs. The 

commenters urged the EPA to consider that these early action and nation leading policy 

decisions have a true cost to current and future Minnesota ratepayers. The commenters said early 

renewable energy deployment actions, along with demand side management conservation and 

efficiency programs, should allow Minnesota to be rewarded and credited for existing programs. 

The commenters said using the year 2005 as a baseline for the CPP assures Minnesota credit for 

their existing programs and avoids any punishment for the more recent Minnesota early action 

initiatives. The commenters said Minnesota's NGEA referenced 2005 as a baseline year for 

setting and tracking progress of the state's greenhouse gas emissions extending through 2030. 

The commenters said the magnitude of CO2 emission reductions in the state from Minnesota's 

early action more than satisfies Minnesota's "fair share" contribution towards meeting overall 

United States climate policy objectives for improving the electric generating sectors emissions 

profile through 2030. 
398

Commenters stated the selection of 2012 as the baseline for measuring improvements, 

furthermore, fails to account for substantial improvements that have already been achieved and at 

the same time ties reduction goals to data from a period of economic recovery. The commenters

said during that intervening period, industrial consumers in Indiana diligently pursued energy 

efficiency initiatives that, under the proposed regulations, would not be properly credited toward 

the achievement of the Indiana goals. The commenters said in many other respects, Indiana 

would be penalized for earlier efforts to achieve heat rate improvements in coal-fired generation, 

to increase gas-fired and renewable energy resources and to promote efficiency. The commenters

said in 2012, moreover, economic conditions in Indiana and the United States were still 

recovering from a serious recession, and for a manufacturing-intensive state such as Indiana in 

particular, the level of energy consumption in 2012 was not representative of productivity at full 

strength. The commenters said locking in emission reduction goals to a baseline period in which 

consumption was down due to economic adversity is inconsistent with the objective of 

supporting a vibrant and growing economy. The commenters said an earlier baseline period such 

as 2005 would better reflect both measures already implemented and reasonably expected 

conditions moving forward.

Comment 6: Must allow credit for early reductions for BB3 and BB4 (RE & EE)

Response 6: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year. See sections V.A and V.E of the final rule preamble for 

discussions of demand-side energy efficiency and renewable energy, respectively. See section 

VIII of the final rule preamble for discussion of state plans.

The following are summaries of the specific public comments under this comment:

Commenters stated in its Proposed Rule, EPA proposes to use 2012 as the baseline year to 

develop the state-specific carbon emission reduction goals based on the BSER. The commenters

said each of the Building Blocks is a separate component to the BSER, developed using a 

distinct proposed methodological approach based on a cost-benefit analysis for each GHG 

abatement measure; for example, for Building Block 3, EPA applied a regional annual growth 

rate to each state's 2012 level of renewable energy generation to derive the future renewable 

energy generation in that state from 2017 to 2029; for Building Block 4, EPA used a "best 

practices scenario" by determining each state's incremental annual savings as a percent of retail 

sales for the most recent year of data (2012) and then applying a series of other inputs to arrive at 

a level of sustainable performance. The commenters said EPA's proposed baseline of 2012 for 

Building Blocks 3 and 4 does not provide full credit for investments already made that offset 

CO2 emissions, including numerous efforts over the last decade by Heartland and Heartland's 

customers to proactively and responsibly reduce their carbon footprint. 

Commenters requested that EPA push back the 2012 baseline in the Proposed Rule to 2005 for 

Building Blocks 3 and 4. The commenters said using 2005 as the baseline year for Building 

Blocks 3 and 4 would appropriately enable entities to be credited with measures they have taken 

in the last decade to reduce their carbon footprint through the increased use of renewable energy 

and energy efficiency. The commenters said EPA should recognize the efforts by entities that 
399

were forward-thinking on renewable energy and energy efficiency measures over the past 

decade, and it should not use a baseline in its Building Blocks that essentially penalizes states 

that have already invested in these areas by not counting their past measures toward their carbon 

emission reduction targets. The commenters said use of a 2005 baseline year for these two 

Building Blocks would be more consistent with the Proposed Rule's selection of 2005 as the year 

against which the goal of 30 percent reduction in carbon emissions from EGUs by 2030 will be 

compared. Commenters respectfully requested EPA revisit its 2012 baseline for Building Blocks 

3 and 4, and instead allow states to capture the benefits of any renewable energy and energy 

efficiency projects and programs that have the effect of reducing carbon emissions. The 

commenters said using 2005 as the baseline year would enable entities to be credited with 

voluntary, proactive measures they have taken in the last decade to reduce their carbon footprint. 

Commenters stated the proposal fails to provide credit for early adoption and implementation of 

programs; as a result, programs already incorporated into the calculations of a state baseline 

cannot be relied on to meet a state's future emission reduction goals. The commenters said those 

programs may be put at a comparative disadvantage when competing for future funding against 

newer initiatives or requirements that can be relied on to meet the new emission reduction 

standards. The commenters said states may also choose to postpone the adoption or extension of 

energy savings initiatives. The commenters said this disincentive to maintain successful 

voluntary DSM programs again runs counter to the goals of the Clean Power Plan and 

undermines the achievements builders have made in partnership with utilities in bringing energy 

efficient homes to market. 

Commenters urged EPA to redesign the BSER to eliminate the incongruent treatment of early 

action by states on energy efficiency. The commenters said under the current BSER, early 

adopters that have deployed DSM programs widely at the state level may be closer to achieving a 

reduction in electricity generation equal to 1.5% of prior year retail sales; however, the inclusion 

of existing energy efficiency programs in the baseline not only affects the rate of emission 

reduction expected from the state, but also the ability to credit the impact of those programs on 

compliance with the state emissions performance standard. The commenters said if the proposal 

is finalized as drafted, these early adopter states will be forced to incorporate more aggressive 

program measures to ensure they achieve the necessary emissions reductions during the 

compliance periods. The commenters said these measures will not be targeting the so called lowhanging fruit but will instead be measures that are more stringent, contain more prescriptive 

requirements, and represent less cost-effective means of achieving end-use energy efficiency. 

Commenters stated EPA's assumptions about the build out of renewable generation unfairly 

penalize Texas for taking the lead on new zero-carbon generation and are arbitrary and 

capricious. The commenters said under Block 3, the baseline again puts Texas at an unfair 

disadvantage. The commenters said EPA does not give Texas adequate credit for billions of 

dollars of renewable generation development, including the necessary transmission 

infrastructure, made since 2001, much less 2005. The commenters said by ignoring the efforts 

already undertaken by states to reduce CO2 EPA erred in setting BSER; the result is a higher 

cost of compliance and fewer alternative choices for those states which chose to implement 

policies that reduced carbon emissions prior to the EPA proposal.
400

Commenters stated Utah has increased its renewable energy generation, primarily wind energy, 

from 301,862 MWH in 2008 to 1,099,724 MWH in 2012, a 2.6 times increase in generation over 

five years. The commenters asserted this commitment to renewable energy should be recognized 

in EPA's rule. The commenters said one way EPA could give some early action credit would be 

to create a five-year average baseline from the years 2008-2012; this would give partial credit to 

the commitment Utah has already made to develop renewable energy.

Commenters stated credit for early action should be expanded for energy efficiency programs 

already implemented by states. The commenters said states that have taken early action in EE are 

penalized by the Proposed Rule because goals are based on a higher starting point, due to the 

electricity generation savings already accomplished, leading to a higher ramp-up rate than if the 

state had started at zero.

Commenters suggested that the rule give credit for 2005 to 2012 renewables and energy 

efficiency in setting the goal or that EPA clarify that these resources can be used to demonstrate 

compliance in the state plan.

Commenters stated Minnesota has undertaken early action measures for customer energy 

efficiency deployment that already delivered significant conservation and process efficiency 

improvement gains for Minnesota electricity consumers. The commenters said Minnesota 

Power's analysis of energy efficiency and conservation improvement measures through 2005, as 

reported to the EIA 1605(b) voluntary reporting of greenhouse gas emissions program, show 

cumulative efficiency improvements of over seven percent relative to MP's annual electricity 

customer demand. The commenters said the "timing out" of earlier conservation and energy 

efficiency measures contributing to cumulative conservation estimates has been such that new 

measures being implemented under Minnesota's energy efficiency program are approximately 

sustaining this magnitude of cumulative conservation. The commenters said in the CPP proposal, 

EPA has now reset the basis for calculating cumulative conservation by assigning 2012 as a new 

reference year for conservation and energy efficiency improvements, effectively nulling out the 

indicated benefits from Minnesota Power's conservation and energy efficiency actions through 

2012. The commenters said additionally, Minnesota utilities are now challenged by needing to 

sustain energy efficiency gains by implementing new measures from a depleting list of candidate 

projects so that expiring earlier measures can be replaced.

Commenters stated renewable energy projects developed prior to 2012 should not be used to 

lower the regional average rate used by the CPP. The commenters said it is understood the CPP 

grouped states into regions and applied regional averages to establish renewable energy targets. 

The commenters said states who voluntarily or through renewable portfolio standards (RPS) 

constructed renewable energy prior to 2012 are penalized under the current EPA model with 

higher renewable energy requirements and lower state emission rates.

Commenters stated as EPA recognized in its proposed rule, Minnesota has already been a leader 

among states in passing legislation that promotes clean energy development. Commenters said 

that Minnesota has "worked collaboratively with its investor-owned utilities to develop multipollutant emission reduction plans on a utility-wide basis. This approach enables utilities to 

determine the least cost way to meet long term and comprehensive energy and environmental 

goals." The commenters said Minnesota adopted a mandatory renewable energy standard 
401

("RES") in 2007. The commenters said under this standard, utilities were required to obtain 12% 

of their retail sales of electricity in 2012 from renewable sources, and Xcel Energy, Minnesota's 

largest utility, was required to reach an 18% level. The commenters said more recently, in 2013, 

the Minnesota Legislature passed legislation requiring utilities to ensure that, on top of the 

existing RES, at least 1.5% of their retail electricity sales in 2020 come from solar energy. 

Commenters stated these policies have been quite successful in moving Minnesota toward a 

cleaner energy economy; for example, in 2000, 4% of the electricity generated in Minnesota 

came from renewable sources; by 2011, renewable electricity jumped to 16% of total generation. 

The commenters said this has resulted in approximately 15,300 clean-energy-sector jobs in 2014 

and this sector is growing at a significantly faster pace than others in the state; clean energy 

sector average wages are also significantly higher that state average wages. 

Commenters stated when a state or federal carbon reduction plan is adopted, the EPA should 

credit new renewables, gas generation or energy-efficiency reductions that have occurred since 

2012: 

• Texans have built 48,000 MW of new generation since 1999; about 25%, or more than 

13,000 MW, has been wind energy; Texas has installed over 11,800MW since 2005. 

• 12,754 MW of renewable generation is committed for the future; Texas has obtained 

transmission contracts and this capacity is likely to be completed before the state plan is 

submitted or approved. 

• Texas's generation grid has the potential to accommodate over 18,000 MW of wind and 

solar energy and storage. 

• 51,100 MW of active generation requests under are review, more than half of which are 

for gas-fired plants that can replace retiring coal plants; this number includes more than 

24,200 MW of wind Electric co-ops should be treated 

Commenters stated EPA should give credit for early investments in renewable energy, zeroemitting energy including baseload nuclear and hydropower generation, and energy efficiency by 

properly adjusting the baseline period. The commenters said EPA's failure to give appropriate 

credit for early action creates a harmful precedent. The commenters said a program that fails to 

recognize efforts by states and companies to show leadership in reducing emissions will have the 

long-term "chilling" effect of discouraging states and companies from implementing beneficial 

environmental measures unless and until mandated by EPA. The commenters said equally 

important, consumers - the ratepayers and customers - of those companies, along with owners, 

already are paying for those investments. The commenters said EPA could correct this by 

utilizing an earlier baseline period, or by explicitly giving states credit for early actions to reduce 

GHG emissions when they demonstrate compliance with their interim and final standards; 

further, EPA could provide credit for early investments in EE by employing the same baseline 

electricity savings rate for all states. The commenters said finally, EPA should allow hydropower 

generation to be credited towards compliance. The commenters said an earlier baseline period 

would recognize and reward state and company leadership in reducing emissions; displacement 

of fossil-fuel fired generation by early investments in RE, EE, and natural gas generation would 
402

not be "built in" to the standard calculation, so states that made these investments will not be 

assigned overly restrictive reduction standards and compressed compliance periods. 

Commenters stated in order to set realistic and equitable state goals, EPA must start with a 

baseline period for each state that is representative of actual generation and GHG emission levels 

in that state. The commenters said the 2012 baseline period in the Proposed Rule is not 

necessarily representative in each state, in part because EPA did not correct for anomalous 

events that impacted total GHG emissions in that single year. The commenters said a better 

approach would be to expand the baseline period from one year to five years in order to 

minimize the impact of anomalies that inevitably arise during a one-year period. The 

commenters said EPA must address certain anomalies that arose in 2012 to avoid the unfair and 

arbitrary impacts that penalize some states and/or companies. The commenters said a multi-year 

baseline period would smooth out the anomalies and accurately represent the natural variations 

inherent in the electric industry. The commenters said while anomalous events occur every year, 

these events do not all have the same impact on operations and emissions; as a result, any singleyear baseline period will not accurately represent normal operations of the energy industry. The 

commenters said a multi-year baseline would better represent the natural yearly variation and, 

thus, better depict normal operations. 

Comment 7: 2012 not representative; need a more representative year; need to credit early 

actions.

Response 7: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year. See section VIII of the final rule preamble for a discussion 

of state plans.

The following are summaries of the specific public comments under this comment:

Commenters stated the EPA's Plan proposes to use a single year, 2012, as the baseline year for 

measuring CO2 emission reductions. The commenters said if a single year is chosen, it must be 

more representative of annual emission levels. The commenters said for New York and other 

states affected by Super Storm Sandy, 2012 is decidedly not a typical year and would result in an 

artificially low baseline. The commenters said the Plan's choice of a baseline period must take 

into account anomalous weather events or other occurrences that would render the baseline 

inappropriate; if 2012 ultimately is chosen as the baseline year, adjustments must be made to 

account for such anomalous circumstances. 

Commenters recommended that emission reductions achieved from September 25, 2008 (the date 

of the first RGGI allowance auction) to December 31, 2019 be credited, banked and applied 

toward New York's compliance with the EPA's Plan during the interim and final performance 

periods. The commenters said compliance entities under the RGGI program need continuity to 

retain the value of allowances sold to them in good faith. The commenters said this approach 

would reward early movers like New York, provide an incentive for additional early emission 

reductions, and allow a more gradual emission improvement trajectory during the interim 

performance period of 2020-2029. 
403

Commenters stated the EPA uses 2012 as a baseline year for the rule. The commenters said 

many state carbon reduction programs went into place prior to 2012 such as RGGI, and 

Delaware's RPS and efficiency programs. The commenters asked that the EPA consider an 

earlier baseline year, to the extent possible given legal and regulatory authorities, to reflect early 

state actions.

Comment 8: 2012 not representative year; multi-year baseline (5 year) would be better; if 2012 

is used as baseline must correct for anomalies

Response 8: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year.

The following are summaries of the specific public comments under this comment:

Commenters said that CO2 emissions in 2012 were not representative, in part because the EPA 

did not correct for anomalous events that impacted total CO2 emissions in that single year. 

Commenters said the EPA should expand the baseline period from one year to five years to 

minimize the impact of atypical events that inevitably arise during a single-year period. 

Commenters said if the EPA does not expand the baseline period to five years, EPA must, at a 

minimum, correct for anomalies like those discussed below. Commenters said one way that the 

EPA could do this, as the Agency recognizes, NODA, 79 Fed. Reg. at 64,553, is to use different 

data years for individual states, as opposed to using the same data year, or combination of years, 

consistently across states. Commenters said such an approach would account for atypical events 

that affected individual states or a subset of states.

Commenters said that numerous uncharacteristic events can occur during any single year, and 

such was the case in 2012. Commenters said these anomalies include increased utilization of 

affected units due to extreme weather events, atypically low CO2 emissions from coal-fired 

generation due to historically low natural gas prices, and a changing portfolio (additions and 

retirements) of available units for dispatch. Commenters said additionally, as the EPA has 

recognized in previous rulemakings, an EGU's operations (and, consequently, its CO2 emissions) 

will vary greatly over the course of any given year due to unusual weather and its impact on 

demand. Commenters said in addition to nationwide anomalous events that occurred during 

2012, single-unit issues also significantly affected states' 2012 emissions, including extended 

outage periods for major sources of CO2 emissions and partial year operation of new NGCCs, 

and the EPA did not adjust for any of these events. 

Commenters said a multi-year baseline period would dilute the disparate impact that an atypical 

event can have on a single year and would more accurately represent the natural variations 

inherent in the electric industry, and would be consistent with how EPA expects states to 

demonstrate compliance under the Proposed Rule. Commenters said further, a multi-year 

baseline period is consistent with other existing EPA programs and guidance. 
404

Comment 9: 2012 not representative, multi-year baseline should be used, use of multi-year 

baseline can make big difference in translating rate-based goal into a mass-based goal, states 

must get credit for early reductions, the EPA needs to clarify exactly what state and federal 

programs were relied upon in calculating state goals so public can make informed comments

Response 9: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year. See sections VI and VII for discussion of calculation 

methodology for subcategory-specific emission performance rates and state goals, respectively.

The following are summaries of the specific public comments under this comment:

Commenters stated that the EPA should adopt an averaging approach to establish the base 

year. Commenters indicated that the EPA considered using average fossil fuel generation and 

emission rate values over a baseline period but determined that there would be little variation in 

the results compared to a 2012 base year data set due to the rate-based nature of the 

goal. Commenters said in fact, many variables affect the amount of generation and emissions in 

a particular year, including the level of hydroelectric generation, natural gas prices, and weather 

variability. Commenters added that notwithstanding EPA's rationale, the baseline generation 

assumptions do impact the ultimate emission target goal. Commenters therefore recommended 

the use of an averaging approach in order to account for yearly differences in generation.

Commenters said that over the last decade, the landscape of energy use in the U.S. has fluctuated 

significantly, and the EPA's use of the year 2012 as a baseline for the states' budgets is arbitrary 

and leads to anomalous results. Commenters provided a graph and stated it showed that on a 

national level, carbon emission levels and coal use were at a seven-year low in

2012. Commenters said that due to the severe cold, CO2 emissions increased 2.5 percent from 

2012 to 2013, and that despite this increase over 2012 emissions, emissions in 2013 were still 

10% below their 2005 level. Commenters said that this shows that 2012 is not a reasonable 

baseline for any power usage statistics-it reflects reduced power usage due to a well-documented 

downturn in the economy. Commenters said that on a state level, some states had anomalous 

carbon output in 2012 - a fact that the EPA did not take into account. Commenters said for 

example, Minnesota's Sherburne County coal-fired power plant went offline beginning in 

November 2011 due to extensive turbine damage and remained offline for all of 2012, thereby 

reducing Minnesota's carbon emissions significantly for that year. Commenters said similarly, 

while a coal-fired power plant in West Virginia was named the most efficient plant in the U.S. in 

2011, its efficiencies fell in 2012 due to "restarts" and other issues "typical of the first year of 

operation of any power plant ... " Commenters indicated these types of issues can likely be found 

in the data from any year, but said they should not control the states' budgets or be viewed in a 

vacuum. Commenters said that instead of using one year of emission statistics, the EPA should at 

the very least aggregate the data in order to produce averages for each state that more accurately 

reflect the emissions trends.

Commenters said the baseline year selection is an important issue for some states, because some 

states already have regulations or policies that would directly (e.g., emissions cap) or indirectly 

(e.g., renewable portfolio standards) reduce CO2 emissions, and some of these state requirements 

were in place well before 2012. Commenters said under the EPA's proposal, states may only 

apply emission reductions achieved under an existing state requirement or program and 
405

attributable to actions taken after the date of the proposal towards their individual state 

goal. Commenters said the EPA does not explain, nor is it clear from the proposal, what 

"actions" taken under an existing state requirement or program might include. Commenters asked 

that the EPA provide examples of what it considers "actions" taken under a state requirement or 

program to include.

Commenters asked that the EPA clearly show what state and federal programs it relied upon in 

calculating state goals so the public can make informed comments. Commenters said the state 

goal emission rate will not be changed once the EPA issues the rule as final and it must therefore 

rely on accurate data and recognize early adopters of carbon reduction strategies such as heat rate 

improvements at coal units or existing state energy efficiency programs. Commenters said these 

efforts should be recognized and rewarded in each individual state's goal.

Commenters indicated a multi-year baseline should be used. Commenters said despite using a 

single year's worth of data to represent the baseline emission rate, the proposal allows EGUs -

after 2030 - to measure actual plan performance against the final goal by using a three-year 

rolling average. Commenters said the EPA reasons that a three-year average will account for 

"year-to-year variability in economic and other factors, such as weather, that influence power 

system operation and affect EGU CO2 emissions." Commenters said for these same reasons, the 

EPA should rely on a multi-year average for determining the initial performance level rather than 

only 2012 data.

Commenters said moreover, even if there may be little variation between a single vs. multi-year 

baseline when viewing the rate-based goal, a multi-year baseline may make a big difference 

when translating that rate into a mass-based goal for any given state. Commenters said the EPA 

should allow multi-year baselines when a State chooses to utilize mass emissions targets rather 

than rate-based targets. Commenters said the rule should account for the economic and other 

factors discussed above by using a multi-year baseline period to calculate both rate-based and 

mass-based goals. Commenters said as these numbers show, using a multi-year average provides 

a more accurate snapshot of a state's performance level against which states can compare future 

carbon emission reductions.

Commenters said that states should be able to utilize at least a 3-year average to calculate state 

goals. Commenters said that in addition, the EPA should consider adjusting the baseline 

emission levels to reflect plant shutdowns and other early reductions, particularly if bankable 

emissions credit is not otherwise provided for such emissions reductions.

Comment 10: Multi-year baseline needed; for NC 10-year period 2002-2012 is best, would be 

more representative and allow some credit for early reductions; other multi-year baseline 

possibilities

Response 10: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year.

The following are summaries of the specific public comments under this comment:
406

Multi-year Baseline. Commenters disagreed with the concept of using a baseline year, but said 

that if a baseline year is established it should be a multi-year average and not a single baseline 

year. Commenters said the selection of a single baseline year merely provides a snapshot of a 

state's energy and emission profile at a given time and, for North Carolina, gives an inaccurate 

picture of the State's overall profile. Commenters stated that failure to utilize an average when 

establishing the baseline for the Proposed Rule is incongruous with the building blocks fashioned 

largely by "averaging" data across states.

2002-2012 Baseline Best for NC. Commenters said that while there are numerous yearly 

combinations that would yield a more equitable result than the singular year of 2012, the most 

appropriate baseline for North Carolina is an average of years 2002 through 2012. Commenters

said there is precedent for the EPA's usage of a ten year period. Commenters said using an 

average of this ten year period is both more accurate and more equitable for multiple reasons:

“A 10-year average balances out statistical variations that appear in the State's data for any given 

year arising from weather, outages, fuel cost, demand, retirements, economic conditions and 

dispatching. A multi-year baseline approach would be less sensitive to these types of variations.

Additionally, economic conditions varied significantly throughout the previous decade, with 

significant growth followed by the Great Recession (2007-2009) and slow recovery. As 

economic conditions are a significant driver of electricity consumption, it is important that 

economic trends be normalized and accurately reflected in any baseline calculation. A ten year 

average would level out significant economic fluctuations experienced by individual states and 

ensure that any established standard would not be skewed toward a good or bad economic 

environment.

Using an average of the years between 2002 and 2012 also would give North Carolina ratepayers 

some credit for their significant investment in environmental measures and utility retirements 

that have reduced coal-fired electric generation in North Carolina during that time period. In 

2002, the North Carolina General Assembly passed the "Clean Smokestacks Act" (S.L. 2002-4). 

Under the Clean Smokestacks Act, NOx and SO2 emissions (and carbon emissions) were 

reduced by retiring older coal units, retrofitting some plants at a total cost of $2.89 billion, and 

building new natural gas-fired plants. An average would ensure that the baseline reflects North 

Carolina's trend of reducing emissions from coal-fired power plants and would incorporate these 

ongoing efforts into the standard.”

Other Possible Multi-year Averaging Periods. Commenters said that while they advocate for a 

baseline established using a 2002-2012 average, a 2005-2012, 2007-2012 or 2010-2012 year 

average would be more accurate and preferable to the singular year of 2012. Commenters said 

additionally, considering the EPA's focus on 2005 in conversations prior to issuing the Proposed 

Rule, a 2004-2006 average (or similar average) would also present a more credible alternative to 

2012.

Must Protect Investments. Commenters said that any standard that does not recognize and 

protect existing investments to improve air quality is unjust and unreasonable. Commenters said 

the Proposed Rule should be tailored to protect ratepayers and to avoid such uneconomic 
407

outcomes by using a multi-year average or by creating a mechanism by which states receive 

credit for investing in emissions control technology prior to 2012.

Comment 11: The EPA should use 5-year average over a 7-year period for baseline; states 

should be allowed to select either 2012 or any 3 consecutive years out of the last decade for 

baseline; baseline should be average of 2010-2012; baseline of 2010-2012 better than just 2012, 

but 2008-2010 better; provide a range of baseline options to states; baseline should be average of 

any 3-year consecutive years from 2005-2013 or 2008-2013; baseline should be 2005 but if that 

is not possible then highest of 2010-2012; final compliance date should be extended to 2040.

Response 11: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year.

The following are summaries of the specific public comments under this comment:

Five-year Average over a 7-year Period. Commenters suggested that to calculate baseline 

emissions, the EPA should look towards an average of at least five years of data over a seven 

year period, and said this is not unprecedented. 

Commenters said that the EPA, in order to determine a unit's baseline emissions in Cross-State 

Air Pollution Rule (CSAPR), took the average of the three highest, non-zero annual heat input 

values within a 5 year baseline. Commenters suggested that the survey period and averaging time 

should be even greater in the Clean Air Plan because, unlike SO2 and NOx under CSAPR, CO2 

has not been previously regulated. Commenters said that even with experience in regulating SO2 

and NOx, the EPA recognized that emissions vary and operators of power plants should be 

afforded sufficient time to account for operational and other variations. Commenters suggested 

that since CO2 has never been regulated from utilities, and since a Rule like this has never been 

implemented, additional time should be provided.

Commenters said that the purpose of the CSAPR average timeframe was to reduce the likelihood 

that any particular single year's operations determines a unit's allocation. Commenters said that 

by not only taking the average, but also looking towards the highest data within the five-year 

range, the EPA was attempting to minimize the risk in CSAPR that outlier years would skew 

emissions limitations in a way that disproportionately or inappropriately harmed emitting units.

2012 or any 3 Consecutive years out of last 10. Commenters stated that the selection of a single 

year for baseline is unreasonable, arbitrary and capricious. Commenters suggested that states 

should be allowed to select either 2012 or any three consecutive years out of the last decade on 

which to base an emission inventory. Commenters said that the EPA should utilize a multi-year 

average of at least three years or permit states to select and justify the use of the most 

representative years from the last ten. Commenters said using a multi-year average or other 

flexible year selection process will better account for normal year operations and allow for some 

recognition of early reductions over years directly prior to 2012.

3-year average. Commenters said that many variables affect the amount of generation and 

emissions in a particular year, including the level of hydroelectric generation, unit outages, 
408

natural gas prices and weather variability, and notwithstanding the EPA's conclusions, the 

baseline generation assumptions do impact the ultimate emission target goals. Commenters

recommended the use of 2010-2012 for baseline, which represent the most recent available data. 

Commenters supported use of multi-year baseline such as 2010-2012, or alternatively for states 

to be able to elect this option. Commenters did not suggest which years should be used for 

baseline, but indicated that a 3-year baseline would be more representative than using a single 

year, and said that 2012 was especially unrepresentative for New Mexico as 2012 coal-fired 

emission levels were the lowest for any one year between 2001 and 2012.

2010-2012 Better than just 2012; 2008-2010 Better. Commenters said the use of any single year, 

and 2012 in particular, is not appropriate for baseline. The commenters noted 2012 emissions 

were anomalous, as the New York system was impacted by Super Storm Sandy for much of 

November and into December. The commenters said the use of a three-year average baseline of 

the years 2010, 2011, and 2012 is an improvement but the Alliance suggests that the appropriate 

baseline is before RGGI was implemented, i.e., the average of 2008 to 2010.

Range of Baseline Options. Commenters stated that for many states, including Florida, the year 

2012 was not representative of normal operations and therefore should not be used as 

baseline. Commenters said instead, they recommend that the EPA provide a range of baseline 

year options that could be used by the states in developing their state specific emission limiting 

standards. Commenters said these should include multiyear averaging or use of any single year 

within 10 years of the ESPS proposal date of 2005.

Average of any 3 consecutive years from 2005-2013 or 2008-2013. Several commenters said 

rather than using a single year for baseline, the EPA should follow the approach used in other 

CAA regulatory programs and should allow affected electric utilities to select as their baseline 

the average of any three-year consecutive years from 2005-2013 (Commenters) or 2008 through 

2013. Commenters analyzed historic generation levels for affected EGUs in New Mexico and 

found that during the period 2008 through 2012 the ratio of low to high net generation varies by 

a factor of 1.2 up to 4.5. Commenters said the arbitrary selection of 2012 as the baseline year in 

calculating the State of New Mexico's goal does not capture each facilities high end dispatch 

needs, particularly for the states' coal-fired facilities. Commenters said to correct this, the EPA 

should allow each state to determine the most representative facility dispatch in establishing a 

state goal - in particular, affected electric utilities should be allowed to select as their baseline the 

average of any three consecutive years from 2008 through 2013. Commenters added that 

hydropower-dependent states should be allowed to request a longer average baseline period to 

account for variations in hydroelectric power production.

2005 or highest of 2010-2012. Commenters responded to the EPA's NODA in which they 

discussed potentially allowing 2010 and 2011 to be considered part of the baseline. Commenters

said they believe that an appropriate baseline year is 2005 and that any emissions limitation set 

by the states should be based on this new baseline. But, commenters said, because the EPA seeks 

comment on whether 2010, 2011 or 2012 should serve as baseline years, EKPC recommends that 

the highest of these three years be used as the baseline and that the time to come into compliance 

be extended such that the final goal is effective circa 2040. 
409

Highest of 2010-2012 as baseline. Commenters supported consideration of 2010 and 2011 as 

baselines in the emissions rate goal calculations; the commenters recommended that the highest 

of 2010, 2011 and 2012 be used as the baseline and that any emissions limitation be set by the 

states based on this new baseline.

Comment 12: Baseline did not credit early actions, resulted in more stringent targets.

Response 12: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year.

The following are summaries of the specific public comments under this comment:

Commenters contended that early actions were not adequately credited, but rather were used to 

produce more stringent state targets.

Commenters stated EPA used 2012 state-level emission rate data from fossil-fuel fired 

generating sources as the baseline for calculating the interim and final emission rate goals. The 

commenters said EPA did not adjust the 2012 baseline emission rate to account for the fossil 

megawatts already being displaced by renewable generation; thus, the interim and final emission 

rate goals assume those displaced emissions. The commenters said prohibiting states from 

accounting for the emission rate reductions that are essentially "baked in" to the emission rate 

goal calculations would be inconsistent with EPA's own methodology and arbitrarily and 

capriciously increase the stringency of the emission rate goals.

Commenters stated EPA should consider efforts to move to lower emitting resources in years 

prior to 2012 when setting goals. The commenters said by way of example, South Dakota would 

experience a goal change from an unrealistic 741 lbs. CO2/MWhr (2012) to 1,627 lbs 

CO2/MWhr (2005), by adjusting the baseline year. The commenters said though less dramatic, 

other states would realize material goal shifts should EPA consider early actions that result in 

reduced emissions rates.

Comment 13: The EPA offered no data or analysis to support that there would be little variation 

in results using 2009-2012 baseline period compared to a 2012 base year, and FCG-EC analysis 

showed 2012 was lowest possible value and not representative. Price of natural gas in 2012 was

at lowest level since before 2000, and for that reason alone 2012 disqualifies as 

representative. Due to year-to-year variability in electric power sector, a multi-year baseline 

should be used.

Response 13: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year.

The following are summaries of the specific public comments under this comment:

Several commenters said in the EPA's NODA dated October 30, 2014, the EPA requested 

comment on their approach to a specific baseline. Several commenters said the Florida Electric 

Coordinating Council Environmental Committee (FCG-EC), of which JEA is a member, 
410

and Seminole Electric Cooperative, agree with the EPA that a historic baseline is preferable to a

projected year or a combination of historic and projected, but it does not agree with the EPA's 

decision to use a single year (2012) as the starting point for calculating the state's emission rate 

goals. Several commenters said the EPA has offered no data or analysis to support its stated 

finding that there would be little variation in results using a 2009 - 2012 baseline period 

compared to a 2012 base year. 

Commenters said the FCG-EC used data from 2009 - 2012 to calculate alternative baselines for 

Florida. Commenters said using the EPA's methodology, the FCG-EC found that EPA's 2012 

baseline is the lowest possible value and does not reflect a representative year or average for 

Florida. Commenters said that in fact, 2012 was the lowest mass and rate year recorded for CO2 

emissions in Florida's emissions database. 

Commenters said that in addition to the fact that state baselines using years other than or in 

addition to 2012 do in fact vary from a 2012 baseline, there is the fact that it is inappropriate to 

use any single year as a baseline to represent the electric power sector. Several commenters said 

sources and amounts of electricity generation can and do vary from year to year; the variability is 

due to many factors that include economic conditions, weather variability, year-to-year 

fluctuations in fuel prices, and significant unplanned and planned unit outages. Several 

commenters said with regard to fuel prices, natural gas prices in 2012 were at their lowest level 

since before 2000 (the 2012 annual average Henry Hub price was $2.75 per mmBtu), which is 

lower than today's price and lower than any natural gas price the EIA projects into the 

future. Several commenters said that this fact alone disqualifies 2012 as a representative single 

baseline year applicable to the electric power sector.

Commenters said that the EPA clearly recognizes that there is year-to-year variability in the 

electric power sector, and has taken steps in previous power sector rulemakings, such as 

the Cross State Air Pollution Rule (CSAPR), to address the variability. Commenters said that in 

its Existing-Unit CO2 proposal, the EPA states that there is "year-to-year variability in economic 

and other factors, such as weather, that influence power system operations and affect EGU CO2 

emissions." Commenters noted that the EPA has proposed to include rolling three-year 

performance periods for compliance purposes, apparently in an effort to address the variability, 

yet makes no mention of power sector variability with respect to its proposal to use 2012 as the 

single baseline year. Several commenters said the EPA must address power sector variability by 

using a multi-year baseline, which will produce a more representative baseline than a single year.

Comment 14: A multi-year baseline should be used; use of 2012 as baseline dis-incentives 

action between now and 2017; should not use data from 2012 or other recession years

Response 14: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year.

The following are summaries of the specific public comments under this comment:

Use of 2012 as baseline dis-incentives action between now and 2017. Commenters said that the 

decision to use 2012 as a baseline for energy consumption is ill-conceived, because it effectively 

penalizes any efficiency initiatives that Indiana undertakes between 2012 and 2017. Commenters
411

said because energy efficiency programs get more expensive as additional savings are realized, 

the most cost-effective option for states is to preserve easy improvements until they can be 

counted towards compliance with the proposed rule. Commenters said Indiana would be 

incurring unnecessary costs if the state took steps to realize net energy savings between now and 

2017 - the incentive structure of the proposed rule errs strongly towards inaction, precisely the 

opposite of its intended effect. Commenters said the EPA has acknowledged this issue in the

proposed rule, and is seeking comment on the best way to avoid a perverse incentive. 

Commenters suggested that one option is to give states credit for programs that are already in 

place that will result in emissions reductions during the compliance period.

Commenters also indicated that the Proposed Rule, in essence, penalizes utilities that have 

already taken steps to reduce carbon emissions by using a 2012 baseline. Commenters said that 

instead of penalizing utilities that have already taken steps to reduce carbon emissions, the EPA 

should adjust the baseline to provide credit for early actions, or else few utilities will undertake 

voluntary emission reduction measures in the future. Commenters said the "penalty" will 

incentivize utilities to wait, instead, until such improvements are mandated by regulation.

Total demand in 2012 was relatively low. Commenters indicated that 2012 was an anomalous 

year in natural gas markets because mild weather led to large declines in residential and 

commercial gas consumption as well as electricity demand. Commenters said that according to 

EIA data, Indiana's total energy supply was lower in 2012 than in any year since 1996.

Commenters said that due to decreased electricity demand and other reasons, natural gas prices

fell below coal prices in 2012, which led to increased dispatch from NGCC plants, relative to 

coal-fired plants. Commenters said that since 2012, however, coal-fired plants have, for the most 

part, regained their market share in electricity markets. Commenters said this effect is 

particularly noticeable in Indiana - a report by SNL Energy projects that gas generation's share of 

Indiana's electricity mix will decline from 13.6 percent in 2012 to 5.3 percent in 2030.

Commenters said the EPA's computations assume that the state of affairs that existed in 2012 

persists today, when data and market trends suggest that is not the case. Commenters said the 

EPA should re-formulate its estimates for realistic NGCC utilization on the basis of a more 

representative multi-year average. Commenters said similarly, if the EPA expects Indiana to 

achieve net year-over-year energy savings relative to demand in 2012, the EPA should take into 

account the conditions that produced peculiar demand-side conditions that year. Commenters

said otherwise, the EPA's estimates for future consumption will not reflect the restoration of 

"normalcy" to Indiana's energy markets in 2013 and 2014 and the state will be penalized for 

macroeconomic developments outside its control. Commenters indicated there is precedent for 

the use of a multi-year average in other EPA environmental regulations.

Multi-year baseline and adjust for economic activity. Commenters supported the use of a multiyear base period and suggested making some adjustments to reflect normalized U.S. economic 

activity. Commenters said that the establishment of a target based solely on an unadjusted year, 

or even an average of unadjusted years, after 2008, is ill advised. Commenters cautioned that 

such a target will represent electric generation serving depressed economic activity, and said that 

cannot be in the best interest of the U.S. economy, and is particularly problematic for West 

Virginia.
412

Commenters said that business customers, particularly larger industrial customers, evaluate many 

factors when deciding where to locate their plants and where to increase production levels, and 

availability of reliable and economical electricity is an important factor in those decisions. 

Commenters stated that by setting 2012 as the target from which emissions must be reduced, the 

EPA is effectively condemning West Virginia and the nation to an electricity generation starting 

point from which reductions must be measured that reflects power consumption during a severe 

economic recession and a low level of industrial activity in the State. Commenters acknowledged

that all states may not have experienced West Virginia's slow recovery rate from the 2008 

recession; however, this economic malaise continued to affect other states to varying degrees, 

and the EPA's choice of 2012 as a base year cements this malaise for years to come. 

Comment 15: Other commenters contended that the proposal penalizes early actors by requiring 

early-acting states to meet more stringent interim performance standards sooner.

Response 15: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year.

Comment 16: Structure of proposed guidelines creates disincentives for reductions between 

2012 and 2020. The EPA should allow states to bank and use for compliance all emission 

reductions that are achieved between 2012 and 2020, regardless of whether they result from 

measures that were "on the books" before proposal. The EPA can't rely on existing state 

programs and measures to support assertion that proposed goals are achievable, then deny states'

rights to use those reductions to demonstrate compliance

Response 16: See section VIII of the final rule preamble of the CPP for the EPA’s response to 

this comment.

The following are summaries of the specific public comments under this comment:

Commenters stated that the structure of the proposed guidelines, particularly the approach to 

calculating the proposed state-specific emission rate goals, does not recognize appropriately the 

efforts of states and utilities to reduce emissions before 2012. Commenters also said the structure 

of the proposed guidelines serves to discount and creates disincentives for reductions achieved 

between 2012 and 2020.

Commenters said as a policy matter, the EPA should allow states to recognize all reductions that 

occur after 2012, the baseline year selected by the Agency for calculating the state emission rate 

goals, and the final guidelines should allow states to bank and then use for compliance emission 

reductions that result from state requirements, measures and programs instituted after 2012 and 

prior to 2020. Commenters said further, the final guidelines also should affirm that states can 

include in compliance plans emission reductions that occur during the compliance period without 

reference to whether these reductions were achieved by measures that were "on the books" at the 

time the guidelines were proposed
413

Commenters said the EPA proposes two limits on states' ability to include reductions that occur 

after 2012 in state plans: first, states can only include those reductions that occur during the 

interim compliance period, which starts in 2020; second, states can only include those reductions 

that result from actions taken after a specified date. Commenters said according to EPA, 

reductions from "existing measures" that were "on the books" at the time the proposed guidelines 

were issued cannot be included in state compliance plans, even if they achieve reductions during 

the interim compliance period. (See 79 Fed. Reg. at 34,918). Commenters said however, the EPA 

proposes that states can include generation that occurs after 2019 from any renewable generating 

facility, regardless of the in-service date of the facility. (See Id. at n.293.)

Commenters said preliminarily, the EPA should not limit states to those reductions that occur 

during the compliance period, but should allow states to bank and use for compliance the 

emission reductions that are achieved between 2012 and 2020. Commenters said in advance of 

the proposed guidelines, many states and companies were contemplating - or did implement -

strategies that would achieve CO2 reductions, and to the extent that states and companies are 

able both to adopt and implement these strategies earlier than 2020, allowing banking could 

provide an incentive for earlier emission reductions. Commenters added that authorizing states to 

include in compliance plans reductions from these pre-2020 strategies also would allow states to 

begin demonstrating compliance earlier and could help states more gradually phase in other 

emission reductions measures. Commenters said in recognition of this, the EPA should allow the 

banking of reductions that occur between January 1, 2013 and December 31, 2019.

Commenters said in addition, the EPA should allow states to use reductions that occur during the 

compliance period, regardless of whether they result from measures that were "on the books." 

Commenters said the EPA states that it is necessary to discount reductions that result from 

measures that were "on the books" or that were implemented before the guidelines were 

proposed (except for renewable generating units) because of the "forward-looking goal-setting 

approach." (See Id. at 34,918.) Commenters said that this is inconsistent with the EPA's assertion 

that the proposed emission rate goals are achievable because of existing state programs. 

Commenters said as the EPA notes in the preamble:

EPA proposes that a 2020 start date for the interim goal plan performance period 

is achievable in light of the following additional considerations. First, existing 

state programs will play a role in helping to achieve the rule's proposed emission 

performance levels. Second, in advance of this proposal, many states already were 

contemplating design of strategies that would achieve CO2 emission reductions 

equivalent to those that could be required by CAA section 111(d) emission

guidelines. (Id. at 34,905 (emphasis added)). 

Commenters said the EPA cannot rely on existing state programs and measures to bolster the 

assertion that the proposed goals are achievable, but deny states the right to use the reductions 

that are achieved by these measures to demonstrate compliance.

Commenters said as a practical matter, measures that reduce emissions from existing affected 

units will be reflected in state average emission rates, regardless of when they occurred. 

Commenters said for example, if a coal-based unit is retired in 2015 to comply with other 

environmental regulations - and this retirement was "on the books" before June 2014 - this will 
414

be reflected when the state measures the emission performance of affected units in 2020, relative 

to the 2012 emission rate calculated by EPA, because that unit will no longer be operating. 

Commenters said the EPA certainly could not mean to require states to add emissions from units 

retired before 2020 back into any compliance demonstration because the retirements were 

already "on the books". Commenters said yet, the discussion of "existing measures" in the 

preamble implies this. Commenters said the final guidelines should make clear that the "existing 

measures" limitation, if applicable to any measure in a state's compliance plan, is not applicable 

to actions that reduce affected unit emissions before 2020. Commenters said this includes not 

only unit closures, but also HRI projects and changes in dispatch between existing coal-based 

units and natural-gas based units.

Commenters said similarly, the EPA should affirm that it will not discount reductions from EE

measures, other than to limit reductions to those that occur during the compliance period. 

Commenters said specifically, EE measures should be treated the same as RE measures. 

Commenters said for CAA purposes, it does not matter when the EE measure was put in place -

or whether that measure was in response to an existing state EE program or a new program - as 

long as reductions are achieved during the interim compliance period. 

Commenters stated as proposed, states and utilities have an incentive to delay implementing 

some emission reduction measures until the compliance period, which could lead to a relative 

increase in CO2 emissions. The commenters said to avoid creating this perverse and unintended 

consequence, EPA should allow states to bank credits from reductions that occur during the 

period between the baseline year and the compliance period (e.g., 2013-2019) due to measures 

installed during this time period. The commenters said these measures could include, but are not 

limited to, plant retirements, fuel switching, new renewable energy installations and newly 

installed energy efficiency measures. The commenters said states should not be required to 

demonstrate that these reductions were "additional" to what would have occurred anyway (i.e., 

without the Clean Power Plan), as long as the measures reduce CO2 emissions. The commenters

said under Wisconsin's RPS, the ability to bank credits proved essential in allowing utilities to 

meet their individual requirements each year as well as meet the overall statewide goal two years 

ahead of schedule.

Commenters stated concern that the draft rule provides no benefit to taking action to reduce 

emissions between the June 2014 release of the draft rule and the end of 2019 since renewable 

energy deployed during this period would not be able to generate compliance credits until 

January 1, 2020. The commenters said EPA should provide states with flexibility to take credit 

for actions taken after the NOPR was issued and before the interim compliance period begins 

(2020) and count that credit toward achievement of the state's compliance obligation. The 

commenters said this early-action provision would help ensure that the states have an incentive 

to reduce GHGs prior to 2020. The commenters said it would also help prevent a dip in market 

activity in the renewable energy sector, as obligated parties otherwise may delay projects until 

after the compliance period begins. The commenters said one option for ensuring states have an 

opportunity to begin compliance earlier than 2020 is to give states the option to bank credits 

from 2014 to 2020 for use in the 2020-2029 interim compliance period.
415

Comment 17: Electric power system is dynamic so multi-year baseline should be used, 

adjustments for power imports and exports requires same base year be used in every state, using 

2013 data in state goal calculations resulted in different goals and different rates of progress; 

NODA didn't provide enough information to evaluate impact of suggested changes; using threeyear average heat rate is more representative than 2012 average

Response 17: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year.

The following are summaries of the specific public comments under this comment:

Electric Power System is dynamic so multi-year baseline needed. Commenters said the 

methodology used by the EPA to calculate target emission rates for each state under the CPP 

relies on historical operating data from 2012. Commenters said these data include existing 

generating units and their output levels, as well as power demand and interstate power transfers. 

Commenters said however, the electric power system is dynamic, and its operation in one time 

period has little bearing on how it will operate in another time period. Commenters said factors 

such as fuel prices for power plants, demand variability, and the construction or retirement of 

electric infrastructure will all affect the generation levels for individual power plants. 

Commenters said selecting a single year as a starting point from which to calculate target 

emission rates will "lock in" any transient effects particular to that year, regardless of the year 

chosen.

Adjustments for power imports and exports requires same base year in all states. Commenters

said in its October 2014 NODA, the EPA released power plant operating data for years 2010 and 

2011. Commenters said although the EPA did not release sufficient data to recreate state 

emission rate targets using these years as the base, the data showed a substantial difference in 

power plant operations from those of 2012. Commenters said certainly, some states will find 

their target rates higher or lower if a year other than 2012 is used as a base year. Commenters

said importantly, the EPA's methodology includes adjustments for power imports and exports 

between states; for consistency, this requires the same base year to be applied to every state, and 

would not permit a state to choose its own base year without leading to inconsistent target 

emission rates in other states. Commenters said therefore, the arbitrary and capricious nature of 

selecting a single year to determine emission rate targets cannot be mitigated without a 

fundamental change to EPA's methodology.

Influence of base year on goals. Commenters examined the influence of the base year upon 

which the goals are calculated, and found changing the baseline year makes a substantial 

difference, but the direction and extent of that difference are influenced primarily by local 

weather patterns, unit availability, and other unrelated factors. Commenters compared the 

renewable energy that would be included in the state goal calculations using 2013 data, with the 

results of EPA's calculations using 2012 data. Commenters found that changing the base year 

resulted in different goals and different rates of progress toward the regional goals. Commenters

found that in certain regions, using 2013 data instead of 2012 data allowed the state to meet the 

regional target for 2020-2029. Commenters said that the EPA's NODA suggests that other years 

may be used in the calculation of the final goals, but did not provide the kind of quantitative data 
416

necessary to evaluate the impact of such a change, and did not explain why any specific year or 

group of years is a more reasonable basis upon which to make such a calculation.

Commenters said that the EPA calculations for NGCC plants in Michigan used a heat rate of 810 

lbs CO2/MWh based on 2012 data, and the proposed heat rate for new NGCC plants was 1,000 

lbs CO2/MWh. Commenters said that the average heat rate for NGCC plants in Michigan based 

on the years 2010 through 2012 is 986 lbs CO2/MWh, which is more representative than 

the numbers used by the EPA.

Comment 18: The EPA should use a long-term baseline for BB1 rate setting and compliance, 

and should add 4% reduction

Response 18: See sections V.C. and VI of the final rule preamble of the CPP for the EPA’s

response to this comment.

The following are summaries of the specific public comments under this comment:

Commenters said that data from the 52-Unit Study, which was attached to their comment, 

demonstrates that selecting a single year's emission data to calculate the heat rate improvement 

(HRI) expected under a rule can result in an unfair allocation to certain individual units. 

Commenters said that for some units, 2012 represented the best performance year over the past 

decade, while other units had relatively high emission rates in 2012. Commenters indicated that 

the EPA has asked whether it should address this problem by permitting states or sources to 

choose 2010 or 2011 as a baseline year instead of 2012, and commenters stated that this option is 

not an appropriate solution to the allocation problem. Commenters said that any state or source 

that is allowed to choose its preferred baseline year will inevitably select the year that minimizes 

its own compliance obligation, and this will invariably reduce the effectiveness of the standard 

and will result in a rule that does not reflect the best system of emission reductions. 

Commenters said their approach to Building Block 1 resolves the allocation problem without 

degrading the efficacy of the standard. Commenters said that the EPA could calculate Building 

Block 1 emission reductions on the basis of the difference between a source's best rolling annual 

average rate and its long term (2001-2014) emission rate, and an additional four percent 

reduction based on available plant upgrades. Commenters stated that this approach minimizes the 

impact of any particular year of operation and, since it is largely based on improved operation 

that has already been demonstrated by the source, is feasible. Commenters said that States can 

thereafter allocate compliance obligations among in-state sources to address any issues that 

might remain. 

Comment 19: States that have already enacted measures are required to do more than states that 

have not - raises inequality issues

Response 19: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year. 
417

The following are summaries of the specific public comments under this comment:

Several commenters stated that the proposed rule results in requiring states that have realized 

early emission reductions to do more than states that have not, resulting in raising equity issues, 

including cost and reliability concerns. Commenters added that EPAs approach is inconsistent 

with the CAAs objective to achieve nationally consistent standards. Commenters contended that 

states that produce the most emissions should be required to make the greatest reductions. 

Commenters added that states unknowingly increased the stringency of their Clean Power Plan 

emission targets by passing RPS laws to address GHG emissions. The commenters also stated 

that within and individual region, block 3 also imposes a lesser standard for states that have low 

levels of existing renewables. Commenters added that electricity generation rates currently being 

accomplished provide little or no credit during the compliance period.

Comment 20: 2012 was outlier year for NGCC EGU operations, so the EPA should use 3-year 

historical average, or even exclude 2012 in calculating a 3-year average, in determining any 

capacity factor for BB2

Response 20: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year.

The following are summaries of the specific public comments under this comment:

Commenters said the capacity factors of NGCC EGUs in 2012 should be considered the 

maximum achievable NGCC utilization for each state. Commenters said that in 2012, the 

electrical grid experienced both extreme summer peaking conditions and record low natural gas 

prices - both these conditions were optimal for NGCC use and resulted in historically high use of 

NGCCs system-wide.

Commenters said 2012 was followed by extreme winter weather conditions in 2013, during 

which natural gas prices increased and Wisconsin industrial customers were called on to curtail 

natural gas usage. Commenters said because of this series of events, natural gas supply reserves 

heading into the 2014-15 winter are still below 2008 levels, even with increased production of 

natural gas. Commenters indicated this creates further challenges to increasing NGCC use as 

EPA has proposed. Commenters said this evidence strongly supports that EPA should use a 

three-year historical average, or even exclude 2012 in calculating a three-year average, to 

determine any capacity factor for building block 2.

Comment 21: Baseline period should start earlier to avoid penalizing early action. The EPA 

should improve the treatment of existing state programs

Response 21: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year.

The following are summaries of the specific public comments under this comment:
418

Several commenters indicated that the baseline period used in calculations should start earlier 

than 2012 to avoid penalizing early action. Several commenters recommended using (or starting) 

the baseline period with an earlier year, e.g., 2005, to address the punitive impact of the proposed 

rule on states and companies that have taken early action to reduce GHG emissions. Several 

commenters indicated an earlier baseline period would recognize and reward state and company 

leadership in reducing emissions. Several commenters indicated in that way, displacement of 

fossil-fuel fired generation by early investment in renewable energy, energy efficiency, and

natural gas would not be "built in" to the goal calculation, so states that made these investments 

would not be assigned overly restrictive reduction goals and compressed compliance 

periods. Commenters said that the EPA should include guidance in its Proposed Rule to instruct 

states how they can include credit for early reduction efforts in their compliance plans.

Commenters indicated that the baseline year should be set somewhere in the 2005 to 2007 time 

frame to give states credit for early action. Commenters stated that this baseline period would 

also be more appropriate since it predates the recession and would therefore be more reflective of 

normal energy demand. Commenters noted that states that expanded their NGCC capacity prior 

to the proposal are being penalized by the BSER requirements of Building Block 2. Commenters

compared Georgia's NGCC capacity and 2012 NGCC utilization to that of other Region 4 states. 

Commenters found that 30% of Georgia's total CO2 emission reduction goal is dependent on 

increased natural gas dispatch. Commenters found, however, that one Region 4 state is not 

required to do any natural gas dispatch - Kentucky. Commenters indicated that Kentucky has no 

NGCC units, so Block 2 BSER does not apply to Kentucky. Commenters indicated that this 

example illustrates the unfairness of this proposal - states with the largest NGCC dispatch 

changes will incur the higher costs for their CO2 reduction.

To demonstrate how the proposed regulation penalizes states that took early action, commenters

examined the CO2 mass emissions in the years 2005, 2012, and 2030 and associated mass 

emission reductions for the Region 4 states. Commenters included the year 2005 because EPA, 

in the rule preamble, states that the CPP will achieve a nationwide 30% reduction in CO2 

emissions between 2005 and 2030. Commenters projected 2030 emissions for the southeastern 

states using values for the 2030 rate- based goals and generation from the CPP's Goal 

Computation TSD. Commenters determined that the projection for Georgia reflects a 46percent 

reduction in CO2 emissions between 2005 and 2020. Commenters indicated that this is the 

highest percentage of CO2 reductions in the Region 4 states, and well above the 30% nationwide 

average that the rule is expected to achieve. Commenters stated that in fact, Georgia already 

reduced CO2 mass emissions by 33% from 2005 - 2012. Commenters said that this example 

illustrates the unfairness of this proposal - states that took early action to reduce CO2 emissions 

are being penalized by the proposed CPP. Commenters added that the wide range in projected 

CO2 mass reductions within the region has the potential to provide some states with an economic 

advantage over states with very high CO2 emission reduction projections, like Georgia.

Commenters stated that the proposed rule must allow states to choose a baseline year between 

2005 and 2012, or to use an average of any three consecutive years within that 

period. Commenters indicated that in that way states that took early action through programs 

such as Regional Greenhouse Gas Initiative (RGGI) can get credit for emissions reductions 

already achieved.
419

Several commenters stated that the application of the Clean Power Plan should reward and 

encourage early acting states such as Maine and Arizona for the results achieved to date by 

giving equitable treatment to recent emissions reductions. Several commenters stated that by 

investing in renewable energy and significant energy efficiency measures over the past decades, 

they have already achieved significant reductions in fossil fired emissions and emissions 

rate. Commenters indicated that in most cases, the investments needed to achieve these results 

exceed those of other states. Commenters stated that the emissions reductions achieved in Maine 

already exceed the national goals of 30 percent reduction set by the Clean Power Plan by a 

substantial degree when examined in the context of reductions since 2002. Commenters

indicated that the investments made in Maine increased renewable generation, extensive costeffective efficiency programs for residential, commercial and industrial sectors, and transitioning 

to use of less-carbon intensive fuels for generation - mirror the elements of the emission 

reduction building blocks. Commenters said that it would therefore be arbitrary to ascribe to 

Maine additional reductions beyond those applicable in states where no effort has been made and 

no expense incurred. Commenters indicated that Maine's RPS is already among the highest in the 

U.S. and that as a percentage of load, Maine generates more electricity from renewable resources 

than any other state east of the Mississippi. Commenters added that Maine is a net exporter of 

electricity, renewable energy, and renewable energy credits to the northeast regional grid and 

markets. Commenters noted that as a result, Maine has already achieved many of the goals of 

EPA's proposed rules. Commenters indicated that because of its actions and investments, Maine 

as an early actor state has fewer untapped opportunities than late-starting states. Commenters

said that the cost of achieving additional emissions reductions in states such as Maine may be 

higher than achieving the same amount of initial reductions in a state that has not yet acted.

Commenters did not suggest a particular timeframe for baseline, however, they indicated the 

importance of crediting early action taken before 2012 and for resources that come on-line 

between 2012-2017. Commenters emphasized AMP's hydropower investments, as well as those 

in wind, solar, and landfill gas, were made knowing the likelihood of future carbon regulations 

and, as such, they should not be denied credit under any state plans simply because they are preexisting projects.

Commenters said the EPA should improve its treatment of existing programs. Commenters said 

the EPA states early emission goals (those that took place before the date of the Proposal), are 

reflected in the baseline for each state but are not otherwise credited. Commenters said the EPA 

should improve its treatment of existing programs and early reductions by expanding the ways 

states can apply those goals to meeting their goals. Commenters said one way the EPA could do 

that is by adopting alternative approaches described in the Proposed Rule for taking existing EE 

programs into account. Commenters said specifically, the EPA should change the cutoff for the 

date by which actions to put EE into place may be taken to at least 2005. Commenters said the 

EPA should also allow emission reductions that occur prior to the initial performance period - at 

least as early as 2005 - to count toward meeting state goals.

Commenters said that 2012 should not be used as baseline for several reasons, one of them being 

that NGCC use was higher in 2012 due to reduced natural gas prices. Commenters said a key 

benchmark location for natural gas pricing throughout the United States is at Henry Hub (HH) in 

Erath, Louisiana. Commenters said reviewing HH natural gas (pipeline) pricing data from 2002 

to 2012, the electric utility industry benefitted from the lowest natural gas prices in a decade - in 
420

fact, in a single year, from 2011 to 2012, natural gas prices dropped 32 percent. Commenters said 

this anomalous low price point was predicated on the fact that demand was far behind a steadily 

increasing production of shale gas resulting in an abundant natural gas supply in 2012. 

Commenters said that because EGUs operate on an economic dispatch model, and not an 

environmental dispatch model, generation shifted from coal-fired EGUs to natural gas-fired 

EGUs during 2012. Commenters said from the EPA's formula to calculate the 2012 "unadjusted 

fossil emission rate (or historical fossil rate)," it is obvious to see how a significant, albeit 

temporary, shift in generation from coal-fired to natural gas-fired would result in a baseline 

carbon emission rate that is much lower than would be calculated under normal source 

operations.

Commenters said not only is 2012 not representative of typical operations during this period in 

history, the selection of 2012 also negates, for the purposes of calculating carbon emission 

reductions, the progressive moves made by the power sector through heat rate improvements, redispatch to NGCC units on a more widespread basis (not just via economic dispatch over a single 

year), and the development of robust RE and EE programs initiated by the electric utility 

industry and assisted by the Energy Policy Act of 2005.

Comment 22: Use of 2012 as baseline year does not give credit for early action

Response 22: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year.

The following are summaries of the specific public comments under this comment:

Commenters stated that although the rule establishes 2012 as the baseline year for calculating 

emission reductions, many states had already taken significant steps at reducing CO2 emissions 

prior to 2012. The commenters listed several energy efficiency and renewable activities, which 

are also components of the BSER building blocks, that the state of Texas undertook and achieved 

prior to 2012. The commenters contended that their prior activities would make future 

compliance and future reductions more complicated to obtain. The commenters stated that 

comparing 2012 emission to the 2030 emissions target without the benefit of reductions made 

prior to 2012 would result in Texas having more difficulty than any other state to comply with 

the requirements in the proposed rule. 

Comment 23: The EPA's choice of baseline dates punishes states that have taken aggressive 

measures to reduce carbon emissions and promote increased use of renewable energy generation.

Response 23: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year.

The following are summaries of the specific public comments under this comment:
421

Commenters stated EPA has defined reductions on a state by state basis. The basis was the 

existing power generation technologies, and policies unique to each state; for example, some 

states relied more on nuclear generation, while others relied more on coal combustion for their 

generation. The commenters said EPA then based each state's GHG reduction requirement on 

each state's natural gas electricity generation, nuclear generation, solar generation, wind 

generation, policies that incentivized energy efficiency, and policies that reduce consumption of 

electricity through demand side management. The commenters said since EPA based the 

potential improvements on the current energy portfolio, the resultant rule requires the smallest 

GHG reductions from states with the highest coal usage; this outcome is a direct result of EPA's 

use of source categories for compliance other than that regulated by the proposed standard (i.e., 

coal-fired power plants).

Commenters stated by choosing a 2012 as the baseline year, as opposed to the originally 

proposed 2005 baseline year, EPA is punishing states like North Carolina that have undertaken 

aggressive and expensive new policies to reduce carbon emissions. The commenters said 

aggressive emission reduction policies by the State of North Carolina have led to the retirements 

of coal generation units, and extensive upgrades to increase efficiency and reduce emissions at 

the remaining operating units. The commenters said Duke Energy has retired 26 coal-fired units 

at eight (8) generation stations; seven (7) of those stations no longer generate electricity from 

coal; the Cliffside station is the exception, where all but units 5 and 6 at Cliffside were retired. 

The commenters said at the seven (7) remaining operating coal stations in North Carolina, there 

are 20 units, all with NOx controls and FGD scrubbers; in addition, as the only state in the 

southeast to adopt a renewable energy and energy efficiency portfolio standard (REPS adopted in 

2007), North Carolina added significant new renewable energy projects between 2005 and 2012, 

yet will receive no "credit" for undertaking such progressive policies. The commenters said the 

clear message to states like North Carolina is to postpone such strategies.

Commenters stated EPA set state goals based on the inclusion of not-yet-constructed renewable 

and zero-emitting generation; however, while the Proposed Emission Guidelines mandate future 

emission targets based on the carbon reduction potential of a state's entire electric generating 

system, they do not consider the carbon intensity of a state's electric generating system as it 

exists now when setting a state's baseline. The commenters said EPA's approach fails to 

recognize the achievements made by many states, including Virginia, that have reduced CO2 

emissions by making significant investments in zero and low carbon emitting generation, such as 

nuclear power, and rewards states that have not done so by giving them substantially higher CO2 

emission reduction targets. The commenters said it also compares apples to oranges by 

discounting the carbon intensity of a state's current electric generating system but setting future 

requirements based on projected zero-emitting facilities. The commenters said the BSER in the 

Proposed Emission Guidelines effectively requires that many existing fossil fuel facilities either 

be shut down or drastically curtailed and replaced with zero-emitting generation, but gives no 

credit for existing zero-emitting generation currently in a state's generating portfolio; it thus 

places states already having a large amount of zero-emitting generation at a disadvantage by 

skewing the analysis and requiring them to do more than states that presently have little or no 

zero-emitting generation. The commenters said the Proposed Emission Guidelines also create a 

perverse incentive to increase CO2 emissions because states may be encouraged to prematurely 

retire zero-emitting nuclear generation and replace it with natural gas generation, which in some 

states may be credited to their carbon emission goal. 
422

Comment 24: Early emissions reductions should be counted in baseline.

Response 24: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year.

The following are summaries of the specific public comments under this comment:

Commenters stated in choosing 2012 as a baseline for goal setting and applying the 4 building 

blocks to each state, the individual state-specific goals established by EPA fail to credit states 

that have taken early action that served to lessen the carbon intensity from their power sector. 

The commenters said EPA's goal setting methodology actually serves to penalize states that have 

taken early action. By arbitrarily choosing 2012 as the baseline year for use with EPA's building 

blocks, the reductions from New Jersey's "All Fuel Sources" (affecting all 4 building blocks) and 

"Fossil Source Only" (affecting building blocks 1 and 2) are not recognized and go uncredited.

Commenters stated the proposed standards give no credit for early action to reduce or offset 

carbon dioxide (CO2) emissions, which, in the commenter's case, has been substantial. The 

commenters said EPA should revise its baseline year or period in the Proposed Rule and/or allow 

the use of fleet emission averaging to provide states credit for earlier beneficial actions taken by 

affected entities and units.

Commenters stated EPA's goal-setting mechanism and its use of a 2012 baseline for the purpose 

of setting state goals generally fail to recognize emission-reducing actions taken by states and 

utilities prior to 2012. The commenters said many companies implemented projects prior to 2012 

that provided significant benefits related to greenhouse gas reduction, but these companies are 

now being penalized for their early action. This result is not fair. The commenters made 

investments prior to 2012 to increase the efficiency of its power plant fleet and to increase the 

use of renewable energy sources by: (1) adding new generation and state-of-the-art emission 

control technology to new and existing units; (2) repowering older, less efficient coal plants to 

combined cycle natural gas plants; (3) adding the two largest wind farms in Wisconsin and a 

biomass plant; (4) increasing customer energy efficiency; and (5) investing in distribution 

upgrades. The commenters said these projects include: 

• Repowering about 320 MW of coal retired in 2002 and 2004 to 1,090 MW of natural gas 

combined cycle in 2005 and 2008 at a cost of $664 million; and

• Constructing the two largest wind projects in Wisconsin: 145 MW Blue Sky Green Field 

in 2008 at a cost of about $300 million and 162 MW Glacier Hills Wind Park in 2011 at a 

cost of about $364 million 

The commenters said EPA's proposed rule does not account for any of the major initiatives 

undertook prior to 2012; this could result in stranded costs for customers for some of power plant 

investments. The commenters added compared to states that have not taken such actions, 

Wisconsin has more stringent interim and final emission targets under the proposed rule than 

states with a similar fuel mix that did not take similar actions prior to the 2012 baseline year; in 

order to create a more equitable baseline calculation and goal setting process, early actions prior 
423

to 2012 should be excluded from baseline and target calculations, and allowed for compliance 

purposes.

Comment 25: Do not support use of 2012 as baseline; credit must be given for early reductions.

Response 25: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year.

The following are summaries of the specific public comments under this comment:

Several commenters did not support the use of 2012 as the baseline, or benchmark, year as it 

does not credit early reductions/actions. 

Commenters stated that clearly, the Proposed GHG rule is designed to reduce the nation's CO2 

emissions as a whole, and the EPA clearly contemplated that each state will be affected 

differently. Several commenters indicated that years ago Florida took the initiative to move to a 

lower carbon energy portfolio, and since then Florida's ratepayers have funded plant upgrades 

that created cleaner utility plants and the construction of new plants that burn cleaner, more 

efficient fuels, such as natural gas and nuclear. Several commenters said that Florida's CO2 

emission rate in 2012 was 30% lower than 2005 levels, and Florida's ratepayers funded that 

reduction. Several commenters said that the Proposed GHG Rule would cause Florida's 

ratepayers to fund another 38% reduction, essentially ignoring strides already made. 

Several commenters stated that the rule should provide states with the option of utilizing an 

earlier baseline that would recognize the progress that has already been achieved. Several 

commenters said that it would also be important for the EPA to recognize the relationship 

between the baseline year and current reductions already achieved for the purpose of setting the 

performance level. Commenters said that for example, if the EPA were to select 2005 as a 

baseline year, it should recognize that 2011 emissions nationwide are already 11 percent below 

2005 emissions, and the average power sector emissions rate in 2011 is 11 percent below the 

emission rate in 2005. 

Several commenters said that the EPA's approach of applying a uniform heat rate percent 

efficiency improvement, without considering heat rates at individual facilities, penalizes utilities 

that are using best practices and/or had upgraded equipment to increase boiler efficiency prior to 

2012, while rewarding units that had done little to improve plant-level efficiencies before 2012. 

Commenters said that in order for states to receive credit for early action, in establishing the final 

goals for a state, the EPA must identify which existing individual units in the state no longer 

have cost-effective options available to achieve, for instance, the 6 percent HRI from BB1, and 

increase the state's CO2 target accordingly.

Commenters indicated that states should have the discretion to adjust the 2012 baseline to give 

credit for early action. Commenters indicated that a special consideration that states should be 

able to address is where certain utilities - particularly small utilities - have recently implemented 

capital projects resulting in HRI soon before the issuance of the proposed rule. Commenters

contended that where small utilities have already spent considerable capital on increasing EGU 
424

efficiencies, states should be given the latitude in the SIP process to adjust the 2012 

baseline. Commenters said that States are best positioned to evaluate the Propose Rule and the 

objectives it sets, and look at circumstances that are unique in a particular state. Commenters

stated the Proposed Rule should authorize state SIPs to provide flexibility in setting the 

efficiency baselines up to three years for early actors. Commenters indicated that failure to grant 

states this flexibility would prevent applicable utilities from being credited for HRI already 

achieved in recent years, while at the same time precluding the utilities from achieving any 

additional HRI, and said this inequity would be particularly troubling where the EGU with an 

HRI through a turbine upgrade is the small utility's only jurisdictional EGU.

Several commenters also indicated that as proposed, the rule does not account for carbon 

emissions reductions made from 2005-2012. Commenters indicated that any single year 

snapshot will have abnormalities that may not reflect the long-term energy mix and forecast, and 

requested that the EPA give serious consideration to adjusting the benchmark emissions date, 

whether to an earlier year or a multi-year average, to accurately reflect Georgia emissions 

accounting for emissions reduction made before 2012. Commenters said that in 2005, 

approximately 64 percent of Georgia's generation was from coal, and today that number is under 

33 percent. Commenters said that similarly, natural gas-fired generation in Georgia has grown 

ten-fold since 2005, from 7 percent to 35 percent, and other portfolio changes have included 

securing new renewable resources such as solar, wind and biomass, and certifying the first new 

nuclear units in 30 years. Commenters indicated that the proposed rule does not give appropriate 

credit for these efforts, and suggested that because of this they may have been better off if they 

had waited until after 2012 to make decisions regarding utility investments in cleaner 

technologies.

Several commenters emphasized that states that have already taken significant steps to decrease 

CO2 emissions should get credit for these actions. Several commenters said their states have 

already taken a number of steps to build high efficiency coal-fired units, increase renewable 

energy, and/or increase energy efficiency, and the EPA should allow such states to bank credits 

for what they accomplish before the first compliance date. Commenters said the EPA should 

establish baseline references for each state by year and allow quantities of energy efficiency 

achieved in excess of reference levels prior to 2020 to be carried forward for application in the 

compliance period. Commenters said that the draft CPP requires greater reductions from states 

that have already reduced emissions, and this is not consistent with the structure of the 

CAA. Commenters said that in a more traditional approach to Section 111 standards, the EPA 

would base standards on the emission rate achievable through the use of a particular control 

technology, and if a unit already had installed that control technology, it would be deemed 

compliant. Commenters said in the proposed Section 111(d) guidelines, however, reductions 

already achieved through state and utility investments in clean energy are not deemed compliant, 

but are, instead, met with standards that require further reductions in order to be achieved.

Commenters said that using 2012 data to set each state's target was troubling because by that 

point several coal-fired power plants had shut down or invested significant capital to improve 

efficiency. Commenters said that Pennsylvania's Alternative Energy Portfolio standards was 

passed in 2004, and suggested that the EPA should move the baseline back to 2005 to capture the 

significant emissions reductions made since then. Commenters also suggested that the EPA 

move the baseline back to 2005, rather than the 2010 mentioned in the NODA.
425

Commenters said that the claim that CO2 emissions will be reduced by 30 percent from 2005 

emissions levels is misleading as 2012 is being used as the baseline year for 

calculations. Commenters said this stated goal is misleading, because the EPA proposed statespecific targets using 2012 as the baseline year; 2005 data was not considered when establishing 

the proposed emission targets. Commenters said that consequently, states that have already 

achieved significant CO2 reductions would need to require further CO2 emissions reductions 

that may not be achievable in practice. Commenters said that CO2 emissions in Pennsylvania 

were reduced by approximately 15 percent between 2005 and 2012; the final goal set by the EPA 

for Pennsylvania requires the Commonwealth to reduce CO2 emissions from 2012 by 

approximately 31 percent by 2030, which represents a 41 percent reduction from 2005 levels. 

Commenters noted that while the proposal allows EGU retirements to be credited towards 

meeting a state target, establishment of a more stringent target that incorporates those reductions 

makes the early retirements of fossil fuel-fired EGUs not creditable from a practical standpoint. 

The only credits for retirements afforded in the proposed plan are those that occur after 2012. 

Therefore, commenters recommended that EPA consider a five-year averaging approach for 

establishing baseline for emission targets.

Commenters submitted the Proposed GHG Rule's failure to consider previous reductions makes 

the rule overly burdensome and arbitrary, especially compared to the minimal reductions in other 

states that have not already spent billions of dollars creating a cleaner fleet of electric utilities.

Commenters stated with respect to energy efficiency measures, since the 1990s, Southern 

Minnesota Municipal Power Agency (SMMPA) has developed an extensive energy efficiency 

program that has been able to achieve up to a 2.08% reduction in retail electricity sales in recent 

years. The commenters said the Proposed Rule's chosen baseline of 2012 simply ignores these 

efforts. The commenters said this punishes SMMPA for its prior, volitional efforts, as SMMPA 

has essentially exhausted the easy and inexpensive efficiency measures (e.g., light bulb changes) 

and is now left with the daunting task of having to squeeze additional efficiencies out of an 

already highly energy-efficient system. The commenters said at bottom, the Proposed Rule's use 

of a 2012 baseline unfairly penalizes SMMPA and all other utilities that have already made 

significant efforts to reduce carbon emissions from their footprint. The commenters said EPA 

should adjust the baseline to give utilities credit for early action.

Commenters stated Vectren has already achieved significant reductions in GHG emissions from 

its electric generation system. The commenters said since 2005 Vectren has reduced its GHG 

emissions approximately 23 percent through the retirement of a coal-fired unit, investments in 

turbine efficiency, the purchase and development of renewables and the implementation of 

energy efficiency programs. The commenters said Vectren has already reached the 

Administration's previously stated goal of reducing GHGs 17 percent from 2005 levels by 2020, 

yet EPA's approach to setting state-specific emission rate goals does not recognize emission 

reductions achieved by individual utilities before 2012. The commenters said many companies 

such as Vectren have already completed the most cost effective of these early reductions, 

particularly in the areas of heat rate improvements and energy efficiency (i.e. the low-hanging 

fruit), and the additional incremental emission reductions required to meet new emissions goals 

based upon a 2012 baseline will be more costly to consumers and are a future disincentive to 
426

take early action to reduce emissions. The commenters said EPA should allow the use of an 

alternative baseline to recognize early actions taken by states and individual utilities.

Commenters stated EPA claims that "states with currently existing programs and policies, and 

states that put in place new programs and policies early, will be better positioned to achieve the 

goals," however, EPA's building block approach, combined with its single 2012 baseline year, 

does not give appropriate credit for states and utilities that have acted proactively to manage 

CO2 emissions prior to 2012. The commenters said since 2012 generation provides the starting 

point for EPA's goal calculation, only actions taken after 2012 will provide a compliance benefit 

to a state because pre-2012 actions are inherently assumed in the calculation of the goal. The 

commenters added EPA somewhat inconsistently claims in the preamble to its proposal that only 

actions taken after June 18, 2014 will count towards compliance. Commenters stated as an earlyactor state that has endeavored to reduce its carbon footprint for many years, New Mexico is 

penalized by EPA's failure to allow credit for actions prior to 2012 (or 2014). The commenters

said New Mexico has had success in encouraging the development of renewable energy and 

demand-side energy efficiency improvements in the years prior to EPA's proposal (in MWh).

Commenters stated Idaho has long been ahead of EPA's curve to utilize non-CO2 sources of 

electricity production; unfortunately, much of the wind generation was put into operation prior to 

your proposed 2012 base year. The commenters said because 2012 is arbitrarily established, 

there will be no credit for the efforts that occurred prior to 2012; as such, there will be no credit 

allowed for the work to maximize the good efforts to utilize wind power and other renewable 

generation installed prior to 2012. The commenters said much of Idaho's electrical power is 

generated using renewable hydro resources, thus reducing the need for coal-or even gas-fired 

generation. The commenters said the proposed rule does not recognize hydro generation as a 

renewable, non-CO2 producing source of electricity.

Commenters stated EPA's 2012 baseline, and thus EPA's program, does not adequately credit the 

reductions that Iowa has already achieved at a significant investment or cost. The commenters

said Iowa's cooperatives have a variety of existing policies and programs that have had the effect 

of reducing carbon emissions. The commenters said some of these programs have been in place 

for many years and have resulted in significant energy savings and reductions in the carbon 

intensity of Iowa's generation fleet. The commenters said the EPA should recognize the value of 

these programs and allow Iowa's cooperatives to include them as part of the best system of 

emission reductions. The commenters said Iowa's electric cooperatives, and more generally, 

Iowa's utilities have had a long history of implementing energy efficiency and load management 

programs, with early versions starting in the 1980s. The commenters said programs over time 

have required increased investments and energy savings and have become subject to more 

stringent review. The commenters said Iowa electric and gas utilities offer a number of energy 

efficiency programs, products, services, and training to residential, industrial, and commercial 

customers.

Commenters were concerned that the CPP fails to recognize that in economic fairness the 

ratepayers of the TVA area should receive the benefit a credit toward carbon emission reduction 

requirements for the voluntary strides TVA made with its voluntary, progressive energy 

efficiency programs by 2005 and thereafter rather than EPA using a 2012 baseline against which 

carbon emission reductions are measured.
427

Commenters stated EPA's proposed rule does not allow TVA to receive any credit for early 

actions before 2012. The commenters said because TVA upon its own initiative reduced its 

carbon emissions by than thirty percent (30 percent) between 2005 and 2013, then the proposed 

rule consequently requires an excessive and burdensome over-investment by TVA to reach 

EPA's newly proposed required goals even if reaching those goals was reasonably possible. The 

commenters said that financially penalizes the ratepayers of the TVA region served by TVPPA 

member LPCs.

Commenters stated EPA's cumulative percentage for PA EE reductions in 2017 is 1.02%. The 

commenters said PA's estimated value for 2017 under PA Act 129 is 5.93%.The commenters

said this higher value for PA Act 129 considers the reductions attributable to Phases I and II (all 

prior to the 2012 baseline date) and an assumed annual average incremental reduction value of 

0.74% explained previously. The commenters asserted that the EPA should allow PA to be 

credited with EE reduction benefits back to a 2012 baseline date. The commenters said the 

cumulative percentages for EPA and PA Act 129 in 2030 are 12.07% and 15.49% respectively. 

The commenters estimated EE reductions through 2030 amounts to 19,327 GWh when starting 

from baseline year of 2012 projecting forward through 2030 using an incremental annual factor 

of .74%. The commenters said this compares to EPA's calculated EE reductions of 19,329 GWh 

through 2030 utilizing an incremental factor of 1.5%; thus, the commenter-calculated target and 

the EPA estimates for 2030 are nearly identical. The commenters said if EPA were not to credit 

PA with PA Act 129 EE reductions back to the 2012 baseline then PA's cumulative EE 

reductions (2017 through 2030) would be 10.3% and PA's associated cumulative GWh 

reductions would be approximately 14,927, a shortfall of 4,402 GWh. The commenters said on 

this point, the commenters recommended the EPA allow PA to take credit under BB4 for EE 

benefits achieved since the baseline year of 2012. 

Commenters stated the baseline year and reduction targets for Colorado, as for other states, are 

arbitrary and punish Colorado for early action. The commenters said Colorado's enactment of 

mandates for increased use of renewable energy and conversion of power plants from coal to 

natural gas prior to 2012 have not improved the state's position with respect to meeting EPA 

deadlines for compliance. The commenters said in fact, other states which have not yet taken 

such drastic measures will actually be required to cut carbon emissions by much lower 

percentages; thus, Colorado is already at a competitive disadvantage to some other energy 

producing states. The commenters said these combined factors mean that EPA has set an 

artificially low baseline for further CO2 emission reductions, with no justification for selecting a 

year with higher amounts of gas generation and lower amounts of coal generation. The 

commenters said this arbitrary selection puts Colorado utilities and their customers at risk. 

Commenters stated as a state, Wisconsin should be well-positioned to comply with a rule that 

limits carbon dioxide (CO2) emissions; EPA's Clean Power Plan purports to reduce overall CO2 

emissions nationwide by 30 percent from 2005 levels. The commenters said since 2005, 

Wisconsin utilities have taken actions that reduced CO2 emissions by over 15 percent on a mass 

basis for the 2005 to 2012 period. The commenters said the EPA's goal-setting methodology and 

use of a 2012 baseline for the purpose of setting state goals generally fails to recognize emissionreducing actions taken by states prior to 2012. The commenters said by assigning state-by-state 

emission reduction requirements using a baseline year of 2012, the proposed rule often requires 

deeper cuts by states that have taken early action than by states that have not. The commenters
428

said Wisconsin, for example, would be expected to reduce its CO2 emission rate by more than 34 

percent by 2030; other states, including many who have done less to reduce CO2 emissions to 

date, are given less stringent reduction targets.

Commenters stated on or around October 30 EPA issued a Notice of data availability (NODA) 

related to the proposed Carbon Pollution 111(d) Rule. The commenters said among other things, 

the agency solicited comments "on whether state-specific circumstances exist that could justify 

using different data years for individual states, as opposed to using the same data year, or 

combination of years, consistently across states." The commenters asserted those circumstances 

do exist. The commenters said using 2012 as the baseline year unfairly penalizes RGGI 

participants, who have already shown leadership in reducing GHG emissions. The commenters

said the wording in the NODA implies EPA is not amenable to allowing the group of states 

participating in RGGI together to take any credit for the significant, early reductions the program 

has achieved; that would be wrong. The commenters said EPA risks reinforcing the impression 

that companies and states would be better off next time waiting until EPA forces action, rather 

than taking the initiative to address environmental concerns. The commenters said at least states 

should be allowed to choose a baseline period that recognizes their policies and actions taken to 

date to rein in GHG emissions.

Commenters stated the Proposed Rule penalizes states like Colorado that were early adopters of 

emission reduction and renewable energy statutes by using 2012 baseline data to establish 

standards of performance. The commenters said the 2012 baseline disregards the considerable 

investment made by utilities prior to 2012 and places a higher standard of compliance on states 

that are industry leaders in renewable energy investment. The commenters said electric service in 

Colorado is provided through investor-owned utilities (IOUs), municipal utilities, and 

cooperative electric associations. The commenters said all of these utilities serving over 40,000 

customers must meet a renewable energy standard. The commenters said in 2004, Colorado 

citizens passed Amendment 37, which adopted a renewable energy standard for IOUs. The 

commenters said in 2007, the Colorado General Assembly passed a renewable energy standard 

for municipal utilities and cooperative electric associations. The commenters said in 2013, the 

Colorado General Assembly increased the renewable standard for both distribution and 

wholesale cooperative electric associations. The commenters said in 2010, the Colorado General 

Assembly passed the Colorado Clean Air, Clean Jobs Act (CACJA) to reduce emissions from 

older coal-fired power plants through retrofit technologies, retirement, and construction of new 

natural gas units.

Commenters stated Colorado utilities are industry leaders in renewable energy investment; in 

2012, about 17 percent of Xcel Energy's companywide power supply came from wind, solar, 

hydro, and biomass resources, 266 MW (AC) of which was solar power, including about 129 

MW (AC) of customer-sited solar. The commenters added Xcel Energy retired the Cherokee 

Unit 1 107 MW coal unit in 2011. The commenters said by 2012, Tri-State Generation and 

Transmission Association, Inc. generated or purchased 184,045 MWh of energy from renewable 

sources. The commenters said by 2012, Black Hills/Colorado Electric Utility Company, LP d/b/a 

Black Hills Energy had invested in 158,494 MWh of energy from renewable sources. The 

commenters said prior to 2012, Colorado utilities had already invested millions of dollars in 

reducing emissions; the Proposed Rule disregards this considerable investment. 
429

Commenters stated in using 2012 baseline data to establish standards of performance for states, 

the Proposed Rule penalizes states like Colorado that were early adopters of emission reduction 

and renewable energy statutes. The commenters said credit for coal plant retirements, 

construction of renewable and natural gas generation, heat rate improvements, and other 

advancements in emission reduction that occurred prior to 2012 cannot be included in Colorado's 

plan. The commenters said the Proposed Rule does not provide credit for customer-sited retail 

distributed generation facilities, which are interconnected to the electric grid through state law 

provisions or the Public Utility Regulatory Policies Act of 1978 (PURPA). The commenters said 

these omissions place a greater burden on Colorado than on other states that did not take early 

action to address source emissions. 

Commenters stated despite references to a greenhouse gas (GHG) reduction timeframe of 2005 

to 2030, the rule sets goals based on 2012 data; this eliminates acknowledgement of key GHG 

reduction projects occurring during the 2005-2012 time period. The commenters said Madison 

Gas and Electric Company (MGE) voluntarily converted the Blount Generating Station 

("Blount") from coal to natural gas and retired 90 MW of the 190-MW capacity prior to 2012; 

plans for the transition started in 2006. The commenters said natural gas became the primary fuel 

at Blount in March 2010, and as of December 31, 2011, the ability to burn coal was discontinued 

entirely. The commenters said at that time, MGE anticipated possible future GHG regulation and 

worked with the Wisconsin Department of Natural Resources (WDNR) to specifically 

acknowledge this voluntary early action. The commenters said MGE requested credit to the 

extent possible in future regulation and formalized that as part of the Environmental Cooperative 

Agreement-a contract between the WDNR and MGE to acknowledge superior environmental 

performance. The commenters said the period between 2005 and 2012 is also important as it was 

a period in which significant renewable energy projects were added to MGE's generation fleet. 

The commenters said MGE's renewable energy production increased from approximately 60 

GWh in 2005 to over 400 GWh in 2012.

Commenters stated the proposed rule fails to provide credit for CO2 emission reduction activities 

undertaken by states prior to 2012; in many cases, states are penalized for taking such early 

action. The commenters said for example, EPA's current approach results in more stringent goals 

for states in which coal units have been converted to natural gas-fired units or replaced with a 

natural gas combined cycle (NGCC) unit prior to 2012. The commenters asserted that these CO2 

emission reduction actions should be given credit and considered in EPA's baseline and goal 

setting computation. The commenters said EPA should finalize a rule that rewards good faith 

actions taken by utility companies as a preferred environmental policy approach to continue to 

encourage proactive efforts in the future. The commenters recommended EPA provide a 

methodology allowing states to request adjustment to the baseline and/or obtain credit towards 

compliance with the EPA's goals for CO2-reducing early actions such as retirements, fuelswitching and repowering, renewable energy, and customer energy efficiency that occurred in or 

after 2005 and prior to 2012. 

Commenters stated the Administration has repeatedly stated that a primary environmental 

objective is to "by 2030, reduce nationwide carbon dioxide (CO2) emissions, from the power 

sector by approximately 30 percent from 2005 levels", yet when the proposed CPP was released, 

each state's emission reduction level was calculated by applying the BSER to 2012 levels. The 

commenters said using 2012 levels penalizes states that took early action to reduce carbon 
430

emissions by not providing compliance credit for carbon reduction from 2005 to 2012, thus 

making their targets more severe and limiting the state's flexibility to meet their target.

Commenters stated is concerned that Pennsylvania, and other states that have taken aggressive 

measures to improve air quality, will not receive credit for being early adopters of these 

programs. The commenters said in the Proposed Rule, the EPA states that it will rely on 2012 

carbon intensity data to set state emission reduction targets; if this is the case, emissionsreducing policies adopted prior to that point, such as Pennsylvania's: 

1. Mandatory statewide utility Energy Efficiency and Conservation Program that reduces 

total annual consumption of electricity; and 

2. Alternative Energy Portfolio Standard, that spurred significant investment in renewable 

energy, will not count towards the reductions required by the Proposed Rule. 

The commenters said additional emissions reductions from nuclear uprate projects, coal plant 

retirements, and increased gas-fired generation from Marcellus Shale production in Pennsylvania 

prior to 2012 have the potential to go unnoticed if the EPA relies on 2012 carbon intensity data. 

Commenters stated the target-setting methodology is unfair because it fails to give credit for 

reductions of CO2 that were implemented before 2012. The commenters said by ignoring effects 

from CO2 reduction by states and utilities achieved before the baseline year, EPA erred when it 

performed its analysis of what is reasonably achievable in establishing BSER. The commenters

said ignoring these early actions creates a higher cost of compliance and fewer alternative 

choices for states choosing to reduce carbon emissions prior to the implementation of the rule.

Commenters stated EPA rolled out the Clean Power Plan by stating that the goal is to reduce 

carbon dioxide emissions to 30 percent below the 2005 level; there is no mention in 

any information that states emissions are currently 13 percent below these levels. The 

commenters said this is an important fact, that was left out, EPA should mention there has been 

expensive measures taken to deal with the problem.

Comment 26: Ratepayers in early action states would bear a higher cost then other states

Response 26: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year.

The following are summaries of the specific public comments under this comment:

Several commenters expressed concern that ratepayers in early action states might bear a 

proportionally greater burden in reducing carbon pollution than ratepayers in states that have 

done much less. Commenters contended that the rule will severely impact the states relative 

competitiveness; in some cases at least doubling the disadvantage the state now has regarding 

electric rates. Commenters added that it makes little sense to require a state to deeply worsen its 

economic position relative to its neighbors because it pollutes less, especially when other states 

are not required to reduce their carbon intensity to the same absolute level. Commenters stated 
431

that projects that are part of the billion dollar reductions they recently completed are amortized 

over the remaining life of the coal plant beyond 2030. The commenters added that if the 

proposed limits are finalized, their customers will be paying twice for the same reductions many 

other companies deferred until now. Another commenters added that because previous 

investments in energy efficiency and renewables are not credited, some states will need to make 

further investments to meet EPA's targets, which may result in consumers paying for utility 

investments that will not be used. Commenters questioned whether EPA had considered the 

conditions specific to each state, specifically Minnesota, and the utility markets.

Comment 27: 2012 not a representative year; multi-year average that starts earlier would be 

more representative and would not penalize early action

Response 27: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year.

The following are summaries of the specific public comments under this comment:

Commenters stated that the EPA's use of 2012 as a base year for the state goals is 

misrepresentative because 2012 was an abnormal year due to the unusually low prices of natural 

gas, and indicated this skews the EPA's assumptions about the feasibility and impacts of redispatching under BB2. Commenters said that furthermore, using 2012 penalizes states that have 

already made significant efforts to develop RE and EE. Commenters also indicated another 

concern regarding the use of 2012 as a baseline year - it is not representative of coal-fired EGU 

dispatch. Commenters said that dispatch of EGUs in a competitive least-cost electric market 

tends to reflect costs of fuels; natural gas prices were unusually low in 2012 - resulting in greater 

dispatch of natural gas-fired units and less dispatch of coal-fired EGUs. Commenters noted that 

dispatch of coal-fired EGUs over the last two summers has increased as natural gas prices have 

increased since 2012, and said that historic dispatch trends bear out the relationship between fuel 

costs and dispatch. 

Commenters also indicated that 2012 was not a representative year due to higher than usual gas 

utilization and lower than usual coal utilization, and also due to unusually mild 

weather. Commenters said that according to the Edison Electric Institute (EEI), mild weather in 

2012 contributed to a 1.3 percent reduction in electric demand compared to 2011, while 

residential and commercial natural gas consumption fell by 12.3 percent and 8.5 percent, 

respectively. Commenters noted that EEI also points to anomalous investment patterns in 2012-

with the highest level of new capacity additions since 2004, the highest level of retirements to 

date, and historic highs in wind and natural gas-fired generation announcements.

Commenters said a multi-year baseline should be used due to the natural yearly variations in 

supply, weather, interruptions, etc. Commenters said a multi-year baseline period also would be 

consistent with how the EPA expects sates to demonstrate compliance under the proposed rule, 

and the commenters urged the expansion of the baseline period of the timeframe of 2005 through 

2012.
432

Commenters said the proposed regulation may have the effect of disadvantaging states (like NY) 

for taking early action to reduce power plant emissions, while seemingly benefitting many other 

states that have delayed action. Commenters said that as currently proposed, the rule requires 

little of many states that have yet to take action and that typically have more "low hanging fruit" 

opportunities to reduce emissions, and more states like New York that would have to work even 

harder to realize even more emission reductions from their electricity sectors. Commenters

suggested that potential ways to resolve this would be for EPA to use an earlier baseline, such as 

205, that recognized early action taken by states, or to consider a mechanism whereby 

appropriate credit is given to reflect emission reductions already achieved.

Several commenters said that while using a multi-year baseline would partially address the 

concern with unusually low natural gas prices in 2012, it does not address the issue of penalizing 

states that have made early emissions reduction efforts. Several commenters therefore 

recommended a more representative and earlier baseline year (i.e., 2005) or a multi-year baseline 

average be used that takes into account the early efforts made by states. Commenters

recommended that the EPA use a multi-year baseline rather than a single-year baseline, and 

indicated that a historic baseline is preferable to a projected year or a combination of historic and 

projected. Commenters indicated that the EPA has proposed to include rolling three-year 

performance periods for compliance purposes, apparently in an effort to address the year to year 

variability in power system operations and associated emissions, but said that the EPA makes no 

mention of power sector variability with respect to its proposal to use 2012 as the single baseline 

year. Commenters said that a multi-year baseline will produce a more representative baseline 

than a single year.

Commenters said that states that took early action should be given credit for their 

efforts. Commenters indicated that between 2005 and 2012 Florida utilities increased annual 

electrical generation while decreasing CO2 emissions (on both a lb/MWh and tons per year 

basis), and stated that these emissions reductions should have been taken into account in 

calculating Florida's interim and final goals.

Commenters also requested that the EPA utilize a multi-year average to set the targets - an 

approach it has used in all past regulatory actions establishing set state emission budgets, such as 

the NOx SIP call, the Clean Air Interstate Rule (CAIR) and the Cross-State Air Pollution Rule 

(CSAPR). Commenters said the EPA has acknowledged concerns with the use of a single-year 

baseline in the NODA and is requesting comment on using 2010 and 2011 data in addition to 

2012. While Commenters indicated that this would be an improvement, they requested the best 

(optimal MWh) three out of five years from 2008 through 2012 be used to establish the 

emissions baseline. Commenters indicated consideration of a multi-year baseline would smooth 

out economic, commodity, or weather anomalies arising from use of a single year by providing a 

more realistic average or representative baseline from which to develop state goals and emission 

targets. 

Comment 28: 2005 or range of years between 2005-2012 should be used as baseline
433

Response 28: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year.

The following are summaries of the specific public comments under this comment:

Several commenters stated that the President's Climate Action Plan issued in June 2013, speaks 

of a 17% reduction in carbon emissions from 2005 to 2020, yet in spite of these directives, the 

EPA has chosen to use 2012 as the baseline for emissions in the Clean Air Plan proposal. 

Commenters said this baseline year does not reflect any of the prior reductions that have been 

implemented to reduce carbon emissions, and said that the EPA could consider a range of years 

such as 2009 to 2012 or 2010 to 2012. Commenters added that a more appropriate baseline may 

even be 2005 since this is the beginning year mentioned in the Climate Action Plan.

Commenters said that reductions in CO2 emissions that occurred from 2005 to 2011 are 

discounted and completely ignored by selecting a 2012 baseline year. Commenters indicated 

that they have already reduced CO2 emissions by 33.4% from 2005 to 2013. Commenters stated 

that this is a significant reduction that is not accounted for with the use of a 2012 baseline data 

for the Clean Power Plan. Commenters asked "If the directive for carbon emission reductions 

from President Obama began with the year 2005, why is a 2012 baseline used as the starting 

point", and said that it appears that the EPA was selective in choosing this particular year for the 

state goal calculations.

Commenters said that the EPA's Notice of Data Availability (NODA) indicates that EPA may be 

considering a range of dates for the baseline or another single year besides 2012. Commenters

suggested using a range of years between 2005-2012 instead of one single year if a 2005 baseline 

cannot be used. Commenters said a range of years is more reflective of a facility's actual 

operation and would avoid the handicap of picking a year in which the facility experienced 

significant downtime due to an extended outage. Commenters said 2012 was not a 

representative year, and said that a multi-year baseline would be appropriate, and said at a 

minimum they recommend using a 3-year period such as 2010-2012, or earlier, should be 

used. Commenters said that credit for emissions reductions made since 2005 should be given, 

and indicated using a baseline including the year 2005 would accomplish this.

Several commenters suggested the EPA should start calculating emissions targets using 2005 

data, not 2012 data. Commenters said that although the goal of the Clean Power Plan is to 

reduce emissions 30 percent below 2005 levels, when it came time to formulate each state's 

emissions target, the EPA used average 2012 emissions rates from fossil-fired electrical 

generating units - this makes little sense. Commenters said if 2005 emission rates constitute the 

benchmark against which emissions reductions will be measured, then it is logical (and fair) to 

calculate state emissions targets beginning in 2005, not 2012. Commenters said that by jumping 

ahead to 2012, the EPA does not give credit for early emissions reductions. Commenters said 

that total U.S. CO2 emissions fell by almost 9 percent between 2005 and 2013; the vast majority 

of these cuts, however, will not be counted by the EPA, and states will not receive any credit for 

them. Commenters said if the EPA begins its calculations in 2005 rather than 2012, the 

emissions targets for many states would be much lower and more manageable, and several coalfired plants might be able to survive.
434

Commenters stated according to EPA's Trends in Greenhouse Emissions Table 2-1, emissions 

have been reduced by approximately 12% in fossil fuel usage and 16% in that used to generate 

electricity between 2005 and 2012. The commenters said at the very least, EPA should recognize 

this effect and establish its targets on decreases since 2005.

Commenters stated in the past, performance standards have been technology-based and tied to 

achieving the NAAQS for a particular pollutant; however, for CO2 there is no NAAQS or 

readily-available control technology on which to base emission guidelines. The commenters said 

EPA must distinctively define BSER for the multitude of existing EGUs. The commenters said 

the level of control should be considered from a 2005 base year. The commenters said the year 

2005 is the appropriate base year for a number of reasons: it is the base year in the President's 

Climate Action Plan, it is representative of energy demand prior to the 2008-2009 recession, and 

2005 has a robust emissions inventory because states were required to submit a full emissions 

inventory pursuant to the Air Emissions Reporting Requirements rule.

In comments submitted prior to the proposal in April 2014, and resubmitted following proposal, 

commenters offered the following as part of their to the question, "How should EPA set the 

performance standard for state plans," in EPA's "Considerations in the Design of a Program to 

Reduce Carbon Pollution from Existing Power Plants." Commenters supported the use of 2005 

as the base year for level of control. The commenters noted that year 2005 is a national emissions 

inventory (NEI) year for which states were required to submit full emissions inventories pursuant 

to the Air Emissions Reporting Requirements Rule. The commenters stated that year 2005 is also 

the best representation of the electric generation market, energy supply and demand, before the 

onset of the economic recession in 2008. 

Comment 29: 2005 should be used as baseline; any reductions made after proposal date should 

be counted

Response 29: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year.

The following are summaries of the specific public comments under this comment:

Commenters said that 2012 was remarkable in that natural gas prices were so low that fuel 

switching from coal to natural gas was at its maximum in years prior and since. Commenters

said that in choosing 2012 as baseline year, the EPA is therefore setting the baseline at an 

extremely aggressive level. Commenters said that generators should not be penalized for having 

taken early action to reduce GHG emissions. Commenters stated that any such action taken after 

2005 should be credited into the baseline. In addition, Commenters said that all reductions taken 

and GHG emissions reductions achieved after the June 18, 2014 proposal date, including end-use 

energy efficiency enhancements, generation retirements, new capital investments in existing or 

new generation to include nuclear, natural gas and renewable, should be counted against future 

GHG reduction targets.

Commenters said that the use of a single year for the baseline is inappropriate, and even if a 

single year were to be used, 2012 is not representative and does not provide credit for action 
435

taken prior to any federal or state mandate. Commenters strongly suggested that the emission 

targets contained in the rule more closely mimic the EPA press releases which call for a 30% 

reduction in emissions over 2005 levels. Commenters said a 30% reduction over 2005 levels, as 

announced and described by EPA during the press release, is a very aggressive goal that allows 

utilities to get credit for early actions taken since 2005. Commenters said a 30% goal can also be 

implemented with less impact to utility customers, and without unduly compromising reliability. 

Commenters said that instead, the proposed rule calls for Florida to achieve a 38% reduction 

over 2012 levels. 

Commenters said they agree with the EPA's statements that the use of actual, historical data as a 

baseline is more appropriate than using a projected year data set (which would be 

deterministically defined based on model inputs and assumptions). Commenters said this is not 

appropriate for defining "adequately demonstrated". Commenters said however, the EPA is not 

correct in stating that there would be "little variation in results of a multi-year baseline period, or 

even another more representative year compared to 2012". Commenters examined the increased 

use of NGCC and decreased use of coal and oil electricity generation in Florida since 2005, and 

the associated decrease in emissions. Commenters said that using a baseline of 2005, Florida's 

state goal calculation would result in a goal no lower than 1,163 lb/MWh.

Commenters said that if the EPA retains its beyond -the-unit approach to setting state goals, the 

EPA should use 2005 as the baseline year for computing state goals, rather than 2012, for several 

reasons. Commenters said the year 2005 was a key year for U.S. and international climate and 

energy policy because the Kyoto Protocol entered into force in that year. Commenters said the 

2005 Energy Policy Act (which included major changes to federal energy policy) was also 

enacted into law the same year. Commenters said 2005 are also relevant because the EPA's own 

climate change goals are based on reductions from that year. Commenters said in addition, 

although some states were already implementing RE and climate policies prior to 2005, most 

leading states have made significant progress in reducing emissions in the nearly 10 years since 

2005. Commenters said were the EPA to base state emission goals on a 2005 baseline instead of 

the proposed 2012 baseline, it would avoid penalizing these states for their early investments in 

emission reductions, while ensuring that all states implement emission reductions from RE and 

EE that are roughly equivalent.

Comment 30: The EPA should retain the proposed RE goal setting approach; 2004 baseline 

should be used for Wyoming RE, 2012 baseline should not be used for SD

Response 30: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year. See section VII of the final rule preamble for discussion of 

state goals. 

The following are summaries of the specific public comments under this comment:

Commenters said that the EPA has requested comment on whether the approach to calculating 

state emission limits should be modified to include a floor based on reported 2012 generation 

(because a handful of states have calculated RE goals less than their reported RE generation in 
436

2012). Commenters said such a floor would punish early renewable energy adopting states by 

requiring them to meet more stringent goals than their similarly situated regional 

neighbors. Commenters said because the generation information provided is inappropriate since 

these levels represent in-state generation reported on Energy Information Administration Form 

923, and may not represent creditable RE for the generating state because the Proposed Rule 

contemplates in certain instances that the RE will be credited outside the state of generation. 

Commenters said that due to these reasons, the EPA should retain the proposed renewable 

energy goal setting approach and not establish a floor based on 2012 generation.

Commenters suggested that 2004, rather than 2012, should be used for renewable energy in 

Wyoming. Commenters said that Wyoming is an energy exporting state and therefore it is 

reasonable to look at the RPS start dates for the states in the region that depend on Wyoming's 

energy. Commenters said the Wyoming Department of Environmental Quality (WDEQ) has 

evaluated the RPS start dates for the various states in the region and when each of the RPS 

programs began, as these initiatives fueled the need for RE in that state. Commenters said the 

EPA incorrectly established a baseline year of 2012 for RE, which shows an inflated outlook of 

RE in Wyoming. 

Commenters said the interest in and growth of RE in Wyoming began in 2004 as the result of 

RPS requirements from other states, and said the RE in Wyoming in 2012 is a result of RE 

development from 2004-2012. Commenters said as such, WDEQ determined 2004 to be the 

accurate and most appropriate baseline year of Wyoming's RE before outside influences began 

impacting the state's resources.

Commenters said the year 2012 is a particularly unsuitable baseline for South Dakota due to the 

extremely limited operations at Deer Creek Station during 2012. Commenters said using 2012 

for South Dakota's baseline would distort the EPA's assumptions about the State and about the 

capacity of Deer Creek to ramp up generation to displace coal-fired generation. Commenters said 

in its October 30, 2014 NODA, the EPA requests comment on whether a different year or the 

average of a combination of years should be used to calculate the state fossil fuel emission rates 

used in state goal computations. Commenters does not have a strong preference between using a 

single year versus an average of years, except that the assessment should in no way rely on data 

from 2012.

Comment 31: The EPA should use projected data whenever units didn't operate normally (like 

PSGC), and the EPA should adjust Illinois' state goal accordingly

Response 31: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment for discussion of the subcategory-specific emission performance rates and baseline 

year. See section VII of the final rule preamble for discussion of state goals. 

The following are summaries of the specific public comments under this comment:

Commenters said the EPA's choice to use 2012 data from which to determine initial fleet CO2 

emissions and build its BSER calculation is misguided. Commenters said that the EPA assumed 

that one year, 2012, is representative of CO2 emission rates for the entire industry, but too many 
437

variables are lost in such an assumption. Commenters said the EPA recognizes stakeholders' 

concerns with this approach in the recently-issued NODA and requests comment on alternatives 

to the 2012 data year - the EPA proposes using either a different single year or a combination of 

years. 

Commenters said that as applied to Prairie State Generating Company (PSGC), the national 

assumption is particularly flawed. Commenters said that PSGC had not begun normal operations 

in 2012 and the data reported is not representative of PSGC's normal and intended operation. 

Commenters said in normal steady state operations, PSGC will operate its base-loaded units at an 

intended 90% capacity factor, yet the 2012 data that is currently used represents barely a 23% 

capacity factor. Commenters said PSGC submits that the EPA should be willing to estimate 

emissions and generation using projected data for a newly operating unit whose operations were 

not representative of steady state conditions. Commenters said the EPA does just that in the CPP 

when EPA accommodates "under construction" NGCC units by using estimates. Commenters

said the EPA should adjust state baselines for any other EGU that came online or began normal 

operations after 2012, and the EPA should adjust state goals accordingly.

Commenters said projected data is easily estimated from more recent information submitted to 

both EPA's Acid Rain Program and the Department of Energy's Energy Information Agency. 

Commenters said that using data that are not representative of future actual operations of a plant 

that is in the initial stages of operation distorts the state goal calculations, particularly if a ratebased emission goal is converted to a mass-based emission goal. Commenters said using the 

newly added technical support documents provided for converting a rate-based goal to a massbased goal, Illinois' state goal would be almost 15% less than it should be by using actual 2012 

data for PSGC rather than projected data reflecting expected normal operations. Commenters

said as such, PSGC believes that the EPA should use estimated data which projects CO2 

emissions and electric generating data at the expected 90% capacity factor, and adjust Illinois' 

state goal accordingly.

Comment 32: States should be able to choose their baseline; 2010-2012 should be default 

baseline with option to pick different period in last 5 years if can demonstrate not representative; 

a 3-year or 5-year average should be used as baseline; 2012 should be used as baseline, or 

alternate if can demonstrate not representative; 2012 should be default baseline, but states can 

request alternate year or years

Response 32: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year.

The following are summaries of the specific public comments under this comment

States Should Choose Own Baseline. Commenters said that they believe that state-specific 

circumstances exist in Oregon (and other states) to justify using different data years in different 

states for purposes of establishing baseline fossil emissions, as the NODA 

contemplates. Commenters said that choosing any single year as a baseline unnecessarily creates 
438

the risk that events unique to that year and state will introduce bias, and a multi-year baseline 

would be more representative.

Commenters stated that the EPA should leave it up to states to determine their appropriate 

baseline based on the measures used to develop the goals. Commenters said that the EPA 

"recognizes that states that have already shifted toward lower carbon-intensity generation or 

ramped up demand-side EE programs are better positioned to meet state-specific goals" and that 

existing state measures taken after the date of proposal would be recognized in a way that "may 

be generally compatible with the forward-looking methodology that the EPA used to propose 

state emission performance goals." 

Commenters stated that these statements are a clear reflection of the flawed logic throughout the 

proposed rule. Commenters said firstly, those states, such as Ohio, that already have taken 

measures to shift to lower intensity fuels, maintain a robust generation mix, and improve end-use 

efficiencies, received more stringent state emission goals than states that have done nothing with 

respect to early adoption. Commenters said secondly, they recognize that the EPA did use a 

"forward-looking methodology" in setting state goals, but said that unfortunately, such a 

methodology is contrary to the intent of Section 111, in which the BSERs is based on adequately 

demonstrated, commercially available technologies, not optimistic projections of what might be 

possible in each state.

Commenters said to avoid what is viewed by Ohio EPA as a penalization of states that have 

adopted beneficial measures prior to this proposal, the EPA should allow the states to determine 

when reductions should be credited to its emission performance goals. Commenters urged U.S. 

EPA to consider, in the name of flexibility and to avoid penalizing forward-looking state actions, 

the ability for states to recognize and credit prior emission reduction measures based on 

reasonable and defensible analyses of prior actions. Commenters stated that the EPA's action on 

excluding some CO2 reductions prior to 2020 is arbitrary, and without technical foundation.

Baseline should be 2010-2012 as default, can request alternate. Commenters stated that the EPA 

should use a 2010-2012 three-year average baseline as a default and allow states to select a 

different baseline period if the three-year average is not representative. Commenters said that 

the final rule should not rely on a single data year for calculating state emission goals because 

state emission levels can fluctuate significantly from year to year due to weather, fuel prices, the 

economy, and outages at both fossil and non-fossil generators. Commenters indicated that the 

EPA's proposed baseline year, 2012, was not representative of emission levels in many states, 

and indicated that the final rule should use data from multiple years when establishing baseline 

emission levels for states. Commenters said that a 2010-2012 three-year average - one of the 

options discussed in the October 2014 NODA - would be an improvement over the EPA's current 

single-year proposal. Commenters added that moreover, in some cases, even a three-year average 

could be unrepresentative of a state's actual emission profile. Commenters said therefore, the 

EPA should allow states to select a different baseline year or period within the previous five 

years if the state can demonstrate that the 2010-2012 baseline is not representative of affected 

EGUs' typical emission performance.

3-Year or 5-Year baseline. Commenters said that a single year will almost never be truly 

representative of a state's electric generating operations, and said if the EPA is going to establish 
439

a representative baseline, states should be given the opportunity to choose representative 

baselines established from averaging various years, including three to five year averages.

2012 Baseline as default, states can request alternate. Commenters supported the EPA's original 

proposal to use 2012 as the default baseline year, with the caveat that the modifications to the 

quantification of the RE and EE components of the state goals are necessary to avoid penalizing 

early actors. Commenters added, however, that the EPA should also allow a state to select an 

alternative baseline year if the state can show that 2012 emissions are unrepresentative and that 

basing state goals on the 2012 baseline year would be unfair or inequitable.

2012 as default baseline, states can request alternate year or years. Commenters

strongly supported the EPA's proposed use of 2012 as the baseline year. Commenters said it is 

the most recent year of available data, and is most representative of California's existing EGUs 

due to the closure of SONGS in early 2012. Commenters said that the California Utilities also 

recognize that a 2012 baseline year may not be representative of other states' electricity 

portfolios, and therefore urged the EPA to set 2012 as the default baseline year, and provide 

states with the ability to either request an alternative baseline year or use a multi-year average 

(e.g., 2010-2012). 

Commenters suggested allowing states to identify a "baseline" year or even average several 

years, rather than using one data set. 

Commenters stated choosing a single year, 2012, for the compliance baseline is not 

representative of typical operation; for example, 2012 was an outage year for OMU, meaning 

that heat input and emissions were not representative of a more typical or average operating year. 

The commenters said the rule should allow states to establish a baseline that the state believes 

equitably represents its circumstances; for example, EPA could allow a state to choose any three 

years within the most recent ten year period for which emissions data is available and then 

average those three years to establish its baseline for the its' compliance plan.

Commenters stated the year EPA selected as the baseline for calculating emission reduction 

goals - 2012 - was not a representative year for electric generation in Louisiana because of a mild 

winter and historically low natural gas prices that led many utilities to switch to gas and reduce 

solid fuel generation. The commenters said for Cleco, the petroleum coke and coal-fired 

fluidized bed unit, Madison 3, experienced a very low capacity factor in 2012 because it was just 

beginning commercial operation and completing the shakedown phase of its initial startup. The 

commenters said in its goal calculation for Louisiana, EPA identified solid fuel generation as 

having a nameplate capacity of 4,727 MW in 2012, which provided 24 million MWh to the grid, 

resulting in a weighted capacity factor of 58.5 percent; however, if Madison 3 had been in full 

operation, the capacity factor of Louisiana solid fuel generation would have been 64.4% in year 

2012 using nameplate capacity, resulting in a higher goal calculation for Louisiana. The 

commenters said because a single year is often a poor representation of a state's generation mix, 

the commenters supported EPA's discussion in its Notice of Data Availability regarding the use 

of an average of several years as the baseline for the goal calculation. The commenters also 

supported allowing states to choose their own baselines, rather than arbitrarily requiring all states 

to follow a single baseline that will inevitably be unrepresentative for at least some states.
440

Commenters stated U.S. EPA acknowledges stakeholder concerns regarding the use of the 2012 

base year or the use of a single year for goal computation; further, stakeholders identified 

anomalies with generation in their state or at their companies for 2012. The commenters said 

therefore, U.S. EPA has provided eGRID data for 2010 and 2011 and is requesting comment on 

whether a different single data year or average of a combination of years should be used. The 

commenters said U.S. EPA is also seeking comment on whether a state-specific year or set of 

years is warranted. The commenters have several concerns regarding the 2012 base year for goal 

computation; the commenters did not believe, given the scope of this proposal, there is a onesize-fits-all base year that would be appropriate for all states. The commenters asserted U.S. 

EPA's simplified approach to determining an appropriate base year that applies to all building 

blocks raises issues. The commenters said a proposal of this magnitude warrants significant 

analysis by individual states to determine the appropriate base line for each individual building 

block given their individual state characteristics for generation, changes in diversity of the fleet, 

RPS programs, EE programs, etc. The commenters said if U.S. EPA moves forward with this 

proposal, in the spirit of "flexibility," U.S. EPA must find a more workable method to engage 

states in determining appropriate baselines to mitigate the impracticality of this proposal. 

Commenters stated given the diverse operating conditions and resource portfolios of the western 

states, using 2012 as the baseline year for the CPP has varying impacts on EPA's goal setting 

process; in effect, the baseline date can determine "winners and losers" depending on the 

circumstances present in a utility's system in 2012 - some of which are entirely beyond their 

control. 

Commenters stated a single year baseline date may or may not reflect "normal operating 

conditions" for the state and its utility systems; atypical CO2 emissions due to anomalies related 

to climatic or weather conditions (e.g., affecting hydro power availability that can have 

significant effects on regions like the Pacific Northwest), or operational challenges unique to the 

state (e.g., generation is offline for anticipated or unanticipated repairs; or units were run on an 

alternate fuel in that year due to temporary shifts in fuel and transportation costs). The 

commenters said sometimes these circumstances may have unique and dramatic effects on a 

state's CO2 emissions. The commenters recommended that EPA allow states greater flexibility 

by: 

1. Allowing state to demonstrate that an alternative baseline year is more representative of 

its annual emissions; or 

2. Allowing states to establish a baseline based on an average of years within a range of 

years. 

The commenters said EPA and states recognize these kinds of approaches in the context of other 

CAA programs in order to address similar concerns. 

Comment 33: No credit is given for early reductions; interim goal is not necessary

Response 33: See sections VI and VIII of the final rule preamble of the CPP for the EPA’s

response to this comment regarding the baseline year and state plans, respectively.
441

The following are summaries of the specific public comments under this comment

Commenters said that the regulation as proposed does not give credit for early reductions, and 

therefore, if 2012 remains the year from which calculations for CO2 reductions are made, the 

reduction calculation should be credited from 2005. Commenters said that if the EPA does not 

use 2005 for the base year, then 2012 forward should be used rather than starting in 2020. 

Commenters added that there is no language in the CAA Section 111(d) to suggest an interim 

goal is appropriate or required. Commenters said that in prior Section 111(d) regulations, the 

EPA did not propose interim scheduled reductions. Commenters said that the calculation for 

reductions should be no later than 2012.

Commenters stated that the EPA penalizes the early action Tampa Electric Company (TEC) and 

others have already taken with respect to coal plant efficiency improvements. Commenters said 

that TEC and many other utilities have already completed the relevant efficiency improvement 

projects outlined by the EPA. Commenters indicated that since 1980, the FPSC has incentivized 

heat rate improvements utilizing a program called Generation Performance Incentive Factor 

(GPIF) Program for investor-owned utilities. Commenters explained that targets are set annually 

through a formal hearing procedure, and investor-owned utilities either gain rewards or suffer 

penalties based on the prior year's performance compared to the previously set annual targets.

Commenters said that the EPA's goal-setting exercise for Florida simply assumes a reduction 

from efficiency improvements is plausible, without due consideration of whether or not the 

potential measures have already been completed. Commenters said that as proposed, the EPA 

would arbitrarily reward those who delayed maintenance on power plants until after 2012 and 

penalize others who have already completed such projects. Commenters indicated that States 

should be afforded the flexibility to work with the EPA to adjust the target goal if the appropriate 

efficiency projects that the EPA assumes are feasible have already been completed or would not 

achieve the reduction that EPA predicts. Commenters stated that the opportunities for efficiency 

improvements are limited, and the resulting very low coal-fired unit capacity factors that would 

result from fuel switching render reductions from Building Block 1 insignificant.

Comment 34: CPP gives proper recognition to existing state policies, programs and early 

actions to reduce CO2 emissions. CPP rate-based goal guidelines should be retained

Response 34: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year.

The following are summaries of the specific public comments under this comment

Commenters said that in prior comments concerning the appropriate method for deriving CO2 

reduction goals as part of an overall CO2 reduction plan, Iowa stakeholders urged the EPA to 

give the state credit for its existing policies, programs, and early actions to reduce CO2 

emissions, and indicated that through the proposed CPP, the EPA has given appropriate 

recognition to existing state policies, programs and early actions to reduce CO2 emissions. 
442

Commenters said Iowa DOJ finds the EPA's calculation of Iowa's goals to be fair and wellfounded.

Commenters urged the EPA to retain the CPP rate-based goal guidelines that give Iowa 

appropriate credit for these early-action initiatives that reduce CO2 emissions. Commenters said 

Iowa consumers have paid for these early action initiatives, often at a significant premium as 

compared to a business as usual or more traditional system planning approach, with the 

expectation that they would benefit from such investments under potential future CO2 

regulations. 

Comment 35: Final performance level should be 3-year average; interim goal should be 

eliminated and glide path should be used

Response 35: See sections VI and VIII.B. of the final rule preamble of the CPP for the EPA’s

response to this comment regarding the baseline year and state plans, respectively.

The following are summaries of the specific public comments under this comment:

Commenters agreed that a three-year average for demonstration of achievement and maintenance 

is an improved amount of time. Commenters did not agree with an established interim goal, and 

instead said that there should be a glide path with the states reporting progress to the EPA. 

Commenters stated that there is no statutory basis for requiring an interim goal.

Commenters also agreed with the proposal of a final actual plan performance check using a 

three-year rolling average, the first year of such a check being 2016. Commenters said that by 

allowing credit for EE in 2012 and beyond, the state could make a show of progress for RE and 

EE with the state plan submittal.

Comment 36: Baseline based on a single year of data is especially unrepresentative for states 

with hydropower, the EPA should either use a 10-year average OR other multiyear average for 

hydro-dependent states or allow states to determine their own baseline

Response 36: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year.

The following are summaries of the specific public comments under this comment:

Commenters said that choosing any single year as a baseline unnecessarily creates the risk that 

events unique to that year and state (e.g., low or high water, extended plant outages, and 

atypically cold winters or hot summers) will introduce bias in a manner that makes the baseline 

less representative of average conditions. Commenters said that calendar year 2012 data implies 

that Oregon's electricity sector has a lower emission rate than it actually does because 

hydropower made up an unusually large percentage of the state's power generation that year. 

Commenters said that in 2012 in Oregon, the unusually large water supply and historically low 
443

natural gas prices resulted in Oregon's only coal-fired power plant operating at an unusually low 

capacity factor of approximately 50 percent. Commenters stated that a baseline representative of 

average conditions would be more consistent with utility planning practices and other EPA 

rulemakings and ease state compliance reporting and tracking. Commenters suggested two ways 

to make the baseline representative of average conditions and more consistent with utility 

planning processes and other EPA rulemakings: i) use a ten-year average to set the baseline or ii) 

allow states to determine their own baseline through established ratemaking or utility planning 

proceedings.

Use of 10-year (or multi-year) average for baseline. Commenters said that by using a ten-year 

average for baseline, the EPA would capture the variability in water years, which would mitigate 

the likelihood that single-year anomalies, like high hydropower production, would lead to 

inaccurate emission profiles. Commenters said that the variability in water years is significant, 

but a ten-year average can produce a result that is representative of an average water year. 

Commenters said that using a ten-year average would create a final goal of 415 in Oregon and an 

interim goal of 450, representing more than a 10% change from the proposed goals.

Commenters said that while less representative of an average water year, multi-year averages 

based off fewer years will also produce a result that is closer to average. Commenters said that in 

an effort to more closely represent average conditions, states often use multi-year averages in 

ratemaking settings to moderate single year fluctuations. Commenters said that in addition to 

hydro conditions, multi-year averages can smooth out unusual impacts from extended plant 

outages or other short term irregular market distortions, and indicated that the EPA itself uses a 

multi-year average in other EPA rulings (such as NSR).

Allow States to determine their own baseline. Commenters said that another possible way to 

make the baseline representative of average conditions would be to allow states to determine 

their own baseline through established ratemaking or utility planning proceedings. Commenters

said that under this approach, the EPA would replace the baseline with guidelines that would 

require states to propose a baseline representative of average conditions, which the EPA would 

have to approve. Commenters stated that through their extensive experience in utility planning, 

rate-making, and other regulatory proceedings, states are well-positioned to estimate the 

appropriate average conditions to use in establishing a baseline. Commenters said that for 

example, common practice in the Pacific Northwest is to use an "average water year" in utility 

planning due to the continuous and unpredictable nature of water availability. Commenters noted 

that in this context, an average water year does not represent averaging fossil dispatch occurring 

over several years, but models fossil dispatch as if a historic (e.g., 30- or 60-year) average 

amount of hydropower is placed on the electric system.

Other. Commenters stated using the 2012 generating year as a baseline is not representative -

multi year baseline is needed: EPA established state emission rate goals by first determining each 

state's emission rate baseline, based on electric generation in 2012. The commenters said setting 

a representative baseline for the State is important both from the standpoint of calculating the 

state's emissions goal and for the calculation of compliance on an annual basis. The commenters

said because 2012 was an exceptionally high water year, a higher than normal amount of 

electricity was generated by hydro resources. The commenters said this abnormally high hydro 

generation displaced some thermal generation. The commenters said to ensure a more 
444

representative baseline period, suggest that EPA allow each state to establish a benchmark based 

on an average of some period of years; for a predominantly hydropower state, that period should 

span at least 5 years. The commenters said as an example, Tacoma Power uses a 15-year sample 

of historical data to produce a baseline hydrologic generation curve; entities, such as the 

No1ihwest River Forecast Center, might serve as a good source of information in devising a 

representative baseline for Washington State; in addition, some mechanism should be in place to 

normalize the year-to-year variations in weather and water availability. 

Commenters stated EPA's arbitrary use of a 2012 baseline to determine a goal that is supposed to 

be a 30% carbon reduction from 2005 to 2030 does not take into account any anomalies from 

intermittent renewables, market changes, energy demand, supply changes, etc.; specific to 

Washington State, 2012 was a very high hydropower year and natural gas prices were low; this 

led to a significantly lower thermal dispatch than normal-base load coal was only dispatched at 

approximately 32% capacity factor and Washington State CCCT plant dispatch was even lower 

(less than 21%), resulting in an abnormally low level of carbon emissions. The commenters said 

in Washington State the 2012 total CO2 emissions equaled 6.9 million tons, while average 

emissions from 2008 to 2012 equaled 11.8 million tons per year, meaning 2012 represents only 

58% of the preceding 5 year average. 

Commenters stated in response to EPA's NODA, a three year average as proposed by EPA does 

not adequately address hydro variability because both 2011 and 2012 were unusually high hydro 

seasons. The commenters said states should be allowed to either normalize according to industry 

standard practices or pick a year in the recent past that had close to normal hydro, such as 2008 

in the Pacific Northwest. The commenters requested that EPA allow states flexibility to 

normalize baselines for factors such as hydro conditions, which could include using a multi-year 

baseline for developing state goals or using a single year within the last few years that is within 

2% of normal conditions. The commenters said including multiple years will better represent the 

variability in weather and energy markets that can affect regional generation and dispatch. The 

commenters said a range from 2005 to 2012, or at a minimum a range 2008 to 2012, would more 

adequately represent these fluctuations. The commenters said alternatively, 2008 exhibited hydro 

conditions at 99% of normal, which would be a reasoned basis for selecting thermal operations in 

that year as the basis for estimating dispatch of affected generating units, rather than an arbitrary 

selection 2012. The commenters said the EPA should ensure states have the flexibility to make 

reasonable normalizing adjustments to address hydro variability. 

Commenters stated as proposed, the proposed rule selects a reference year in which states like 

Idaho experienced higher than- normal stream flows. The commenters said for states like Idaho 

that are heavily reliant on hydropower generation, that has the inevitable result of skewing our 

emissions levels as the state was less dependent on its out-of-state thermal power production due 

to greater use of lower-emissions hydropower. The commenters said the region's year-to-year 

variability in stream flows and hydropower generation require a more accurate baseline as the 

foundation for its compliance targets. The commenters said EPA should instead use an average 

of multiple years - at least five - to better account for the variability in steam flows and, as a 

result, clean power generation. The commenters said this would better normalize and more 

accurately depict electricity generation conditions and minimize climate anomalies such as 

temperature and precipitation that may affect a state's reduction target.
445

Commenters stated the proposed rule uses a 2012 baseline. The commenters said using a single 

year is particularly problematic in the Pacific Northwest due to the fluctuation of electric power 

emissions from year to year. The commenters said water supply is variable and due to the 

region's reliance on hydropower, using a single year is arbitrary and can prove problematic if the 

year chosen is exemplifies extreme conditions. The commenters said indeed, 2012 was one of the 

biggest hydropower years recently, and additionally, the Boardman Coal plant had been down 

for maintenance during significant portions of 2012. The commenters said using such a below 

average thermal generation in the baseline year effectively leads to more stringent targets in the 

Pacific Northwest. The commenters recommend the rule should use a five-year average for 

setting a baseline and annual targets to account for the challenges of yearly water supply and 

hydropower variations.

Commenters stated energy production from the hydropower system in the Pacific Northwest 

differs significantly from year to year, due in large part to variations in precipitation. The 

commenters said in 2012, the Northwest experienced a high water year and consequently, higher 

than average generation from the 31 dams of the Federal Columbia River Power System. The 

commenters said EPA proposed using 2012 as the baseline year for calculating emissions goals, 

but an above-average water year is inherently flawed for purposes of determining average 

outputs from thermal resources in the Northwest. The commenters said this is the case because 

high hydropower production is typically correlated with below average thermal production. The 

commenters said higher production of hydropower reduces the need to generate power from 

thermal resources. The commenters said therefore, using only 2012 as a baseline for purposes of 

the rule at hand results in a baseline choice that is not representative of a longer term average of 

emissions in the Pacific Northwest.

Commenters stated the final rule should allow for year-to-year hydro variation. The commenters

said as a hydro-dependent region, the Pacific Northwest would be exposed to discriminatory 

treatment under EPA's proposal for its use of this non-carbon emitting resource. The commenters

said the Pacific Northwest hydroelectricity varies from year to year; flow and generation over the 

past 23 years have varied significantly due to weather conditions. The commenters said because 

most Pacific Northwest states depend significantly on hydroelectric generation, and have 

relatively little thermal generation, they will be required to rely largely on building blocks three 

Renewable Energy ("RE") and four Energy Efficiency ("EE") of the proposed rule to meet their 

emission-rate goals. 

Commenters stated the ability of the Pacific Northwest to maintain system reliability and 

compliance with the requirements of EPA's proposal by depending solely on building blocks 

three and four is extremely problematic. The commenters said energy efficiency, especially that 

achieved under a cost-effectiveness standard, and intermittent renewable energy generation are 

not sufficient to economically or operationally compensate for CO2 emission in low and even 

average water years. The commenters demonstrated the importance of setting the baseline year to 

a level representative of expected average conditions; out of 80 years, Washington State would 

likely never meet EPA's 2030 target, whether calculated on a mass-basis of emission-rate basis. 

The commenters illustrated how much year-to-year variability exists in the historical record; this 

variability will continue in the future. The commenters said total estimated CO2 emissions in a 

year of high hydroelectricity generation are approximately 3.5 million tons. The commenters said 

in a low hydroelectricity generation year, emissions rise to as high as 11 million tons. The 
446

commenters said understanding this natural variability is critical in setting expectations for what 

emissions reductions are possible. 

Comment 37: A 3-year, 5-year, or 10-year baseline should be used for hydro-dependent states

Response 37: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year.

The following are summaries of the specific public comments under this comment:

Commenters stated that hydropower generation in Washington and other Pacific Northwest 

states is highly correlated with mountain snowpack which in turn correlates with winter 

temperature and precipitation. Commenters said, for instance, Washington's hydropower 

generation recently ranged from a low of 54.7 million MWh in 2001 to a high of 91.8 million 

MWh in 2011. Commenters indicated generation in hydro-dependent states is also highly 

dependent upon weather cycles, such as an El Nino, and climate change may cause further 

variability in hydropower generation

Commenters recommended defining hydro-dependence as those states with hydroelectric 

generation consisting of more than 50 percent of total instate generation. Commenters

recommended that for these hydro-dependent states, if EPA has not already decided to use a fiveyear baseline as the standard approach, that a five-year baseline be used for this subset of states 

that are reliant on hydropower for the majority of their in-state generation. Commenters noted 

that differentiating the baseline periods of states based on shared characteristics (such as 

hydropower dependency) is a concept that the EPA specifically asked for comment on in the 

NODA. Commenters stated that the approach proposed is consistent with that concept.

Several commenters said that for states dependent on fluctuating hydrologic cycles, the baseline 

period for deriving baseline data (generation, emissions, capacity factors, et al) should be 10 

years. Commenters said at a minimum, a 5-year average should be used. Commenters said at a 

minimum the EPA should consider an average of no less than three years, which better 

represents a "typical" profile. Commenters indicated that for Montana and other states of the 

Pacific Northwest, the amount of thermal generation online is highly dependent on the 

hydrologic cycle, and even a three-year baseline would not serve to normalize the performance 

of the fleet in those states. Commenters recommended that hydro conditions be normalized 

through the use of a 10-year period or through another method that identified an average water 

year for the region and the consequent run times of local thermal generation. Commenters also 

indicated that the use of any single year for baseline will also lead to unrepresentative estimates 

of non-hydro dependent states' emissions, levels of energy efficiency performance, renewable 

energy generation, etc., and suggested a multi-year baseline would be more representative.

Comment 38: 2012 was a very good hydro year, and not typical. Good hydro years translate 

into decreased fossil fuel generation
447

Response 38: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year.

The following are summaries of the specific public comments under this comment:

Commenters stated EPA is mistaken in assuming that by excluding existing hydroelectric 

generation from consideration in the rule that variability in annual electricity generation from 

existing hydro facilities will not create problematic levels of variability in the electricity 

generation from fossil-fuel fired power plants from one year to the next; this is especially the 

case in regions of the country where hydroelectric generation represents a significant percentage 

of total electricity generation. The commenters said for Montana, a good hydro year can generate 

as much as twice the electricity from dams located in the state as during a bad hydro year. The 

commenters said in good hydro years, fossil fuel-fired power plants, which are primarily coal 

plants in Montana, operate less while they operate significantly more in bad hydro years. 

Commenters said key to the potential validity of EPA's proposed rule, 2012 was a good hydro 

year for the Pacific Northwest, which in turn significantly depressed electricity generation from 

affected coal and natural gas facilities across the broader region, including in Montana. The 

commenters said EPA's implicit assumption in setting each state's emission rate goal is that 

hydro generation in future years will reflect generation in 2012. The commenters said this 

assumption is overly optimistic for Montana and the greater Pacific Northwest; future years' 

electricity generation and carbon emissions for Montana's affected EGUs are likely to be 

significantly higher than they were in 2012, in part because Montana's hydroelectric generation 

in 2012 was more than 1,300 GWh more than the state's 2003-2012 10-year average; the 1,300 

GWh of above average hydro generation in 2012 is equal to almost 5 percent of the state's total 

generation in 2012.

Commenters stated the year 2012 was one of the two highest hydroelectric generation years this 

century for the Columbia River basin. The commenters said as noted by the U.S. Energy 

Information Administration (EIA) in June of this year, "Hydroelectric power plants located on 

the river and its tributaries account for 29 gigawatts (GW) of hydroelectric generating capacity 

and contributed 44% of the total hydroelectric generation in the nation in 2012." The 

commenters said the 2012 hydroelectric generation rate in Washington State was 19% higher 

than the average generation rates from 2001 through 2013 based upon the EIA data; the 

hydroelectric generation rate in Washington State varies substantially from year to year, as does 

the portion of power generated by hydroelectric generation. The commenters said the EIA noted, 

"Hydroelectric supply can have implications for the dispatch of other generators (such as wind 

turbines, thermal generators, and the Columbia nuclear station) in the Pacific Northwest, where 

four states (Washington, Oregon, Idaho, and Montana) host 35% of U.S. hydroelectric capacity." 

The commenters said the very high hydroelectric generation in 2011 and 2012 resulted in much 

lower generation rates from TCG during those years than are considered normal operation. The 

commenters said the variability of hydroelectric generation cannot be accounted for in setting 

State goals for Columbia River Basin States utilizing data from any single year, especially 2012. 

The commenters said a long-term average must be used to set the goals and to determine State 

performance against the goals. The commenters said an average of at least ten years is needed to 

achieve reasonably stable hydroelectric generation rates; at a minimum, a 10-year average 

baseline period is needed to set goals for States in the Pacific Northwest. The commenters said 
448

analysis of a larger set of annual data than the 13 years available on the EIA website may lead 

EPA to choose an even longer baseline and compliance averaging period than ten years. The 

commenters requested that EPA use, at minimum, a ten-year baseline for hydroelectricity 

production to set goals and compliance requirements for States in the Pacific Northwest; this 

change will more appropriately reflect the variability that hydroelectric power production has on 

a state wide emission factor.

Commenters stated hydropower generation in the Pacific Northwest varies considerably from 

year to year, which can impact the level of thermal generation, and thus emissions, in the region. 

The commenters said the Proposal uses 2012 as the "baseline year" to calculate state emission 

goals, and the EPA specifically solicits comment on the use of this single year as the baseline in 

its October 27, 2014 Notice of Data Availability. The commenters said there is an inherent 

amount of variability in FCRPS generation from year to year depending on precipitation level 

and timing, reservoir conditions, and other variables. The commenters said the level of 

hydropower generation, along with other factors, can impact the level of thermal generation in 

the region in any given year. The commenters said in the Pacific Northwest, 2012 was a high 

water year resulting in greater than normal hydropower generation. 

Commenters said states with large amounts of hydropower may experience yearly variations in 

thermal generation. The commenters said the Pacific Northwest has often experienced cases 

where a strong hydro production year contributed to conditions for a low thermal (natural gas 

and coal) production year; 2012 is an example of such a year. The commenters said the use of 

2012 as the baseline year, where hydro production was above average and thermal production 

was below average, could lead to more ambitious emission reduction goals than the use of a 

different year; similarly, the use of a below average hydro production and above average thermal 

production year as a baseline year could lead to less ambitious carbon reduction goals. 

Commenters asserted that climate change may increase the variability on the FCRPS in the 

future; recent studies, including the latest information from the Intergovernmental Panel on 

Climate Change (IPCC), agree that Columbia Basin weather will likely continue to warm. The 

commenters said this warming will cause more precipitation to fall as rain in the winter rather 

than snow, resulting in increased river flows in winter and early spring, reduced flows in summer 

and new challenges for future river operations and planning.

Commenters stated the Pacific Northwest benefits from a large base of emissions-free 

hydroelectricity generation. The commenters said thermal plants constitute a smaller percentage 

of overall output (approx.18%) relative to other regions of the country and certain states have 

very few such plants subject to regulation under the EPA proposal. The commenters said for 

example, Idaho has only two thermal plants that would be impacted by the EPA proposal. The 

commenters said both plants operated at a low level in 2012, relative to the expected long term 

average, because the region experienced an above-average water year. The commenters said the 

implications of the 2012 baseline are magnified in Avista's Idaho service territory because the 

state has only two natural gas-fired plants falling under proposed 111(d) regulation. The 

commenters said one of the two, the 318-MW Langley Gulch plant owned by Idaho Power, came 

online late in calendar year 2012 and operated at a 15% annual average capacity factor. The 

commenters said this level is well below the level operated at similar plants. The commenters

said having almost identical operating characteristics and integrated similarly in the marketplace, 
449

the plant operated in 2012 with a capacity factor of one-third that of Rathdrum Power, the only 

other Idaho regulated plant. 

Commenters stated 2012 was an above-average hydro year, causing baseline CO2 emissions in 

Washington and the Pacific Northwest to be artificially low. The commenters said 2012 carbon 

emissions in Washington State were 5.5 million tons lower than the 10-year average due to 

above-average hydroelectricity generation. The commenters said this figure is significant, given 

the 2012 actual CO2 emissions of approximately 7 million tons for the state, and EPA's goal to 

reduce those emissions to approximately 2.5 million tons by 2030. 

Comment 39: Use of 2012 as base year is arbitrary

Response 39: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year.

The following are summaries of the specific public comments under this comment:

Commenters disagreed with the whole concept of using a baseline year for establishing BSER in 

the proposed rule, and said that any legal emission standard should be based on what is 

technically and economically achievable in any given state. Commenters said it is arbitrary to 

establish standards for states by superimposing "what other states have been able to achieve" in 

each of the four building blocks, and it is equally arbitrary to establish standards based upon an 

average of "what other states have been able to achieve". Commenters contended that each state 

has a unique generation and dispatch profile, demand profile, weather profile, customer profile, 

and economic profile, as well as unique customer growth, reliability considerations, and 

renewable energy resources.

Commenters indicated that the EPA's choice of 2012 as the base year is arbitrary, that 2012 in 

particular was highly unusual and therefore unrepresentative, stated that no single year or several 

years combined is representative of current conditions, and said that the EPA's selection of 2012 

as the base year creates large and disparate impacts for wholly arbitrary reasons.

Commenters stated that the EPA's selection of 2012 as the base year is particularly arbitrary, 

because it was a highly unusual year in the energy sector. Commenters said that because natural 

gas prices were historically low in 2012, natural gas generation was historically high and has 

since abated somewhat. Commenters said that because of the relatively large amount of natural 

gas generation relative to coal in 2012, electricity sector CO2 emissions in that year, as well as 

coal generation CO2 emissions, were also significantly lower than they had been previously, and 

have since increased. Commenters added that the fact that 2012 was a high water year in the 

Pacific Northwest also made it an atypical year. Commenters said that these factors combined 

mean that the EPA has set an artificially low baseline for further CO2 emissions reductions, and 

said the EPA has provided no justification for determining that the year with high amounts of gas 

generation, low amounts of coal generation, and the low energy sector CO2 emissions is a 

representative year for projecting future performance - there is none.
450

Commenters said that given the dynamic nature of the electricity system and the national 

economy, no one year, or even several years combined, is representative of "current" conditions 

for the purpose of establishing a baseline that will then be used to measure future performance 

over the long-term. Commenters said that for instance, selecting 2006 as the baseline would be 

arbitrary because it would exclude the recession, but selecting 2007 or 2008 as the baseline 

would be arbitrary because it would be dominated by the effects of the recession. Commenters

indicated that even selecting the average of 2006-2012 as a baseline would be arbitrary because

it cannot be said that those years are representative of the past or expected future conditions. 

Commenters said that the EPA's NODA recognizes that selecting the single year of 2012 as the 

base year is arbitrary and seeks comment on whether another year of an average of multiple 

years should be selected, but added that any year or combination of years that the EPA selects 

will be arbitrary and will produce winners and losers based on nothing more than the base year.

Commenters stated that the EPA's selection of 2012 as the base year creates large and disparate 

impacts for wholly arbitrary reasons. Commenters said that for instance, the amount of natural 

gas combined cycle generation produced within a state in 2012 has a significant impact on the 

state's ultimate emission rate "goal" because the 2012 capacity factor for existing natural gas 

units within a state determines how far the state must go to achieve EPA's 70% capacity factor 

assumption. Commenters said that natural gas combined cycle units in Virginia, for example, 

operated at a 60% capacity factor in 2012, and that as a result, increasing the dispatch of those 

units to 70% does not displace as much coal-fired generation as a state with lower 2012 capacity 

factors, such as Nebraska, where existing combined cycle units operated only at a 10% capacity 

factor in 2012. Commenters said that because of the differences in the 2012 baseline underlying 

the EPA's goal calculations, the EPA's calculation of Virginia's goal assumes Virginia need only 

increase natural gas generation by one-quarter of its 2012 levels, whereas the EPA's calculation 

of Nebraska's goal assumes that state must increase its natural gas generation six-fold. 

Commenters said that if the EPA had selected a different year in which Virginia and Nebraska 

operated their combined cycle units at different levels, their goals would be different.

Commenters added that even non-emitting generation resources and energy demand in 2012 can 

have a significant impact on a state's interim and final goals. Commenters said that for instance, 

states with relatively high renewable generation in 2012 compared to their neighbors may not 

have as far to go to achieve the regional targets established by the EPA, whereas states with 

relatively low renewable generation in 2012 may have to ramp up generation from those 

resources much more quickly and extensively. Commenters said that likewise, states that 

achieved significant energy savings through existing demand side management programs in 2012 

may be better positioned to reach the EPA's one-size-fits-all energy savings rate goal in the 

future. Commenters said yet if EPA had selected a different baseline year in which these same 

states produced lower amounts of renewable electricity or energy efficiency, these states' goals 

would be different.

Commenters added that selecting 2012 as the base year also produces anomalies due to plant 

outages, etc. Commenters said that due to a fire that kept the largest coal fired unit in 

Minnesota (Sherburne County Unit 3) offline for the entire year, the EPA's decision to use 2012 

as the single baseline year in its analysis resulted in an unrealistically low baseline of coal-fired 

generation in Minnesota, which presumably will make compliance with the even lower targets 
451

set by the EPA that much more difficult. Commenters indicated that other anomalies likely exist 

in other states.

Commenters found the use of 2012 as the sole source of baseline data problematic in the overall 

operation of the building blocks. The commenters said EPA's suggestion that renewables and 

energy efficiency might displace fossil fuel-fired generation is not realistic. The commenters 

were also concerned that the four building blocks proposed by EPA do not work together as a 

concerted system and are, in fact, sometimes in tension with one another.

Commenters stated selection of 2012 as the base year is arbitrary. The commenters said given the 

dynamism of the electricity system and the national economy, no one year, or even several years 

combined, is representative of "current" conditions for the purpose of establishing a baseline that 

will then be used to measure future performance over the long-term. 

Commenters stated for instance, selecting 2006 as the baseline would be arbitrary because it 

would exclude the recession, but selecting 2007 or 2008 as the baseline would be arbitrary 

because it would be dominated by the effects of the recession. The commenters said even 

selecting the average of 2010, 2011, and 2012 as a baseline would be arbitrary because EPA has 

not demonstrated that those years are representative of the past or expected future conditions in 

North Dakota.

Commenters stated to ensure a more representative baseline period and provide some partial 

credit for early actions, EPA should set the baseline levels for computing the state goals based on 

a recent multi-year period prior to 2012. The commenters said following the approach used in 

other Clean Air Act regulatory programs, EPA should allow Montana to select a more 

representative baseline -and one that receives credit for all "early action efforts."

Comment 40: 2012 baseline values are not representative

Response 40: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year.

The following are summaries of the specific public comments under this comment:

Commenters stated to the extent that EPA determines that Idaho must meet a specific emission 

rate under the proposed rule, EPA must use baseline operating values and emission rates that 

appropriately characterize state generation and CO2 emissions levels in order to set rational, 

achievable, and non-arbitrary state performance goals. The commenters said EPA's 2012 

baseline emission rate for Idaho is not representative; specifically, EPA failed to appropriately 

characterize generation levels for Idaho Power's Langley Gulch NGCC plant. The commenters

said EPA's understatement of Langley Gulch's operations and Idaho's baseline emissions results 

in an artificially low and arbitrary performance goal for Idaho that is not reasonably achievable.

Comment 41: 2012 Not Representative for Baseline - state specific comments
452

Response 41: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year.

The following are summaries of the specific public comments under this comment:

Idaho

Commenters stated in its goal-setting analysis, EPA identifies two "existing" NGCC plants that 

were in operation in Idaho as of the end of 2012 - Idaho Power's Langley Gulch plant and the 

Rathdrum LLC plant. The commenters said EPA used the operating data from 2012 for those 

plants in determining baseline emissions and setting the Idaho state performance goals; however, 

EPA failed to take into account that Langley Gulch, a newly constructed $400 million unit, was 

not commissioned until June 29, 2012; thus, the 2012 operating data for Langley Gulch used by 

EPA in its baseline include only a partial year of operation and significantly understates the 

anticipated future capacity factors. The commenters said specifically, EPA took the capacity 

factor of approximately 37% for the six months the plant operated in 2012 and annualized it to 

derive an overall 2012 capacity factor of only 15.2%. The commenters said not only does EPA's 

calculation fail to adjust for the six months of non-operation prior to the plant's commissioning, 

but it also fails to recognize that the period after commissioning a new unit includes periods that 

do not represent normal operation conditions. 

Commenters stated by comparison, the plant operated in 2013 at an annual capacity factor of 

approximately 46% and projections for future use are much higher; EPA's reliance on the partial 

year data resulted in an underestimate of overall Idaho NGCC generation in the 2012 baseline 

and an inaccurate baseline capacity factor for both NGCC units of only 30%. 

Commenters stated EPA's underestimate of NGCC generation in the 2012 baseline substantially 

impacts Idaho's and Idaho Power's ability to achieve future compliance while meeting customer 

demand. The commenters said through EPA's goal-setting process, the underestimated NGCC 

baseline component translates directly into a lower state performance goal for Idaho. The 

commenters said the real-world compliance effect is to severely constrain the future (post-2020) 

use of Idaho's existing NGCC resources, including the brand new Langley Gulch plant. The 

commenters said given the disparity between the interim (244 lbs/MWh) and final (228 

lbs/MWh) goals for Idaho, which are based on an inaccurate 2012 baseline rate (339 lbs/MWh), 

and the emission rate for Langley Gulch (approximately 850 lbs/MWh), compliance can only be 

achieved, if at all, when existing NGCCs are limited to very low capacity factors associated with 

extreme peaking operation. The commenters said the limitations necessary to achieve 

compliance would thus severely impact Idaho utilities ability to meet load and maintain reserve 

requirements. The commenters said EPA's overly stringent performance goals could force Idaho 

Power to virtually idle the brand new $400 million Langley Gulch plant while building new 

NGCC capacity and/or using peaking units with substantially higher costs and carbon intensity 

that would be outside the scope of Section 111(d). The commenters said this outcome would 

have substantial impacts on customers, both in terms of the diminished utilization of Langley 

Gulch and the additional costs of building or obtaining comparable replacement generation. The 

commenters said in addition, any new NGCC capacity built would be subject to a higher 

emissions limit under the proposed Section 111(b) standards and could ultimately produce 
453

greater total carbon emissions. The commenters said this result demonstrates the arbitrary and 

capricious nature of EPA's state performance goals for Idaho in the proposed rule.

Iowa, Minnesota and South Dakota

Commenters stated to calculate the state goals, EPA started with the combined 2012 CO2 

emission rate for each state's covered fossil fuel-fired power plants. The commenters said using a 

single year as the starting point to calculate the rate-based goals for each compliance period fails 

to take into account data anomalies that can occur in any given year, and did in fact occur in

2012. For example, the commenters have identified data anomalies in three states in which 

MRES serves members: Iowa, Minnesota and South Dakota, as well as an anomaly in the 

operation of LRS. 

Commenters stated in Iowa, the City of Pella Municipal Power Plant is identified as an affected 

unit, but was retired in 2013 and did not emit any tons of CO2 in 2012. 

Commenters stated in Minnesota, Sherburne County Generating Station (Sherco) Unit 3 was 

offline for all of 2012 due to an unplanned outage, making the starting point of Minnesota's goal 

calculation atypical. The commenters said this should be corrected, as Minnesota will continue to 

rely on this generating unit (approximately 900 MW) for the duration of the planning period, and 

likely beyond; further, Hutchinson Plant #2 is erroneously categorized as an affected unit, even 

though it does not meet the criteria because its average annual operation has been below 219,000 

MWh threshold. The commenters said the Hutchinson unit should be removed from the list of 

affected units, and the goal recalculated for Minnesota. The commenters said a significant forced 

outage at Laramie River Station in 2012 makes the selection of that single year unrepresentative 

of generation at LRS. The commenters said the operating hours for 2012 for Unit 1 were less 

than 60% of normal because of a long forced outage caused by a fire; the 2012 data for LRS is 

not representative of normal source operations for LRS Unit 1. 

Commenters stated in South Dakota, Deer Creek Station, the only NGCC plant in South Dakota, 

was modeled by EPA as operating at 1% capacity factor during 2012; however, Deer Creek 

should have been considered "under construction" during 2012 because it did not go into 

commercial operation until late in 2012 and had only 190 total run hours for the year. The 

commenters said while firing of the unit may have begun in April, it was not commercially 

operated for the bulk of the year. The commenters said the 1% capacity factor is clearly 

unrepresentative, and South Dakota was the only state that had a less than 10% NGCC capacity 

factor applied in EPA's building block 2 calculation.

Comment 42: Tribal and Territorial Supplemental - 2012 not representative; earlier baseline 

should be used (e.g. 2005) to allow credit for early reductions. Emissions reductions that will 

occur due to compliance with other rules should be recognized by the EPA; Navajo Nation is not 

like a state

Response 42: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year.
454

The following are summaries of the specific public comments under this comment:

Responding to the Tribal and Territorial supplemental proposal, several commenters said they 

support using alternatives to the 2012 base year because 2012 was an unusually low year for coal 

generation. Several commenters said that according to the Proposed Rule, "Nationwide, by 2030, 

this rule would achieve CO2 emission reductions from the power sector of approximately 30 

percent from CO2 emission levels in 2005." Several commenters said that in fact, throughout the 

Proposed Rule comparisons are made to 2005 emissions, and therefore the EPA should look as 

far back as 2005 for an appropriate representative baseline year. Several commenters indicated 

they understand the EPA's desire to have consistency between jurisdictions in establishing base 

years, and suggested using the highest base year generating level at least looking back to 2005 

would be reasonable in establishing the base year for fossil generation. Commenters said that 

using averages for the base generation is not an appropriate approach since it does not account 

for changes that were beyond the EGU owner's control. Commenters urged the EPA to consult 

with the Navajo Nation prior to issuing a final rule in order to determine which year between 

2005 and 2012 is the most representative of operations at NGS and FCPP.

Several commenters said that EPA should use a historic baseline rather than the year 

2012. Several commenters said that high gas usage in 2012 due to the presence of unusually low 

gas prices, combined with continuing depressed economic conditions, resulted in a lower 

dispatch rate for NGS and FCPP in 2012. Several commenters said it is therefore encouraging 

that EPA is open to looking to other years to serve as a baseline in calculating 

emissions. Commenters said that the baseline rate should be set based on historic emissions that 

are representative of historic CO2 emissions at FCPP and NGS. Commenters recommended that 

the EPA allow a look-back to 2005 in order to establish a more representative baseline 

year. Commenters said the use of a baseline year back to 2005 is justified because it is the 

baseline year that the EPA is using for assessing the total carbon reductions, and 2005 has also 

been used as a baseline year with international actions. Several commenters stressed that the 

emissions rate that will be established for the Navajo Nation must be sufficiently high to be able 

to accommodate the options available to NOS under EPA's Best Available Retrofit Technology 

determination under the Regional Haze Rule. Approval of Air Quality Implementation Plans; 

Navajo Nation; Regional Haze Requirements for Navajo Generating Station, EPA-R09-OAR2013-009. Commenters indicated these options are identified in Appendix B of the Technical 

Work Group (TWG) agreement as "Alternative A" and "Alternative B."

Commenters stated that carbon emissions will decrease at the two power plants (FCPP and NGS) 

as a result of previous rules promulgated by the EPA, and the effect this will have on the Navajo 

Nation's coal-based economy should be recognized by the EPA. Commenters said that the 

Navajo Nation's economy is severely underdeveloped, and the Navajo people are currently 

experiencing an unemployment rate of a staggering 52%. Commenters said that many of the 

Navajo people live in extreme poverty, with 32% lacking electricity, 31 % lacking complete 

plumbing, 38% lacking water services, 28% lacking kitchen facilities, and 60% lacking a 

telephone. Commenters emphasized the Navajo people cannot absorb the detrimental economic 

effects that will come with unit shutdowns and decreased coal production at the two power plants 

located on their lands. Commenters added that the Navajo Nation government has also seen a 

significant decrease in its revenue, which weakens its sovereignty and forces it to become more 

dependent upon the federal government to provide essential services to the Navajo people.
455

Commenters stated that the power plants and the Navajo Nation have already taken measures 

that have yielded substantial reductions in CO2 emissions, and said some credit should be given 

to the Navajo Nation for those efforts. Commenters said that the Parties have already begun 

discussing possible allocations of CO2 credits, and indicated there is general agreement between 

the Parties that the owners of NGS and FCPP need sufficient credits to assure the ongoing 

operation of these power plants, along with the concept that the Navajo Nation would receive 

some sort of economic benefit if credits were used off tribal lands. Commenters said the Parties 

are also exploring opportunities for the Navajo Nation to retain excess credits that can be used 

for the benefit of the Navajo Nation. Commenters said that building flexibility into the Navajo 

Nation's emissions rate (i.e., giving the Navajo Nation a more favorable emissions rate) gives the 

Navajo Nation the opportunity to develop a carbon trading program and participate in a multijurisdictional program, and also gives the Navajo Nation an effective tool to assist it in 

determining its own economic future and lessens the need for reliance on the federal government 

for assistance.

Several commenters added that the EPA must also realize that the Navajo Nation is not like a 

state - among other things, states have diverse economies, while the Navajo Nation's economy is 

severely underdeveloped. Several commenters said that States have the ability to absorb 

occurrences like EGU shutdowns and job losses, but the Navajo Nation does not. Several 

commenters added that the Navajo people are facing economic hardships that are much more 

severe overall than those in the states, with many Navajos living in extreme poverty.

Commenters stated EPA's use of 2012 emissions data in applying Building Block One to 

Bonanza fails to recognize that 2012 was not a typical year. The commenters said the goal 

calculation for the Uintah-Ouray Reservation is based on a single data point from a single 

operating unit - the 2012 emissions at Bonanza unit 1. The commenters said EPA 's Technical 

Support Document utilized the 2012 Bonanza emissions rate of 2145 lbs./MWh and reduced it 

by 6% and 4%, respectively to obtain the 2,016 and 2,059 lbs./MWh alternative building block 

one goals for the reservation. The commenters said unlike goal computation for multi-source 

jurisdictions, where variation in operating levels from one unit to another tend to offset and 

diminish when averaged over multiple units within a jurisdiction, the selection of a single year's 

data for a single unit does not produce representative results for future operations. 

Commenters stated using 2012 for calculating possible HRI for Bonanza Unit 1 is particularly 

inappropriate and unrepresentative because 2012 was the third best year within a ten year 

operating period in terms of carbon dioxide emissions/per electric output. The commenters said 

there is no reason to assume that the unit could meet that rate in future years, much less achieve 

the additional reduced emissions EPA expects from building block one. The commenters said the 

use of 2012 year "single point" data as a baseline for Bonanza Unit 1 carbon dioxide emission 

rate presents an unrepresentative characterization of the unit's normal operations. Specifically: 

1) 2012 was a major planned outage which involved a major turbine generator overhaul. The 

commenters said as part of the 2012 major outage, the generator turbine at Bonanza underwent a 

major overhaul for the first time in years. The commenters said as part of the 2012 overhaul, 

seals were replaced, reducing leakage from years of wear, and the unit experienced temporary 

marked improvement in carbon dioxide emission rate which, as the data indicates, did not 
456

continue in following years due to normal wear-in of equipment and plant systems, as is typical 

following such an extensive overhaul outage

2) Unit heat rate, and therefore carbon dioxide emission rates, immediately following the 2012 

major unit outage were significantly better than average unit heat rate over multiple years. The 

commenters said the Bonanza Unit heat rate typically exhibits marked improvement in the 

months immediately following major maintenance outages. The commenters said such outages 

do not occur each year; and the 2012 outage was especially rigorous in that it involved a 

protracted overhaul of the turbine generator - an occurrence which occurs only once or twice in a 

decade. The commenters said as part of such an overhaul (especially involving turbine overhaul), 

many plant systems are attended to, with significant replacements taking place to address wear 

issues over the years' interval between such outages. The commenters said naturally occurring 

degradation through wear of seals and other parts once again commences following such outages 

thus giving the year in which such an outage occurs an unusually low (better) heat rate than is 

representative of the unit's actual performance and capability when measured over multiple 

years.

Comment 43: T&T Supplemental – The EPA should use a historic baseline rather than the year 

2012

Response 43: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment.

The following are summaries of the specific public comments under this comment:

Commenters stated, the Navajo Nation should be given a more flexible emissions rate than what 

is currently stated in the Proposed Supplemental Rule. The commenters asserted that the rate 

should be set based on historic emissions that are representative of historic CO2 emissions at 

FCPP and NGS; accordingly, instead of using 2012 as the baseline year, EPA should allow a 

longer look look-back period for purposes of establishing a more representative year. 

Commenters stated the power plants and the Navajo Nation have already taken measures that 

have yielded substantial reductions in CO2 emissions. The commenters said some credit should 

be given to the Navajo Nation for those efforts. The commenters said building flexibility into the 

Navajo Nation's emissions rate (i.e., giving the Navajo Nation a more favorable emissions rate) 

gives the Navajo Nation the opportunity to develop a carbon trading program and participate in a 

multi-jurisdictional program; it also gives the Navajo Nation an effective tool to assist it in 

determining its own economic future and lessens the need for reliance on the federal government 

for assistance. 

Comment 44: Due to variability in coal constituency and other factors, a single year baseline is 

inappropriate for Bonanza Unit 1 on Uintah-Ouray Reservation. Instead a 5-year average (2008 

- 2012) should be used as baseline
457

Response 44: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year.

The following are summaries of the specific public comments under this comment:

Commenters said the Bonanza Unit 1 on the Unitah-Ouray Reservation relied on one single 

source of coal for all of its primary fuel requirements in 2012 and most other years. Commenters

said that source, a dedicated Mine located 35 miles away from the Unit, has no coal sorting or 

blending facilities, is not located within practical distance of any coal delivery or coal market 

facilities, and must mine the coal ahead of its one long-wall mining system as that coal 

exists. Commenters said as a result, the fuel variability at Bonanza Unit 1 differs greatly from 

one year to the next and for portions of the year as the Mine retreats through various pockets of 

differentiated coal reserves. Commenters said the effect on carbon emission rates can be 

dramatic both because of the nature and speed with which coal delivered into the Unit can 

change, but also because of challenges in operating the Unit systems at optimal configuration to 

address sudden changes and swings in coal constituency. Commenters said 2012 did not reflect 

representative carbon emission rates over the extended period of operations at Bonanza Unit 1

Commenters said the Supplemental Proposal uses a historical baseline emissions rate of 2,145 

lb/MWh for the Bonanza unit - as the only generating source within the Uintah-Ouray (UTE) 

Reservation. Commenters said based on the foregoing historical figures, and given the factors 

cited above for not relying on one single operating year data, Deseret urges that the appropriate 

representative baseline carbon dioxide emission rate should be adjusted for Bonanza Unit to use 

the 5 year average period (2008-2012) which increases the baseline emission rate to 2,173 

lb/MWh.

Commenters stated operations of Bonanza during 2012 do not reflect normal or representative 

operations of the Unit for purposes of setting standards intended to be attained over long periods. 

The commenters said the Interim Goal compliance period under the Supplemental Proposal 

encompasses the years 2020 -2029, a multi-year period during which operations at Bonanza are 

anticipated to vary depending on a number of factors. The commenters said factors that existed 

during 2012 which render that year unsatisfactory as a representative year to use for converting 

to a mass based standard include: 

2012 was a year of an unusually extended outage planned for repair, replacement and inspection 

of the turbine generator at Bonanza. The commenters said 2012 was a major maintenance outage 

year for Bonanza Unit 1. The commenters said such planned maintenance outages are not 

scheduled every calendar year at Bonanza Unit 1. The commenters said the unit is designed and 

intended to run for many consecutive months (more than one calendar year) between major 

planned outages; moreover, to preserve a warranty from its equipment manufacturer, Deseret 

committed to a very lengthy planned maintenance outage to occur on or before the close of the 

year 2012 in order to facilitate an internal inspection of the generator turbine assembly - an event 

that was not scheduled for some 12 years going into 2012, and would not be expected to be 

repeated for another 6 to 10 years thereafter.

Deseret adjusted the dispatch order of its generating resources in 2012. The commenters said 

although Deseret owns and operates one generating facility, Bonanza Unit 1, it also has a 
458

minority interest in the Hunter 2 unit operated by PacifiCorp. The commenters said in managing 

its load and resources, Deseret has in limited circumstances re-designated the order of dispatch 

between the Bonanza unit and its entitlement to output from Hunter 2 to reflect specific, isolated 

events or circumstances. The commenters said these "re-dispatch" decisions are a-typical, 

infrequent, and usually extend for a few months' time. The commenters said during 2012 Deseret 

re-ordered the dispatch of its generating resources such that, for the entire year 2012, Bonanza 

was dispatched down, therefore generating less, and the Hunter 2 unit dispatched to a higher 

output level than during typical operating conditions. The commenters said the re-dispatch 

decision in 2012 reversed the usual order in which these two generating resources are dispatched. 

The commenters said the cause for the 2012 re-dispatch decision revolved around challenges that 

Deseret anticipated in potential short-term disruption in coal deliveries to Bonanza. The 

commenters said in order to preserve and stockpile fuel stock at Bonanza against the risk of short 

term supply disruption, Deseret took the unusual step of re-ordering the dispatch points between 

its resources; this results in skewing the 2012 operating level and results. 

Commenters said operating data for Bonanza Unit 1 demonstrate that the Equivalent Availability 

Factor for the unit was 88.18% during 2012; this compares with EAF for 2011 (the preceding 

year) of 93.51%, and 2013 (the subsequent year) of 94.44%; likewise, Net Capacity Factor in 

2012 was only 76.91%, which is much lower than the 87.59% the following year and 82.40% the 

previous year; 2012 was clearly not representative.

Commenters stated EPA has recognized and invited input from affected jurisdictions which 

would be unusually and unfairly disadvantaged by choosing 2012 as a baseline period due to 

unique circumstances. The commenters said the Uintah-Ouray Reservation is just such a 

jurisdiction. 

Commenters stated unlike standards set for multi-source jurisdictions, the Uintah-Ouray 

emission source is one single unit - Bonanza Unit 1; it is therefore not like states which 

aggregate and therefore "average" among several or multiple emitting units events or 

occurrences that are not annual or more frequent in nature - in most situations, the frequency 

and/or duration of planned outages, for one example, would tend to "average out" among 

multiple units, precisely because most operators avoid scheduling prolonged outages 

simultaneously with outages scheduled for multiple units under that operator's control. The 

commenters said Deseret and the Bonanza Unit 1 has no such offsetting opportunity; it is 

therefore inappropriate to base the historic emission rate baseline on any single year.

Commenters urged a multiple year period as a baseline determination. The commenters said 

overall, operating levels at Bonanza Unit 1 were the very lowest during 2012 of any of the 10 

years beginning 2004 through 2013; 2012 operating levels and emissions results do not fairly 

represent a valid baseline from which to derive a baseline for computing goals under the 

Supplemental Proposal. 

Comment 45: Territories. The EPA should allow Puerto Rico to use 2014 as the baseline period 

for AESPR, as the current calendar year is more representative of CO2 emissions from AESPR's 
459

Facility. Alternatively PR should calculate baseline using any two consecutive years out of last 5 

years

Response 45: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year.

The following are summaries of the specific public comments under this comment:

Commenters said in its proposal, the EPA has used 2012 as the "baseline" year from which 

reductions in CO2 emissions would be measured in Puerto Rico, the same baseline year EPA has 

proposed for facilities in the rest of the United States. Commenters again urged the EPA to 

reconsider its one-size-fits-all approach because there are "specific circumstances" which justify 

using a "different data year for" Puerto Rico "as opposed to using the same data year, or 

combination of years," as the EPA has proposed across the 50 states. (79 Fed. Reg. 64,543, 

64,553 (Oct. 30, 2014) (seeking comment on use of 2012 as a single baseline year in EPA's 

proposal for the 50 states)). Commenters said rather, if the EPA proceeds with this approach to 

determine the BSER when setting a CO2 emissions goal for Puerto Rico, the EPA should allow 

Puerto Rico to establish a baseline for each of its sources that is representative of expected 

operations for each source. Commenters said for AES Puerto Rico, that representative baseline is 

the current calendar year, 2014.

Commenters said in general, establishing a baseline that is representative of current facility 

operations simply reflects common sense. Commenters said a single historic year may be an 

anomaly that is not representative of current or historic operations. Commenters said there may 

have been an extended outage due to a major maintenance - or an unusually high forced outage 

rate - or simply a downturn in dispatched generation for any of a number of reasons. 

Commenters said is arbitrary for the agency to set a baseline - and derive reductions from that 

baseline - without first considering the specific circumstances in a state or territory or at a 

particular facility within the state or territory. Commenters said otherwise, a source could be 

forced to make additional reductions from an already atypical, reduced operating level.

Commenters said to provide for a representative baseline year is especially critical here, because 

using a 2012 baseline would require AESPR to dramatically reduce its operations by more than 

25% below 2014 operating levels in 2020. Commenters said yet, 2012 would not be 

representative of either AESPR's current or historic operations - or the operating level expected 

going forward.

Commenters said on the contrary, calendar year 2014 has been the culmination of sustained 

efforts by AESPR management to maintain their units more effectively in order to reduce the 

equivalent forced outage rate (EFOR) at its facility and achieve the equivalent availability factor 

(EAF) of 90% expected under the PPA. The commenters said the data in this regard are very 

clear: In 2012 the equivalent forced outage rate (EFOR) for the AESPR plant was 9.43%. 

Commenters said by contrast, the EFOR for AESPR in 2014 was 1.69%, in line with the 

expectation for properly maintained CFB units. Commenters said similarly, in 2012 the EAF was 

82.15% - while the EAF in 2014 to date has been 91.17%. Commenters said with the increased 

availability and reliability, AESPR has produced substantially more electricity for PREPA in 

2014 than in 2012 - the net capacity factor (NCF) for AESPR in 2012 was only 80.94%, but has 
460

been 91.68% during 2014. Commenters said moreover, PREPA has forecast that it expects to 

continue to purchase electricity from AESPR in the range of the 2014 production levels in 

coming years.

Commenters said in the alternative, the EPA should allow Puerto Rico to establish a baseline for 

BSER by averaging any two consecutive years of operations in the past five years as 

representative of normal operations. Commenters said setting a baseline based on a two-year 

average would follow the same approach the EPA itself has used when setting a baseline under 

the New Source Review requirements of the federal Clean Air Act. 57 Fed. Reg. 32,314, 32,325 

(July 21, 1992) (discussing presumption that any two years in the five years preceding a physical 

change would be considered representative of normal operations for the source); see 40 C.F.R. 

section 52.21(b)(48)(i) (regulation establishing the presumption of two years as the baseline).

Comment 46: As is proposed rule won't accomplish reductions needed. For meaningful 

comparison the Proposed Rule's reduction targets should be articulated and evaluated in 

comparison to emissions in 1990, the internationally-accepted year, not 2005.

Response 46: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year.

The following are summaries of the specific public comments under this comment:

Several commenters said the emissions reductions that would be achieved by the Proposed Rule 

will not achieve the emissions reductions needed to avoid the worst of climate change. Several 

commenters said that to be able to make meaningful comparisons, the proposed goals should be 

compared to a baseline of 1990, the internationally-accepted baseline year, not 2005.

Commenters said the EPA expresses the Proposed Rule's targets as a 30% decrease in existing 

plant emissions by 2030 as compared with baseline emission levels in 2005. Commenters said 

because emissions in 2005 were, however, higher than those in 2012 (the last year for which 

EPA has published comprehensive inventory data), the Proposed Rule will, by 2030, result in 

only about a 17% reduction from 2012 power sector emission levels. Commenters said the 

Proposed Rule also omits any comparison with emission levels in1990, the internationally 

agreed-upon emission baseline year. Commenters said given the proper 1990 baseline, this 

proposal amounts to a reduction of less than 4 percent.

Commenters said a group of leading climate scientists has calculated that developed countries 

like the United States must reduce their greenhouse gas emissions by 35-65% below 1990 levels 

by 2030 in order to preserve a likely chance of limiting global temperature rise to 2 degrees 

Celsius this century. Commenters said when measured against 1990 emissions, the Proposed 

Rule reduces power sector emissions by only 7.7% by 2030. Commenters said on an economywide basis, moreover, current United States climate policy, including the Proposed Rule, will 

result in emissions 5% above 1990 levels by 2030. Commenters said the Proposed Rule thus 

clearly fails to accomplish reductions urgently required from the nation's largest source of 

greenhouse gas emissions. Commenters said moreover, because the Proposed Rule seeks only to 

create a carbon intensity standard rather than an emissions cap, it is far from certain whether 
461

even the 30% target of emissions reductions from 2005 levels will in fact be 

reached. Commenters said in light of these grim facts, there is simply no justification for the 

Proposed Rule's low targets and slow implementation schedule.

Commenters stated the proposed Clean Power Plan improperly calls for reductions in CO2 from 

2005 levels; the problem is that CO2 levels in 2005 were the highest ever. The commenters said 

in fact, current levels are 15% less than in 2005. The commenters said the proposed rule should 

at least use current levels, or more appropriately, 1990 levels.

Commenters stated using 2005 emission levels as a baseline is a mistake for multiple reasons; 

first, the 2005 baseline will take credit for reductions that have already occurred as emissions 

have declined since their height in 200; second, the international community has agreed to use 

1990 as the appropriate baseline and we should follow suit. The commenters said scientists base 

their required reduction amounts on 1990 levels so it only makes sense to use these levels as the 

baseline for reductions.

Commenters said the base year should be changed from 2005 to 1990, because having 2005 as a 

baseline takes credit for reductions that have already occurred.

Commenters stated progress in reducing greenhouse gases should be based on emissions in 1990, 

the Kyoto Protocol baseline, not emissions in 2012. The commenters said the international 

community has used 1990 as a baseline ever since the Kyoto Protocol.

Comment 47: The EPA should use 2012 as base year for all calculations

Response 47: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year.

The following are summaries of the specific public comments under this comment:

Commenters said that there is considerable confusion of what the goals are, and recommended 

that 2012 should be used as the base year for all calculations. 

Commenters stated that the 30 percent reduction goal is from a 2005 base year. Commenters said 

the emission rate was 2,434 million metric tons in 2005, and, in the most optimistic case, will be 

reduced to 1,701 million tons by 2030. Commenters added that by 2012, EGU's had already 

reduced emissions to 2,023 metric tons, or 17% by switching from coal to natural gas for lower 

cost, and by closing older, smaller coal fired EGU's that were not worth upgrading to meet other 

EPA air pollution reduction standards.

Commenters stated that the actual state specific goals are calculated from a 2012 base year 

compared to a base case of future emissions. Commenters said the base case assumes no carbon 

reduction goal is set and calculates CO2 emissions will grow to 2,256 metric tons by 2030. So, 

Commenters said, compared to the base case, CO2 emissions will only fall 25% (from 2,256 tons 
462

to 1701 tons), according to the EPA. Commenters said therefore, the EPA should drop the 

reference to 30% reduction by 2030 from 2005, and use a 25% reduction by 2030 from 2012 to 

end this confusion.

Comment 48: 2012 should be used for baseline

Response 48: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year.

The following are summaries of the specific public comments under this comment:

Commenters stated EPA has offered states the opportunity to request an alternative base year in 

calculating the goal; however, for Oklahoma, data for the years 2010 and 2011 do not appear to 

provide any significant advantage over the year 2012. Therefore, the commenters requested that 

the year 2012 be retained as the base year for the state.

Commenters supported the EPA's proposal to use 2012 as the base year for compliance 

calculations. The commenters said while others have argued that use of an earlier base year is 

more appropriate, the commenters asserted that they are requesting a change because of a 

misunderstanding of rate-based targets. The commenters said if properly implemented, a revised 

base year would have no outcome on the overall plan. The commenters said under the proposed 

rate-based methodology, compliance depends on the average emission rate of the entire fossilfuel generation sector; consequently, all historic changes that have resulted in lower carbon 

intensity from that sector are already considered in the estimation of what reduction level is 

achievable and will contribute to meeting the goal. The commenters said while an earlier base 

year would not impact the fossil fuel sector, it could increase the amount of credit available from 

energy efficiency and renewable energy sources without increasing the associated costs. The 

commenters said such a change would necessarily require EPA to revise its analysis to determine 

the Best System of Emissions Reductions under 7411(a)(1); this would result in a corresponding 

need for a more stringent standard of performance. The commenters did not investigate the 

impacts of changing the base year on the conversion from rate-based to mass-based targets. If 

EPA were to alter the baseline, the commenters expected the alteration would include any 

necessary changes to methodology to ensure mass-based goals remain as close as possible to the 

final rate-based goals.

Commenters stated according to EPA, the application of EPA's building block methodology to 

Minnesota's existing energy mix results in a need to reduce its carbon emissions rate (CO2 

lbs/MegaWatt hour ("MWh")) from a 2012 emissions rate of 1,470 lbs/MWh to a 2030 

emissions rate of 873 lbs/MWh. The commenters said using EPA's figures would place 

Minnesota among those states with the largest emissions reduction goals. The commenters said 

despite a seemingly stringent target, the analysis of Minnesota's current emissions rate and its 

projected emissions rate under a business-as-usual scenario discussed below demonstrates that 

Minnesota is well positioned to meet the Clean Power Plan's goal. The commenters said this 

analysis shows that, despite what EPA will likely hear from other Minnesota stakeholders about 
463

"fixing" the perceived disparity between Minnesota and other states, there is no need to fix any 

disparity by weakening Minnesota's target.

Commenters calculated how close Minnesota would get to reaching its Clean Power Plan target 

by merely complying with existing state laws; Minnesota's robust RES and solar energy standard 

already require an increasing percentage of renewable energy from its utilities through 2025. The 

commenters said Minnesota also has an annual energy-savings goal equivalent to 1.5% of the 

average of the three prior year's weather-normalized gross annual retail sales. The commenters

said assuming that the utilities comply with Minnesota's mandatory RES and EPA's energy 

efficiency savings methodology, Minnesota's 2030 emissions rate would be 940 lbs/MWh. The 

commenters said this means Minnesota would only need a 7% reduction in emissions to achieve 

Clean Power Plan compliance after achieving the state's RES, energy efficiency goals, and solar 

energy standard. 

Comment 49: 2012 should be used as base year; regulation should be strengthened

Response 49: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year.

The following are summaries of the specific public comments under this comment:

Several commenters supported the use of 2012 as the base year for the Clean Power Plan 

building block methodology. Commenters stated that emissions of CO2 were lower in 2012 than 

in any year after 2005, and indicated that use of any other calendar year or average of multiple 

years for the baseline would weaken the national stringency of the Clean Power Plan proposal, 

all else remaining equal. Commenters confirmed the EPA's conclusion that there was not a 

significant difference in the state emission targets with a 2012 baseline versus a baseline of 

2010-2012, and indicated they are indifferent as to whether a 2012 single year baseline or a 3-

year average 2010-2012 baseline is used in the determination of the state emission targets.

Commenters expressed support for the Clean Power Plan overall, but indicated that the draft 

proposal for a 30% reduction from 2005 power plant emissions levels is incommensurate with 

the pace of pollution reductions that scientists have found necessary to avoid catastrophic climate 

change. Commenters said that this is due partly to the choice of a 2005 baseline, representing 

America's peak pollution. Commenters said that some utilities are already moving away from 

coal to natural gas, and the EPA's proposed rule would curtail industry behavior only slightly 

from a baseline, "no-action" scenarios assuming low natural gas prices, and is not adequate to the

Clean Air Act.

Commenters encouraged the EPA to hold to the 2012 baseline, not only because that's when data 

is available that EPA started gathering on emissions from power plants but because ultimately 

the bar is too low at that 30 percent. The commenters said by the time we go forward, the process 

is proceeding and we've been a dozen years down this road of knowing we're going to have to 

limit emissions on coal fired power plants, and the private sector has a couple years to get used 

to the idea that that's going to happen. The commenters said they have 20 years, 2020 to 2029 to 

implement it. The commenters said that they can accomplish this with little effect; and by the 
464

time we get to 2020, by the time we get to 2029 we will know very clearly that the bar has been 

set too low.

Comment 50: The EPA should reevaluate baseline to strengthen targets; early reductions result 

in underestimate what's achievable

Response 50: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year.

The following are summaries of the specific public comments under this comment:

Commenters stated EPA must set stronger and faster pollution reduction targets; the Clean 

Power Plan's goals for states underestimate our capacity to expand clean energy and energy 

efficiency. The commenters said these goals are, in many cases, lower than pre-existing targets 

of state renewable portfolios and efficiency standards, or equal to what states have already 

achieved, and only minimally higher than U.S. Energy Information Administration (EIA) 

projections under a "business as usual" scenario (UCS 2014, C2ES 2014). 

Commenters stated they cannot wait until 2030 to make sure states are meeting the goals in the 

Clean Energy Plan; the EPA must re-evaluate the baseline it used to set the plan's state pollution 

reduction goals. The commenters said the current baseline fails to account for progress that is 

already occurring and therefore significantly underestimates what is readily achievable. The 

commenters said the plan gives states 15 years to achieve reductions, even in cases where states 

are already halfway or most of the way there; states can and are already doing better. 

Commenters stated the plan needs binding milestones to keep us on track for achieving the 

pollution reductions that are critical by 2030. The commenters said the EPA must have a stronger 

oversight role to ensure that every state does its fair share to reduce carbon pollution. The 

commenters said past experience tells us that polluters exert outsized influence in many state 

capitals, and they routinely use that influence to try to evade accountability for their pollution. 

The commenters said they should not be allowed to push the cost of dealing with their pollution 

onto the public nor operate as though they are above the law. The commenters said even the best 

environmental standards can become largely meaningless if the public and EPA are not able to 

monitor compliance and enforce those standards. 

Commenters stated EPA should guard against the possibility that changes in baseline years or 

credit for early action will simply defer the burden of adjustment to no ultimate purpose. The 

commenters recommended that any adjustments to baseline year or credit for early action should 

not increase the actual national-average carbon dioxide intensity of power generation in the later 

years of the period covered by the rule, beginning in 2025. The commenters said since the 

endangerment is ultimately a function of cumulative carbon dioxide emissions rather than annual 

emissions, the commenters recommended that any adjustment to baseline years or credit for early 

action should be tailored such that the cumulative carbon dioxide emissions from 2016 through 

2024 are no larger than would have been allowed absent the adjustments in baseline years or 

consideration of credit for early action. In order to provide maximum flexibility to states while 

meeting this objective, the commenters recommended that the enforceable standard for the 
465

period prior to 2025 be formulated as a limit for each state on the average carbon dioxide 

emissions intensity during the entire period from 2016 through 2024, leaving it to the state 

implementation plans to determine each state's specific glide path. The commenters said if the 

reference glide path used by EPA to determine this allowance is adopted, then credit for early 

action will automatically accrue to states under this formulation. 

Commenters stated the real concern about the Clean Power Plan is that it doesn't do enough; 

rather than spurring immediate and significant action that is achievable and needed, the plan 

focuses too much, in our opinion, on endorsing advances that are already occurring. The 

commenters said EPA must reevaluate the baseline it uses to set the state pollution reduction 

goals; as such, baseline fails to account for progress that is already occurring, and thereby leads 

to results that underestimate what is readily achievable. The commenters said for example, EPA 

proposal assumes nearly 49 gigawatts of coal plant retirements throughout the country by 2020, 

but nearly 68 gigawatts of coal plants have already retired or announced their intent to do so. The 

commenters said in Pennsylvania, the 2020 coal plan emissions baseline EPA uses includes 11 

coal plants that have already retired or announced their intent to retire in the next few years. The 

commenters said if those emissions are removed from the 11 plants from the 2012 baseline, that 

baseline is already below the level of carbon pollution EPA assumed Pennsylvania could achieve 

through the redispatching of coal plants. The commenters said EPA's carbon proposal would 

have little further direct impact on generation of electricity from the most carbon intensive form

of power, which is coal.

Comment 51: 2012 is generally an appropriate base year, but for units whose operation in 2012 

was anomalous, states should select an alternative baseline; due to unplanned outage in 2012 of 

largest coal-fired plant in Minnesota (Sherco 3), the targets developed by the EPA are fatally 

flawed and must be revised

Response 51: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year and treatment of the Sherco facility.

The following are summaries of the specific public comments under this comment:

2012 generally appropriate baseline but alternate should be allowed for anomalous

units. Commenters indicated that the NODA solicits input regarding whether a different single 

data year or average of a combination of years should be used to calculate a baseline for use in 

state goal calculations. Commenters asserted that 2012 is generally an appropriate base year, and 

should remain the presumptive base year for most units in most states. However, commenters

stated that for units whose operation in 2012 was anomalous, states should select an appropriate 

three-year average for use in baseline calculations. Commenters said that providing the 

opportunity for states to select years would better ensure the use of data more reflective of the 

unique circumstances of these particular units. Commenters stated that requiring such data to be 

in the form of a three-year average would lessen the likelihood that a state could simply select 

the highest-emitting year for a particular unit. Commenters noted that this approach could 

address, for Minnesota the concern with Sherco Unit 3 identified in their September 16, 2014 

letter, and may address concerns for other units whose 2012 operation was also anomalous. 
466

Commenters suggested that the EPA should issue an additional NODA or supplementary 

proposal providing this option, and allowing states the opportunity to submit appropriate threeyear average baseline information for anomalous units. Commenters said that the final goals 

would incorporate data for these anomalous units.

2012 Baseline Erroneously and Significantly Underestimates Current Coal-Fired Generation and 

Emission levels in MN. Commenters said the fact that the Proposed Rule's baseline assumptions 

do not include annual emissions from Sherco 3 highlights why reliance on a baseline year of 

2012, or any single year, for that matter, is not appropriate for determining historical emission 

levels. Commenters said indeed, using a single year as a baseline disregards the variability of 

electric power resulting from anomalous weather years, unanticipated outages, fluctuations in 

fuel prices, and other factors. 

Commenters said that as an alternative to the 2012 baseline, SMMPA supports the Minnesota 

Pollution Control Agency's initial proposal to use an average of generation data from 2009 to 

2011. Commenters said that any baseline period that includes 2012 will significantly understate 

coal-fired generation and emissions in Minnesota. Commenters said they agree that using data 

from multiple years is a rational approach to determining historical emissions rates, as it would 

yield generation data that more accurately takes into account the many factors that cause 

generation dispatch to fluctuate year to year. Commenters emphasized that the EPA should 

recalculate the baseline using an average of generation and emissions levels during a single, 

representative year or over the course of multiple years (not including 2012) so that its starting 

assumptions for the Proposed Rule more accurately reflect historical emissions levels. 

Commenters said if a single alternative baseline year is to be used, a year such as 2009 or 2010, 

during which Sherco 3 was online for the entire year, would be appropriate. Commenters said at 

the very least, the EPA must recalculate Minnesota's emission reduction targets to account for 

Sherco 3's generation capacity and emissions levels. 

Comment 52: 2012 baseline and nuclear uprates

Response 52: The final goals do not have nuclear assumed in the rates, please see section V.A 

and V.E. of the final rule preamble of the CPP for more information about nuclear generation 

and Building Block 3, respectively.

The following are summaries of the specific public comments under this comment:

Commenters asked whether the EPA has considered whether its use of nuclear uprates completed 

in 2012 or post-2012 in calculating the at-risk nuclear generation goal is consistent with its use of 

a 2012 baseline. Commenters further asked would the EPA consider using a different baseline 

date that allows recently completed nuclear uprates to be excluded from the goal-setting 

calculation but be included in the compliance calculation.

Comment 53: Compliance period must be clarified; two EE-related issues must be clarified
467

Response 53: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the compliance period. See section V.A of the final rule preamble for 

discussion of demand-side energy efficiency. See section VIII of the final rule preamble for 

discussion of state plans.

The following are summaries of the specific public comments under this comment:

Commenters said that the EPA needs to clarify the compliance period in order to ensure there is 

no disincentive to make investments in clean energy and energy efficiency before the start of the 

interim compliance period in 2020. Commenters said the EPA should allow credit for new 

carbon reduction actions (i.e., from increasing existing policies, new policies and/or adding new 

qualifying facilities) taken after a final state plan is submitted to EPA, and before the beginning 

of the plan performance period (2020), to count toward achievement of the state's emissions 

goals. Commenters indicated this would help ensure that states have an incentive to engage in 

carbon reduction measures prior to that period and get a jump on being better positioned to 

achieve their final compliance goals.

Commenters stated that there are two areas related to energy efficiency that also need a more 

clear explanation. Commenters said first, the EPA assumed in its drafting of the plan that energy 

efficiency measures are sustained on an average of ten years. Commenters encouraged the EPA 

to permit credit for the full term of the contract or for a longer period of time if so decided by a 

state. Commenters said that secondly, under the proposed rule actions taken after the rule's 

proposal (June 2, 2014) would be creditable in 2020. Commenters indicated this could be 

interpreted to allow credit for buildings that have been built under outdated building codes and 

standards; to remedy this they suggest the EPA could use a baseline building code standard using 

such standards that are in place in 2014.

Commenters stated concurs that "EPA needs to clarify the compliance period in order to ensure 

there is no disincentive to make investments in clean energy and energy efficiency before the 

start of the interim compliance period in 2020. States should be given flexibility with respect to 

meeting targets over a multi-year period, but the compliance schedule should ensure emission 

reductions are secured as soon as possible and that state plans include provisions to correct 

shortfalls." 

Comment 54: Snapshot data from 2012 does not adequately demonstrate that states can achieve 

incremental EE savings of 1.5 percent.

Response 54: See section V.A of the final rule preamble for discussion of demand-side energy 

efficiency. See section VI of the final rule preamble of discussion of subcategory-specific 

emission performance rates. See section VII of the final rule preamble for discussion of state 

goals. See section VIII of the final rule preamble for discussion of state plans.

The following are summaries of the specific public comments under this comment:

Commenters stated looking at reported 2012 incremental EE savings snapshot data, EPA found 

that three states, Arizona, Maine and Vermont, had achieved an annual incremental retail sales 
468

savings rate of 1.5 percent. The commenters said EPA then concludes that this level of reduction 

is the "best practices" level and an annual incremental savings that all states can achieve. The 

commenters said EPA's reliance on this 2012 snapshot data is misplaced for two reasons: first, 

EPA takes the 2012 reported data out of context by not discussing how or how long it took the 

three "best practices" states to achieve this savings rate; second, if this data were to demonstrate 

anything, it is that the savings rate that arguably could be achieved by all states is closer to 0.5 

percent, not 1.5 percent, as this is the median savings level achieved in 2012.

Comment 55: Under BB3, when setting the solar portion of RE target a baseline year of 2013 or 

later should be used

Response 55: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year.

The following are summaries of the specific public comments under this comment:

Commenters did not support using a baseline year below 2012, and strongly suggests the use of a 

baseline year of 2013 or higher in setting the solar portion of the renewable state target under 

building block 3. Commenters noted that the solar industry has grown dramatically in recent 

years and the amount of solar capacity online in the U.S. has doubled since the end of 2012. 

Commenters said that therefore, the use of a lower baseline year would not accurately represent 

the current or future potential contributions from solar to a low carbon energy supply. 

Commenters said that if the EPA decides to use an average of multiple years of generation to set 

the baseline, it will be critical for the EPA to adjust the calculation to reflect the generating fleet 

as it exists today (i.e. end of September 2014). Commenters suggested that to do this, the EPA 

can look at the generation mix relative to the existing online generation capacity of each 

technology in each averaged year. Commenters said that put another way, the EPA could look at 

the average capacity factor of each technology in each year and then apply that to generation 

fleet as it exists today. Commenters said that to clarify further, the EPA could estimate baseline 

solar generation by either multiplying the historical average capacity factor for solar in each state 

by the current existing capacity in each state, or by modeling the expected performance of 

current existing capacity in each state. Commenters said that modeling for wind and solar is a 

sensible approach as wind and solar are at the top of merit order dispatch, and thus their modeled 

performance is very likely to reflect their average lifetime performance.

Commenters stressed that correctly assessing the baseline and solar energy's contribution to the 

baseline for the Clean Power Plan is critical, as the generation fleet has changed in meaningful 

ways since 2012 and especially since 2010. Commenters said that using a simple average of 

absolute generation levels of each technology would grossly underrepresent solar generation as it 

exists today because there is a significantly larger amount of solar capacity online today.
469

Comment 56: Not accounting for current and projected RE market expansion between 2012 and 

2017 distorts the methods proposed by the EPA, and ultimately undermines the true potential of 

solar and other renewable technologies.

Response 56: See section V.E. of the final rule preamble of the CPP for the EPA’s response to 

this comment and more information about Building Block 3 and the CO2 Emission Performance 

Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenters said the EPA's Proposed and Alternative Approaches use 2012 as the base year for 

setting renewable penetration levels for when the rule goes into effect - 2017. Commenters said 

the combination of continued performance improvements and price declines, coupled with an 

expiring federal Production Tax Credit (PTC), and an approaching roll-back sunset date for the 

federal Investment Tax Credit (ITC) have fueled major capacity additions, making reference to 

2012 levels obsolete. Commenters said that not accounting for current and projected market 

expansion between 2012 and 2017 distorts the methods proposed by the EPA, and ultimately 

undermines the true potential of solar and other renewable technologies. 

Commenters said for example, EIA projects that wind power capacity will increase by 8.8% in 

2014, and 16.2% in 2015. Commenters said solar capacity at a national level increased by nearly 

three times between mid-2012 and mid-2014.Commenters said the southeast has contributed to 

these gains, doubling its solar capacity between 2012 and 2013.

Commenters said distributed generation (Residential and Non-Residential) capacity is a major 

component of solar development, accounting for about 40% of all solar photovoltaic (PV) 

capacity installed (over 1,600 MW-ac) in 2013 and nearly half the cumulative solar PV capacity 

installed to date in the U.S. Commenters said both the benchmark rate approach and IPM model 

approach fail to capture existing and potential distributed generation, which is a major omission 

from the solar technology sector. Commenters said in addition to being a power source that does 

not have emissions, distributed generation has other unique "value" benefits for customers and 

the grid that should not be overlooked.

Comment 57: Renewable generation floor should not be set equal to amount of the state's actual 

2012 renewable energy generation for states that exceed regional average

Response 57: See section V.E. of the final rule preamble of the CPP for the EPA’s response to 

this comment and more information about Building Block 3 and the CO2 Emission Performance 

Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenters said the EPA seeks comment on whether the final rules should set a renewable 

generation floor equal to the amount of the state's actual 2012 renewable energy generation for 

states such as Iowa that exceed the regional average. Commenters opposed this alternative 

baseline because it would penalize and fail to give appropriate credit to Iowa utilities and 
470

ratepayer s for the significant costs of associated with their early actions to implement renewable 

energy. 

Comment 58: Summarizes comments regarding applying credits from shutting down coal/oil 

EGU's and/or switching to NGCC.

Response 58: See sections VI and VII of the final rule preamble of the CPP for discussion of the 

subcategory-specific emission performance rates and state goals, respectively. See section VIII 

for discussion of state plans. 

The following are summaries of the specific public comments under this comment:

Retirements from 2012 should be credited. Several commenters contended that shutdowns or 

retirements of existing EGUs as of the date of state plan submission should be included in target 

rates for each state. Commenters stated that nationally, at least 330 coal-fired EGUs have retired 

or converted to biomass since 2010. Commenters added that the proposed state targets do not 

reflect any of the approximately 60 GW of projected coal-fired power plant retirements projected 

to occur from 2012 through 2016. The commenters stated that EPA's BSER must accurately 

reflect expected control options which includes affected source retirements since 2012. 

Commenters contended that emission reductions resulting from coal plant retirements occurring 

after 2012, but prior to 2020 should count for purposes of calculating whether states have met 

their CO2 emission reduction goals from 2020 through 2030. The commenters stated that such 

coal plant retirements may occur prior to 2020 (the first year in which the EPA proposed an 

interim CO2 emission reduction goal) does not mean that those real CO2 emission reductions 

should be considered irrelevant for purposes of assessing whether a state has met its CO, 

emission reduction goals. 

Disparity in goals depending on NGCC capacity. Commenters raised concerns about the 

disparity in state goals between those states with little or no NGCC generating capacity and those 

with significant amounts of NGCC capacity. Commenters contended that EPAs 70 percent 

natural gas re-dispatch assumption in building block 2 disadvantages states that have taken steps 

prior to 2012 to replace aging coal-fired facilities with NGCC facilities. Commenters contended 

that EPA should exempt from the Block 2 redispatch calculation of all NGCC capacity 

constructed since 2005 to replace retired coal-fired capacity. The commenters stated this 

exemption should apply to both existing NGCC capacity and NGCC capacity currently under 

construction. Other commenters stated that because EPA does not account for coal-fired 

megawatts that already have been displaced by RE and NGCC, both a lower baseline emission 

rate and high levels of RE in the baseline year cause a state's ultimate performance goal to be 

more stringent. 

Re-dispatch goals have more significant affect for States with significant RE. Commenters

explained that EPA created a 2012 baseline emission rate for each state that reflects the level of 

generation from all in-state affected fossil-based units. As a result, the commenters stated that the 

2012 baseline emission rate for states that had retired coal-based units and built new NGCC units 

already reflects these reductions, resulting in a more stringent goal. The commenters stated that 
471

the goal calculation approach relies on the amount of electricity produced by renewable sources 

in 2012, meaning that the more renewable energy produced in 2012, the more stringent a state's 

goal emission rate. The commenters added that states that already had, as of 2012, increased use 

of wind, solar and other variable renewable resources often had built new NGCC units to balance 

their systems. The commenters concluded that NGCCs in states with significant amounts of 

renewable generation had a lower capacity factor and, thus, the re-dispatch goals envisioned 

under Building Block 2 have a more significant effect on their emission reduction goals. 

Various methods of crediting early action. Commenters added that EPA could adjust the interim 

and final goals upward in early acting states by exempting from Building Block 2 NGCCs that 

replaced coal and eliminating the NGCC capacity factor penalty in leading RE states. The 

commenters recommended that that EPA consider the impact of high levels of wind penetration 

and recalculate the baseline NGCC capacity factors for each state in order to eliminate the 

NGCC capacity factor penalty. The commenters stated that EPA should adjust the baseline 

NGCC generation to account for what NGCCs in each state would have generated were it not for 

high levels of RE penetration. The commenters concluded that this would provide credit to states 

that have both been RE leaders and built high-efficiency NGCCs. Commenters suggested that 

EPA apply a "floor" and "ceiling" to the amount of coal plant output displaced by NGCCs to 

help decrease the disparity of the impact Building Block 2 has on different states and it could 

provide states, like Oregon, that acted early to retire coal plants with some relief from the impact 

of Building Block 2. Commenters supported crediting coal-heavy states, live West Virginia, for 

actual emission reductions that occurred between 2005 and 2012 as a result of displacing coal 

with natural gas. The commenters claimed that these states have already seen an implementation 

of Building Block 2 as a result of market conditions. The commenters added that these states 

would get no credit because they did not have substantial in-state natural gas generation, but did 

reduce mass emissions. The commenters concluded that because EPA is claiming the rule will 

result in a 30 percent reduction in CO2 emissions since 2005, emission reduction due to 

displacement of coal units with natural gas units should be credited against the states goal. One 

commenters recommended providing states with credit for prior CO2 reductions as an option 

towards meeting reasonable national targets for reducing CO2 emissions. Commenters added the 

EPA should work with states to adjust the goals relating to building block 2 to a level that 

recognizes early actions, and acknowledges the importance of fuel diversity. 

Forced early retirement and reliability. Commenters added that the proposal threatens the 

nation's electricity supply by forcing coal plants to remain idle or shut down before replacement 

power is in place, and would not allow owners to recoup investments on pollution control 

technologies already outfitted on newer units and obtain the remaining useful life of the coalfired EGU's. 

Transferring credit to affected EGUs. Commenters supported owners or operators of nonemitting units or efficiency programs be allowed to use the credit for meeting its compliance 

obligations under the section 111(d) program or transfer the credit to affected EGUs for their 

compliance use under the program. The commenters stated that in the case of existing affected 

fossil-fuel fired EGUs that retire prorate to the start of the interim goal period, a state would 

assume the unit's generation was replaced by existing NGCC generation located with the state.

The commenters added that the credit could be based on the reduction in emissions caused by the 

change in generation location.
472

Credit for coal to NGCC switch in 2005. Commenters contended that they repowered coal units 

to natural gas combined cycle in 2005 and realized substantial CO2 emission reductions. The 

commenters added that reductions resulted from an agreement with EPA's ongoing New Source 

Review enforcement program. The commenters objected to EPA's proposal not giving credit for 

these reductions which were a result of agreement with EPA. The commenters added that the 

reductions were included in a voluntary, but legally binding greenhouse gas trading program 

from 2003-2010.

Credit for retirements since 2005 and those scheduled to occur by 2015. Commenters said states 

must be allowed to take into account the substantial CO2 emissions reductions that have 

occurred since 2005 (i.e., the shutdown of nine (9) coal-fired units in West Virginia), and those 

which are scheduled to occur by 2015 (i.e., the shutdown of an additional nine (9) coal-fired 

units in West Virginia).

Comment 59: The EPA should check eGRID data for more appropriate baseline.

Response 59: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year.

The following are summaries of the specific public comments under this comment:

Commenters stated the NODA also attempts to address EPA's use of a single year (2012) as the 

baseline from which state goals are calculated. The commenters said EPA's use of 2012 

penalizes states like Texas that are already implementing the measures in the building blocks. 

The commenters said extending the baseline to cover 2010 or 2011 or some other combination is 

not sufficient. The commenters said EPA must release and analyze eGRID data for a 

significantly longer period of time in order to assess what an appropriate baseline might be. The 

commenters said for a state like Texas, such a baseline would likely extend further back than 

2010. The commenters said without additional analysis of these data, and without EPA making 

data from prior years available, it is difficult to predict whether any of these options presents an 

improvement on EPA's proposal. The commenters said EPA's barebones "notice" and the limited 

amount of time it has provided for comment simply do not allow for adequate analysis; if EPA 

wishes to alter its proposal to use a different baseline, it must issue a new proposal and allow for 

full public comment on that proposal.

Comment 60: General comments about using 2005 as the baseline

Response 60: See section VI of the final rule preamble of the CPP for the EPA’s response to this 

comment regarding the baseline year.

The following are summaries of the specific public comments under this comment:

Commenters stated in terms of timeframe the base year of 2005 is problematic. The commenters

said many utilities, since 2005, have closed coal fire power plants, largely due to the 
473

obsolescence and inefficiency of some of these plants, and other market changes. The 

commenters said in that respect they would be receiving, under the regulations, automatic credit 

for those plants that have already been closed due to these market and engineering forces.

Commenters stated the proposal to cut carbon pollution is based on 2005 levels. The commenters

said 2005 was close to the peak year of U.S. carbon pollution, so EPA's baseline is already 

skewed toward the highest level of carbon. The EPA Fact Sheet states that the proposal will 

maintain an affordable, reliable energy system, while cutting pollution and protecting our health 

now and for future generations, but in reality this is just not true. The commenters said a healthy, 

sustainable future cannot afford the amount of carbon the plan allows for; it's not possible.

Commenters were concerned that EPA is using a standard that's a few years old instead of using 

2012 or '13 as the base; it weakens the net result of what the rule does.

Commenters stated the EPA's targets for reducing carbon dioxide pollution by 2030 are too low 

and do not do enough to reduce our risk from climate change. The commenters said under the 

proposed rule, overall US greenhouse gas emissions will still be higher in 2030 than they were in 

1990; that's well below the level recommended by the Intergovernmental Panel on Climate 

Change, which says developed nations must hit targets 20 - 40% below 1990 levels in order to 

avoid extreme climate scenarios. 

Commenters stated the EPA says that the rule will cause the US power sector to reduce overall 

carbon pollution in 2030 by 30% from 2005 levels. The commenters said using that year as a 

baseline reflects a more lenient approach than many analysts expected. The commenters said the 

US burned a lot of coal in 2005 due to disruptions to the natural gas infrastructure caused by 

hurricanes Katrina and Rita in the Gulf of Mexico. The commenters said the 2005 baseline also 

allows the US to claim credit for pollution reductions that happened when our economy shrank 

during the great recession. The commenters added, the EPA rule allows states to count carbon 

dioxide reductions from coal plant retirements that were already in the works before the rule was 

established; for example, by the time the rules take effect next year, Kentucky will have achieved 

11 percentage points of our 18 percent reduction target without doing anything more than 

business as usual. 

Commenters stated the proposed rule, if fully implemented, is projected to result in a 30% 

reduction in carbon dioxide emissions from power plants below 2005 levels by 2030. The 

commenters said according to calculations by the Center for Biological Diversity, this 

corresponds to only a 7.7% reduction from 1990 - the base year accepted by the United Nations 

Framework Convention on Climate Change. The commenters said by using a misleading base 

year of 2005, the high point of economic activity pre-recession, the rule takes dubious credit for 

carbon dioxide reductions that occurred largely because of economic decline. The commenters

said as long as the U.S. continues to rely mostly on fossil fuels, these are not reductions that can 

be sustained with future economic activity and population growth; furthermore, as discussed in 

the next section, much of that reduction is anticipated to come from greater reliance on natural 

gas, resulting in a surge of methane emissions that is likely to undermine climate benefits.

Commenters stated according to EPA's description of the proposed rule, "[n]ationwide, the Clean 

Power Plan will help cut carbon pollution from the power sector by 30 percent from 2005 
474

levels." The commenters said while EPA can take some credit for some of the falling emissions 

in recent years, it certainly isn't due to the new carbon rule because it didn't even exist yet; it is 

misleading to refer to a 2005 base year to judge what this rule will accomplish. The commenters

said the most recent year included in the newest EPA greenhouse gas inventory is 2012; between 

2005 and 2012, emissions in the power sector fell over 15%; emissions fell 10% economywide. 

The commenters said if 2012 emissions are used as the basis, the best case scenario is this rule 

achieves not quite a 15.88% cut from power CO2 by 2030; at best, referring to data provided in 

the RIA, the proposed rule achieves less than a 5.96% decrease in economy-wide CO2 between 

2012 and 2030.

Commenters stated that they strongly urge U.S. EPA to consider how states can take credit for 

early adoption and shutdown measures taken after 2005, the year U.S. EPA is using as a baseline 

for 30% in CO2 emission reductions. 

Comment 61: Should the EPA credit early action taken by states to reduce carbon emissions; if 

so, how.

Response 61: See section V of the final rule preamble for discussion of the final BSER 

determination. See sections VI and VII of the final rule preamble of the CPP for discussion of the 

subcategory-specific emission performance rates and state goals, respectively. See section VIII 

of the final rule preamble for discussion of state plans. 

The following are summaries of the specific public comments under this comment:

Commenters said the clean energy programs developed in Minnesota, Colorado, and the other 

states we operate in should serve as models for carbon abatement strategies across the nation. 

The commenters said in fact, these programs are exactly the kinds of initiatives that the proposed 

Clean Power Plan is designed to encourage. The commenters said they have already resulted in 

dramatic reductions in greenhouse gas emissions within our system. The commenters said Xcel 

Energy has already reduced its carbon dioxide emissions by 19 percent from 2005 levels and will 

achieve a reduction of at least 31 percent by 2020, 10 years earlier than the administration's 2030 

target. 

Commenters said although we are proud that our clean energy leadership has achieved so much 

while maintaining reasonably priced power, these initiatives have not been free - our customers 

are funding billions of dollars of investments to make them a reality. 

Commenters said unfortunately, the Clean Power Plan virtually ignores these investments - it 

would provide very little credit to existing state clean energy programs. The commenters said the 

proposal would give an easier compliance path to states that resisted clean energy in the past, and 

even worse, the Clean Power Plan actually punishes states that are clean energy leaders. 

Commenters said for example, building blocks 1 and 4 of the proposed rule discount the fact that 

the cheapest coal plant and customer efficiency projects and programs have already been 

completed in leading states. The commenters said Building block 2 requires greater emissions 

reductions in states such as Minnesota that, prior to 2012, replaced aging coal plants with natural 
475

gas combined cycle units. The commenters said Block 2 also punishes states that balance their 

intermittent renewable energy with natural gas plants. The commenters said finally, block 3 

requires greater emissions reductions in states and regions that have moved forward with 

renewables under progressive renewable standards. The commenters said in other words, the 

proposed rule takes clean energy leadership for granted and would establish more aggressive 

targets in states that committed early to clean energy leadership. 

Commenters said over the last decade, our states committed to clean energy on the promise that 

leadership would give them a head start under federal climate policy. The commenters said there 

is still time to make this promise a reality. The commenters said we believe that a few simple 

changes to the Clean Power Plan will credit early emissions reductions without significantly 

altering the structure or environmental benefits of the rule. The commenters said Xcel Energy 

will continue to work with EPA to ensure that the nation's climate policy recognizes the value of 

clean energy leadership. 

Commenters said state and private sector leadership in addressing pollution is something that 

should be recognized and supported. The commenters said of course, under the Clean Power 

Plan, states and companies that have already transitioned toward lower-carbon and zero-carbon 

energy and energy efficiency are closer to the full deployment of the best system of emissions 

reduction than others - and EPA should consider clarifying that states that go beyond their targets 

under the Clean Power Plan would receive credit for those actions under future updating of the 

carbon pollution standards for power plants. 

Commenters said the proposed Clean Power Plan currently states: "Emission impacts of existing 

programs, requirements, and measures that occur during a plan performance period may be 

recognized in meeting or projecting CO2 [carbon dioxide] emission performance by affected 

EGUs according to section 60.5740(a)(3) and (4), as long as they meet the following 

requirements: Actions taken pursuant to an existing state program, requirement, or measure, such 

as compliance with a regulatory obligation or initiation of an action related to a program or 

measure, must occur after June 18, 2014."

Commenters said credit for early action should be provided for in the final EPA regulation. 

Commenters said the agency should also be aware that only counting emissions reductions from 

2020 to 2029 creates a perverse incentive for states and utilities to defer implementation of 

programs that reduce energy waste, and thus prevent pollution of many kinds, until 2017 or later. 

The commenters said in Michigan, for example, Public Act 295 of 2008 set requirements for 

increased renewable energy and for programs that incentivized energy waste reduction - and 

implementation continued despite the deep economic crisis and rising energy costs in the state 

during the intervening years. The commenters said if the federal Clean Power Plan disallows 

counting of such measures toward the state's goal - or worse, would disallow credit for pollution 

reductions achieved by such measures until 2017 or later - EPA is actually creating an incentive 

to repeal Michigan's (and other states') laws that currently reduce all pollutants. The commenters

said moreover, it is clear that many states do not have mandatory energy efficiency requirements 

in place, and as drafted, the rule would further discourage their adoption prior to 2020. The 

commenters said this will likely result in more CO2 (as well as increases in other pollutants, 

including mercury, acid rain precursors, and particulate matter) being emitted into the 
476

atmosphere than might occur under a final rule that encouraged early investment in pollution 

prevention. 

Commenters said the EPA states that concerns over the "acceptable" lifetime of various measures 

led to the decision to propose not crediting earlier reductions. The commenters said although it 

can be argued that some waste reduction measures have a shelf life, these should not be difficult 

to establish, as "payback" figures are abundant in available information and other parts of the 

federal government have expertise setting depreciation schedules that assume reasonable lives of 

a variety of assets. The commenters said additionally, the "shelf life" of measures such as added 

insulation and replacement windows is so long that there should be no concern. The commenters

said in most cases, the emissions reductions will not be "lost," but continue to provide 

quantifiable pollution reductions for years to come.