Clean Power Plan:

Overview of EPA’s Proposed 

Carbon Reduction Regulations

Marguerite McLamb, OAQPS, U.S. EPA

September 19, 2014
Agenda

► Discuss the origin of this proposal 

► Identify the four “building blocks” of the proposal

► Describe how we used them to determine BSER and create 

state goals for reducing carbon pollution 

► Describe the process, components and flexibilities available 

to the states in creating plans to meet these goals

► Review the timeline for implementation

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Carbon Pollution and Health

► Unchecked carbon pollution leads to climate changes, 

including rising global temperatures, rising sea level, 

changes in weather and precipitation patterns, and changes 

in ecosystems, habitats and species diversity

► Public health risks include:

► More heat waves and drought

► Worsening smog (also called ground-level ozone pollution)

► Increasing the intensity of extreme events, like hurricanes, extreme 

precipitation and flooding

► Increasing the range of ticks and mosquitoes, which can spread disease 

such as Lyme disease and West Nile virus

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► Issued in June 2013

► Calls on the federal government to work with states, 

cities, industries, consumers and the international 

community to address climate change

► EPA action under the President’s Climate Action Plan

► Reducing carbon pollution from power plants

► Building a 21st century transportation sector

► Cutting energy waste in homes, businesses and factories

► Reducing methane and hydrofluorocarbons (HFCs)

► Preparing the U.S. for the impacts of climate change

► Leading international efforts to address global climate change

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The President’s Climate Action Plan
President’s directive to EPA: 

► Set flexible carbon pollution standards, regulations or 

guidelines, as appropriate, for power plants under section 

111 of the Clean Air Act (CAA)

► for modified, reconstructed and existing power plants by no later than 

June 1, 2014 

► Issue final standards, regulations or guidelines, as appropriate, by no 

later than June 1, 2015

► Include in the guidelines addressing existing power plants a 

requirement that states submit to EPA the implementation plans by no 

later than June 30, 2016

► Focus on certain elements when developing the standards

► Stakeholder engagement on program design 

► Flexibilities in the program design

► Costs

► Continued importance of relying on a range of energy sources

► Other regulations that affect the power sector

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Reducing Carbon Pollution From Power Plants
► EPA conducted a robust stakeholder engagement 

process

► Participated in meetings with more than 300 utility, labor and 

environmental groups 

► Developed video webinar about the Climate Action Plan and 

CAA section 111(d), viewed more than 5,400 times 

► Held 11 public listening sessions around the country

• 3,300 attendees; oral statements from more than 1,600 people

► Engagement process has given EPA several key insights 

and takeaway messages 

► Reliable, affordable energy supply is vital 

► Flexibility is key 

► Power plants are part of a large and complex interstate system 

► Allow for, or even encourage, regional solutions

► Account for state leadership and the many measures that states 

are already undertaking

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Engagement
Power Plant CO2 Emission Reduction Actions

► Three related rulemakings issued under CAA section 111:

► Standards of performance for new sources under section 111(b)

► Standards of performance for modified and reconstructed sources under 

Section 111(b)

► Existing source emission guidelines under section 111(d)

► Emission Guidelines Package

► Defines BSER (best system of emission reduction) for existing sources

► Translates BSER into specific state-by-state goals

• Primary proposal achieves approximately 25% to 30% CO2reduction from 2005 

levels by 2020

• Takes comment on a less aggressive option with a shorter compliance time-frame

► Provides additional guidance to states on their existing source plan

• Components of a plan

• Flexibility in compliance options

• Timing for submittal

• Timing of reductions

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Flexibilities Available

► States will have a 10 to 15-year window for planning and achieving 

reductions in carbon pollution

► States will choose how to meet the goal through measures that reflect 

their particular circumstances and policy objectives; e.g., they can:

► Design plans that use innovative, cost-effective regulatory strategies 

► Tap into the investments already being made to upgrade aging 

infrastructure 

► Achieve meaningful reductions in carbon pollution

► Help Americans save money and energy in the long run

► Proposal allows states to collaborate and to develop plans on a multistate basis

► Electricity is transmitted across state lines

► State measures may impact and be designed to reduce regional CO2

emissions from utilities

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Benefits, Costs and Impacts 

► Coal and natural gas will remain the two leading sources of electricity 

generation, with each providing more than 30% of the projected generation in 

2030

► By 2030: 

► Carbon pollution reduced due to this proposal: approximately 30% below 2005 

levels

► Climate and health benefits including significant reductions of SO2, PM, and NOx: 

$54 billion to $89 billion

► Costs: $7.3 billion to $8.8 billion

► Net benefits: $47 billion to $80 billion

► National average retail electricity prices: roughly 2.7% to 3.1% increase

► National average impact on electric bills: roughly 8% lower

► Retirements

► EPA’s analysis projects that 19% of all coal-fired capacity would become 

uneconomic to maintain – only about 5% of all power generating capacity projected 

to be in service (or about 46 to 49 GW of coal-fired capacity)

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Ranges reflect Option 1 Regional and State illustrative compliance scenarios.
Clean Air Act Section 111

► Authorized in 1970 

► Establishes a mechanism for controlling air pollution from stationary 

sources 

► Applies to sources for which the Administrator, in her judgment, finds 

“causes, or contributes significantly to, air pollution which may reasonably 

be anticipated to endanger public health or welfare”

► Can apply to new, existing, modified and reconstructed sources

► More than 70 stationary source categories and subcategories are 

currently regulated under section 111 

► Lays out different approaches for reducing air pollution from new and 

existing sources

► New sources under section 111(b) 

• Federal standards for new, modified and reconstructed sources

► Existing sources under section 111(d) 

• State programs for existing sources that are equivalent to federal 

guidelines

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Clean Air Act Section 111(d)

► Requires a different approach for 

achieving emission reductions than the 

approach used for new sources

► Provides that EPA establish 

► A procedure for states to issue 

performance standards for existing sources 

in the source category and

► Guidance about the appropriate level of 

the standard

► EPA has established section 111(d) 

regulations for existing sources for 5 

source categories 

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Section 111(d) 

regulations

- Sulfuric acid plants 

(acid mist)

- Phosphate 

fertilizer plants 

(fluorides)

- Primary aluminum 

plants (fluorides)

- Kraft pulp plants 

(total reduced sulfur)

- Municipal solid 

waste landfills 

(landfill gases)
Determination of Guidelines and 

Implementation Process

► Under CAA section 111(d): 

► EPA determines BSER 

► EPA applies BSER – in the proposal, by using statespecific data to derive the emissions rate that represents 

the state goal for covered sources reflecting BSER

► State develops standards of performance that implement 

that goal and establishes those standards in its plan, 

along with implementing and enforcing measures

► The state applies that standard as appropriate

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BSER: Best System of Emission Reduction

► From CAA section 111(a)(1) (Definitions):

► “The term ‘standard of performance’ means a standard for emissions of air 

pollutants which reflects the degree of emission limitation achievable through the 

application of the best system of emission reduction which (taking into account 

the cost of achieving such reduction and any non-air quality health and 

environmental impact and energy requirements) the Administrator determines 

has been adequately demonstrated.” 

► Key factors in BSER determination for existing power plants

► Feasibility

• System of emission reductions must be technically feasible

– Reliability considerations

► Costs

• Costs of the system are reasonable 

– Impacts on electricity rates and fuel prices 

► Size of reductions 

• Consideration given to the amount of emission reductions the system would 

generate

► Technology

• Promotion of the development and diffusion of technology can be taken into 

account

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Building Blocks and Determining BSER

► EPA has identified four categories of measures providing the basis for 

determining and quantifying BSER

► They entail a combination of addressing emissions rates and levels of 

utilization at the affected source in the power sector:

1. Lowering the carbon intensity of generation at individual existing EGUs through 

heat rate improvements

2. Reducing emissions of the most carbon-intensive existing EGUs by shifting 

generation to less carbon-intensive existing fossil fuel-fired EGUs

3. Reducing emissions of carbon-emitting EGUs by expanding the amount of new, 

lower (or no) carbon-intensity generation 

4. Reducing emissions of carbon-emitting EGUs by increasing demand-side energy 

efficiency

► Together, the four building blocks constitute BSER, with each state’s 

goal established through applying BSER to its fleet of affected sources

► For each building block, EPA can identify a target level of performance 

that reflects more or less aggressive performance

► The assumptions are then applied to state specific data (e.g. existing 

generation mix) to set state specific targets

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Building Blocks Technologies Translated to State Goals

Technology/BSER Building Block Option 1 Option 2

1. Heat rate improvement (Avg. 

Reduction for Coal) 6% 4%

2. Dispatch to existing and underconstruction NGCCUtilization of NGCC 

up to 70% capacity factor

Utilization of NGCC 

up to 65% capacity factor

3. Dispatch to new clean electric 

generation

Includes new nuclear generation under construction, 

moderate deployment of new renewable generation, 

and continued use of existing nuclear generation

4. Demand-side Energy Efficiency 

(% annual incremental electricity savings) 1.5% annually 1.5% annually

Goal Option 1 Option 2

Average nationwide goal for covered 

sources (lbs/MWh)

25% to 30% below 2005 

levels

20% to 25% below 2005 

levels

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State Goals

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State CO2 emissions from fossil fuel fired power plants (lbs)

State electricity generation (MWh)

 Each state goal is a rate 

 encompasses the dynamic variables in the power system that ultimately 

determine how much carbon pollution is emitted by fossil fuel power plants

 calculated to account for the mix of power sources in each state and the 

application of the building blocks that make up the best system of emission 

reduction

 Each state’s goal is different because each state has a unique mix of fossilfuel and other power sources, emissions, and energy efficiency 

opportunities

Basic formula 

for state rate-based goal

(coal gen. x coal emission rate)+ (OG gen. x og emission rate) + (NGCC gen. x NGCC emission rate) +”Other” emissions

Total Fossil Generation MWh + Nuclear MWh + RE MWh + EE MWh

Detailed 

formula
BSER and Compliance Options Compared

Building Block BSER Examples of State 

Compliance Measures

1. Make fossil fuel fired

power plants more 

efficient

Efficiency Improvements Efficiency improvements

Co-firing or switching to natural 

gas

Coal retirements

Retrofit CCS (e.g., Parish in 

TX)

2. Use lower emitting power 

sources more

Dispatch changes to 

existing natural gas CC

Dispatch changes to existing 

natural gas CC

3. Build more renewable 

energy sources

Renewable Energy

Certain Nuclear

New NGCC

Renewables

Nuclear (new and up-rates)

New coal with CCS

4. Use electricity more 

efficiently

Demand-side energy 

efficiency programs

Demand side energy efficiency 

programs

Transmission efficiency 

improvements

Energy storage

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Section 111(d) State Plan Process

► The state develops standards of performance that 

implement its BSER-derived goal and establishes those 

standards in its plan, along with implementing and enforcing 

measures

• EPA recognizes states’ requests for both flexibility and 

specificity

– States can choose to meet rate- or mass-based goal

– EPA would allow and encourage multi-state and regional plans

– EPA would support building off existing reduction programs 

• EPA recognizes states’ concerns regarding timing for 

submission of plans

– Phased plan submittals considered

► The state applies that standard to the appropriate entities

• EPA recognizes the need for accountability and 

verifiability of attaining CO2 emission reductions

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State Plan Components

► Emission guidelines would include a list of state plan components

► Recommendation: Require state plans to include:

► Identification of affected entities 

► Description of plan approach and geographic scope

► Identification of state emission performance level 

► Demonstration that plan is projected to achieve emission performance 

level

► Identification of milestones

► Identification of backstop measures

► Identification of standards of performance 

► Demonstration that each standard of performance is enforceable, 

quantifiable, surplus, permanent and verifiable (recognizing nontraditional nature of some potentially affected entities) 

► Identification of monitoring, reporting and recordkeeping requirements 

► Description of state reporting 

► Certification of hearing on state plan 

► Supporting material 

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Potential Pathways for State Plans

► Multiple pathways exist for states’ plans

► These may include emissions reduction measures identified in 

building blocks or others

► Pathways that EPA anticipates include implementation of the following 

actions, alone or in various combinations:

► Direct emission limits on EGUs

► Collaboration with RTOs and ISOs regarding re-dispatch prioritization

► State policies to deploy new, lower- or non-carbon-emitting generation 

capacity, such as NGCC sources, renewable energy (RE) sources such 

as solar and wind, and/or nuclear

► Energy efficiency (EE) deployment programs 

► Legislation or regulations establishing EE resource standards (EERS) 

and/or renewable portfolio standards (RPS)

► Regional emissions reductions agreements 

► Integrated Resource Plan-type approaches for reducing utility fleet CO2

emissions

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Timing for State Plan Submittals 

► Individual and multi-state plans due June 30, 2016 

► Some states may reasonably need additional time to submit complete 

plans, due to factors such as timing of legislative approval process and 

complexities associated with regional approaches

► Proposal provides states with additional time to submit complete plans if 

justified and if states provide specific information

► Proposed timing of extensions to submit a complete plan, if justified and 

supported:

• Submit initial plan by June 30, 2016

• Individual state plans: a one-year extension (June 30, 2017) 

• Multi-state plans: a two-year extension (June 30, 2018)

 Would submit a progress report on June 30, 2017

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By June 30, 2016

State submits initial multistate implementation plan 

and request for 2-year 

extension

EPA reviews initial plan 

and determines if 

extension is warranted

by June 30, 2017

State submits progress 

report of implementation 

plan

by June 30, 2018

States submits multistate implementation 

plan

State submits Negative Declaration

State submits complete Implementation Plan by June 30, 2016

State submits Initial Implementation Plan by June 30, 2016 and requests 1-year extension

EG Promulgation

June 1, 2015

by June 30, 2016

State submits negative 

declaration

State submits multi-state Implementation Plan by June 30, 2016 and requests 2-year extension

EPA publishes FR notice

by June 30, 2016

State submits 

implementation plan

by June 30, 2016

State submits initial 

implementation plan and 

request for 1-year extension

EPA reviews initial plan and 

determines if extension is 

warranted within 

by June 30, 2017

State submits complete 

implementation plan

Compliance 

period begins

2020

2015 2019

Clean Power Plan Implementation Timeline

2020

EPA reviews plan and 

publishes final decision 

within 12 months on 

approval/disapproval

EPA reviews plan and 

publishes final decision 

within 12 months on 

approval/disapproval

EPA reviews plan and 

publishes final decision 

within 12 months on 

approval/disapproval

2016 2017 2018

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Timing of Reductions

► Timing of reductions can vary, depending on a state's situation

► Some states have existing programs that are achieving results

► Some measures are more easily implemented and/or may obtain reductions 

promptly; others may require longer to implement and/or realize reductions

► Early emphasis on effective implementation of EE programs could allow more 

EE to substitute for other, more expensive measures

► New multi-state programs (or additions to existing multi-state programs) would 

need time to achieve goals

► State plans must be designed to achieve and maintain affected EGU 

emissions performance consistent with final post-2029 goal, as well as an 

interim goal

► Interim emissions performance goals apply during the years 2020-2029 on a 10-

year average or cumulative basis, as states ramp up programs to meet their final 

goals 

• Milestone requirements and emissions reporting are proposed to track interim progress 

and enable corrective action if necessary

► States must achieve and maintain final goals after 2029; a three-year averaging 

period (2030-2032) is proposed for demonstration that final goal will be initially 

achieved

► States must maintain the final-goal level of performance over time

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APPENDIX

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Clean Air Act Section 111 – Excerpts

► Section 111(a)(1) (Definitions):

► “The term ‘standard of performance’ means a standard for emissions of air 

pollutants which reflects the degree of emission limitation achievable through the 

application of the best system of emission reduction which (taking into account 

the cost of achieving such reduction and any non-air quality health and 

environmental impact and energy requirements) the Administrator determines 

has been adequately demonstrated.” 

► Section 111(d)(1) (Standards of performance for existing sources; remaining 

useful life of source):

► “The Administrator shall prescribe regulations which shall establish a procedure 

similar to that provided by section 7410 of this title under which each state shall 

submit to the Administrator a plan which 

• (A) establishes standards of performance for any existing source for any air pollutant (i) 

for which air quality criteria have not been issued or which is not included on a list 

published under section 7408 (a) of this title or emitted from a source category which is 

regulated under section 7412 of this title but (ii) to which a standard of performance 

under this section would apply if such existing source were a new source, and 

• (B) provides for the implementation and enforcement of such standards of 

performance. 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.” 

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Clean Air Act Section 111 – Excerpts (cont.)

► Section 111(d)(2) (Standards of performance for existing sources; 

remaining useful life of source):

► “The Administrator shall have the same authority

• (A) to prescribe a plan for a state in cases where the state fails to submit 

a satisfactory plan as he would have under section 7410 (c) of this title in 

the case of failure to submit an implementation plan, and 

• (B) to enforce the provisions of such plan in cases where the state fails 

to enforce them as he would have under sections 7413 and 7414 of this 

title with respect to an implementation plan. 

► In promulgating a standard of performance under a plan prescribed 

under this paragraph, the Administrator shall take into consideration, 

among other factors, remaining useful lives of the sources in the 

category of sources to which such standard applies.”

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