Federal Register / Vol. 79, No. 210 / Thursday, October 30, 2014 / Proposed Rules 64543 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 60 

[EPA–HQ–OAR–2013–0602; FRL–9918–53– 

OAR] 

RIN 2060–AR33 

Carbon Pollution Emission Guidelines 

for Existing Stationary Sources: 

Electric Utility Generating Units 

AGENCY: Environmental Protection 

Agency. 

ACTION: Notice of data availability. 

SUMMARY: The Environmental Protection 

Agency (EPA) is issuing this notice of 

data availability (NODA) in support of 

the proposed rule titled ‘‘Carbon 

Pollution Emission Guidelines for 

Existing Stationary Sources: Electric 

Utility Generating Units,’’ which was 

published on June 18, 2014. In this 

document, the EPA is providing 

additional information on several topics 

raised by stakeholders and is soliciting 

comment on the information presented. 

The three topic areas are the emission 

reduction compliance trajectories 

created by the interim goal for 2020 to 

2029, certain aspects of the building 

block methodology, and the way statespecific carbon dioxide (CO2) goals are 

calculated. 

DATES: Comments must be received on 

or before December 1, 2014. 

ADDRESSES: Comments. Submit your 

comments, identified by Docket ID No. 

EPA–HQ–OAR–2013–0602, by one of 

the following methods: 

Federal eRulemaking portal: http://

www.regulations.gov. Follow the online 

instructions for submitting comments. 

Email: A-and-R-Docket@epa.gov. 

Include Docket ID No. EPA–HQ–OAR– 

2013–0602 in the subject line of the 

message. 

Facsimile: (202) 566–9744. Include 

Docket ID No. EPA–HQ–OAR–2013– 

0602 on the cover page. 

Mail: Environmental Protection 

Agency, EPA Docket Center (EPA/DC), 

Mail code 28221T, Attn: Docket ID No. 

EPA–HQ–OAR–2013–0602, 1200 

Pennsylvania Ave. NW., Washington, 

DC 20460. 

Hand/Courier Delivery: EPA Docket 

Center, Room 3334, EPA WJC West 

Building, 1301 Constitution Ave. NW., 

Washington, DC 20004, Attn: Docket ID 

No. EPA–HQ–OAR–2013–0602. Such 

deliveries are accepted only during the 

Docket Center’s normal hours of 

operation (8:30 a.m. to 4:30 p.m., 

Monday through Friday, excluding 

federal holidays), and special 

arrangements should be made for 

deliveries of boxed information. 

Instructions: All submissions must 

include the agency name and Docket ID 

number (EPA–HQ–OAR–2013–0602). 

The EPA’s policy is to include all 

comments received without change, 

including any personal information 

provided, in the public docket, available 

online at http://www.regulations.gov, 

unless the comment includes 

information claimed to be Confidential 

Business Information (CBI) or other 

information whose disclosure is 

restricted by statute. Do not submit 

information that you consider to be CBI 

or otherwise protected through http://

www.regulations.gov or email. Send or 

deliver information identified as CBI 

only to the following address: Ms. Amy 

Vasu, c/o OAQPS Document Control 

Officer (C404–02), Office of Air Quality 

Planning and Standards, U.S. EPA, 

Research Triangle Park, North Carolina 

27711, Attention Docket ID No. EPA– 

HQ–OAR–2013–0602. Clearly mark the 

part or all of the information that you 

claim to be CBI. For CBI information on 

a disk or CD–ROM that you mail to the 

EPA, mark the outside of the disk or 

CD–ROM as CBI and then identify 

electronically within the disk or CD– 

ROM the specific information you claim 

as CBI. In addition to one complete 

version of the comment that includes 

information claimed as CBI, you must 

submit a copy of the comment that does 

not contain the information claimed as 

CBI for inclusion in the public docket. 

Information so marked will not be 

disclosed except in accordance with 

procedures set forth in 40 CFR part 2. 

The EPA requests that you also 

submit a separate copy of your 

comments to the contact person 

identified below (see FOR FURTHER

INFORMATION CONTACT). If the comment 

includes information you consider to be 

CBI or otherwise protected, you should 

send a copy of the comment that does 

not contain the information claimed as 

CBI or otherwise protected. 

The www.regulations.gov Web site is 

an ‘‘anonymous access’’ system, which 

means the EPA will not know your 

identity or contact information unless 

you provide it in the body of your 

comment. If you send an email 

comment directly to the EPA without 

going through http://

www.regulations.gov, your email 

address will be automatically captured 

and included as part of the comment 

that is placed in the public docket and 

made available on the Internet. If you 

submit an electronic comment, the EPA 

recommends that you include your 

name and other contact information in 

the body of your comment and with any 

disk or CD–ROM you submit. If the EPA 

cannot read your comment due to 

technical difficulties and cannot contact 

you for clarification, the EPA may not 

be able to consider your comment. 

Electronic files should avoid the use of 

special characters, any form of 

encryption and be free of any defects or 

viruses. 

Docket: All documents in the docket 

are listed in the http://

www.regulations.gov index. Although 

listed in the index, some information is 

not publicly available (e.g., CBI or other 

information whose disclosure is 

restricted by statute). Certain other 

material, such as copyrighted material, 

will be publicly available only in hard 

copy. Publicly available docket 

materials are available either 

electronically in http://

www.regulations.gov or in hard copy at 

the EPA Docket Center, EPA WJC West 

Building, Room 3334, 1301 Constitution 

Ave. NW., Washington, DC. The Public 

Reading Room is open from 8:30 a.m. to 

4:30 p.m., Monday through Friday, 

excluding federal holidays. The 

telephone number for the Public 

Reading Room is (202) 566–1744, and 

the telephone number for the Air Docket 

is (202) 566–1742. Visit the EPA Docket 

Center homepage at http://

www.epa.gov/epahome/dockets.htm for 

additional information about the EPA’s 

public docket. 

In addition to being available in the 

docket, an electronic copy of the 

proposed rule is posted on the World 

Wide Web (WWW) at: http://

www2.epa.gov/cleanpowerplan/. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Amy Vasu, Sector Policies and Programs 

Division (D205–01), U.S. EPA, Research 

Triangle Park, NC 27711; telephone 

number (919) 541–0107, facsimile 

number (919) 541–4991; email address: 

vasu.amy@epa.gov or Ms. Marguerite 

McLamb, Sector Policies and Programs 

Division (D205–01), U.S. EPA, Research 

Triangle Park, NC 27711; telephone 

number (919) 541–7858, facsimile 

number (919) 541–4991; email address: 

mclamb.marguerite@epa.gov. 

SUPPLEMENTARY INFORMATION: 

Organization of This Document. The 

information presented in this document 

is organized as follows: 

I. Background 

A. Proposed Clean Power Plan 

B. Purpose of the NODA 

C. Overview of Topics Discussed in This 

NODA 

II. Stakeholder Input on Select Topics in the 

Proposed Rule 

A. The 2020 to 2029 Glide Path 

B. Certain Aspects of the Building Block 

Methodology 

C. Implementation of the Goal-Setting 

Equation 


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III. Topics Upon Which the EPA Is Soliciting 

Additional Comment 

A. The 2020 to 2029 Glide Path 

B. Certain Aspects of the Building Block 

Methodology 

C. Implementation of the Goal-Setting 

Equation 

I. Background 

A. Proposed Clean Power Plan 

Under the authority of Clean Air Act 

(CAA) section 111(d), on June 18, 2014, 

the EPA proposed emission guidelines 

for states to follow in developing plans 

to address greenhouse gas (GHG) 

emissions from existing fossil fuel-fired 

electric generating units (EGUs) (79 FR 

34830). The proposed rule, which we 

refer to as the Clean Power Plan, would 

continue progress already underway to 

lower the carbon intensity of power 

generation in the United States (U.S.). 

Lower carbon intensity means, for each 

megawatt-hour (MWh) of generation, 

fewer emissions of CO2, which is a 

potent greenhouse gas that contributes 

to climate change. The proposal 

incorporates critical elements that 

reflect the information and views shared 

during what stakeholders have called an 

unprecedented effort by the EPA, 

beginning in the summer of 2013, to 

interact directly with, and solicit input 

from, a wide range of states and 

stakeholders. This effort encompassed 

several hundred meetings across the 

country with, among others, officials in 

state environmental and energy 

agencies, as well as public utility 

commissions; entities in the electricity 

sector, including utilities, generators, 

and system operators; and tribal 

governments, industry, citizens groups 

and members of the public. Many 

participants submitted written material 

and data to the EPA as well. 

B. Purpose of the NODA 

Since publication of the proposal on 

June 18, 2014, the EPA has held public 

hearings and has continued outreach to 

stakeholders. During the week of July 

29, 2014, the EPA conducted eight days 

of public hearings in four cities. Over 

1,300 people shared their thoughts and 

ideas about the proposal, and over 1,400 

additional people attended those 

hearings. Agency officials have also 

continued to engage with states and 

stakeholders through meetings, 

webinars, and conference calls. 

The agency has heard a broad range 

of questions, concerns, and constructive 

suggestions from stakeholders on how 

the proposed rule could be improved. 

Many of these comments and 

suggestions relate to the array of 

alternatives presented in the proposed 

rule. This document is not intended to 

address all of the many issues that have 

been raised; we will summarize and 

respond to all comments in the final 

rule. Rather, the purpose of this 

document is to describe and seek 

comment on several ideas raised by 

multiple stakeholders that may go 

beyond those for which the agency 

sought comment in the June 18, 2014 

proposal. By issuing this notice, we are 

ensuring that other stakeholders and the 

public have the opportunity to consider 

these ideas as they formulate their own 

comments on the proposal. In section II, 

we describe the specific issues and 

ideas raised by stakeholders and explain 

which of those ideas we consider to be 

within or possibly beyond the scope of 

comment already requested. In section 

III, we further discuss the approaches 

stakeholders have suggested which go 

beyond the June 18, 2014 proposal and 

on which we are seeking comment 

through this document. 

The purpose of this document is to 

bring these ideas to the attention of 

other stakeholders and the public and 

provide commenters with a sense of the 

way in which the EPA believes these 

ideas relate to determining the best 

system of emission reduction (BSER) so 

that they have the opportunity to 

consider these ideas as they are 

formulating their comments on the 

proposal. 

It should be noted that the topics 

discussed in the NODA interact with 

each other and some of them could have 

the effect of increasing the stringency of 

the BSER as reflected in each state’s 

target, while others could have the 

impact of decreasing it. The effect of the 

ideas presented here may have different 

impacts in different states, increasing 

the stringency of the BSER as expressed 

in the state goals in some states while 

decreasing it in others. The EPA 

welcomes comment specifically on the 

potential changes identified in this 

document in terms both of the rationale 

for these changes and of their effects on 

the stringency of the state goals, as well 

as the ways in which the potential 

changes interact with each other. 

C. Overview of Topics Discussed in This 

NODA 

Since the June 18, 2014 proposed 

rule, the EPA has received feedback on 

a wide range of topics. This feedback 

includes comments from a significant 

number of stakeholders that may go 

beyond the scope of what the EPA 

originally took comment on in the 

proposal. The EPA would like to 

identify these ideas for other 

stakeholders and the public so that all 

stakeholders and the public are made 

aware of these ideas and have the 

opportunity to comment on them. The 

topics that the EPA is seeking additional 

comment on are: The compliance 

trajectory or glide path of emission 

reductions from 2020 to 2029, certain 

aspects of the building block 

methodology, and the way the statespecific CO2 goals are calculated. These 

issues are described briefly here and 

discussed in more detail in sections II 

and III of this document. 

Some stakeholders have expressed 

concern that, as proposed, the interim 

goals, which govern emission 

reductions over the 2020–2029 period, 

do not provide enough flexibility for 

some states—specifically, states in 

which building block 2 results in large 

amounts of the overall required CO2

reductions relative to other building 

blocks—to choose measures other than 

relying heavily on re-dispatch from 

fossil steam generation (e.g., coal-, oil-, 

or gas-fired boilers) to natural gas 

combined cycle (NGCC) units to achieve 

the required reductions. Further, they 

have expressed concern that this effect 

of the interim goals severely limits the 

opportunity to fully take advantage of 

the remaining asset value of existing 

coal-fired generation. Some stakeholders 

have even suggested that the interim 

goals would force retirements of coal 

plants that could make unexpected 

events such as last winter’s polar vortex 

more challenging to address. As 

reflected in the proposal, in a world 

impacted by climate change, such 

severe weather events are likely to 

become more frequent. The agency is 

seeking to ensure that, consistent with 

the BSER, the overall framework that we 

have proposed includes sufficient 

flexibility, particularly with respect to 

time and emission reduction strategies 

in meeting the required emission goals, 

to allow states and sources to readily 

respond to unexpected changes or 

demands on the system, such as severe 

weather. This flexibility also reflects 

consideration of cost (which could, in 

part, be reflected in concerns about 

stranded assets). 

In section II.A, the EPA discusses 

these concerns in more detail, as well as 

two alternate approaches that have been 

suggested by stakeholders. We also 

explain that the original proposal 

already requests comment on one of 

these alternative approaches—achieving 

some reductions earlier than 2020 to 

allow for a more gradual reduction of 

emissions between 2020 and 2030. In 

section III.A, we discuss and solicit 

comment on another approach offered 

by stakeholders—the concept of phasing 

in the reductions required under 

building block 2 over time, just as 


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Federal Register / Vol. 79, No. 210 / Thursday, October 30, 2014 / Proposed Rules 64545 

reductions required under building 

blocks 3 and 4 are phased in over time. 

Stakeholders, including states, have 

also noted concerns with the 

methodology used for the individual 

building blocks, particularly building 

blocks 2 and 3. With respect to building 

block 2, stakeholders have offered a 

range of views. Some have commented 

that this component should be less 

stringent (i.e., require shifting less 

utilization from existing coal-fired units 

to existing NGCC units), some have 

offered that it should be more stringent 

(i.e., require shifting more utilization 

from existing coal-fired units to existing 

NGCC units), and others have offered 

that it should be more stringent in some 

states and less stringent in other states. 

Some stakeholders have also noted that 

they believe the higher levels of 

utilization of existing NGCC units 

proposed for building block 2 are not 

feasible in the early years of the 2020– 

2029 compliance period due to 

infrastructure constraints and recent 

significant capital investments at some 

existing coal-fired units. 

Other stakeholders have suggested 

that focusing solely on increasing 

utilization of existing NGCC units 

ignores opportunities for emission 

reductions from the use of natural gas 

from states that are not already using 

natural gas for electricity generation. 

With respect to renewable energy 

(RE), stakeholders have expressed 

concern about the discrepancy between 

setting targets based on in-state 

renewable assets or resources while 

allowing other states that import 

renewable energy to count certain 

amounts of that generation toward their 

compliance. Some have also expressed 

concern that the approaches proposed 

with respect to renewable energy 

impose greater stringency on states that 

have already taken action to promote 

and deploy renewable energy. With 

respect to nuclear facilities and 

generation, stakeholders have raised 

concerns about a variety of aspects of 

including nuclear power in the goalsetting equation. 

In section II.B of this document, the 

EPA discusses these concerns in more 

detail, describes alternative approaches 

put forward by stakeholders and 

identifies which of these alternative 

approaches the EPA requested comment 

on in the original proposal. In section 

III.B, we discuss and solicit comment on 

additional concepts stakeholders have 

suggested for addressing concerns with 

the methodology used for building 

blocks 2 and 3. In particular, the EPA 

requests comment on ways that building 

block 2 could be expanded to include 

new NGCC units and natural gas cofiring in existing coal-fired boilers and 

ways that state-level RE targets could be 

set based on regional potential for 

renewable energy. Although a number 

of stakeholders have also commented 

that building block 1 is too stringent, we 

are not discussing it at length in this 

document because we have already 

requested comment on this in the June 

18, 2014 proposal. Comments that 

stakeholders have offered on the 

treatment of nuclear power are also 

covered in the June 18, 2014 proposal 

and, therefore, we do not believe that it 

is necessary to request additional 

comment on those ideas in this 

document. 

Stakeholders, including states, have 

also noted concerns with the way the 

state-specific CO2 goals are calculated. 

These include concerns that the 

numeric formula for calculating each 

state’s goal is not consistent in its 

application of the best system of 

emission reduction (BSER) for building 

block 2, as compared with building 

blocks 3 and 4, and concerns with the 

use of data for the single year 2012. In 

section II.C, the EPA discusses these 

concerns in more detail, describes 

alternatives noted by stakeholders and 

explains that the original proposal 

requests comment on some of the 

potential alternatives suggested by 

stakeholders. In section III.C we discuss 

and solicit comment on two ideas 

suggested by stakeholders: Alternative 

approaches for the goal-setting equation 

and alternative uses of data in 

calculating the goals. 

This document is not intended to be 

a complete summary of the wide variety 

of ideas that have been raised. The 

agency has heard many other concepts 

that are not highlighted in this 

document because they are covered in 

the June 18, 2014 proposal. 

II. Stakeholder Input on Select Topics 

in the Proposed Rule 

In this section, the EPA explains some 

of the concerns, and ideas to address 

those concerns, that have been raised by 

multiple stakeholders. We also explain 

how some of those ideas have already 

been addressed in the June 18, 2014 

proposal and, in section III of this 

document, we identify the additional 

new ideas on which the agency is 

seeking comment. 

A. The 2020 to 2029 Glide Path 

Some stakeholders have expressed 

concern that the goal-setting 

methodology—in particular, calculating 

the interim goals on the basis of 

achieving the shift in generation 

assumed under building block 2 by 

2020—requires states to achieve such a 

significant portion of the required CO2

emission reductions early in the interim 

period that it defeats the intended 

purpose of providing states flexibility in 

how they may achieve the required 

emission reductions. In addition, we 

have heard that there may be technical 

challenges associated with achieving all 

of the reductions that states would be 

required to make as early as 2020, when 

the interim period commences. 

Stakeholders also have expressed 

concerns that such a lack of flexibility 

would prevent them from taking 

advantage of more cost effective 

reduction strategies and from ensuring 

that the energy system can respond to 

severe weather events such as occurred 

during the polar vortex in 2014. The 

EPA is interested in considering 

additional stakeholder ideas, such as 

those regarding the 2020–2029 glide 

path, to ensure that the overall 

framework includes sufficient 

flexibility, particularly with respect to 

timing of and strategies for reducing 

emissions from the affected units so that 

states can develop cost-effective 

strategies, and states, utilities, grid 

operators and others can readily 

respond to unexpected changes or 

demands on the energy system, such as 

severe weather. 

Stakeholders have suggested two 

ways of addressing these concerns. The 

first involves allowing credit for early 

CO2 emission reductions that could be 

used to allow flexibility to defer 

additional CO2 emission reductions 

until later in the 2020–2029 period. The 

second approach involves phasing in 

building block 2 over time, just as 

building blocks 3 and 4 are currently 

phased in. 

1. Early Reductions 

With regard to the suggestion that 

early reductions could be used as a way 

to ease the 2020–2029 glide path, the 

agency believes that the existing 

proposal provides both stakeholders and 

the EPA the latitude to consider this 

concept. In the proposed rule, the EPA 

requests comment on a range of possible 

approaches to this type of credit for 

early action (79 FR 34918–34919). In the 

first approach, full accounting of 

emission reductions continues to begin 

in 2020 but credit could be received for 

certain pre-2020 reductions that could 

be used to reduce the amount of 

reductions needed during the 2020– 

2029 period. The EPA also requests 

comment in the proposed rule on a 

second approach in which states could 

choose early (e.g., pre-2020) 

implementation of state goal 

requirements, which could provide 

states with the ability to achieve the 


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64546 Federal Register / Vol. 79, No. 210 / Thursday, October 30, 2014 / Proposed Rules 

1 It should be noted that, in the June 2014 

proposal, the EPA recognized that programs that are 

implemented between 2015 and 2020, to the extent 

that they continue to generate low- or zero-carbon 

in 2020 and beyond, are beneficial, even in the 

absence of crediting such emission reductions 

toward compliance in 2020 because states 

possessing these programs will be better positioned 

to comply beginning in 2020 (79 FR 34918). 

2See 79 FR 34862 for a discussion of the BSER 

analysis of building block 2. 

same amount of overall emission 

reductions but do so by making some 

reductions earlier (79 FR 34919). The 

EPA recognizes that some measures may 

take longer than 2020 to implement, 

while others can be, and are being, 

implemented more quickly. 

Implementation of any of these ideas 

would allow states or sources to include 

such reductions in their compliance 

strategies in lieu of achieving the full 

measure of reductions otherwise 

required in 2020 to meet the interim 

goal, and would thereby result in states 

and/or sources being able to phase in 

these reductions.1 It may be possible for 

at least some states to take advantage of 

these approaches by, for example, taking 

advantage of RE and demand-side 

energy efficiency (EE) projects already 

under development and scheduled to be 

implemented prior to 2020 or by 

expediting other projects currently 

scheduled to be implemented after 

2020. The EPA is interested in these and 

other ways to ensure that states 

continue the progress they are making to 

reduce CO2 from the power sector prior 

to 2020 and that this rule does not 

create disincentives for those pre-2020 

actions. 

2. Phasing in Building Block 2 and a 

More Gradual Glide Path 

Some stakeholders have stated that 

significant shifts of generation away 

from coal-fired generators to NGCC 

units (as calculated under building 

block 2 and illustrated in the Regulatory 

Impact Analysis (RIA) in support of the 

June 18, 2014 proposal) will be difficult 

for some states to achieve by 2020 as a 

result of technical, engineering, and 

infrastructure limitations or other 

considerations, and may limit costeffective options for emission 

reductions. According to these 

stakeholders, these concerns exist even 

though the proposal does not require all 

emission reductions to be achieved in 

2020, but rather provides that the 

interim goal can be met on an average 

basis for the 2020–2029 period. 

In the proposal, the EPA determined 

that emission reductions are feasible 

and achievable at fossil fuel-fired steam 

EGUs by shifting from more carbonintensive EGUs to less carbon-intensive 

EGUs, as part of the BSER.2 More 

specifically, the EPA concluded that, by 

shifting generation from fossil fuel-fired 

steam units (which are primarily coalfired) to NGCC units, up to a utilization 

of 70% could be achieved by 2020, as 

part of building block 2 and for 

purposes of establishing state goals. In 

contrast, in the approach to building 

blocks 3 and 4, the EPA concluded that 

reductions in CO2 emissions from fossil 

fuel-fired units associated with 

increased utilization of RE and EE 

would be achievable on a phased-in 

basis between 2020–2029, reflecting the 

necessary time needed for deployment 

(79 FR 34866). 

We note that the design of the 

guidelines makes clear that states are 

not required to reach their targets using 

precisely the building blocks that EPA 

used to determine each state’s goal. 

Nevertheless, some stakeholders have 

expressed concern that it may not be 

feasible to ensure significantly higher 

levels of utilization for existing NGCC 

units that might be required in order to 

meet the interim state goals because of 

the time required to improve natural gas 

pipeline infrastructure in some states, as 

well as other factors. Stakeholders have 

also stated that, while some coal-fired 

units have recently been constructed 

and many have received significant 

capital investment (e.g., in the form of 

pollution control retrofits), some states’ 

interim goals could not be achieved 

unless these units stop operating by 

2020. According to stakeholders, this 

concern particularly applies for states 

that have both significant amounts of 

steam generation and significant 

amounts of existing NGCC capacity that 

is not currently being operated at high 

levels of utilization. While the EPA 

solicited comment in the proposal 

broadly on the proposed start date of 

2020 (79 FR 34902), the proposal does 

not discuss specific potential rationales 

for phasing in dispatch changes under 

building block 2. Therefore, in this 

document, the EPA is explicitly 

requesting comment on that topic. More 

detail on specific suggestions we have 

heard from stakeholders is provided in 

section III.B of this document. 

B. Certain Aspects of the Building Block 

Methodology 

While the agency has already received 

significant feedback on all four building 

blocks, there are specific comments and 

concerns regarding particular aspects of 

the way in which building blocks 2 and 

3 were designed that may not have been 

fully evident in the original proposal 

and that commenters may want to 

consider as they prepare their 

comments. 

1. Stringency of Building Block 2 

With regard to the ultimate stringency 

of building block 2 (dispatch changes 

among affected EGUs), stakeholders 

have offered a wide range of views, with 

some suggesting that building block 2 

should be less stringent, others 

suggesting that it should be more 

stringent and still others suggesting 

changes that could make it more 

stringent in some states and less 

stringent in others. Some stakeholders 

have expressed concerns that it might 

not be possible for all NGCC units to 

operate at capacity factors of 70%. Other 

stakeholders have raised concerns that, 

with respect to states with large 

amounts of steam generation, the 

proposed approach to building block 2 

creates significant disparities in state 

goals between those states with little or 

no NGCC generating capacity and those 

with significant amounts of NGCC 

capacity not currently being used fully. 

Some stakeholders have also suggested 

that the EPA’s BSER determination 

should recognize that there are 

additional opportunities to employ 

natural gas beyond what the EPA 

included in the proposed rule: The 

construction and/or increased 

utilization of new NGCC units and 

additional co-firing of natural gas at 

existing fossil steam units. 

In the proposed rule, the EPA invited 

comment on whether the BSER should 

include: (1) Increasing utilization of 

NGCC units that are under construction, 

from an expected capacity factor of 55% 

to 70% (reflecting a 15% increase), and 

displacing generation from fossil firedsteam units by an equivalent amount (79 

FR 34876); and (2) co-firing with natural 

gas (79 FR 34875). In the proposed rule, 

the EPA also discussed the opportunity 

to reduce CO2 emissions at affected 

EGUs by means of the addition, and 

greater operation, of new NGCC units 

(i.e., beyond what is currently under 

construction). The agency also solicited 

comment on whether new NGCC units 

should be included as part of the BSER, 

and how to define state-level goals 

based on consideration of new NGCC 

deployment (79 FR 34876–77). 

While the agency requested comment 

on the use of co-firing of natural gas and 

the inclusion of new NGCC units, a 

number of stakeholders have suggested 

that building block 2 should not focus 

purely on re-dispatch, but instead 

should focus more comprehensively or 

holistically on the use of natural gas as 

a means of reducing CO2 from the power 

sector. This concept may go beyond 

ideas raised in the original proposal; 

therefore, the EPA invites comment on 


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3While the June 2014 proposal included two 

different approaches for quantifying RE targets to 

inform state goals, both approaches premised RE 

targets on in-state generation potential. 

4There is also an extensive discussion of 

interstate effects and related compliance strategies 

in section VII of the TSD titled ‘‘State Plan 

Considerations,’’ Docket ID No. EPA–HQ–OAR– 

2013–0602–0463. 

this idea, as discussed in section III.B.1 

of this document. 

It is also worth noting that, although 

the EPA calculated the proposed state 

goals on the basis of applying building 

block 2 on a state-by-state basis (under 

which generation from fossil fuel-fired 

steam units within the state is shifted to 

NGCC units within the state), the EPA 

also invited comment on whether 

building block 2 should be applied on 

a regional basis, under which generation 

from fossil fuel-fired steam units within 

a region is shifted to NGCC units within 

the region (79 FR 34865, 34899). The 

EPA is noting this idea to alert 

commenters to the fact that it might be 

another possible mechanism for 

addressing stakeholders’ concerns about 

the disparity of the impact of building 

block 2 between states that have already 

invested significantly in developing 

NGCC generation and those that have 

not. 

2. Methodology for Building Block 3 

and How Building Block 3 Targets 

Relate to Compliance Options 

Stakeholders have noted concerns 

both with the treatment of renewable 

generation and the treatment of nuclear 

generation in building block 3. 

a. Approaches for RE target setting. 

Stakeholders have raised concerns 

regarding the renewable energy targetsetting component of building block 3, 

specifically what they describe as a 

potential misalignment between 

estimating each state’s target based on 

in-state renewables while allowing use 

of out-of-state renewables for 

compliance with state goals.3

Stakeholders have expressed interest in 

a target-setting methodology that takes 

into account interstate exchanges of RE 

in the calculation of state goals, on the 

premise that such an approach would 

better align with existing state RE 

policies and potential claims on a given 

state’s RE generation by parties from 

other states (such as renewable energy 

certificates and power purchase 

agreements). This feedback has been 

received both from states that are net 

suppliers of RE generation to other 

states and from states that are net 

consumers of RE generation produced in 

other 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. Other stakeholders 

have raised concerns that, due to 

dynamics of the target-setting 

calculations related to the in-state 

nature of targets, the RE target-setting 

approaches in the June 2014 proposal 

may require substantially more RE 

development from states that have 

already invested considerably in RE 

while requiring less from states that 

have not put significant effort into 

developing RE resources. Some 

stakeholders suggest that better aligning 

goal-setting to probable compliance 

approaches may mitigate some of these 

potential concerns. 

The June 2014 proposed rule included 

two approaches for RE target-setting. 

The approach that the EPA proposed 

established state RE targets premised 

upon an average of state RPS 

requirements across states in certain 

regions (see 79 FR 34866–34869 and 

Chapter 4 of the technical support 

document (TSD) titled ‘‘GHG Abatement 

Methods,’’ Docket ID No. EPA–HQ– 

OAR–2013–0602–17180). The EPA also 

requested comment on an alternative 

approach that used a state-by-state 

determination of RE targets, based on 

technical and market potential (see 79 

FR 34869–34870 and ‘‘Alternative RE 

Approach Technical Support 

Document,’’ Docket ID No. EPA–HQ– 

OAR–2013–0602–0458). 

Both of these approaches focused on 

the ability to develop renewable 

generation within a state. At the same 

time, the EPA proposed that, for 

compliance, a state could take credit for 

any RE generation that was related to an 

enforceable measure in its state, 

whether that generation originated in its 

state or in another state. This approach 

was designed to reflect the nature of 

existing state policy that allows for 

compliance with out-of-state generation, 

such as renewable energy standards 

(RES). 

The proposed rule acknowledged the 

interstate nature of the electricity 

system (79 FR 34921–34922), while 

focusing requests for comment on 

alternative state plan options that could 

help states better align interstate RE 

measures and related emission 

reductions in their plan with the 

proposed in-state RE targets that 

informed their goal.4 These options 

included: 

(1) Allowing states to participate in 

multi-state plans to distribute the CO2

emission reductions among states in the 

multi-state area equivalent to the total 

CO2 emission reductions of each state’s 

in-state emission reductions from RE 

measures, or to jointly demonstrate RErelated emission performance, which 

would make distribution of RE impacts 

unnecessary (note that these plans may 

be limited to, for example, RE or RE and 

EE, or they may encompass all of the 

building blocks); 

(2) allowing states to take into account 

only RE generation related to emission 

reductions occurring in-state; and 

(3) allowing a state to take credit for 

out-of-state emission reductions related 

to RE generation only if the state 

demonstrates that the generation will 

not also be credited by the other 

relevant state(s). 

Some stakeholders have suggested a 

different way to align state goal setting 

and state compliance through adjusting 

the state goal-setting method. Consistent 

with the proposed idea that states could 

take credit for renewables developed in 

other states if they were attributable to 

state policies such as RES programs, 

these stakeholders have suggested that 

state targets could be developed by 

defining regional RE targets, then 

assigning shares of those regional targets 

to individual states within the region. 

We believe this idea lies beyond the 

scope of the June 18, 2014 proposal; 

thus, we are sharing this idea more 

broadly and requesting comment on this 

idea, which is discussed in more depth 

in section III. 

b. Inclusion of nuclear units in 

building block 3. Stakeholders have 

provided numerous suggestions about 

inclusion of nuclear power in the 

calculation of state goals and as a 

compliance option. The EPA believes 

that the topics that stakeholders, 

including states, have raised related to 

whether to, and if so, how to, include 

nuclear units that are currently under 

construction and at-risk existing nuclear 

capacity in the calculation of goals are 

covered in the original proposal (79 FR 

34870–34871). We are carefully 

considering stakeholders comments on 

these topics and others for which we 

requested comment in the June 18, 2014 

proposal. 

C. Implementation of the Goal-Setting 

Equation 

1. Goal-Setting Equation 

Some stakeholders have raised 

concerns that the numeric formula for 

calculating each state’s goal is not 

consistent in its application of the BSER 

for building block 2, as compared with 

building blocks 3 and 4. They state that 

the goal calculation for building block 2 

not only reflects an increase in less 

carbon-intensive generation, but also 


tkelley on DSK3SPTVN1PROD with PROPOSALS
64548 Federal Register / Vol. 79, No. 210 / Thursday, October 30, 2014 / Proposed Rules 

5Note that, in states with under-construction 

NGCC units, the total fossil generation assumed in 

the proposed goal-setting equation exceeds the 2012 

level due the 55% capacity factor assumed from 

these new sources. 

applies an equal downward adjustment 

to each state’s total existing fossil steam 

generation level in 2012, reflecting a 

generation shift away from higheremitting fossil steam generation and 

toward lower-emitting NGCC 

generation. The result is that total 

generation is held constant, with only 

the mix of more and less carbonintensive generation changing.5 In 

contrast, they state, the approach in the 

proposal for incorporating building 

blocks 3 and 4 in the goal calculations 

does not reflect shifting generation away 

from fossil units because the total 

amount of generation is increased 

(including ‘‘megawatts’’ from EE as 

‘‘generation’’) without any offsetting 

decrease in generation from 2012 fossil 

generation levels. Some stakeholders 

suggest that, by holding existing fossil 

generation at 2012 levels for purposes of 

goal calculation and estimating building 

blocks 3 and 4 independent of the 

interaction with those existing fossil 

generation levels, the state goals do not 

reflect the potential for added 

generation from building block 3 and 

avoided generation from building block 

4 to shift generation away from existing 

fossil steam generation below the 2012 

level and, therefore, do not reduce 

generation, and thus emissions, from 

affected fossil fuel-fired generation in 

keeping with the EPA’s proposed 

approach to the BSER. 

Since the EPA did not address this 

issue explicitly in the June 2014 

proposal, the EPA discusses alternative 

approaches that have been suggested by 

stakeholders and solicits comment on 

these in section III.C of this document 

so that all stakeholders will have an 

opportunity to consider these ideas as 

they prepare their comments. 

2. Alternatives to the 2012 Data Year 

Since publication of the proposed 

rule, many states and other stakeholders 

have expressed concern over the use of 

2012 as the single data year for 

calculating interim and final goals. 

Some states and stakeholders have 

identified anomalies with generation in 

their state or at their companies for 2012 

that they believe make 2012 an 

inappropriate base year. At proposal, 

the EPA considered using average fossil 

generation and emission rate values 

over a longer period than a single year. 

As a result of the goal calculation 

methodology, the EPA determined that, 

on average, any potential changes to 

state goals using a multi-year base year 

would be minimal, and would result in 

increases for some states and decreases 

for others (see ‘‘Goal Computation 

Technical Support Document’’ at 4, 

Docket ID No. EPA–HQ–OAR–2013– 

0602–0460). Numerous stakeholders 

have expressed interest in obtaining 

Emissions and Generation Resource 

Integrated Database (eGRID) data for 

years prior to 2012 to foster comparison 

with results from the 2012 dataset. As 

is discussed further in section III.C.2 of 

this document, the EPA is making 

available the 2010 and 2011 eGRID data 

and requesting comment on the use of 

2010 and 2011 data, in addition to 2012 

data, in setting state-specific CO2 goals. 

III. Topics Upon Which the EPA Is 

Soliciting Additional Comment 

As discussed above, stakeholders, 

including states, have raised questions 

or concerns, and provided suggestions, 

regarding several topics that relate 

either to the EPA’s determination of the 

BSER or to states’ and sources’ options 

for compliance with the rule 

requirements and, if addressed in the 

final rule, could result in changes to the 

stringency of the proposed emission 

rate-based CO2 goals, at least for some 

states. The EPA is identifying these 

topics to ensure that all stakeholders 

have the opportunity to consider these 

topics as they comment on the proposal. 

This document is not a 

comprehensive presentation of the 

issues raised by stakeholders or under 

consideration by the EPA. The issues 

presented here arise from the agency 

having heard concerns and suggestions 

raised about the stringency of the CO2

goals; the timeframe required for 

complying with those goals and its 

potential impact on flexibility and cost; 

and unwanted effects that may arise 

from the differences between and among 

state goals. Potential changes to the rule 

based on any one of these issues could 

increase or decrease the stringency of 

the goals or shift stringency levels 

between and among states. 

A. The 2020 to 2029 Glide Path 

It was the EPA’s intent in the proposal 

that, through the inclusion of a ten-year 

averaging period and other flexibility 

mechanisms, the interim goals would 

provide states with a reasonable glide 

path to compliance with their final goals 

by 2030. However, as noted in section 

II.A above, some stakeholders have 

expressed concerns with the approach 

that the EPA used to determine states’ 

interim goals and have stated that, 

notwithstanding the flexibility provided 

in the proposal, significant shifts of 

generation away from coal-fired 

generators to NGCC units (as calculated 

under building block 2) will be 

necessary by 2020 and will be difficult 

for at least some states to reasonably 

achieve in that timeframe. To facilitate 

further consideration of these and other 

stakeholder concerns about the potential 

challenges associated with achieving all 

of the reductions that states may need 

to obtain as early as 2020, the EPA is 

seeking comment on two additional 

specific adjustments to the interim goal 

calculations, discussed below, that 

would allow for a more gradual phasein of building block 2 during the 2020– 

2029 period. 

With regard to the glide path, some 

stakeholders have also suggested that a 

phase-in of building block 1 would be 

appropriate. The EPA is also requesting 

comment on that idea. 

Stakeholders have suggested at least 

two additional ways that a trajectory for 

a gradual phase-in could be developed 

to respond to their concerns. First, a 

phase-in schedule could be developed 

for building block 2 on the basis of 

whether, and to what extent, any 

additional infrastructure improvements 

(e.g., natural gas pipeline expansion or 

transmission improvements) are needed 

to support more use of existing natural 

gas-fired generation. To the extent that 

more infrastructure is needed, the 

methodology for building block 2 could 

be modified on the basis of how much 

utilization shift toward existing NGCC 

generation would be possible by 2020, 

by factoring in how quickly additional 

infrastructure could be developed to 

support any additional use of natural 

gas-fired generation by that date. This 

would result in two parameters, parallel 

to the way that building blocks 3 and 4 

are implemented in the proposal. The 

first parameter would define an amount 

of utilization shift to existing natural gas 

that is feasible by 2020, and the second 

parameter would define how quickly 

that amount could grow until the full 

amount of natural gas utilization could 

be achieved as part of the BSER. 

Second, building block 2 could be 

modified to respond to stakeholder 

concerns about the pace with which 

generation in some states may need to 

be shifted from higher-emitting to 

lower-emitting units. In particular, 

stakeholders have expressed a concern 

that shifting generation away from 

existing generating assets, particularly 

coal-fired EGUs, could, in some 

situations, result in limiting costeffective options. As discussed in the 

proposal (79 FR 34925), due to the 

flexibility provided by the EPA’s 

approach to establishing state goals, and 

the flexibility provided to states in 

developing plans to achieve those goals, 

the EPA believes that the proposal 


tkelley on DSK3SPTVN1PROD with PROPOSALS
Federal Register / Vol. 79, No. 210 / Thursday, October 30, 2014 / Proposed Rules 64549 

6 IPM version 5.13 Documentation, Chapter 8, 

Financial Assumptions, available at: http://

www.epa.gov/airmarkets/progsregs/epa-ipm/docs/

v513/Chapter_8.pdf. 

provides states the flexibility to specify 

appropriate requirements for individual 

EGUs, including coal-fired EGUs, taking 

into account the potential for stranded 

investments and other unit-specific 

factors. However, to the extent that 

stakeholders are concerned that the 

tools available to states under the 

proposal may, in some instances, be 

inadequate to address concerns 

regarding stranded investments, an 

additional way to address these 

concerns 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. For 

example, in its modeling, the EPA 

assumes a book life of 40 years for new 

coal-fired units.6 The EPA requests 

comment on whether, and how, book 

life might be either used as part of the 

basis for the development of an 

alternative emission glide path for 

building block 2 or used to evaluate 

whether other ways of developing an 

alternative glide path (such as the 

phase-in approaches discussed above) 

would address stakeholders’ stranded 

investment concerns. The EPA is 

providing this additional information, 

arising from stakeholder concerns, to 

allow additional continued engagement 

of stakeholders in the comment process. 

It is also important to consider that 

changes to the structure of building 

blocks 2 and 3, as well as changes to the 

goal-setting equation discussed below in 

section III.D, would likely impact the 

glide path. The EPA continues to 

welcome other ideas on how to craft a 

glide path that offers states flexibility 

while still ensuring that they can 

achieve the final goals. 

B. Certain Aspects of the Building Block 

Methodology 

This section describes alternative 

approaches, including approaches based 

on regional considerations or 

allocations. In offering these stakeholder 

ideas for comment, the agency’s intent 

is not to require regional plans. Rather, 

it is to respond to stakeholder concerns 

that currently proposed approaches 

could limit some states’ flexibility in 

meeting the goals. To address this 

concern, the agency is offering 

additional stakeholder ideas that could 

support states’ flexibility in achieving 

the goals. Under any of the approaches, 

each state would still have the option of 

submitting an individual CAA section 

111(d) plan or of participating in a 

multi-state CAA section 111(d) plan. 

The EPA acknowledges that 

determining the component of the BSER 

related to shifting generation from fossil 

fuel-fired units to renewable units based 

on regional considerations or allocations 

among states could result in changes to 

state’s goals relative to a non-regional 

approach. Furthermore, ultimate 

decisions about how a source may 

respond are dependent both on whether 

a state participates in a regional plan 

(which could effectively change the 

impact of the goals across the states 

involved) and on how a state assigns 

obligations to sources. The agency is 

also aware that how states decide to 

assign reduction obligations in their 

state plans, as well as a state’s decision 

to develop an individual state plan or to 

participate in a regional plan, can play 

a significant role in how sources 

respond. 

1. Stringency of Building Block 2 

In section II.B.1 above, we identified 

stakeholder comments on the treatment 

of natural gas in building block 2 and 

described stakeholder suggestions for 

approaches that are covered in the June 

2014 proposal. In this section, we 

further describe stakeholder comments 

and also present new approaches for the 

treatment of natural gas for which the 

agency is seeking comment. The EPA is 

providing this additional information, 

arising from stakeholder concerns, to 

allow additional continued engagement 

of stakeholders in the comment process. 

Some stakeholders have raised 

concerns that, with respect to states 

with large amounts of steam generation, 

the proposed approach to building block 

2 creates significant disparities in state 

goals between those states with little or 

no NGCC generating capacity, and those 

with significant amounts of NGCC 

capacity not currently being used fully. 

Stakeholders have also raised concerns 

that these disparities could result in 

distortions in regional electricity 

markets. Some stakeholders have 

suggested that these disparities could be 

reduced by increasing the obligation of 

those states with little or no NGCC 

generating capacity to employ natural 

gas beyond what the EPA included in 

the proposed rule, including the 

construction and/or increased 

utilization of new NGCC units and 

additional co-firing of natural gas at 

existing fossil steam units. 

Greater use of new NGCC units or 

additional co-firing of natural gas at 

existing steam boilers could result in 

changes in natural gas use. Some have 

argued that if there is increased demand 

for natural gas for new NGCC units and/ 

or co-firing, it could add upward 

pressure on natural gas prices. However, 

commenters may want to consider 

whether there are ways to incorporate 

new NGCC units and co-firing into the 

BSER that might not result in an overall 

increase in the amount of natural gas 

usage, For example, if the EPA adopts 

the type of more gradual glide path for 

building block 2 described above in 

section III.A, increases in natural gas 

use from new NGCC units and increased 

co-firing might leave the amount of 

overall natural gas use similar to what 

would result from what the EPA 

proposed in building block 2 (at least in 

the early years of the glide path). 

Some stakeholders have suggested 

other reasons to consider new NGCC 

generation and natural gas co-firing as 

part of building block 2. They note that 

the incorporation of natural gas as part 

of the BSER should consider the cost 

and feasibility of the total amount of 

natural gas used, as opposed to the 

extent to which the gas is used for 

particular types of generation (i.e., 

existing NGCC generation, new NGCC 

generation, or co-firing). In the proposal, 

the EPA concluded that existing NGCC 

generation, which relies upon existing 

infrastructure, was the most costeffective manner in which to base 

building block 2. However, there may be 

other important considerations that can 

shape the relationship of the BSER to 

natural gas consumption, such as the 

ability to build new infrastructure and 

the flexibility that co-firing could 

provide. 

These stakeholders note that this 

expanded approach would be more 

consistent with historic NGCC 

deployment, better reflect growing 

geographic availability of natural gas 

supply, contribute to expanded 

generation fuel diversity in states that 

currently have relatively little NGCC 

capacity, and offer more cost-effective 

emission reductions. 

The EPA has identified one potential 

approach to accommodate these 

stakeholder suggestions about 

utilization of new NGCC generation or 

co-firing, especially in states with little 

or no existing NGCC capacity, to assist 

public engagement during the comment 

process and to solicit more specific 

comment. This approach would be to 

include an assumption about some 

minimum level of generation shift from 

higher-emitting to lower-emitting 

sources for all states containing some 

fossil steam generation in the state 

goals. In determining this minimum 

amount, it should be recalled that the 

proposal indicated a total amount of 

generation shift from fossil steam to 

NGCC generation assumed in building 


tkelley on DSK3SPTVN1PROD with PROPOSALS
64550 Federal Register / Vol. 79, No. 210 / Thursday, October 30, 2014 / Proposed Rules 

7See ‘‘Regulatory Impact Analysis for the 

Proposed Carbon Pollution Guidelines for Existing 

Power Plants and Emission Standards for Modified 

and Reconstructed Power Plants’’ (June 2014). 

Docket ID No. EPA–HQ–OAR–2013–0602–0391 at 

3–24. 

8This is based on the forty states that had: (1) 

NGCC capacity in 2012, and (2) some fossil steam 

generation from which shifting could occur. The 

55% and 12% discussed here are non-weighted 

averages of the percentage fossil steam generation 

shift observed in each state, the nationwide 

percentage of fossil steam generation shift assumed 

was 28%. See ‘‘Goal Computation Technical 

Support Document,’’ Docket ID No. EPA–HQ–OAR– 

2013–0602–0460, ‘‘Appendix 1—State Goal Data 

and Computation,’’ Docket ID No. EPA–HQ–OAR– 

2013–0602–0255, and ‘‘2012 Unit-level Data Using 

the eGRID Methodology,’’ Docket ID No. EPA–HQ– 

OAR–2013–0602–0254. 

9 ‘‘Coal unit retirements, conversions continue to 

sweep through power sector.’’ M. Niven and N. 

Powell. SNL Financial, Charlottesville, VA. October 

14, 2014. Accessed on 10/22/14 at: https://

www.snl.com/InteractiveX/Article.aspx?cdid=A9431641-13357. 

block 2 for each state.7 The 2012 eGRID 

data, used for purposes of setting state 

goals, reflects the total generation for 

each state. Dividing the former by the 

latter provides the percentage of each 

state’s generation that is shifted from 

higher-emitting to lower-emitting 

sources. For example, on average, the 

states that are able to shift fossil steam 

generation to lower-emitting generation 

sources shift 55% of their fossil steam 

generation, on average, under the 

proposed approach. The lower quartile 

of these states shift approximately 12% 

of their fossil steam generation.8

The EPA solicits comment on whether 

to establish some minimum value as a 

floor for the amount of generation shift 

for purposes of building block 2, 

whether that shift takes the form of redispatch from steam generation to 

existing NGCC units, re-dispatch to new 

NGCC units, or co-firing natural gas in 

existing coal-fired boilers. The EPA also 

solicits comment on what that value 

should be, e.g., the lower quartile value 

of 12%, or any other value between 0 

and the 55% average described above. 

To illustrate this minimum approach, if 

the lower quartile value were used, a 

state with 100 MWh of fossil generation 

and no existing NGCC generation in 

2012 would have a state goal premised 

on 12 MWh shifting from higheremitting to lower-emitting NGCC 

generation. 

The EPA also solicits comment on 

how this approach to add a minimum 

requirement for states that currently 

have little or no NGCC capacity should 

relate to the proposed approach that 

requires states with significant amounts 

of unused NGCC capacity to utilize up 

to 70% of that capacity. Note at the 

outset that the total nationwide amount 

of NGCC generation assumed under 

building block 2 is approximately 1,450 

terrawatt-hours (TWh). Should the 

minimum generation shifts in states 

with little or no NGCC capacity be in 

addition to this total amount? 

Alternatively, should the total level of 

gas use for purposes of building block 

2 be held the same? Under the latter 

approach, the amount of generation 

from states with higher amounts of 

NGCC capacity would be reduced in 

amounts equal to the additional NGCC 

generation applied to states with zeroor low-NGCC capacity states, for 

building block 2. This approach would 

further reduce the disparities between 

states with little or no NGCC capacity 

and those with significant amounts of 

NGCC capacity. 

Some stakeholders have made 

additional observations about natural 

gas co-firing, in response to the EPA’s 

solicitation of comment in the proposed 

rulemaking (79 FR 34865). They have 

brought to the EPA’s attention that there 

are some benefits associated with the 

co-firing of natural gas with coal that 

might make it a practical option for 

consideration in goal setting and 

compliance in lieu of, or in addition to, 

shifting from coal-fired steam generating 

units to NGCC units. For example, 

stakeholders point out that co-firing can 

reduce emissions of nitrogen oxides 

(NOX); sulfur dioxide (SO2); particulate 

matter; and hazardous air pollutants, 

including mercury. Co-firing could also 

reduce some portion of the costs related 

to control of these pollutants 

(depending on the extent of co-firing). 

Co-firing might also provide additional 

operational flexibility, particularly for 

coal-fired units that are regularly used at 

less than full load or that cycle 

regularly. Co-firing may allow units to 

ramp up and down more quickly, which 

could give a company the opportunity 

to take advantage of low fuel prices, 

when they occur, to achieve cost 

savings. Co-firing could allow 

additional time for implementation of 

strategies in state plans that have a 

lengthier implementation timeframe, 

such as building up a robust energy 

efficiency program. Further, co-firing 

could provide an opportunity to achieve 

emission reductions at existing higheremitting units with relatively low levels 

of capital investment, thereby 

addressing companies’ concerns about 

stranded assets. It should also be noted 

that utilities continue to announce 

conversions or plans to convert coalfired steam boilers to natural gas.9 We 

noted and requested comment on some, 

but not all, of these observations in the 

June 18, 2014 proposal (see 79 FR 

34875–34876). 

We are requesting comment on these 

aspects of the costs and potential 

benefits (or offsetting cost advantages) of 

co-firing natural gas at existing coal 

plants, to the extent they were not 

considered or presented for comment in 

the proposed rule, along with any other 

additional costs and potential benefits 

of such co-firing that could be 

considered in goal setting. In addition, 

we are requesting comment on other 

factors or variables that might affect the 

decision to use natural gas in co-firing 

at a particular unit (e.g., type, age, or 

size of a boiler), as well as factors that 

could limit the amount of co-firing that 

could be done. For units currently cofiring with natural gas, we request 

comment on the benefits experienced 

and the extent to which co-firing is 

being done. 

It should be noted that in its June 

2014 proposal, the EPA stated that 

replacing fossil steam generation with 

new NGCC units and natural gas cofiring at existing fossil steam units may 

be considered the BSER for various 

reasons. New NGCC units and natural 

gas co-firing at existing fossil steam 

units may be considered part of a 

‘‘system of emission reduction,’’ in light 

of the broad definition of that phrase; 

for example, the affected sources can 

themselves undertake those actions (i.e., 

fossil steam generators may invest in 

new NGCC units and coal-fired steam 

generators may co-fire with natural gas); 

and steam generators may reduce their 

utilization, which, through the 

operation of the market, would lead to 

the construction of new NGCC capacity 

(see 79 FR 34885–90). In addition, 

replacing fossil steam generation with 

new NGCC units and natural gas cofiring at existing fossil steam units are 

‘‘adequately demonstrated’’ in light of 

the extent to which they have already 

occurred. 

As discussed above in section II.B, the 

June 2014 proposal already solicits 

comment on an alternative approach to 

addressing the concern that states with 

little existing natural gas infrastructure 

do not have the same opportunities to 

shift generation to lower-emitting NGCC 

units. We are highlighting this 

alternative approach from the June 2014 

proposal so that stakeholders can 

consider whether this approach could 

address their concerns. Under this 

approach, regional availability of NGCC 

generation would be considered rather 

than just in-state availability of NGCC 

generation in setting building block 2 

targets. Determining the appropriate 

levels of generation shift under building 

block 2 in a similar, regional manner— 


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Federal Register / Vol. 79, No. 210 / Thursday, October 30, 2014 / Proposed Rules 64551 

10See ‘‘Regulatory Impact Analysis for the 

Proposed Carbon Pollution Guidelines for Existing 

Power Plants and Emission Standards for Modified 

and Reconstructed Power Plants’’ (June 2014) 

Docket ID No. EPA–HQ–OAR–2013–0602–0391 at 

3–11; TSD on ‘‘GHG Abatement Measures’’ (June 

2014), Docket ID No. EPA–HQ–OAR–2013–0602– 

0437 at 3–25. 

11The regions were defined as follows, East 

Central: Delaware, District of Columbia, Maryland, 

New Jersey, Ohio, Pennsylvania, Virginia, West 

Virginia; North Central: Illinois, Indiana, Iowa, 

Michigan, Minnesota, Missouri, North Dakota, 

South Dakota, Wisconsin; Northeast: Connecticut, 

Maine, Massachusetts, New Hampshire, New York, 

Rhode Island, Vermont; South Central: Arkansas, 

Kansas, Louisiana, Nebraska, Oklahoma, Texas; 

Southeast: Alabama, Florida, Georgia, Kentucky, 

Mississippi, North Carolina, South Carolina, 

Tennessee; and West: Arizona, California, Colorado, 

Idaho, Montana, Nevada, New Mexico, Oregon, 

Utah, Washington, Wyoming. Alaska and Hawaii 

were considered as two individual regions. Because 

Vermont and the District of Columbia lack affected 

sources, no goals are being proposed for these 

jurisdictions. 

12This criterion could be informed by publicly 

available data in 2012 Retail Sales of Electricity by 

State by Sector by Provider, as reported from EIA 

Form 861, available at: http://www.eia.gov/

electricity/data/state./ 

13Further information is available at: http://

www.nerc.com/AboutNERC/keyplayers/Pages/

Regional-Entities.aspx. 

14An illustrative map is provided on p. 4 of the 

document at the following link: http://

www.ferc.gov/media/news-releases/2011/2011-3/

07-21-11-E-6-presentation.pdf. 

15Further information and an illustrative map are 

available at http://www.ferc.gov/industries/electric/ 

indus-act/rto.asp. 

16There are several renewable energy tracking 

systems that serve to issue and retire renewable 

energy credits (RECs) across regions in the U.S. 

More information, including an illustrative map, is 

available from the U.S. Department of Energy at 

http://apps3.eere.energy.gov/greenpower/markets/

certificates.shtml?page=3. 

using either the same regional structure 

as that defined by the EPA for the RIA 

of the proposed rule (i.e., six regions 

whose borders are informed by North 

American Electric Reliability (NERC) 

regions and Regional Transmission 

Organizations (RTOs)) (79 FR 34865 n. 

142),10 or some alternative regional 

structure—could be another way to 

mitigate the concerns expressed by 

stakeholders that building block 2 has 

little or no effect on certain states with 

large amounts of coal-fired generation 

and limited excess NGCC capacity. The 

EPA seeks comment on the appropriate 

regional structure to use in such a 

framework and the appropriate manner 

in which the goals could be derived and 

allocated among states. 

2. Methodology for Building Block 3 

and How Building Block 3 Targets 

Relate to Compliance Options 

In section II.B.2 above, we identified 

stakeholder comments on the renewable 

energy target-setting component of 

building block 3 and described two 

methodological approaches for RE 

target-setting that are within the scope 

of the June 2014 proposal. In this 

section, we provide a conceptual 

discussion of a third methodological 

option for RE targets that some 

stakeholders have suggested and which 

we refer to here as a regionalized 

approach. This approach adjusts each 

state’s RE target based on the RE 

potential available across a multi-state 

region in which the state is located. 

Under this approach, a state’s goal 

would be informed by the opportunity 

to develop out-of-state RE resources as 

part of its state plan, and thus better 

align RE targets with the proposal to 

allow the use of certain out-of-state 

renewables for compliance, in 

accordance with stakeholder comments 

described in section II.B.2. This 

regionalized approach could group 

states into regions; aggregate RE 

generation potential across states within 

each region; and then reapportion the 

aggregate identified RE generation to 

individual states according to criteria 

that assume regional RE development in 

which parties in multiple states 

participate, regardless of the specific 

state where the generation occurs. One 

example of this type of regionalized 

approach would be grouping states into 

the regional structure shown in the June 

2014 proposal 11 (79 FR 34866–34867); 

for each region, summing the RE target 

generation identified under the 

alternative approach in the June 2014 

proposal for all states in that region; and 

then reallocating that summed 

generation proportionally to each state 

within that region by a chosen criterion, 

such as each state’s share of total 

electricity sales within that region in 

2012.12 The EPA requests comment on 

this regionalized approach for RE target 

setting, and specifically on the 

reallocation criterion. 

The agency also requests comment on 

several key methodological assumptions 

involved in this regionalized approach. 

First, the EPA requests comment on 

what the regional structure would be, as 

well as a justification for that structure. 

One option would be grouping states 

together that are currently involved in 

interstate RE exchanges and are likely to 

do so in the future, and would include 

a balance of states that are net suppliers 

and states that are net consumers of RE 

generation. We invite comment on how 

a potential regional structure for this 

regionalized RE approach could address 

these concerns. 

Regional structures could be informed 

by NERC regions,13 FERC Planning 

Regions,14 RTOs,15 current regional 

renewable energy credit tracking 

systems,’’ 16 or some other approach. We 

recognize that some of these structures 

may need to be adjusted to conform to 

state boundaries for the purposes of 

informing state goals, and we invite 

comment on how to do so. In addition, 

some of these regional structures may 

yield isolated states, and we seek 

comment on whether these should be 

single-state regions or whether 

adjustments should be made to 

incorporate such states into multi-state 

regions. We also cite the regional 

structure used in the proposed targetsetting approach and in compliance 

modeling as one example of a regional 

structure that could be used (79 FR 

34866–34867). We noted above in 

section II.B.1, as well as in section 

III.B.1, that the June 2014 proposal 

sought comment on a regional approach 

to building block 2 and provided 

analysis using a structure informed by 

NERC regions and RTOs. It may be 

appropriate to use the same regional 

structure for building blocks 2 and 3, 

whether it is the one specified in the 

block 2 analysis or an alternative 

structure, particularly if transmission 

concerns are a primary driver of the 

structure. The EPA seeks comment on 

these regional structure considerations. 

Second, the EPA requests comment 

on the criteria that should be used for 

reapportioning state RE targets within 

given regions, as well as a justification 

for those criteria. The agency believes 

that a useful criterion would provide a 

simple state-specific quantitative 

characteristic that reflects interstate 

patterns to develop RE potential at 

reasonable cost across a region. Total 

electricity sales in each state in 2012 is 

an example of a possible criterion. 

Another possible criterion is total 

generation in each state in 2012. The 

EPA requests comment on other 

possible criteria. 

Third, the EPA requests comment on 

what components of the state RE targets 

should be regionalized under such an 

approach. For example, a regional 

approach may or may not apply to the 

entirety of each state’s RE target from 

the alternative approach in the June 

2014 proposal; the generation that 

would be reallocated across states in a 

given region may or may not include 

existing generation (as of 2012), 

incremental generation (beyond 2012 

levels), or all types of RE generation 

(e.g., solar, wind) considered. In the 

June 2014 proposed rule, the EPA 

sought comment on the role of existing 

hydropower in target-setting (79 FR 

34869), and we also request comment 

on whether a regionalized approach 

should or should not reallocate existing 

hydropower generation across states 

(even if all other types of RE generation 


tkelley on DSK3SPTVN1PROD with PROPOSALS
64552 Federal Register / Vol. 79, No. 210 / Thursday, October 30, 2014 / Proposed Rules 

17 It should be noted that the EPA is not, in this 

document, addressing stakeholder comments 

concerning whether existing RE generation should 

be included in building block 3 or what types of 

generation (e.g., hydropower) to include in existing 

RE or incremental RE, the possibility of a floor 

based on 2012 generation or the possibility of a 

limitation based on 2012 fossil fuel-fired 

generation—those issues are already clearly covered 

in the June 2014 proposal’s request for comments 

and should be applied to this regionalized approach 

as well. Stakeholders are encouraged to provide 

input on these and other issues addressed in the 

proposal. 

18EE avoidance is incorporated into the goalsetting formula as zero-emitting generation. 

19This section discusses approaches for state goal 

calculations that focus specifically on the treatment 

of incremental RE generation and EE generation 

avoidance. The June 2014 proposal set out a 

methodology for state goal calculations that 

includes existing RE, and comments on that 

inclusion are within the scope of the proposal. The 

state goal calculation methods outlined in this 

section are independent of the treatment of existing 

RE. 

20This alternative approach would be consistent 

with identifying, as part of the BSER, fossil 

generating sources replacing their historical 

generation levels with incremental RE and EE. 

21Fossil generation in the formula is greater than 

2012 historical levels in states where ‘‘existing’’ 

NGCC units were under construction during 2012 

and, therefore, did not report generation in that 

year. 

are reallocated across states under a 

regionalized approach).17

The EPA is requesting comment on 

the above approach, the extent to which 

the approach allows for states to address 

interstate RE concerns, and whether 

there are other ways to treat RE targetsetting informing state goals that would 

take into account interstate effects. We 

are also still taking comment on the two 

approaches for RE target-setting 

specified in the June 2014 proposal. 

Finally, the EPA notes that there are a 

number of possible methodologies for 

using technical and economic 

renewable energy potential to quantify 

RE generation for purposes of state 

goals. The EPA invites comment on 

other possible techno-economic 

approaches. 

C. Implementation of the Goal-Setting 

Equation 

1. Goal-Setting Equation 

As noted above in section II.C.1, 

stakeholders have raised concerns that 

the proposed numeric formula for 

calculating each state’s goal is not 

consistent in its application of the BSER 

for incremental generation from existing 

NGCC units under building block 2, as 

compared with incremental RE 

generation and EE generation avoidance 

under building blocks 3 and 4. (For ease 

of reference, unless otherwise indicated, 

we refer to both incremental RE 

generation and incremental EE 

generation avoidance 18 as ‘‘incremental 

RE and EE.’’) 19 They state that, for 

building block 2, the formula subtracts 

1 MWh of fossil steam generation and 

corresponding emissions from the 2012 

baseline levels for every 1 MWh of 

incremental NGCC generation 

(subtracting emissions from the 

numerator and subtracting generation 

from the denominator of the goal 

calculation formula) (see 79 FR 34896 

and ‘‘Goal Computation Technical 

Support Document,’’ Docket ID No. 

EPA–HQ–OAR–2013–0602–0460, at 10– 

12). In the stakeholders’ view, this 

approach reflects the assumption that 

incremental NGCC generation will 

supplant historical fossil steam 

generation levels. 

In contrast, as the stakeholders also 

point out, the formula adds incremental 

RE and EE to 2012 baseline generation 

levels (in the denominator of that 

formula) but does not reduce the 2012 

baseline levels of fossil generation (in 

the denominator of the formula) by that 

incremental RE and EE, or remove the 

corresponding emissions (in the 

numerator of that formula) (see 79 FR 

34896 and ‘‘Goal Computation 

Technical Support Document,’’ Docket 

ID No. EPA–HQ–OAR–2013–0602– 

0460, at 15–18). In the stakeholders’ 

view, by holding existing fossil 

generation and the corresponding 

emissions at 2012 levels, and not 

reducing them based on the amounts of 

incremental RE and EE, the state goals 

fail to reflect the full potential, under 

the BSER, for incremental RE and EE to 

replace fossil steam generation. Instead, 

simply adding incremental RE and EE to 

the denominator, while making no 

equivalent subtraction from the 2012 

levels of fossil generation and 

corresponding emissions, does not 

clearly indicate whether, and to what 

extent, that generation will replace 

existing fossil generation as opposed to 

future generation increases from 

existing sources. 

Some stakeholders have suggested an 

alternative approach of applying 

generation from building blocks 3 and 4 

to reduce fossil generation below 2012 

levels in the goal calculation. They have 

stated that this alternative approach is 

more consistent with the treatment of 

generation under building block 2, 

while also achieving greater CO2

reductions. They suggest that the 

alternative approach, in which 

incremental RE and EE explicitly 

replaces generation from fossil fuel-fired 

sources in the goal calculation, better 

represents the BSER by better reflecting 

the likely reductions in fossil generation 

(and corresponding reduction in 

emissions) that can be achieved by 

affected sources.20

The following subsections describe 

two different approaches for revising the 

state goal-setting formula to address this 

concern. These approaches are being 

shared more broadly to allow continued 

stakeholder engagement and to enhance 

the ability of stakeholders to submit 

substantive comments. 

a. Replace all historical fossil 

generation on a pro rata basis. The 

proposed state goal-setting formula 

assumes a constant level of generation 

for total existing fossil generation 

greater than or equal to 2012 historical 

levels (i.e., the amount of fossil 

generation in the denominator of the 

state goal equation is greater than or 

equal to 2012 levels).21 In the proposal, 

incremental RE and EE was simply 

added to the denominator of the state 

goal formula. An alternative treatment 

of this incremental RE and EE would be 

to assume that it directly replaces 2012 

fossil generation levels and the 

corresponding emissions on a pro rata 

basis across generation types (i.e., fossil 

steam and gas turbine). Although the 

incremental generation levels assumed 

for building blocks 3 and 4 would not 

change under this approach, this 

adjustment to the goal-setting formula 

would yield more stringent state goals. 

Note that, under this alternative 

approach, the incremental RE would 

replace fossil steam and NGCC 

generation in proportion (i.e., pro rata) 

to their historical generation. 

The incremental RE and EE is 

assumed to replace generation from 

existing fossil sources in both the goalsetting calculation approach in the June 

2014 proposal and this alternative 

approach. However, these two 

approaches reflect two different 

interpretations of how this replacement 

occurs. Under the approach in the June 

2014 proposal, incremental RE and EE 

could replace a generation increase from 

existing fossil sources that would 

otherwise occur after 2012, while under 

this alternative approach, incremental 

RE and EE could replace historical fossil 

generation below 2012 levels. The 

assumption is that the former of these 

two scenarios results in a smaller 

reduction in carbon intensity and, 

hence, a less stringent state goal than 

under the latter scenario. The former 

scenario also implicitly assumes 

significant increases in existing fossil 

generation beyond 2012 levels absent 

building block three or four. 

This alternative approach would 

recognize a greater reduction potential 

in carbon intensity from incremental RE 

and EE, and it would be more closely 

analogous to the treatment of 


tkelley on DSK3SPTVN1PROD with PROPOSALS
Federal Register / Vol. 79, No. 210 / Thursday, October 30, 2014 / Proposed Rules 64553 

incremental NGCC generation identified 

under building block 2 (given that under 

the proposal, generation from building 

block 2 was assumed to reduce carbon 

intensity by replacing generation from 

2012 levels). The rationale for this 

approach would be that the BSER for all 

fossil generation includes replacing that 

generation with incremental RE and EE. 

Moreover, this approach acknowledges 

that, taken by itself, such incremental 

generation would not necessarily 

replace the highest-emitting generation, 

but would likely replace a mix of 

existing fossil generating technologies. 

b. Prioritize replacement of historical 

fossil steam generation. A second 

alternative approach would be similar to 

the one described above, but the 

adjustment would reflect incremental 

RE and EE first replacing fossil steam 

generation below 2012 levels rather than 

replacing all fossil generation on a pro 

rata basis. Subsequent to replacing fossil 

steam generation, if there were any 

remaining incremental RE or EE, it 

would replace gas turbine generation 

levels and the corresponding emissions. 

Therefore, the reduction in carbon 

intensity observed from this type of 

adjustment would be more than that 

estimated in the proposal’s goal-setting 

formula and more than the alternative 

approach above, in section III.C.1.a, 

because incremental and avoided 

generation would replace generation 

from higher-emitting fossil steam 

sources first. The rationale for this 

alternative approach would be based on 

the view that, as part of the BSER, 

because fossil steam generation has 

higher carbon intensity, it should be 

replaced before NGCC generation. 

By identifying the two alternative 

approaches above and providing more 

detailed data by which to assess them, 

the EPA is seeking additional 

engagement during the public comment 

process and supporting the ability of 

stakeholders to provide comment. The 

EPA is requesting comment on whether 

a formula change of this nature would 

better reflect the emission reduction 

potential from incremental RE and EE. 

In particular, the EPA is seeking 

comment on how the amount of 

incremental RE and EE in the June 2014 

proposal relate to potential future 

generation increases from existing fossil 

sources. The EPA is also soliciting 

comment on approaches where some 

portion of such incremental generation 

is calculated to replace future increases 

in existing fossil generation with the 

remainder assumed to replace historical 

existing fossil generation. The EPA is 

also requesting comment on how to treat 

a state in which the incremental RE and 

EE exceeds historical fossil steam 

generation levels. Together, the 

approach in the proposal and the 

alternative approach in this document 

reflect a range of possible emission rate 

impacts that could be expected through 

the application of the incremental RE 

and EE in the state goal calculation. The 

EPA is seeking comment on which 

approach better reflects the BSER. At 

the same time, we note that the 

alternative state goal formula 

approaches listed here may raise a 

number of additional considerations. 

These approaches, for example, would 

increase the collective stringency of the 

state goals, which would likely increase 

both the costs and benefits of the 

proposed rule. 

As noted above, at least some of these 

alternative applications of the targetsetting equation would result in many 

states having tighter rate-based goals. 

Therefore, in considering any of these 

changes, the EPA would also consider 

how they relate to other issues 

discussed in this document, as well as 

in the original proposal, particularly 

inclusion of new NGCC units in the 

state goal calculation and alternatives to 

the 2020–2029 glide path. While the 

goal-setting formula adjustments 

described here would tighten the state 

goals, the glide path adjustments 

discussed previously would have the 

offsetting effect of reducing the 

stringency of the goals. The EPA 

welcomes comment specifically on the 

potential changes identified in this 

document in terms both of the rationale 

for these changes and of their effects on 

the stringency of the state goals. 

2. Alternatives to the 2012 Data Year 

A number of stakeholders have raised 

concerns over the use of 2012 as the 

single data year for calculating interim 

and final goals. The EPA has identified 

several approaches that stakeholders 

may want to consider and upon which 

we are requesting comment. The EPA is 

seeking comment on whether we should 

use a different single data year or the 

average of a combination of years (such 

as 2010, 2011, and 2012) to calculate the 

state fossil fuel emission rates used in 

state goal calculations. The agency is 

also seeking comment on whether statespecific 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. 

Stakeholders have also expressed 

interest in obtaining eGRID data for 

years prior to 2012 in order to foster 

comparison with results from the 2012 

dataset. The EPA is adding, to the 

docket for this action, data for the years 

2010 and 2011 that are based on the 

same information sources and presented 

in the same format as the 2012 dataset 

used for the June 2014 proposed rule. 

We are also making these data available 

at: http://www2.epa.gov/

cleanpowerplan/. 

Dated: October 27, 2014. 

Janet G. McCabe, 

Acting Assistant Administrator, Office of Air 

and Radiation. 

[FR Doc. 2014–25845 Filed 10–29–14; 8:45 am] 

BILLING CODE 6560–50–P 

DEPARTMENT OF THE INTERIOR 

Fish and Wildlife Service 

50 CFR Part 23 

[Docket No. FWS–HQ–ES–2013–0052] 

RIN 1018–AZ53 

Notice of Intent To Include Four Native 

U.S. Freshwater Turtle Species in 

Appendix III of the Convention on 

International Trade in Endangered 

Species of Wild Fauna and Flora 

(CITES) 

AGENCY: Fish and Wildlife Service, 

Interior. 

ACTION: Proposed rule: Notice of intent 

to amend CITES Appendix III. 

SUMMARY: We, the U.S. Fish and 

Wildlife Service (Service), propose to 

include the common snapping turtle 

(Chelydra serpentina), Florida softshell 

turtle (Apalone ferox), smooth softshell 

turtle (Apalone mutica), and spiny 

softshell turtle (Apalone spinifera) in 

Appendix III of the Convention on 

International Trade in Endangered 

Species of Wild Fauna and Flora (CITES 

or Convention), including live and dead 

whole specimens, and all readily 

recognizable parts, products, and 

derivatives. Listing these four native 

U.S. freshwater turtle species (including 

their subspecies, except Apalone 

spinifera atra, which is already 

included in Appendix I of CITES) in 

Appendix III of CITES is necessary to 

allow us to adequately monitor 

international trade in these species; to 

determine whether exports are 

occurring legally, with respect to State 

and Federal law; and to determine 

whether further measures under CITES 

or other laws are required to conserve 

these species. 

DATES: To ensure that we are able to 

consider your comment on this 

proposed rulemaking action, you must 

send it by December 29, 2014. 

ADDRESSES: You may submit comments 

by one of the following methods: 


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