Deliberative – Do Not Cite or Quote 

Overview: 

Emission Guidelines and Standard

Performance for Existing Power P

Under CAA Section 111(b) and 
Deliberative – Do Not Cite or Quote 

Overview► EPA’s Tasks Under the President’s Climate Action Plan► Background on Clean Air Act Section 111► Key Messages from Early Outreach to Stakeholders► Overview of Reduction Strategy for Existing Sources► Overview of Emissions Guidelines Under CAA Section 111(d)

► Determination and Implementation Process► Building Blocks for the Best System of Emission Reductions► Building Block Technologies Translated to State Goals► Basis for Interim and Final State Goals► Historical CO2 Emission Rates and State Goals

► Regulatory Impacts► State Plans to Implement Emission Guidelines

► Process► Components► Potential Pathways► Timing

► Timing of Reductions► Summary of Proposed State Goals► Proposed Standards for Modified and Reconstructed Sources under CAA sect

► Boilers ► Turbines
Deliberative – Do Not Cite or Quote 

EPA’s Tasks Under the President’s Climate A

1. Issue carbon pollution standards for new power 

► Proposal issued on September 20, 2013

• Informed by the more than 2.5 million comments received 

April 2012 proposal

• Reflects recent developments and trends in the power se

► Will follow the agency’s open and transparent review p

including public comment and a public hearing

2. Issue carbon pollution standards for modified an

reconstructed power plants

► Proposal: June 2014► Final: June 2015► Will follow the agency’s open and transparent review p

including public comment and a public hearing
Deliberative – Do Not Cite or Quote 

3. Issue carbon pollution emission guidelines for exis

power plants

► Issue federal guidelines for the states

• Work in partnership with states• States will develop plans that set standards for existing sources• States use EPA guidelines as a reference

► Federal guidelines should build on states’ leadership an

experience with programs that reduce GHGs

► Will follow the agency’s open and transparent review pro

including public comment and a public hearing

EPA’s Tasks Under the President’s Climate A
Deliberative – Do Not Cite or Quote 

Background on Clean Air Act Section 1► Section 111 of the CAA establishes the process by wh

to develop standards of performance for stationary sopollution

► Section 111(b) addresses new, modified and reconstruc

• Standards are to be based on the “best system of emissio

reduction...adequately demonstrated” (BSER)

► Section 111(d) addresses existing sources

• Comes into play once EPA has adopted a 111(b) standard 

category

• EPA establishes, through guidelines, a procedure for state

plans that establish and implement standards for existing based on BSER

– BSER determinations are not the same for new and e

sources but are grounded in the same CAA definition the same criteria

• EPA develops existing source BSER determinations for po

than NAAQS pollutants and Section 112 air toxics (e.g., C
Deliberative – Do Not Cite or Quote 

Section 111 Regulations► EPA has promulgated 60+ NSPS for new sources

► Rich litigation history with significant jurisprudence on w

constitutes BSER

► EPA has promulgated 111(d) regulations for 5 existing 

categories

► Sulphuric acid plants (acid mist)► Phosphate fertilizer plants (fluorides)► Primary aluminum plants (fluorides)► Kraft pulp plants (total reduced sulphur)► Municipal solid waste plants (landfill gases)

► There have been no court decisions on 111(d) regulat
Deliberative – Do Not Cite or Quote 

► EPA conducted an extensive outreach effort, starting 

2013

► Several common themes emerged from stakeholder 

► Broad agreement that opportunities exist to lower the carb

intensity of power generation through a wide range of me

► States need more than one year to develop and submit p

• More time necessary due to legislative/regulatory schedule in many • Additional time would allow and promote multi-state programs and c

► Multiple opinions about how broader measures taken thro

electric system could factor into programs

► General support for giving states flexibility 

• Recognize existing programs and the progress achieved • Allow compliance options that permit the use of approaches that are 

power plant “fence line” (e.g., demand-side management)

► Acknowledge leadership for prior GHG activities in states

Key Messages from Early Outreach to Stake
Deliberative – Do Not Cite or Quote 

► Potential hurdles or concerns identified by stakeh

► Views vary regarding form of the goal 

• Rate-based: States must stay below a pounds-of-CO2-per-megaw

limit

• Mass-based: States must stay below a total tons-of-CO2-emitted

limit

► Many states have already achieved greenhouse gas red

and have exceeded the President’s goal

► Some suggest that EPA legally only can base the reduc

on measures “within the fence line”

• This would eliminate EPA’s ability to count reductions achieved a

power plant (e.g., demand-side energy efficiency programs)

► Concerns that rulemaking will have a negative impact o

and ratepayers

• Concern that ratepayers will have to pay for stranded assets• Concerns regarding maintaining the reliability of the electric powe

Key Messages from Early Outreach to Stake
Deliberative – Do Not Cite or Quote 

Overview of Reduction Strategy for Existing 

► Package consists of two separate but related rulemakings:

► Existing source guidelines under Section 111(d)► Standards of performance for modified and reconstructed sou

Section 111(b)

► Emissions Guidelines Package

► Defines what represents BSER for existing sources► Translates BSER into state-specific goals

►Primary proposal achieves approximately 25% to 30% reduction ►Takes comment on a less aggressive option

► Provides additional guidance to States on their existing sourc

►Components of a plan►Flexibility in compliance options►Timing for submittal►Timing of reductions

► Modified and reconstructed package

► Based largely on efficiency improvements at existing sources
Deliberative – Do Not Cite or Quote 

Section 111(d) Emission Guidelines: Determination and Implementation Process

► Under CAA Section 111(d), as applied in this context: 

► EPA determines the best system of emission reduction ► EPA applies BSER using state-specific data to derive th

rate that represents the state goal for covered sources BSER

► The state develops standards of performance that impl

goal and establishes those standards in its plan, along implementing and enforcing measures

► The state applies that standard
Deliberative – Do Not Cite or Quote 

Building Blocks and Determining BSER► EPA has identified four categories of measures providing th

determining and quantifying BSER

► They entail a combination of addressing emissions rates an

utilization at the affected source in the power sector:

1. Lowering carbon intensity of generation at individual existing EGU

rate improvements

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

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

3. Reducing emissions of carbon-emitting EGUs by expanding the a

lower (or no) carbon-intensity generation 

4. Reducing emissions of carbon-emitting EGUs by increasing dema

efficiency

► Together, the four building blocks constitute BSER, with ea

goal established through applying BSER to its fleet of affec

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

that reflects more or less aggressive performance

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

generation mix) to set state-specific goals
Deliberative – Do Not Cite or Quote 

Building Block Technologies Translated to State 

Technology/Building Block Option 1 Opt1. Heat rate improvement (Avg. Reduction for Coal) 6% 42. Dispatch to existing and underconstruction NGCC Utilization of NGCC up to 70% capacity factor Utilization 

up to 65% c

3. Dispatch to new clean electric generation

Includes new nuclear generation under co

moderate deployment of new renewable 

and continued use of existing nuclear g

4. Demand-side Energy Efficiency 

(% reduction in demand from BAU MWh sales)

3.0% / 10.7%

(2020 / 2030)

2.4% 

(2020 

Goal Option 1 OptAverage nationwide goal for covered sources (lbs/MWh)

25% to 30% below 2005 

levels

20% to 25% 

lev
Deliberative – Do Not Cite or Quote 

State Emission Rate Goal = (coal gen. x coal emission rate)+ (OG gen. x og emission rate) + (NGCC gen. x N

Total Fossil Generation + EE MWh + BB 3 Generation

How Are the Building Blocks Turned into Stat
Deliberative – Do Not Cite or Quote 

Basis for Interim and Final State Goals
Deliberative – Do Not Cite or Quote 

 ‐

500

1,0001,5002,0002,500

North Dakota

Montana

Wyoming

South Dakota

Kansas

North Carolina

Iowa

Illinois

Nebraska

Kentucky

West Virginia

Maryland

Missouri

Wisconsin

Indiana

Minnesota

Tennessee

Colorado

Michigan

New Mexico

Utah

Ohio

Arkansas

South Carolina

Pennsylvania

Georgia

Arizona

Oklahoma

Washington

Texas

Alabama

Louisiana

Virginia

Delaware

Mississippi

Florida

New Hampshire

New Jersey

Yk

Rate (lbs/MWh Option 2

Historical Rates and State Goals (At Full Imple

2012 fossil ra

Option 1 

Note: The 2012 data and the calculated state goals are inclusive of all four building blocks, with EE and under caveraged in at a 0 lb/MWh. These target rates are not the rates that covered fossil sources will have to achieve 

This slide is illustrative and does not fully reflect all measures.
Deliberative – Do Not Cite or Quote 

► CO2 reductions

► 25% to 30% below 2005 levels 

► Monetized annual benefits

► $20 to $35 billion (half associated with CO2 reductions; 

associated with criteria pollutant reductions)

► Annual costs

► $6-9 billion 

► National average retail electricity prices

► Up to 7.5% increase

► Coal

► 20% to 25% decrease in power sector coal use► 5-8% decrease in coal price► About 200-215 remaining GW (about 30-45 GW of retire

► Natural gas

► About 10% increased use

Impacts (Early estimates; do not fully reflect all mea
Deliberative – Do Not Cite or Quote 

Section 111(d) State Plan Process

► Under CAA Section 111(d), as applied in this context: 

► The state develops standards of performance that implement 

derived goal and establishes those standards in its plan, alonimplementing and enforcing measures

• EPA recognizes states’ requests for both flexibility and sp

– States can choose to meet rate- or mass-based goal– EPA would allow and encourage multi-state and regional pla– EPA would support building off existing reduction programs 

• EPA recognizes states’ concerns regarding timing for sub

plans

– Phased plan submittals considered

► The state applies that standard to the appropriate entities

• EPA recognizes the need for accountability and verifiabil

CO2 emission reductions
Deliberative – Do Not Cite or Quote 

State Plan Components► Emission guidelines would include a list of state plan ► 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 p

level

► Identification of milestones► Identification of backstop measures► Identification of standards of performance ► Demonstration that each standard of performance is enfor

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

► Identification of monitoring, reporting and recordkeeping re► Description of state reporting ► Certification of hearing on state plan ► Supporting material 
Deliberative – Do Not Cite or Quote 

Potential Pathways for State Plans► Multiple pathways exist for states’ plans► These may include emissions reduction measures identifie

building blocks or others

► Pathways that EPA anticipates include implementation of th

actions, alone or in various combinations:

► Direct emission limits on EGUs► Collaboration with RTOs and ISOs regarding re-dispatch prior► State policies to deploy new, lower- or non-carbon-emitting ge

capacity, such as natural gas combined cycle (NGCC) sourcerenewable energy (RE) sources such as solar and wind, and/

► Energy efficiency (EE) deployment programs ► Legislation or regulations establishing EE resource standards 

and/or renewable portfolio standards (RPS)

► Regional emissions reductions agreements ► Integrated Resource Plan-type approaches for reducing utility 

emissions
Deliberative – Do Not Cite or Quote 

Timing for State Plan Submittals 

► Individual and multi-state plans due June 30, 2016 ► Some states may reasonably need additional time to submit complete 

to factors such as timing of legislative approval process, complexities with regional approaches

► Proposing providing states with additional time to submit complete pla

and if states provide specific information

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

• 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

► Proposed steps for initial plan submittal, if state seeks an extension:

• Submit notice of intent by April 1, 2016 with justification for extension, desc

actions taken to develop plan, and commitment to meet submittal content 

• Submit initial plan with following content by June 30, 2016

– Description of plan approach and progress made to date in developing plan– Initial quantification of the level of emission performance that will be achieved th– Commitment to maintain existing measures that limit or avoid CO2 emissions (e

specific limits on operation or fuel utilization), at least until the complete plan is a

– Comprehensive roadmap for completing the plan, including process, analytical m

schedule (including milestones) specifying when all necessary plan components (e.g., projection of emissions performance; implementing legislation, regulations necessary approvals)

– Existing programs state intends to rely on to meet its target (if used)– Executed agreement(s) with other states (e.g., MOU), if regional approach is be

– Commitment to submit a complete plan by the applicable required date and acti

take to show progress in addressing incomplete plan components
Deliberative – Do Not Cite or Quote 

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 reductio

others may require longer to implement and/or realize reductions

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

substitute for other, more expensive measures

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

achieve goals

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

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

► Goals represent the collective CO2 emission rate of affected EGUs in a sta

reflect the potential to achieve emissions reductions by avoiding fossil genmay translate its rate goal into a mass-based goal

► Interim emissions performance goals apply during the years 2020-2029 o

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

• This 10-year interim performance period provides timing flexibility for state

specific implementation differences; milestone requirements and emissionproposed to track interim progress and enable corrective action if necessa

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

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

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

• Preamble takes comment on alternate mechanisms for maintaining p
Deliberative – Do Not Cite or Quote 

10-year State Plan Performance

Basisforstate goal ‐‐

Emissions pathway

reflecting application of

building blocks

2020 2021 2022 2023 2024 2025 2026 2027 2028 

State plan emissionstrajectory
Deliberative – Do Not Cite or Quote 

Proposed State Goals (Illustrative; do not fully reflect all m(Adjusted Output-Weighted-Average Lbs. of CO2 per Net MWh from All Affected Fossil Fuel

State Interim Goal Final Goal State Interim Goal 

Alabama 1,286 1,241 Montana 2,066 Alaska 1,136 1,048 Nebraska 1,756 Arizona 759 733 Nevada 798 

Arkansas 1,112 1,066 New Hampshire 773 California 710 678 New Jersey 823 Colorado 1,392 1,343 New Mexico 1,279 Connecticut 689 652 New York 797 Delaware 967 937 North Carolina 1,256 Florida 903 866 North Dakota 2,080 Georgia 979 931 Ohio 1,537 

Hawaii 1,605 1,502 Oklahoma 1,070 Idaho 400 355 Oregon 559 Illinois 1,612 1,535 Pennsylvania 1,383 Indiana 1,704 1,642 Rhode Island 845 Iowa 1,602 1,542 South Carolina 964 Kansas 1,857 1,763 South Dakota 1,058 

Kentucky 1,860 1,787 Tennessee 1,344 Louisiana 1,188 1,121 Texas 1,136 Maine 675 633 Utah 1,568 Maryland 1,581 1,489 Virginia 950 

Massachusetts 761 723 Washington 536 Michigan 1,444 1,382 West Virginia 1,885 

Minnesota 1,141 1,075 Wisconsin 1,436 Mississippi 802 767 Wyoming 2,100 Missouri 1,669 1,597
Deliberative – Do Not Cite or Quote 

Modified and Reconstructed Sources

► Proposed Section 111(b) modified and reconstructed standa

electric generating units is a separate package with a differefrom the Section 111(d) rulemaking

► Under same schedule ► Common technical analysis for modified standards and hea

reduction building block

► Proposed standards follow traditional analytical approach

► Request comment on a range of alternative options to main

and for the final rule

► Do not anticipate being triggered often

► Modified requirements triggered by increase in hourly emis

(generally associated with increasing fuel throughput)

• Increases due to pollution control devices would be exempt u

pollution control exemption 

► Reconstructed standard triggered when cost of a single pro

50% of replacement cost of unit

• Only triggered once in the last 15 years (when a coal-fired bo

and was rebuilt (Hawthorne, in Kansas))
Deliberative – Do Not Cite or Quote 

Proposed GHG Standard for Modified Boilers and IGCC Units► Proposed different standards for modifications of boilers and I

that occur both before and after Section 111(d) rulemaking is i

► Before 111(d) rulemaking is in place:

• Unit-specific numerical standard determined from the best demo

historical operating performance for the modified facility using poand further reductions through implementation of heat rate impromeasures (additional 2%); OR

• Take comment on a range of alternatives including nationwide nu

emission standard based on best performing existing sources (sestandard for sub-critical and super-critical boilers) 

► After 111(d) rulemaking is in place (at this point source would 

both 111(b) and 111(d)):

• Unit-specific numerical standard determined from an assessmen

energy efficiency improvement opportunities at the affected mod

► If convinced by commenters that 111(d) requirements do not r

effect, take comment on:

• Pre-111(d) requirements outlined above; or• Allowing a source to choose the option to remain in the 111(d) pr

meet unit-specific numerical standard determined from an assesidentifying energy efficiency improvement opportunities at the affEGU
Deliberative – Do Not Cite or Quote 

Proposed GHG Standard for Reconstructed ►Fossil fuel-fired boilers

► Efficiency standard based on combustion techn

• Large subcategory (>~200 MW); standard of 1,900 lb 

CO2/MWhnet

• Small subcategory (<~200 MW); standard of 2,100 lb 

CO2/MWhnet

– Supercritical steam turbines are not available below ~200 

► Request comment on equal treatment by fuel t

• Petroleum coke and coal-refuse are more carbon int

other coals; natural gas and oil are less carbon inten
Deliberative – Do Not Cite or Quote 

Proposed Standards for Combustion Turbin

► Modified combustion turbines would have two alterna

depending on timing of the modification:

► Alternative 1: Nationwide numeric emission standard (sam

standards for new) 

• Large subcategory (>~100 MW); standard of 1,000 lb CO2/MWhg• Small subcategory (<~100 MW); standard of 1,100 lb CO2/MWhg

► If the modification occurs after the source is subject to a 

qualifying/approved 111(d) GHG plan, the source would reto 111(d) plan requirements, and the source could choose the emission limit shown above OR could choose to meet shown below

► Alternative 2: Unit-specific numeric standard determined fr

assessment to identify energy efficiency improvement oppthe affected modified EGU

► Reconstructed combustion turbines

► Large subcategory (>~100 MW); standard of 1,000 lb CO2/MW► Small subcategory (<~100 MW); standard of 1,100 lb CO2/MW
Deliberative – Do Not Cite or Quote 

APPENDIX
Deliberative – Do Not Cite or Quote 

Clean Air Act Section 111 – Excerpts► Section 111(a)(1) (Definitions):

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

pollutants which reflects the degree of emission limitation achievaapplication of the best system of emission reduction which (taking the cost of achieving such reduction and any non-air quality healtenvironmental impact and energy requirements) the Administratohas been adequately demonstrated.” 

► Section 111(d)(1) (Standards of performance for existing sourc

useful life of source):

► “The Administrator shall prescribe regulations which shall establis

similar to that provided by section 7410 of this title under which esubmit to the Administrator a plan which 

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

for which air quality criteria have not been issued or which is not inclupublished under section 7408 (a) of this title or emitted from a source regulated under section 7412 of this title but (ii) to which a standard ounder this section would apply if such existing source were a new so

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

performance. Regulations of the Administrator under this paragraph sstate in applying a standard of performance to any particular source usubmitted under this paragraph to take into consideration, among othremaining useful life of the existing source to which such standard ap
Deliberative – Do Not Cite or Quote 

Clean Air Act Section 111 – Excerpts (c► Section 111(d)(2) (Standards of performance for exist

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 

a satisfactory plan as he would have under section 7410 (the case of failure to submit an implementation plan, and 

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

to enforce them as he would have under sections 7413 antitle with respect to an implementation plan. 

► In promulgating a standard of performance under a plan 

under this paragraph, the Administrator shall take into camong other factors, remaining useful lives of the sourccategory of sources to which such standard applies.”