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CHAPTER 15. ENVIRONMENTAL ASSESSMENT FOR PROPOSED ENERGY 

CONSERVATION STANDARDS FOR DISTRIBUTION TRANSFORMERS

TABLE OF CONTENTS

15.1 INTRODUCTION ........................................................................................................... 8-1

15.2 AIR EMISSIONS ANALYSIS ........................................................................................ 8-2

15.2.1 Air Emissions Descriptions.............................................................................................. 8-2

15.2.1.1 Sulfur Dioxide ................................................................................................ 8-2

15.2.1.2 Nitrogen Oxides ............................................................................................. 8-3

15.2.1.3 Mercury .......................................................................................................... 8-3

15.2.1.4 Carbon Dioxide .............................................................................................. 8-4

15.2.1.5 Particulate Matter ........................................................................................... 8-4

15.2.1.6 Air Quality Regulation ................................................................................... 8-5

15.3 RESULTS ........................................................................................................................ 8-6
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CHAPTER 8. ENVIRONMENTAL ASSESSMENT FOR PROPOSED ENERGY 

CONSERVATION STANDARDS FOR DISTRIBUTION TRANSFORMERS

8.1 INTRODUCTION

The U.S. Department of Energy (DOE) will conduct an environmental assessment as part 

of the notice of proposed rulemaking for distribution transformers. To assess the impacts of 

proposed energy conservation standards on certain environmental indicators, DOE will use a 

variant of the Energy Information Administration (EIA)’s National Energy Modeling System 

(NEMS).a EIA uses NEMS to produce the Annual Energy Outlook (AEO).

1 DOE will use a 

variant known as NEMS-BT to provide key inputs to the analysis, based on the latest version of 

the Annual Energy Outlook. 

The intent of the environmental impact assessment is to properly quantify and consider 

the environmental effects of new Federal rules. DOE intends the environmental assessment to 

describe for policymakers and other stakeholders the impact on air emissions of amended energy 

conservation standards for distribution transformers. The outcomes of the environmental analysis 

are driven largely by changes in power plant types and quantities of electricity generated under 

each of the alternatives. Changes in electricity generation are described in the utility impact 

analysis in chapter 13 of this technical support document. As noted in chapter 14, NEMS-BT 

model forecasts end in 2035. Emissions impacts beyond 2035 are assumed to be equal to the 

impacts in 2035. 

The primary environmental effects of energy conservation standards for distribution 

transformers would be reduced power plant emissions resulting from reduced consumption of 

electricity. An air pollutant is any substance in the air that can cause harm to humans or the 

environment. Pollutants may be natural or man-made and may take the form of solid particles 

(i.e., particulates or particulate matter), liquid droplets, or gases.b The environmental assessment 

considers three pollutants—sulfur dioxide (SO2), nitrogen oxides (NOX), and mercury (Hg)—as 

well as carbon emissions. The only form of carbon emissions tracked by NEMS-BT is carbon 

dioxide (CO2), so the carbon discussed in this report is in the form of CO2DOE will use NEMSBT to calculate power sector emissions, using additional external analysis as needed.

 

a For more information on NEMS, refer to the U.S. Department of Energy, Energy Information Administration 

documentation. A useful summary is National Energy Modeling System: An Overview 2003, DOE/EIA0581(2003). March 2003. EIA approves use of the name NEMS only to describe an official version of the model 

without any modification to code or data. Because this analysis entails some minor code modifications, and the 

model is run under policy scenarios that are variations on EIA assumptions, DOE refers to the model as NEMS-BT 

(BT is DOE’s Building Technologies Program). NEMS-BT was previously called NEMS-BRS.

b More information on air pollution characteristics and regulations is available on the U.S. Environment Protection

Agency’s website at www.epa.gov.
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 DOE notes that the Clean Air Act requires the U.S. Environmental Protection Agency 

(EPA) to set National Ambient Air Quality Standards for the following six common air 

pollutants, also known as criteria pollutants: (1) ozone; (2) particulate matter (PM); (3) carbon 

monoxide (CO); (4) nitrogen dioxide; (5) SO2; and (6) lead.2 SO2 and NOX

8.2 AIR EMISSIONS ANALYSIS

are the primary 

precursors to ozone and PM, respectively, and will be addressed by the environmental 

assessment. In the case of CO, electric utilities and fuel-fired appliances are not significant 

sources. Finally, with regard to lead, industrial processes (not electric utilities), including 

primary and secondary lead smelters and battery manufacturers, are responsible for most lead

emissions. 

DOE plans to conduct the environmental assessment as a policy deviation from the most 

recent AEO, 

8.2.1 Air Emissions Descriptions

applying the same basic set of assumptions. The NEMS reference case and 

alternative growth scenarios are as described in the utility impact analysis (see chapter 14 of the 

preliminary technical support document). Below are descriptions of the air emissions that DOE 

will consider in the environmental assessment. 

DOE’s analysis considers three pollutants: sulfur dioxide (SO2), nitrogen oxides (NOX), 

and mercury (Hg). An air pollutant is any substance in the air that can cause harm to humans or 

the environment. Pollutants may be natural or man-made (i.e., anthropogenic) and may take the 

form of solid particles (i.e., particulates or particulate matter), liquid droplets, or gases.c This 

analysis also considers carbon dioxide (CO2

8.2.1.1 Sulfur Dioxide 

).

Sulfur dioxide, or SO2, belongs to the family of sulfur oxide gases (SOX). Sulfur is 

prevalent in all raw materials, including crude oil, coal, and ore that contains common metals 

such as aluminum, copper, zinc, lead, and iron. SOX gases are formed when fuel containing 

sulfur, such as coal and oil, is burned, and when gasoline is extracted from oil, or metals are 

extracted from ore. SO2 dissolves easily in water vapor to form acid, and interacts with other 

gases and particles in the air to form sulfates and other products that can be harmful to people 

and their environment. 

SO2 emissions from affected Electric Generating Units (EGUs) are subject to nationwide 

and regional emissions cap and trading programs, which create uncertainty about the standards’ 

impact on SO2 emissions. The attainment of emissions caps is flexible among EGUs and is 

enforced through the use of emissions allowances and tradable permits. Under existing EPA 

regulations, any excess SO2 emission allowances resulting from the lower electricity demand 

caused by the imposition of an efficiency standard could be used to offset increases in SO2

 

c More information on air pollution characteristics and regulations is available on the U.S. Environment Protection 

Agent (EPA)’s website at www.epa.gov.
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emissions by any regulated EGU. If the standard resulted in a permanent increase in the quantity 

of unused emission allowances, however, it would result in an overall reduction in SO2

emissions. Although some uncertainty remains about the ultimate effects of efficiency standards 

on SO2 emissions covered by the current cap-and-trade system, the NEMS-BT modeling system 

that DOE plans to use currently indicates that no physical reductions in power sector emissions 

would occur for SO2

8.2.1.2 Nitrogen Oxides

. 

Nitrogen oxides, or NOX, is the generic term for a group of highly reactive gases, all of 

which contain nitrogen and oxygen in varying amounts. Many nitrogen oxides are colorless and 

odorless. However, one common pollutant, nitrogen dioxide (NO2), combines with particles in 

the air, and often can be seen as a reddish-brown layer above many urban areas. NO2 is the 

specific form of NOX reported in this document. NOX is a primary ingredient involved in the 

formation of ground-level ozone, which can trigger serious respiratory problems. It can 

contribute to the formation of acid rain and can impair visibility in areas such as national parks. 

NOX also contributes to the formation of fine particles that can impair human health.4

 Nitrogen oxides form when fossil fuel is burned at high temperatures, as in a combustion 

process. NOX also can be formed naturally. The primary man-made sources of NOX are motor 

vehicles; electric utilities; and other industrial, commercial, and residential sources that burn 

fossil fuels. Electric utilities account for about 22 percent of NOX emissions in the United 

States.4 

There is a cap on NOX emissions in 28 eastern States and the District of Columbia. All 

these States and D.C. elected to reduce their NOX emissions by participating in cap-and-trade 

programs for EGUs. Therefore, as with SO2 emissions, energy conservation standards for 

distribution transformers may have little or no physical effect on these emissions in the 28 

eastern States and D.C. for the same reasons that they may have little or no physical effect on 

NOX emissions. 

DOE is using the NEMS-BT to estimate NOx emissions reductions from possible 

standards in the States where emissions are not capped.

8.2.1.3 Mercury

 During the burning process, coal-fired power plants emit mercury (Hg) that occurs in 

coal. Although coal-fired power plants are the largest remaining source of human-generated Hg

emissions in the United States, they contribute little to the global Hg pool or to contamination of 

U.S. waters.3 U.S. coal-fired power plants emit Hg in three forms: oxidized Hg (likely to deposit 

within the United States); elemental Hg, which can travel thousands of miles before depositing to

land and water; and Hg that is in particulate form. Atmospheric Hg is deposited on land, lakes, 

rivers, and estuaries through rain, snow, and dry deposition. Once there, it can transform into 

methylmercury and accumulate in fish tissue.
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Americans are exposed to methylmercury primarily by eating contaminated fish. Because 

the developing fetus is the most sensitive to the toxic effects of methylmercury, women of 

childbearing age are regarded as the population of greatest concern. Children exposed to 

methylmercury before birth may be at increased risk of poor performance on neurobehavioral 

tasks, such as those measuring attention, fine motor function, language skills, visual-spatial 

abilities, and verbal memory.3

8.2.1.4 Carbon Dioxide 

 

 Carbon dioxide (CO2) is not a regulated or criteria pollutant, but is of interest because of 

its classification as a greenhouse gas (GHG). GHGs, which either occur naturally in the 

atmosphere or result from human activities, trap the sun’s radiation inside the Earth’s 

atmosphere. Naturally occurring GHGs include water vapor, CO2, methane, nitrous oxide, and 

ozone. Human activities add to the levels of most of these naturally occurring gases. For 

example, CO2 is emitted to the atmosphere when solid waste; fossil fuels (oil, natural gas, and 

coal); wood; and wood products are burned. During the past 20 years, about three-quarters of 

anthropogenic (human-made) CO2 emissions resulted from burning fossil fuels. In 2007, more 

than 90 percent of anthropogenic (i.e., human-made) CO2 emissions resulted from burning fossil 

fuels.4

 Concentrations of CO2 in the atmosphere are regulated naturally by numerous processes, 

collectively known as the “carbon cycle.” The movement of carbon between the atmosphere and 

the land and oceans is dominated by natural processes, such as plant photosynthesis. Although 

these natural processes can absorb some of the anthropogenic CO2 emissions produced each 

year, billions of metric tons are added to the atmosphere annually. In the United States, in 2007, 

CO2 emissions from electricity generation and industrial processes accounted for 39 percent of 

total U.S. GHG emissions.

In the absence of any Federal regulation of power plant emissions of CO2, a DOE 

standard is likely to result in reductions of those emissions. To estimate the reductions in CO2

emissions likely to result from a standard DOE will use NEMS-BT and estimates of national 

energy savings drawn from the NIA spreadsheet model. The net benefit of the standard is the 

difference between emissions estimated by NEMS-BT at each standard level considered and the 

AEO2010 reference case. NEMS-BT tracks CO2

8.2.1.5 Particulate Matter

 emissions using a detailed module that provides 

results based on broad coverage of all sectors and inclusion of interactive effects.

Particulate matter (PM), also known as particle pollution, is a complex mixture of 

extremely small particles and liquid droplets. Particle pollution is made up of various 

components, including acids (such as nitrates and sulfates), organic chemicals, metals, and soil 

or dust particles. PM impacts are of concern because of exposures that can impact human health. 

Particle pollution—especially fine particles—contains microscopic solids or liquid droplets that 

are so small that they can get deep into the lungs and cause serious health problems. Numerous 

scientific studies have linked particle pollution exposure to a variety of problems, including: 

increased respiratory symptoms, such as irritation of the airways, coughing, or difficulty 
15-8-5 

breathing; decreased lung function; aggravated asthma; development of chronic bronchitis; 

irregular heartbeat; nonfatal heart attacks; and premature death in people with heart or lung 

disease.

DOE acknowledges that particulate matter (PM) exposure can impact human health. 

Power plant emissions can have either direct or indirect impacts on PM. Some pollutants emitted 

by a power plant are in the form of particulates leaving the smoke stack. These are direct, or 

primary, PM emissions. However, the great majority of PM emissions associated with power 

plants are in the form of secondary sulfates, which are produced at a significant distance from 

power plants by complex atmospheric chemical reactions that often involve the gaseous (nonparticulate) emissions of power plants, primarily SO2 and NOX. The quantity of secondary 

sulfates produced is determined by a complex set of factors that include the atmospheric 

quantities of SO2 and NOX, and other atmospheric constituents and conditions. Because these 

highly complex chemical reactions produce PM comprising different constituents from different 

sources, the EPA does not distinguish direct PM emissions from the secondary sulfate 

particulates in its ambient air quality requirements, PM monitoring of ambient air quality, or PM 

emissions inventories. For these reasons, it currently is not possible to determine how a proposed 

standard would impact either direct or indirect PM emissions. Therefore, DOE is not planning to 

assess the impact of standards on PM emissions. Further, DOE is uncertain whether efficiency 

standards will result in a net decrease in power plant emissions of SO2 and NOX

8.2.1.6 Air Quality Regulation 

, because those 

pollutants are now regulated largely by cap-and-trade systems. 

The Clean Air Act Amendments of 1990 list 188 toxic air pollutants that EPA is required 

to control.6 EPA has set national air quality standards for six common pollutants (also referred to 

as “criteria” pollutants), two of which are SO2 and NOX. Also, the Clean Air Act Amendments 

of 1990 gave EPA the authority to control acidification and to require operators of electric power 

plants to reduce emissions of SO2 and NOX. Title IV of the 1990 amendments established a capand-trade program for SO2, in all 50 states and the District of Columbia (D.C.), intended to help 

control acid rain. 6 This cap-and-trade program serves as a model for more recent programs with 

similar features.

 In 2005, EPA issued the Clean Air Interstate Rule (CAIR) under sections 110 and 111 of 

the Clean Air Act (40 CFR Parts 51, 96, and 97).7 d CAIR will permanently cap emissions of 

SO2 and NOX in eastern States of the United States. CAIR achieves large reductions of SO2

and/or NOX emissions across 28 eastern States and the District of Columbia. CAIR will 

gradually replace the Title IV program in the 28 states and D.C. States must achieve the required 

emission reductions using one of two compliance options: 1) meet an emission budget for each 

regulated state by requiring power plants to participate in an EPA-administered interstate capand-trade system that caps emissions in two stages, or 2) meet an individual state emissions 

budget through measures of the state’s choosing. Phase 1 caps for NOX have been in place since

2009. Phase 1 caps for SO2 are to be in place beginning in 2010. The Phase 2 caps for both NOX

and SO2 

 

d See http://www.epa.gov/cleanairinterstaterule/.

are due in 2015. 
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On July 11, 2008, the U.S. Court of Appeals for the District of Columbia Circuit (D.C. 

Circuit) issued its decision in North Carolina v. Environmental Protection Agency, which 

vacated the CAIR issued by the U.S. Environmental Protection Agency on March 10, 2005.e

CAIR was the vehicle for capping NOX emissions.

f

 On December 23, 2008, the D.C. Circuit 

decided to allow CAIR to remain in effect until it is replaced by a rule consistent with the court’s 

earlier opinion. North Carolina v. EPA, 550 F.3d 1176 (D.C. Cir. 2008) (remand of vacatur).g

Thus, CAIR is currently in force. However, on July 6, 2010, EPA proposed the Transport Rule, 

a replacement for CAIR, which would limit emissions from EGUs in 32 states, potentially 

through the interstate trading of allowances, among other options. 75 FR 45210 (Aug. 2, 2010). 

 

With respect to Hg emissions, in 2005, EPA issued the final rule entitled “Standards of 

Performance for New and Existing Stationary Sources: Electric Steam Generating Units,” under 

sections 110 and 111 of the Clean Air Act (40 CFR Parts 60, 63, 72, and 75)8

. This rule, called 

the Clean Air Mercury Rule (CAMR), was closely related to the CAIR and established standards 

of performance for Hg emissions from new and existing coal-fired electric utility steam 

generating units. The CAMR regulated Hg emissions from coal-fired power plants. 

 On February 8, 2008, the U.S. Court of Appeals for the District of Columbia Circuit 

(D.C. Circuit) issued its decision in State of New Jersey, et al. v. Environmental Protection 

Agency,

h

8.3 RESULTS

 in which the Court, among other actions, vacated the CAMR referenced above. 

The results of the environmental assessment include NOX, mercury, and CO2 emissions 

in 5-year forecasted increments, with extrapolation as needed. DOE will report the outcome of 

the analysis for each trial standard level as a deviation from results for the reference case of the 

latest Annual Energy Outlook. 

 

e See http://www.epa.gov/cleanairinterstaterule/.

f See id. at 903. 

g State of North Carolina, et al. v. Environmental Protection Agency, 550 F.3d 1176 (D.C. Cir. 2008). 

h 517 F.3d 574, 583 (D.C. Cir. 2008).
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REFERENCES

 

1 Energy Information Administration. Annual Energy Outlook 2010–Early Release with 

Projections to 2035. March 2010. Washington, D.C. Report No. DOE/EIA-0383(2010). 

(Last accessed March 29, 2010). <http://www.eia.doe.gov/oiaf/aeo/ > 

2 U.S. Environmental Protection Agency. National Ambient Air Quality Standards. 2008.

(Last accessed March 2, 2011.) <http://www.epa.gov/air/urbanair/>

3 Trasande, L., C. Schechter, K.A. Haynes, and P.J. Landrigan. Applying Cost Analyses to 

Drive Policy That Protects Children: Mercury as a Case Study. Annals of the New York 

Academy of Sciences, Living in a Chemical World: Framing the Future in Light of the 

Past. 2006. 1076: pp. 911–923. 

4 U.S. Environmental Protection Agency. U.S. Greenhouse Gas Inventory Report, 2009. 

(Last accessed March 2, 2011.) 

<www.epa.gov/climatechange/emissions/usinventoryreport.html>