From: Frey, Nathan J. <Nathan_J._Frey@omb.eop.gov>

Sent: Wednesday, July 15, 2015 11:24 AM

To: Culligan, Kevin; Harvey, Reid; Vasu, Amy; Owens, Nicole

Subject: Summary of Interagency Comments Under EO 12866 and 13563 -- CPP CO2

Emission Performance Rate and State Goals TSD

Attached please find a summary of interagency comments under EO 12866 and EO 13563 on the

EPA draft final Clean Power Plan rule’s CO2 Emission Performance Rate and State Goals TSD.

Thanks and please let me know if you have any questions

Nathan

<< Sum_InteragencyComUnderEO12866_13563_EO 12866_CPP 2060 AR33

Final_GoalComputationTSD.docx >>

## Summary	of	Interagency	Working	Com ments	on	Draft	Language	under

EO12866/13563	Interagency	Review.		Subject	to	Further	Policy	Re view.

1 Major Comments on Treatment of Existing NGCC in BB2 and the Fossil Steam Rate

1. Reviewer recommends correcting the inconsistency between the methodologies used for BB2 in

“Step 6” and “Step 7” in the TSD. “Step 6” uses NGCC generation equal to “NGCC Potential at

75% CF” minus “Post BB3 NGCC Gen” to replace fossil steam generation. However, “Step 7” only

adds back the emissions of “NGCC Potential at 75% CF” minus “2012 NGCC Gen” to the

numerator of the fossil steam rate equation. Reviewer recommends using “NGCC Potential at

75% CF” minus “Post BB3 NGCC Gen” for both steps.

2. Reviewer recommends EPA adopts the approach of defining the amount of NGCC generation to

replace fossil steam as the NGCC generation “post step 6 levels minus the post step 5 levels” as

considered in footnote 9 on page 15. (This is the same as using “NGCC Potential at 75% CF”

minus “Post BB3 NGCC Gen” as mentioned above.) While footnote 9 correctly notes that this

could increase the amount of BB2 ERCs generated, it is difficult to predict the absolute effect on

stringency since stringency depends on what measures units ultimately use to comply.

Reviewer requests additional clarification on the formula used for BB2 ERCs.

3. Reviewer recommends that incremental NGCC generation not be measured from baseline

levels, because measuring NGCC from baseline levels results in effective load growth in the fossil

steam rate. Measuring incremental NGCC from baseline levels is similar to the effective load

growth caused by RE and EE in the proposed rule, which was eliminated in the draft final rule.

The most appropriate way to determine what NGCC generation replaces fossil steam is to

measure incremental NGCC generation from NGCC generation after BB3 which maintains the

2012 generation levels in the denominator of the fossil steam rate equation.

4. Reviewer requests a meeting with EPA technical staff to walk through the calculations and

discuss the issues in the TSD, particularly with respect to the issues mentioned above.

Technical Comments on Word Document

1. Reviewer requests the opportunity to review the spreadsheet that aggregates the unit

‐ level

data to the state level in “Step 1” on page 8. Reviewer recommends that this spreadsheet be

made available as part of this TSD.

2. Reviewer recommends clarifying that some of example columns that are shown in the TSD

document are not calculated in the excel spreadsheet. For example, in “Step 3” on page 10

column H, the Fossil Steam Emission Rate before BB1 is not calculated in the Excel spreadsheet.

3. Reviewer recommends clarifying that the total baseline generation referred to in the last

sentence on page 13 is the total fossil baseline generation.

4. Reviewer requests the opportunity to review the Excel attachment titled “State

‐ level

adjustments” reference in Appendix 7 on page 22.

5. Reviewer recommends clarifying why unit generation in 2012 is compared to the unit

generation in years 2010 and 2014 to evaluate if there is a significant outage (page 22). Why

were years 2010 and 2014 chosen as opposed to other years?

6. Reviewer recommends clarifying whether the discussion about unit outage adjustments includes

emergency and/or maintenance outages (see page 22 and other similar discussions throughout

the document).

7. Reviewer recommends clarifying the statement on page 30 that “the 111(d) baseline analysis

does not include units that use less than 10% fossil fuel on a heat input basis in 2012, units that

are retired or under construction, and certain commercial and industrial units...”The reviewer

understood that under construction units were included in the baseline data.

## Summary	of	Interagency	Working	Com ments	on	Draft	Language	under

EO12866/13563	Interagency	Review.		Subject	to	Further	Policy	Re view.

2 8. Reviewer recommends, in the process of matching EPA and EIA data, clarifying how many units

retain original emissions rates less than 500 lbs. CO 2 /MWh or greater than 10,000 lbs. CO 2 /MWh

even after using net

‐ gross conversion factors (page 33).

9. Reviewer recommends clarifying the “non

‐ methodological change”

– “4. Changes to unit

categorization” on page 33. The terms “under construction” and “commenced operations in

2012” are not used as the reviewer expected. Changes or edits to clarify this section would be

helpful.

10. Reviewer notes that the BB3 incremental generation numbers on page 3 are inconsistent with

those in Table 9 of the most recent revised Final Draft that was reviewed (Final Draft numbers

are 435 TWh Eastern, 178 TWh Western, 100 TWh Texas).

11. Reviewer recommends not assuming that all biomass emissions should be counted as emissions

from fossil fuel units when co

‐ fired, given that some percentage of the existing biomass would

qualify as sustainably sourced under EPA’s Biogenic Assessment Framework (page 31).

Reviewer recommends, for 2012 BSER purposes, changing the historic emissions rate for

biomass to be consistent with the preamble, i.e. counting sustainably sourced and waste

derived biomass as zero emissions.

12. Consistent with the preamble and the federal plan, reviewer recommends that Indian lands with

affected EGUs receive their own rate rather than being included in state rates.

Technical Comments on Excel Spreadsheet

1. Review recommends that EPA clarifies what column V represents in the associated excel file in

tab “Appendix 3

– State

‐ level Data.” Columns T and U seem to be all that is needed to represent

Under Construction NGCC.

2. Reviewer recommends clarifying why the Fort Calhoun Nuclear Plant (line 5249) in Appendix 1

shows negative electric generation. Page 33 explains that the cause for fossil units having

negative generation is from matching the EPA emissions data with the generation data from EIA,

but it is unclear how this pertains to zero emitting nuclear.

Comments on Additional Potential

1. Reviewer recommends increasing the BSER RE deployment rates throughout the interim period.

2. Reviewer recommends increasing the total amount of existing gas in BB2, per the major

comments above.

3. Reviewer recommends increasing the ramp rate of existing gas in building block 2 to 22%

increase in utilization every year.

4. Reviewer recommends applying separate BSER goals to each interconnect.

Typographic Comments

1. Reviewer recommends numbering each equation for ease of reference throughout text.

2. Reviewer recommends referring to specific table numbers when first referencing columns within

a given table for clarity.

## Summary	of	Interagency	Working	Com ments	on	Draft	Language	under

EO12866/13563	Interagency	Review.		Subject	to	Further	Policy	Re view.

3 3. Reviewer recommends changing column F to column G in the last sentence on page 12. “The

total baseline generation (columns B & C) equals the total remaining generation and renewable

generation (columns FG

, H, I, and J) reflecting that...”

4. Reviewer notes that the current “Figure 1” appears incorrectly labeled and should be “Table 1”

(page 3).

5. Reviewer recommends reformatting the equations presented in “Exhibit A” on page 4 such that

it is clear that the “replacement generation” is in the denominator

6. Reviewer recommends re

‐ wording the following for clarity on page 8, and indicating what other

adjustments besides those regarding under construction units were made (if any): “EPA then

made the aforementioned adjustments to the state

‐ level values to address concerns addressed

by commenters’ concerns. This included adding in the expected generation and emissions from

likely affected units considered under construction.”

7. Reviewer recommends showing in Table 1 (page 9) the example calculation with coal as well as

NGCC so both the 55% and 60% capacity factors for under construction units are shown.

8. Reviewer recommends that throughout text that is within equations, the multiplication sign “×”

be used consistently instead of the asterisk “*” or the letter “ x ”.

9. Reviewer recommends that throughout the text that the output of an equation be shown in

‐ line

with the equation consistently (compare equation under Table 1 with equation beneath Table

3).

10. Reviewer recommends removing the extraneous dash between “extent that” on page 13.

11. Reviewer recommends defining ERC briefly in Footnote 8 on page 15, as it has not been defined

in this document.

12. Reviewer recommends making generation units consistent in equations below table 7 on page

16. Generation units are in GWh while rate units are lbs/MWh.

13. Reviewer recommends the following edit on page 18. “Final category

‐ specific rate

– The 2030

emission rate (as calculated above) becomes the state goal category specific goal for 2030 and

each year thereafter”

14. Reviewer recommends adding “Table 9:” to the table heading on page 18.

15. Reviewer recommends the following edit on page 22. “ Commenters States suggested that 2012

was an abnormal year for hydro...”

Additional typographical suggestions

Data

– This is a plural term

– “data are”

– in a number of places.

Top page 5: “there was a limited number of high utilization combustion” There were.

Middle Page 5: “... EIA to produce useful values like pounds per megawatt

‐ hour (lb/MWh)...” Suggest

“such as” to sound more professional.

Page 8, second last para: “... Appendix 1, 2 and 3.” Suggest plural, appendices.

Page 9, middle under Step 2: “Exhibit A above.” Does EPA mean “Table 1 above”?

## Summary	of	Interagency	Working	Com ments	on	Draft	Language	under

EO12866/13563	Interagency	Review.		Subject	to	Further	Policy	Re view.

4 Page 13, first line last para: Add “leap” after 2012. And, there is a typographical error ‐ dash

‐ in the third

line of this paragraph.

Page 15, second para: Suggest adding “in Table 7” after (column F in Table 7) and (column J in Table 7).

Otherwise, I went to the wrong (preceding) table 6.

Page 16, footnote 10. This sounds a little apologetic, when in fact the need is obvious for this inclusion

of emissions in both Fossil and NGCC rate setting. The basis for including NGCC emissions in both rates is

that NGCC is not a zero emission source. Reduced emissions from moving generation from higher rate

coal to lower rate NGCC are included in the coal rate [at a reduced number based on EPA footnote

9]. But, the NGCC still has its own emissions that must be included in the NGCC rate

calculation. Suggest minor text revision to make this footnote clearer.

Page 29. Fix “Error! Reference source not found.. 22 ”

Page 31, Adjustments to emissions from biomass. How big is the impact of this biomass adjustment, or

not, numerically? There seems to be considerable industry and environmental concern conceptually, so

EPA might best make the scale clear here.

Page 34 onwards: Why do we have all these emission factors?