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Chapter 3

Impacts of Proposed Action

Contents

3.1 Regulatory Impact Analysis (RIA)...................................................................................... 2

3.2 Air ...................................................................................................................................... 11

3.3 Energy................................................................................................................................ 12

3.4 Compliance Costs.............................................................................................................. 15

3.5 Climate Change Protection ................................................................................................ 19

3.6 Economic and Employment Impacts................................................................................. 21

3.7 Benefits.............................................................................................................................. 31
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3.1 REGULATORY IMPACT ANALYSIS (RIA)

Comment 3.1-1: Commenters 0152, 0186, 0187, 0214, and 0256 stated various reasons for why

EPA's use of the social cost of carbon (SCC) is not justified or legal.

Commenter 0186 noted that it would be impermissible to rely on the SCC for several reasons "(i) 

it is inherently flawed, ultimately a meaningless metric; (ii) it ascribes undue certainty and 

reliability to the scientific evidence; (iii) it ignores the social benefits of carbon...; and (iv) it 

ignores the problematic aspects of carbon-reduction policies. The SCC is a metric that reflects 

more about the assumptions fed into it than what it is purporting to measure." The commenter 

stated that the SCC estimates are of highly questionable validity and are based on speculative 

assumptions and much-criticized integrated assessment model (IAM) simulations. The 

commenter additionally noted that the SCC assumes that climate science is settled and 

uncontroversial, when in fact the opposite is true. The commenter stated that the SCC lacks 

theoretical and empirical foundation for the impacts of asserted climate change that form the key 

parts of analysis. The commenter also noted that because the SCC counts only the cost of carbon, 

it will always yield a rule that reduces carbon--"it is a one-sided statistic." The commenter stated 

that a comparison of the CO2 costs and benefits using GDP figures based on EPA's own SCC 

estimates demonstrates that any of the SCC estimates are relatively so small as to be in the 

statistical noise of the estimated CO2 benefits. The commenter additionally noted that EPA 

selected discount rate values that are biased toward the low end of the acceptable range given by 

the OMB, and slanted the measure even further by specifically adding a "catastrophic" scenario 

without a corresponding "optimistic" scenario. The commenter noted that while these details 

may seem like a technical matter, they have a dramatic effect on the SCC analysis. The 

commenter stated that "when the models on which the SCC draws are recalculated using the 7% 

discount rate EPA left out, the SCC goes to zero or even negative---showing a net benefit to 

increased emissions under EPA's own analysis." See Kevin Dayaratna and David Kreutzer, 

Unfounded FUND: Yet Another EPA Model Not Ready For The Big Game 3, HERITAGE 

FOUNDATION (Apr. 29, 2014).

Commenter 0256 urged EPA to use the domestic SCC value in its analysis, not the global SCC 

value. The commenter stated that the costs of these and other CO2 regulations are borne by the 

companies and citizens of this country and as such the purported benefits should also be 

reflective of the benefits to the United States. The commenter added that unless the CAA directs 

the EPA to require unilateral actions by the United States to address global environmental issues 

in other countries, while those countries do not take similar steps, the domestic SCC seems to be 

the only logical metric to use in a cost benefit analysis. The commenter noted that the SCC

document indicates its use is meant for projects/regulations that have a marginal effect on CO2

emissions and while it is true that the proposed rule may have little effect on CO2 emissions, the 

manner in which EPA is implementing CO2 regulations acts to set energy policy for the country

and will have a lasting effect on the energy industry, the competitiveness of American companies 

and the economic well-being of many Americans. The commenter stated that the use of cost 

parameters that were intended for marginal or small projects should not be used as the basis of 

regulations with far-reaching and long-lasting impacts on the United States.
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Commenters 0152 and 0187 stated that EPA's reliance on SCC violates the CAA Section 

111(a)(1) requirement to consider the cost of achieving a proposed standard. Commenter 0187 

stated that the RIA relied on climate change benefits determined through applications of values 

calculated using a "controversial, indeed, legally suspect, protocol fraught with a myriad of 

shortcomings." Commenter 0152 urged that EPA not use the newly-revised SCC metric until 

OMB's review is completed.

Commenter 0214 noted the SCC should not be used in a regulatory context given "the 

nontransparent manner in which it was derived and the inconclusive results achieved through 

that analysis" and stated that "the choice of non-reviewed models and the input assumptions that 

were used to contrive the SCC are arbitrary and discount rates were applied inconsistently."

Response 3.1-1: First, the Agency's demonstration that costs of the standard are reasonable do 

not rely on the social cost of carbon. See preamble section V.H. and I. See also Portland 

Cement I, 486 F. 2d at 387 (cost-benefit analysis not required under section 111 (a)). 

Second, while the commenters identify a number of limitations and uncertainties associated with 

the illustrative analysis presented in the Regulatory Impact Analysis (RIA) for the modified 

source standard at proposal, EPA notes that for the RIA supporting the final rule, the EPA 

considered the limited data available on past modifications and the diversity of existing units that 

could potentially modify and determined that it was not possible to conduct a representative 

illustrative analysis of what costs and benefits might result from this final rule in the unlikely

case that a unit were to take an action that would be classified as a modification. However, the 

EPA anticipates that few EGUs will take actions that would be considered NSPS modifications 

and subject to the standards of performance finalized in this action during the period of analysis. 

For this reason, the standards will result in minimal emission reductions, costs, or quantified 

benefits in the period of analysis. Likewise, the Agency does not anticipate any impacts on the 

price of electricity or energy supplies.

Third, the commenters' characterization of the SC-CO2 process and reliability of the SC-CO2

values is deeply misplaced. See comment responses in unit 4.4 of the section 111 (b) RTC. 

Also, the SC-CO2 comments summarized in 3.1-1 mirror those submitted to the Office of 

Management and Budget’s separate comment solicitation on the SCC (78 FR 70586; November 

26, 2013). As a member of the interagency working group (IWG) on SC-CO2, EPA has 

carefully examined and evaluated comments submitted to OMB’s separate solicitation. EPA has 

also carefully examined and evaluated all comments received regarding SC-CO2 through this 

rulemaking process and determined that the IWG responses to the comments on the OMB 

solicitation address the comments on the SC-CO2 methodology, including the models used to 

estimate the SC-CO2. Specifically, EPA concurs with the IWG’s response to these comments and 

hereby incorporates them by reference.1 The remainder of this section elaborates on these 

comments in the context of this rulemaking. 

 

1 Referred to as the "OMB Response to Comments on SC-CO2." See 

https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-response-to-comments-final-july-2015.pdf .
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EPA appreciates the commenters’ recommendations for potential opportunities to improve the 

SC-CO2 estimates and has considered each one in the context of this rulemaking. EPA and other 

members of the IWG have reconfirmed their commitment to periodic review and update of the 

methodology and estimates to ensure that they continue to reflect the best available science and 

economics. Furthermore, EPA has determined that the SC-CO2 methodological 

recommendations require additional research, review, and public comment before it can apply 

them to a rulemaking context. 

To help synthesize the technical information and input reflected in the comments, and to add 

additional rigor to the next update of the SC-CO2, the EPA and all of the other IWG members 

plan to seek independent expert advice on technical opportunities to improve the SC-CO2

estimates, including the approaches suggested by commenters and summarized in this document. 

Specifically, EPA and all of the other IWG members plan to ask the National Academies of 

Sciences, Engineering, and Medicine (Academies) to examine the technical merits and 

challenges of potential approaches to improving the SC-CO2 estimates in future updates. Input 

from the Academies, informed by the comments submitted to this rulemaking and the peerreviewed literature, will help to ensure that the SC-CO2 estimates used by EPA continue to 

reflect the best available science and methodologies.

Finally, should (against the law of the Circuit and EPA's view) some type of cost-benefit analysis 

be required under section 111 (a), chapter 5 of the RIA shows that quantified benefits of the final 

standard of performance would exceed regulatory costs under a range of assumptions.

Comment 3.1-2: Commenter 0202 stated support for EPA's use of the social cost of carbon 

(SCC) metric in its RIA analysis with four main points: the SCC is an important policy tool; the 

IWG's analytic process was science-based, open, and transparent; the SCC is an important and 

accepted tool for regulatory policy-making based on well-established law and fundamental 

economics; and that the IWG correctly used a global SCC value. Commenter 0202 also offered 

further recommendations on refinements to the SCC.

Commenter 0202 stated that the SCC estimates the economic cost of climate impacts -

specifically the additional economic harm caused by one additional metric ton of carbon dioxide 

(CO2) emissions and that SCC calculations are important for evaluating the costs of activities 

that produce greenhouse gas emissions and contribute to climate change, such as burning fossil 

fuels to produce energy. The commenter noted that the SCC is also important for evaluating the 

benefits of policies that would reduce the amount of those emissions going into the atmosphere. 

For example, the commenter stated that in order to properly evaluate standards that reduce the 

use of carbon-intensive energy or that improve energy efficiency - like the proposed greenhouse 

gas standards - it is important to understand the benefits they will provide, including the benefit 

of reducing carbon pollution and the harm it causes. The commenter noted that even though the 

analysis is generally not able to encompass all of the effects of a policy, and it is challenging to 

translate impacts on health, mortality, and welfare into dollar values, benefit-cost analysis is an 

important economic tool to help inform decision-makers about the societal benefits of different 

policy choices. The commenter also stated that without an SCC estimate, regulators would by 

default be using a value of zero for the benefits of reducing carbon pollution, implying that 

carbon pollution has no costs and that, sadly, is not the case, as evidenced by the large body of 

research outlining the sobering health, environmental, and economic impacts of rising 
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temperatures, extreme weather, intensifying smog, and other climate impacts. The commenter 

stated if anything, most evidence points to the fact that current numbers significantly

underestimate the SCC and it would be arbitrary for a federal agency to weigh the societal 

benefits and costs of a rule with significant carbon pollution effects but to assign no value at all 

to the considerable benefits of reducing carbon pollution.

Commenter 0202 further noted that the increase in the SCC estimate is important because it 

reflects the growing scientific and economic research on the risks and costs of climate change, 

but is still very likely an underestimate of the economic cost of carbon emissions. The 

commenter stated the increase is also necessary given the costs of climate change that we are 

already experiencing, such as those associated with sea level rise and rising temperatures. The 

commenter stated that the analytic work of the IWG has been transparent and noted that 

the Office of Management and Budget (OMB) recently created a further opportunity for public 

comments and transparent review specifically on the calculation of the social cost of carbon. 

Additionally, the commenter noted the comment period on these greenhouse gas standards are 

yet another opportunity for continued dialogue about areas requiring further stud and such 

repeated comment processes demonstrate that the IWG's SCC estimates were developed - and 

are being used - transparently. The commenter stated that given their strong grounding in the best 

science available, nothing should prevent the current, continued use of this well-established 

estimate. The commenter noted that as economic and scientific research continues to develop, 

future revisions will be able to further refine existing estimates based on the latest peer-reviewed 

literature and the latest updates to the quality of the overall modeling exercise.

Commenter 0202 noted criticisms submitted via petition to OMB and the individual agencies 

involved in the IWG which included concerns that the estimates of SCC are too uncertain and 

imprecise to be used in regulatory analysis, that the IWG did not follow appropriate protocols in 

either its estimation or use of SCC, and that SCC must be banned from use while it undergoes a 

wholly new public review process. The commenter stated that as a matter of law and economics, 

uncertainty in benefits estimates does not mean they should be excluded from regulatory impact 

analyses. No benefit or cost estimate is certain. Further, the commenter noted the courts have 

explicitly rejected this argument with respect to the SCC, and executive orders dating back as far 

as the Reagan administration have all issued guidelines specifying explicit consideration of 

benefits even if the precise size of the benefit is uncertain. The commenter noted that in 2008, 

the National Highway Traffic Safety Administration had decided not to account for avoided 

climate damages in issuing fuel economy standards, but the U.S. Court of Appeals for the 9th 

Circuit determined "NHTSA's reasoning is arbitrary and capricious for several reasons. First 

while the record shows that there is a range of values, the value of carbon emission reductions is 

certainly not zero", which directly contradicts arguments made by the petitioners about the 

validity of SCC. The commenter stated that the IWG's choice of Integrated Assessment Models 

(IAMs) reflects the best available, peer-reviewed science to tally costs and benefits within 

regulations and noted that the IWG should indeed periodically update its choice of socioeconomic scenarios to reflect major changes in economic growth projections and other factors 

influencing emissions trajectories. The commenter noted, however, the long-term emissions 

impact of any one particular energy efficiency or other carbon reduction standard is only

marginal to the trajectory of socio-economic scenarios, minimizing any risk of double counting 

the regulatory benefits towards the petitioners' concern of misrepresentation and double-
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counting. The commenter concluded that the IWG has properly and lawfully used the best 

available techniques to quantify the benefits of carbon emission reductions, basing its analysis on 

the peer-reviewed literature and noted that the petitioners offer no alternative estimation 

procedure in their critique.

Commenter 0202 stated that to design the economically efficient policies necessary to forestall 

severe and potentially catastrophic climate change, all countries must use a global SCC value 

and given that the United States and many other significant players in the international climate 

negotiations have already applied a global SCC framework in evaluating their own climate 

policies, the continued use of the global value in U.S. regulatory decisions may be strategically

important as the United States seeks to set an example for other countries, harmonize regulatory

systems, and take the lead in ongoing international negotiations. The commenter noted that 

binding legal obligations, basic ethical responsibilities, and practical considerations further 

counsel in favor of the United States using a global SCC value and to avoid a global "tragedy of 

the commons" and an economically inefficient degradation of the world's climate resources, all 

countries should set policy according to a global SCC value. The commenter noted that if all 

countries set their greenhouse gas emissions level based on only their domestic costs and 

benefits, ignoring the large global externalities, the collective result would be substantially suboptimal climate protections and significantly increased risks of severe harm to all nations, 

including the United States. The commenter noted that Mexico and Canada have both adopted 

greenhouse gas standards for vehicles that harmonize with U.S. standards and that calculate 

benefits according to a global SCC value, and that further efforts towards regulatory

harmonization are currently underway as countries within the E.U. are beginning to adopt a 

global SCC value for use in their regulatory analyses. The commenter also noted that multiple 

Presidential orders on regulatory analysis (E.O. 13609, E.O. 13563, and E.O. 12866) deferred to 

the discretion of regulatory agencies on whether to evaluate "effects beyond the borders of the 

United States", supporting a global SCC value. Commenter stated that unlike some other 

significant international environmental impacts, no methodological limitations block the 

quantitative estimation of a global SCC value and given that sophisticated models already exist 

to quantify global SCC, the global estimate is appropriate to use. The commenter also noted that 

using a global SCC value if of national interest, as harms experienced by other countries could 

significantly impact the United States -- particularly climate damages that affect foreign 

economies.

Commenter 0202 offered the following recommendations for further refinements to the SCC 

metric:

1. The commenter stated that the IWG appropriately used consumption discount rates rather than 

returns on capital because typical financial decisions focus on private decisions and utilize 

private rates of return but that economic theory would require making optimal choices based on 

societal preferences (discount rates) rather than from the narrow perspective of investors alone. 

The commenter stated that IWG correctly adopted, as one of its discount rates, a value reflecting 

long-term interest rate uncertainty, and should go further by implementing a declining discount 

rate. The commenter offered two possible declining interest rate schedules for consideration by 

IWG: the one proposed by Weitzman (2007) and the one by Cropper et al. See Martin L. 

Weitzman, Gamma Discounting, 91 AM. ECON. REV. 260, 270 (2001); and, Maureen L. 
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Cropper et al., Declining Discount Rates, AMERICAN ECONOMIC REVIEW: PAPERS AND 

PROCEEDINGS (forthcoming).

2. The commenter stated that the IWG used solid economic tools to address uncertainty and 

ought to go further in capturing the full extent of its implications. The commenter noted that 

IWG was rigorous in addressing uncertainty: "First, it conducted Monte Carlo simulations over 

the IAMs specifying different possible outcomes for climate sensitivity (represented by a Roe 

and Baker Distribution). It also used five different emissions growth scenarios and three discount 

rates. Second, the IWG reported the various moments and percentiles of the resulting SCC 

estimates. Third, the IWG put in place an updating process, e.g., the 2013 revision, which 

updates the models as new information becomes available. As such, the IWG used the various 

tools that economists have developed over time to address the uncertainty inherent in estimating 

the economic cost of pollution: reporting various measures of uncertainty, using Monte Carlo 

simulations, and updating estimates as evolving research advances our knowledge of climate 

change." Commenter noted that "while the IAMs take different approaches to explicitly

modeling tipping points, which to a great extent is lacking in current versions of FUND and 

DICE, the IWG improved (but in no way fixed) the representation of uncertain catastrophic 

damages with the Monte Carlo analysis. Still, black swan events go completely unaddressed in 

the IWG modeling framework, and to the extent that society has a strong desire to prevent the 

occurrence of catastrophic events that is not reflected in the estimates."

3. The commenter noted that the current inclusion of CO2 fertilization benefits likely overstate its 

effects. The commenter stated that the models do not reflect recent research on agricultural 

changes, which suggest the CO2 fertilization is overestimated, particularly in the FUND model, 

and that much, if not all, of the fertilization benefits may be cancelled out by negative impacts on 

agriculture (e.g., extreme heat, pests, and weeds). If the agency is not able to adequately model 

all agricultural impacts it should, at a minimum, remove CO2 fertilization benefits.

4. The commenter stated that IWGs reliance on the three IAM models available at the time 

(DICE, FUND, and PAGE) was fully justified, however, updates to the SCC should 

also consider other models that are similarly peer reviewed and based on the state of the art of 

climate-economic modeling. The commenter noted that one such model is Climate and Regional 

Economics of Development (CRED); another is the World Bank's ENVironmental Impact and 

Sustainability Applied General Equilibrium (ENVISAGE) model.

5. The commenter stated that the IWG should update its socio-economic assumptions to reflect 

the latest Shared Socio-economic Pathways (SSPs). The commenter noted that IWG selected five 

sets of trajectories, four of which represent business as usual, and one which represents a CO2

emissions pathway with concentrations stabilizing at 550ppm. The commenter suggested that 

IWG include a high-CO2 pathway, given the possibility of increases in emissions above those 

expressed in the business as usual scenarios.

6. The commenter stated that while the current treatment of uncertainty around climate 

sensitivity by the IWG is sufficient to highlight the range of possible uncertainties, a 

reconsideration of the assumptions feeding into the SCC ought to take the latest advances 

highlighting the potentially higher costs of deep uncertainty into account.
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Response 3.1-2: EPA thanks the commenters for submitting this information and agrees with 

their support for the application of the estimates. Please see comment responses in unit 4.4 of 

the section 111 (b) RTC for a detailed response to the comments. While the commenters focused 

on the illustrative analysis presented in the Regulatory Impact Analysis (RIA) for the modified 

source standard at proposal, EPA notes that for the RIA supporting the final rule, the EPA 

considered the limited data available on past modifications and the diversity of existing units that 

could potentially modify and determined that it was not possible to conduct a representative 

illustrative analysis of what costs and benefits might result from this final rule in the unlikely

case that a unit were to take an action that would be classified as a modification. However, the 

EPA anticipates that few EGUs will take actions that would be considered NSPS modifications 

and subject to the standards of performance finalized in this action during the period of analysis. 

For this reason, the standards will result in minimal emission reductions, costs, or quantified 

benefits in the period of analysis. Likewise, the Agency does not anticipate any impacts on the 

price of electricity or energy supplies. 

In addition, we note that the comments mirror those submitted to the Office of Management and 

Budget’s separate comment solicitation on the SC-CO2 (78 FR 70586; November 26, 2013). As 

a member of the interagency working group (IWG) on SC-CO2, EPA has carefully examined and 

evaluated comments submitted to OMB’s separate solicitation. EPA has also carefully examined 

and evaluated all comments received regarding SC-CO2 through this rulemaking process and 

determined that the IWG responses to the comments on the OMB solicitation address the 

comments on the aggregation of SC-CO2 estimates and use of the estimates in this RIA. 

Specifically, EPA concurs with the IWG’s response to these comments and hereby incorporates 

them by reference.2 

EPA and other members of the IWG have reconfirmed their commitment to periodic review and 

update of the methodology and estimates to ensure that they continue to reflect the best available 

science and economics. Furthermore, EPA has determined that the SC-CO2 methodological 

recommendations require additional research, review, and public comment before it can apply 

them to a rulemaking context. 

To help synthesize the technical information and input reflected in the comments, and to add 

additional rigor to the next update of the SC-CO2, the EPA and all of the other IWG members 

plan to seek independent expert advice on technical opportunities to improve the SC-CO2

estimates, including the approaches suggested by commenters and summarized in this document. 

Specifically, EPA and all of the other IWG members plan to ask the National Academies of 

Sciences, Engineering, and Medicine (Academies) to examine the technical merits and 

challenges of potential approaches to improving the SC-CO2 estimates in future updates. Input 

from the Academies, informed by the comments submitted to this rulemaking and the peerreviewed literature, will help to ensure that the SC-CO2 estimates used by EPA continue to 

reflect the best available science and methodologies.

 

2 Referred to as the "OMB Response to Comments on SC-CO2." In particular, see pgs 25 to 28, 40-41 at 

https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-response-to-comments-final-july-2015.pdf
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After careful evaluation of the full range of comments and associated technical issues described 

in section 4.5, EPA will has determined that it will continue to use the current SC-CO2 estimates 

until further updates can be made to reflect forthcoming guidance from the Academies. EPA 

believes that the current estimates continue to represent the best scientific information on the 

impacts of climate change available in a form appropriate for incorporating the damages from 

incremental CO2 emissions changes into regulatory analysis. Therefore, EPA has presented the 

current SC-CO2 estimates3in the analysis of illustrative benefit-cost scenarios for new sources in 

RIA Chapter 5 (see RIA Chapters 3 and 5; see Response to Comments 3.2 for detailed discussion 

about the conclusions of the RIA). EPA will continue to consider these comments and will 

share the recommendations with the IWG as it moves forward with the Academies process.

Comment 3.1-3: Commenters 0152, 0214, 0224, 0230, 0242, and 0254 stated that the use of a 

single, hypothetical, 500 MW bituminous coal-fired unit in EPA's RIA is not adequate to 

properly determine the costs and benefits for a rule that spans numerous sources and it not 

representative of all units that may be subject to EPA's proposed standard.

Commenters 0152, 0224 and 0254 stated that EPA's cost analysis of this hypothetical unit and 

further extrapolation of the costs to a global benefit is erroneous. Commenter 0224 stated that 

"even if those hypothetical estimates approximate anticipated national costs, EPA calculates the 

Proposed Rule's benefits on a global scale that considers emission reductions not only for CO2, 

but also for other pollutants." Commenter 0224 stated that "EPA, on its own, questions whether 

its estimated efficiency improvements and emission reductions can be fully realized to reach the 

calculated benefits level" and that "the mismatch between national costs and global benefits, as 

might be expected, produces greater benefits than costs." Commenter 0224 further noted that the 

CAA appears to limit consideration of both costs and benefits to actual, nation-wide numbers. 

Commenters 0152 and 0254 stated that "extrapolation to a global rather than U.S. benefit, EPA's 

calculated cost does not support the imposition of its proposal."

Commenter 0230 stated that EPA's approach in using solely a single, hypothetical 500MW 

bituminous coal-fired unit to represent all affected units may indicate costs and benefits that are 

significantly different than what may result from an actual operating EGU. The commenter noted 

that EPA is assuming that a modified affected unit attempting to comply with the proposed 

carbon rule can realize certain efficiencies through best practices and equipment upgrades in 

order to comply which may not be the case. The commenter stated that the analysis does not 

address the fact that such a unit likely will be unable to dispatch with the frequency necessary to 

attain the efficiency as part of the state's effort to comply with the applicable 111(d) carbon limit.

Commenter 0242 examined the NEEDS 5.13 database to determine if the 500 MW theoretical 

case-study was applicable to the types of units found in states that meet a large proportion of 

electricity demand from coal-fired EGUs. Commenter stated that of the 213 coal and IGCC units 

located in Ohio, Pennsylvania, West Virginia, Indiana, and Kentucky, only 38 units, or 18%, are 

between 400 and 600 MW. Commenter cited this finding as a reason why EPA's singular RIA 

example is not representative of coal-fired units located in states that are heavily reliant on coal-

 

3

See https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-tsd-final-july-2015.pdf
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fired generation---let alone representative of the universe of unit types that will be subject to this 

rule.

Commenter 0214 stated that EPA not only generalized all affected sources by using a 

hypothetical bituminous coal-fired unit for the illustrative analysis, but it generalized all coal 

units as well, even though coal-fired units are heterogeneous with respect to generation 

technologies, fuel types, and size classes.

Response 3.1-3: The commenters identify a number of limitations and uncertainties associated 

with the illustrative analysis presented in the Regulatory Impact Analysis (RIA) for the modified 

source standard at proposal. For the RIA supporting the final rule, the EPA considered the 

limited data available on past modifications and the diversity of existing units that could 

potentially modify and determined that it was not possible to conduct a representative illustrative 

analysis of what costs and benefits might result from this final rule in the unlikely case that a unit 

were to take an action that would be classified as a modification. However, the EPA anticipates 

that few EGUs will take actions that would be considered NSPS modifications and subject to the 

standards of performance finalized in this action during the period of analysis. For this reason, 

the standards will result in minimal emission reductions, costs, or quantified benefits in the 

period of analysis. Likewise, the Agency does not anticipate any impacts on the price of 

electricity or energy supplies.

Comment 3.1-4: Commenters 0214 and 0242 stated that EPA, in its RIA, evaluates the 

annualized cost and fuel savings of heat rate improvement at three different level -- four percent, 

six percent, and eight percent -- but unrealistically assumes that those different levels of 

efficiency improvements cost the same. Commenter 0242 stated that "surely EPA does not 

believe the results of an impact analysis of a singular modified coal unit performing HRI is 

indicative of the impacts for all units potentially subject to, or impacted by, this 

rule." Commenter 0214 stated that EPA must either explain why it believes that significantly 

different levels of efficiency improvements can be achieved at the same cost, or revise its 

analysis to recognize that greater efficiency improvements would generally cost more.

Response 3.1-4: The commenters refer to the illustrative analysis presented in the Regulatory

Impact Analysis (RIA) for the modified source standard at proposal. In that document, the EPA 

explained that different units may be able to achieve different levels of efficiency for the same 

investment. “The actual efficiency improvement a unit can achieve for this cost will depend on 

its starting efficiency and operating capacity. Less efficient units may have more efficiency

improvement options available and be able to achieve greater efficiency for the same cost. 

Relatively more efficient units may have fewer remaining cost-effective options to improve 

efficiency.”

For the RIA supporting the final rule, the EPA considered the limited data available on past 

modifications and the diversity of existing units that could potentially modify and determined 

that it was not possible to conduct a representative illustrative analysis of what costs and benefits 

might result from this final rule in the unlikely case that a unit were to take an action that would 

be classified as a modification. However, the EPA anticipates that few EGUs will take actions 

that would be considered NSPS modifications and subject to the standards of performance 

finalized in this action during the period of analysis. For this reason, the standards will result in 
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minimal emission reductions, costs, or quantified benefits in the period of analysis. Likewise, the 

Agency does not anticipate any impacts on the price of electricity or energy supplies.

Comment 3.1-5: Commenter 0289 stated that the EPA found that "few sources will trigger 

either the NSPS modification or reconstruction provisions" outlined in the Rule Proposal; a claim 

repeated numerous times in the Rule Proposal. The commenter stated that EPA's finding that 

there are no benefits to this rule, and likewise limited costs, is clear evidence that this rule is an 

unnecessary regulatory action that should not have been proposed and should not be finalized. 

Response 3.1-5: Although there have historically been few units that trigger the NSPS 

modification and reconstruction provisions, any unit that triggers these provisions in the future 

will be subject to the standards set by this rule. In that case, there would be benefits and costs 

associated with the standard.

3.2 AIR

Comment 3.2-1: Commenter 0169 noted that EPA explains that by improving energy efficiency, 

generally a unit reduces CO2 emissions as well as other air pollutants which could lead to lower 

ambient air concentrations of PM2.5 and ozone. The commenter also noted, however, that in some 

cases CO2 emission reductions due to energy efficiency improvements may be offset if, as a 

result of these reductions, a unit is able to reduce operation of pollution control equipment and 

still meet output-based standards for these pollutants or pollutants related to their control.(RIA, 

Chapter 9, p.9-9) The commenter stated that this assumes that an EGU can reduce operation of 

air pollution control equipment which is required to be operational so it 'just' meets the limits in 

the EGU's air permit and that in such "reduced operation" instances, the pollution control 

equipment may provide less control than if operated at maximum design performance. The 

commenter stated that they find this suggestion controversial or potentially even contrary to 

positions EPA has taken in the past regarding operation of air pollution control equipment and 

that improving heat rate in this way may conflict with other CAA regulations, state rules, or 

permits. The commenter requested that EPA clarify the statement of provide specific examples 

of when a unit may be able to "reduce operation of pollution control equipment and still meet 

output-based standards." The commenter asked that such clarification also explain what 

"pollutants related to their control" would expressly include.

Response 3.2-1: The commenters refer to the illustrative analysis presented in the Regulatory

Impact Analysis (RIA) for the modified source standard at proposal. The statement was intended 

to provide an example of a situation in which the conclusions of the analysis may differ, not as a 

prediction of behavior that would actually occur.

For the RIA supporting the final rule, the EPA considered the limited data available on past 

modifications and the diversity of existing units that could potentially modify and determined 

that it was not possible to conduct a representative illustrative analysis of what costs and benefits 

might result from this final rule in the unlikely case that a unit were to take an action that would 

be classified as a modification. However, the EPA anticipates that few EGUs will take actions 

that would be considered NSPS modifications and subject to the standards of performance 

finalized in this action during the period of analysis. For this reason, the standards will result in 
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minimal emission reductions, costs, or quantified benefits in the period of analysis. Likewise, the 

Agency does not anticipate any impacts on the price of electricity or energy supplies.

3.3 ENERGY

Comment 3.3-1: Commenters 0193 and 0242 expressed concern about the impact simple cycle 

turbines will have on grid reliability and emissions reductions under the proposed rule.

Commenter 0193 stated that limiting the role of simple cycle units will result in increased 

emissions from NGCC units. The commenter noted that combined cycle units produce 

significantly more emissions during startup and shutdown than simple cycle units, and that this is 

especially true when comparing the emission profiles of a "cold" combined cycle startup with a 

simple cycle unit. The commenter stated that forcing combined cycle units to take the place of 

simple cycle units and operate under conditions of rapid cycling at lower overall capacity factors 

would lead to potentially higher emissions and higher in-use degradation. The commenter also 

noted that forcing generators to deploy combined cycle units in lieu of simple cycle units may

force the operator to run the plant during low load periods to be prepared to respond quickly to 

grid demands instead of simply shutting the unit down completely. The commenter repeatedly 

emphasized the important role that simple cycle units have in terms of being able to respond 

quickly to changing power demands.

Commenter 0242 noted that it is likely that simple cycle combustion turbines will be needed, in a 

manner they have not historically been needed, if EPA finalizes Section 111(d) and 111(b) 

requirements in the manner currently proposed. The commenter stated that simple cycle turbines 

will be needed to ensure reliability when peak demand expands as a result of MATS and Section 

111(d). The commenter questioned if EPA considered the impact that increased use of simple 

cycle turbines will have on ozone, because they saw no such analysis in any of the proposed 

rules.

Response 3.3-1: The non-base load subcategory includes in this final rule provides adequate 

flexibility for the continued use of simple cycle turbines.

Comment 3.3-2: Commenter 0181 requested that, as EPA develops regulations under Section 

111 of the Clean Air Act, it should keep in mind the significant value of the nation's nuclear 

fleet. The commenter stated that nuclear energy is the only carbon free source of predictable, 

non-intermittent and reliable electric generation, and nuclear plants operate at a higher capacity

factor than any other generation resource. The commenter noted that until recently, the common 

understanding was that nuclear plants would operate until license expiration and pointed out that 

most carbon emission projections assume that nuclear plants will continue to generate carbon 

free electricity-however, it is no longer safe to assume that existing nuclear units will continue to 

operate. The commenter noted that many of the plants today that are producing large quantities 

of emissions free electricity and operating at above 90% capacity factors are in danger of early 

closure. The commenter went on to state that the lack of coherent carbon policy has hurt the 

nuclear industry, in addition to economic factors such as low natural gas prices, and that the 

government at all levels has reacted to the failure of carbon legislation by implementing 

subsidies and mandates that benefit all carbon free generation except nuclear-"the nation's largest 

and most reliable carbon free energy source."
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Commenter 0181 felt that if current policies are not changed, retirements of nuclear units will 

have drastic impacts on climate change goals. The commenter stated that closing even a few 

nuclear power plants would make achieving state and national carbon reduction goals difficult or 

impossible and noted that the power sector has reduced its emissions by 15% from 2005 levels 

and is responsible for the vast majority of the nation's progress in meeting President Obama's 

climate goal of reducing overall carbon emissions. The commenter stated that if we continue on 

the same pace of retirements that we saw in 2013, we would lose 25% of the nation's nuclear 

fleet by 2020 and would lose much of the progress the electric industry has made to date. The 

commenter noted, by way of example, after the January 2012 shutdown of the San Onofre 

Nuclear Generating unit in California, the state's carbon dioxide output increased by 35% in the 

first year, according to the California Air Resources Board and generation costs in the state 

increased by about $369 million, equivalent to a 15% increase in total generation costs, during 

the 12 months following the January 2012 shutdown.

Commenter 0181 detailed their company's 2020 plan to invest in cost-effective, clean energy

projects which aims to reduce, offset, or displace 17.5 million metric tons of greenhouse gas 

emissions per year by 2020. The commenter noted that the closure of even one of their existing 

nuclear units would jeopardize all accomplishments in the company's 2020 plan, and would 

weaken progress in reducing greenhouse gas emissions from the electric sector.

Commenter 0181 noted that four of the most respected climate and energy scientists---Dr. Ken 

Caldeira of the Carnegie Institution, Dr. Kerry Emanuel of MIT, Dr. James Hansen of Columbia 

University, and Dr. Tom Wigley of the National Center for Atmospheric Research---

acknowledged the value of nuclear energy to addressing climate change. The commenter stated 

that the scientists released a letter calling on world leaders to support nuclear energy, concluding 

that "in the real world there is no credible path to climate stabilization that does not include a 

substantial role for nuclear power." In addition, the commenter stated that in April of this year, 

the Center for Climate and Energy Solutions released a study identifying the challenges facing

nuclear units and noting that retirements of nuclear units will have serious climate change

implications. See Doug Vine & Timothy Juliani, Center for Climate and Energy Solutions, 

Climate Solutions: The Role of Nuclear Power (Apr. 2014).

Commenter 0181 concluded by stating that is it essential that EPA's regulatory program be 

structured to preserve the existing nuclear fleet, which is critical to sustaining reductions 

achieved to date. In addition, the commenter stated that the regulations should encourage the 

expansion of zero emission electricity generation through nuclear plants, and that weak standards 

based solely on improving energy efficiency of fossil fuel-fired units can have the perverse effect 

of displacing zero emissions nuclear facilities, while standards that effectively impose a cost on 

carbon-either through the cost of operating pollution control equipment of the purchase of 

allowances-will prevent this perverse effect.

Response 3.3-2: Nuclear units are not included in this final rule.

Comment 3.3-3: Commenter 0150 noted that additional reliability assessments regarding the 

Modified/Reconstructed Proposed Rule, as well as the proposed emission guidelines under 

Section 111(d) may be forthcoming, and stated that such assessments conducted by appropriately 

designated reliability entities such as the Federal Energy Regulatory Commission, the North 
3-14

American Reliability Corporation, and/or regional transmission organizations would be of high 

value to EPA, the public, and industry. The commenter urged EPA to fully consider the results of 

any reliability assessments in any final rule for modified and reconstructed EGUs issued under 

Section 111(b).

Commenter 0150 stated particular concern for the performance required of 

modified/reconstructed natural gas units necessary to back up deliveries from intermittent 

renewable generation sources such as wind and solar but notes that the forthcoming reliability

assessments are likely to address the issue, among others, and again stresses that EPA consider 

these issues in its promulgation of final rules.

Response 3.3-3: Historically, few EGUs have triggered the NSPS modification or reconstruction 

provisions. As a result, the EPA anticipates that few EGUs will take actions that would be 

considered NSPS modifications or reconstructions and subject to the standards of performance 

finalized in this action during the period of analysis. For this reason, the standards will result in 

minimal emission reductions, costs, or quantified benefits in the period of analysis. Likewise, the 

Agency does not anticipate any impacts on the price of electricity or energy supplies.

Comment 3.3-4: Commenter 0242 noted that, as part of the proposed Section 111(d) rule for 

existing units, natural gas units could be re-dispatched at greater than historical levels. The 

commenter stated that some of these units would likely be operating well outside of their original 

design parameters following re-dispatch, which could necessitate accelerated maintenance 

schedules and possibly reconstructions. The commenter stated that is it also likely that some 

natural gas units may choose to reconstruct a unit or units in anticipation of what the commenter 

believes to be a major restructuring of the entire power generation and delivery system via the 

proposed standards for existing units. The commenter stated that EPA has clearly shown in past 

rulemakings that the IPM model is not a good future predictive tool for distribution of electric 

generation in this country, this is premature for EPA to speculate that NGCC units will not 

undertake such measures.

Response 3.3-4: The EPA made its determination that few units would trigger the NSPS 

modification or reconstruction provisions in consultation with the Office of Enforcement and 

Compliance Assurance (OECA). This conclusion was based on OECA’s determination that 

historically few units have qualified as NSPS modifications or reconstructions, not on modeling.

Comment 3.3-5: Commenter 0193 stated that the proposed rules for new and modified and 

reconstructed units should encourage the expansion and deployment of CHP systems because 

CHP systems can achieve overall efficiency levels of 60 to 80 percent by simultaneously

producing electricity and useful thermal energy.

Response 3.3-5: The EPA has concluded that the emission standard for reconstructed 

combustion turbines is achievable. Therefore, the requirements in this final rule would not limit 

the ability of owners and operators to reconstruct existing combustion turbines. The final 

applicability includes and expanded exemption for industrial CHP units.
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3.4 COMPLIANCE COSTS

Comment 3.4-1: Commenters 0142, 0161, 0215, 0221, and 0223 stated that the potential 

emissions benefits stated by EPA within the Proposed Rule do not justify the costs.

Commenter 0142 stated that EPA has dramatically underestimated the cost of the rule to industry

and to consumers of electric power. The commenter further stated that EPA's evaluation of the 

costs and benefits of the proposed modification rule is not a sufficient analysis because it does 

not reflect or acknowledge the cumulative costs from all sources which would be affected by the 

Proposed Rule.

Commenter 0161 stated that EPA should withdraw the Modified Source Proposal because the 

potential CO2-related benefits of the proposal do not justify the costs. The commenter noted that, 

based on EPA's evaluation, complying with the Modified Source Proposal would cost a 500MW 

coal-fired unit between $0.78 and $4.5 million and result in CO2 reductions of 133,000 to 

266,000 tons in 2025 but that these achieved reductions would be dwarfed by increases in global 

CO2 emissions. The commenter noted that non-U.S. CO2 emissions, which already represent 82 

percent of global emissions, are projected to grow by 41 percent between 2010 and 2030. See 

Institute for 21st Century Energy, U.S. Chamber of Commerce, "Statement for the Record on the 

U.S. Environmental Protection Agency's 'Proposed Carbon Pollution Standard For Existing 

Power Plants,'" EPA's Standards of Performance for Greenhouse Gas Emissions from Existing 

Sources: Electric Utility Generating Units, Docket: EPA-HQ-OAR-2013 -0602, RIN 2060-

AR33, July 30, 2014

Commenter 0221 noted that substantial CO2 reductions have already been realized in the electric 

utility sector over the past decade due to economic downturn, increasing renewable generation, 

low natural gas prices, energy efficiency programs, and retirements of older, less efficient plants 

resulting from ever-increasing environmental regulations. The commenter stated that benefits 

were improperly calculated on a global basis, and when properly calculated on a domestic basis 

are far exceeded by the costs of the Proposed Rule. The commenter noted that the electric utility

sector is expected to meet or exceed the President's goal of a 17% CO2 reduction below 2005 

levels by 2020 without any further government action. The commenter reasoned that since the 

cost of the Proposed Rule exceeds the environmental benefits, and CO2 emission reductions are 

already being achieved by the electric utility sector without governmental regulation, EPA 

should exercise its authority to exempt modified and reconstructed units from NSPS.

Commenter 0223 noted that EPA did not analyze the cost impacts of modifications that could 

result from the installation of numerous new technologies on coal units in response to EPA's 

proposed Section 111(d) ruling, and that these costs must be analyzed. The commenter stated 

that the Proposal will force utilities to install technologies in search of incremental efficiencies, 

with marginal benefit, to meet the proposed 2% threshold since most EGU owners routinely 

invest in technologies to operate more efficiently. The commenter stated that because of this 

marginal benefit, the costs will outweigh the possible gain. Additionally, the commenter noted 

that EPA suggested that a reduction in fuel (coal) costs will offset technology costs. The 

commenter stated that EPA's Proposal does not hold in the state of Wyoming and inaccurately 
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represents the impacts to Wyoming coal units because most coal units in Wyoming are mine-tomouth, meaning they have near-zero transportation costs, and EPA did not consider this factor.

Response 3.4-1: The commenters refer to the illustrative analysis presented in the Regulatory 

Impact Analysis (RIA) for the modified source standard at proposal. In that document, the EPA 

presented the costs and benefits associated with a single unit because historically few units have 

triggered the NSPS modification provisions and there were no data available about any that may 

do so in the future. 

The EPA expects that most of the actions EGUs are likely to take in the foreseeable future that 

could be classified as NSPS “modifications” would qualify as pollution control projects. In many 

cases, those projects are likely to involve the installation of add-on control equipment needed to 

meet Clean Air Act (CAA) requirements for criteria and air toxics air pollutants. Any associated 

CO2 emissions increases would likely be small and would occur as a chemical byproduct of the 

operation of the control equipment. In other cases, those projects would involve equipment 

changes to improve fuel efficiency to meet state requirements for implementation of the CAA 

section 111(d) rulemaking for existing sources and would have the effect of increasing a source’s 

maximum achievable hourly emission rate (lb CO2/hr), even while decreasing its actual output 

based emission rate (lb CO2/MWh). Because all of these actions would be treated as pollution 

control projects under the EPA’s current NSPS regulations, they would be specifically exempted 

from the definition of modification.

For the RIA supporting the final rule, the EPA considered the limited data available on past 

modifications and the diversity of existing units that could potentially modify and determined 

that it was not possible to conduct a representative illustrative analysis of what costs and benefits 

might result from this final rule in the unlikely case that a unit were to take an action that would 

be classified as a modification. However, the EPA still anticipates that few EGUs will take 

actions that would be considered NSPS modifications and subject to the standards of 

performance finalized in this action during the period of analysis. For this reason, the standards 

will result in minimal emission reductions, costs, or quantified benefits in the period of analysis. 

Likewise, the Agency does not anticipate any impacts on the price of electricity or energy

supplies.

Comment 3.4-2: Commenter 0267, 0289 stated that EPA should exclude the costs of complying 

with EPA's final Section 111(d) existing source program from any reconstruction analysis under 

Section 111(b). The commenter noted that, in addition to potentially triggering NSPS 

modification, compliance with EPA's final ESPS under Section 111(d) for EGUs may also force 

sources to invest heavily to upgrade their existing units. The commenter urged EPA to exclude 

these costs from any reconstruction analysis under Section 111(b) since the investments are 

being made to comply with existing standards.

Response 3.4-2: The commenter refers to the illustrative analysis presented in the Regulatory

Impact Analysis (RIA) for the modified source standard at proposal. In that document, the EPA 

analyzed only the benefits and costs associated with compliance with the Section 111(b) 

modification provisions. No analysis was conducted for the reconstructed source standards due 

to a lack of information.
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The EPA expects that most of the actions EGUs are likely to take in the foreseeable future that 

could be classified as NSPS “modifications” would qualify as pollution control projects. In many

cases, those projects are likely to involve the installation of add-on control equipment needed to 

meet Clean Air Act (CAA) requirements for criteria and air toxics air pollutants. Any associated 

CO2 emissions increases would likely be small and would occur as a chemical byproduct of the 

operation of the control equipment. In other cases, those projects would involve equipment 

changes to improve fuel efficiency to meet state requirements for implementation of the CAA 

section 111(d) rulemaking for existing sources and would have the effect of increasing a source’s 

maximum achievable hourly emission rate (lb CO2/hr), even while decreasing its actual output 

based emission rate (lb CO2/MWh). Because all of these actions would be treated as pollution 

control projects under the EPA’s current NSPS regulations, they would be specifically exempted 

from the definition of modification.

For the RIA supporting the final rule, the EPA considered the limited data available on past 

modifications and the diversity of existing units that could potentially modify and determined 

that it was not possible to conduct a representative illustrative analysis of what costs and benefits 

might result from this final rule in the unlikely case that a unit were to take an action that would 

be classified as a modification. However, the EPA anticipates that few EGUs will take actions 

that would be considered NSPS modifications and subject to the standards of performance 

finalized in this action during the period of analysis. For this reason, the standards will result in 

minimal emission reductions, costs, or quantified benefits in the period of analysis. Likewise, the 

Agency does not anticipate any impacts on the price of electricity or energy supplies.

Comment 3.4-3: Commenter 0213 noted that Section 111(a)(1) directs EPA to "take into 

account" the cost of achieving reductions, and that in Essex Chemical Corp. v. Ruckelshaus, 486 

F.2d 427, 433 (D.C. Cir. 1973), the court held that 111(b) standards must be "reasonable reliable, 

reasonably efficient, and...reasonably...expected to serve the interests of pollution control without 

becoming exorbitantly costly in an economic of environmental way." (emphasis added) The 

commenter noted that similarly, in Portland Cement Ass'n v. Train, 513 F.2d 506, 508 (D.C. Cir. 

1975), the court upheld EPA's interpretation that section 111's cost inquiry functions as a safety 

valve to ensure that the costs a performance standard imposes are not "greater than the industry

could bear and survive," but would instead allow industry to "adjust" in a "healthy and economic 

fashion to the end sought by the Act as represented by the standards prescribed." The commenter 

also noted that in Lignite Energy Council, 198 F.3d at 933, the court held that "EPA's choice [of 

BSER] will be sustained unless the environmental or economic costs of using the technology are 

exorbitant." The commenter stated that, as the previous holdings make clear, a performance 

standards under section 111 will be upheld unless the costs it imposes are exorbitant or too great 

for the industry to bear, and that the D.C. Circuit has never invalidated a section 111 rule for 

being too costly. The commenter cited multiple cases in which the court upheld performance 

standards for proposed rules even with seemingly high costs of compliance (Portland Cement 

Ass'n v. Ruckelshaus, 486 F.2d (D.C. Cir. 1973): court upheld standard for PM emissions even 

though the control technologies amounted to roughly 12 percent of the capital investment for an 

entirely new plant and consumed 5 to 7 percent of a plant's total operating costs; Portland 

Cement Ass'n v. EPA, 665 F.3d (D.C. Cir. 2011): court upheld PM standards that were 

anticipated to increase the cost of cement by 1 to 7 percent with little projected decrease in 

demand; Lignite Energy Council v. EPA, 198 F.3d (D.C. Cir. 1999): court ruled that a two 

percent increase in the cost of producing electricity was not exorbitant and upheld the 1997 NOx 
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standards for EGUs and industrial boilers). The commenter referred to their comments on the 

New Source Standard at 25-27 for additional cost considerations.

Response 3.4-3: The EPA anticipates that few EGUs will take actions that would be considered 

NSPS modifications and subject to the standards of performance finalized in this action during 

the period of analysis. For this reason, the standards will result in minimal emission reductions, 

costs, or quantified benefits in the period of analysis. Likewise, the Agency does not anticipate 

any impacts on the price of electricity or energy supplies.

Comment 3.4-4: Commenter 0230 stated concern with the cumulative costs of EPA's actions or 

proposals over the last several years and their burden on Alabama residents. The commenter 

stated that they are not aware of any meaningful analysis undertaken by EPA as to the 

cumulative cost impacts resulting from implementation of, and compliance with, the suite of 

pending and issued rules affecting electric utility generating units. The commenter urged EPA to 

perform a comprehensive cost analysis that cannot merely examine each proposed rule in 

isolation, but instead should consider the cumulative cost impacts of all such proposals. 

The commenter additionally noted that the proposal does not appear to analyze the cost impacts 

caused when a unit cannot economically comply with the standard and is forced off-line.

Commenter 0215 stated that EPA has not provided a macroeconomic impact analysis of any of 

the Proposed Standards, contrary to law. The commenter stated that instead, EPA estimates that a 

hypothetical modified 500 MW coal-fired unit will incur $8.3 million annually to comply with 

the Proposed Standards. EPA estimates that this $8.3 million will be incurred regardless of 

whether the unit makes a 4 percent, 6 percent, or 8 percent efficiency improvement. The 

commenter felt that they cannot fully evaluate and comment on EPA's cost estimates for the 

Proposed Standards because EPA either has not provided any analysis (for three of the four 

Proposed Standards), or has provided such scant analysis that it is impossible to evaluate.

Response 3.4-4: The commenters refer to the illustrative analysis presented in the Regulatory

Impact Analysis (RIA) for the modified source standard at proposal. In that document, the EPA 

explained that different units may be able to achieve different levels of efficiency for the same 

investment. “The actual efficiency improvement a unit can achieve for this cost will depend on 

its starting efficiency and operating capacity. Less efficient units may have more efficiency 

improvement options available and be able to achieve greater efficiency for the same cost. 

Relatively more efficient units may have fewer remaining cost-effective options to improve 

efficiency.”

For the RIA supporting the final rule, the EPA considered the limited data available on past 

modifications and the diversity of existing units that could potentially modify and determined 

that it was not possible to conduct a representative illustrative analysis of what costs and benefits 

might result from this final rule in the unlikely case that a unit were to take an action that would 

be classified as a modification. However, the EPA anticipates that few EGUs will take actions 

that would be considered NSPS modifications and subject to the standards of performance 

finalized in this action during the period of analysis. For this reason, the standards will result in 

minimal emission reductions, costs, or quantified benefits in the period of analysis. Likewise, the 
3-19

Agency does not anticipate any impacts on the price of electricity or energy supplies or 

significant macroeconomic impacts.

3.5 CLIMATE CHANGE PROTECTION

Comment 3.5-1: Commenters 0142, 0177, 0186, and 0263 stated that the Proposed Rule does 

not impact carbon emissions or address climate change in an adequate manner, and therefore 

contend that EPA should withdraw this proposal.

Commenters 0142 and 0186 noted that EPA, in its RIA for the Proposed Rules, states that the 

impact of "reduced climate benefits" has been "monetized" but not "quantified". The commenters 

noted that EPA discusses at length it's assessment of climate change impacts in the RIA, e.g. 

global average temperature, sea level rise, and extreme weather events; however, the 

commenters claimed that EPA did not provide a single quantified effect to any climate parameter 

to demonstrate that the Proposed Rule would actually affect the climate change events which 

EPA cites as justification for the Rule. Commenter 0186 noted that this is remarkable, because 

EPA previously presented its estimates of impact on climate for other rulemakings such as the 

RIA for light-duty vehicle GHG emission standards in August of 2012 which explicitly

considered the climate impact of the reduction of GHGs produced by the rule. Commenter 0186 

stated that even under EPA's assumptions (with which they do not agree), atmospheric CO2

concentrations would be reduced by less than 1% (1.52 ppm, against a projected increase of 50-

150 ppm over the same period), global warming would be slowed by 0.009 degrees C (against a 

projected temperature rise of 1.0-2.0 degrees C during the same period), and sea level ruse would 

be reduced by 0.03 mm. Commenter 0186 noted that even in the best-case scenario reductions 

for each of these parameters, EPA's projected benefits are swamped by projected increases.

Commenter 0142 stated that the EPA has not provided an estimated impact of the Proposed Rule 

on global atmospheric CO2 concentrations and even though the EPA used the global SCC factor 

for calculating monetized benefits from the CO2 reductions of the proposed rule, the EPA failed 

to consider global CO2 emission trends. The commenter stated that the EPA cannot claim 

benefits on a global basis while only taking into consideration changes in United States CO2

emissions.

Commenter 0186 pointed to a statistic from the Intergovernmental Panel on Climate Change that 

calculated that power plants in the United States account for somewhere between 4.2 and 5.1% 

of GHG emissions worldwide. Commenter 0186 calculated that the maximum amount of CO2

taken out of the air, when considering all scenarios EPA presents to comply with Section 111(d), 

would be 555 million metric tons per year, which would constitute between 1.03 and 1.12% of 

GHG emissions worldwide, likely less. Commenter 0186 stated that assuming perfect 

compliance and support from the states, the EPA Power Plan might affect around 1% of the 

GHG emissions. Commenter 0186 further stated that research shows that even an entire 

shutdown of America's reliable coal-fueled generating fleet would have no discernible effects on 

the climate. Commenter 0186 referenced an analysis by the American Coalition for Clean Coal 

Electricity which showed that such a shutdown -- which is far beyond what EPA is proposing in 

this Proposed Rule -- would result in 1/20th of one degree temperature change.1 Commenter 

0186 stated that EPA's " 'solution' ... is not even a drop in the bucket."
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Commenter 0186 stated that EPA's RIA continues to rely on flawed IPCC data to define its 

asserted climate impacts. The commenter stated that "precisely at the point where the science 

needs to be strongest, at the very link that would couple these Proposed Rules to the climate 

impacts they claim will result, the science became polluted by anthropogenic error, an all-toohuman tendency to compromise good science in favor of an unscientific agenda." The 

commenter further stated at their base, all of EPA's projections on the impacts of carbon 

reduction rely on one crucial causal connection that has no scientific basis. The commenter noted 

that EPA's RIA spent approximately 25% of the document (96 pages) monetizing but not 

quantifying the climate impact caused by the rule and stated that no science supports the causal 

link: "we do not understand the complex links between changes in GHG levels and any changes 

in climate, much less whether x reduction in emissions will "cause" y impact. In other words, 

there is no reasoned basis for accepting EPA's assessment."

Response 3.5-1: These comments refer to information presented in the Regulatory Impact 

Analysis for the proposed standards, which addressed both 111(d) and 111(b) sources. While the 

EPA expects few sources to trigger the NSPS modification or reconstruction provisions, 

emission reductions, costs and benefits are expected for the 111(d) emission guidelines. These 

are presented in Chapter 4 of the RIA for that rulemaking. See also the Response to Comments 

for 111(b) for response to comments on climate change science (4.1) and on the social cost of 

carbon (4.4), and also the Response to Comments for 111(d) in Section 8.7.

Comment 3.5-2: Commenter 0177 stated concern that a sector limited approach, such as EPA's 

proposed regulation of carbon dioxide from the utility sector, as opposed to an international 

framework, will raise consumer electric rates without providing any significant beneficial 

climate impact.

Response 3.5-2: As discussed in the RIA for the 111(d) rulemaking (Section 8.7), the Clean 

Power Plan overall will result in the largest reductions of carbon dioxide emissions from a single 

regulatory action in U.S. history. However, EPA has been clear that, as stated in the 2009 GHG 

Endangerment Finding under Section 202 of the CAA, "the global nature of the air pollution 

problem and the breadth of countries and sources emitting greenhouse gases means that no single 

country and no single source category dominate or are even close to dominating on a global 

scale." EGUs are the largest contributors of CO2 in the US, and the reductions achieved in this 

rule are an unprecedented and necessary first step towards slowing the rate of climate change.

Comment 3.5-3: Commenter 0215 stated that EPA's estimated benefits reflect global, rather 

than domestic, effects. It is inappropriate to calculate global benefits when EPA has no 

jurisdiction to control worldwide emissions. When calculated more properly on a domestic basis, 

the purported benefits of the rule are far outweighed by their costs.

Response 3.5-3: While the commenters identify a number of limitations and uncertainties 

associated with the illustrative analysis presented in the Regulatory Impact Analysis (RIA) for 

the modified source standard at proposal, EPA notes that for the RIA supporting the final rule, 

the EPA considered the limited data available on past modifications and the diversity of existing 

units that could potentially modify and determined that it was not possible to conduct a 

representative illustrative analysis of what costs and benefits might result from this final rule in 

the unlikely case that a unit were to take an action that would be classified as a modification. 
3-21

However, the EPA anticipates that few EGUs will take actions that would be considered NSPS 

modifications and subject to the standards of performance finalized in this action during the 

period of analysis. For this reason, the standards will result in minimal emission reductions, 

costs, or quantified benefits in the period of analysis. Likewise, the Agency does not anticipate 

any impacts on the price of electricity or energy supplies.

EPA disagrees with the commenter’s recommendation of a domestic SC-CO2. See comment 

responses in unit 4.4 of the section 111 (b) RTC for a full discussion. See also the interagency

working group’s (IWG’s) responses to the comments on the OMB solicitation address the 

comments on the use of a global SC-CO2. Specifically, EPA concurs with the IWG’s response to 

these comments and hereby incorporates them by reference.4 

3.6 ECONOMIC AND EMPLOYMENT IMPACTS

Comment 3.6-1: Commenters 0170, 0183, 0186, 0230, 0231, 0237, and 0249 worried that the 

Proposed Rule would preclude coal and coal-fueled generation in the United States by

discouraging the use of coal in place of natural gas or other fuels, which would have a negative 

impact on the U.S. economy in terms of GDP, jobs, and the affordability of electricity.

Commenter 0186 stated that the EPA Power Plan represents a reversal of decades of federal 

policy emphasizing increased use of domestic coal as a way of achieving U.S. energy

independence, reducing consumption of imported foreign oil, and providing the Nation with 

reliable and affordable domestic energy. The commenter stated that this reversal of federal policy

after private industry has already committed to its investments, operates in retroactive fashion to 

strand the investments the federal government encouraged under Penn Central Transportation 

Co. v. New York, 438 U.S. 104, 107 (1978). The commenter noted that the cumulative benefits of 

low carbon coal programs in the United States total about $40 billion (in 2008 dollars) and 

federal expenditures for these programs totaled about $3 billion (2008 dollars), thus creating a 

benefit-cost ratio of 13 to 1. See Roger Bezdek and Robert Wendling, The Return on Investment 

of the Clean Coal Technology Program in the USA, 54 Energy Policy 104-12 (March 2013). The 

commenter noted that these programs are currently creating about 60,000 jobs in the U.S. 

economy. The commenter emphasized the importance of coal in the U.S. economy and energy

policies as the investments made in coal, and in developing new coal technologies, have led to 

economic growth, affordable and reliable energy, and a substantial number of jobs. The 

commenter stated that low-cost electricity from coal allows American business to prosper and 

lower-income Americans to improve their quality-of-life and on the flip side, the costs to society 

from suddenly curtailing the nation's energy mix away from coal will be substantial. The 

commenter expressed concern that the change sought by the EPA Power Plan will result in 

millions of jobs lost, billions less in gross economic output, skyrocketing electricity prices, and 

disparity affecting communities based on income and geography. The commenter noted that the 

EPA declined to include a discussion or consideration of these "crippling costs" in its RIA, and 

that EPA cannot ignore these costs. The commenter stated that while it may be politically 

expedient to target coal, our nation's economy depends significantly on it. The commenter cited a 

 

4 Referred to as the "OMB Response to Comments on SC-CO2." See 

https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-response-to-comments-final-july-2015.pdf .
3-22

Pennsylvania State University study the estimated that U.S. coal-fueled generation in 2015 

would contribute $1.05 trillion (in 2005 dollars) in gross economic output, $362 billion in annual 

household incomes, and 6.8 million jobs. The commenter noted that they study further concluded 

that displacing 33% of coal-based generation in 2015 would result in a $166 billion reduction in 

gross economic output, $64 billion reduction of annual household incomes, and a loss of 1.2 

million jobs.2

Commenter 0186 stated that EPA's Power Plan "threatens to...direct() investment away from 

coal. Indeed, the Proposed Rules do not even analyze investing in low carbon technology as a 

regulatory alternative at all. A more rational approach suggests using 21st Century Coal 

technologies to ensure prosperity and economic growth around the world." The commenter 

stated that the EPA Power Plan is unquestionably designed to cut and eventually eliminate the 

use of coal, a policy that would fall harshly on the Midwestern United States and other selected 

regions throughout the country, while largely bypassing coastal areas. The commenter suggested 

that the unprecedented scope and impact of the Proposed Rule raises deep Fifth Amendment 

concerns in that while property may be regulated to a certain extent, if regulation goes too far it 

will be recognized as a taking. Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 415 (1922). The 

commenter said that the Proposed Rules would "unduly penalize" coal companies, their 

employees, customers, and communities simply for following the government's past directive to 

invest in coal. The commenter stated that this "about-face in policy punishes those who relied 

upon the government, in the same way as the regulation held to be an impermissible taking in 

Ruckelshaus v. Monsanto, 467 U.S. 986 (1984) (finding a constitutional infringement when the 

government frustrated statutorily created expectations that trade secretes submitted to the 

government would be kept confidential.) Government policies shape business decisions and help 

determine the reasonableness of investment-backed expectations. See Palazzolo v. Rhode Island, 

533 U.S. 606, 618 (2001);Tahoe-Sierra Preservation Counsel Inc. v. Tahoe Regional Planning 

Agency, 533 U.S. 606, 633 (2001)."

Commenter 0237 stated that the Proposed Rule is "another front in President Obama's wellpublicized war on coal, the requirements appear especially burdensome for coal-fueled facilities" 

and that without meaningful explanation, EPA would deny coal-fueled facilities to access to two 

exemptions that the agency proposes to provide natural gas-fueled facilities. The commenter 

stated that while the Performance Standards Programs provide EPA with limited authority to 

promulgate adequately demonstrated, technology-based "standards of performance," EPA does 

not have authority to use those programs to effectively eliminate coal-fueled power plants and 

doing so would violate Congressional authority. The commenter noted that Congress has 

clarified, time and again, that coal must figure into the nation's energy future, and the Clean Air 

Act is not to be used to produce a contrary result and that EPA's actions, granting itself the 

privilege to enact laws where Congress has declined to do so, and in failing to execute the laws 

that Congress has enacted, the Proposed Rule has profound constitutional ramifications. The 

commenter cited one study which considered what would happen from a 20-year phase-out of 

coal-produced energy and found that: 500,000 jobs would be lost, aggregate GDP would 

decrease by $1.47 trillion, electricity prices would rise by 20%, natural gas prices would rise 

42%, and a family of four's annual income would drop by more than $1,000 per year. See 

Kreutzer, David W. and Kevin Dayaratna, "Cost of a Climate Policy: The Economic Impact of 

Obama's Climate Action Plan," Heritage Foundation (June, 27, 2013).
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Commenter 0249 cited a study commissioned by the NDTA, performed by Kadrmas, Lee and 

Jackson, Inc., which forecasted an expected electrical load growth for the next 20 years, from 

2012 to 2032, in the study area which spans regions across North Dakota, South Dakota and 

Montana. The commenter noted that by the end of the study period in 2032, the 43 counties 

within the Williston Basin are projected to require 2,512 megawatts (MW) of additional 

electrical demand, related to oil and gas development, to accommodate population growth, new 

ancillary business development and more than 30,000 additional wells. The commenter stated 

that new efficient lignite-fueled baseload electric generation facilities should not be prohibited by

the Proposed Rule for being an option available for meeting the substantial projected demand, as 

the Proposed Rule directly threatens the ability of new lignite generation to address the 

substantial projected electrical demand.

Commenter 0231 stated that coal is a critical component of the nation's energy portfolio with 

nearly 40% of U.S. electricity derived from coal combustion. The commenter added that coal can 

provide substantial amounts of transportation fuels and syngas to displace significant amounts of 

imports of crude oil, refined products and natural gas. The commenter added that coal is by far 

the nation's most abundant source of energy, constituting 94 percent of the nation's fossil fuel 

resources and that the U.S. has nearly 261 billion tons of recoverable coal reserves, according to 

the Energy Information Administration, which is a 240-year supply at current rates of use. The 

commenter noted that the mining industry is also a major source of jobs and economic 

development in the United States and that the U.S. coal mining industry directly employs nearly 

120,000 people in 23 states. The commenter stated that for each coal mining job, an additional 

3.5 jobs are created elsewhere in the economy and about 300,000 people work directly in 

minerals mining throughout the United States. The commenter stated that employment in 

industries supporting mining, including manufacturing, engineering and environmental and 

geological consulting, accounts for nearly 1.6 million jobs. The commenter noted that the 

average miner makes over $71,000 per year in salary, not including overtime, bonuses and 

benefits and that these are often the highest paying jobs in the community if not some of the 

highest paying statewide. The commenter stated that with its proposal EPA risks the hundreds of 

billions of dollars the mining industry contributes to the national economy each year. The 

commenter noted that mining of coal, metals and minerals provides more than $232 billion 

annually in direct and indirect economic impact.

Response 3.6-1: This rule addresses modified and reconstructed sources and does not impose 

any requirements on new sources. (111(b) new source standards were proposed in a separate 

rulemaking in January 2014.) The EPA anticipates that few EGUs will take actions that would be 

considered NSPS modifications or reconstructions and subject to the standards of performance 

finalized in this action during the period of analysis. For this reason, the standards will result in 

minimal emission reductions, costs, or quantified benefits in the period of analysis. Likewise, the 

Agency does not anticipate any impacts on the price of electricity or energy supplies.

Comment 3.6-2: Commenters 0186, 0237, 0249, and 0271 expressed concerns about the 

Proposed Rule's effect on the affordability of electricity to businesses and the general public.

Commenter 0186 noted that the current Administration concedes that the plan will result in 

significantly higher electricity prices. The commenter also noted that the Proposed Rule does not 

require the federal government to make any capital investment in change but instead will saddle 
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electric taxpayers with the true cost of the EPA Power Plan. The commenter stated that 

skyrocketing electricity prices will have an immediate impact on businesses that rely on 

affordable energy to sustain hiring and production levels and will hit low-income Americans 

particularly hard, given the percentage of their monthly budgets that they devote to basic needs 

such as heating and cooling. The commenter pointed to the experience of numerous U.S. states 

and overseas countries whose experiences they feel are "telling". The commenter noted that 

California's cost of electricity is significantly higher than the national average, and has led to 

significant job losses and economic hardship. The commenter stated that between 2009 and 

2013, the average energy bill for EU consumers increased by some 17 percent, while energy 

costs for individual users jumped by 21 percent and between 2005 and late 2013, the average 

price of residential electricity in the EU rose by 55 percent, and industrial electric rates jumped 

by 26 percent. See Robert Bryce, Maintaining the Advantage: Why the US Should Not Follow 

the EU's Energy Policies, (report prepared for the Manhattan Institute for Policy Research), 

(February 2014). The commenter noted that the average U.S. household historically pays 12 

cents per kilowatt-hour, about a third of what the same amount of electricity costs in Germany. 

The commenter noted that Spain has pushed aggressively for renewable energy, but 

Spain's electricity bills are among the highest in Europe, having risen 60 percent between 2006 

and 2012. The commenter noted that a Spanish newspaper reported around 4 million Spaniards 

facing difficulties paying their electricity bills, and some 1.4 million homes had their electricity 

cut off for non-payment. See "The shocking price of Spanish electricity", EL PAIS, (Jan. 1, 

2014). The commenter went on to state that Australia experienced a soar of electricity prices 

because of its Renewable Energy Target and carbon tax, with household electricity costs rising 

100 percent over a five year period. Similarly, The commenter noted that Ontario's Green Energy

and Economy Act has made great strides in solar energy, but has caused Ontario's electric rates 

to increase by approximately 33%. The commenter concluded that every country that has 

aggressively sought to discourage coal usage has experienced large electricity price increase with 

no similar corresponding benefit.

Commenter 0237 stated that access to inexpensive energy is the most important contributor to 

human welfare and that any increase in the cost of energy creates injuries to individual and 

collective welfare across numerous dimensions. The commenter noted that money spent on 

energy is not available to be spent on healthcare, education, food, or housing. The commenter 

stated that increases in energy costs must either be absorbed by manufacturing companies, 

leading to decreased capital available for investment and lowered growth, or passed on to 

consumers, who then suffer the corresponding loss in income meaning that increased energy

prices create yet another incentive for American companies to shift production to foreign 

operations. The commenter also noted that increased energy prices also adversely affect the 

agricultural sector, driving up the price of food--"creating yet another ripple throughout the 

economy." The commenter emphasized the importance of coal in sustaining "a healthy American 

economy". The commenter said the following on the importance of coal: "Over the past 10 years, 

coal has accounted for half of domestic energy production. Total demand for U.S. coal reached 

1.12 billion tons in 2008. Half of U.S. electricity is generated from coal. Coal accounts for about 

32 percent of U.S. total energy production and 23 percent of total energy consumption. Coal is 

the most affordable source of power fuel per million BTU, historically averaging less than onequartet the price of petroleum and natural gas. There are approximately 600 coal generating 
3-25

facilities (1,470 generating units) and 1,100 manufacturing facilities using coal in the U.S., 

according to the U.S. Energy Information Administration (EIA)."

Commenter 0249 urged EPA to allow potentially promising greenhouse gas (GHG) emissions 

reducing technologies to "come into their own," while allowing the utilization of abundant, 

affordable, and reliable lignite coal reserves. The commenter stated that failure to do so will 

greatly increase electricity prices to families and businesses, threaten the reliability of the electric 

grid by diminishing fuel choices to generate future stable, baseload electricity, retard economic 

growth and energy security, and cause the unnecessary loss of thousands of jobs in the coalmining and manufacturing sectors.

Commenter 0271 stated concern that this proposal will be in direct conflict with Indiana's goal of 

affordable reliable energy because it will result in additional and unnecessary costs to EGUs in 

order to comply. The commenter noted that these costs generally get passed along to the 

consumer. The commenter stated that according to the Indiana State Utility Forecasting Group's 

(SUFG) 2013 Forecast, compliance with recent environmental regulations alone will push 

Indiana's electricity prices 30 percent higher from 2012 to 2023. The commenter is concerned 

that the proposed restrictions will lead to Hoosiers losing heat and power because they won't be 

able to pay the rising utility costs, that U.S. businesses will be unable to compete in a global 

economy, and that worldwide greenhouse gas emissions may actually increase due to the 

relocation of manufacturing operations from the U.S. to other countries.

Response 3.6-2: Based on historical data, the EPA anticipates that few EGUs will take actions 

that would be considered NSPS modifications or reconstructions and subject to the standards of 

performance finalized in this action during the period of analysis. For this reason, the standards 

will result in minimal emission reductions, costs, or quantified benefits in the period of analysis. 

Likewise, the Agency does not anticipate any impacts on the price of electricity or energy

supplies.

Comment 3.6-3: Commenter 0183 stated that EPA justifies its overly burdensome regulation on 

coal-fueled plants by asserting that low natural gas prices are independently driving a decline in 

coal-fueled power generation and that stated that to make this assertion, EPA assumed that gas 

prices would remain at their current low levels into the indefinite future. The commenter argued 

that this assumption is short-sighted, cannot be verified, and ignores the benefit of fuel diversity

to buffer against unexpected supply and price fluctuations.

Response 3.6-3: The commenter refers to analysis supporting 111(b) standards for new sources. 

This rule addresses modified and reconstructed sources and does not impose any requirements on 

new sources. 111(b) new source standards were proposed in a separate rulemaking in January

2014.

Comment 3.6-4: Commenter 0183 felt that EPA failed to consider the impacts of the Proposed 

Rule on the ERCOT market and the unique and critical generation assets operating in Texas. The 

commenter stated that the proposal is a threat to the reliability of the electricity system in Texas 

and the continued recovery of the economy nationwide. The commenter felt that EPA's approach 

is especially ill-suited for Texas's deregulated market and will result in stranded investments, 

reduced fuel diversity, and loss of jobs. The commenter stated that the ERCOT market supplies 
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8%% of the Texas load, with coal-fueled units supplying nearly 34% of energy used in 2012. 

The commenter further stated that ERCOT must be self-sufficient in providing power for its 23 

million customers and that EPA's proposal, coupled with its historic litigating position on New 

Source Review applicability, could effectively eliminate the ability of coal-fueled units to 

undertake routine maintenance, repair, and replacement to keep the units operating as designed.

Commenter 0183 noted that the ERCOT market design does not include a capacity payment for 

generators; instead, generators are only paid when they generate electricity for consumers. The 

commenter added that generators compete against other generators to be "dispatched" to generate 

electricity and, as such, participants in the market are incentivized to operate as efficiently as 

possible. The commenter noted that they, and other market participants, have looked for and 

adopted energy efficiency measures to reduce the amount of fuel used to generate electricity, as 

fuel is a major expense in generating electricity. The commenter stated that because of the 

ERCOT market design, all viable heat rate improvements have already been made and are not 

available for additional reductions as EPA assumes in this proposal and the Existing Unit 

Proposal.

Response 3.6-4: Based on historical data, the EPA anticipates that few EGUs will take actions 

that would be considered NSPS modifications or reconstructions and subject to the standards of 

performance finalized in this action during the period of analysis. For this reason, the standards 

will result in minimal emission reductions, costs, or quantified benefits in the period of analysis. 

Likewise, the Agency does not anticipate any impacts on the price of electricity or energy

supplies.

Comment 3.6-5: Commenters 0161 and 0186 showed concern with U.S. regulation of CO2

emissions, as they believe that emissions from countries such as China and India would 

overwhelm any CO2 reductions achieved by U.S. GHG regulations, including the Modified 

Source Proposal.

Commenter 0186 noted that in 2013, CO2 emissions worldwide rose 2.5% and hit a record high, 

with China leading this growth and countries such as India and Brazil rapidly increasing their 

emissions as well. Commenter stated that China emits more CO2 in one month than the EPA 

Power Plan would eliminate in one year and assuming the same rate of emissions, China will 

wipe out one year's worth of emissions reduction under both Proposed Rules in only 21 days. 

Commenter calculated this by taking China's emission rate of 9.86 Gt/yr (= 0.82 Gt/mo), 

dividing it into 0.027 Gt/day for a 30-day month, multiplying by 20.5 days, which resulted in 

0.554 Gt of emissions---roughly what EPA claims the Proposed Rule would eliminate over the 

course of one year after full implementation. Commenter stated that other countries relying upon 

coal for energy also swamp the reductions from the Proposed Rules because of the high demand 

for power from emerging markets, which they expect to continue. Commenter concluded that 

"because of the global need for reliable, affordable energy, much of the rest of the world will 

need to depend on coal for stable development in the 21st century" and that "any reduction made 

in carbon emissions from generating units will be inconsequential given the international demand 

for affordable, reliable electricity from coal." Commenter noted that Russia recently announced 

construction of an 8,000 MW coal-fired plant, the largest in the world, with plans to sell the 

energy to China while India recently rejected the idea of GHG cuts. Commenter suggested that a 

more sound policy would be a global push towards 21st century coal, and that the United States 
3-27

should lead by example. See "Russian Firm Studying World's Largest Coal-Fired Plant to Supply

China", REUTERS (May 26, 2014).

Response 3.6-5: While the commenters focus on the illustrative analysis presented in the 

Regulatory Impact Analysis (RIA) for the modified source standard at proposal, EPA notes that 

for the RIA supporting the final rule, the EPA considered the limited data available on past 

modifications and the diversity of existing units that could potentially modify and determined 

that it was not possible to conduct a representative illustrative analysis of what costs and benefits 

might result from this final rule in the unlikely case that a unit were to take an action that would 

be classified as a modification. However, the EPA anticipates that few EGUs will take actions 

that would be considered NSPS modifications and subject to the standards of performance 

finalized in this action during the period of analysis. For this reason, the standards will result in 

minimal emission reductions, costs, or quantified benefits in the period of analysis. Likewise, the 

Agency does not anticipate any impacts on the price of electricity or energy supplies.

Furthermore, all countries contribute to climate change, and no one nation can stop it alone. All 

nations that are significant emitters of greenhouse gases will need to take the steps necessary to 

reduce their emissions in the near and long term. We have an obligation to ensure that the world 

we leave behind for our children and our grandchildren is healthier and safer. This rulemaking 

further establishes the United States as a leader in international efforts to secure an ambitious and 

lasting climate agreement in 2015 that will include significant contributions from all major 

economies. Already, U.S. action has helped spur announcements from China and Brazil to limit 

their own greenhouse gas emissions, building momentum for broader global commitments later 

this year in Paris.

Comment 3.6-6: Commenter 0186 stated that the Proposed Rule threatens to impede progress in 

the developing world. Commenter stated that "these nations currently rely on coal because it is 

affordable and reliable" and that "the success of our own Nation's development is undeniably

linked in large part due to our abundance of coal and our government's past consistent focus and 

priority on affordable, reliable, and plentiful energy for homes and businesses." Commenter 

further stated that if the United States intends to lead by example, suggesting that developing 

countries and economies suddenly shift away from coal -- "the very resource that guided 

American industrialization" -- "will be a step backwards." Commenter noted that such an act 

would "reduce prosperity and human welfare" because "coal is a necessary bedrock component 

of global energy, and clean-coal technologies are the global future."

Commenter 0186 also noted that if these developing countries followed the model of the EPA 

Power Plan, alternative energy sources would "cause energy costs to 'skyrocket' beyond the reach 

of many -- and certainly beyond the reach of those who need it most." Commenter stated for 

these reasons, coal and lower carbon emission technology using coal must "continue to be the 

cornerstone and bedrock of global energy policies."

Response 3.6-6: Please see response to 3.6-5. 

Comment 3.6-7: Commenter 0186 stated that "in addition to the impact that increased energy

costs will have on jobs, the EPA Power Plan as a whole will have broad and devastating 

implications for millions of jobs and the economy generally" and that EPA did not consider these 
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costs. Commenter relied on a 2011 study by the National Economics Research Association 

(NERA) to support their stance. The NERA study estimated the effects from 2012-2020 of the 

four environmental regulations in three major areas: (1) coal unit retirements, (2) electricity and 

other energy market impacts, and (3) economic impacts. Commenter stated that NERA found 

"Over the period from 2012 to 2020, about 183,000 jobs per year are predicted to be lost on net 

due to the effects of the four regulations. The cumulative effects mean that over the period from 

2012 to 2020, about 1.65 million job-years of employment would be lost." Commenter noted that 

the study also estimated that U.S. disposable personal income would be reduced by $34 billion 

each year on average over this period (in 2010 dollars), and the average annual loss in disposable 

personal income per household would be $270, with a cumulative loss of $1,750 (in 2010 

dollars). Commenter also noted that these net figures in the study account for "jobs that would be 

created in some sectors as a result of spending on pollution controls (i.e. 'green jobs') as well as 

jobs lost due to higher electricity prices and other negative impacts."

Commenter 0186 also stated that it is not plausible to assume that workers displaced from jobs 

because of EPA regulations will readily be able to find alternative work, as EPA had stated that it 

did not need to consider job losses as a result of the Proposed Rule because the losses would be 

temporary. Commenter referenced the Bureau of Labor Statistics' most recent Displaced Worker 

Survey that found that among the 4.3 million long-tenured displaced workers who lost their jobs 

between 2011 and 2013, 39% were still unemployed and that among those long-tenured workers 

who were displaced from full-time wage and salary jobs but were re-employed in such jobs in 

January 2014, nearly half (48%) had earnings that were lower than those of their lost job.

Commenter emphasized again that decreasing the amount of electricity generated from coal will 

result in fewer jobs, even taking into account gains in 'green jobs', and EPA "has not shown that 

those jobs can be replaced elsewhere given the state of the economy."

Commenter 0281 also expressed concern about potential job losses, shifts in the workforce 

(particularly in rural mining areas where other jobs may not be plentiful), and the corresponding 

adverse impacts on the communities supporting these workers. The commenter stated that the 

EPA failed to conduct meaningful job impact and economic analyses of the proposed rule.

Response 3.6-7: The commenter refers to analysis conducted regarding the 111(d) emission 

guidelines for existing sources. This rulemaking addresses new and modified sources under CAA 

section 111(b). Based on historical data, the EPA anticipates that few EGUs will take actions that 

would be considered NSPS modifications or reconstructions and subject to the standards of 

performance finalized in this action during the period of analysis. For this reason, the standards 

will result in minimal emission reductions, costs, or quantified benefits in the period of analysis. 

Likewise, the Agency does not anticipate any impacts on the price of electricity or energy

supplies.

Comment 3.6-8: Commenter 0186 stated that a shift away from coal will significantly increase 

the cost of electricity, which will in turn have a very significant cascading impact on gross 

domestic product (GDP). Commenter noted that a review of the studies which estimated the 

energy price/GDP elasticity, one inquiry "determined that a reasonable electricity elasticity

estimate is -0.1, which implies that a 10 percent increase in the electricity prices will result in a 

one percent decrease in GDP." See American Coalition for Clean Coal Electricity, "The Social 

Costs of Carbon-No, the Social Benefits of Carbon," 9 (Jan. 2014). Commenter pointed to 
3-29

another study which analyzed the potential impacts of the EPA power plant rules on the 

electricity sector and the economy as a whole and noted that the study found that the rules would 

cause lower GDP -- on average $51 billion every year through at least 2030, with a peak decline 

of nearly $104 billion in 2025 -- accompanied by losses in employment. See IHS, "Assessing the 

Impact of Potential New Carbon Regulations in the United States,"(report prepared for the U.S. 

chamber of Commerce) (2014).

Response 3.6-8: The commenter refers to analysis conducted regarding the 111(d) emission 

guidelines for existing sources. This rulemaking addresses new and modified sources under CAA 

section 111(b). Based on historical data, the EPA anticipates that few EGUs will take actions that 

would be considered NSPS modifications or reconstructions and subject to the standards of 

performance finalized in this action during the period of analysis. For this reason, the standards 

will result in minimal emission reductions, costs, or quantified benefits in the period of analysis. 

Likewise, the Agency does not anticipate any impacts on the price of electricity or energy

supplies.

Comment 3.6-9: Commenters 0160, 0220, 0230, and 0252 said that they were concerned with 

the effect that the Proposed Rule would have on the nation's power system.

Commenter 0220 held the position that Congressional action, not administrative rule, is required 

to properly address the complex and impactful issue of limiting greenhouse gas emissions. 

Commenter stated that "the proposals threaten the diversity, affordability and security of our 

state and nation's power supply, which is central to the vitality of our economy and quality of 

life" and that "EPA's proposal for modified and reconstructed EGUs is complex, inflexible, 

costly and unnecessarily burdens long-term investment decisions needed to ensure the future 

health of the United States' power system." Commenter stated that EPA's proposed CO2

standards for new, modified and reconstructed, and existing EGUs would "increase the volatility

and expense of our state and nation's power system without demonstrating that they would 

actually reduce overall greenhouse gas emissions." Commenter noted that instead of supporting 

the many advantages of domestic power production, the EPA's Proposed Rule "may encourage 

shifting power production, and related carbon emissions, to unregulated entities outside the U.S. 

that are generally less environmentally responsible than U.S. power generators."

Commenter 0252 stated that EPA's Proposed Rules for new, modified and reconstructed, and 

existing sources "evidence() unparalleled regulatory hubris." Commenter stated that EPA seeks 

to "unlawfully leverage its authority under the Clean Air Act, which is limited to regulating air 

pollutant emissions, to take near total control over the entire electricity sector, from generation to 

transmission and even demand." Commenter suggested that the effect of EPA's action would be 

"the crippling of the Nation's electric generation fleet."

Commenter 0230 encouraged EPA to avoid energy policies that will have more severe economic 

impacts than the assumed negative impacts associated with carbon. Commenter urged the EPA to 

use any and all available flexibilities to temper its proposed modified and reconstructed standard 

to avoid such adverse impacts, and assure the consuming public the good and quantifiable 

benefits of the proposed standard.
3-30

Response 3.6-9: Based on historical data, the EPA anticipates that few EGUs will take actions 

that would be considered NSPS modifications or reconstructions and subject to the standards of 

performance finalized in this action during the period of analysis. For this reason, the standards 

will result in minimal emission reductions, costs, or quantified benefits in the period of analysis. 

Likewise, the Agency does not anticipate any impacts on the price of electricity or energy

supplies.

Comment 3.6-10: Commenter 0199 urged EPA to craft rules that are obtainable by electric 

generating units and that do not impose unworkable requirements that would only serve to 

increase cost, decrease electric reliability and have negligible environmental benefits.

Commenter 0237 stated that the Proposed Rule will significantly contribute to the substantial and 

unwarranted harm on the American public that EPA will cause with its proposed Standards of 

Performance for Greenhouse Gas Emissions From New Electric Generating Units and proposed 

Carbon Pollution Emission Guidelines for Existing Electricity Generating Units.

Commenter 0215 stated that EPA has not undertaken a complete economic impact assessment of 

the Proposed Standards as required by sections 312 and 317 of the CAA. The commenter stated 

that EPA provides no impact assessment of Proposed Standards for three of the four 

subcategories and only an "illustrative analysis" for a single "hypothetical unit" complying with 

the modified subpart Da standard. 

Response 3.6-10: The EPA has concluded that the requirements included in this final rule are 

achievable and reasonable in terms of costs. The commenters refer to the illustrative analysis 

presented in the Regulatory Impact Analysis (RIA) for the modified source standard at proposal. 

In that document, the EPA presented the costs and benefits associated with a single unit because 

historically few units have triggered the NSPS modification provisions and there were no data 

available about any that may do so in the future. 

The EPA expects that most of the actions EGUs are likely to take in the foreseeable future that 

could be classified as NSPS “modifications” would qualify as pollution control projects. In many

cases, those projects are likely to involve the installation of add-on control equipment needed to 

meet Clean Air Act (CAA) requirements for criteria and air toxics air pollutants. Any associated 

CO2 emissions increases would likely be small and would occur as a chemical byproduct of the 

operation of the control equipment. In other cases, those projects would involve equipment 

changes to improve fuel efficiency to meet state requirements for implementation of the CAA 

section 111(d) rulemaking for existing sources and would have the effect of increasing a source’s 

maximum achievable hourly emission rate (lb CO2/hr), even while decreasing its actual output 

based emission rate (lb CO2/MWh). Because all of these actions would be treated as pollution 

control projects under the EPA’s current NSPS regulations, they would be specifically exempted 

from the definition of modification.

For the RIA supporting the final rule, the EPA considered the limited data available on past 

modifications and the diversity of existing units that could potentially modify and determined 

that it was not possible to conduct a representative illustrative analysis of what costs and benefits 

might result from this final rule in the unlikely case that a unit were to take an action that would 

be classified as a modification. However, the EPA still anticipates that few EGUs will take 
3-31

actions that would be considered NSPS modifications and subject to the standards of 

performance finalized in this action during the period of analysis. For this reason, the standards 

will result in minimal emission reductions, costs, or quantified benefits in the period of analysis. 

Likewise, the Agency does not anticipate any impacts on the price of electricity or energy

supplies.

Comment 3.6-11: Commenter 0182 stated that economic considerations must be recognized for 

coal refuse-fired CFB's due to fuel considerations and physical plant size and that coal refuse 

EGU's utilizing CFB technology "cannot economically apply capital intensive advanced 

efficiency (heat rate) technologies to reduce the greenhouse gases at the plant sites AND be 

economically competitive in the market."

Response 3.6-11: See the preamble for the EPA’s rationale for not exempting coal refuse-fired 

EGUs. The EPA notes that the expanded industrial CHP exemption would be applicable to coal 

refuse-fired units 

3.7 BENEFITS

Comment 3.7-1: Commenters 0150, 0157, 0169, 0183, 0186, 0187, 0199, 0214, 0215, 

0222, 0224, 0227, 0230, 0239, 0242, 0253, 0263, and 0284 stated that the Proposed Rule offers 

no benefits and should therefore be withdrawn.

Commenters 0150, 0157, 0183, 0186, 0241, 0215, 0224, 0230, 0239, 0253, 0263, and 0284 

noted that EPA stated in the proposal that "[h]istorically, few EGUs have undertaken 

reconstruction" and that it "expects few units would trigger the modification or reconstruction 

provisions" in this proposal. The commenters stated that because of these negligible benefits, 

EPA should exercise its authority to not establish NSPS for modified and reconstructed sources, 

as it has done in other cases.

Commenters 0150, 0183, 0186, 0187, 0199, 0222, 0224, 0253, 0263, and 0284 noted that EPA 

stated in its RIA that it "do[es] not anticipate any significant costs or benefits associated with this 

proposal", and therefore find it difficult to justify the Proposal.

Response 3.7-1: Although there have historically been few units that trigger the NSPS 

modification and reconstruction provisions, any unit that triggers these provisions in the future 

will be subject to the standards set by this rule. In that case, there would be benefits and costs 

associated with the standard.

Comment 3.7-2: Commenters 0142, 0161, 0214, 0215 and 0256 stated concern with EPA's 

evaluation of the potential health benefits of the proposed rule.

Commenters 0161 and 0256 noted that the EPA did not provide the benefits associated with the 

pollutant that is the target of the proposed regulation -- carbon dioxide -- in the cost-benefit 

discussion in the preamble. Commenters noted that EPA instead relied on the co-benefits 

associated with the reduction of other pollutants such as SO2, NOx, and fine particulate matter. 

The commenters stated that the benefits of the proposed rule should be quantified based on the 

benefits associated with the emissions reduction of solely the target pollutant. Commenter 0161 
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stated that EPA has provided no legal justification for relying on the "health co-benefits" of the 

reductions of SO2, NOx, and fine particulate matter and that EPA is precluded from citing their 

alleged benefits as support for the proposal. Commenter 0256 noted that where co-benefits are 

enumerated by EPA, a majority of the co-benefits are due to premature mortality due to fine 

particulate matter. Commenter 0256 stated that because sulfate based fine particulate resulting 

from emissions of sulfur dioxide from utility units appears to be EPA's major cost component 

used as a basis for various EPA regulations, the preamble should include a detailed discussion 

and analysis of the health effects of sulfate based fine particulate versus other times of fine 

particulate. Commenter 0256 further stated that, absent such analysis, it seems that EPA is 

promulgating a series of regulations that are setting the energy policy for this country and will 

likely result in harmful long-term effects on the economy without bothering to do the appropriate 

scientific analysis that is the basis for the regulations.

Commenters 0161 and 0214 stated that if the National Ambient Air Quality Standards for 

pollutants such as SO2, NOx, and fine particulate matter have been properly set, there cannot be 

additional substantial human health measures available as co-benefits of other regulations such 

as the Modified and Reconstructed Source Proposal.

Commenter 0142 stated that the health benefits for collateral decreased in SO2, NOx, and PM2.5

continue to be exaggerated and do not take into account other recent rules implementing 

emission reductions from electric generating units.

Commenter 0215 stated that EPA claims that the health co-benefits from the Proposed Standards 

are equal to or greater than the climate benefits. Those co-benefits are, however, illusory. Most 

of them are attributable to exposures to pollutants at levels below those EPA has found 

protective of public health. Even those fictional benefits are largely due to emission reductions 

that will occur even in the absence of the Proposed Standards in order to address any residual 

pollutant levels above those found to be protective of public health. Thus, the health co-benefits 

of the Proposed Standards are essentially zero.

Response 3.7-2: These comments refer to the analysis conducted in the RIA for the proposed 

standards. For the RIA supporting the final rule, the EPA considered the limited data available 

on past modifications and the diversity of existing units that could potentially modify and 

determined that it was not possible to conduct a representative illustrative analysis of what costs 

and benefits might result from this final rule in the unlikely case that a unit were to take an action 

that would be classified as a modification. However, the EPA anticipates that few EGUs will 

take actions that would be considered NSPS modifications and subject to the standards of 

performance finalized in this action during the period of analysis. For this reason, the standards 

will result in minimal emission reductions, costs, or quantified benefits in the period of analysis. 

Likewise, the Agency does not anticipate any impacts on the price of electricity or energy

supplies.

Although there is no illustrative analysis of costs or benefits for the final rule, the commenters 

raise general issues with EPA’s benefit methodology that are addressed here. EPA does not 

conduct benefit-cost analyses under any specific requirement of the CAA. The benefit-cost 
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analysis included in the RIA accompanying the proposed rule was conducted in compliance with 

Executive Order 12866. Consistent with OMB5and EPA guidance6, when conducting a costbenefit analysis to meet the requirements of EO 12866, the EPA estimates all of the anticipated 

costs and benefits associated with a regulatory action to the extent feasible, including benefits 

anticipated to occur from reducing air pollution to below the NAAQS levels. As EPA has 

consistently stated, the NAAQS are not risk free, and as a result, consistent with scientific 

evidence and CASAC review. 

The EPA disagrees that it has double-counted the benefits for this proposal, as all of the 

estimated health benefits are attributable to the emissions reductions associated with this 

proposed rule. The EPA notes that NAAQS are set at a level deemed by the EPA Administrator 

to be protective of public health within an adequate margin of safety and are not set at a level of 

zero risk. Therefore, there would still be health benefits that occur at the lower concentrations, 

even if we have less confidence in the magnitude of those benefits. The EPA believes that the 

best estimate of benefits includes benefits both above and below the levels of the NAAQS and 

maintains it is not double-counting benefits simply because the magnitude of the health benefits 

that occur at lower concentrations are more uncertain. 

The EPA’s standard practice for its rules is to estimate, to the extent data and time allow, all 

benefits of the emissions reductions achieved by a rule beyond control requirements for other 

rules, i.e., establish a baseline. While it can be difficult to account for concurrent rulemakings in 

a baseline, the EPA clearly identifies what is and what is not in the baseline for each analysis. If 

this proposed rule was duplicative of other rules, then there would be no additional costs or 

benefits attributable to this proposed rule. Prior to estimating the health benefits of this proposed 

rule (and any other rule), we simulated what PM2.5 concentrations would be in the future to 

account for the air quality benefits that would occur due to other regulations (e.g., MATS) or 

economic factors in this baseline. Any emissions changes expected as a result of this proposed 

rule are additional emissions reductions beyond the other regulations included in the baseline 

(e.g., MATS). Therefore, the benefits from particle reductions are not double-counted – they are 

real health benefits from emissions reductions anticipated to be achieved by this proposed rule. 

Further, the PM2.5 and ozone health co-benefits expected from this proposed rule are not doublecounted with benefits estimated in the NAAQS RIAs. NAAQS RIAs illustrate, but do not 

predict, the emissions reductions strategies that States may choose to enact when implementing a 

revised NAAQS. Subsequent Federal and State implementation rules will be reflected in future 

baselines for PM and ozone NAAQS reviews. Also, because it is not possible to accurately 

account for rules that have not yet been promulgated, RIAs prepared for a future rulemaking will 

likely include any additional rulemakings in the baseline. For example, the baseline in this RIA 

reflects many recently promulgated rulemakings, including MATS, CSAPR, and CCR. 

 

5 Office of Management and Budget (OMB). 2003. Circular A-4: Regulatory Analysis. Washington, DC. Available 

on the Internet at http://www.whitehouse.gov/omb/circulars/a004/a-4.html.

6 U.S. Environmental Protection Agency (U.S. EPA). 2010a. Guidelines for Preparing Economic Analyses. EPA 

240-R-10-001. National Center for Environmental Economics, Office of Policy Economics and Innovation. 

Washington, DC. December. Available on the Internet at <http://yosemite.epa.gov/ee/epa/eerm.nsf/vwAN/EE-0568-

50.pdf/$file/EE-0568- 50.pdf>.
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The U.S. EPA follows a highly structured, transparent and peer-reviewed process for estimating 

the human health impacts attributable to poor air quality. As a first step, the Agency identifies 

the health endpoints to quantify by consulting the Integrated Science Assessment, a systematic 

review of the clinical, toxicological and epidemiological literature. This document is reviewed by

the independent Clean Air Scientific Advisory Committee. The Agency quantifies those 

endpoints classified by the ISA as being causal or likely causal, selecting concentration-response 

relationships from studies that satisfy a host of criteria—most notably whether the population 

characteristics match those affected by the regulation, thus excluding studies performed outside 

of the U.S. and Canada. The Agency’s approach for characterizing the benefits of air quality 

changes has been extensively reviewed by independent scientific bodies including the National 

Academies of Sciences and the U.S. EPA Science Advisory Board. 

Consistent with the findings of the PM ISA, which found that the log-linear no-threshold model 

best estimates PM-related premature death, the Agency quantifies PM impacts resulting from 

changes in ambient concentrations at all levels.

Comment 3.7-3: Commenter 0157 noted that EPA's 111(d) proposal means that all coal units, 

high and low cost, will run even less since 111(d) mandates increased gas-fired generation. The 

commenter stated that this means that both reduced hours of operation and increased operation at 

lower loads will negate benefits that EPA assumes will occur under this proposal. The 

commenter felt as is EPA failed to consider the interaction of the two proposals.

Response 3.7-3: The EPA anticipates that few EGUs will take actions that would be considered 

NSPS modifications and subject to the standards of performance finalized in this action during 

the period of analysis. For this reason, the standards will result in minimal emission reductions, 

costs, or quantified benefits in the period of analysis. The commenter refers to the benefits 

identified in an illustrative analysis conducted for the RIA for the proposed rule. For the RIA 

supporting the final rule, the EPA considered the limited data available on past modifications and 

the diversity of existing units that could potentially modify and determined that it was not 

possible to conduct a representative illustrative analysis of what costs and benefits might result 

from this final rule in the unlikely case that a unit were to take an action that would be classified 

as a modification.

Comment 3.7-4: Commenter 0186 stated that, according to EPA, the Proposed Rule has no 

freestanding benefits other than serving as a necessary predicate (in EPA's view) to a separate 

Section 111(d) rulemaking for existing sources, on which EPA focuses its regulatory analysis. 

The commenter noted that EPA did not bother to create separate RIA reports for the two 

proposed rules, and merely appended the effects of the Proposed Rule to the much more 

substantial analysis for the rulemaking.

Response 3.7-4: Although there have historically been few units that trigger the NSPS 

modification and reconstruction provisions, any unit that triggers these provisions in the future 

will be subject to the standards set by this rule. In that case, there would be benefits and costs 

associated with the standard.
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Comment 3.7-5: Commenter 0294 stated that waste-derived materials must be broadly defined. 

The commenter stated that the McCabe Memorandum appropriately concludes that the carbon 

benefits of non-forestry "waste-derived materials" are obvious, given that (1) the so-called 

"landscape emissions effects" (primarily the growth of forests and land use changes) are not 

implicated since these wastes are generated regardless of potential use for bioenergy and (2) 

conversion to energy avoids methane emissions. The commenter felt that while correct, this 

analysis should not only apply to municipal solid waste but also any non-forest organic material 

including such material as urban wood (or what EPA proposes to define as "clean cellulosic 

biomass" under proposed changes to the Non-Hazardous Secondary Materials ("NHSM") Rule 

(Vol. 78 Federal Register No. 26, February 7, 2013) as well as railroad ties and wood derived 

from construction and demolition debris (as defined by EPA's proposed amendments to NHSM, 

Vol. 79 Federal Register No. 71. April 14, 2014). The commenter stated that apart from nonforestry organic material discussed above, the primary source of biomass feedstock for energy is 

what is called "low-value" wood residues in the form of tops and limbs and fiber such as 

thinnings and low-grade wood that would not be used for saw timber or pulp. Because this 

material is a byproduct of another activity that would occur regardless of bioenergy, the 

collection and use for energy is, in and of itself, a sustainable practice. 

The commenter also stated that to restrict carbon benefits to the physical location of a specific 

facility would jeopardize the financial viability of many biomass plants that need the flexibility

of selling into the most attractive state REC market, which sometimes is not the state where the 

facility is located. Restricting the ability of exporting carbon benefits would potentially

disqualify a biomass REC in another state since state RPS programs are often premised on the 

belief that such "attributes" include carbon benefits.

Response 3.7-5: Applicability and emissions from non-fossil sources are discussed in Section 

III.D of the preamble.

Comment 3.7-6: Commenter 0215 stated that for the non-transparency and the uncertainties 

involved in the choice of IAMs and the choice of inputs to the IAMs, the lack of public and peer 

review of the process, and the resulting risk for gamesmanship, the U.S. government's 

deployment of SCC values is premature and should not be used in this rulemaking. The 

commenter stated that EPA improperly uses the SCC to justify the Proposed Standards. EPA 

estimates that a single, hypothetical coal-fired boiler complying with the modified source rule 

would generate between $2 million and $41 million in global climate benefits in 2025 depending 

on the discount rate used and the efficiency improvement achieved. The commenter concluded 

stating in summary, the numerous uncertainties and other issues with both the IAMs used to 

derive SCC values and the derivation and application of the SCC make SCC values too 

speculative to be useful in trying to ascertain the real costs and benefits of the Proposed 

Standards.

Response 3.7-6: See response to 3.1-1 in this Response to Comments. 

Comment 3.7-7: Commenter 0293 stated that the benefits of this rule are undeniable. The 

commenter stated that the tremendous reduction in CO2 emissions that will occur will help us 

prevent the severe impacts of climate change, or at least better position us

to adapt to them. According to the commenter, the financial benefits of this rule are also 
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undeniable. Climate and health benefits are estimated to be $ 55 billion to $ 93 billion by 2030, 

and this will include avoiding 2,700 to 6,600 premature deaths and hundreds of thousands of 

asthma attacks in children. The commenter stated that these monetary benefits outweigh annual 

costs of the plan, which are estimated to be $ 7.3 billion to $ 8.8 billion in 2030. It is also 

expected this plan will reduce electricity costs. In 2030 electricity bills are expected to be 

roughly 8 percent lower than would be the case under "business as usual," and this will save 

Americans about $ 8.00 on an average monthly residential electricity bill. And finally, the 

commenter stated that the rule will have the substantial co-benefit of bringing about significant 

additional reductions in other air pollutants that are subject to NAAQS. There will be significant 

reductions in sulfur dioxide, nitrogen oxides, and fine particulate matter (PM2.5) pollution, and 

mercury emissions will probably also be reduced. Overall it is expected there will be a 25 

percent reduction in soot and smog (ozone) pollution.

Response 3.7-7: This commenter refers to analysis of the 111(d) emission guidelines for existing 

sources, which are outside the scope of this rulemaking.