From: Szabo, Aaron [ mailto:Aaron_L_Szabo@omb.eop.gov ] Sent: Tuesday, June 23, 2015 10:25 PM To: Vasu, Amy; Culligan, Kevin Cc: Frey, Nathan J.; Grossman, Andrea; Laity, Jim Subject: Summary of Interagency Comments under EO 12866 and 13563 for EPA's Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units (RIN 2060

- AR33)

Attached please f ind a summary of interagency comments under EO 12866 and 13563 on the EPA final rule entitled, Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units (RIN 2060

- AR33).

Thanks and please let me know if you h ave any questions.

Aaron L. Szabo Policy Analyst Office of Management and Budget
202

- 395

- 3621 Aaron_L_Szabo@omb.eop.gov

### Summary of Interagency Working Comments on Draft Language under EO12866/13563 Interagency Review. Subject to Further Policy Review.

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- ENVIRONMENTAL PROT ECTION AGENCY (EPA): Final Rule

Carbon Pollution Emission Guidelines for Existing Stationary Sources:

Electric Utility Generating Units

RIN 2060

- AR33

General Comments

1) Reviewer recommends clarifying why the unit

- based emission performance rates for the existing source rule are based on MWh

- net and the NSPS rule is based on MWh

- gross.

a. Reviewer recommends finalizing an emission standard that is calculated on a net
basis. Reviewer s uggests that both 111(b) and (d) should have standards expressed in a common net

- unit basis.
b. Reviewer recommends clarifying the language in both rules; the language on ease of measuring net versus gross generation i n this rule is contradictory to the language in the 111(b) rule. 2) Reviewer recommends clarifying why the existing source rule unit

- based emission performance rates are lower (i.e. more stringent) than the NSPS rule and whether EPA has done this in any prev ious rulemakings. 3) Reviewer recommends clarifying how the uniform emission performance rates were
translated into state

- specific goals (see page 55). 4) Reviewer recommends clarifying how this rule reduces the stringency of the interim goals while increasing the stringency of the 2030 goal? (see page 348). 5) Reviewer recommends clarifying how statewide rate

- based CO2 emissions goals would change based on any likely affected plant closing, modifying, or reconstructing. If the
statewide rate

- based CO2 emission goa ls can change, how could EPA make modifications of this in the rule language? 6) Reviewer recommends clarifying why 2012 is being used as the baseline as more recent
data may be available for the final rule. 7) Reviewer recommends clarifying what the unit based emissions performance rates are based on, as the preamble includes language implying that rates are based on regional as
well as national levels. 8) Reviewer recommends making a clear statement that any equipment upgrades necessary to implement building block 1 does not trigger NSR. 9) Reviewer recommends clarifying the benefits from the use of a blended rate. 10) Reviewer notes internal inconsistencies in recognizing carbon sequestration and sinks associated with agriculture and forestry at the national level (page 113) while explicitly excluding these sinks from participating as offsets. Reviewer recommends removing the exclusion of agriculture and forestry offsets in section VIII. 11) Reviewer recommends adding and carrying the option to co

- fire biofuels (in add ition to natural gas) throughout the sections on fuel

- switching.

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- 12) Reviewer recommends reflecting biomass as a RE resource throughout the rule. 13) Reviewer recommends addressing potential impacts of the rule on rural utilities that lack

investor

- owned utilitie s by requiring States to address these issues as a condition of state plan approval. This could take the form of a “Rural Safety Valve” explicitly requiring states to address potential cases where rural communities are disproportionately impacted by an inc rease in electricity prices as a result of the rule. 14) Reviewer recommends addressing federal rural development interests, including impacts on the ability of federal loan recipients to obtain additional financing for compliance with this rule and repay thei r existing federal loans. Reviewer recommends that States be prohibited from implementing plans which contemplate or result in write

- offs of obligations to pay Federal debt. 15) Reviewer suggests disaggregating income and race with reference to climate impacts on “low income and some communities of color” (pages 28, 63, etc.). The language adopted in the aircraft endangerment finding rule was “low

- income populations and some populations defined jointly by ethnic/racial characteristics and geographic location.” 16) Reviewer recommends deleting the section on pages 143

- 147 about Congress’ awareness of climate change. 17) Reviewer recommends greater specificity regarding the criteria under which units may exercise the reliability safety valve measure and the process for o btaining EPA approval. 18) Reviewer recommends clarifying that all uprated/upgraded RE capacity at existing RE sites would be eligible as a compliance option, using the methodology outlined for hydropower on page 940. 19) Reviewer recommends adding an additional section under VIII.G.1.b.(3) to clarify how performance improvements at existing RE will be treated. Suggested language:

a. “ Performance improvements at existing RE . Incremental generation resulting from technological innovations that increase performance via increased capacity factors but that do not change a facility’s nameplate capacity that are made after 2012 to RE generation installed in 2012 or earlier will be eligible compliance mechanisms. An example would be installation of improved wind power contr ol systems to an existing wind site that optimizes total generation through individual control of each turbine. The incremental MWh generated would need to be calculated through an EM&V procedure similar to those for EE measures outlined
in section VIII.G. 5.b wherein a baseline generation is established.” 20) Reviewer recommends editing the text to ensure that vehicle electrification is recognized as a means to reduce economy

- wide emissions. 21) Reviewer requests clarification on whether mass targets that are not a djusted for growth are more stringent than BSER. 22) Reviewer recommends that over compliance in the interim period be bankable for compliance post

- 2030. 23) Reviewer recommends making a finding in the alternative that the combined category of

sources causes or co ntributes significantly to air pollution (see pages 245 and 246).

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- Trading

1) Reviewer recommends highlighting in the text the relative simplicity of adopting a mass

based policy as well as the complications and additional scrutiny necessary to avoid unintended emissions increases for states that choose to adopt a rate based policy.

a. Reviewer recommends providing more explanation on the allowance trading approach to ensure that states understand how to implement a mass

- based trading approach.
b. Rev iewer r ecommends more complete treatment in the rule of the two types of

programs (i.e., rate

- based and mass

- based) to enable states to compare programs

. The significantly greater amount of text on ERCs compared to allowances in the
current draft may prevent stat es from fully understanding all of the benefits and potential issues of each program

. 2) Reviewer recommends clarifying how the development of transportation and distribution lines, either interstate or intrastate, would be treated in the development of crea ting ERC. 3) Reviewer recommends considering ways to make the process for generating ERCs more automated once initial approval to generate ERCs is given to the low or zero emitting

source. 4) Reviewer recommends clarifying how ongoing monitoring of trading of ERCs will occur and to whom oversight would be expected to ensure proper implementation of a multi

state trading program. 5) Reviewer recommends clarifying the distinction between existing and “new” demand

- side EE programs for the purposes of ERC trading. Fo r example, would an expansion of an existing EE program be new? (see page 404) 6) Reviewer recommends clarifying whether a nuclear unit that retires and is replaced by renewable energy would be eligible to receives ERCs? Could this ultimately lead to
increase d emissions? 7) Reviewer recommends that for emissions leakage, the burden of proof should be on the
owners of the EGUs or the state, as appropriate, to prove that no double counting occurred in the emissions or generation impacts of trading. 8) Reviewer recomm ends clarifying the equation by which ERCs are integrated into a EGUs denominator to avoid double counting. 9) Reviewer recommends additional discussion of why EPA chose to allow trading in MWh
rather than tons. 10) Reviewer recommends clarifying on page 343 that only “bundled” RECs represent pollution control measures, though there are markets for both “bundled” and “unbundled”

RECs. 11) Reviewer recommend s additional clarification on why ERCs associated with building
block 2 would be considered “zero

- emissions gene ration”. Reviewer recommends including a sample calculation to demonstrate. 12) Reviewer recommends that the creation of ERCs by NGCCs should be based on the difference between actual emissions of the individual NGCC unit being credited and the regional averag e CO2 emission rate from coal fired units.

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- a. Reviewer suggests that the use of the regional coal

- fired rate is more appropriate
than the state coal

- fired rate as electricity markets are regional, and the NGCC may be displacing a coal

- fired unit in an adjacen t state.
b. Reviewer recommends that the sentence on page 383 be revised to read “The specific number of incremental MWh that an NGCC unit would need to generate in order to qualify for issuance of an ERC representing one MWh of zero

emissions generation woul d depend on the magnitude of the difference between the NGCC unit’s actual emission rate and the regional average CO2 emission rate
from coal

- fired units.” 13) Reviewer recommends allowing state access to the registry infrastructure discussed in the
rule for c reation of all ERCs by generators who meet applicable monitoring, accounting and verification requirements. Reviewer also recommends providing states with existing recognized registries the option to also participate in an interconnected tracking system
th at would function similarly to the CAMD. 14) Reviewer recommends that, for utilities that operate an integrated electrical system across multiple states, the language about demonstrating that measures in a mass

- based state being delivered to meet load in a ra te

- based state on page 969 should be revised to be consistent with language on page 971 which reads “used to serve regional load that
included the rate

- based state”. 15) Reviewer recommends explaining on page 722 why does the fact that CO2 effects occur

over the long term make a tradable emissions regime “appropriate” for this pollutant? 16) Reviewer recommends clarifying and, if appropriate, providing guidance on the treatment in the following situations for the generation of ERCs:

a. I f one NGCC unit with a low ca pacity factor in 2012 increases generation and one NGCC unit with a high capacity factor in 2012 decreases generation, both operating at their designated emissions rate limits. Will the first unit produce ERCs even though there is no net change in generati on or displacement?
b. I f a new NGCC plant comes online and displaces generation from an identical plant, with no change in net emissions, can the state claim that its 111d emissions have declined for compliance purposes?

c. I f an EGU becomes a non

- affected source via biomass conversion. Could the source still generate ERCs? 17) Reviewer recommends clarifying what specific evidence an entity in a mass state that

wants to sell an ERC to a rate state would need to demonstrate that the ERC

- producing
measure is actua lly feeding load in the rate state. 18) Reviewer recommends clarifying a perceived inconsistency in the descriptions provided in the preamble for the generation of ERCs for early actions.

a. Footnote 568: “States may also consider issuing ERCs representing MWh

ge neration or savings that occur from 2013

- 2021.” This could mean that a state can generate ERCs from incremental generation sources that come online in 2013 and beyond.

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- b. Page 926: “only the MWh of energy savings that occur in 2022 and subsequent

years as a result of these measures may be applied toward adjusting a CO2

emission rate.”

c. Reviewer recommends resolving this in favor of the methodology for MWh savings occurring after 2013, and that this provision be expanded to not only include energy efficiency, b ut also other low or zero

- emitting generation. 19) Reviewer recommends stating more clearly the conditions under which mass

- based plans can be considered “trading ready”.

a. Reviewer recommends on page 761 clarifying that if both types of plans
demonstrate that t hey can achieve the mass targets described in the rule for affected sources and have corrective measures in place if needed, trading should be allowed and the plans should be considered trading ready.

b. Reviewer recommends that requirements for plan approval s that allow trading for other state programs are no more restrictive for mass programs than they are for
rate programs. 20) Reviewer recommends clarifying the consideration of growth in the initial conversion of rate to mass goals (see pages 674

- 675) 21) Reviewer recommends including “incremental nuclear” similar to how EPA mentions RE and NGCC where examples are given about what would generate an ERC or allowance throughout the rule. 22) Reviewer recommends clarifying how EPA plans to allow for the certification of ERCs from incremental RE (after 2012 or after 2014) that would not qualify to generate a REC (many cases of incremental hydro or international RE), because state RPSs do not recognize all forms of incremental RE that are recognized in the final draft.

a. Rev iewer recommends clarifying how incremental RE that does not generate a
REC is certified and its ERC creation verified. 23) Reviewer recommends addressing the interaction between ERCs and RECs to acknowledge in state REC requirements where necessary. Reviewer recommends including the text below on page 996:

a. “However, as the requirements and definitions for RECs differ as established under individual state policies, individual states will need to determine how ERC certifications offered in a state plan interact with existing instruments authorized and defined in state law, particularly with respect to how the same MWh of RE generation or EE savings can be used for both state plan compliance and other state policies, such as RPSs.” 24) Reviewer recommends implementin g a n “export adjustment requirement” with respect to electricity trade between a mass and rate state. This would require rate state plans to retire ERCs equal to a change in net exports relative to 2012 exports that exceed a certain
threshold. 25) Reviewer recommends clarifying how EE programs that reduce energy use in a mass state, but are implemented by a rate state, could be certified while ensuring that double counting does not take place.

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- 26) Reviewer recommends clarifying that trade between state s with a technology

- specific rate
based standard and a state with a blended rate should not be allowed because it would

increase overall emissions. 27) Reviewer recommends implementing a n “ERC Interstate Emissions Adjustment”

, applying the ratio of the interc onnect’s reference rate to the assigned rate of the entity claiming ERCs for compliance as a method to adjust the number of MWhs ( for trading between states with different blended rates).

a. This could involve converting the ERC to tons of carbon using the re ference rate of the interconnect. The entity that wants to claim an ERC for compliance would convert the carbon to an ERC using their assigned rate. 28) Reviewer recommends clarifying whether third parties can buy ERCs to move beyond the statutory requirement s for RE. See page 1015

a. Reviewer also recommends clarifying whether EGU owners are the only entities that can own ERCs. If not, how is ownership determined? 29) Reviewer recommends clarifying how ERCs are awarded for non

- affected fossil EGUs (both new units an d small units) 30) Reviewer recommends additional explanation on the “specific requirements for trading systems for ERCs in a rate

- based approach”, referenced on page 722. 31) Reviewer recommends additional clarification on page 761 of how compliance would be

ass essed in the circumstances discussed in section (ii).

Start Date/ Compliance Path / Interim Goals

1) Reviewer recommends clarifying how using a start date of 2022 instead of 2020 justified incorporating additional clean technology into the BSER (since 2022

- 20 29 is only an interim glide period before the full requirements of 2030)

. Specifically, since BSER was
calculated in the proposed rule with the full 2020

- 20 30 and beyond period in mind, why would starting in 2022 justify a change in how much technology ado ption should be
included in the BSER? 2) Reviewer recommends clarifying the compliance path for states between the interim goal in 2022 and the final goal in 2030.

a. For example, reviewer recommends reconciling the terms “glide path” and “step

down approach

, ” w hich appear to both refer to the 2022

- 2029 interim compliance period.

b. Reviewer recommends clarifying that the suggested “step

- down approach” is not mandatory and is just one example of a way a state could get to the 2030 targets. 3) Reviewer recommends that EPA revise the illustrative interim period targets for each state based on EPA’s own BAU projection to ensure that the bar is not set too low for trading

states, that could result in the market being flooded by ERCs. 4) Reviewer recommends that in addition to the 10 percent trigger for the federally enforceable backstop, EPA should clarify whether any gap between actual emissions and approved glide path emissions is grounds for implementing corrective actions.

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- 5) Reviewer recommends using 2012 rates for the year 2020 and implementing a limited version of building block 2 for the year 2021. Alternatively, the glide path could use 2012 rates for both 2020 and 2021, BAU rates for both years, or the le ss stringent of the two.

State Plans

1) Reviewer recommends a shortened timeline for plan submission, with 13 months for the initial period followed by two additional periods of 12 months and 6

- 8 months, with interim plans submitted with each extension request. 2) Reviewer recommends clarifying how energy storage (menti oned on page 947) would be considered by EPA or within a state plan. 3) Reviewer recommends providing additional clarification for why the negative impacts on waste reduction and recycling for a WTE plant must be discussed in a state plan and how
this relates to other RE projects that may be discussed within a state plan. 4) Reviewer recommends clarifying the analysis for relying on the federally enfo rceable “backstop” to establishing a state measures plan. 5) Reviewer recommends clarifying on page 60 how “backstop federally enforceable standards” on affected EGUs are different from the previous sentence that says a state measures approach can have “no federally enforceable emission standards for affected

EGUs”. 6) Reviewer recommends clarifying the requirement to mai ntain existing emissions reductions measures as a condition for extending the final plan deadline.

a. Does this requirement include programs that have statutory sunset dates between
2016 and 2018?
b. Voluntary utility programs or only state programs?

c. Measures that require state or federal funds that may have expired?
d. If a state does not maintain the measures, does EPA intend to use a FIP? 7) Reviewer recommends clarifying how a state that adopts a state measures plan that
includes carbon offsets or other non

- aff ected EGUs, how would compliance accounting work if a state adopts a rate standard, to ensure reasonable assurance of equivalence with

BSER. 8) Reviewer recommends that EPA provide examples of state plan types that are presumptively approvable, and give examp les of accompanying plan design elements that could ensure compliance despite state policy choices like differentiated rates, such as backstop mass limits on plants that receive higher rate limits. 9) Reviewer recommends clarifying under what circumstances a state may revise its plan. 10) Reviewer recommends clarifying how EM&V methods are deemed “acceptable

, ” including potentially with specific methods for calculating baselines and energy savings
that state plans could incorporate. 11) Reviewer recommends clarifyin g on page 531 how, if EPA is not “authorizing states to include in their CAA 111(d) plan regulations covering non

- affected EGU s ,” will the states be able to develop trading programs with renewable energy generators? Or regulatory programs to achieve EE or demand response? How does this impact the compliance flexibility states should have in implementation?

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- 12) Reviewer recommends that the reliability analysis and demonstration be an iterative process, rather than as stated on page 1049, that a planning authorit y review the state plan

at least once. 13) Reviewer recommends that a FERC

- coordinated reliability demonstration is warranted since a reliability demonstration for a single state does not ensure the reliability of the bulk electric system. Reviewer recommends that the national/regional reliability review could not be completed until all the draft final state plans are submitted. 14) Reviewer recommends clarifying the provision on page 693 requiring that state plans include a mechanism to credit reductions in year s prior to 2022.

a. Would this provision require all states to use a 10

- year averaging period with projected BAU emissions used as values in the first two years? 15) Reviewer recommends clarifying that i f a state submits an initial plan that does not meet

criteri a and a federal plan is promulgated, will EPA also work concurrently with the state to revise its initial plan. Would EPA withdraw the federal plan if the state is able to correct deficiencies in its state plan? 16) Reviewer recommends that EPA require states to consider how their state plan could incentivize existing nuclear generation and mention the role that state level policies and state plans can have in preserving carbon free nuclear generation. 17) Reviewer recommends that EPA clarify that it is more strai ghtforward for EE to help reach goals in mass

- based programs than in rate

- based programs because energy efficiency savings would be reflected in emissions measured at the stack in mass

- based programs without having to explicitly credit EE in an intensity f raction. 18) Reviewer recommends clarifying why in the NSPS rule, an emergency event does not trigger a requirement to count those emissions against compliance while it does in this
rule. 19) Reviewer recommends clarifying how the reliability safety valve is triggered, including examples of triggering events. 20) Reviewer recommends providing guidance to states about how to adjust category or portfolio rates when the composition of the category or portfolio changes. 21) Reviewer recommends clarifying whether documentation has to be submitted multiple times for ERC programs lasting more than one year and that may expand or diminish in scale over that time. See page 990. 22) Reviewer recommends introducing a definition of leakage that would enable leakage to be estimated and potentially minimized through state implementation plans. 23) Reviewer recommends clarification on the purpose of the 2021 progress report. Alternatively, reviewer recommends removing this requirement. 24) Reviewer recommends clarifying why EPA chose the 90 day timeframe for the reliability safety valve instead of a longer period. 25) Reviewer recommends clarifying why the reliability safety valve can only be used once.

BSER

1) Reviewer recommends additional discussion (and consistency throughout the rule) on how
and why BSER is set on the basis of the Eastern Interconnection (see page 351).

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- a. Does this mean that other regions will have additional “ compliance headroom ”
that can be translated into cre dits and sold into the Eastern Interconnection?

b. Reviewer recommends clarifying on page 553 how the discussion of the three different heat rate improvements calculated for the regions meshes with the earlier
statement that BSER was calculated on the basis o f the Eastern Interconnection. 2) Reviewer recommends considering the following as a potential way to strengthen cumulative emissions reductions by:

a. Implementing new NGCC in BSER and compliance (as the preamble mentions)
b. Using 3 separate BSER standards for ea ch of the 3 interconnections instead of using the least stringent

c. Updating renewable energy treatment in BSER
d. Including “under const ruction” nuclear at 100% in BSER. This could be included as part of Building Block 3. 3) Reviewer recommends clarifying throug hout the rule (see page 499 for an example) that the BSER includes shifting generation, and that a credit system is only one compliance option.

a. The BSER building blocks are described on page 499 as “reduced generation, along with the purchase of emission r eduction credits or allowances”. 4) Reviewer recommends clarifying on page 499 why NGCC and renewable energy are characterized as “a portion of the amount of the generation reduction component of the

BSER

. ” What else other than these generation shifting techniques was calculated in the generation reduction component of the BSER? 5) Reviewer recommends clarifying throughout the rule (see page 513 for an example) that BSER is “shifting generation between affected EGUs and other lower or zero emitting
units” ra ther than “reduced generation in specified amounts.” Reduced generation is a
side

- effect of the shifting, which is the action taking place at any given affected EGU. 6) Reviewer recommends clarifying through the rule (see page 514 for an example) that

“ reduce d generation ” is not a separate component of the BSER, but a necessary side

- effect of the generation shifts that make up building blocks 2 and 3.

a. Example from page 514 states “building blocks 2 and 3, as well as reduced generation, meet the requirements f or the BSER”. 7) Reviewer recommends clarifying on page 514 that the “ amount of reduced generation ” is not actually prescribed by this rule, as stated. Instead, assumptions were made about shifts in generation to calculate the BSER, which states are then free to implement as they see
fit.

a. Could a state still choose to rely more on buil ding blocks 2 and 3 than the BS ER supposes and thus reduce more generation than the “ prescribed amount ” ? 8) Reviewer recommends excluding existing nuclear and existing large zero C O 2 emissions entities in the BSER rate goal, but accounting for lost generation by subtracting the lost generation in the denominator of the compliance calculation for the state beginning in the year that the EGU goes offline.

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- a. Reviewer suggests that EPA wo uld need to clarify the conditions under which lost clean energy is subtracted from the denominator and clearly define the period of time that the penalty lasts. 9) Reviewer recommends including distributed photovoltaic (PV) in building block 3 to
determine the BSER performance standards, using NREL’s economic potential to determine 2030 deployment targets.

a. Reviewer recommends that distributed PV be treated in the same way as incremental hydropower. 10) Reviewer recommends increasing the aggressiveness of the BS ER RE deployment rates in the early interim period. 11) Reviewer recommends the following suggestions to make the calculation of BSER:

a. Using the expected 2022 share of natural gas and coal relative to all fossil generation to determine the application of buil ding block 3 instead of the 2012 share of natural gas and coal relative to all fossil generation. This would take into account the rapid growth of NGCC that started in 2012.
b. Incorporating partial year 2012 gas into the model at a capacity factor closer to that of redispatched natural gas, instead of the average capacity factor of 55%

. 12) Reviewer recommends that the 64 region limits on RE used in IPM may be too restrictive and recommends that larger regions would be more appropriate (especially in the east).

a. Reviewer also recommends that EPA provide explanatory language to clarify the discrepancy between doing BSER on an interconnect region and capping RE on a

64

- region level. 13) Reviewer recommends additional clarification on whether energy efficiency is measuring gross or net savings. 14) Reviewer recommends clarifying, in the discussion of interactions between the building blocks on page 372, whether displacing coal with NGCC or re newables could cause coal units to cycle more, raising average heat rates and potentially counteracting the improvements from building block 1. 15) Reviewer recommends clarifying why building block 2 should only apply to steam (see page 529) as generation cou ld also be redispatched between inefficient and efficient
NGCC units.

Treatment of new NGCC

1) Reviewer recommends unifying the definition of building block 3, specifically whether it
envision s substituting generation at new NGCC plants for generation at ex isting EG Us

.

a. On page 48, BB3 defined as “including new natural gas combined cycle units”
b. On page 193, no reference to NGCC units, but low and zero

- emitting

c. On page 276, only reference to zero

- carbon generating capacity
d. Page 299 seems to explicitly exclude NGCC 2) Reviewer recommends clarifying whether emissions and generation from new NGCC units would be used in establishing the statewide rate

- based and mass

- based emission performance goals. NGCC units are mentioned on page 49 as part of Building Block 3, but this issue is not addressed in the discussion of the building blocks in Section V.

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- 3) Reviewer recommends that EPA consider including new natural gas units as a “non

BSER” option for compliance on page 411. 4) Reviewer recommends defining an interconnection ’ s “ potential ” to build new NGCC generating capacity as the level of historical NGCC capacity additions within the
interconnection. 5) Reviewer recommends consistency in how much of the redispatched natural gas from building block 2 replaces steam generation. Different definitions currently on pages 664 and in footnote 555 on page 665.

a. Reviewer recommends that the definition for incremental NGCC be changed to “incremental NGCC generation is defined as the final adjusted NGCC generation
level minus the level of NGCC generation after applying building block 3”. 6) Reviewer recommends clarifying whether, in the NGCC uniform rate, the numerator and denominator use the amount of total NGCC generation at 75% of summer capacity or the NGCC generation after displacement by RE plus the increment between 2012 baseline NGCC generation and 75% summer capacity generation to displace steam.

Technical Comments

1) Reviewer recommends that EPA set forth the process for States to propose and EPA to
consider the various forms of bioma ss, including waste, byproducts, forest, and agriculturally derived on page 401. Recommended wording included below:

a. “The EPA expects to recognize the climate benefits of biomass feedstocks, such as

waste

- derived and certain forest and agriculture

- derived byproducts and sustainably derived forest and agriculture biomass when considering state plans. These conclusions are supported by a variety of technical studies. The EPA expects that states’ reliance on biomass feedstocks may be an approvable element of t heir state plans.” 2) Reviewer recommends clarifying the use of the word “level” in the following sentence on pages 402 and 906. Does EPA mean to refer to a level, portion, or proportion (rate or quantity), or the use of a Biomass Accounting Factor?

a. “...i.e. th e proposed level of biogenic CO2 emissions from the use of the biomass
feedstock” 3) Reviewer recommends clarifying whether MSW also needs to “qualify” or if it is Waste Derived Biomass on page 408. From the sentence below, it appears that MSW may be
automati cally in.

a. “...that combust qualifying biomass or biogenic portions of municipal solid waste...” 4) Reviewer recommends on pages 905, 906, and 913 replacing whether a form of biomass may not qualify with instead whether a portion of the CO2 from qualifying biomas s may not be counted. As written, this may prove problematic for manufacturers/suppliers relying on multiple sources. Reviewer also recommends removing the term “qualifying” as it refers to biomass throughout, as the accounting framework does not qualify b iomass
but instead accounts for the inherent carbon benefits.

a. “Not all forms of biomass are expected to be approvable...”

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- 5) Reviewer recommends expanding the use of “waste

- derived biogenic feedstocks” on page 908, footnote 647, to include field and processing wastes, black liquor, slash, and residues. 6) Reviewer recommends clarifying on page 896 why new, modified, and reconstructed fuel

fired EGUs under 111(b) are not allowed to be used for compliance. 7) Reviewer recommends providing a more concise location for ER C trading within footnote

651. 8) Reviewer recommends providing additional explanation on page 458 how this rule relates

to the 1998 NOX SIP call and the CAIR rule

. 9) Reviewer recommends deleting the discussion on page 488 of the distinction between this
rule and a hypothetical rule requiring car owners to shif t some of their travel to buses. 10) Reviewer recommends noting on page 559 that the largest heat rate opportunities appear to be present in the East, where coal fired units are relatively old. 11) Reviewer reco mmends clarification on whether a rate

- based compliance state can opt

- in new CCS, and how that would work for different levels of CCS. 12) Reviewer recommends clarifying that the justification for “ more stringent ” requirements (as compared to 111(b)) on page 521 is based on the “toolbox of compliance methods” that an affected EGU can rely on rather than the “ extended timeframe for compliance ”

. 13) Reviewer recommends providing additional information on page 545 about the analysis
that led to the selection of a he at rate improvement consistency factor of 30%, since the preamble just refers to “engineering judgment”. 14) Reviewer recommends adding a clarifying sentence to page 586 to provide additional analysis of why EPA did not use 80% utilization of NGCC as the BSER , since it is described here as being found to be technically feasible. 15) Reviewer recommends clarifying on page 606 whether the 75% capacity factor is truly “an individual unit requirement” as states still have flexibility to rely on building blocks to
diff erent degrees? 16) Reviewer recommends translating the narrative formulas on and around page 666 into a numerical example , or providing both

. 17) Reviewer recommends clarifying that the emission performance rates for stationary combustion turbines that are prescri bed on page 634 apply to bi

- model units only when they are operating in combined cycle mode.

a. The preamble to the final rule clarifies that stationary combustion turbines that do not “recover heat from the combustion turbine engine exhaust gases for purpose s other than enhancing the performance of the stationary combustion turbine itself” are not considered affected units and are exempt from this rule. However, the rule does not
discuss that recent combined cycle installations have included dampers that allo w the associated combustion turbine to operate in either combined cycle more or simple cycle mode. This operational flexibility is becoming more important to complement the integration of increasing amounts of variable energy resources like wind and
solar. 18) Reviewer recommends clarifying Table 7 on page 614, which described RE owned by owners of affected EGUs. A significant portion of this RE is existing hydroelectric capacity, which is omitted from this rule. Reviewer recommends either removing this

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- table (because currently owned RE is not a valid predictor of an owner’s ability to add incremental renewables to meet rule requirements), or giving a breakdown of these resources and identifying those which cannot be used to meet this rule’s requirements. 19) Reviewer recommends providing additional detail with regards to the impact of the regional economic potential that is used to set the RE target generation levels under building block 3. EPA gives the building block target generation levels by region in t able 8 on page 627, but it is unclear how these values are calculated and then how they translate to the state emission guidelines. 20) Reviewer recommends clarifying the discussion on page 217. Reviewer recommends , if appropriate, amending the text to explai n that the Senate chose to update the cross reference rather than adopting the House’s amendment to clarify that the sole intention of the provision is to ensure that pollutants that are regulated under 112 are not separately regulated under 111d. 21) Reviewer recommends citing to the Kagan or Roberts concurring opinions from the Scialabba case instead of the Sotomayor dissent (page 219). 22) Reviewer recommends clarifying the explanation of “combined” categories of steam EGUs and combustion turbines on page 244.

a. B ecause EPA sets out two different standards in this rule for steam and combustion turbines, in what sense have the categories been “combined”? Reviewer recommends referring to this as a single rule that sets out standards for two preexisting categories

rat her than as a rule that combines two preexisting categories. 23) Reviewer recommends clarifying on page 302 how existing nuclear is different than existing NGCC for use in building block 2. 24) Reviewer recommends clarifying on page 432 the section on reliance on actions taken by other entities. This section needs to acknowledge the difference between these kinds of third party actions (which result in a lower emissions rate at the affected source) and the kinds of actions in building blocks 2 and 3 (which reduce total energy production at the affected source). 25) Reviewer recommends that when new nuclear units are reference in the text, that “small modular reactors” be mentioned as an example. 26) Reviewer recommends that, on page 402, EPA clarify that affected EGUs usi ng waste

heat to energy conversion receive credit for useful thermal output from CHP at 100% when calculating the affected EGU’s emissions rate.

a. Previous rules have used both 100% and 75%. On page 1296, in the definition of “ net electric output ,” EPA desc ribes that CHP units would receive credit for 100% of useful thermal output. 27) Reviewer recommends clarifying that 3 rd party EE programs, such as those run by energy service companies, also qualify as EE programs in the definition given in footnote 694 (page 977). 28) Reviewer recommends implementing a 30% interconnection

- wide limit with no other
limits on individual technolo gy type for variable generation. Reviewer suggests that IPM’s constraint of variable renewable energy as explained on page 626 may be too restrictive.

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- a. If EPA accepts this recommendation, reviewer recommends making the following addition to page 625:

“ The modeling framework incorporates a host of constraints on the deployment of RE resources, including resource constraints (resource quality, land use exclusions, terrain variability, distance to existing transmission, population density etc.), system

constra ints (interregional transmission limits, partial reserve margin credit for variable RE installations, minimum turndown constraints for fossil fuel

- fired EGUs,
short

- term capital cost adders to reflect the potential added cost due to competition
for scarce labor and materials etc.) and technology constraints (construction lead times, hourly generation profiles for non

- dispatchable resources by season etc.). 1 Additionally, deployment of variable, non

- dispatchable RE resources in IPM is limited to 30 percent o f net energy for load in total at each of the three U.S.

interconnections. 2

The 30% constraint reflects levels commonly modeled in grid integration studies. These studies have demonstrated that impacts to the grid in reaching levels as a high
as 30% vari able generation are relatively minor. For instance the Western Wind and Solar Phase 2 study found cycling costs ranged from $0.20

- 0.50, $0.14

- 0.38, and $0.22

- 0.67 per MWh of added wind and solar generation. These integration costs are
minimal relative to t he fuel savings associated with wind and solar generation. As such, these constraints do not represent a technical feasibility limit but rather an estimate of penetration levels that would not require significant grid integration costs.
The Western Wind an d Solar Integration phase 3 study found that stability and inertial response of the grid could be maintained at these 30% levels.
b. Reviewer alternatively recommends implementing a smaller than 30%
int erconnection

- wide limit (25%) and would still likely resu lt in larger aggregate RE deployment than a 30% cap at IPM subregions. 29) Reviewer recommends eliminating or dramatically raising the threshold at which the
short

- term capital cost capacity trigger takes effect. (pages 625

- 626)

a. Reviewer also recommends removing these capital cost adders for solar PV, or alternatively raising the thresholds to values above the most recent deployment of utility scale solar in 2013. 30) Reviewer recommends clarifying whether there are interactions between the process for

evalua ting carbon emissions for woody feedstocks and non

- waste feedstocks (page 912) and the forthcoming biogenic guidance. 31) Reviewer recommends clarifying that mass

- based allowances are not created by over complying (page 317). There is a set number of allowanc es equal to the cap and additional allowances are not created by heat rate improvements, renewable generation, etc. 32) Reviewer recommends adding the following text regarding economic options available in regards to the integration of variable renewable ener gy into the grid (page 367

- 368)

1 Refer to GHG Abatement Measures TSD for more detail on modeling methodology.

2 Regions that have already exceeded these limits are held at historical percent of net energy for load.

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- a. “ Recent studies looking at high penetration of variable renewable energy have highlighted the ability of the power system to respond through a suite of technologies and operational changes. While recognizing that the challen ges to integrating variable renewable energy are real, power systems build upon the inherent operational flexibility to respond to supply and demand to integrate these variable resources. Through emerging practices such as improved integrated planning proc edures, better forecasting, optimized transmission usage, automated balancing services and larger interconnected transmission networks, variable renewable energy can effectively be integrated into the grid. The specific solutions used by power systems and grid operators to integrate variable renewable energy will depend on the relative costs of
the avail able options. “Carrying Capacity of the U.S. Grid to Incorporate Variable Renewable Energy,” NREL, March

2015: http://www.nrel.gov/docs/fy15osti/62607.pdf ” 33) Reviewer recommends including distributed solar in the list of considerations on pages

1065

- 70. Reviewer suggests the following text:

a. “Solar energy systems offer homeowners the ability to receive long

- term, clean, and affordable energy that can lower their monthly expenses, hedge against future electricity price spikes and make them more energy independent. However, despite boom in residential solar systems, this trend has not necessarily extended to low income households. The 49.1 million households that earn less than $40,000 of income per year make up 40 percent of all US households but account for less than five percent of solar installations (Mueller, J.; Ronen, A. (2015). Summary for Policymak ers: Bridging The Solar Income Gap. Washington, DC: GW Solar Institute). This is despite the fact that low

- income households stand to gain the most from solar, as electricity costs make up a much larger share of their households’ budget compared to more af fluent families. Electricity costs account for 5.7 percent
of the median low

- income family’s budget, while only accounting for 1.9 percent of other families’ budgets (Mueller & Ronen, 2015). Some of this lag can be attributed to the shortcomings of histori c solar business models which have required homeownership, a good roof, and a good credit rating. Low

- income communities are more likely to be renters (49 percent of lower income households are renters versus 22 percent of households with incomes greater t han $40,000 (Mueller & Ronen, 2015)), live in multifamily units, live in buildings with deferred maintenance, or have limited access to capital.

Community shared solar business models offer a solution to many of the barriers of
low

- income household partic ipation in the solar market. Shared solar projects, which
can be located on

- or off

- site, allocate the electricity of a jointly owned or leased system to offset individual consumers’ electricity bills, allowing multiple energy
consumers to share the benefi ts of a single solar array. Because a system is not tied to an individual customer’s utility meter, shared solar expands participation to renters and those in multifamily units, and offers easier financing solutions and less credit risk (due to the fungib le nature of ownership)

– thus offering a solution to many

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- barriers of low

- income participation. While community shared solar is still small in the U.S., it has grown over 25 times in the past 4 years (GTM Research Q1 2015
report: http://www.seia.org/research

- resources/us

- solar

- market

- insight ); further it is estimated that in the next five years the market has the potential to expand to between

5.5

– 11 GW (Feldman, D; Brockway, A.; Ulrich, E.; Margolis, R. “Shared Solar: Current Landscape, Market Potential, and the Impact of Federal Securities Regulation.” NREL. April 2015).”

As of January 2015 the U.S. solar industry employed 174,000 workers and experienced the second straight year of 20%+ workforce growth. In 2015 solar workforce growth is projected to be 8 times greater than oil, gas and coal industries, and twenty times greater than the overall economy. Since 2010 PV manufacturing has grown 30 percent compared to overall U.S. manufacturing which grew 3.2 percent over the same time period. Finally, the solar industry is becoming increasingly diverse with a greater percentage of women, minorities and veterans of the United States Armed Forces employed by solar firms in 2014 as compared to 2013 (The
Solar Foundation. 2015. "National Solar Jobs Census 2014" ( http://www.thesolarfoundation.org/national

- solar

- jobs

- census

- 2014/)) .” 34) Reviewer requests p roviding more information on the natural gas electricity price data referenced on pages 603

- 604. 35) Reviewer requests clarifi cation as to what it means that “an affected EGU or a state may only take credit for avoided CO 2 emissions at that affected EGU or set of EGUs in question, as reflected in the reported stack CO 2 emissions of affected EGUs,” if they are allowed to take credit for reductions that occur across the region. See page 921. 36) Reviewer recommends clarifying foo tnote 660 on page 930. It would seem that the scenario in this footnote would only hold if in addition to purchasing the RECs for compliance with their RPS the state also purchases the ERCs for the same MWhs to use for meeting their CPP goal. 37) Reviewer rec ommends basing the hydro calculation on page 940 on generation capacity, not nameplate capacity. 38) Reviewer recommends clarification regarding the “applicable CO 2 emissions rate” described on pages 954

- 955. Reviewer recommends that this be the state’s interi m 8 year average EGU emissions rate. 39) Reviewer recommends the following edits from the section on WHP (pages 957

- 958)

a. (10) WHP . Electric generation from WHP units that meet the eligibility criteria under section VIII.G.1.b.(2) may be used to adjust the CO 2 emission rate of an affected

EGU. There are several types of WHP units. There are WHP units, also referred to as bottoming cycle CHP units, are units where the waste heat from the initial combustion process is used to generate power (e.g., fuel is first u sed to provide thermal energy for an industrial process and the waste heat from that process is then

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- used to generate electricity .) 3 There are several approaches to WHP. In WHP units where supplemental fuel is used to enhance the heat energy recovered

from the process, incremental emissions from the supplemental fuel Emissions from these WHP facilities would be based on the initial fuel combustion process that produced the waste head and would be accounted in the same way as non

- affected
CHP units under sec tion VIII.G.1.b.9. There are WHP facilities where the waste heat from the initial combustion process is used to generate additional power. In WHP units where there is no additional or supplemental fuel used to generate this addittional power , as so there a re no incremental emissions associated with that additional power. As a result, the incremental electric generation output from the WHP facilities could be considered

non

- emitting and the MWh of electrical output used to adjust the CO 2 emission rate

of an affected EGU. 40) Reviewer recommends considering the retirement announcement notice requirements across the different ISOs, RTOs, etc. See page 1051. 41) Reviewer recommends clarifying the relative emissions reductions between the light duty vehicle rule and the emissions reductions coming in 2030 fr om this policy (see page 1113). 42) Reviewer recommends that cost analys e s take into account uncertainty surrounding natural gas supply costs by explicitly considering a scenario in which natural gas prices remain in the $3 to 4.50 range through 2040. 43) Reviewer recommends clarifying the implications that updating AEO

- based cost estimates with estimates from the sources cited on page 623 implies a change in the scope of costs

under consideration. 44) Revie wer recommends that the final paragraph on page 590 (stating that the final rule will have no significant impact on peak demand for natural gas) be deleted or supported by a
citation. 45) Reviewer recommends clarification on why a 1% adjustment trigger is use d on page 682. 46) Reviewer recommends explaining on page 611 why net upstream emissions of methane and CO2 emissions from flaring of methane will decrease under the CPP.

Typographical Comments

1) Reviewer recommends standardizing the use of the acronym “ERC” f or “Emission Rate Credits” in the text and adding it to the list of acronyms at the beginning of the rule. 2) Reviewer recommends the deletion of the word “some” from the following sentence on page 401 because the word “can” is used later in this sentence, an d recommends the use of a clearer description of the process for determining “qualifying” biomass that should
better address the intent of this sentence.

3 This configuration is sometimes referred to as a “bottoming cycle” CHP unit. In such a configuration, the waste heat stream could also be generated from a mechanical process, such as at natural gas pipeline

compressors.

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- a. “...the EPA recognizes that some biomass

- derived fuels can play an important
role in CO2 emissions redu ction strategies.” 3) Reviewer recommends clarifying whether “expanded” in the following sentence on page 408 refers to a modified facility and recommends the use of consistent language on this distinction throughout the rule.

a. “Generation from new or expanded facilities that combust qualifying biomass...” 4) Reviewer recommends adding the word “overall” to the first sentence on page 20. Because other building blocks involve shifting generation between utilities, the emission guidelines will still require that some utilities produce less generation.

a. “...the agency not base the final emission guidelines on requiring that utilities produce less generati on overall”. 5) Reviewer recommends clarifying on page 359 that building block 2 is adequately

demonstrated as a component of BSER, rather than as BSER itself. 6) Reviewer recommends adding a sentence on page 51 about the reliability risks being found reasonable. The quoted sentence is followed by information about the costs being found reasonable, but nothing further is said on reliability.

a. “EPA considered t he impacts that implementation . . . will have on the cost of electricity and electricity system reliability” 7) Reviewer recommends updating and correcting the reference on pages 235 and 236 to EPA finalizing two separate 111(b ) rulemakings. 8) Reviewer recommends removing the reference on page 355 (first paragraph) to the need
for BSER to include demand

- side energy efficiency, since this is no longer a building
block of BSER. 9) Reviewer recommends explaining the distinction on pag e 527 of “investment in the building blocks”, “replaced or reduced generation” and “emissions trading”. All three seem very similar, with the latter two being components of the first, rather than 3 separate compliance options. 10) Reviewer recommends scrubbing the document to references to building block 4 being a component of BSER. See page 536. See also page 80 and page 414. 11) Reviewer recommends that footnote 591 should be clarified to explain that rate

- based
states can trade with mass

- based states along with a reference to section VIII.G.2 12) Reviewer recommends restructuring sections IV.B.4.a and b to begin with the sentences currently in the middle of page 220, then move on to the various possible interpretations of the that text (potentially aided by a table w ith the various possible readings of the language

- the itemization on page 221 is confusing). Then, EPA can make the argument that statutory interpretation requires consideration not only of the text but of the statutory
structure and the broader context f or the text. 13) Reviewer recommends clarifying on page 419 that the Clean Air Mercury Rule was “vacated on other grounds” (see also page 720). 14) Reviewer recommends adding on page 722 “as required by CAA 111(d)(1)(B) after the sentence “The integrity of the tra ding system is key to ensuring that a state plan provides for implementation and enforcement of the standards of performance”.

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- 15) Reviewer notes the use of “EUG” instead of “EGU” in several places in the rule (see pages 22 and 1164). 16) Reviewer recommends editi ng the large paragraph on page 202 to clarify that it refers to both building blocks 2 and 3. 17) Reviewer recommends using the term “reliable system operating” in place of “reliability assurance” on page 18 to match common industry terminology. 18) Reviewer recom mends being more specific than “state utility agencies” throughout the rule by replacing with “state utility regulators with reliability authority”. 19) Reviewer recommends replacing “planning authorities” with “reliability coordinators and planning authoritie s” throughout the rule. 20) Reviewer recommends removing the sentence on page 29 about isolating the system through switches or valves, because though portions of the grid are frequently isolated, this typically happens at a localized level and primarily durin g maintenance. 21) Reviewer recommends changing the quoted sentence on page 43 to use either “can” or

“must use”

a. “The EPA does not prescribe how a state must meet the emission guidelines, but these final guidelines do identify the methods which a state can or must use to
demonstrate that the combination of measures and standards that the state does adopt meet its state

- level CO 2 goals.” 22) Reviewer recommends , as appropriate, changing the language on page 48 to “substituting increased generation from new low and zero

- emitting generating units, including renewable energy and new NGCC”. As written, the reliance on shifting to either “lower

emitting affected EGUs” and “renewable energy generation” excludes new NGCCs. 23) Reviewer recommends editing the following sentence on page 129 because a number of ISO/RTOs operate in regions served by vertically

- integrated utilities (SPP, MISO, and to a partial extent CAISO).

a. “RSOs and ISOs are g enerally responsible for dispatch in non

- vertically integrated states”. 24) Reviewer notes for page 130 that NERC is the North American Electric Reliability Corporation (not council). 25) Reviewer recommends clarifying whether the non

- hydro RE capacity is 13,000 (page 140) or 16,000 (page 610).

a. Reviewer recommends clarifying whether this is electric power sector only or for

all sectors. 26) Reviewer recommends replacing “intermittent” renewable sources with “variable” renewable sources throughout the text.

a. Reviewer suggests the following sources be used to demonstrate the economic competitiveness of RE generation:
b. “Revolution Now

– The Future Arrives for Four Clean Energy Technologies

– 2014 Update,” DOE, Oct
2014: http://energy.gov/sites/prod/files/2014/10/f18/revolution_now_ updated_charts_and_text_october_2014_1.pdf

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- c. “Photovoltaic System Pricing Trends,” NREL, 22 Sept
2014: http: //www.nrel.gov/docs/fy14osti/62558.pdf
d. “Tracking the Sun VII” LBNL, Sept
2014: http://emp.lbl.gov/publications/tracking

- sun

- vii

- historical

- summary

installed

- price

- photovoltaics

- united

- states

- 1998

- 20

e. “2013 Wind Technologies Market Report,” LBNL, August
2014: http://emp.lbl.gov/publications/2 013

- wind

- technologies

- market

- report f. “2013 Cost of Wind Energy Review,” NREL, Feb
2015: http://www.nrel.gov/docs/fy15osti/63267.pdf 27) Reviewer recommends using either “ERCOT Interconnection” or “Texa s Interconnection” consistently throughout the rule. 28) Reviewer recommends rephrasing “unavailability of large scale electricity storage” to read “current low availability of large scale electricity storage”. On page 446. 29) Reviewer recommends rephrasing “ther e is no capacity for substantial amounts of storage” to “there is currently low capacity for storage” on page 486. 30) Reviewer recommends the following changes to the text on page 625

a. “Estimates for the economic potential of new hydropower are the result of a DOE
an NREL avoided cost methodology that develops regional hydropower supply curves and compares that supply potential against the revenue available to those projects through regional marginal generation prices and capacity values , while accounting for resource and land constraints as well as system constraints. The deployment levels of hydropower are increased until total generation costs, inclusive of the reduced cost of building new RE capacity, equal avoided costs for each regi on. In contrast, EPA’s IPM economic potential estimates for utility

- scale solar photovoltaic (PV)), onshore wind and geothermal technologies are the result of IPM modeling projections that assess opportunities for RE deployment in an integrated framework a cross power, fuel and emission markets.” 31) Reviewer recommends using the following reference regarding grid integration of variable RE on page 625:

a. Wind Technologies Market Report 2013. LBNL. 2014.
Cochran et al. 2015.
b. Grid Integration and the Carrying Cap acity of the U.S. Grid to Incorporate Variable Renewable Energy. http://energy.gov/epsa/downloads/grid

- integration

and

- carrying

- capacity

- us

- grid

- incorporate

- variable

- renewable

- energy 32) Reviewer notes that tables on page 627 and 634 are both labeled table 8 33) Reviewer recommends that the preamble state how to average the baseline oil and natural gas fired steam rate with its build ing block 1 steam rate. (See page 662). 34) Reviewer recommends changing the sentence on page 918 to read “. . . while there will
be a reduction in CO2 emissions at the affected EGU, the fact that both CO2 emissions . .

. . ” 35) Reviewer recommends the following edit on page 963: “. . . which avoids concerns about counting the same mass reductions in two different mass states.” 36) Reviewer recommends using the 780 lb CO 2 /MWh finalized rate as the emission rate limit in the example on page 983, to avoid confusion.

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- 37) Rev iewer recommends adding the below clause to the section on page 993 to support third party/private sector participation:

a. “The EPA is exploring options for providing such support and is conducting an initial scoping assessment of tracking system support nee ds and functionality but is also maintaining the option for private sector companies to fill this need provided they can meet established requirements .” 38) Reviewer recommends adding the below clause to the section on page 1004:

a. “The EPA expects that EM&V using the above methods will occur at a minimum of four year intervals for building energy codes and product standards; every one, two or three years for different publicly or rate

- payer funded EE programs; and annually for large individual commercial and industrial projects , unless the projects are included in a multi

- year energy savings certification program such as Superior Energy Performance, which verifies overall facility energy performance improvement over a multi

- year period. ” 39) Reviewer recommends ma king the following edits to the section on skill certification standards on pages 1019

- 1020:

a. “h. Skill certification standards

. Utilizing a skilled workforce to implement
demand

- side EE and RE projects, as well as a skilled workforce to evaluate,

measure a nd verify the savings associated with EE projects or the additional generation from performance improvements at existing RE projects are both important. Several commenters pointed out that skill certification standards can help to assure quality and credib ility of demand

- side EE and RE projects. The EPA agrees that in conjunction with other EM&V measures discussed in this section, recommending quiring that workers installing demand

- side EE and RE projects be certified by either a party aligned with the Depar tment of Energy’s (DOE) Better Building Workforce Guidelines and validated by a third party entity
that: 1) Develops a training or competency based program aligned with a job task analysis and/or certification scheme; 2) Engages with subject matter experts in t he development of the job task analysis and/or certification schemes that represent appropriate qualifications, categories of the jobs, and levels of experience; 3) Has clearly documented the process used to develop the job task analysis

and/or certificatio n schemes, covering such elements as the job description, knowledge, skills, and abilities; 4) Has pursued third

- party accreditation aligned with consensus

- based standards, for example ISO/IEC 17024 or IREC 14732. Examples of such entities include: parties a ligned with the accrediting body recognized by Department of Energy’s (DOE) Better Building Workforce Guidelines and validated by a third party accrediting body recognized by DOE; or by parties aligned with an apprenticeship program that is registered with the federal Department of Labor (DOL), Office of Apprenticeship ; parties aligned
with or a state apprenticeship program approved by the DOL, or by another skill certification validated by a third party acc rediting body can help to substantiate the authenticity of emission reductions due to demand

- side EE and RE.

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- EPA also recognizes that a skilled workforce performing the EM&V is important to substantiate the authenticity of emission reductions. As such, E PA recommends that workers who perform the EM&V of demand

- side EE and RE performance improvement projects have been certified by a third

- party organization that offers a program including the following elements: 1) Develops a training or competency based prog ram aligned with a job task analysis and/or certification scheme; 2) Engages with subject matter experts in the development of the job task analysis and/or certification schemes that represent appropriate qualifications, categories of the jobs, and levels o f experience; 3) Has clearly documented the process used to develop the job task analysis and/or certification schemes, covering such elements as the job description, knowledge, skills, and abilities; 4) Has pursued third

- party accreditation aligned with conse nsus

- based standards, for example ISO/IEC 17024 or IREC 14732. 40) Reviewer recommends adding reliance on a federal plan as one of the options in response to the question on page 1186 about state compliance obligation options. 41) Reviewer recommends clarifying what is meant by “on a regular basis” on page 1238 in regards to how often savings values must be determined. 42) Reviewer recommends including additional specificity on page 1198 section (8) (taking language from page 1050 to p ut into the reg text)

a. “While following the recommendations of the planning authority would not be mandatory, the state should document its consultation process, any response and recommendations from the planning authority, and the state’s response to those recommendations in its state plan submittal to the EPA.” 43) Reviewer recommends including a citation for “DOE avoided cost methodology” on page

628. 44) Reviewer recommends clarifying on page 611 whether the wind energy tripling reference refers to wind capacity or wind generation, and for which sectors.

a. Similarly, on page 611, please specify which sectors are included in the reference to solar capacity growing twenty

- fold.

b. Similarly, on page 611, please specify which sectors the RE generation increases by more than 70% is referencing. 45) Reviewer recommends a reference source for the quoted funding amounts on page 35. 46) Reviewer suggests that the natural gas net generation increase on page 138 should be

47% 47) Reviewer recommends that on page 579, the phrase “from 2012 to 2030” should be changed to “from 2014 to 2030”. 48) Reviewer recommends that the text on page 592 should be edited to state:

a. “ According to EIA, proven natural gas reserves have nearly doubled between

2000 and 2012. Domestic dry gas production has increased by 25 percent over

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- that same timeframe (from 19.2 TCF in 2000 to 24.0 TCF in 2012). EIA's Annual Energy Outlook for 2015 Reference Case projects that production will further increase to 33 TCF by 2030, as a result of increased supplies and favorable

marke t conditions. IN AEO2015 high oil and gas resource case, production
increases to ___ TCF in 2030.” 49) Reviewer recommends changing “NGCC is also a clean generation option” to say “cleaner” in the executive summary. 50) Reviewer recommends editing the executive s ummary sentence “

. . . offers the same options for states but with a firmer legal foundation”, because this implies that the primary CPP option does not have a firm legal foundation. 51) Reviewer recommends adding a citation for the executive summary statement that CO2 accounts for 31% of US GHG emissions. Reviewer suggests the number may be closer to 83% on a weighted basis. 52) Reviewer notes that there is no content in footnote 246. 53) Reviewer recommends that the use of the term “fungibility” on page 514 and throu ghout the rule may overstate the potential for intermittent/non

- dispatchable renewables to fully replace. Specifically, some renewables must be complemented by supporting services to ensure voltage stability. 54) Reviewer recommends clarifying that the cost es timate of 50

- 100 million dollars cited on page 568 is not interpreted as a cost that states or industry will have to pay when they attempt to meet their targets. 55) Reviewer recommends defining the term “environmental dispatch”, used on page 607. 56) Reviewer recommends changing “meeting” to “implementing” when referencing state targets on page 43 and throughout. 57) Reviewer recommends focusing on “innovation” rather than “technology”, given the breadth of the “system of emission reduction” concept, on page 46 and throughout. 58) Reviewer recommends editing the language in the last paragraph of pages 56 and 64 to clarify that the reductions do not need to be achieved in 2020. 59) Reviewer recommends the following edits to footnote 82 to clarify the physics of the

electric grid.

a. “Casazza, J. and Delea, F., Understanding Electric Power Systems , IEEE Press, at 159 (2d ed. 2010). In an amicus brief to the Supreme Court, a group of electrical engineers, economists, and physicists specializing in electricity explained:

“ Energy is transmitted, not electrons. Energy transmission is accomplished through the propagation of an electromagnetic wave. The electrons merely oscillate in place, but the energy

– the electromagnetic wave

– moves at the speed of light. The energized electr ons making the lightbulb in a house glow are not the same electrons that were induced to oscillate in the generator back at the power plant. . . . Energy flowing onto a power network or grid energizes the entire grid

, and consumers then draw undifferenti ated energy from that grid. A networked

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- grid flexes, and electric current flows, in conformity with physical laws, and those laws do not notice, let alone conform to, political boundaries. . . . The path taken by electric energy is the path of least resis tance . . . or, more accurately, the paths of least resistance. . . . If a generator on the grid increases its output, the current flowing from the generator on all paths on the grid increases. These increases affect the energy flowing into each point in the network, which in turn leads to compensating and corresponding changes in the energy flows out of each point.” Brief Amicus Curiae of Electrical Engineers, Energy Economists and Physicists in Support of Respondents at 2, 8

- 9, 11, New York v. FERC, 53 5 U.S. 1 (2001) (No. 00

- 568).” 60) Reviewer recommends clarifying or deleting the paragraph on page 839, as it may suggest that a plan developed in 13 months would not adequately provide for meaningful public engagement. 61) Reviewer recommends deleting the sente nce on page 727 about legal concerns about requirements on non

- affected EGUs, as it appears to preclude a state

- measures type approach.