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MEMORANDUM 

From: U.S. EPA Office of Policy 

To: Steam Electric ELG Final Rule Record 

Date: September 16, 2015 

Subject: Analysis of Potential Effect of Using a Baseline with the CPP Proposal in Lieu of 

the CPP Final 

The Clean Power Plan (CPP) was finalized on August 3, 2015, a little less than two months 

before the date on which the final Steam Electric Effluent Limitations Guidelines (ELGs) (steam 

electric rule) are due to be signed (September 30, 2015). Because of this timing, the final CPP 

could not be fully incorporated into the “baseline conditions” (i.e., pre-rule scenario) for 

purposes of certain analyses completed for the final steam electric rule. Thus, EPA used the 

proposed CPP in the analytical baseline. As explained in this memorandum, EPA determined 

that the proposed and final CPP are similar enough that using the proposed rather than final CPP 

in the analytical baseline did not materially impact the final rule analyses, and EPA’s decisions 

on the final steam electric rule would not be altered if EPA had instead used the final CPP in the 

baseline. These conclusions are based on a careful evaluation of how the population of steam 

electricity generating units (EGUs) estimated to incur costs under the final steam electric rule 

differs between the final CPP baseline and the proposed CPP baseline. 

To compare the proposed CPP and final CPP, the “parsed files” from their Integrated Planning 

Model (IPM) outputs can be used.1

 Those files contain data on the post-CPP universe of EGUs, 

which form the baseline of the steam electric rule analysis, such as the forecast population of 

coal steam units in 2025. To identify any relevant changes in the EGUs that might incur costs 

under the steam electric rule between the proposed CPP baseline and the final CPP baseline, we 

therefore compare the 2025 status of EGUs from the IPM model runs for the proposed CPP and 

final CPP rule analysis.2

 We focus specifically on the status of those EGUs that might be subject 

to the final steam electric rule. Specifically, IPM represents the behavior of individual plants 

using model plant representation. Modeling results for model plants are then “parsed” into their 

constituent EGUs. These files of the population of EGUs included in the IPM modeling are 

called the parsed files.3

 The analysis compares the 2025 parsed file for the proposed CPP 

 

1

 http://www.epa.gov/airmarkets/programs/ipm/psmodel515.html 

2

 The EGUs in represented in the model runs for the proposed and final CPP analyses can be found in the National 

Electricity Energy Data System (NEEDS) files: USEPA, 2013, National Electric Energy Data System (NEEDS) 

v.5.13. http://www.epa.gov/airmarkets/programs/ipm/psmodel.html 

USEPA, 2015, National Electric Energy Data System (NEEDS) v.5.15. 

http://www.epa.gov/powersectormodeling/psmodel515.html

3

 USEPA. 2015, GUIDE TO IPM Output FILES EPA Base Case. v.5.15

http://www.epa.gov/airmarkets/documents/ipm/EPA%20Base%20Case%20v515_InputOutputGuide%20August%2

02015.pdf 
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Option 1 Regional Illustrative Compliance Scenario with the final CPP Rate-Based Illustrative 

Plan Approach. 

As shown in the RIAs and described in the IPM documentation for the proposed and final CPPs, 

in addition to regulatory changes between the proposed and final rule, there were a number of 

changes to the baseline for the analysis of the benefits, costs and impacts of the CPP.4

 Therefore, 

differences in the populations of coal steam EGUs that are forecast to be in operation in 2025 

between the proposed and final CPP analysis could result from both differences in the baselines 

and differences in the CPP regulation itself between proposed and final. The effect of changes 

other than those associated with the requirements of the CPP would not significantly change the 

estimates of the cost of the steam electric rule because, as described in the RIA for the steam 

electric rule, the final steam electric rule is not forecast to have a significant impact on the cost of 

supplying electricity or the generation mix. 

The differences in CPP’s effect on the industry and in the baseline universe assumptions can be 

seen clearly in Table 1, which compares the Proposed and Final CPP in terms of capacity, 

generation, number of units, and number of plants across different segments of the electric 

industry. The first six columns differentiate between active, inactive, and total for both proposed 

and final parsed files. Inactive units are those that may have retired either in the IPM baseline 

for the CPP in response to economic and regulatory conditions, retired in response to the CPP, 

or, according to the EGU’s owner or a similar authoritative source, are scheduled to retire before 

2025. The "Inactive" category also includes partial retirements, i.e., plants with at least one unit 

assessed as retiring are counted in the "inactive” category. The last three columns indicate the 

percent difference between proposed and final for each of the categories. 

 

The first row of table 1 shows that there is a small increase in the projected total capacity 

between the proposed and final parsed files, of 1%. The key portion of the table for the Steam 

Electric ELG analyses can be found in Section 2 of the table, “Total Coal Steam Capacity AND 

To Be Assigned ELG Costs.” This part of the table illustrates the differences between the 

proposed and final parsed files in the EGU’s that are relevant for the final steam electric rule. For 

example, the final column of the spreadsheet shows that the difference between proposed and 

 

4

 USEPA, 2013, Documentation for EPA Base Case v.5.13 Using the Integrated Planning Model. 

http://www.epa.gov/airmarkets/documents/ipm/Documentation.pdf 

USEPA, 2014, EPA v5.13 Base Case Documentation Supplement to Support EPA’s Proposed Carbon Pollution 

Guidelines for Existing Electric Generating Units. 

http://www.epa.gov/airmarkets/documents/ipm/EPA%20Base%20Case%20v5%2013%20Documentation%20Suppl

ement%20for%20CPP_6_12_14.pdf 

USEPA, 2014, Regulatory Impact Analysis for the Proposed Carbon Pollution Guidelines for Existing Power Plants 

and Emission Standards for Modified and Reconstructed Power Plants.

http://www2.epa.gov/sites/production/files/2014-06/documents/20140602ria-clean-power-plan.pdf 

USEPA. 2015, EPA Base Case v.5.15 Using IPM Incremental Documentation. 

http://www.epa.gov/airmarkets/documents/ipm/EPA%20Base%20Case%20v.5.15%20Incremental%20Documentati

on%20August%202015.pdf 

USEPA, 2015. EPA v5.15 Base Case Documentation Supplement to Support EPA’s Clean Power Plan.

http://www.epa.gov/airmarkets/documents/ipm/EPA%20Base%20Case%20v515%20Documentation%20Supplemen

t%20for%20Final%20CPP.pdf 

USEPA, 2015, Regulatory Impact Analysis for the Clean Power Plan Final Rule.

http://www2.epa.gov/sites/production/files/2015-08/documents/cpp-final-rule-ria.pdf 
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final CPP for steam EGU’s that will be affected by the steam electric rule is a -1% decrease in 

GW capacity. This means that the proposed CPP files contained a larger amount of capacity than 

the final CPP files. Also, there was a 6% decrease in generation, a 2% decrease in the number of 

units, and a 2% increase in the number of unique plants. These relatively small changes strongly 

demonstrate that using a baseline that reflects the proposed CPP in lieu of a baseline that uses the 

final CPP would only result in small differences in terms of overall analytical results. 

Table 1: Comparison of Proposed and Final CPP projections 

A second way to evaluate the similarities and difference between the proposed and final CPP 

options is to look at the predicted behavior of individual coal steam EGU’s under both scenarios. 

There are four possible outcomes for an EGU between the IPM proposed CPP and final CPP 

runs: Active in both; Inactive in both; Inactive in Proposal CPP and Active in Final CPP; and 

Active in Proposal CPP and Inactive in Final CPP. Active EGUs include those that produce 

power for sale in 2025 or are available to produce power for sale. EGUs that are active but not 

producing in 2025 are often supplying reserve capacity and/or may be supplying power in the 

model after 2025. Inactive units are those that may have retired either in the IPM baseline for the 

CPP in response to economic and regulatory conditions, retired in response to the CPP, or, 

according to the EGU’s owner or a similar authoritative source, are scheduled to retire before 

2025. 

As shown below in Table 2, the population of coal steam electric units that are expected to incur 

costs for complying with the final steam electric rule by the time it takes full effect, represented 

by 2025, does not differ significantly between the proposed CPP and final CPP. The first row of 

the table shows that the total number of coal steam EGUs that have the same status in both the 

proposed CPP and the final CPP model run is a large percentage of the total number of EGUs. 

All units projected to incur costs under the steam electric rule that are in both the proposed and 

final CPP model runs are active. Therefore, the outcome is the same for these units in the two 

model runs in that they would incur the same costs for complying with the final steam electric 

rule whether the proposed or final CPP baseline is used. 

 

Active Inactive Total Active Inactive Total Active Inactive Total

Capacity (GW)                  995                  121             1,116              1,015                  107              1,122 2% ‐11% 1%

Generation (Thousand GWh)               ‐ 4,062                               4,062               ‐ 4,128                                4,128 2% 2%

Number of units (#)            16,111                  729           16,840            17,154                  950            18,104 6% 30% 8%

Number of plants (#)              6,042                  396             6,438              5,261                  341              5,602 ‐13% ‐14% ‐13%

Capacity (GW)                  132                    44                 176                  128                    47                  174 ‐3% 5% ‐1%

Generation (Thousand GWh)                   ‐ 829                                   829                   ‐ 779                                    779 ‐6% ‐6%

Number of units (#)                  305                  158                 463                  287                  165                  452 ‐6% 4% ‐2%

Number of unique plants (#)                    97                    76                 173                  109                    68                  177 12% ‐11% 2%

Proposed CPP Final CPP (rate‐based)

1. Total Generating Capacity

2. Total Coal Steam Capacity AND To Be Assigned ELG Costs

National‐level Totals

[Final ‐ Proposed]/[Proposed] (in %)

Projected Status as of 2025 Run Year
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Table 2: Comparison of Coal Steam EGU’s under the Proposed and Final CPP 

Universe 

Inactive in 

Proposal CPP 

but Active in 

Final CPP 

(A) 

Active in 

Proposal CPP 

but Inactive 

in Final CPP 

(B) 

Net Inactive 

EGUs (Final 

CPP less 

Proposal 

CPP) 

(B-A) 

Total EGUs 

that match 

between the 

two CPP IPM 

runs, by 

universe 

Net Inactive 

EGUs as 

percentage of 

Total EGUs 

that match 

Matching 

coal steam 

electric units 

with steam 

electric ELG 

costs 

41 52 11 458 2.4 

Matching 

coal steam 

electric units 

108 109 1 917 0.1 

Matching 

steam electric 

units 

159 184 25 1,498 1.7 

The number of EGUs that are inactive in the proposed CPP baseline and active in the final CPP 

baseline and vice-versa are similar. These units have similar capacities. Therefore, the net 

number of inactive EGUs, the second column of the table below, is another important indicator 

that it was reasonable to use the proposed CPP rather than the final CPP in the baseline for the 

steam electric rule analyses, in lieu of conducting a separate IPM run for the final steam electric 

rule that uses the final CPP in the baseline. As the table shows, the percentage of coal steam 

EGUs with different outcomes between these two possible baselines, relative to the number of 

EGUs that are present in both baselines, is less than 2.5 percent. 

In sum, EPA concluded that using the proposed CPP baseline in lieu of the final CPP in certain 

analyses for the final steam electric rule is reasonable because (1) the number of EGUs that 

would incur costs under the final steam electric rule is very similar when comparing baseline 

conditions represented by the proposed CPP to baseline conditions represented by the final CPP, 

and (2) where the populations do differ, the net number of EGUs that are in one baseline and not 

another is small relative to the total population of EGUs that would incur costs under the final 

steam electric rule in either baseline.