MEMORANDUM

To: Carbon Power Plan for Existing Power Plants; Docket id: OAR-2013-0602

From: Region 5, EPA

Summary: The following questions were submitted to EPA prior to an 8/28/14 conference call 

between EPA the Indiana Department of Environmental Management about the proposed carbon 

power plan for existing power plants.
Indiana Questions on 111(d)

8-28-2014 

Does EPA have a model of plans that would be acceptable to them for RE and EE? That is, 

IDEM is struggling with the documentable, measurable, and enforceable aspects of these 

requirements and an example may help us formulate a plan of our own.

How is nuclear factored in for goal calculations? A lot of northern Indiana citizens have paid 

increased rates to keep Michigan at risk nuclear facilities operating so they can continue to get 

energy from those plants.

We are interested in hearing more about the heat rate BSER of 6%. Our research indicates that 

many facilities in Indiana already have applied dense pack to the facilities and less than 1% heat 

rate efficiencies can be achieved after those efficiencies have been applied. Also, research 

indicates that efficiency measures become less effective over time, making it difficult to maintain 

any set percentage of improvements over 15 years.

Additionally, our information indicates that using block 2 to redistribute from coal-fired EGUs 

on an as needed basis would also drastically impact the heat rates achievable by those units. It 

would cause more coal units to act as “peakers” and thus be even less efficient during those high 

demand times. Would the loss in efficiencies by the coal units be offset by the greater use of 

natural gas or would the net CO2 rate actually go up? Has EPA looked into this issue? It appears 

to us that block 1 and block 2 could work against each other in application.

We are interested in hearing more about why a net CO2 rate was used instead of gross. This 

seems to provide coal plants the ability to turn off criteria pollutant control devices to increase 

efficiency to meet the CO2 standard and could cause areas to not meet a NAAQS. Using a gross 

rate for both the baseline and goal would not put the different set of pollution control measure 

against each other.

On that same gross vs. net discussion: It appears that the CAMD data used by EPA is a mixture 

of both net and gross MWhrs. Would EPA expect/like states to submit their own baseline and 

goal calculations based on all net outputs?

Has EPA considered using a multi-year approach for determining the base year as opposed to 

2012? That is, using a method similar to that used in CAIR, CASPR, NOx SIP Call, etc. Is EPA 

open to the idea of using a multi-year evaluation for base year determination?

Can EPA provide an explanation as to how to treat facilities that sell part of their energy to the 

grid and part of their energy to specific industries?

Is there consideration of developing a national trading program for CO2?

How would being a net exporter of energy affect the development of a state plan for the rule?

Has EPA evaluated the reliability issue concerning power on peak demand days? A recent MISO 

evaluation indicates that beginning in 2015 capacity of Indiana’s fleet will not meet demand for 

peak summer days. During those same days in the past Indiana has had surplus capacity that was 
necessary to meet excess demand in the NE. If there is insufficient capacity to meet our own 

needs, has there been an evaluation to show that there will be sufficient added capacity to meet 

the nation’s need? We would be interested in seeing that study.

Can EPA explain the methodology as to how they calculated the “State Generation as a % of 

sales” value in Step 5 of the goal sheet? We have not been able to replicate EPA’s numbers.

How will EPA handle the potential triggering of NSR requirements if a facility decides to make 

improvements? The current set up seems to be a stumbling block for facilities to make changes 

because it could require them to take new, more stringent limits for criteria pollutants or 

potentially have to install very expensive controls. There would be very little incentive for 

facilities to do this.

Would EPA allow states to use the rules alternative goal approach (higher CO2 rate but faster 

compliance deadline) even if that is not the primary approach adopted in the rule? That is, the 

rule allows States to propose and submit their own goal for EPA approval. Would using the 

alternative approach as laid out in the rule be something EPA envisions as being the type of state 

derived plan that would be approvable? 

Timeframes: IDEM is very concerned about timing with this rule. Primarily IDEM is concerned 

that there is not enough time to get state rules in place to enforce the new EGU rule. Additional 

state legislative action may have to take place which may not be able to happen in time too. 

IDEM would also like to incorporate a stakeholder process into the development of the state plan 

since so many stakeholders are involved but IDEM is worried that there is not time to actually do 

this, thus opening IDEM up to potential lawsuits when our plan is released without stakeholder 

involvement. Is EPA considering extending deadlines back by a year or two to allow for more 

input given the extreme complexities both legislatively and logistically?

Would purchase power agreements made by utilities meet the requirement under the rule for 

enforceable?