EPA 

Moderator: Scott Fraser

10-29-14/12:00 p.m. ET

Confirmation # 27436902

Page 1

EPA

Moderator: Scott Fraser

October 29, 2014

12:00 p.m. ET

Operator: Ladies and gentlemen, this is the operator. Today's conference is scheduled to 

begin momentarily. Until that time, your lines will again be placed on a music 

hold. Thank you for your patience.

Hello. My name is (Kiana) and I will be your conference operator today. At 

this time I would like to welcome everyone to the Clean Power Plan's 

supplemental proposal conference call.

All lines have been placed on mute to (inaudible) any background noise. 

After the speakers' remarks, there will be a question and answer session. If 

you would like to ask a question during this time, simply press star then the 

number one on your telephone keypad. If you would like to withdraw your 

question, press the pound key. Thank you. 

Mr. Scott Fraser, you may begin your conference. 

Scott Fraser: Thank you so much, and welcome, everybody. My name is Scott Fraser, with 

EPA's office of public engagement. 

Today's call is focused around the announcement we made yesterday where 

we issued two actions related to the proposed Clean Power Plan to cut carbon 

pollution from power plants, and this call deals with the proposed goals to 

reduce that carbon pollution in areas of Indian country and U.S. territories 

where the fossil fuel power plants are located.
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So with me in the room I have Janet McCabe, the acting assistant 

administrator for EPA's office of air and radiation, and she's going to provide 

a quick intro and then we're going to turn it over to Melanie King. She's the 

project lead for the supplemental proposal, and she'll have about 10 to 15 

minutes for remarks. So we will have time after our remarks to take questions 

from those on the line, and if your question is not able to be answered today, 

you can send us an e-mail at publicengagement@epa.gov.

So with that, I'm going to turn it over to Janet. 

Janet McCabe: All right. Thanks, Scott, and hi, everybody. Thank you for joining us today, 

especially with kind of late notice.

Since last year, EPA has been following through on President Obama's 

directive to extensively engage with the broadest possible range of 

perspectives as we work to develop a plan to cut energy waste, strengthen the 

economy and leverage cleaner energy sources. Today we wanted to provide 

you with more details about our supplemental proposal.

The supplemental proposal to address carbon pollution from affected power 

plants in Indian country and U.S. territories. This action is a routine step in 

the course of rulemakings, to supplement an original proposal with additional 

material, and it's one that we signaled we would do last June.

We believe that public input is one of the most important parts of the 

rulemaking process, and that the more we listen and engage, the more 

perspectives we hear, the better the Clean Power Plan and all of our work will 

be. At every stage of this process, EPA has prioritized outreach to the public, 

states, tribes, industries, non-governmental organizations, labor, and other 

community organizations. The many meetings, conference calls, public 

hearings, and the nearly 1.5 million public comments that the agency has 

already received have identified a wide range of ideas and information. 

Our actions here reflect what we have heard, and have benefited greatly from 

this high level of interest and engagement. That's exactly how the rulemaking 

process is intended to work. These steps show that we are listening, and that 

we are committed to continuing the dialogue.
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Let me fill you in on a few of the details, but then Melanie will really take us 

through the proposal. The supplemental proposal addresses carbon pollution 

in Indian country and U.S. territories. When we proposed the Clean Power 

Plan in June, we noted that we would be taking this step.

Like the Clean Power Plan proposal for states, this proposal sets area-specific 

goals for Indian country and for territories, and provides options for meeting 

those goals in a flexible manner that accommodates a diverse range of 

approaches. The goals are based on information and data provided through 

additional outreach, covered facilities, and tribal and territorial governments. 

I want to emphasize that the areas we're covering in this rule are areas were 

large fossil fuel fired generating facilities are located. In addition, we held 

consultations with all three tribes that have affected power plants on their land, 

as well as other tribes that requested consultation. 

For Indian country, EPA is proposing goals for four affected power plants, 

Navajo Generating Station and Four Corners Power Plant within the Navajo 

Nation; the Bonanza Power Plant, located on the Ute Tribe of Uintah and 

(Inaudible) Reservations; and the Fort Mojave Tribe's South Point Energy

Center. The supplemental proposal also addresses six affected sources in 

Puerto Rico and two in Guam. EPA will be accepting comment on the 

proposal until December 19th, and will hold a public hearing on November 

19th in Phoenix, Arizona. 

I'll also just mention quickly the Notice of Data Availability, or NODA, that 

we also issued yesterday. The NODA discusses a few issues and ideas that 

stakeholders have raised about the Clean Power Plan, so that all stakeholders 

and the public can consider these ideas when commenting on the proposal. 

We'll be talking about the NODA at 3:00 p.m. Eastern today, on a call similar 

to this one, and we encourage you to call back for more information then.

We began our work on the Clean Power Plan by listening, and we will 

continue to listen. As I said earlier, for most of the agency's work, 

supplemental proposals and notices of data availability are routine, and often 

pass without mention, but with respect to the Clean Power Plan, we know that 
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there is such a great level of interest that we wanted to make sure that we had 

these calls with you today. These are important tools that EPA uses to make 

sure that we're getting it right, which is exactly why our engagement process 

is so important. We're confident that the end result will be a final Clean 

Power Plan that will help accomplish the president's goals to cut harmful 

pollution which is fueling climate change, to build a resilient nation to deal 

with impact today, and to lead the world in our global climate fight, and to do 

so in a way that strengthens our economy and creates new jobs and 

opportunities in our communities. 

Climate action spurs innovation, encourages investment, grows industry, and 

creates jobs and protects public health. (Inaudible) strong, world-leading 

economy depends on a healthy environment and a stable climate. We cannot 

have one without the other, and open, inclusive public involvement is 

absolutely critical to getting this right.

With that, I'll say thank you again, and I'll turn it over to Melanie King to go 

into more detail about the supplemental proposal. 

Go ahead, Melanie.

Melanie King: OK. Thanks, Janet, and thanks, everyone, for joining us on such short notice. 

So I'm just going to give a brief overview of the supplemental proposal. It has 

two main elements. The first is emission rate-based goals specific to each of 

the three areas of Indian country and two U.S. territories that have affected 

electric generating units, or EGUs, as we refer to them; and then the second 

element is guidelines for the development, submission and implementation of 

plans to achieve those goals.

This supplemental proposal relies very heavily on the approach used to set the 

goals and guidelines for plans for states in the June 2014 Clean Power Plan. 

So I'll first go through an overview of the goal process.

As we discussed in the June proposal, our first step for setting the goal for 

each area was to determine the best system of emission reduction. We – EPA 

determined that a set of four types of measures, or building blocks, together,
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are the best system to reduce carbon pollution from fossil fuel-fired power 

plants. 

And if you're not familiar with those four building blocks, the first, building 

block one, is measures to make coal plants more efficient, e.g. heat rate 

improvements; the second is increase use of high efficiency natural gas 

combined-cycle units; the third is generating electricity from low or zero 

(emitting) facilities; and the fourth is demand side energy efficiency. And I 

would – if you want to see an extensive discussion of the BSER and the 

building blocks, I would refer you to the June proposal. We did not repeat the 

discussion in the supplemental proposal. 

So after we made that determination of the best system of emission reduction, 

or BSER, we set the goals based on the application of the BSER to each area. 

That way, we could factor in any unique conditions for each area. So I just 

wanted to highlight some of the unique considerations for the areas of Indian 

country and the U.S. territories. 

For building block one, applying the best methodology for building block one 

from the June proposal doesn’t result in any adjustments to the goals for 

Guam or for the Fort Mojave Indian Country because there are no coal-fired 

affected EGUs in those areas. Applying the methodology for building block 

two would not result in any adjustments to the goals for Guam or any of the 

areas of Indian country because there are no natural gas combined-cycle units 

for re-dispatch within those areas. For building block three, the proposed 

approach that we used for states, those are on a 2012 utility scale, non-hydro 

renewable energy, which the information available to us shows as zero for the 

areas of Indian country and territories. So using the approach that was 

proposed for states, we would have zero adjustment to the goal from building 

block three, using that methodology. 

So we're taking comment on not only using that methodology, but also using 

an adjustment to the proposed approach, which would result in a positive 

amount of renewable energy for building block three. And then, as we did for 

the states, we're also taking comment on an alternative approach for building 

block three which uses technical potential for renewable energy. And there is 
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a technical support document available on our Web site which walks through 

all the background data and all the calculations, and how we arrived at the 

goals and how we apply to each of the building blocks, so you can refer to that 

for a more extensive discussion.

Some other things I wanted to highlight about the goals – the proposed – the 

goals that we're proposing are expressed in the form of an emission rate; 

however, we do provide areas the option of translating the rate-based goal to a 

mass-based goal, as long as the translated goal achieves the same degree of 

emission limitation. We're also taking comment on a second set of areaspecific goals that would reflect less stringent application of the same BSER 

by 2025, with interim goals that would apply over 2020 to 2024 phase in 

periods.

And I wanted to note that the goals do not lay out a set of required 

mechanisms that an area has to use to reduce carbon pollution. Rather, we're 

setting the numeric goal and then an area can choose whatever measures they

want to in order to meet the goal.

So that's just a quick overview of the goals, and then, as I mentioned, the 

second element of the proposal is the implementation plan. For territories, 

we're proposing that they would have the same guidelines and same timing for 

implementation plans that we proposed for states in the June proposal, and 

those guidelines are discussed in great detail in the June proposal and we 

summarized them very briefly in the supplemental, and they include plan 

approvability criteria, required plan components, and the process and the 

timing for plan submittal and demonstrating achievement of the goal.

The territories would have the same flexibility as the states do to choose how 

they meet their proposed goals, reflecting their particular circumstances and 

policy objectives. And the territories, like states, must submit initial or 

complete plans by June 30th, 2016, with the option to use a two-step process 

for submitting final plans if more time is needed. We're proposing to provide 

the territories with additional time to submit complete plans if it's justified and 

the territories provide specific information. 
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So individual territory plans would be eligible for a one-year extension to June 

30th, 2017, and then multi-area plans would be eligible for a two-year 

extension to June 30th, 2018, although they'd have to submit a progress report 

in interim by June 30th, 2017. If a territory does need more time to submit a 

complete plan, have to make an initial submittal by June 30th, 2016, in lieu of 

a complete plan.

For the areas of Indian country, tribes can choose to seek the authority to 

develop a plan but they're not required to do so. Pursuant to the Tribal 

Authority Rule, EPA must promulgate such federal plan provisions as are 

necessary or appropriate if a tribe does not seek and obtain the authority to 

submit a plan. In this particular supplemental proposal, we are not proposing 

a determination regarding any tribe's eligibility to develop a plan, or whether a 

federal plan is necessary or appropriate for the areas of Indian country. If the 

tribes do seek and obtain the authority to develop a plan, they would have the 

same flexibility as the states and territories for developing the plan, and so we 

think that they would have – you know, they would follow a very similar 

process as what's laid out for the states and the territories for developing the 

plan.

And then another issue that we are – in addition to the areas of Indian country

and territories that have EGUs, affected EGUs, we're also hearing from a 

number of stakeholders about areas without affected EGUs and the ability of 

those areas to participate in multi-jurisdictional plans. And by jurisdiction I 

mean a state, a tribe or a territory. So in this supplemental proposal we're 

requesting comment on allowing state or multi-jurisdictional plans, to include 

CO2 emissions avoided through demand-side energy efficiency, renewable 

energy, and other new low or non-emitting generation from areas without 

affected EGUs.

So that's just a quick overview of the goals and the implementation plans. In 

terms of the impacts of the supplemental proposal, for Guam and Puerto Rico 

we estimate that there would be emission reductions of CO2, SO2, NOx and 

PM as a result of actions taken to implement the goals proposed in the 

supplemental proposal. Our (inaudible) of analysis indicates that the 

supplemental proposal will yield monetized climate benefits of approximately
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$170 million in 2013. The estimated annual compliance costs in 2030 are a 

savings of $350 million, including reduced fuel expenditures from energy

efficiency programs and re-dispatch, and the quantified net benefits in 2030 

are $520 million.

We estimate that there are no additional impacts for areas of Indian country in 

the supplemental proposal. Our understanding is that some units at the power 

plants in the Navajo Nation have already shut down, and some other units are 

expected to shut down in the next few years to comply with Regional Haze, so 

if – once those units shut down, our information is that the Navajo Nation goal 

could be complied with without further actions if it's translated to a massbased goal. And then the reductions associated with compliance with the 

goals for the lands of the Fort Mojave Tribe and the Ute Tribe were already 

accounted for in the June proposal, so we don’t have any additional impacts 

for them in this proposal.

So as Janet indicated, we're holding a public hearing on November 19th in 

Phoenix, and the comment period closes on December 19th. Our Web site for 

the Clean Power Plan has information on how to register for the public 

hearing and how to submit a comment.

As Janet mentioned, we met with stakeholders in Puerto Rico and Guam, and 

we had consultation with tribes, and you'll see that input reflected in the 

proposal, but we certainly look forward to receiving additional input from 

stakeholders. We have sent out letters to all the tribal leaders, offering further 

consultation on the supplemental proposal, and the Intertribal Council of 

Arizona has offered to make a room available in Phoenix on November 18th, 

so please let us know if there are any tribes that would be interested in holding 

consultation on that date.

That's it. I'll turn it back to Scott. 

Scott Fraser: (Kiana), our operator, could you please re-prompt folks for how they can ask a 

question? 

Operator: Absolutely. 
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Ladies and gentlemen, if you would like to ask a question at this time, please 

press star (inaudible) one on your telephone keypad. Again, that is star, then 

the number one, on your telephone keypad. Let me pause for just a moment 

to compile the Q&A roster. 

And we do have a question from the line of (Gregory Jones), with (BWGP). 

(Gregory Jones): Hi. Thank you for this presentation here. I have just a question about EPA's –

the guidance for converting from a rate-based to a mass-based goal. I had 

heard that EPA would be issuing some additional guidance on how to do this. 

I was just curious if that's correct, and if so, what the timeframe might be for 

EPA issuing such guidance.

Janet McCabe: Thanks, (Greg). This is Janet. I'll take that one. We do intend to issue 

guidance, and to do so fairly shortly, and so we'll be getting back with people 

when that's ready to go. But it should be very soon.

(Gregory Jones): Great. Thank you. 

Operator: Again, ladies and gentlemen, if you would like to ask a question, please press 

star then the number one on your telephone keypad. That is star, then the 

number one, on your telephone keypad.

Scott Fraser: So I'm just going to – I'm going to stop the call at this point, but if you do 

have a burning question that you did not – oh, we did have one more question 

that just came in. 

Operator: Yes, we do have a question from (Al), from the Bureau of Reclamation. 

(Al): Right. Thank you. Having to do with the Navajo Nation, it sounded like you 

got into how there are units that are – have already been shut down and 

(aren’t) – and planned to be shut down, and it was – the indication was that 

this maybe, by itself, would satisfy the requirements. Does that include –

'cause you talked about building blocks as well; you talked about possibly 

building block three and four might be evaluated. Does just the fact that 

we've shut down these units mean that we would not be required to also 

consider building blocks two and three?
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Janet McCabe: Kevin Culligan is going to answer that one.

Kevin Culligan: Right. So the overall requirement in a – in a state or a tribal plan is to ensure 

that the final target is met, and that can be either on a rate basis, or, as the 

previous caller noted, on a mass basis. So there's no explicit requirement to 

do everything in each of the building blocks as we did it to set the targets in 

the first place.

And I think, you know, what Melanie had indicated is that the – as we've 

looked at it, we think that the reductions that would be achieved from those 

retirements would likely be greater, certainly at least on a mass basis, than the 

cumulative reduction targets required, even with looking at building blocks 

three and four, so using all four building blocks. 

(Al): Thank you. 

Operator: And your next question comes from the line of Stacy Tellinghuisen, with 

Western Resource.

Stacy Tellinghuisen: Hi. Thanks for the presentation today. I just had a question about tribes 

and tribal lands that are not covered by EPA's proposal, or that wouldn’t have 

a standard, (and let's say) that renewable was developed on those lands. 

Where would that renewable energy be credited? Would it go to the state or 

would the tribes have flexibility with how they use that renewable energy

(with the credits)? 

Kevin Culligan: This is Kevin Culligan with EPA again, and that is an excellent question, and 

the proposal actually also does touch upon this. We do take comments on the 

ability of a non-affected jurisdiction, so that certainly could include tribes. It 

could also include one of the states or other jurisdictions, so Vermont or the 

District of Columbia, that do not have affected units, and how (ERNE), and in 

fact, anything under any of the building blocks, (EE), potentially new fossil 

generation, could be factored into a – into a target and how they could 

participate, really, in a – in a sort of – probably in a multi-state plan or through 

another state's plan. But we do take comment on that idea, and do not – we 
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don’t suggest a specific (past forward), but take comment in general on what 

ways we should consider. 

Operator: And our next question comes from the line of (Haynes Lynn), with Resources 

for the Future.

(Haynes Lynn): Hello. Thank you for the presentation. So I guess I missed the first part, 

when you were talking about the building blocks one and two and three. You 

said there wouldn’t be any adjustment for those Indian land fossil fuel plants, 

but I'm aware that four of the involved power plants, three of them are coalfired, and I guess one of them is natural gas combined cycle. 

So I guess I'm a little confused about what you mean by there is no adjustment 

for building block one and two and three. Can you clarify that a little bit for 

me? Thank you. 

Melanie King: Yes. This is Melanie. What I indicated was that for building block one there 

would be no adjustments to the goals for Guam or for the Fort Mojave Indian 

Country, which is the area that has the natural gas combined-cycle plant. 

Because – so because they don’t have any coal-fired EGUs in those areas, 

there would be no adjustments, but there is an adjustment for the other areas 

in Indian country.

(Haynes Lynn): Thank you. 

Operator: Once again, ladies and gentlemen, as a reminder, if you would like to ask a 

question, please press star then the number one on your telephone keypad. 

Once again, that is star, then the number one, on your telephone keypad. 

And we do have a question from the line of (David Crabtree), with Desert 

Power. 

(David Crabtree): Yes. You mentioned the Navajo resources, and the fact that several are either 

shut down or plan to shut down, and that on a mass-based translation to a 

mass-based standard, that doing so would be – would provide sufficient 

decreases in carbon to meet the standard. I'm curious, what affect, in that case, 
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if any, does new generation built in that – in that territory, how does that 

interplay with the reductions in shutting those units down? 

Kevin Culligan: The treatment of new generation really goes back to the original proposal, so 

in – what we did in the supplemental that was issued yesterday is really focus 

solely on the targets. In terms of sort of implementation issues like treatment 

of new generation, that'd be – you know, we'd be looking back to the things 

that we said in the original proposal on how we would evaluate that on a stateby-state basis and we'd apply the same sort of ideas within a tribe. 

And so the simple answer to that is that 111 (b), or new, units do not need to 

be factored into meeting a state's target. Now, we have taken comment on the 

idea that a state, and in this case in a tribal plan, one might want to choose to 

do that, so, you know, if you're averaging in new lower-emitting generation 

and offsetting some of the higher-emitting existing fossil generation, that 

might be a compliance mechanism, but it certainly isn't – we don’t (view) 

anything under 111 (d) as in any way restricting the ability to build new fossil 

generation. 

(David Crabtree): Thank you. 

Operator: Ladies and gentlemen, to ask a question, please press star then the number one 

on your telephone keypad. 

And there are no further audio questions at this time. 

Scott Fraser: OK. Thank you, everybody, for joining. I'm going to turn it over to Janet for 

just closing remarks, and just remind folks if you – excuse me – didn’t get a 

chance to get your question asked today, to send that in writing to 

publicengagement@epa.gov. 

Janet McCabe: Yes. Thanks, Scott, and thanks, everybody. Thanks for your questions. We 

realize that this call is coming very quickly after you getting your hands on the 

material, so you may well have more questions after you read through it, and 

please do feel free to use the Web site – the e-mail box that Scott mentioned. 
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We'll be providing more information along the way about opportunities to talk 

with you about this, so we certainly want to make sure that all of your 

questions get answered. And I'll just make one more reminder that at 3:00 

Eastern today we'll be having another call to go through in a little bit more 

detail the notice of data availability that we also put out yesterday, so we hope 

that if convenient and if you're interested, you will join us then. 

Thanks, Operator. 

Operator: And ladies and gentlemen, this does conclude today's conference call. At this 

time you may now disconnect. 

END