EPA Moderator: Scott Fraser 10

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**EPA Moderator**  **: Scott Fraser**  **October 29, 2014 12:00 p.m. E**  **T**

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 y ou f

or your patience. Hello. My

name is (Kiana) and I will be y our conference operator today . At this time Iwould like to welcome everyone to the Clean Power Plan's suppleme ntal proposal conference call. All lines have been placed on mute to (i naudible) any background noise. After the speakers' remarks, there will be a question and answer session. If yo u would like to ask a question during this time, simply press star then the number one on your telephone key pad. If you would like to withdraw your que stion, press the pound key . Thank y ou. Mr. Scott Fraser, you may begin your conference. Scott Fraser : Thank y ou so much, and welcome, every body . My

name is Scott Fraser, with EPA's office of public engagement. Today's call is focused around th e 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.EPA Moderator: Scott Fraser 10

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Page 2 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 ov er to Melanie King. She's the project lead for the supplemental proposal, and she'll have about 10 to 15 minutes for remarks. S o we will have time after our remarks to take questions from those on the line, and if y our question is not able to be answered today , yo u 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, every body . Thank y ou for joining us today , especiall y with kind of late notice. Since last y ear, 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 econom y and leverage cleaner energy sources. T oday

we wanted to provide yo u 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 rule makings, 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 man y meetings, conference calls, public hearings, and the nearl y 1.5 million public comments that the agency has alread y received have identified a wide range of ideas and information. Our actions here reflect what we have heard, an d 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.EPA Moderator: Scott Fraser 10

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Page 3 Let me fill you in on a few of the details, but then Melanie will reall y 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 b y listening, and we will continue to listen. As Isaid 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 thatEPA Moderator: Scott Fraser 10

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Page 4 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 P lan 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 o ur econom y 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 econom y depends on a healthy e nvironment 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, every one, 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, su bmission and implementation of plans to achieve those goals. This supplemental proposal relies very heavil y 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 s ys tem of emission reduction. We

– EPA determined that a set of four ty pes of measures, or building blocks, together,EPA Moderator: Scott Fraser 10

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Page 5 are the best sy stem to reduce carbon pollution from fossil fuel

- fired power plants. And if y ou'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 y ou want to see an extensive dis cussion 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 s ystem 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 an y adjustments to the goals for Guam or for the Fort Mojave Indian Country because there are no coal

- fired affected EGUs in those areas. Appl yi ng th e methodology for building block two would not result in any adjustments to the goals for Guam or an y 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 pr oposed 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 isEPA Moderator: Scott Fraser 10

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Page 6 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 appl y 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 go al achieves the same degree of emission limitation. We're also taking comment on a second set of area

specific 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

briefl y 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 po licy objectives. And the territories, like states, must submit initial or complete plans b y 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 addi tional time to submit complete plans if it's justified and the territories provide specific information.EPA Moderator: Scott Fraser 10

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Page 7 So individual territory

plans would be eligible for a one

- ye ar extension to June 30th, 2017, and then multi

- area plans would be eligible for a two

- y ear 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 authorit y 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 an y 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 anal ys is indicates that the supplemental proposal will yield monetized climate benefits of approximatelyEPA Moderator: Scott Fraser 10

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Page 8 $170 million in 2013. The estimated annual compliance costs in 2030 are a savings of $350 million, incl uding 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 und erstanding is that some units at the power plants in the Navajo Nation have alread y shut down, and some other units are expected to shut down in the next few y ears to comply with Regional Haze, so if

– once those units shut down, our information is that th e Navajo Nation goal could be complied with without further actions if it's translated to a mass

based 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 an y 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 Po wer 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 r oom available in Phoenix on November 18th, so please let us know if there are an y 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

- pr ompt folks for how they can ask a question? Operator : Absolutely

.EPA Moderator: Scott Fraser 10

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Page 9 Ladies and gentlemen, if you would like to ask a question at this time, please press star (inaudible) one on y our telephone key pad. Again, that is star, then the number one, on your telephone key pad. 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 guidanc e. Janet McCabe : Thanks, (Greg). This is Janet. I'll take that one. We do intend to issue

guidance, and to do so fairly shortl y, and so we'll be getting back with people when that's read y to go. But it should be very soon. (Gregory Jones ): Great. Th ank you. Operator : Again, ladies and gentlemen, if you would like to ask a question, please press

star then the number one on your telephone key pad. That is star, then the number one, on your telephone key pad. 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 y ou 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 yo u. 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 may be, b y itself, would satisfy the requi rements. 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 consi der building blocks two and three?EPA Moderator: Scott Fraser 10

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Page 10
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 every thing in each of the building blocks as we did it to set the targets in the first place. And I think, y ou 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 likel y be greater, certainl y 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 y ou. Operator : And y our next question comes from the line of Stacy Tellinghuisen, with West ern Resource

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

and tribal lands that are not covered b y 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 h ave 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, an ything under an y of the building blocks, (EE), potentially new fossil generation, could be factored into a

– into a target and how they could participate, reall y, in a

– in a sort of

– probabl y in a multi

- state plan or through another state's plan. But we do take comm ent on that idea, and do not

– weEPA Moderator: Scott Fraser 10

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Page 11 don’t suggest a specific ( past forward), but take comment in general on what way s we should consider. Operator : And our next question comes from the line of (Hay nes Ly nn), with Resources for the Future. (Hay nes Ly nn ): Hello. Thank you for the presentation. So I guess Imissed 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 coal

fired, and I guess one of them is natural gas combined cy cle. So Iguess I'm a little confused about what you mean by there is no adjustment for building block one and two and three. Can yo u clarif y that a little bit for me? Thank you. Melanie King : Yes. This is Melanie. What Iindicated 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

. (Hay nes Ly nn ): Thank y ou. Operator : Once again, lad ies and gentlemen, as a reminder, if you would like to ask a

question, please press star then the number one on y our telephone key pad. 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,EPA Moderator: Scott Fraser 10

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Page 12 if any , does new generation built in that

– in that territory , how does that interplay with the reductions in shutting those units down? Kevin C ulligan : 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 reall y focus solely on the targets. In terms of sort of implementation issues like treatment of new ge neration, 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 state

by

- 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, y ou know, if y ou' re averaging in new lowe r - emitting generation and offsetting some of the higher

- emitting existing fossil generation, that might be a compliance mechanism, but it certainl y isn't

– we don’t (view) any thing under 111 (d) as in any way restricting the ability

to build new fossil gen eration. (David Crabtree ): Thank y ou. Operator : Ladies and gentlemen, to ask a question, please press star then the number one

on y our telephone key

pad. And there are no further audio questions at this time. Scott Fraser : OK. Thank you, every body , for joining. I'm going to turn it over to Janet for just closing remarks, and just remind folks if y ou

– 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. Th anks, Scott, and thanks, every body . Thanks for y our questions. We realize that this call is coming very quickl y 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 th e Web site

– the e

- mail box that Scott mentioned.EPA Moderator: Scott Fraser 10

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Page 13 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 y esterday , so we hope that if convenient and if you're interested, you will join us then.
T hanks, Operator. Operator : And ladies and gentlemen, this does conclude today 's conference call. At this

time you may

now disconnect.

END