Y -M_ 

pennsylvania 

DEPARTMENT OF ENVIRONMENTAL 

PROTECTION 

Written Testimony of 

Vincent Brisini, Deputy Secretary 

Office of Waste, Air, Radiation and Remediation 

Pennsylvania Department of Environmental Protection 

on EPA's Proposed Carbon Pollution Emission Guidelines for Existing Stationary Sources; 

Electric Utility Generating Units 

("Proposed Clean Power Plan Rule") 

Docket ID No. EPA-HQ-OAR-2013-0602 

July 31, 2014 

Good Morning. I am Vince Brisini, Deputy Secretary for the Office of Waste, Air, 

Radiation and Remediation in Pennsylvania's Department of Environmental Protection 

(PA DEP). Thank you for the opportunity to testify on EPA's proposed Clean Power Plan Rule. 

This proposed rule was published in the Federal Register on June 18, 2014, under 

Section 111(d) of the Clean Air Act (CAA) to reduce carbon dioxide emissions from fossil fuelfired electric generating units (EGUs). 

The overall national target is equivalent to a 30 percent reduction from 2005 emissions 

from existing fossil fuel-fired EGUs. However, the proposed emission reduction goals for each 

state are established based on the 2012 emission intensity expressed as pounds of carbon 

dioxide (CO2 ) per megawatt-hour of fossil fuel-fired electric generation. In Pennsylvania 

significant CO2 emission reductions from EGUs have been achieved prior to 2012. 

EPA determined each individual state's emission reduction target using 2012 data for 

several "building blocks," including: 6 percent heat rate improvements at existing coal plants; 

redispatching existing natural gas combined-cycle plants to 70 percent capacity; increasing the 

use of renewable energy; ensuring the continued operation of nuclear plants; and enhancing 

energy efficiency programs. EPA's plan emphasizes that states will have flexibility in the means 

chosen to meet the carbon dioxide target goals, through these and other measures. However, 

with the exception of the heat rate improvements, the other measures only serve to shift 

generation away from existing coal-fired EGUs. 

Pennsylvania recognizes EPA's limited authority to regulate carbon dioxide emissions 

under the CAA. Our concerns relate to establishing CO2 reduction targets under Section 111(d) 

that force the development of a State Energy Plan rather than the regulation of affected fossil 

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fuel-fired EGUs. This is an unprecedented method of establishing control requirements for 

existing sources from a source category that is subject to New Source Performance Standards 

under Section 111(b) of the CAA. Simply stated, Pennsylvania believes the Section 111(d) state 

plan should not be the State Energy Plan; rather, the Section 111(d) plan should be part of a 

state's energy plan. 

Pennsylvania has developed a White Paper entitled Recommended Framework for the 

Section 111(d) Emissions Guidelines Addressing Carbon Dioxide Standards for Existing Fossil 

Fuel-Fired Power Plants. This White Paper was sent to EPA Administrator Gina McCarthy on 

April 10, 2014, and has received a significant amount of attention in the national press. In that 

paper we recommend, and now urge, that EPA establish emission guideline targets based upon 

actions that can be taken directly by operators at existing sources that would actually be 

subject to the Section 111(d) emission guidelines. This approach is consistent with previous 

emissions guidelines promulgated under the CAA by EPA for other source categories. 

We urge EPA to limit their definition of "Best System of Emission Reduction" (BSER) to 

actions that can be taken at the affected existing fossil fuel-fired EGUs, without redefining the 

source. That interpretation is consistent with how the U.S. Supreme Court recently viewed best 

available control technology in the UARG v. EPA case, which overturned EPA's Tailoring Rule. 

The court found that EPA guidance acknowledged that best available control technology may 

not be used to require reductions in a facility's demand for energy from the electric grid, which 

is the basis for the vast majority of the emissions reduction targets in the proposed emission 

guidelines. Historically, Section 111(d) emission guidelines mandated the BSER for each source. 

This approach would make each coal-fired EGU cleaner. However, under the proposed Clean 

Power Plan Rule EPA says it also means taking steps to replace coal-fired EGUs with other 

sources of electricity: more use of natural gas plants; more use of low carbon generators like 

hydro, nuclear, wind, and solar; and lowering electricity demand through energy efficiency from 

sources. Simply stated, EPA's interpretation of BSER is to force generation away from coal-fired 

power plants to other means of generating electricity and the elimination of some level of 

market demand for electricity. 

Pennsylvania questions EPA's authority to interpret the terms "best available control 

technology" and "best system of emission reduction" differently for the purpose of regulating a 

source under the CAA to reduce carbon dioxide emissions. It seems that both of these terms 

need to be interpreted consistently to ensure conformance with the CAA. Pennsylvania 

believes that EPA needs to carefully weigh this interpretation as it would establish a precedent 

for environmental regulation that would allow environmental regulatory agencies to establish 

programs that are more related to achieving desired social and economic outcomes rather than 

developing and implementing performance standards to achieve emission reductions from 

existing units. Pennsylvania believes these types of social and economic decisions should be 

made by elected officials. 

Pennsylvania is concerned that the Clean Power Plan Rule has moved EPA away from its 

traditional mission of environmental protection; the Agency is instead developing energy and 

social policy. For example, EPA's attempt to mandate a level of CO2 emission reduction that is 

unachievable by existing power plants under Section 111(d) will force states to pursue "outsidethe-fence" emission reductions from non-affected sources and measures, such as renewable 

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energy and demand-side energy efficiency mandates as the key compliance options. Using 

these options from sources and activities that are not affected by Section 111(d) indicates a 

move away from traditional environmental regulations to the establishment of an overarching 

energy policy that picks winners and losers in the marketplace. Pennsylvania would ask EPA to 

consider if it is appropriate to use its regulatory authority in a manner that manipulates the free 

market that has reduced and continues to reduce CO2emissions. 

One of the principles of Pennsylvania's White Paper is the need for EPA to recognize 

state leadership and authority to regulate pollutants within their borders. This would ensure 

the preservation of the states' discretion in the development and implementation of flexible 

emission control programs that are consistent with the Congressional intent of Section 111(d) 

of the CAA. 

EPA has stated repeatedly that there is flexibility in the proposed Clean Power Plan Rule 

in that it allows states to develop their own compliance plans. Those compliance plans may, 

but are not required to, utilize any combination of the four "building blocks" identified in the 

proposed Clean Power Plan. However, Pennsylvania is concerned that any purported flexibility 

is illusory, and asks how flexibility can be achieved when EPA has already demonstrated that 

Pennsylvania will need to use all four building blocks to achieve an overall 31 percent reduction 

from the 2012 emission intensity to 1,052 pounds of CO2per megawatt-hour. It must be 

recognized that the proposed emission reduction goals for Pennsylvania cannot be achieved 

solely by inside-the-fence-line improvements at existing fossil fuel-fired EGUs, which is the only 

legal method to achieve these CO2emission reductions. 

From a practical standpoint, when EPA used all available measures to establish CO2 

emission reduction targets that are so far beyond the reductions that can be achieved by fossil 

fuel-fired power plants, the states have no other option than to use those same measures in 

the development of the State Energy Plan that would be required under the proposed 

Section 111(d) program. 

The Pennsylvania White Paper relates the importance of recognizing the inherent 

differences in rate-based versus competitive energy markets and the need to provide for 

electric grid reliability. The proposed Clean Power Plan Rule's natural gas redispatch, energy 

efficiency, and renewable energy "building blocks" are areas traditionally reserved to the 

sovereign authority of the states. To date, Congress has been unwilling to develop national 

renewable energy standards, recognizing the wide diversity of state laws in existence, and the 

disparate capabilities to deploy renewable resources among states. EGUs in states like 

Pennsylvania operate in a competitive energy market while EGUs in states like West Virginia 

operate in a rate-based market. This is one of many issues that need to be considered by EPA 

in a balanced way. For example, how will the Clean Power Plan Rule achieve economic and 

regulatory parity based on the expanding zone of influence that Regional Transmission 

Organizations have today? As an agency constrained by its statutory authority, how does EPA 

extend its regulatory reach to influence the decisions made by Regional Transmission 

Organizations? How does EPA expect state administrative agencies, like the PA DEP, to 

influence or regulate the decisions of these organizations? 

3 
Importantly, Pennsylvania does not believe that environmental agencies should regulate 

or influence energy markets and that energy markets should not be in the business of 

environmental regulation. 

Pennsylvania appreciates the opportunity to testify on the Clean Power Plan Rule. 

While the White Paper demonstrates that Pennsylvania does support efforts to reduce CO2 

emissions, we believe it must be done in a lawful manner that results in cleaner air, more jobs, 

and lower prices for consumers. If done in that fashion, the program could result in benefits to 

the entire economy — and the market then decides who will continue to operate, as only the 

most efficient and lowest emitting sources will be competitive. By unleashing efficiency 

improvements, emission reductions at existing power plants and other industrial sources will 

continue so long as a competitive marketplace continues to exist. 

I request that you include this detailed written testimony in the record along with a 

copy of the Pennsylvania White Paper, the Fact Sheet, and the PowerPoint slides for my 

testimony before the Pennsylvania Senate Environmental Resources and Energy Committee on 

June 27, 2014. 

Once again, thank you for providing the opportunity for Pennsylvania to testify on the 

proposed Clean Power Plan Rule. We will submit detailed comments on the proposed rule to 

EPA in October 2014. 

4 
DEP 111(d) Recommendation pennsylvania 

DEPARTMENT OF ENVIRONMENTAL 

PROTECTION 

Cleaner Air, Lower Prices, More Jobs 

What is DEP proposing? 

• The U.S. Environmental Protection Agency (EPA) is developing carbon dioxide (CO2 ) pollution standards for both new 

and existing fossil fuel-fired power plants. The EPA proposal for existing fossil fuel-fired plants is expected to be 

available June 1, 2014, with a final rulemaking due by June 2015. 

• In anticipation of EPA's proposal, Pennsylvania submitted a plan for consideration that would achieve lower 

emissions from existing power plants, which would lead to cleaner air, by removing obstacles and encouraging 

efficiency projects. This plan is critical to maintaining the stable and diverse supply of electricity vital to our economy 

and national security. 

• At the heart of Pennsylvania's plan is efficiency and the preservation of states' authority and discretion in the 

development and implementation of emissions control programs. 

Why is this important? 

• An EPA mandate that does not provide for an "all of the above" energy approach does not recognize Pennsylvania's 

diverse energy resources and would compromise electric grid reliability, increase the cost of energy and result in 

significant job loss. 

A Creative Path Forward 

• Under Governor Tom Corbett's leadership, Pennsylvania is continuing to make great progress in its efforts to position 

the state as a world leader in the new energy economy while ensuring that we continue improving our air quality and 

protecting public health. 

• The key to the success of any effort to reduce CO2 is optimizing and maximizing the benefits of efficiency 

projects. Pennsylvania's plan would put an end to penalizing efficient plants for increased demand. 

Cleaner air, lower prices, more jobs at the same time? 

• Pennsylvania is committed to meeting all of its environmental needs in a fashion that allows us to best serve the needs 

of our citizens. 

• The best way to achieve this is to implement a plan that focuses on state leadership, provides flexibility and takes 

advantage of a wide range of energy resources and technologies towards building a cleaner power sector. 

• Specifically, the Pennsylvania plan has identified that: 

0 Emissions guidelines must be developed in close consultation with the states. 

0 EPA must establish guidelines for reductions, rather than establish mandate pathways to achieve them. 

0 EPA must recognize the different makeup of the existing power generation fleets in each state. 

0 Modifications to New Source Review must be accomplished so efficient plants are not penalized for increased 

demand as a result of investments in energy efficiency. 

An "Everybody Wins" Solution 

• A flexible, state-by-state approach preserves fuel diversity and grid reliability. 

• Investments in efficiency result in lower operating costs, cheaper energy for consumers and improved air 

quality through lower emissions of all pollutants, not just CO2. This proposal allows all sectors to invest in and benefit 

from efficiency improvements. 

• An efficient, stable, diverse supply of energy improves competitiveness, preserves existing jobs, creates new jobs and 

expands the Pennsylvania economy. 

TOM CORBETT, GOVERNOR I E. CHRISTOPHER ABRUZZO, SECRETARY 
Recommended Framework for the Section 111(d) 

Emissions Guidelines Addressing Carbon Dioxide Standards 

for Existing Fossil Fuel-Fired Power Plants 

or4r , 

pennsylvania 

DEPARTMENT OF ENVIRONMENTAL 

PROTECTION 

Tom Corbett, Governor 

E. Christopher Abruzzo, Secretary 
April 10, 2014 

Gina McCarthy, Administrator 

Environmental Protection Agency 

Ariel Rios Building 

1200 Pennsylvania Avenue, NW 

Washington, DC 20460 

Dear Administrator McCarthy: 

Pennsylvania is making great progress in its efforts to position the state as a world leader in the 

new energy economy. A key part of this plan is maintaining the stable and diverse supply of 

electricity that is vital to our economy and national security. 

To that end, I am pleased to provide you with a copy of a new Pennsylvania white paper that 

presents an innovative and flexible framework for achieving lower carbon dioxide (CO2) 

emissions from existing fossil fuel-fired power plants. 

At the heart of this plan is the preservation of states' authority and discretion in the development 

and implementation of flexible emission control programs. EPA should establish targets for 

reductions, rather than mandate pathways to achieve them. A flexible approach avoids picking 

"winners and losers" and empowers states to design the most cost-effective compliance options 

for their constituents. 

As stated in our white paper, Pennsylvania believes that a key to the success of any effort to 

reduce CO2 is optimizing and maximizing the benefits of energy efficiency projects. For that to 

occur, it is critical for EPA to endorse, adopt and implement our proposal to modify the New 

Source Review applicability test. If this change is made, a paradigm shift would be 

accomplished that would result in considerable investment in energy efficiency efforts not just in 

the fossil fuel-fired electric generating sector but throughout the entire U.S. economy. 

Companies paying to make energy efficiency improvements would benefit economically through 

lower operating costs, which results in lower prices for consumers while achieving lower CO2 

emissions. This change would provide an incentive to companies to make investments that 

would result in emissions reductions, including CO2, from all emitting sources without the need 

of a regulation to force the reduction. 

Pennsylvania is committed to achieving the goals that would be established under a flexible CO2 

program in a fashion that allows us to best serve the needs of our citizens. We look forward to 

hearing your feedback on our proposal and pledge our commitment to work in partnership with 

your staff as you craft a plan to meet President Obama's directive to build on state leadership, 

provide flexibility and take advantage of a wide range of energy sources and technologies 

towards building a cleaner power sector. 

Sincerely, 

E. Christopher Abruzzo 

Secretary 

Secretary 

Rachel Carson State Office Building I P.O. Box 2063 I Harrisburg, PA 17105-2063 I 717.787.2814 I www.depweb.state.pa.us 
Commonwealth of Pennsylvania's Recommended Framework for 

the Section 111(d) Emissions Guidelines Addressing Carbon 

Dioxide Standards for Existing Fossil Fuel-Fired Power Plants 

If EPA develops emissions guidelines, it should be done under Section 111(d). 

Section 111(d) of the Clean Air Act (CAA) is applicable for air pollutants that are neither regulated 

as a National Ambient Air Quality Standard (NAAQS) nor as a hazardous air pollutant (HAP) and 

where a New Source Performance Standard (NSPS) would apply for new affected sources. This 

section specifies that the U.S. Environmental Protection Agency (EPA) shall develop regulations 

establishing a procedure similar to the state implementation plan process which must be followed by 

the states. Further, this section obligates the states to prepare and implement plans that establish 

standards of performance for existing sources as well as provide for the implementation and 

enforcement of such standards. Under Section 111(d), states have the authority to devise flexible 

programs for existing units that achieve the federal guidelines using provisions that work best for the 

individual states. Considering the dramatic differences among the states relative to fuel diversity and 

the market differences between rate-based markets and restructured markets, this state flexibility is 

critical. Therefore, Section 111(d) would be the most appropriate section of the CAA to regulate 

carbon dioxide (CO2) emissions from existing large fossil fuel-fired electric utility steam generating 

units (EGUs) and fossil fuel-fired combustion turbines. Using the guidelines, states would be 

required to develop Section 111(d) plans for existing sources. These requirements can and should be 

less stringent than the NSPS, taking into account, among other factors, the remaining useful life of 

the existing source to which the standards of performance apply, additional environmental benefits of 

a fuel source, and other important considerations including market impacts and electric grid 

reliability. 

Emissions guidelines should be developed in close consultation with the states. 

The EPA must recognize state leadership and authority to regulate pollutants within their borders and 

should ensure preservation of states' discretion in the development and implementation of flexible 

emission control programs that are consistent with Section 111(d) provisions. The EPA should 

develop emissions guidelines that provide for maximum flexibility to the states in meeting those 

guidelines. The emissions guidelines should establish targets, not mandate how to achieve the 

established targets. Only the states have the authority to design and implement pollution control 

programs to meet the requirements adopted to regulate carbon dioxide in accordance with Section 

111(d), except in areas where the authority has been delegated to a local agency, or a state has failed 

to submit the necessary plan. 

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The emissions guidelines should address CO2 emission reductions achieved by the affected 

sources. 

Emissions guidelines should establish targets based upon actions that can be taken directly by and at 

existing sources affected by a Section 111(d) CO2 program. This approach is consistent with EPA's 

previous emissions guidelines promulgated for other source categories under the CAA. Furthermore, 

the EPA should limit the definition of "best system of emission reduction" (BSER) to actions that 

can be taken by the affected existing source without redefining the source. This will require the 

consideration of the inherent differences within the universe of existing boilers and combustors that 

are included in the fleet of fossil-fuel fired electric generation sources. 

If an energy-efficiency project or some other project with unique environmental benefits (e.g., 

municipal waste-to-energy projects) associated with a "non-affected" source is to be granted a 

"credit" under a Section 111(d) program, the "credited" reductions must be quantifiable and 

enforceable consistent with the quantification by a source affected under the program. The owner, 

operator or entity receiving credit for actions taken at a non-affected source must be responsible for 

ensuring that the CO2 reductions continue at the credited level. To ensure the integrity of Section 

111(d) programs which include actions taken by non-affected sources, it is critical to have very high 

data quality standards. Absent high quality data, the effectiveness of the program would be 

compromised to the economic benefit of some and detriment of others. Consequently, it is suggested 

that the quantification methods for credits awarded to non-affected sources be standardized by or be 

required to receive approval from the EPA when using reductions from non-affected sources in a 

Section 111(d) program. 

It is important to note that energy efficiency projects not associated with existing sources or facilities 

are actually emissions avoidance efforts and not emissions reduction efforts. Consequently, only 

energy efficiency efforts at existing sources or facilities, or new energy efficiency projects that are 

coupled with the replacement or retirement of an existing source or facility, should be considered for 

crediting toward a Section 111(d) program. In the case of a project with unique environmental 

benefits, the amount of credit should be demonstrated on a continuous basis. Because of the 

complications of a program that includes non-affected sources, EPA should establish Section 111(d) 

guidelines for CO2 emissions that only consider currently available and economically feasible 

technologies that improve energy efficiency at affected sources. 

Emissions guidelines should provide for unit averaging for a rate-based program or accumulation of 

emissions from multiple sources if the program is mass-based. Also, because CO2 is not a pollutant 

for which a short-term ambient air quality standard is necessary or desirable, a multi-year (e.g., fiveyear) rolling average can be used to demonstrate compliance. This methodology provides 

recognition of year-to-year variations in operations without requiring the use of emission allowances. 

After the close of the reporting period, a "true up" period should be provided to allow "overemitters" and "under-emitters" to reach a negotiated settlement that provides for "net" compliance 

with emissions obligations. This approach may be a very desirable option for restructured energy 

markets as it provides for flexibility without picking "winners and losers," as can occur with 

allowance-based programs. These opportunities would enable states to design the most flexible 

2 
programs and the owners and operators of affected sources to select the most cost-effective 

compliance options for meeting their compliance obligations. 

States must be allowed to join with other states in multi-state or regional programs. 

States must have the opportunity to collaborate with other states in either formal or ad-hoc forums 

while developing compliance demonstration options. The opportunity to collaborate should also be 

provided to the owners and operators of affected sources to allow them flexibility in achieving the 

most effective compliance options. This collaborative process should be provided for, but not 

obligated in the guidelines developed by EPA. The most critical aspect of having creditable and 

high-functioning programs is the quantification of the emissions. In the case of EGUs, monitoring 

provisions are consistent and specified under federal regulation. This consistent quantification of 

emissions obviates the need of emission allowances for the success of multi-state trading programs. 

However, the decision to utilize an emission allowance-based program should be at the state's 

discretion. Importantly, the emission allowance-based program must also be reliant upon the 

consistent quantification of emissions. 

EPA must recognize the different makeup of existing power generation in each state and 

recognize flexible compliance pathways or mechanisms. 

The existing power generation fleet in Pennsylvania is extremely diverse in terms of fuel sources, 

combustion technology, and vintage. As the Commonwealth is intimately familiar with the exact 

composition of the fleet, Pennsylvania is best suited to design the plan to meet the final emissions 

guidelines promulgated by EPA and also to be adequately flexible to accommodate Pennsylvania's 

diverse resources. This is true for all state and local agencies. 

Importantly, states should also have the ability to exclude certain electric generators that have 

environmental benefits that are beyond the CO2 emissions from those sources. Examples of fuel 

sources that this may apply to are coal refuse and coal bed methane. 

An excellent example of an electric generation source category with multi-media benefits is coal 

refuse combustion units. In Pennsylvania, large piles of coal refuse are a legacy issue and these 

facilities turn this refuse into electricity in a controlled combustion process rather than through 

uncontrolled burning, which occurs due to the exposure of coal refuse piles to air. The exposure of a 

mining refuse pile to atmospheric oxygen and pressure promotes heat generating reactions, primarily 

oxidation of the coal refuse itself (i.e., the coal refuse piles are slowly burning), releasing CO2 

emissions as well as sulfur oxides, particulate matter, and other pollutants associated with poor 

combustion. The benefits of utilizing this fuel source are that it is essentially carbon neutral, 

emissions of other pollutants from coal refuse-fired sources are well controlled, and sources of acid 

mine drainage and ground water pollution are removed. Additionally, the use of coal refuse reduces 

the emissions from use of "new" coal or natural gas from being combusted to generate electricity in 

an amount that would reflect the amount of electricity generated by the coal refuse-fired combustion 

units. 

3 
Because the ash from the controlled combustion of coal refuse is used to remediate the site where the 

coal refuse pile was located, these areas are reclaimed without any funding necessary from 

Pennsylvania taxpayers. At this point, over 7,200 acres of affected land in Pennsylvania have been 

reclaimed through the use of this fuel source. This represents savings to Pennsylvania taxpayers of 

$140 to $220 million dollars while providing jobs, environmental benefits, and taxes to the localities 

where these coal refuse-fired facilities operate. For perspective, the industry estimates there are still 

approximately 170,000 acres affected by coal refuse remaining in the Commonwealth. 

Emissions guidelines should provide for emission reductions compared to a designated baseline 

period. 

Regulating greenhouse gas such as CO2is unique when compared to criteria pollutants. Section 

111(d) of the CAA allows EPA to consider flexible approaches when establishing the guidelines and 

allows states to utilize flexible approaches for compliance demonstrations. Potential strategies 

include state budgets, multi-year averaging, and early reductions. EPA should establish specific 

goals for the states based on standards of performance, recognizing that existing sources have very 

limited options when compared to new sources. New sources have the opportunity to incorporate 

emissions controls and efficiency improvements into their design much easier than existing sources. 

Further confounding the installation of controls on existing units is the New Source Review (NSR) 

process specified in the CAA and the regulations. EPA should address the NSR ramifications of the 

installation of controls or modifications on existing units used to meet the standards of performance 

established under the guidelines. NSR ramifications should not impede the maximum possible 

implementation of energy efficiency improvement projects at these affected sources. 

Pennsylvania recommends the EPA's emissions guidelines provide for a state budget approach 

option for only existing sources being regulated for CO, under a Section 111(d) program. This is 

because new affected sources will be regulated under Section 111(b) through the New Source 

Performance Standards (NSPS), which, as proposed, establish unit-specific CO2 limits. Under 

Section 111(d), EPA should provide for a state budget based on achievable rate-based standards of 

performance which can then be converted to a mass-based target by multiplying the baseline year 

energy output (i.e., the gross output in MWh for the baseline year) multiplied by the rate-based 

standard (expressed in lbs/MWh (gross)) to determine the mass-based target in tons per year. 

Pennsylvania recommends that the EPA use 2005 as the appropriate baseline year as suggested by 

President Obama's Climate Change Action Plan. The emission guidelines should allow compliance 

with the budget to be demonstrated using system-wide averaging or accumulation on a rolling fiveyear basis for facilities under common control. This system of implementation would provide states 

the ability to recognize and use all quantifiable and enforceable reductions including, but not limited 

to, source retirements, permanent curtailments, and early reductions. 

EPA must recognize the differences inherent in regulated versus competitive energy markets 

and the need to provide for electric grid reliability. 

EGUs in Pennsylvania are participating in a competitive energy market. Therefore, the costs to 

4 
comply with state plans implementing the emissions guidelines cannot be directly passed on to the 

customers. On the other hand, EGUs participating in a regulated rate-based market can directly 

recover the costs of compliance after obtaining approval from the Public Utility Commission and will 

be compensated with a return on investment for costs associated with compliance efforts. EPA must 

recognize the fundamental differences in these marketplaces by recognizing the authority of the 

states to design and implement programs that best serve the affected sources located within their 

jurisdiction. 

Emissions guidelines mandating an electric grid system-based approach, i.e. the re-dispatch of EGUs 

based on a lower CO2 emission rate should not be part of a 111(d) program. This type of program 

could disrupt the competitive energy market and could place additional coal-fired EGUs at risk of 

early retirement, resulting in additional job losses and potential grid reliability issues. The dispatch of 

EGUs is beyond the scope of the EPA's authority, and the regulation of carbon dioxide emissions is 

beyond the authority of RTOs or ISOs. The operation of a competitive energy market is the role of 

RTOs and ISOs while the regulation of environmental pollution in Pennsylvania is the responsibility 

of the Pennsylvania Department of Environmental Protection. 

Changes to major New Source Review regulations should be considered to encourage efficiency 

improvements. 

Any physical change or change in the method of operation relating to efficiency improvements at an 

affected facility would trigger NSR applicability determinations. If NSR is triggered, the owner or 

operator may opt out of such efficiency improvement projects or choose not to optimize or maximize 

the benefits of the project, which is counter to the intent of the emissions guidelines. Therefore, we 

recommend that NSR regulations for EGUs be amended to redefine major modification as a 

modification that increases any regulated air pollutant emissions in terms of the lbs/MWh (gross), 

rather than the current threshold of tons per year. 

There are likely other provisions in the CAA that have "absurd results" when it is used to regulate 

CO2 or other greenhouse gases. Those provisions should all be identified and "tailored" to provide 

for the greatest opportunity to avoid unintended or negative consequences should this program for 

EGUs be implemented under Section 111(d) of the CAA. As previously addressed by EPA, 

circumstances that have absurd results should be corrected through regulatory amendments as was 

done under the "Tailoring Rule." 

5 
pennsylvania 

FM140,ENTAL =OIEC71, 

Bureau of Air Quality 

Energy Effects of EPA's Proposed 

Clean Power Plan 

Pennsylvania Senate Environmental 

Resources and Energy Committee 

Harrisburg, PA 

June 27, 2014 

EPA's Section 111(d) Proposal 

• EPA proposed State Specific goals by 2020 

and 2030 

• EPA's Final rule by June 2015 

• State Plans Due to EPA by June 2016 

• EPA may grant extensions 

— Individual State Plans for 1 year 

— Multi State Plans for 2 Years 

pennsylvania 

PROTECTION 

F ENVIRONMEN TA 

7/30/2014 

1 
EPA's Section 111(d) Proposal 

• EPA proposed CO2 emission reduction goals for 

Pennsylvania. 

o Interim Goal by 2020 

o 37% from 2005 level 

o 23% from 2012 level 

o Final Goal by year 2030 

o 44% from 2005 level 

o 31% from 2012 level 

IIIPP

_, pennsylvania 

a

. DEPARTMENT OF ENVIRONMENTAL 

PROTECTION 

EPA's Section 111(d) Proposal 

• EPA established CO2 emission targets using: 

o Coal-fired boiler heat rate improvements 

(assumed 6%) 

o Switching to natural gas fired units 

o Switching to additional nuclear power 

o More renewable energy 

o Energy efficiency programs ("outside the 

fence") 

f

r04, pennsylvania _

isfif DEPARTMENT OF ENVIRONMENTAL 

PROTECTION 

7/30/2014 

2 
EPA's Section 111(d) Proposal 

• The EPA's Clean Power Plan makes Section 

111(d) the State Energy Plan, rather than a 

component of the State Energy Plan. 

• EPA claims that these measures represent the 

"Best System of Emission Reduction" (BSER) 

which has been "adequately demonstrated." 

pennsylvania 

PROTECTION 

DEPARTMENT F ENVIRONMENTAL 

EPA's Section 111(d) Proposal 

• EPA proposed Pennsylvania's final goal using 

the following rate reduction contributions: 

—Redispatch of natural gas (11%) 

— Redispatch of additional nuclear (7%) 

—Renewable energy (43%) 

— Energy efficiency programs (27%) 

—Coal-fired heat rate improvements (11%) 

env, pennsylvania 

raid ,JL PAN' MEN! 0' LNVIRONME N SAL 

,tOrLt: ION 

7/30/2014 

3 
EPA's Section 111(d) Proposal 

• Pennsylvania's coal fleet annual capacity 

Year Capacity Factor Coal Consumption 

Reduction in Coal 

Consumption from 2005 

2005 73.4% 43.4 million tons N/A 

2012 54.6% 33.0 million tons 24% 

2020 23.7% 12.5 million tons 71% 

2030 16.9% 10.5 million tons 76% 

IIPIP

_.4 pennsylvania 

■

DEPARTMENT OF ENVIRONMENTAL 

- PROTECTION 

PA's Section 111(d) White Paper 

• PA's White Paper offers a "no regrets" 

strategy. 

— Process efficiency improvements 

o Addresses the single greatest impediment to 

efficiency improvements 

o Framework is based on facilitating compliance 

— Regulates only the truly affected sources 

— CO2reductions achieved from other sectors 

Pt ;Pt, pennsylvania 

, DEPARTMENT OF ENVIRONMENTA, 

PROTECTION 

7/30/2014 

4 
PA's Section 111(d) White Paper 

• PA's framework results in: 

—Cleaner air 

—A fuel diverse energy profile 

—Lower electricity prices 

—More jobs 

pennsylvania 

rs,, DEPARTMENT OF ENVIRONMENTAL 

PROTECTION 

Apennsylvania 

Bureau of Air Quality 

Vincent J. Brisini 

Deputy Secretary for Waste, Air, Radiation 

and Remediation 

PA Department of Environmental Protection 

717-772-2725 

vbrisini@pa.gov 

7/30/2014 

5