December 20, 2013

Mr. Joseph Goffman

Counsel to Assistant Administrator

Office of Air and Radiation

U.S. EPA

1200 Pennsylvania Ave, NW 20004

Washington, D.C.

(via email)

Dear Mr. Goffman:

The American Public Power Association (APPA) is the national service organization representing the 

interests of over 2,000 municipal and other state- and locally-owned, not-for-profit electric utilities 

throughout the United States (all but Hawaii). Collectively, public power utilities deliver electricity to 

one of every seven electricity consumers (approximately 47 million people), serving some of the nation’s 

largest cities, as well as utilities in Puerto Rico, American Samoa, Guam, Northern Marianas Islands, and 

the U.S. Virgin Islands. However, the vast majority of APPA’s members serve communities with 

populations of 10,000 people or less. 

Overall, public power utilities’ primary purpose is to provide reliable, efficient service to local customers 

at the lowest possible cost, consistent with good environmental stewardship. Public power utilities are 

locally created governmental institutions that address a basic community need: they operate on a not-forprofit basis to provide an essential public service, reliably and efficiently, at a reasonable price.

APPA appreciated the opportunity to speak at the November 8, 2013 listening session held by the 

Environmental Protection Agency (EPA) on its expected proposal to address greenhouse gas (GHG) 

emissions from existing fossil-fuel fired power plants pursuant to Section 111(d) of the Clean Air Act 

(CAA). The association is providing these written comments on the expected existing plant rule in 

response to the request for such comments by the agency. APPA further references comments we filed 

with EPA in June 2012 on the original proposed New Source Performance Standards (NSPS) for GHG 

emissions from new fossil fuel-fired power plants.

1 While the agency withdrew that proposal earlier this 

year, APPA believes much of we expressed in our comments is relevant to the forthcoming NSPS for 

existing power plants proposal.

In November 2013, APPA adopted a set of policy principles on NSPS for GHG emissions from existing 

fossil fuel-fired power plants. A copy of the principles is attached. The principles outline policy positions 

APPA believes must be adhered to in any regulatory regime to reduce GHG emissions from existing 

power plants under Section 111(d) of the CAA. Issues addressed by the principles include the need for 

the standards to be technologically achievable; that they do not impose undue costs on consumers; that 

they do not jeopardize electric reliability or create any reliability gaps; among other things. Most 

 

1

See Docket Number EPA-HQ-OAR-2011-0660 or http://www.publicpower.org/files/PDFs/APPA-NSPSComments-WithAttachments-Final.pdf
Joseph Goffman

Page 2

December 20, 2013

importantly, the principles stress the need for EPA to recognize the key role states have in developing and 

implementing Section 111(d) with maximum flexibility and discretion. 

Public Power’s Generation Portfolio

Public power utilities provide electricity to approximately 14% of the population, and own about 9.8 

percent of the generating capacity in the country. Further, of the 2,010 public power utilities nationwide, 

only about 650 own any generation, much of it of relativity small size.

The chart below shows public powers generation portfolio:

Credit for Reduction of Carbon Dioxide (CO2) Made to Date

Although worldwide CO2 emissions have not decreased,

2

they have 

decreased significantly in the U.S. due to several factors.3 They range 

from increased use of renewable energy sources for generation to 

increased use of energy efficiency and demand side management to 

reduce load. Other factors include the retirements of coal-fired 

generation units, conversion of coal-fired units to natural gas-fired 

units, and flat electricity demand because of the sluggish economic 

recovery. To date, APPA is aware of the announced closure of 17 coalfired power plants (some with multiple generating units) in 2013.

Based on EPA’s assessment of annual output emission rates for CO2,

4

as well the increasing use of renewable resources by public power 

utilities,5 APPA estimates that collectively, public power utilities have 

thus far reduced their emissions by more than 39 million metric tons of 

CO2 since 2005. APPA believes EPA and state environmental agencies should give electric utilities

credit for their CO2 reductions that resulted from their increased use of renewable energy resources, fuel 

switching to lower or non-emitting resources, and power plant closures. APPA agrees with EPA 

Administrator Gina McCarthy’s many public statements regarding the agency’s ability to “measure the 

results, not the motivations.”

CO2 Reductions from Future Coal-Fired Power Plant Retirements

In addition, while APPA does not know how many utilities will switch their remaining coal-fired power 

plants to natural gas, there have been many reports from organizations such as SNL, Bloomberg, the 

North American Electric Reliability Corporation (NERC), and ScottMadden Associates that predict 

between 62 to 110 GW of coal-fired power plants will be replaced with new natural gas-fired power 

plants. Such fuel switching from coal to natural gas will result in the reduction of CO2 emissions by 

 

2 On December 3, 2013, International Energy Agency’s World Energy Outlook indicated that CO2 emissions from 

Europe, China, and Japan are expected to rise by 20 percent by 2035 largely due to the increased use of fossil fuels 

in Europe, Japan, and China. 

3 These decreases in CO2 also reflect changes in industrial fuel switching from coal to natural-gasand increased 

efficiency standards in the automobile sector, along with natural auto fleet turnover.

4

http://www.epa.gov/cleanenergy/documents/egridzips/eGRID2012V1_0_year09_GHGOutputrates.pdf

5 Based on an analysis of Ventyx data, 2013.

Public Power's Generation Portfolio
Joseph Goffman

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December 20, 2013

approximately half if the units are dispatched roughly the same amount of time. EPA should factor these 

reductions in its proposed NSPS for existing fossil fuel-fired power plants and give credit for them.

Importance of Cooperative Federalism in Addressing CO2 Regulation

EPA is not required to set an existing NSPS for electric generating units (EGUs). However, the President 

has directed the agency to do so. APPA is strongly concerned that such a standard could harm residential, 

commercial, and industrial electric customers by significantly increasing electricity costs, as well as

impact electric reliability in certain parts of the country. The likelihood of these negative impacts will 

increase substantially if the NSPS is based on un-commercialized and/or undemonstrated technologies,

such as carbon capture and geologic storage and/or if the standard is implemented too quickly. 

For these reasons and others, states must retain primacy in developing and implementing the NSPS for 

existing sources. APPA believes it is clear that Congress gave states the primary authority to “establish 

standards of performance for existing sources” (in contrast to the exclusive authority it gave to EPA to set 

NSPS for new sources). Section 111(d) of the CAA gives states broad discretion to develop such plans, 

and to implement and enforce them. Moreover, Section 111(d)(2) states that EPA shall approve state 

plans that are “satisfactory” under Section 111(d).

One Size Does Not Fit All

State flexibility is critical to achieving CO2 reductions in a reasonable and cost-effective manner. Many 

states have renewable resource and/or energy efficiency requirements that are already reducing CO2

emissions. Most APPA members comply with these state regulations even though they are not legally

required to do so. These utilities should receive credit for these reductions in the state NSPS. Some states 

have implemented GHG reduction requirements ahead of EPA. In addition, because the age, type of 

EGU, and fuel sources can vary considerably by state, they should be given maximum flexibility to 

accommodate these varying factors.

In November 2013, the National Association of Regulatory Utility Commissioners (NARUC) passed a 

resolution6calling for cooperative federalism and general deference to state agencies. State energy and 

air officials have echoed similar views on the need for cooperative federalism at a number of public 

meetings held by think tanks on NSPS for existing power plants. Virtually all states have urged EPA to 

take slow, deliberative steps on NSPS for existing power plants and to recognize the need for states to 

exercise their maximum authority. This view of state primacy has even come from states that took early 

action to reduce CO2 emissions under state regulations.

States are in the best position to determine how to address renewables, energy efficiency, and related

programs in their jurisdiction. They may want to address baseline issues slightly differently, just as they 

might want to use their own existing methods of measurement, monitoring, and verification. EPA should 

not make State Implementation Plan (SIP) approval contingent upon “cookie-cutter” approaches to 

verification. States should be encouraged to use their own existing systems.

The proposed NSPS for existing plants, like the re-proposed NSPS for new power plants released on 

September 20, 2013, should evaluate all fuel types differently. Separate NSPS standards should be set 

based upon the fuel type, age of plant, remaining useful life of the plant, and consider other impacts on 

 

6

http://www.naruc.org/Resolutions/Resolution on Increased Flexibility with Regard to the EPAs Regulation of 

Greenhouse Gas Emissions from Existing Power Plants.pdf
Joseph Goffman

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December 20, 2013

plants owners, such as stranded assets or debt. In addition, the regulations should take into consideration 

related infrastructure issues, such as the proximity of CO2 and natural gas pipelines, natural gas storage, 

etc.to existing power plants.

EPA Should Regulate the Source of the CO2 at the Point of Generation and Be Achievable

by “Affected Sources,” Not “Systems”

Some have advocated for a broad “systems-based” approach for regulating existing power plants under

Section 111(d). Such an approach would require EPA to set a standard based on the achievability of a 

standard for the utility industry as an entire “system.” However, the CAA does not allow EPA to 

prescribe an NSPS that is only achievable by individual sources trading credits nationally if it is not based 

on a technology that is “adequately demonstrated” and achievable by individually-covered sources. Once

the NSPS has been established based on what is adequately demonstrated and achievable for an “affected

source,” states are free to implement the standard more flexibly, including allowing in-state trading. Each 

state should have the freedom to make the determination as to participation in bilateral or multistate 

coordination or trading with other states.

CCS Requirements Should Not Be Imposed on Existing Coal- or Gas-Fired Generation

Despite EPA assertions in the re-proposed NSPS for new sources that carbon capture and sequestration 

(CCS) is adequately demonstrated, this is not true. Even though some plants have invested in piloting 

CCS technology, it has not been commercially demonstrated. The CCS projects EPA points to are still in 

development or have barely commenced. At thirteen meetings since 2006, APPA has provided EPA with 

six white papers on the limitations of CCS.

7

APPA appreciates recent public comments by EPA Administrator McCarthy that CCS is not appropriate 

for existing power plants. We hope the proposed NSPS for existing power plants will match what 

Administrator McCarthy has stated regarding the inappropriateness of CCS for such power plants.

EPA and States Should Recognize Unique Characteristics of Public Power When 

Reviewing Feasibility

APPA believes that EPA and state regulatory agencies should recognize the key characteristics of public 

power utilities, such as consumer ownership, not-for-profit operation, relatively small size, limited 

generation ownership, and other factors, when setting NSPS and related implementation deadlines. APPA 

has highlighted these unique characteristics of public power to EPA at several meetings (including the 

Small Entity Representative meeting held in the summer of 2012 and at a recent meeting convened by 

Resources for the Future (RFF) on October 28, 2013, at the request of the agency. Additionally, these 

issues were discussed with Administrator McCarthy, Acting Assistant Administrator for Air and 

Radiation Janet McCabe, and Mr. Goffman at a November 13, 2013, meeting with APPA and members of 

its CEO Climate Change and Generation Policy Task Force.

Conclusion 

APPA believes that Congress should take the lead on addressing greenhouse gas emissions from power 

plants. But since Congress has not addressed this and EPA has decided to regulate GHG emissions from 

 

7

See http://www.publicpower.org/files/HTM/CCS.html
Joseph Goffman

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December 20, 2013

power plants, state governments should take the lead on doing so. They are the most knowledgeable 

about the generation portfolios of utilities operating in their borders and work closely with utilities on a 

variety of environmental issues. States are in the best position to determine how to most effectively 

reduce CO2 emissions from power plants while protecting the interests of electric consumers. State 

environmental and energy regulatory agencies have a greater ability to understand the unique issues 

facing utilities operating in their boundaries than EPA does.

APPA looks forward to providing more detailed comments during the official comment period, as well as 

meeting with EPA before the proposed rule is sent to the Office of Management and Budget (OMB) for

review in early 2014. 

Sincerely,

James J. Nipper

Senior Vice President of Government Relations

Attachments(1)
Attachment 1
APPA PRINCIPLES ON

EPA RULEMAKINGS TO ESTABLISH STANDARDS OF PERFORMANCE

FOR EXISTING ELECTRIC GENERATING UNITS

UNDER SECTION 111(d) OF THE CLEAN AIR ACT

December 2013

The issue of global climate change needs to be addressed. Since the Clean Air Act (CAA) was not 

designed for regulation of carbon dioxide or other greenhouse gases (GHGs), APPA believes Congress 

should take the lead in addressing the issue. However, it is very unlikely Congress will enact broad 

climate change legislation in the near future due to a lack of consensus about whether and how to address 

the issue. Partly due to this stalemate in Congress, the President has instructed the Environmental 

Protection Agency (EPA) to exercise the discretion given to it by the U.S. Supreme Court to regulate 

GHGs.

Thus, APPA will work with EPA and the states to develop a regulatory regime that is consistent with 

Section 111(d) of the CAA, is workable for public power utilities and their customers, and adheres to the 

following principles:

 Is based on commercially demonstrated, cost-effective, and available technology;

 Recognizes the substantial emission reductions from the power sector that have already occurred 

and will continue to occur as a result of unit retirements, fuel switching, energy efficiency 

programs, and increasing use of renewable and other non-emitting or lower emitting energy 

sources, both voluntarily and pursuant to state mandates, among other factors;

 Recognizes the key role states have in developing and implementing Section 111(d) with 

maximum flexibility and discretion;

 Provides credit for early action;

 Minimizes costs to all consumers to keep electricity affordable; 

 Protects the ability of U.S. industries to compete in world markets;

 Does not jeopardize reliability or create any reliability gaps;

 Recognizes regional and state diversity;

 Recognizes that generation resources can serve load in multiple states;

 Recognizes key characteristics of public power utilities, such as consumer ownership, not-forprofit operation, relatively small size, limited or joint generation ownership, and other factors;

 Prevents consumers of load-serving entities from paying stranded costs for existing fossil-fired 

generation units, allows existing fossil-fired units to operate for their remaining useful life, and 

ensures utilities can manage risks on investments, including regulatory risks, they make to 

comply with the state programs implemented under Section 111(d);

 Provides sufficient time for compliance, including incremental approaches; and

 Considers the impacts on different wholesale electricity market designs and operations.