WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS AEO2016 

MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE.

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February 1, 2016

MEMORANDUM 

TO: John Conti

Assistant Administrator for Energy Analysis

Jim Diefenderfer

Director, Office of Electricity, Coal, Nuclear, and Renewables Analysis

FROM: Coal and Uranium Analysis Team

SUBJECT: Notes from the First AEO2016 Coal Working Group Meeting workshop held 

on December 1, 2015

Attendees (47)

Name Affiliation

Ross, Joey Alliance Resource Partners, L.P.

Alfaro, Jose L. Alpha Natural Resources

Blumenfeld, Andy Arch Coal, Inc.

Lewandowski, David Clean Energy

James, Revis Electric Power Research Institute 

Holmes, Mike Energy & Environmental Research Center

Medine, Emily Energy Ventures Analysis, Inc

Eyster, Jerry General Electric 

Sutton, Jim General Electric 

Heller, Jamie Hellerworx, Inc.

Venkatesh, Boddu ICF International

Zhao, Song Leidos

White, Larry Mitsubishi Hitachi Power Systems America

Coleman, Leslie National Mining Association

Yeh, Starla Natural Resources Defense Council 

Rosner, David U.S. DOE

Schmitter, John U.S. DOE: Argonne National Laboratory

Jones, Ayaka U.S. DOE: EIA

Park, Brian U.S. DOE: EIA

Kearney, Diane U.S. DOE: EIA

Khan, Ehsan U.S. DOE: EIA

Adams, Greg U.S. DOE: EIA

Jones, Jeff U.S. DOE: EIA

Arena, JenAlyse U.S. DOE: EIA

Diefenderfer, Jim U.S. DOE: EIA

Martin, Laura U.S. DOE: EIA

Aniti, Lori U.S. DOE: EIA

Lintner, Michael U.S. DOE: EIA

Mellish, Mike U.S. DOE: EIA

Treiger, Mordechae U.S. DOE: EIA

Jell, Scott U.S. DOE: EIA

Huetteman, Thad U.S. DOE: EIA

Matuszak, Daniel U.S. DOE: FE

Zelek, Charles U.S. DOE: National Energy Technology Laboratory

Balash, Peter U.S. DOE: National Energy Technology Laboratory

Meroney, William U.S. Environmental Protection Agency

Fisher, Brian U.S. Environmental Protection Agency

Kayin, Serpil U.S. Environmental Protection Agency

Pierce, Paul U.S. Geological Survey

Lundgren, Carl U.S. Mine Safety and Health Administration

Moxness, Greg U.S. Mine Safety and Health Administration

Bailie, Alison Union of Concerned Scientists

Sattler, Sandra Union of Concerned Scientists

Peters, Jamie Union Pacific Railroad

Weiner, Michael Van Ness Feldman, LLP

Marmon, Greg Wood Mackenzie

Shattuck, Paul Xcel Energy
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS AEO2016 

MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE.

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In an effort to solicit feedback each year, the Coal and Uranium Analysis Team (CUAT)invites 

stakeholders to participate in coal working group meetings discussing EIA’s coal modeling methodology 

as well as a general discussion of issues facing coal supply and use. On December 1, Greg Adams, 

CUAT Team Leader, presented the attached slides. While the slides provide the information presented, 

discussion and commentary were also encouraged. The highlights of the meeting are provided here. In 

addition, where greater certainty in EIA’s modeling approach has been determined subsequent to the 

meeting, additional information is also provided below as ‘supplemental clarification.’ Participants and 

other stakeholders are encouraged to direct comments on proposed modeling methods and plans to Greg 

Adams (Greg.Adams@eia.gov).

Coal Fleet Aging

• On June 16, 2015, EIA conducted a workshop on the aging of the coal fleet and how aging might impact 

the costs incurred by plants in the future and the capacity of these older plants. If interested in attending a

future workshop on this topic, please contact Diane Kearney (Diane.Kearney@eia.gov). 

• The Electric Power Research Institute (EPRI) has been conducting research regarding the investment 

needs of older plants and how to capture the ‘lumpy’ nature of these investments within a modeling 

platform. This research will be publicly available shortly.

EIA Coal Survey Form Changes

• EIA is currently in the process of re-clearing many of its survey forms including some that are relevant 

to the coal industry. In many instances, this process includes modification to the forms. Among these 

forms are the Forms EIA-3, -5, -7A, -8A, -923, and 860. For concerns, comments, or information about 

changes to Forms EIA-3 thru -8A, direct correspondence to JenAlyse Arena (JenAlyse.Arena@eia.gov)

or Brian Park(Brian.Park@eia.gov). For changes to the Forms EIA-923 and EIA-860, please send 

comments to the email address: Electricity2017@eia.gov.

Capital Cost Updates

• EIA is updating capital costs for power-sector technologies. A clarifying question was asked if ultrasupercritical plants would be updated. EIA responded that this technology is included in the update.

Supplemental clarification: EIA staff is requesting that plants with partial carbon capture (less 

than 90%) are included in the capital cost update. The Electricity Working Group covered this topic in 

additional detail. Please refer to the meeting notes and presentation slides from the Electricity Working 

Group meeting held on December 8 for additional information.

CSAPR, MATS, and Other Regulations Affecting Coal

• EIA staff stated that the Cross State Air Pollution Rule (CSAPR) -- replacing the Clean Air Interstate 

Rule in the model -- and the Mercury Air Toxics Standard --already modeled for AEO2015—will be 

included in the AEO2016. One meeting participant indicated that both of these are being subjected to 

further scrutiny by the courts and perhaps should be excluded from the AEO2016. EIA staff responded 

that both would be included unless the courts actually stayed or vacated the regulations. The court rulings 

on CSAPR only affect a few states. It is possible that EIA could either update the targets for these states 

or potentially exclude them, but it is staff’s current understanding that CSAPR is largely intact. EIA also 
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS AEO2016 

MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE.

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mentioned that many of the large number of coal retirements already underway and being reported to EIA 

are related to MATS. Even without explicit representation of MATS in the model, EIA would continue to 

include these retirements as an input into the modeling process.

Supplemental clarification: In AEO2016, EIA will likely exclude those states from CSAPR 

compliance that are currently under review.

• The ‘unscrubbed plant type’ for existing coal plants (not new plants) in the model is a misnomer 

because – due to MATS – this plant type includes dry sorbent injection equipment (DSI). To comply with 

MATS, the electricity model requires that plants either retire, add scrubbers, or add DSI equipment. 

• In response to a question regarding EPA’s effluent guideline regulation, EIA staff stated that though the 

regulation prohibits the disposal of coal ash wastewaters in water bodies, for wastewater streams coming 

from flue desulfurization equipment (scrubbers), a total dissolved solids limit for discharge to water 

bodies is applied.

Clean Power Plan (CPP)

• EIA anticipates including the final Clean Power Plan (CPP) as part of its Reference case. EIA does not 

have a plant type representing partial carbon capture and sequestration (below a 90% capture rate). This 

technology is allowed in the final CPP. EIA is considering the possibility of adding a plant type with 

lower capture rates. 

• Replacement of the new advanced pulverized coal plant type with a new plant type that includes partial 

capture technologies would require additional coding within the electricity model, and the National 

Energy Modeling System (NEMS) would no longer be able to model scenarios where coal plants without 

carbon capture are economic or supported by policy (e.g. high gas prices, lower coal plant capital costs, 

no Clean Power Plan, high economic growth, or combinations of such assumptions). Stakeholders that 

use the NEMS for their own independent modeling scenarios could be impacted by such a change. EIA 

will need to be careful about making permanent changes to plant types in the event that the CPP is stayed 

or vacated by the courts. Also, EIA anticipates having a side case where the CPP is excluded. CCS 

retrofits are allowed in the model but also capture 90% of the carbon dioxide emissions (rather than 

partial capture).

Supplemental clarification: EIA will likely replace the new plants and retrofits having a 90% 

capture capability with a plant having a lower capture rate (rather than adding a new plant type or using 

another ‘slot’ in the model). The use of this lower capture technology is dependent upon cost estimates 

from the capital cost study mentioned above.

Cost of Capital Adder for Coal

• EIA currently plans to continue using an incremental 3% cost of capital adder for new coal plants that 

either do not capture or capture less than 90% of carbon dioxide emissions in the AEO2016. Several 

meeting participants objected to the use of this cost of capital adder suggesting that the CPP has reduced 

the uncertainty of carbon regulation, and coal plants are unlikely to be built anyway. Currently, EIA’s 

opinion is that a great deal of uncertainty remains, e.g. the CPP could be tightened further, making the 

financial community very risk averse to investing in coal technologies in the United States. EIA staff 

asked participants to provide written correspondence with EIA if they hold strong opinions regarding this 
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS AEO2016 

MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE.

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assumption. Written comments can be directed to Greg Adams (Greg.Adams@eia.gov) and will be 

shared with EIA’s upper management.

Additions, Retirements, and Conversion Assumptions

• In response to one participant’s inquiry, EIA staff stated that coal-to-gas conversions are modeled in the 

NEMS. In the AEO2015, EIA included approximately 4 gigawatts of coal-to-gas conversions as an input 

into the projection.

• The retirement assumed in 2025 is the Intermountain coal plant which currently serves California.

• Among the new coal plants that have been reported to EIA and will be included as inputs for the 

AEO2016 are the Healy plant and the Kemper County IGCC plant. The Healy plant in Alaska is an 

existing plant that was retired years ago and is being restarted. The Kemper County IGCC plant is 

currently running on natural gas but once its gasifiers are in place, it is expected to be fueled by coal. The 

Kemper plant is expected to be running on coal in 2016.

• For the participants’ reference, the slides included a short list of new plants that are reported to EIA, but 

EIA does not include them as an input because they are less than 50% complete. One participant agreed 

that the Two Elk Generating Station is unlikely to be completed.

Other Assumptions and Clarifications

• In response to a question, EIA staff stated that the coal model does not represent foreign exchange rates.

• EIA staff clarified that slide 32 showing minemouth prices does not include transportation rates.