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TABLE OF CONTENTS

CHAPTER 8 ECONOMIC AND EMPLOYMENT IMPACTS .............................................. 2

8.0 Impacts and Costs................................................................................................................... 2

8.1 Baseline emissions................................................................................................................. 22

8.2 Emission Reductions............................................................................................................. 23

8.3 Endangered Species Act ....................................................................................................... 44

8.4 Energy Impacts ..................................................................................................................... 46

8.5 Compliance Costs.................................................................................................................. 94

8.6 Economic and Employment Impacts ................................................................................ 143
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CHAPTER 8 ECONOMIC AND EMPLOYMENT IMPACTS

Part 1 - Sections 8.0 Through 8.6

8.0 IMPACTS AND COSTS

Comment 1: Commenters stated that the CPP is a major federal action warranting NEPA 

review, and that EPA should voluntarily develop an EIS for the proposed rule to satisfy each 

criteria needed to inform EPA regarding whether to voluntarily develop a NEPA document. The 

commenters suggested that the EIS process would allow: improved coordination with other 

federal agencies, such as FERC, which may be involved in future licensing actions; assessment 

of the large-scale environmental impacts that may result from the build-out of the nation's 

energy-supply infrastructure that may arise as a result of the Proposed Rule's mandates; 

expansion of public involvement to address matters of controversy such as the significant 

reliability impacts the will result from the proposed rule implementation; full consideration of 

impacts on special resources and public health. 

The commenters also discussed the possible elements of the build out, including more than 100 

GW of generating capacity, associated electrical transmission infrastructure, natural gas 

transmission infrastructure, and renewable-energy capacity, some of which may be constructed 

in remote or as-yet undeveloped areas. The commenters stated that some of the impacts will fall 

disproportionately on minority or low-income populations and trigger environmental justice 

implications without a robust EIS process.

Commenters stated that the proposed rule should be evaluated through an Environmental Impact 

Statement (EIS).

Response 1: Please see Section 1.15 of this Response to Comments document that addresses the

legal applicability of NEPA to Clean Air Act regulations. As discussed in Section 1.15, NEPA 

does not apply to CAA regulations. EPA has conducted an extensive analysis of the energy and 

environmental impacts of the Clean Power Plan in technical support documents such as the GHG 

Mitigation Measures TSD for the Final CPP, CO2 Emission Performance Rate and Goal 

Computation, Resource Adequacy and Reliability Analysis, and the Regulatory Impact Analysis 

(RIA) developed for the final emission guidelines. EPA specifically discusses reliability 

considerations in section II.D.3 of the preamble for the final rule and section 8.9 of this response 

to comments document. Impacts of the CPP are discussed in Section XI of the preamble for the 

final rule.

As discussed in Section VIII of the preamble for the final rule, states will make the ultimate 

decisions as to how the emission guidelines will be implemented. States will be afforded 

flexibilities in compliance with the CPP. In developing their compliance plans, states are 

encouraged to consider potential local environmental impacts, as well as potential impacts on 

vulnerable communities. See section IX of the preamble for the final rule for a discussion of 

community considerations. The CPP allows for flexibilities that guarantee a continued reliance 

on a diverse energy mix in electricity generation, and also allows for a long implementation 

period in order to ease the impacts associated with transitioning to a lower carbon energy mix. 
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Comment 2: Commenters stated that the proposed rule does not consider the environmental and 

public health impacts associated with natural gas extraction. The commenters further stated that 

fracking enjoys broad exemptions from environmental laws, and the proposed rule must consider 

the social and environmental impacts when developing standards.

Response 2: When estimating the environmental impacts of the CPP, the EPA does consider the 

impact of the guidelines on methane emissions associated with projected increases in the demand 

for natural gas and decreases in the demand for coal by the electricity sector for electricity 

generation. EPA’s methane analysis is presented in the Appendix to Chapter 3 of the RIA 

conducted for the proposed and final emission guidelines. See also the response to section 8.2 

comment 18 below. The analysis found that the net upstream methane emissions from natural 

gas systems and coal mines and CO2 emissions from flaring of methane will likely decrease 

under the proposed guidelines. The estimated impacts to the natural gas and coal markets are 

illustrative of actions that may be taken to comply with CPP. States and sources affected will 

make the ultimate decisions as to how to comply with the CPP and actual methane emission 

changes may differ from those estimated by EPA. 

The CPP is designed to address carbon emissions associated with electricity production. 

Regulatory actions undertaken under the Clean Air Act as well as voluntary programs may 

address emissions from other sectors such as the oil and gas industry. As discussed in the 

President’s Climate Action Plan Strategy to Reduce Methane Emissions1

, EPA is assessing 

methane emissions from the oil and gas industry and considering regulatory action. Potential 

actions taken to address methane emissions from the oil and gas industry will build upon 

successful regulatory actions and voluntary programs already being undertaken by the EPA.

Comment 3: Commenters summarized a recent Electricity Journal study and applied the 

methodology in that study to state that taking risk associated with generation types into account 

is important to arrive at optimal decisions and to demonstrate a rigorous methodology that can be 

easily implemented by public utility commissions. The commenters stated that the optimal 

portfolio: 

• does not include nuclear

• includes 15% to 16% Gas 

• accounts Wind for 34-48%, depending on the cost of integration

• includes Hydro in the range of 21% to 34% 

 

1 https://www.whitehouse.gov/sites/default/files/strategy_to_reduce_methane_emissions_2014-

03-28_final.pdf
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The commenters concluded that: 

• if the decision maker ignores risk and carbon mitigation, the preferred portfolio is 

96% gas. 

• the cost increase resulting from a long term zero carbon policy (i.e., gas with 

carbon capture replacing unabated gas), is relatively small. 

• an approach to zero carbon emissions that is not risk aware increases the expected 

cost by just under 20%. 

• an optimal portfolio strategy keeps it under 13%. 

• controlling the cost of integrating large shares of wind is important, as it can add 2 

to 4% to the cost of the optimal portfolio.

Response 3: The EPA acknowledges the comment. A variety of factors may reasonably be 

considered by states, U.S. territories and tribes in optimal implementation planning of the 

emission guidelines. The CPP when fully implemented, will achieve significant reductions in 

CO2 emissions by 2030. At the same time, the guidelines offer states and utilities substantial 

flexibility and latitude in achieving these reductions. In the final rule, the EPA has established a 

CO2 emission performance rate for each of two subcategories of fossil fuel-fired EGUs -- fossil 

fuel-fired electric steam generating units and stationary combustion turbines. The performance 

rates reflect the “best system of emission reductions ... adequately demonstrated” for CO2 

emissions from the EGU source category. The guidelines also provide for the development, 

submittal and implementation of state plans that implement the CO2 emission performance rates, 

either directly by means of source-specific requirements or through measures that achieve 

equivalent CO2 reductions from the same group of EGUs. States, U.S. territories, and tribes with 

one or more affected EGUs will be required to develop and implement plans to ensure that their 

affected EGUs, individually, in aggregate, or in combination with other measures undertaken by 

the state, achieve the equivalent of the final CO2 emission performance rates by 2030. 

Comment 4: Commenters listed issues with meeting the rulemaking timelines.

Commenters stated that the rulemaking timeline does not allow adequate time to meet interim 

goals. The commenters further stated that the interim compliance average period is inconsistent 

with state planning processes, market schedules and utility investment decision-making and the 

2020 compliance goals limit the ability of states, electric utilities and system operators to manage 

what could be a large number of simultaneously retiring coal-based units. The commenters 

estimated that 46-49 GWs of coal-based units will close before 2020, in addition to the 

approximately 70 GWs of announced coal-based unit closures that will occur between 2010 and 

2022, amounting to nearly one third of the U.S. existing coal-based closing in a decade. The 

commenters suggested that this will have significant implications for system reliability and that 

the interim compliance average deprives states of the ability to schedule these closures in a 
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reasonable way to maintain reliability and minimize costs. The commenters recommended that 

EPA eliminate interim compliance goals and allow states to establish an individualized glide 

path to 2030 compliance because the interim goals require significant changes and upgrades to 

the way power is generated, transmitted, consumed and integrated.

Commenters stated that the ERCOT grid has limited interconnections to the rest of country and 

also transmission line limitations into the non-ERCOT Texas utilities that operate in multi-state 

RTOs, and therefore has limited ability to import power from other RTOs. As noted previously, 

the commenters stated that transmission line planning and construction to address these issues 

typically takes 8.5 years, which will create timing issues if the 111(d) rule is implemented.

Commenters stated that there is not enough time between 2016 and 2020 to plan for and replace 

the lost coal plant capacity as well as resolve existing transmission constraints that may prevent 

replacement generation from being fully utilized. The commenters cited a Fall 2014 preliminary 

study of impacts to East Texas that concludes the compliance timeline presents significant 

problems with resource adequacy, estimates compliance costs would be $55-90 billion on a net 

present value basis, and results in an additional 14 GW of coal retirements. The study also noted 

that regional compliance and carbon reduction measures beyond EPA's four building blocks 

provide the most economic options for meeting the 111(d) rule CO2 reduction targets. The 

commenters assumed that many RTOs in the U.S. presumably have similar 5-6 year timelines for 

constructing transmission lines, which conflicts with the magnitude and timeline of coal plant 

retirements expected under the rule. The commenters stated that utilities and generators will be 

required to quickly find other sources of generation to serve their customers and also find a way 

to deliver this capacity to their customers; however, existing transmission constraints will 

prevent generation from being able to serve where it is needed most for the foreseeable future. 

The commenters cited and echoed comments filed by MISO, which recommended that EPA

eliminate the interim emission performance period and levels from the rule and that the final rule 

provide "structured flexibility to support a variety of compliance strategies to preserve reliability 

of the electric system." 

Commenters stated that the time frame necessary to plan, permit, and construct generation or 

transmission assets to meet resource needs is thrown into further flux due to changes in the 

NODA, which exacerbates an already existing concern with the planning horizon needed to meet 

future resource needs and could jeopardize reliability of the grid. The commenters further stated 

concern about the impact of the proposed rule on electricity cost should the cumulative worst 

case impact of various options introduced by the NODA be adopted in the final rule. 

Commenters stated that the suggested changes in the NODA could be very dramatic to any given 

state and that one month's consideration is inadequate and insufficient time for rule 

consideration. 

Commenters suggested that EPA should re-evaluate the compliance timeframes while 

considering the remaining useful life of the affected EGUs that have recent or soon-to-be 

installed air pollution controls, and that it should be the state's role to determine how it complies 

with the ultimate 2030 standard. Therefore, the commenters strongly recommended eliminating 

the interim compliance period and interim target. The commenters listed the following impacts 
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as major potential unintended consequences of the proposed rule: stranded utility assets; higher 

rates due to constrained economic dispatch in regional wholesale markets; risk to grid reliability; 

and market distortions if issues regarding the transfer of renewable generation in terms of MWh 

between states are not addressed. The commenters stated that several utility stakeholders have 

commented that the interim period forces an impending "compliance cliff" beginning in 2020 

that does not consider potential stranded assets and does not afford them the requisite time to 

prepare for compliance by properly going through their integrated planning process. The 

commenters further added that Kentucky ratepayers will be burdened with a $4.5 billion price 

tag for compliance with the MATS rule if retrofitted plants, which have an assumed remaining 

useful life of 20-30 years, are not allowed to operate. 

Finally, because of the regional nature of wholesale markets, the commenters stated that whether 

or not Kentucky chooses to be a part of a multi-state collaborative, the implementation of other 

state plans will potentially impact the ability to ensure that Kentucky ratepayers are afforded the 

least cost power to meet their needs. 

Commenters also discussed market distortions. The commenters stated that renewable generators 

tend to bid into the market at a price of zero or even negative as well as tends to reduce the run 

time of primarily natural gas generation, but it also tends to replace coal plants in off-peak hours. 

The commenters added that the level of renewable energy required by Rule 111(d) will further 

distort energy market prices, and provided a figure to illustrate how the energy production profile 

is altered when wind generation displaces natural gas production.

Response 4: Commenters discuss issues regarding the timing of implementation of the CPP. 

Issues involving timing of implementation of the CPP are discussed in Section VIII of the final 

rule preamble and Chapter 5 of this response to comments document. To facilitate the state 

planning process, this final rule establishes guidelines for the development, submittal, and 

implementation of state plans. The final rule describes the components of a state plan, the 

additional latitude states have in developing strategies to meet the emission guidelines, and the 

options they have in the timing of submittal of their plans. This final rule also gives states 

considerable flexibility with respect to the timeframes for plan development and implementation, 

as well as the choice of emission reduction measures. The final rule provides up to 2030 for full 

implementation of all emission reduction measures, with incremental steps for planning and then 

for demonstration of CO2 reductions that will ensure that progress is being made in achieving 

CO2 emission reductions. States will be able to choose from a wide range of emission reduction 

measures, including measures that are not part of the Best System of Emission Reductions 

(BSER), as discussed in detail in Section VIII.K of the preamble. 

Regarding concerns about coal retirements, reliability, cost minimization and market distortions, 

the final rule does not require any level of “redispatch” or shift in generation from one kind to 

source to another. States have wide latitude to choose the policies and measure that they will 

include in their state plans to achieve the reductions they need to achieve their state goals. The 

June 2014 proposal featured several important elements: state-specific, rather than sourcespecific goals; a 10-year interim goal that could be met “on average” over the 10-year period 

between 2020 and 2029; and a “portfolio” option for state plans. These features were intended to 

maximize the range of choices that states and utilities could select in order to achieve their

emission limitations at low cost while ensuring electric system reliability. The state goals 
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reflected an approach to the BSER that was intended to capture both the unique interconnected 

nature of the utility power sector and the set of actions, strategies and programs that are already 

under way at the state and utility level that have been resulting in CO2 emission reductions. They 

also reflected the fact that each state has its own energy profile and state-specific policies and 

needs relative to the production and use of electricity. The final guidelines continue to embrace 

this basic approach, but they also incorporate significant changes that respond directly to the 

comments, requests and concerns of states and other stakeholders, while better serving the 

critical objectives of the basic approach of the proposal.

Together with the proposal, this final rule is the product of one of the most extensive and longrunning public engagement processes the EPA has ever conducted, starting in the summer of 

2013 and continuing through December 2014, and resulting in millions of comments from 

stakeholders, which we have carefully considered over the past several months. The EPA gained 

crucial insights from the more than 4 million comments that the agency received on the proposal 

and on notices leading to this final rulemaking, from stakeholders that include state 

environmental and energy officials, tribal officials, public utility commissioners, system 

operators, utility and other industry representatives, labor leaders, public interest advocates, 

community leaders, and members of the public. As a result, the final emission guidelines reflect 

changes from the proposal that are directly responsive to the comments received from the many 

and diverse stakeholders. These final guidelines bear the stamp of the information and input the 

EPA gleaned from its extensive outreach process and from the comment record. The guidelines 

reflect thinking and information that states and utilities provided to us about both the best 

approach to establishing CO2 emission reduction requirements for EGUs and the most effective 

ways to create true flexibility for states and utilities in meeting these requirements. These final 

rules also reflect the results of EPA’s robust and ongoing consultation with federal, state and 

regional energy agencies and authorities, to ensure that the actions sources will take to reduce 

GHG emissions will not compromise electric system reliability or affordability of the U.S. 

electricity supply. 

Comment 5: Commenters discussed the upgrades needed to infrastructure as a result of the 

proposed rule. 

Commenters stated that the proposed rule will require significant upgrades to the transmission 

infrastructure, will result in the retirement of legacy baseload generation, will require 

development of new renewable generation resources, will affect the cost and reliability of the 

transmission system, and will take time to implement. The commenters explained that existing 

legacy resources are located near major load centers and serve to relieve constraints while 

maintaining grid reliability and retirement of these resources would result in a loss of reactive 

power, potentially exceeding thermal transmission limitations and the ability to maintain stable 

transmission voltages. The commenters suggested that to lessen the impact on reliability, new 

NGCCs located near retiring resources and significant transmission systems improvements 

would likely be required which would take at least five years. However, the commenters stated 

that given the competiveness of the current market, retirement decisions will likely be made with 

only 90 days of notification, impacting reliability and market costs. 
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The commenters noted that customer demand for electricity is growing in urban centers and 

stated that the proposed rule would accelerate the need for transmission projects at the costs of 

millions of dollars. The commenters also noted the time and costs associated with integrating 

new infrastructure, citing a $6.9 million dollar renewable energy transmission line project that 

took nearly a decade to complete. The commenters stated that although the project improves 

transmission capacity, it does not provide sufficient capacity to reliably integrate the amount of 

renewables necessary to achieve the requirements of the proposed rule and additional 

transmission improvements will be required if the locations of new installations are not at 

existing line locations. 

Commenters cited a preliminary reliability analysis performed by SPP on the reserve margin 

which concluded that the rule would have significant reliability impacts, would result in portions 

of the system so overloaded that cascading outages and voltage collapse would occur, and would 

result in SPP reserve margins 8.9% below its minimum reserve margin requirement with a 

capacity margin deficiency of approximately 4,500 MW by 2020 and even greater impacts to 

capacity deficiencies and its load serving members by 2024. The commenters detailed the SPP, 

the power grid model developed, and the assumptions used to analyze the proposed rule. The 

report stated that proper implementation of Rule 111(d) would require more comprehensive 

planning with stakeholders using new tools and metrics as well as 'broader system assessments 

of the bulk power system and natural gas pipeline and storage systems based on environmental 

constraints'. The commenters stated that the reliability impacts of Rule 111(d) might be at least 

partially offset by the construction of transmission line upgrades but planning and construction 

of new 345 kV transmission lines can typically take up to 8.5 years, at which time reserve 

margins and deficiencies would already have occurred.

Response 5: Numerous commenters have suggested that the time allowed states to develop state 

plans and to come into compliance with the interim deadline of 2020 is inadequate. Although the 

proposal provided flexibility in the timing with which emission reductions could be made over 

the course of the 2020-2029 period in order to achieve compliance with the emission limitations 

applicable to that interim period, many commenters perceived the start of the period as too soon 

and stated that it provided insufficient time for planning and investments necessary for sources to 

begin complying while maintaining reliable electricity supplies.

The EPA has considered these comments and in the final rule has established an interim 

compliance period of 2022-2029, providing two additional years for planning and investment 

before the start of compliance. The final rule provides sufficient time to ensure system reliability 

and a phase-in that allows for additional time to complete potential infrastructure improvements 

(e.g., natural gas pipeline expansion or transmission improvements) that might be needed to 

support more use of existing natural gas-fired generation, and provides states with increased 

ability to coordinate actions. EPA is persuaded by comments and by EPA’s own further analysis 

that this timeframe is appropriate given the nature and magnitude of planning and investment 

activities that will be necessary. Additionally, this phase-in increases the flexibility provided to 

states to address capital investment concerns regarding individual sources when scheduling 

compliance actions over the course of the interim and final periods. See Section VIII of the 

preamble for the final rule for a discussion of considerations regarding state plans.
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The SPP study referenced by the commenters used assumptions from the proposal that are 

superseded by the final rule. Please see the Resource Adequacy and Reliability technical support 

document for further discussion of the impact of the final rule on resource adequacy. 

Comment 6: Commenters discussed the costs of the proposed rule. 

Commenters stated that the NERA consulting group recently performed a comprehensive 

economic analysis of the impacts of the Clean Power Plan on the US energy markets and found 

that the EPA's proposed rule underestimated the CPP costs by $366 billion over the 15-year 

term. The commenters added that EPA's proposed rule does not adequately account for the cost 

impacts on the electric markets of additional gas pipeline infrastructure, transmission system 

upgrades, and other infrastructure investments needed before building blocks 2, 3, and 4 can be 

implemented. 

Commenters stated that EPA's conclusion that the costs to implement the proposed rule are 

approximately $7-9 billion nationwide vastly underestimates the costs of Rule 111(d). The 

commenters cited various estimates of $12-$15 billion for Texas alone, and a $42 billion 

cumulative annual cost increase for electricity and gas impacts from multiple environmental 

regulations in Texas.

Commenters stated that an ERCOT analysis has concluded that Rule 111(d) would result in 

increased energy costs for consumers of up to 20% in 2020, without accounting for the 

associated costs of transmission upgrades, natural gas supply infrastructure upgrades, 

procurement of additional ancillary services, energy efficiency investments, capital costs of new 

capacity, and other costs associated with the retirement or decreased operation of coal-fired 

capacity in ERCOT. The commenters noted that the analysis yielded increased usage of natural 

gas anticipated not only in ERCOT but nationally, accompanied by natural gas prices that could 

increase beyond the levels anticipated in this modeling analysis. 

Commenters stated that: EPA has underestimated employment effects and have therefore 

underestimated costs and biased the RIA findings towards the proposed rule; that EPA has not 

sufficiently completed a social cost analysis because it unsatisfactorily addresses secondary price 

effects corresponding to the increased opportunity costs of goods produced in manufacturingintensive states; and that EPA should address the impacts of increased electricity costs in 

producer states such as decreased industry and manufacturing. The commenters also disagree 

with EPA's assessment "that impacts on retail electricity prices are modest and fall within the 

range of price variability seen historically in response to changes in factors such as weather and 

fuel supply."

The Commenters’ analysis suggested a ten percent increase in the real price of electricity would, 

on average, be associated with a 1.1 percent reduction in state GDP, resulting in a loss of almost 

$2 billion to the state of Kentucky and represents a loss of over half of its automotive-related 

foreign exports, or eight percent of its total foreign exports. The commenters stated that EPA's 

analysis should reflect what portion of GDP loss is due to the proposed rule's effect on market 

conditions.
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The commenters also stated that EPA should address potential impacts from electricity-intensive 

industries like primary metal manufacturing migrating to countries with less stringent 

environmental regulations if the price of electricity rises, such as economically disadvantaged 

state and regional economies, increased unemployment, and worsening of the trade deficit. The 

commenters stated that these impacts would not only diminish the assumed regulatory benefit

but also threaten U.S. GDP and national security by lessening U.S. independence within the 

manufacturing sector.

The commenters also urged EPA to include a "safety net" provision in the final rule to account 

for these potential significant economic impacts and allow states that have increased exposure to 

natural gas price volatility to be able to dispatch their remaining coal-fueled fleet, if doing so will 

offset rate impacts that exceed ten percent. The commenters stated that this would be done in 

concert with the utility regulators and would provide an alternative in the case of weather 

anomalies, such as the 2014 "Polar Vortex" or severe natural gas pipeline disruptions, which 

could allow utilities to continue to provide safe and reliable electricity service to their end-use 

customers.

Commenters also stated that EPA has significantly underestimated the costs of the Proposed 

Guidelines because the Building Blocks are based on unreasonable assumptions and will be 

much more costly to implement than EPA assumes. The commenters added that the proposed 

rule is not justified by the purported benefits when those benefits are characterized properly, and 

that EPA has failed to accurately estimate the impacts of broad disruptions to the economy, 

energy security, and the reliability of the U.S. power system. 

Commenters noted that the rule has "questionable benefits" and urged EPA to “reconsider 

imposing such a costly, ineffective regulatory burden on the U.S. electricity system in favor of a 

more legally defensible, workable approach."

Response 6: Commenters asserted that the costs of the rulemaking are understated and benefits 

are ‘questionable’. To support assertions of understatement of costs, commenters reference 

studies conducted of the proposed CPP by the National Economic Research Associates (NERA) 

Economic Consulting and an Electric Reliable Council of Texas (ERCOT) analysis. Commenters 

also contend that EPA does not adequately account for the cost impacts of additional necessary 

gas pipeline infrastructure, transmission system upgrades, and other infrastructure investments 

nor fully consider the economic impacts of the guidelines including secondary market price 

impacts due to increases in the price of electricity.

The EPA disagrees with commenters’ statements that the projected costs of the CPP are 

understated, benefits of CPP are ‘questionable’ and benefits of the guidelines do not justify the 

costs. The EPA conducted an in-depth analysis of the benefits, costs, and economic impacts of 

the guidelines in the Regulatory Impact Analysis (RIA) for the final rulemaking for two 

illustrative compliance scenarios. As reported in the RIA, the estimated monetized benefits of the 

CPP far exceed the costs for the scenarios analyzed. Methods and models used to assess the 

benefits, costs, and economic impacts of the CPP are discussed fully in the RIA. Since states, 

territories and tribes will design plans to the implement the guidelines and are afforded 

considerable discretion and flexibilities in planning implementation design, the costs and benefits 

estimated by EPA are illustrative of the costs, benefits and economic impacts that may occur as a 
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result of the CPP. Under the final emission guidelines, states are not required to use any of the 

measures that the EPA determines constitute the Best System of Emission Reductions (BSER), 

or use those measures to the same degree of stringency that the EPA determines is achievable at 

reasonable cost; rather, CAA section 111(d) allows each state to determine the appropriate 

combination of, and the extent of its reliance on, measures for its state plan, by way of meeting 

its state-specific goal. See the preamble sections V and VIII.

EPA used the Integrated Planning Model (IPM) version 5.15 to estimate the illustrative costs, 

emission reductions and economic impacts of the CPP. IPM is a multi-regional, dynamic, 

deterministic linear programming model of the continental U.S. electric power sector. It provides 

forecasts of least cost capacity expansion, electricity dispatch, and emission control strategies 

while meeting energy demand and environmental, transmission, dispatch, and reliability 

constraints. EPA has used IPM for over two decades to better understand power sector behavior 

under future business-as-usual (i.e., baseline) conditions and evaluate the economic and emission 

impacts of prospective environmental policies. The model is designed to reflect electricity 

markets as accurately as possible. EPA uses the best available information from utilities, industry 

experts, gas and coal market experts, financial institutions, and government statistics as the basis 

for the detailed power sector modeling in IPM. The model documentation provides additional 

information on the assumptions discussed here as well as all other model assumptions and 

inputs.2 EPA used IPM to project likely future electricity market conditions with and without the 

rule. The level of energy efficiency-driven reductions in electricity demand, and their associated 

costs, are reported in chapter 3 of the RIA for the illustrative compliance scenarios analyzed. 

Within the IPM analysis reported in the RIA, cost impacts on the electric markets of needed 

additional gas pipeline infrastructure, transmission system upgrades, and other infrastructure 

investments as well as capital costs of new capacity, and other costs associated with retirement of 

generating units are considered. Additional demand-side energy efficiency measures that may be 

adopted in response to the regulation, and the resulting changes to future demand projections, are 

also accounted for in the illustrative compliance scenarios. The costs of energy efficiency 

programs are also incorporated into the cost estimates of the emission guidelines.

The EPA recognizes that reports have been issued by various groups stating costs vastly 

exceeding the EPA estimates. The NERA report and the ERCOT analysis contend huge costs 

estimates, sharp electricity prices increases and zero benefits likely result from the CPP. The 

underlying assumptions of these studies differ from EPA’s analysis and the results of these 

reports are inconsistent with EPA’s projections. For example, in one of NERA’s implementation 

cases that is often cited by commenters, there is an assumption that renewable energy and energy 

efficiency are not available. EPA believes the combination of all of these assumptions made by 

these organizations grossly overestimates negative impacts of the CPP. See responses to section 

8.6, comment 5 of this response to comment document for additional discussion of the studies

from various groups.

 

2 Detailed information and documentation of EPA’s Base Case using IPM (v5.15), including all 

the underlying assumptions, data sources, and architecture parameters can be found on EPA’s 

website at: http://www.epa.gov/airmarkets/powersectormodeling.html.
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Regarding resource adequacy concerns voiced by commenters, the EPA assessed resource 

adequacy to address concerns of reliability and finds that adequate reserve margins (excess 

generating capacity to meet peak demand) and flexibility across the system is expected to 

alleviate reliability challenges. In addition there is ample time for states, public utility 

commissions, utilities and grid operators to develop solutions to any local reliability changes. 

See the Resource Adequacy and Reliability technical support document for more information on 

this topic. When the EPA promulgates environmental regulations that affect the utility power 

sector, as we have done numerous times over the past four decades, we do so with the awareness 

of the importance of the efficient and continuous, uninterrupted operation of the interconnected 

electricity system in which EGUs participate. We also keep in mind the unique product that this 

interconnected system provides – electricity services – and the critical role of this sector to the 

U.S. economy and to the fundamental well-being of all Americans. 

Several commenters’ suggest that significant secondary market impacts will occur. One 

commenters suggests a ‘safety net’ to avoid such impacts. The implementation approaches 

adopted by the states, and the compliance strategies adopted by affected EGUs, will ultimately 

drive the magnitude and timing of secondary impacts from changes in the price of electricity, and 

the demand for inputs by the electricity sector, on other markets that use and produce these 

inputs. The flexibility afforded to states in their state plans allows them to encourage compliance 

methods that include design elements that may mitigate or promote particular impacts based on a 

state’s priorities. For example, states in the Regional Greenhouse Gas Initiative use the revenues 

from allowance auctions to support direct bill assistance for retail consumers, fund investments 

in clean energy and electricity demand reduction for business consumers, and support 

employment in the development of clean and renewable energy technologies. In its recent 

regulations to limit greenhouse gas emissions, California’s Air Resources Board designated a 

portion of allowances to be allocated to electric distribution companies for the purpose of 

mitigating electricity rate increases and their associated impacts. Other states may encourage 

compliance methods by affected EGUs with particularly robust deployment of renewables, 

energy efficiency, or natural gas to promote manufacturing demand or employment in those 

sectors. For example, energy efficiency investments may be targeted towards reducing both 

electricity consumption and natural gas or heating oil consumption, such as weatherization 

projects. The state plan approach and the composition of these programs will influence the 

effects of compliance with the final rulemaking.

Contrary to commenters’ assertions, EPA does address impacts to secondary markets in Chapter 

5 of the RIA that is available in the docket. EPA recognizes that changes in the price of 

electricity, natural gas, and coal can impact markets for goods and services produced by sectors 

that use these energy inputs in the production process. The direction and magnitude of these 

impacts is influenced by a number of factors. Changes in cost of production may lead to changes 

in price, quantity produced, and profitability of firms within secondary markets. If regulation 

results in changes in domestic markets that lead to an increase in imports, increases in production 

in countries with more energy-intensive production may lead to changes in CO2 emissions 

elsewhere. For years when the price of electricity, natural gas, or coal increased, one would 

expect decreases in production and increases in market prices in sectors for which these 

commodities are inputs, ceteris paribus. Conversely, for years when prices of these inputs 

decreased, one would expect increases in production and decreases in market prices within these 

sectors. Smaller changes in input price changes are assumed to lead to smaller impacts within 
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secondary markets. However, a number of factors in addition to the magnitude and sign of the 

energy price changes, influence the magnitude of the impact on production and market prices for 

sectors using electricity, natural gas, or coal as inputs to production. These factors are discussed 

in chapter 5 of the RIA. As previously stated, the flexibility afforded to states in developing their 

state plans allows them to encourage compliance methods which include design elements that 

may mitigate or promote particular impacts based on their priorities. 

Comment 7: Commenters discussed cost and reliability concerns. 

Commenters stated that Block 1 mandated coal plant retirements will also significantly impact 

cost and reliability in non-competitive areas of the country despite regulatory mechanisms in 

place to stabilize costs of electricity. The commenters stated that RTOs must maintain reliability 

in accordance with FERC approved tariffs and NERC reliability standards to avoid significant 

penalties, and that any rules, behavior, pricing, and revenue distribution that need to be changed 

as a result of Rule 111(d) must be filed with and approved by FERC. 

Commenters relayed reliability concerns from a number of industry stakeholders convened at an 

August 2014 workshop, including the impacts anticipated from the IPM-projected retirement of 

30% of total installed capacity by 2020 in one region, the transmission insufficiencies resulting 

from forced retirements, the exacerbation of reliability issues during weather-related natural gas 

curtailment issues, and the costs to purchase electricity to serve customers in the absence of 

transmission sufficiency. The commenters stated that EPA fails to recognize the significant 

investment in new capacity and new transmission required, or the time required for planning, 

approval, permitting and siting time needed to approve and install new generation and 

transmission as a result of the rule. The commenters relayed the notion that EPA must address 

these concerns in the rule. 

Commenters stated that stakeholders convened at an August 2014 workshop also discussed the 

conflict between Rule 111(d) and other EPA regulations. The commenters noted that one system 

has already spent $120 of the estimated $750 million in its coal plants installing emission 

controls to comply with MATS, however these plants are assumed by EPA to be shut down by 

2020. The stakeholder noted that the plants should not be retired without an opportunity to study 

the impact of these retirements on reliability; 2) without time to review available alternatives and 

issue required approvals for new transmission and generation and 3) without sufficient time to 

complete the engineering, design and installation of the chosen alternatives, all of which 

completed before the projected 2020 retirement date. The commenters stated that these conflicts 

demonstrate EPA's lack of analysis on the real effects that Rule 111(d) will have on grid 

reliability. 

Commenters cited a similar case to the proposed rule where the estimated cost would be $206 

million to maintain system reliability under rules that attempt to minimize the use of coal-fired

plants. 

Commenters stated that the NODA has introduced more uncertainty into the process because it is 

no longer clear what a state's goal will be in the final rule, thereby delaying the compliance 
14

planning process. The commenters discussed the glide path text in the NODA that does not 

prevent the potential for stranded assets, and the use of a 40 year "book life" which does not 

reflect the actual life of coal-fired power plants since 65 years is a more realistic time frame. The 

commenters also stated that the estimated 15 year "book life" of retrofits is not realistic given 

how capital intensive these projects are and suggested that thirty years is a more realistic 

estimate for remaining life of these projects. The commenters reported concern about rising costs 

of electricity that will cost ratepayers billions of dollars as new generation resources are built to 

replace those prematurely retired power plants.

Commenters expressed concern regarding the financial cost of replacement (backup) resources 

necessary to ensure the reliability of the electric grid. The commenters stated that construction of 

additional generating capacity to back the intermittent generation along with the additional 

transmission and infrastructure significantly increases the capital cost of meeting the Clean 

Power Plan rules, and operation of higher-priced resources for reserve adequacy will increase 

overall system costs. The commenters stated that they want to ensure that EPA has fully captured 

the capital and operating costs of the additional replacement generation and transmission that 

will be needed to ensure reliability under the Clean Power Plan scenario.

Response 7: The EPA addresses the costs of the emission guidelines in the preamble section V, 

in section XI of the preamble and the Regulatory Impact Analysis (RIA) Chapter 3 for 

illustrative compliance scenarios, and mitigation measures in the GHG Mitigation Measures 

TSD. System reliability is discussed in the Resource Adequacy and Reliability Analysis

technical support document. States, territories and tribes will design plans to implement the 

guidelines and allowed flexibilities in the design of their plan. Thus the costs and benefits 

reported in the RIA by EPA are illustrative of the costs, benefits and economic impacts that may 

occur as a result of the CPP. States, territories and tribes will design plans that will ensure 

compliance by electric generating units. Under the final emission guidelines, states are not 

required to use any of the measures that the EPA determines constitute the Best System of 

Emission Reductions (BSER), or use those measures to the same degree of stringency that the 

EPA determines is achievable at reasonable cost; rather, CAA section 111(d) allows each state to 

determine the appropriate combination of, and the extent of its reliance on, measures for its state 

plan, by way of meeting its state-specific goal. States will be able to address the economic 

interests of their utilities and ratepayers by using the flexibilities in this final action to: 1) reduce 

costs to consumers, minimize stranded assets, and spur private investments in renewable energy 

and energy efficiency technologies and businesses; and 2) if they choose, work with other states 

on multi-state approaches that reflect the regional structure of electricity operating systems that 

exists in most parts of the country and is critical to ensuring a reliable supply of affordable 

energy. The final rule gives states the flexibility to implement a broad range of approaches that 

recognize that the power sector is made up of a diverse range of companies of various sizes that 

own and operate fossil fuel-fired EGUs, including vertically integrated companies in regulated 

markets, independent power producers, rural cooperatives and municipally-owned utilities, some 

of which are likely to have more direct access than others to certain types of GHG emission 

reduction opportunities, but all of which have a wide range of opportunities to achieve reductions 

or acquire clean generation. 

The EPA recognizes the importance of ensuring that the program not undermine electric system 

reliability. As noted above, the EPA has consulted extensively with federal, regional and state 
15

energy agencies, utilities and many others about reliability concerns and ways to address them. 

Many aspects of the final rule’s design are intended to support electric system reliability. In 

addition to not requiring reductions before 2022 and to allowing significant flexibility in how the 

CO2 emission performance rates or the statewide CO2 goals are met, EPA is requiring that states 

demonstrate that they have considered reliability in developing their state plans and have 

consulted with state utility agencies and/or regional planning authorities. 

The final guidelines further provide states with the option of proposing amendments to approved 

plans in the event that reliability challenges arise that need to be remedied by amending the state 

plan. The final rule also includes a reliability safety valve to address situations where, because of 

an unanticipated catastrophic event, there is a conflict between the requirements imposed on an 

affected unit and the maintenance of reliability. The final rule also retains flexibilities presented 

in the proposal and offers additional opportunities, including opportunities for trading within and 

between states, and other multi-state compliance approaches that will further support electric 

system reliability. 

Additionally, see section 5.11 of this document for EPA’s response to the comments relating to 

stranded assets.

Comment 8: Commenters stated that a further analysis is needed to fully understand the 

impacts, costs and benefits of the proposed rule. 

Commenters stated that EPA has had little meaningful input from FERC on the reliability 

impacts of Rule 111(d), which raises reliability concerns. The commenters noted that the GAO 

report entitled, EPA REGULATIONS AND ELECTRICITY: Update on Agencies' Monitoring 

Efforts and Coal-Fueled Generating Unit Retirements is unclear on the exact nature and extent of 

consultations with FERC and DOE regarding the proposed rule, however a July 2014 House 

hearing held by the House Energy and Power Subcommittee of the House Energy and Commerce 

Committee suggested that the proposed rule may have unintended reliability consequences and 

that EPA did not seek a formal reliability analysis of Rule 111(d) from FERC. The commenters 

stated that the lack of a written analysis is clearly insufficient to provide EPA or the public with a 

thorough and unbiased analysis of the reliability impacts of Rule 111(d). The commenters stated 

that EPA has not performed a sufficient analysis of the reliability impacts of Rule 111(d), and 

must do so prior to issuing any final rule. Lastly the commenters stated that RTOs have not had 

sufficient time to perform a thorough reliability analysis of Rule 111(d) and therefore EPA 

should withdraw the proposed rule or at a minimum be delayed to allow the appropriate entities, 

including FERC, NERC and RTOs, to provide meaningful input and analysis on the reliability 

impacts of the proposed rule or any subsequent rule before it is adopted. 

Commenters stated that EPA did not conduct a rigorous cost/benefit analysis in developing the 

proposed rule, especially considering its 2030 final compliance date, and also failed to account 

for the uncertainty of factors affecting the energy landscape nearly two decades into the future. 

The commenters proposed that a rigorous cost/benefit analysis is vital to understand the intended 

outcomes, while also considering the social and economic costs of implementation of any 

rulemaking. 
16

Commenters discussed several limitations in the RIA, including that EPA did not incorporate the 

price risk associated with increased reliance on natural gas, did not estimate consumer sensitivity 

to changes in electricity prices, did not use methods that "permit estimation of economy-wide 

effects" (as stated in the RIA), and is "limited to the direct changes in the amount of labor needed 

in the power, fuels and generating equipment sectors directly influenced by compliance with the 

Guidelines." The commenters stated that omitting price elasticity of demand violates economic 

principles and biases the RIA findings towards environmental regulation by underestimating the 

costs of environmental regulation. The commenters also stated that by failing to take into 

account the potential market responsiveness of electric power consumers to changes in electricity 

prices, EPA is severely underestimating the costs of environmental regulation, particularly for 

electricity-intensive manufacturing processes. The commenters further added that cost of moving 

to greater dependence upon natural gas electricity generation is greatly underestimated and that 

consumers will bear a greater burden of future electricity price increases due to compliance with 

this proposal. Lastly, the commenters cited studies that found that higher electricity prices are 

associated with statistically significant reductions in employment.

Commenters stated that EPA has failed to complete pivotal assessments requested by the Science 

Committee in 2014. 

Commenters stated that EPA must conduct state-by state cost, infrastructure and permit 

limitation requirement analyses and determine the impact on reliability, renewable feasibility and 

early actions by utilities and states.

Commenters expressed concerns in the outcome of components from the BSER, which may 

encourage unsustainable practices that will neither reduce climate change nor best protect the 

environment and human health. 

Response 8: The EPA disagrees with the commenters’ assertion that EPA did not conduct a 

rigorous cost/benefit analysis of the CPP. A comprehensive analysis of the benefits, costs, and 

economic impacts of the proposed and final CPP was conducted by EPA for illustrative control 

scenarios and the results are reported in the final rule preamble Section XI and the Regulatory 

Impact Analysis (RIA) for the proposal and final guidelines in the docket for the rulemaking. 

Section V of the preamble reports the cost analysis conducted for the final emission guidelines.

With regards to comments concerning electric system reliability, the final emission guidelines 

reflect the paramount importance of ensuring electric system reliability. EPA engaged in 

extensive consultation with key agencies responsible for reliability, including the Federal Energy 

Regulatory Commission (FERC) and the Department of Energy (DOE), among others and has 

considered commenters’ concerns. EPA is addressing these concerns in large part by moving the 

start date of the program from 2020 to 2022 and significantly adjusting the interim goals to avoid 

an abrupt initial reduction expectation. These changes provide more time for planning, 

consultation and decision making in the formulation of state plans and in EGUs choice of 

compliance strategies, all within the existing extensive structure of energy planning at the state 

and regional levels. In addition, the various forms of flexibility retained and enhanced in the final 

rule, including opportunities for trading within and between states, and other multi-state 

compliance approaches, will further support electric system reliability. In addition, EPA is 

including in the final rule a requirement that each state demonstrate in its state plan submittal that 
17

it has considered reliability issues in developing its plan, which it can do, for example, by 

consulting with other state utility agencies and/or regional planning authorities. 

EPA recognizes that issues may arise during the implementation of the guidelines that may 

warrant adjustments to a state’s plan in order to maintain electric system reliability. The final 

guidelines further provide states with the option of proposing amendments to approved plans in 

the event that unanticipated and significant reliability challenges arise. And, as a final element 

of reliability assurance, the rule also provides for a reliability safety valve for individual sources 

where there is a conflict between the requirements the state plan imposes on a specific affected 

EGU and the maintenance of electric system reliability due to an extraordinary event. In 

addition, the EPA, DOE and FERC have agreed to coordinate efforts to help ensure continued 

reliable electricity generation and transmission during the implementation of the final rule. The 

three agencies have set out a memorandum that reflects their joint understanding of how they 

will work together to monitor implementation, share information, and to resolve any difficulties 

that may be encountered.

Contrary to commenters’ assertions, EPA does address impacts to secondary markets in Chapter 

5 of the RIA that is available in the docket. EPA report changes in electricity prices, coal and 

natural gas potentially resulting from the CPP. For years when the price of electricity, natural 

gas, or coal increased, one would expect decreases in production and increases in market prices 

in sectors for which these commodities are inputs, ceteris paribus. Conversely, for years when 

prices of these inputs decreased, one would expect increases in production and decreases in 

market prices within these sectors. Smaller changes in input price changes are assumed to lead to 

smaller impacts within secondary markets. However, a number of factors in addition to the 

magnitude and sign of the energy price changes, influence the magnitude of the impact on 

production and market prices for sectors using electricity, natural gas, or coal as inputs to 

production. These factors are discussed in chapter 5 of the RIA. Impacts to secondary markets 

will be dependent upon a variety of factors discussed in the RIA chapter 5. It is important to 

note that these results are based upon illustrative scenarios of state plans that may be undertaken. 

As previously stated, the flexibility afforded to states in developing their state plans allows them 

to encourage compliance methods which include design elements that may mitigate or promote 

particular impacts based on their priorities. 

In response to the comment concerning economy-wide modeling, one potential quantitative 

approach to evaluating the secondary market impacts is to use a computable general equilibrium 

(CGE) model. CGE models are able to provide aggregated representations of the whole economy 

in equilibrium in the baseline and potentially with regulation in place. As such, CGE model may 

be able to capture interactions between economic sectors and provide information on changes 

outside of the directly regulated sector. 

When considering the secondary market impacts of a regulation both the effects of the costs, the 

benefits of improved air quality, and their interaction may be relevant. Therefore, in the Second 

Prospective Analysis under Section 812 of the Clean Air Act Amendments the EPA incorporated 

a set of health benefits arising from air quality improvement into the EMPAX CGE model when

studying the economy-wide impacts of the Clean Air Act. While the external Council on Clean 

Air Compliance Analysis (Council) review of this study stated that inclusion of benefits in an 

economy-wide model “represent[ed] a significant step forward in benefit-cost analysis”, the EPA 
18

recognizes that serious technical challenges remain when attempting to evaluate the benefits and 

costs of potential regulatory actions using economy-wide models. 

In light of these challenges, the EPA has established a Science Advisory Board (SAB) panel on 

economy-wide modeling to consider the technical merits and challenges of using this analytical 

tool to evaluate costs, benefits, and economic impacts in regulatory development. The panel will 

also be asked to identify potential paths forward for improvements that could address the 

challenges posed when economy-wide models are used to evaluate the effects of regulations. The 

final panel membership was announced in March 2015 and the first of multiple face-to-face 

meetings of the SAB panel has been scheduled for October 2015. The EPA will use the 

recommendations and advice of this panel as an input into its process for improving benefit-cost 

and economic impact analyses used to inform decision-making at the agency.

Comment 9: Commenters stated that EPA must answer the following questions before the 

adoption of Rule 111(d): how generators will acquire and pay for replacement capacity for units 

forced to retire under the rule, how generators will be compensated for stranded costs associated 

with retired units and whether there will be sufficient natural gas and associated infrastructure 

available to replace lost coal plant capacity.

Response 9: The EPA considered these factors in developing illustrative scenarios of 

implementation actions that may be taken as a result of the final CPP. However, States, tribal 

governments and territories have the responsibility of developing implementation plans for the 

CPP. States, tribal governments and territories are provided substantial flexibilities in achieving 

the emission reduction goals established by EPA. Thus states, tribes and territories may 

incorporate approaches to minimize the cost of implementation, address reliability concerns and 

issues involving stranded assets as well as consider related infrastructure needs associated with 

implementing the CPP in formulated plans. EPA has established a relatively long planning and 

implementation period that provides states with substantial flexibility regarding methods and 

timing of achieving emission reductions. States may wish to make adjustments to their 

implementation approaches along the way, or as conditions change, may need to make 

adjustments to ensure that their plans achieve the CO2 emission performance rates or state CO2 

emission goals as intended. As a result, the agency envisions that the EPA, states and affected 

EGUs will have an ongoing relationship in the course of implementing this program. The EPA 

believes that timing flexibility in implementing measures provides significant benefits that allow 

states to develop plans that will help achieve a number of goals, including, but not limited to 

reducing cost, addressing reliability concerns and addressing concerns about stranded assets. 

Comment 10: Commenters discussed the impacts of the rule on cooperatives. 

Commenters stated that there are significant concerns about the effect of Rule 111(d) on state 

cooperatives. The commenters stated that EPA fails to address many other issues, including how 

Rule 111(d) would work for companies with power plants located in multiple states and 
19

operating in different RTOs and how Rule 111(d) will apply to entities that are not currently 

regulated by state public utility commissions. The commenters explained that coops and 

municipally-owned electric utilities are subject to only limited state oversight no regulation of 

generation assets however these entities are clearly intended to be subject to and are affected by 

Rule 111(d). The commenters stated that without the requisite state law authority to regulate 

these entities, it is unclear how coops and MOUs can be included as part of either a state or 

federal plan to implement Rule 111(d). 

Commenters also stated that the total cost impact to its members of Rule 111(d) to be $2.9 billion 

including $365 million in stranded costs and $585 million in replacement power costs due to the 

retirement of four coal units. 

Commenters stated that EPA failed to address the significant differences between smaller and 

larger utilities and the disproportional impacts that these compliance measures would have on 

utilities like cooperatives and municipalities. The commenters stated that smaller utilities have 

less generation, less diverse fleets, and significantly different customer bases from the standpoint 

of the mix of industrial, commercial and residential loads. The commenters provided Georgia as 

an example, where 90% of cooperative customers are residential and many of them are located in 

rural and impoverished areas, and many of whom will be disproportionally affected at a time 

when many residents are already struggling to pay their power bills.

Response 10: The final guidelines are designed to build on and reinforce progress by states, 

cities and towns, and companies on a growing variety of sustainable strategies to reduce power 

sector CO2 emissions. In their CAA section 111(d) plans, states will be able to rely on, and 

extend as they choose, programs they may already have created to address the power sector. For 

example, those states committed to Integrated Resource Planning (IRP) will be able to establish 

their CO2 reduction plans within that framework, while states with a more deregulated power 

sector system will be able to develop CO2 reduction plans within that specific framework. Each 

state will have the opportunity to take advantage of a wide variety of strategies for reducing CO2

emissions from affected EGUs. The EPA and other federal entities, including the U.S. 

Department of Energy (DOE), the Federal Energy Regulatory Commission (FERC) and the U.S. 

Department of Agriculture, among others, are committed to sharing expertise with interested 

states as they develop and implement their plans. 

States will be able to address the economic interests of their utilities and ratepayers by using the 

flexibilities in the final CPP to: 1) reduce costs to consumers, minimize stranded assets, and spur 

private investments in renewable energy and energy efficiency technologies and businesses and 

to address issues relating specifically to cooperatives and municipalities and smaller utilities; and 

2) if they choose, work with other states on multi-state approaches that reflect the regional 

structure of electricity operating systems that exists in most parts of the country and is critical to 

ensuring a reliable supply of affordable energy. The final rule gives states the flexibility to 

implement a broad range of approaches that recognize that the power sector is made up of a 

diverse range of companies of various sizes that own and operate fossil fuel-fired EGUs, 

including vertically integrated companies in regulated markets, independent power producers, 

rural cooperatives and municipally-owned utilities, all of which have a wide range of 

opportunities to comply with this rule.
20

Comment 11: Commenters stated that EPA has failed to include the IPM model run 

information, all of the parsed files, and information on the simulated 2030 runs, which violates 

Section 317 and Section 307(d)(5).

Response 11: The EPA disagrees with the commenters. IPM model run and parsed files for the 

proposal and final rulemaking are available in docket EPA-HQ-OAR-2013-0602. Detailed 

information and documentation of EPA’s Base Case using IPM (v5.15), including all the 

underlying assumptions, data sources, and architecture parameters can be found on EPA’s 

website at: http://www.epa.gov/airmarkets/powersectormodeling.html.

Comment 12: Commenters stated that notwithstanding the improper accounting of costs, there 

still remains the fact that compliance decisions related to existing assets will not be made until 

well after state compliance plans are approved. The commenters noted that in the case of multistate plans with 1-year extensions at the state level, this approval could come mid-2019 or later. 

The commenters stated that this is completely inconsistent with the assumption in EPA's 

modeling that compliance decisions related to both the disposition of existing assets and 

investment in new assets could be made to effectuate changes in the 2016 generating mix. The 

commenters noted that a similar argument applies to the construction of new renewable energy 

efficiency measures and energy efficiency programs. 

The commenters stated that the economic selection of unit retirements and new generation in the 

2016 model year artificially skews the cost assessment of the proposal lower by assuming 

premature economic actions without a firm regulatory basis. Economic compliance decisions 

cannot be made and will not be made until well after state plans are approved. Due to this fact, in 

the IPM model assumptions, EPA must assume that any changes in the electric generating mix 

cannot occur until at least 2020 and then factor in the relevant development timelines for the 

various generating technologies. Using this realistic assumption for technology deployment 

would thereby limit any changes in the electric generation mix until well into next decade, which 

is reasonable given the timeline for state plan development, regulatory action and compliance 

determinations.

Response 12: Regarding the timing of actions taken in EPA’s illustrative compliance analysis, 

see Chapter 3 of the RIA for discussion of the “perfect foresight” assumption made in the 

modeling.

The EPA did modify the final guidelines to reflect comments received regarding implementation 

timing for the CPP. Some of the changes in the final guideline do address implementation of the 

guidelines. Specifically, EPA provides for a new start date of 2022 for the interim period, a 

gradual application of the Best System of Emission Reductions (BSER) over the 2022-2029 

interim period, such that a state has substantial latitude in selecting its own emission reduction 

“glide path” over that period, and additional changes discussed in the preamble for the final rule.

See preamble section I for a discussion of additional changes made to the final rule.
21

The suite of changes made in the final CPP is the product of compelling information and analysis 

provided to the EPA via the comment record – and by the work of, and consultation with, other 

federal agencies, notably the Federal Energy Regulatory Commission (FERC) and the U.S. 

Department of Energy (DOE). Earlier this year, FERC conducted a series of technical 

conferences comprising one national session and three regional sessions. The information 

provided by workshop participants echoed much of the material that had been submitted to the 

comment record for this rulemaking. On May 15, 2015, the FERC Commissioners, drawing upon 

information highlighted at the technical conferences, transmitted to the EPA some suggestions 

for the final rule that are available in the docket. In addition, states, utilities, and reliability 

entities asked EPA to ensure adequate time for states, utilities, and grid operators to implement 

strategies to achieve CO2 reductions. They expressed concern that, in the proposal, at least some 

states were required to reduce emissions in 2020 to levels that would require abrupt shifts in 

generation in ways that raised concerns about impacts to electric system reliability, ratepayer 

bills, and stranded assets. To many commenters, the proposal’s 2020 start date for achieving CO2

reductions, together with the stringency of the interim CO2 goal, raised significant reliability 

implications. In this final rule, the Agency is addressing these concerns, in part, by adjusting the 

compliance timeframe from a 10-year interim period that begins in 2020 to an 8-year interim 

period that begins in 2022, and by refining the approach for meeting interim CO2 emission 

performance rates (a glide path separated into three steps, 2022-2024, 2025-2027, and 2028-

2029, and also achievable “on average” over the 8-year interim period). In response to the 

concerns of commenters that the proposal’s 10-year interim target failed to afford sufficient 

flexibility, the final guidelines’ approach will provide states with realistic options for 

customizing their emission reduction trajectories. Of equal importance, the approach provides 

more time for planning, consultation and decision making in the formulation of state plans and in 

EGUs’ choices of compliance strategies. Both FERC’s May 15, 2015 letter and the comment 

record, as well as other information sources, made it clear that providing sufficient time for 

planning and implementation was essential to ensuring electric system reliability.

Comment 13: Emission guidelines should consider protection of wildlife and include renewable 

energy and energy efficiency measures.

Commenters noted that EPA's Proposed Rule, by reducing reliance on coal burning for power 

generation, will help protect wildlife by reducing not only the carbon pollution, but also other 

harmful pollutants like mercury. The commenters asked that EPA work to ensure that the Rule 

ensures that it achieves the deepest reductions possible by requiring states to use wildlifefriendly renewable energy and energy efficiency and not simply more natural gas burning.

Response 13: The EPA agrees with these commenters assertion that the emission guidelines 

should consider protection of the environment by reducing carbon emissions from fossil fuel 

fired generating units. The EPA is establishing final emission guidelines for states, U.S. 

territories, and tribes to follow in developing plans to reduce greenhouse gas emissions from 

existing fossil fuel-fired electric generating units (EGUs). Specifically, the EPA is establishing: 

1) CO2 emission performance rates for two source categories of existing fossil fuel-fired EGUs, 

fossil fuel-fired electric utility steam generating units and stationary combustion turbines, and 2) 

guidelines for the development, submittal and implementation of state plans that implement the 
22

CO2 emission performance rates. The final rule will continue progress already underway in the 

U.S. to reduce CO2 emissions from the utility power sector. In order to comply with the 

guidelines, states, U.S. territories and tribes may pursue a myriad of strategies including 

investment in renewable energy and energy efficiency measures designed to reduce the demand 

for electricity.

8.1 BASELINE EMISSIONS

Comment 1: Commenters stated that EPA uses 2012 as a baseline year inconsistently which 

may mean that some or all states' energy generation and energy efficiency is omitted. For 

example, nuclear generation and hydropower appear to be excluded from the total electricity 

denominator in the calculation

Response 1: See preamble section VI.D.

Comment 2: Commenters stated that EPA incorrectly uses 2005 as the baseline year which 

inflates the GHG emissions reductions attributable to the rule because 2005 emissions were 

higher. The commenters stated that the EPA therefore failed to conduct a proper cost 

effectiveness calculation.

Response 2: EPA disagrees with this comment. EPA’s analysis of cost-effectiveness for each of 

the Building Blocks did not rely on a 2005 baseline. For more information, see section V of the 

preamble.

Comment 3: Commenters stated that it is well documented that 2012 was not a representative 

year for electric generation in this country and supports using a different baseline for calculating 

the Mandatory Goals that does not result in goals that are less than the new source performance 

standard. The commenters also stated that cogeneration coal emission rates would not be not 

expected to fluctuate as substantially as EPA's data indicates occurred for the handful of 

cogeneration facilities that EPA uses to calculate Virginia's Mandatory Goals. The commenters 

therefore requested that EPA should remove the effect of cogeneration emission rates from any 

baseline data used to calculate carbon emission rates required for Virginia and stated that historic 

carbon emission rates identified for other coal-fired EGUs in Virginia (i.e., those that are not 

cogeneration facilities) appear more reliable for purposes of calculating emission rates in 

Virginia.

Response 3: EPA disagrees with this comment. See preamble section VI.D.
23

Comment 4: Commenters stated that EPA has not clearly defined the baseline for the ESPS 

RIA, nor has EPA justified whatever the chosen baseline is. The commenters said the benefits, 

co-benefits and costs that EPA estimates for the proposed regulation are importantly dependent 

on whatever EPA has defined the baseline to be. The commenters added that absent a clear 

statement of what the baseline is for the analysis and why it was chosen, the RIA is incomplete 

and very difficult for the public to review. 

Commenters stated that they disagree with the arguments to the effect that defining the baseline 

will have relatively little impact on net benefits and argued that the choice of baseline will have a 

major effect on the estimated net benefits for the rule as well as on costs and benefits 

individually. The commenters also said that in the ESPS RIA, EPA never clearly states what the 

baseline assumptions for 2020, 2025, or 2030 are, nor does the Agency even list the data 

elements that are addressed in the baseline. The commenters provided an extensive discussion on 

all the topics that EPA needs to clarify regarding the baseline, and stated that it would be helpful 

if EPA were to provide the reader of the RIA with information about the baseline and to explain 

why the Agency chose to make the specific projections for each that have been included in the 

baseline. The commenters also said that EPA's failure in the RIA to address the baseline violates 

the requirements laid out in the RIA guidance manuals issued by each, OAQPS, EPA and OMB. 

Commenters further stated that IPM modeling used by EPA failed to take into account air quality 

improvements associated with several rules for which specific implementation controls have yet 

to be specified and will occur before the proposed guidelines are fully implemented, thus 

existing rules and not the proposed guidelines will address any public health danger from PM2.5 

and O3. 

Commenters stated, "EPA appears to have grossly exaggerated the benefits from the proposed 

rule, particularly because most reductions in carbon dioxide have already occurred since 2005." 

"EPA should not be claiming benefits that have already been achieved, but rather should be 

limited to those benefits that are anticipated from the implementation of the proposed rule." 

Response 4: EPA disagrees with these comments. See the RIA for a discussion of the baseline 

utilized in the impacts analysis, and the docket for this rulemaking which includes full 

documentation and modeling outputs for the base case. This baseline appropriately includes 

projected impacts of federal and state laws and regulations whose provisions were either in effect 

or enacted and clearly delineated by March 2015. As discussed in the Chapter 4 of the RIA, 

benefits were estimated relative to the projected baseline, not 2005.

8.2 EMISSION REDUCTIONS

Comment 1: Commenters asked about the overall impact of the rule on "restoring the energy 

balance of earth, stabilizing the climate system, or preventing further ocean acidification." 

Commenters stated that "The Proposed Rule does not provide any information about how a 30 

percent reduction in emissions from 2005 levels fits with overall national emission reductions 

across all sectors." Commenters further stated that "The Proposed Rule does not provide an 
24

explicit standard for restoring the energy balance of earth or stabilizing the climate system, or 

preventing further ocean acidification." According to commenters, "Nor does the EPA explain 

how or whether the Proposed Rule is consistent with that standard of protection and will achieve 

it in concert with other emission reduction plans, rules, efforts."

Response 1: As discussed in the preamble, the requirements of this rule are consistent with 

section 111 of the Clean Air Act.

Comment 2: Commenters stated that the Proposed Rule is not necessary because GHG 

emissions have decreased and efficiency has improved in the U.S., EPA does not have the legal 

capacity to implement the rule, and EPA has not appreciated the costs that will be incurred by 

EGUs, industry and manufacturing.

Response 2: EPA disagrees with the comment. The Agency considered costs of the rule, and 

presents the analysis in Chapter 3 of the RIA.

Comment 3: Commenters stated that EPA's proposal to reduce CO2 will have a minimal impact 

on global CO2 concentrations. Commenters stated that independent analysis indicates 

approximately a one percent reduction in global greenhouse gas emissions as a result of the CPP 

rule, meaning that it will have little real effect toward meeting its stated goal.

Commenters stated that U.S. coal generation accounts for only 4 percent of global GHG 

emissions, and that Asia consumes more than six times as much coal. The commenters further 

stated that the effect of the proposed rule would reduce sea level rise by one one-hundredth of an 

inch and reduce the average global temperature increase by less than two one-hundredths of a 

degree.

Commenters stated that "final standards that restrict domestic industry without gains that can be 

realized on their own do not meet the intent of the 1970 CAA". Therefore, the commenters 

recommended that EPA evaluate whether this proposed rule will noticeably reduce the 

concentration of carbon dioxide in the atmosphere, result in measurable improvements to public 

health and welfare, and is the most reasonable and cost-efficient mechanism to achieve the 

desired reductions.

Commenters stated that EPA should not move forward with the proposed rule without addressing 

what the potential impact of the rule is on global GHG emissions.

Response 3: See preamble Section II.F.

Comment 4: Commenters stated that EPA's economic justification for the proposed rule relies 

heavily on the reductions in a Section 108 pollutant (PM), however the provision explicitly 
25

prohibits regulation of a Section 108 pollutant. The commenters stated that EPA must defend the 

regulation of GHGs based on the benefit of reducing GHGs.

Response 4: In the RIA, the EPA estimated the health co-benefits that may be produced from 

reductions of non-GHG air pollutants resulting from strategies to reduce GHG emissions in the 

final CPP. However, reductions in these non-GHG pollutants are not regulated under the CPP 

and do not inform the BSER analysis underpinning its requirements.

Comment 5: Commenters stated that the CPP does not call for a large enough reduction. 

Commenters stated that the proposed plan does not put the nation on a trajectory to achieve the 

80 percent reduction in emissions by 2050 that scientists say is necessary to avoid the worst 

impacts of a changing climate. 

Commenters stated that more substantial emission reductions are readily available from states 

that have not yet developed and implemented aggressive energy efficiency and renewable energy 

programs and suggested that these reduction opportunities can be realized cost effectively, while 

creating jobs, maintaining reliability, and producing economic benefits. Commenters added that 

some states are demonstrating the feasibility of reducing emissions by 50% and provided New 

York as an example of a state that has achieved a 40% reduction in emissions since 2005 even 

though the energy system was already relatively clean. The commenters further stated that the 

region has grown and continues to grow the regional economy by 7% since 2005, and 

reinvestment of auction proceeds is contributing to this economic growth. Analyses predict that 

over $8 billion and more than 125,000 job-years will be added to the region's economy as a 

result of the cap reduction through 2040. The commenters further stated that greater parity in the 

emission reduction targets will help facilitate the development of regional strategies to achieve 

compliance.

Commenters stated that the U.S. can achieve a 60 percent reduction in emissions relative to 2005 

according to UCS analysis. Commenters stated that a prime opportunity exists to rethink and 

retool the rule in order to provide steady progress in greenhouse gas reduction and to allow for 

the necessary transformation of our electric utility energy sector to provide sustainable solutions 

for the future.

Commenters stated that an emission reduction of 50% by 2030 and 80-100% by 2050 is 

necessary to avoid the catastrophic impacts of climate change and cited NREL 2012, Jacobson 

and Delucci 2009 & 2011 as support that the U.S. has the technologic and economic capability to 

meet these goals.

Similarly, commenters stated that larger emission reductions from the electricity sector should be 

economically and technically feasible through renewable resource use.

Commenters stated that a stronger standard calling for 35-40% emissions reductions would yield 

more benefits through energy efficiency and renewable energy.
26

Commenters cited the IPCC 5th report and the related literature to discuss the reductions 

needed to be considered adequate. The commenters recognized that a reduction of this magnitude 

requires global support, but stated that the U.S. must lead the way as the most technologically 

advanced nation. The commenters listed several impacts of climate change and provided 

citations.

Response 5: As discussed in section VI of the final rule preamble of the CPP, the requirements 

of this rule are consistent with section 111 of the Clean Air Act.

Comment 6: Commenters stated that EPA can achieve significant emission reductions in the 

range of 44 percent below 2005 levels in 2030 at reasonable costs, as demonstrated by the 

commenters modeling runs. The commenters also stated that when EPA sets final state targets, it 

should use the corrected formula proposed in the Notice of Data Availability to ensure that the 

Clean Power Plan fully reflects the potential for emission reductions achievable under the best 

system of emission reduction. The commenters evaluated the impacts of these state targets based 

on model runs:

• Under the NODA Dirtiest First case, emissions fell to 1,693 million short tons in 

2020, or 36 percent below 2005 and 24 percent below 2012 emissions levels. In 

2030, emissions declined further to 1,495 million short tons, or 44 percent below 

2005 levels and 33 percent below 2012 levels. Total annual compliance costs in 

2020 were $7.7 billion, $4.3 billion in 2025, and $10.6 billion in 2030. 

• The NODA Dirtiest First + Min Gen Conversion case showed 1,705 million short 

tons in 2020, and declined further to 1,485 million short tons in 2030. On an 

annualized basis, compliance costs in the NODA Dirtiest First + Min Gen 

Conversion case totaled $6.5 billion in 2020, declined to $4.3 billion in 2025, and 

rose again to $10.5 billion in 2030.

In 2030, the total benefits of the emission reductions, including reductions of SO2 and CO2, 

range between $73 and $119 billion, with the benefits outweighing the costs by $62 to $108 

billion. The commenters also anticipated that compliance costs would be lower if states choose 

to take a regional approach. In addition to the NODA Dirtiest First cases, Commenters analyzed

the state targets based on the Pro Rata Approach, as described in the October 2014 NODA. 

Under the NODA Pro Rata Approach state targets, outcomes suggest that EPA could achieve 10 

percent more emission reductions with 17 percent less in costs than set forth in the proposed 

standards. The total benefits of the emission reductions, including reductions of SO2 and CO2, 

range between $61 billion and $96 billion, exceeding the costs of compliance by nearly nine 

times. The net benefits are valued between $54 and $89 billion in 2030. 

Response 6: See preamble section VI.D for a discussion of the final performance rate-setting 

equation and computation procedure.
27

Comment 7: Commenters suggested the establishment of a registry to "help track the impacts of 

energy efficiency programs and credits from those programs that could be used for 111(d) 

compliance. The main benefits of such a registry are that it could create a market for energy 

efficiency and avoided carbon emissions, while also potentially helping states avoid challenges 

associated with double-counting. However, such an approach requires determining the 

appropriate "use cases" for such a registry. EPA should provide additional guidance to states on 

how best to approach registries and avoiding double counting concerns from an EPA perspective. 

NASEO, like the other state groups, supports the use of registries."

Response 7: See response to comment 22 in section 5.2.4.

Comment 8: Commenters requested that EPA should assess the reductions that have already 

been realized directly or indirectly as a result of other federal, state and local laws, rule or 

requirements to determine whether additional emissions standards are necessary.

Relatedly, commenters discussed the current and future electricity mix in Texas and stated that 

the state is likely to achieve substantial reductions in emissions even without the proposed rules. 

The commenters estimated that Texas will achieve a 15 percent reduction in water consumption, 

a drop in SO2 emissions of one-third, a 29 percent drop in NOX, a 31 percent drop in the carbon 

intensity rate and a total CO2 emissions decline by 18 percent between 2012 and 2029 when 

modeling Option 1.

Commenters stated that much of the air quality benefits that EPA suggested can be delivered 

through BSER Block 2 switching of dispatch from existing coal to existing natural gas, which 

already have been delivered in Minnesota. The commenters said in November 2014, the benefits 

from Minnesota utility installation of emission control measures were reviewed by the MPCA 

and Minnesota Department of Health, and that since the air quality improvements already 

achieved through Minnesota electric generating unit emission reduction measures were 

recognized, it stated that other emission source categories now need to be the focus for achieving 

further improvements in Minnesota air quality (e.g. transportation). 

Response 8: EPA has appropriately estimated the emissions impacts of the rule, including 

consideration in the base case of any reductions projected to occur as the result of other federal, 

state, and local laws. See Chapter 3 of the RIA.

Comment 9: Commenters supported the proposed rule's emission reductions. Commenters 

stated that the rules have been crafted in an attempt to achieve significant reductions in carbon 

dioxide emissions at the least cost possible, allow a very long implementation period, and great 

flexibility. The commenters urged EPA not to abandon the 1.5 per annum goal for efficiency. 

Commenters 18761 stated that the proposed rule will allow states to showcase particular 

strengths and allow the U.S. to shift toward renewables. 
28

Commenters also supported the proposed rule and stated that the rule is complementary to 

Minnesota's emissions reduction goals. The commenters stated that the state expects to generate 

28.5% of its electricity using renewable sources by 2030, and up to 40% may be technically 

feasible. 

Similarly, commenters stated that North Carolina's Clean Power Plan emissions targets are 

achievable and that North Carolina is already on track to achieve even greater emission 

reductions.

Commenters cited DOE which calculated that 20 percent wind energy would reduce carbon 

emissions by 23 percent by 2030 and reduce carbon dioxide emissions by 550 million metric 

tons by 2050, as well as save $520 billion in damages due to climate change. The commenters 

also cited DOE's calculation that the average cost of wind energy has fallen 43 percent over the 

last four years and stated that renewables like wind and solar have no variable fuel costs so that 

prices can be locked in for two decades or more, protecting electricity consumers from 

fluctuating prices. The commenters also cited the American Wind Energy Association's 2013 

annual market report indicating that the wind industry has invested over $9.5 billion in six states, 

and that the Solar Energy Industries Association counts over 900 solar companies throughout the 

value chain in those six states.

Commenters stated that Industrial Energy Efficiency projects result in demand side EE and can 

achieve low-cost, verified substantial emission reductions, especially within the context of SEP 

certification. 

Response 9: Thank you for your comments.

Comment 10: Commenters discussed the implications of areas where emissions may increase as 

a result of the rule.

Commenters stated that EPA should undertake further and more detailed analysis to determine 

what, if any, areas of the country may experience pollution increases as acknowledged by the 

proposal as possible in certain areas. The commenters stated that although existing modeling 

platforms may not be capable of effectively modeling the response of particular EGUs to 

different potential state 111(d) plans, "EPA should attempt to characterize and identify the 

following information where possible: 

• The location of potential EGUs that could increase emissions based upon 

increased utilization of more efficient coal units or lower GHG emitting gas units;

• The potential magnitude of emissions increases from such units; 

• The result of offsetting emissions decreases from EGUs located upwind from or 

in the same vicinity of the prior universe of EGUs; 

• The availability of state and federal clean air authorities to control or prevent such 

emissions increases.
29

• The availability of state and federal monitoring and reporting authorities available 

to inform citizens of potential emissions increases; Specific guidance that EPA 

might provide state and local authorities in the preamble to a final Clean Power 

Plan to address such emissions increases, if and when they arise."

Commenters provided comments on the two scenarios in which EPA has predicted localized 

emissions increases could occur as a result of the Clean Power Plan. In the first scenario 

involving increased dispatch due to unit upgrades, the commenters stated that it is inadequate for 

EPA to contend that the absence of NAAQS violations would mitigate adverse impacts of local 

emissions increases. The commenters remarked that even in attainment areas that currently meet 

the NAAQS, air quality can be degraded without actual NAAQS violations and that even 

degradation of air quality in attainment areas can result in serious health impacts. The 

commenters further stated that in nonattainment areas, even lawfully increasing emissions would 

result in exacerbation of ongoing health based NAAQS violations. Additionally, the commenters 

stated that it is possible that "power plant operators undertaking upgrades could increase local

emissions and avoid NSR permitting by invoking exemptions (e.g., for routine maintenance, 

repair or replacement) or exclusions (e.g., the "demand growth" exclusion) in the NSR 

regulations", and that any unit that escapes NSR permitting may increase its hours of operation 

and resulting emissions significantly. The commenters added that in rare cases where a modified 

unit does undergo NSR permitting, the unit would be subject to BACT and a local air quality 

impact analysis would be performed. 

In the second scenario involving utilization due to redispatch, commenters stated that EPA writes 

that states "can take steps to avoid increased utilization," but does not specify those possible 

steps. The commenters stated that they do not believe states have legal authority under current 

regulations to prevent increased utilization and, by extension, increased local emissions under all 

circumstances. For example, the commenters noted that power plant operators have the legal 

right to increase utilization of modified or unmodified EGUs, and therefore increase emissions 

from these units, as long as they do not avoid NSR permitting or other restrictions through 

noncompliance. The commenters also stated that EPA says increased utilization "generally 

would not cause higher peak concentrations of PM2.5, NOx or ozone around such EGUs than is 

already occurring, because peak hourly or daily emissions generally would not change, but 

increased utilization may make periods of relatively high concentrations more frequent." The 

commenters stated that EPA's response to increased utilization is inadequate because increased 

frequency of high concentrations of PM2.5, NOx and ozone may cause health concerns in 

localized areas. The commenters noted that NAAQS have averaging periods from one to eight to 

twenty hours because health exposure risk times vary by pollutant. 

Additionally, commenters stated that EPA anticipates that increased utilization is most likely to 

happen with natural gas plants and that while many pollutants may be reduced if coal fired plant 

generation is reduced, potential local health concerns from increased utilization of natural gas 

plants may still be a concern. The commenters noted that it is also possible that regional 

improvements from lower coal generation could lead to net improvement in local air quality and 

that EPA is right that most new combined cycle natural gas units built within the past two 

decades are more likely to have modern NOx pollution control than an average coal EGU. The 

commenters stated that these comparisons are very general and simplistic, and are not adequate 

responses to legitimate health concerns over the significant increases in NOx emissions that 
30

could result from increased utilization of natural gas units. The commenters stated that there are 

valid concerns about increases in NOx emissions even from natural gas units equipped with 

BACT because of potential increased utilization to an average of 70 or even higher depending 

upon reasonable scenarios. The commenters remarked that EPA offers to work with states to 

address localized increases, but EPA has not identified adequate, available remedies to track and 

address the possibility of local NOx emissions increases from significantly increased utilization 

by natural gas units. At a minimum, the commenters suggested that EPA analyze whether any 

local NOx pollution increases are likely to be offset in the same locales by reductions achieved at 

upwind plants.

Commenters stated that EPA should consider the strong interaction of CO2, NOx and CO 

emissions from gas turbines into the rulemaking for all three of these emissions so as to seek a 

more "global" optimum. The commenters added that if CO2 reduction is more highly valued 

than, for example, CO emissions, then existing fleets will be able to operate over a broader set of 

conditions and possibly with lower CO2 emissions by relaxation of CO rules, and that the same 

applies to NOx. 

Commenters stated that the report also found the model that limited actions to improving the 

efficiency of existing plants (i.e. "inside the fence" option), did decrease the annual in CO2 

emissions slightly (by 2.2 percent) from the 2020 reference case; however, the likelihood that 

these more efficient plants would be dispatched more often resulted in an estimated annual 3 

percent increase in sulfur dioxide emissions. The commenters said this estimated sulfur dioxide 

increase actually led to the forecast of an increase in annual premature deaths and heart attacks, 

using this more limited approach. 

Commenters stated that a variety of metrics are of interest to operators of gas turbines, including 

emissions, efficiency, cost, reliability, and operational flexibility. The commenters said that these 

different metrics are coupled, and one can envision some optimum combination of design and 

operating conditions for a given level of technology. The commenters also said this optimum 

depends upon external weightings, such as regulations on NOx, CO, or CO2, whether a machine 

runs in baseload or peaking operation, cost of natural gas, and so forth. The commenters added 

that the need to maintain compliance with compounds such as CO or NOx, may interact with 

other efficiency or increased gas turbine plant dispatch goals. The commenters described in 

detail why these interactions occur and the implications for this rulemaking process. The 

commenters summarized the implications for this rulemaking process as follows: 

1. The degree to which a gas turbine can be turned down in power is limited by CO 

emissions. Thus, CO emission rules will influence gas turbine utilization at off-peak 

times. 

2. NOx emissions and CO2 will increasingly trade off in future high efficiency designs; 

i.e., low NOx can be achieved at the penalty of increased CO2 and vice-versa. 

3. Gas turbines in certain regions utilize selective catalytic reduction (SCR) units for 

NOx control, leading to some degradation in efficiency (i.e., increased CO2 

emissions) and generation of particulates from ammonia slip. This again points to 
31

how current NOx regulations influence the efficiency of power plants and their 

greenhouse gas forcing profiles.

Commenters stated that while gas turbine plant utilization is up, a significant number of plants 

continue to cycle daily for similar reasons - the reasons for this cycling behavior are important to 

consider in the rule-making process in order to enable increased utilization of the existing fleet as 

one of the building blocks for CO2 reduction. The commenters added that CO regulations 

materially impact the operational characteristics and cycling range of low NOx systems and that 

this points to the need to consider CO2-CO interactions in that gas turbine plants will be shut 

down at off-peak times because they cannot remain in CO compliance. The commenters stated

that these comments summarized a more in-depth article on related topics.

Commenters stated that when establishing emission guidelines, EPA must balance the need for 

the control of criteria pollutants, which have scientifically demonstrated adverse public health 

effects, with the need for control of CO2, which has not been demonstrated to have adverse 

effects on public health. The commenters said that the agency must recognize that some criteria 

pollutant controls may result in higher CO2 emissions. 

Commenters stated that precursor emissions will likely increase in some locations and decrease 

in others due to flexibility in where compliance actions occur which may greatly alter co-benefit 

estimates if emissions increases occur in more populated areas than where emissions decreases 

occur. The commenters noted that the RIA does not explore this possibility and has no ability to 

determine the location of where air quality changes will occur. The commenters recommended 

that at a minimum, the RIA should provide maps showing the location of increases and decreases 

using the locations of existing coal fired plants to identify SO2 changes, and IPM to locate the 

market region where new capacity would be needed to estimate NOx. The commenters stated 

that "environmental justice advocates would be particularly interested in this aspect of the cobenefits, as they might reveal inequities that can be traced to locations of disadvantaged 

populations".

Commenters stated that many additional uncertainties may exist due to how compliance may be 

achieved. The commenters further stated that EPA's analysis only considered two alternative 

implementation strategies even though the array of compliance options is vast and highly 

uncertain which may vastly change the number of tons of SO2 that may be reduced under the 

CPP and the location of where reductions will occur. The commenters noted that these 

uncertainties have not been considered in the RIA, although they are eminently amenable to 

analytical evaluation through additional IPM runs, and it is likely that the range of uncertainty on 

the co-benefits estimates would be much greater.

Response 10: See section VIII of the preamble. This final rule establishes guidelines for state 

plans, and each state plan will impact any increases or decreases in generation of specific 

individual units. Within that context, however, EPA notes that the general shift reflected in the 

BSER from generation at coal units to generation at existing NGCC and new renewable units 

will decrease overall emissions of CO2 as well as other pollutants. Additionally, note that the 

guidelines require states to engage with local communities as they develop their plans, and such 

engagement would provide an opportunity to address the types of concerns raised in these 

comments.
32

Comment 11: Commenters cited IPCC's Working group 3 and 2014 synthesis report to provide 

statistics on the contribution of emissions by the U.S. power sector, and the reductions needed to 

avoid global temperature changes. The commenters quoted IPCC to explain the challenge 

associated with meeting the reductions needed to stave off the extreme effects of climate change. 

The commenters stated that low carbon and renewable energy technologies are needed in 

addition of energy efficiency to curb climate change impacts.

Response 11: Thank you for your comment.

Comment 12: Commenters stated that the proposed rule and other rules will not spur other 

countries to take action, especially developing countries. The commenters provided statements 

from India's new environment minister and China's president indicating that carbon emissions 

will rise for the next one to three decades. Commenters added that even developed countries are 

missing their GHG reduction targets. Commenters also added that the proposed rule will have 

drastic impacts, including global competition away from U.S. business.

Similarly, commenters cited CRS and other reference to state that the proposed rule could shift 

business to more carbon intensive countries, resulting in carbon leakage. 

Commenters noted that programs to reduce GHG emissions "must be based on cost-effective 

greenhouse gas reductions, and implemented only if coordinated with other major greenhouse 

gas-emitting nations" and in a "reasonable, deliberative, and transparent manner that ensures the 

United States is not placed at a competitive disadvantage with respect to the rest of the world." 

Commenters stated that the rule" does not satisfy these criteria."

Commenters added that if the federal government wishes to have a real effect on reducing global 

CO2 emissions, its efforts would clearly be better spent working with countries like China to 

gain binding commitments to reduce their increasing CO2 emissions rather than attempt to force 

reductions on the United States electric power fleet, which is relatively stabilized compared to 

countries such as China and India.

Response 12: See preamble section II.G.

Comment 13: Commenters recommended that EPA allow states to develop their own glide 

paths.

Commenters stated that their plan can achieve a 30 percent reduction from 2005 emission levels 

over a slightly longer time frame at nearly $4 billion lower than the cost of EPA's proposed rule. 

Commenters stated that if EPA does not accept the commenters plan, EPA should eliminate the 

aggressive interim goals and replace them with a directive to states to develop non-binding 

emission reduction milestones that are reasonably achievable and reflect the state's view of the 

appropriate glide path to the final state reduction goal, or it will cost the commenters customers 
33

nearly $2 billion by 2020. Commenters also recommended that EPA define and limit the 

emission standards based solely on what is achievable at existing power plants and that states 

should be given the flexibility to develop programs that achieve equivalent emission reductions.

Similarly, commenters recommended that EPA allow states to develop and use true glide paths 

from their 2020 emission levels to the 2030 goals in EPA's final guidance. The commenters 

stated that new gas units would emit substantial amounts of CO2 for an extended period, using 

up a significant share of the remaining "carbon budget" but CO2 from new power plants is not 

regulated by Section 111(d), since that section of the Clean Air Act applies to existing, not new, 

power plants. The commenters provided figures and citations discussing glide paths and stated 

that "it is readily evident that even a relatively small annual amount of CO2 from new gas plants 

will, over enough time, exceed the CO2 emitted by existing plants during the glide-down 

period". The commenters stated that adding more CO2 from new, long lived plants and avoiding 

CO2 from old retiring plants is inefficient and may cause reliability issues, high power prices, 

and market distortions. Commenters added that adding new plants will limit the ability to meet 

2050 carbon emission goals.

Response 13: The final rule includes a new start date of 2022 for the interim period, and a 

gradual application of the BSER over the 2022-2029 interim period, such that a state has 

substantial latitude in selecting its own emission reduction “glide path” over that period. See 

preamble for further discussion.

Comment 14: Commenters stated that EPA has not identified "any mechanism other than the 

illusory 6% reductions" through which emission reductions may be realized and will potentially 

create blackouts due to forced utilization reductions at existing plants or reduction of emission 

rates from existing units.

Response 14: EPA disagrees with this comment. See section V of the preamble.

Comment 15: Multiple commenters recommended that EPA analyze potential emission 

reductions beyond 2030.

Commenters stated that reductions beyond 2030 must be analyzed to understand the implications 

of the proposed rule and whether it helps meet target reduction commitments of 83% by 2050.

Commenters similarly stated that EPA needs to analyze the opportunity cost of investing billions 

in new gas plants which may help meet medium-term goals but compromise long-term 

solutions, compared to other technologies that could help meet long term goals in 2050 and 

beyond.

Commenters stated that EPA and state implementation plans should extend after 2030 and 

remarked that cost-effective energy efficiency programs, hydropower, biomass, and MSW are all 

options to maintain reliability and cost-effectiveness of a decarbonized grid. The commenters 

also supported increased utilization of renewable energy resources.
34

Commenters stated that EPA should model emission reductions through 2050 and, preferably, 

through 2080.

Response 15: EPA’s RIAs appropriately examine impacts in a single year of full compliance, 

which is 2030 for this final rule. For this rule, we are also presenting 2020 and 2025 to provide 

important information to the public and stakeholders on the gradual approach to compliance.

Comment 16: Commenters stated their skepticism about a net emissions drop with an increase 

in fracking and recommended that the modeling be available to public. The commenters also 

stated that the model significantly underrates the potential growth of renewable energy and 

energy efficiency.

Response 16: EPA disagrees with this comment. See Chapter 3 of the RIA for analysis and 

discussion of upstream methane emissions. EPA believes assumptions made in the modeling 

regarding renewable energy and energy efficiency potential are reasonable. See Chapter 3 of the 

RIA and the GHG Mitigation Measures TSD for additional information. Additionally, all 

modeling outputs for the proposed and final rule are available in the public docket for this 

rulemaking.

Comment 17: Commenters stated that EPA should treat unreplaced, retired coal units as zeroemitting resources to properly credit emission reductions.

Commenters also stated that the compliance date should be extended to 2035 to help mitigate the 

reliability concerns and rate shock, as well as save nearly $4 billion dollars compared to the 

proposed rule.

Response 17: The EPA disagrees with this comment. See preamble section VIII.B.1.for a 

discussion of the revised start date.

Comment 18: Commenters stated that the proposed rule does not comprehensively account for 

methane leakage from the natural gas lifecycle, including well methane leakages, which will 

diminish, eliminate or reverse the emission reductions estimated by the proposed rule.

Commenters that the substantial amount of methane leakage that occurs from natural gas system 

components, including production, storage and transmission in the absence of stricter controls 

may offset emissions reductions and lead to EPA overestimating reductions. Commenters noted 

that recent studies estimate that methane leakage rates from natural gas systems may exceed 2 or 

3 percent and event reach up to 10 percent according to a recent American Geophysical Union 

paper. Commenters also provided estimates for methane emissions from various lifecycle stages. 

The commenters stated that methane leakages will likely erase any climate advantage for natural 

gas in the power sector over a 100-year time frame and any estimated advantage will dissipate as 
35

gas production increases, particularly as unconventional gas production grows due to higher 

leakage rates and fugitive emissions occurring during well development. 

Commenters stated that the recent Allen study does not capture fugitive methane, especially with 

regard to drilling and older pipelines. 

Commenters stated that methane leakage must be properly taken into account.

Commenters disagreed with the following aspects of EPA's analysis: 

• choice of 2011 to compare methane emissions from coal mines and natural gas 

systems because it overstates coal emissions and understates natural gas emissions 

and because natural gas usage increased and coal usage declined in the 2012 base 

year that EPA used to calculate state goals. 

• use of GWP of 25 instead of 34 or 86 as recommended by the IPCC. 

• projection of reduced electric consumption after 2020. The commenters stated 

that if EPA's improbable assumption about declining electric consumption proves 

wrong, as is likely based on all historical experience, NGCC generation will 

increase and the supposed GHG benefits of the rule will decline even further.

Commenters also stated that actual methane emissions will be much higher than estimated by 

EPA and is further underestimated by the use of an outdated underestimate of global warming 

potential. The commenters stated that must regulate methane emissions in order to avoid 

increased GHG emissions from increased natural gas use. The commenters recommended 

limiting reliance on natural gas to the extent possible.

Commenters listed the following issues with EPA's estimates and conclusions: 

1. "The EPA relies mainly on industry-supplied data for estimating natural-gas-related 

methane emissions, especially for emissions from hydraulic fracturing operations. 

EPA also used an earlier joint study it did with the Gas Research Institute that 

included field measurements done in 1992.

2. In the one case where the EPA concluded that a set of industry data underestimated 

emissions from completed hydrofractured wells, the EPA estimated emissions using 

the defective industry data and made another estimate without it; but it never used its 

own, much higher venting estimate.

3. The EPA oil and natural gas technical support document failed even to refer to, much 

less to evaluate or use, recent independent measurements, including measurements 

made from aircraft that indicate that leaks from production may be far higher than the 

values used by the EPA. For example, the EPA document did not refer to or use 

Howarth, Santoro, and Ingraffea 2011, which estimated that leakage and venting rates 

from conventional and hydrofractured natural gas production wells as well as all 

downstream emissions may be much higher than estimated by the EPA. Miller et al. 

2013 also conclude that methane emissions associated with both the animal 
36

husbandry and fossil fuel industries have larger greenhouse gas impacts than 

indicated by existing inventories. There is also literature that has appeared since the 

publication of the CPP that provides ample evidence that fugitive methane emissions 

are larger than officially estimated and that the climate impact may be significant. 

The final CPP should also review this evidence. 

4. The EPA used leak rates averaged over all natural gas production. However, the 

increase in production that will be required to supply the fuel for the increase in 

NGCC generation envisaged by the CPP is projected to come from tight gas and shale

gas formations. There is a significant difference between the two. 

5. The EPA entirely ignored the 20-year value of the global warming potential of 

methane. This is critical to the evaluation of threshold effects that may occur on time 

scales shorter than one hundred years, which is the EPA time frame for warming 

potentials. 

6. The EPA did not consider the longer term impact of setting a course of greatly 

expanded natural gas use in electricity generation up to the year 2030. Specifically, 

the EPA did not examine whether its trajectory of increasing natural gas use is 

compatible with longer-term goals for much greater reduction in greenhouse gas 

emissions."

Similarly, commenters stated that fugitive methane emissions are not appropriately regulated and 

will increase due to the proposed rule.

Commenters referred to methane leakage from unconventional hydraulic fracturing (fracking).

Commenters noted that there are fugitive leaks of methane from drill bit to burner tip.

Response 18: Commenters stated that the proposed rule does not comprehensively account for 

methane leakage from the natural gas lifecycle, including well methane leakages, which will 

diminish, eliminate or reverse the emission reductions estimated by the proposed rule. 

The EPA assessed whether the net change in upstream methane emissions from natural gas and 

coal production is likely to be positive or negative and also assessed the potential magnitude of 

changes relative to CO2 emissions reductions anticipated at power plants. This assessment 

included CO2 emissions from the flaring of methane, but did not evaluate potential changes in 

other combustion-related CO2 emissions, such as emissions associated with drilling, mining, 

processing, and transportation in the natural gas and coal production sectors. Also, the EPA did 

not assess potential changes in other upstream non-GHG emissions, such as nitrogen oxides, 

volatile organic compounds, and particulate matter. Table 3A-1 of the final RIA presents 

estimates of the upstream emissions discussed in this analyses for 2013, based on the 2015 U.S. 

GHG Inventory.

The analysis found that the net upstream methane emissions from natural gas systems and coal 

mines and CO2 emissions from flaring of methane will likely decrease under the proposed 

guidelines. Furthermore, the changes in upstream methane emissions are small relative to the 
37

changes in direct emissions from power plants. The technical details supporting this analysis can 

be found in the Appendix to chapter 3 of the proposal and final RIAs.

EPA defined the boundaries of this assessment in order to provide targeted insights into the 

potential net change in methane emissions from natural gas systems and coal production 

activities specifically. CO2 emissions from flared methane are included because regulatory and 

voluntary programs influence the rate of methane flaring over time and the CO2 remaining after 

flaring is a methane -related GHG. Because of the multiple compliance strategies adopted in the 

illustrative compliance scenarios, a more comprehensive assessment of upstream GHG emissions 

would require examination of the broader power sector and related input markets and their 

potential changes in response to the rule. This analysis would be complex and likely subject to 

data limitations and substantial uncertainties. Rather, EPA chose to limit the scope of this 

upstream analysis to evaluate the potential for changes in GHG emissions that may be of 

significant scale relative to the impacts of the rule and for which EPA had previously-reviewed 

projection techniques.

Commenters stated that EPA should have used a different base year for projections (than 2011 in 

the proposal). In the proposal, EPA projected upstream methane emissions starting from 2011 

because the 2011 GHG Inventory (published in April 2013) was the most recent finalized data 

available at the time that the analysis was undertaken. The upstream methane analysis has been 

updated to reflect the most recent 2013 U.S. GHG Inventory (published April 2015). This 

analysis can be found in the appendix to chapter 3 of the final RIA.

Some commenters stated that EPA should have used a different GWP for methane. These topics 

are addressed in section 8.7.1 of the response to comments document.

Some commenters stated that EPA estimates of methane from natural gas systems are 

underestimates. Some commenters cited studies showing higher emissions than EPA estimates.

EPA’s emissions estimates are based on the best data available at the time of their development. 

It is EPA’s standard process to update its estimates in the annual Inventory of U.S. Greenhouse 

Gas Emissions and Sinks (GHG Inventory) when new and improved data are available which 

would improve emissions calculations. Every year, EPA reviews new data and conducts an 

extensive annual multi-phase process including expert review during GHG Inventory 

development and public review before finalization of the Inventory. In recent years, the natural 

gas sector has experienced significant growth and changes in industry practices. Emissions 

profiles from industry practices such as hydraulic fracturing and liquids unloading have changed 

significantly, and only recently have data become available to improve our understanding of 

emissions for these sources. EPA’s estimates take into account differences in production

emissions for conventional versus unconventional practices. For example, EPA calculates 

national emissions from gas well completions and workovers with hydraulic fracturing using 

data on over 25,000 of these events reported to EPA’s Greenhouse Gas Reporting Program 

(GHGRP). As expected, incorporating newly available data resulted in changes to emissions 

estimates for the oil and gas sector overall. 

EPA is aware of studies calculating methane emissions that differ from EPA’s estimates. EPA 

continues to refine the emission estimates in the GHG Inventory to reflect the most robust and up 

to date information available. Substantial amounts of new information on the oil and gas sector 
38

will become available in the coming years from a number of channels, including EPA’s GHGRP, 

and research studies by government, academic, and industry researchers, and industry 

organizations. In addition, the actions in the White House methane strategy, which target both 

bottom-up and top-down measurement approaches, will improve the overall level of confidence 

in methane emissions data. EPA looks forward to reviewing new information and data as they 

become available for potential incorporation in the GHG Inventory. 

EPA does not officially calculate a leak rate for the natural gas industry. Through our annual, 

national-level Inventory of U.S. Greenhouse Gas Emissions and Sinks, we provide an estimate of 

total greenhouse gas emissions from the oil and natural gas sector. This estimate includes process 

emissions like vented and fugitive methane emissions from over 100 activities and equipment 

types that generate emissions in the natural gas industry, from drilling and production, through 

processing and transmission, to distribution. Others have developed leakage rate estimates using 

emissions estimates from EPA's national GHG Inventory, along with data from other sources, 

such as oil or gas production data from EIA. 

Comment 19: Commenters stated that emissions may increase as a result of the proposed rule.

Commenters stated that facilities may choose to meet the goals by shifting to onsite generation, 

which is not subject to the proposed rule but may increase emissions overall. The commenters 

stated that it is unclear how it will impact state rate goals, but the proposed rule does not provide 

a means of accounting for "off-grid" emissions.

Similarly, commenters stated that most of the lost baseload capacity will be replaced by new 

fossil fuel capacity that will not be regulated.

Commenters stated that local energy users could move to diesel, which may increase emissions 

from the current fuel mix. Commenters also stated that if Alaskan residents may burn more wood 

or use diesel as affordable alternatives to increased energy prices, which could exacerbate 

PM2.5. 

Commenters stated that "solutions" to reduce global warming pollution must not create or 

exacerbate other environmental and social problems. The commenters said that CPP's inclusion 

of nuclear power, "waste-to-energy", carbon capture and sequestration, biomass incineration and 

other dirty fuels fails to acknowledge adverse environmental and public health impacts. The 

commenters said these technologies poison our land, water and public health and cannot be 

considered clean energy. The commenters added that guidance for complying with the Clean 

Power Plan should not promote these false solutions to climate change. 

Response 19: EPA’s analysis of two illustrative compliance scenarios in the RIA projects an 

overall emissions decrease as a result of the rule, and an increase in new renewable generation. 

See Chapter 3 of the RIA.
39

Comment 20: Commenters stated that the proposed rule does not account for the potential for 

increased coal exports as a result of the rule. Commenters stated that EPA must attempt to 

address the potential for coal exports in its regulatory analysis since the exports would offset the 

expected reductions from methane emitted from coal mines.

Commenters stated that EPA has failed to consider the potential international consequences of 

the decline in domestic coal prices, which may lead to increased exports and increased usage of 

coal internationally, further accelerating the already rapidly growing CO2 emissions in other 

countries. 

Commenters stated that we should consider our fossil fuel exports, and asked if those exports are 

undermining our efforts to reduce greenhouse emissions here at home.

Response 20: EPA analysis projects a minor decrease to coal prices under the two illustrative 

compliance scenarios analyzed, and does not expect a significant increase in coal exports as a 

result of this rule. See Chapter 3 of the RIA.

Comment 21: Commenters stated that EPA has incorrectly evaluated the amount of emission 

reductions. Commenters stated that EPA uses incorrect values for the GWP of fossil methane; 

underestimates methane leakage rates especially for unconventional natural gas extraction; 

overestimates the carbon reductions Block 2 of the Proposed Rule can achieve; incorrectly 

estimates achievable emission reductions from Block 1 due to excluding natural gas plants and 

some coal plants from heat rate improvements; and severely constrains its target selection 

procedure to drive down emission reductions below what business as usual would otherwise 

achieve. Similarly, commenters stated that increased use of natural gas will not result in up 

to 40% emissions reductions.

Response 21: On EPA’s estimates of methane emissions from natural gas systems, please see 

response to comment 18 in section 8.2 of this response to comments. On the GWP for methane, 

please see section 8.7.1 of this response to comments. Regarding the building blocks, EPA 

disagrees with these comments. See section V of the preamble and the GHG Mitigation 

Measures TSD. Regarding projected emissions reductions under the rule, see Chapter 3 of the 

RIA. 

Comment 22: Commenters stated that EPA may have underestimated the emission reductions 

that can be achieved through increased natural gas use in the power sector, including through (1) 

onsite emission reductions and (2) redispatch strategies. 

Similarly, commenters stated that the proposed rule accurately recognizes the low-carbon 

attributes of natural gas generation. The commenters cited an October 2014 EIA report which 

indicated that carbon emissions have declined in part due to increased natural gas usage.
40

Response 22: EPA estimates of the reduction potential of Building Blocks 1 and 2 are 

reasonable. See Section V of the preamble and the GHG Mitigation Measures TSD.

Comment 23: Commenters stated that the proposed rule does not account for bioenergy 

and standalone biomass power plant emissions, therefore does not properly estimate emission 

reductions. The commenters cited EPA research and further stated that while biomass emissions 

can be offset over time, reductions can take decades. The commenters stated that EPA must 

require rigorous and protective science-based carbon accounting for all bioenergy proposed by 

states as they seek to meet EPA's targets under the GHG rule.

Commenters also stated concern that coal fired plants may be converted to biomass, despite SAB 

modeling that indicates significant emissions from biomass. The commenters stated that EPA is 

still working on an accounting framework for bioenergy, making it difficult for states to account 

for bioenergy in their plans. The commenters suggested that setting a cap for the maximum 

amount of carbon emissions that can be emitted by 2020 and 2030 will address net carbon 

accounting for bioenergy and allow states to evaluate the relative impact of each energy source.

Response 23: A discussion regarding the use of some biomass feedstocks for compliance 

purposes can be found in Section VIII.I.2.c and Section VIII.K.1 of the preamble.

A discussion regarding the current status of the development of the revised Framework and how 

information from the revised Framework and the related peer review processes could be used to 

inform how states and EPA assess biogenic CO2 can be found in Section VIII.I.2.c and Section 

VIII.K.1. For more information regarding the Framework, see: 

http://epa.gov/climatechange/ghgemissions/biogenic-emissions.html

Comment 24: Commenters stated that the base year selected by EPA leads to a misleading 

demonstration of emissions reduction because 2005 represents emissions peaks and allows the 

rule to take credit for reductions that occurred primarily due to economic decline. Commenters 

further stated that the emission reduction goals falls short of the Copenhagen accord for 2020 

and 2030, however neither target is adequate to avoid the worst impacts of climate change. The 

commenters added that any primary reliance on fossil fuels, including natural gas, will not allow 

reductions to be sustained with future economic and population growth.

Commenters stated that EPA claims mistakenly credit for emissions reductions by using 2005 as 

a base year, because emission reduction activities in building blocks 2, 3, and 4 would occur 

without the rule, and because RPS system shifts would occur without the rule. The commenters 

also stated that the proposed rule does not account for the decreased natural gas use that is 

predicted 10 years after natural gas infrastructure is expanded, for increased foreign exports of 

natural gas, or for transportation and mobile source GHG emissions. 

The commenters further stated that the lifecycle emission impacts of rapid expansion of gas 

pipelines as well as lifecycle emissions from renewable energy are not considered. The 

commenters cited photovoltaic and wind lifecycle emissions from 0.07-0.18 pounds CO2 per 
41

kWhr and 0.02-0.04 pounds CO2 per kWhr, respectively. Lastly, the commenters stated that 

EPA uses the Climate Action Report methodology, but recommended the use of a different 

approach in comments to FERC, and provided no explanation of the particular methodology.

Response 24: The RIA includes a comparison of emissions under the two illustrative compliance 

scenarios analyzed against both 2005 and future projected base case levels. The EPA 

appropriately estimated costs and benefits of this rule relative to a future base case, not a 2005 

baseline. See Chapter 3 of the RIA. Additionally, see response to comment 18 regarding 

lifecycle emissions related to gas.

Comment 25: Commenters stated that nuclear emits twice as much carbon emissions as wind 

and solar, and that the costs of nuclear accidents and cleanup are not addressed.

Response 25: The EPA is not finalizing preservation of generation from existing nuclear 

capacity as a component of the BSER. See preamble section V.A.3.

Comment 26: Commenters in this summary discussed the effects of proposed fuel switching to 

natural gas, and the risks methane emissions associated with natural gas processes pose for 

human health.

Commenters stated that EPA should evaluate the increase in emissions caused by the increased 

use of natural gas under the Proposed Rule. The commenters said that an increase in natural gas 

usage from re-dispatch may increase NOx, VOC and methane emissions from upstream oil and 

gas operations in areas that are at risk for ozone nonattainment and that should these areas 

become designated as nonattainment, new constraints would be necessary regarding production. 

The commenters said that all of New Mexico's NGCC facilities are located in areas at risk for 

ozone nonattainment. The commenters said that increased usage of both oil and gas facilities and 

NGCC facilities will increase emissions, leading to additional permitting requirements, which 

could lead to additional economic burdens and additional costs for controls.

Commenters provided concerns in regards to developing oil and gas in the Balcan (tribal 

territory), which are expected to impact air quality. The commenters stated that the expanded use 

of natural gas will negate 13 year effort by Native Energy Inc. to reduce its emissions.

Commenters stated that EPA is touting health benefits associated with the decrease of coal use, 

but that is not taking into account the growing public health impacts from natural gas 

exploitation.

Commenters stated that we should transition into solar, wind and geothermal. The commenters 

said that natural gas technology releases methane and other toxic substances such as radon and 

benzene into the environment. 

Commenters stated that oil and gas sites are the biggest industrial source of methane, and that is 

80 times more powerful as a greenhouse gas than carbon dioxide over a 20-year time frame. The 
42

commenters said that methane accounted for about 14% of US climate pollution in 2013, and 

according to the EPA's greenhouse gas inventory, this value is expected to grow. The 

commenters said that Colorado is currently the only state that has adopted rules limiting methane 

emissions from oil and gas operations, and that Seven Northeastern states (New York, 

Connecticut, Delaware, Maryland, Rhode Island, Vermont, and Massachusetts) are intending to 

sue EPA for failure to regulate methane emissions under Section 111 of the Clean Air Act. The 

commenters asked for clarification in whether Obama Administration's new actions to combat 

methane emissions will stop the Northeast states legal threats.

Commenters stated that a sharp increase in natural gas consumption could result in much higher 

methane emissions from leaks in the transmission and distribution network, which could increase 

total CO2 equivalent (CO2e) emissions. The commenters said that methane is about 25 times as 

potent as CO2 (1 ton of methane is equivalent to 25 tons of CO2), so these leaks represent a 

major concern for the viability of CO2 reductions from fuel switching. The commenters added 

that using EPA's estimate of a 2% methane leakage rate, the fuel switching scenario would result 

in 14.7z million tons of additional CO2e above the BAU scenario. The commenters said that 

recent studies have questioned the validity of EPA's estimates and suggested that much higher 

leakage rates are actually occurring. The commenters stated that using a 10% leakage rate adds 

92.5 million tons of CO2e under the fuel switching scenario compared to 18.7 million tons under 

the 30% RPS scenario, and that this pushes the 2030 carbon intensity from 1,095 lb/MWh to 

1,605 lb/MWh under the fuel switching scenario, and increases the marginal abatement cost from 

$30/ton to $84/ton. The commenters also said that the 30% RPS scenario sees a much smaller 

increase in carbon intensity, from 1,199 lb/MWh to 1,212 lb/MWh and marginal abatement cost 

of $35/ton; and stated that the 30% RPS is a more effective mitigation strategy when fugitive 

methane emissions are considered.

Commenters stated that methane emissions may be higher than the EPA estimates. The 

commenters said that a series of research papers continue to document vulnerability with a U.S. 

policy that looks to substitute coal-burning plants with natural gas generation plants. The 

commenters cited a report published in the Proceedings of the National Academy of Sciences 

that found much higher levels of methane leakage from oil and gas operations and agriculture 

than estimates from the Environmental Protection Agency (EPA) and international monitoring 

agencies, which were found to be 1.5 times to 1.7 times higher than previous estimates by the 

international Emissions Database for Global Atmospheric Research. The commenters said that 

the research work for this study was done by a large, multi-institutional team of researchers 

taking what is termed a top down approach of atmospheric measurements. The commenters said 

that this study published in December 2013 used both observations and modeling to determine 

methane emissions.

Commenters also stated that EPA's bottom up approach of monitoring emissions (or methane 

leaks) at the source site was also criticized by the Office of the U.S. Inspector General in a report 

issued in July of 2014. The commenters added that currently, the EPA uses a voluntary program, 

Natural Gas Star, to address methane leaks from pipeline infrastructure. The commenters also 

stated that in 2012, there were more than 1.2 million miles of gas distribution mains with an 

estimated 32,000 miles of mains that are cast iron or wrought iron and more than 61,000 miles of 

unprotected steel mains, and that leaks are most likely from older pipelines, some over 100 years 
43

old. The commenters said that methane leaks can occur at all points across the supply chain 

from hydraulic fracturing drilling sites to liquid natural gas conversion and shipping facilities.

Commenters stated that shale oil drilling sites methane leakages are higher than once thought, 

and cited a study published in the Scientific Journal, Earth's Future, which found that two shale 

oil drilling basins leaked around 10 percent of the natural gas they produce, during the study 

period of 2006-2011. The commenters said that this is significant because study sites (North 

Dakota Bakken Shale and Eagle Ford East Texas) produced 485 million cubic feet per day of gas 

average during the month of September 2011 and 1,232 million cubic feet of gas per day in 

2011, respectively. The commenters said the methane gas leaks likely come from wellheads, 

valves, tanks, pipes, processing plants and other areas in the energy production supply chain. The 

commenters stated that scientists say that a methane leakage about 3.2 percent may negate the 

natural gas fuel's benefit to reducing electricity power plan greenhouse gas emissions, and that 

these findings mean that natural gas as a fuel sources for electricity power plants is just as bad as 

coal. The commenters said that the authors of the study say they were conservative in providing 

a range of leakage readings over time, but even the low range readings far exceed the leakage 

rates used by the Environmental Protection Agency (EPA) of 1.2 percent for these sources.4 

Commenters stated that the rule will result in increased natural gas production and this will 

increase methane releases and negative impacts to health, water resources and air quality during 

the increased development of gas reserves. The commenters said that even if RE successfully 

cuts gas demand in the US that natural gas production won't diminish given the lack of export 

controls.

Commenters stated that EPA must support accurate measurements of total future methane 

emissions and the whole life-cycle process, as well as the total external costs of all pollution 

from increased natural gas and other fossil fuel production and consumption. Commenters stated 

that encourage the EPA to address the issue of methane, the other major contributor to current 

climate crisis.

Response 26: On EPA’s estimates of methane from natural gas systems, and on recent studies on 

methane from natural gas systems, please see response to comment 18 in section 8.2 of this 

response to comments. Additionally, see RIA Appendix 3A.

Comment 27: The commenters said EPA cannot ascribe positive value to the decreases in 

combustion-related emissions of PM2.5 and ozone precursors from EGUs while failing to 

estimate negative value also for increases in precursor emissions from other source types. The 

commenters said that use of each of the four building blocks will result in at least some partly 

offsetting increases in precursor emissions, mostly from sources other than EGUs, and stated that 

EPA should account the impacts of these emissions increases in the benefits analysis. The 

commenters provided examples of how the use of each of the four building blocks can lead 

directly to increases in precursor emissions related to deconstruction, construction and 

manufacturing associated with each block. The commenters also added that as the proposed 

regulation leads to changes in the relative prices of coal, natural gas and other sources of energy, 
44

usage of these and other fuels will change, which further likely increases emissions from sources 

other than EGUs.

Response 27: EPA disagrees with this comment. The RIA appropriately estimates the cost and 

benefits of compliance with this rule. See chapter 3 for estimated impacts on emissions and fuel 

prices, and chapter 4 for estimated benefits.

8.3 ENDANGERED SPECIES ACT

Comment 1: Commenters stated that EPA does not take into consideration the economic, 

temporal or other impacts that ESA regulations may have on existing and proposed energy 

projects, including transmission, distribution and right of way maintenance. 

Commenters discussed proposed ESA rules and recent findings and stated that they may affect 

existing or proposed renewable energy sites, even if there were existing safe harbor agreements, 

habitat conservation plans, or candidate conservation agreements. Commenters added that the 

Proposed Rule does not factor in the impact of the other legal issues, such as the Migratory Bird 

Treaty Act and American Bald and Gold Eagle Protection Act on renewable energy targets. 

Commenters discussed potential difficulties associated with energy projects in Nevada and 

Wyoming because of existing and future protections for the sage grouse as an example. 

Commenters stated EPA must consider these potential impacts in its evaluation of a state's 

renewable energy potential. 

Similarly, commenters stated that Great Plains states are within the migratory corridor for several 

endangered species which may limit the ability to complete infrastructure upgrades or require 

lengthy consultations and permitting.

Commenters recommended that EPA consult on this issue with the Department of the Interior, 

USFWS, and the United States Forest Service to create streamlined processes, including review 

under the NEPA, and provide, in particular, additional guidance for the western states with 

greater sage grouse habitat. Commenters added that EPA takes no consideration of the need for 

utilities to conduct full NEPA studies.

Commenters discussed the whooping crane migration corridor and the potential Federal action 

delays and increased costs with any transmission line or other infrastructure projects that may 

be needed. The commenters also discussed the sage grouse habitat and issues with wind 

development. 

Commenters stated that much of the land in Oklahoma and New Mexico cannot be readily 

developed because it has been designated critical habitat for the lesser prairie chicken, 

American burying beetle and other species.

Commenters stated that the renewable potential identified in the Alternative RE approach is 

primarily derived from a 2012 NREL report that does not exclude critical habitats of roughly 740 

threatened and endangered species, which will have a significant impact on the potential 
45

renewable generation areas available. The commenters stated that failure to adjust the goal 

setting methodology would result in arbitrarily low emission rate goals.

Similarly, commenters stated that a build-out of wind generation on EPA's proposed scale would 

directly conflict with Wyoming's sage grouse efforts and put western state economies at risk.

Commenters stated that the EPA must also consider the impacts of other federal regulations 

involving listed and threatened species, species of special concern, migratory birds, eagles and 

other similar regulations and requirements when making assumptions about timelines, redispatch and particularly expansion of renewable energy generation. The commenters stated that 

state and federal conservation plans will impact development and siting of wind farms, electric 

generating stations, gas and electric transmission lines, and all associated permanent and 

temporary infrastructure required to construct these facilities. According to the commenters, the 

CPP, and the associated assumptions involving re-dispatch and renewables integration may 

affect whether or not sage grouse, as one example, are listed as endangered in Montana and other 

western states.

Response 1: The final rule does not affect existing requirements that apply under other federal 

statutes or regulations addressing listed threatened or endangered species or other species. The 

application of these other federal statutes and regulations is generally on a site-specific basis and 

is thus difficult to include in setting national emissions standards. Due to the variability in the 

applicability of such statutes, the lack of available site-specific data, and the difficulty in 

assessing these values at a national level in a meaningful way, we are unable to quantify these 

impacts in the final rule. The EPA has also explained in sections VIII and XI.B of the final rule 

preamble that the CPP provides states with considerable implementation flexibility, thus further 

decreasing the likelihood that any species-impacting activity will occur in any particular 

location. For example, the NREL study that the EPA is using to calculate BSER has a much 

higher level of renewable development potential than the EPA is including in our building block 

3 determination. Given this high level of potential renewable development, as well as the many 

flexible compliance options included in the final rule, we believe that affected EGUs can meet 

BSER requirements, while avoiding the most environmentally sensitive areas that are subject to 

other federal statutes.

Comment 2: Commenters stated that EPA is required to consult with wildlife agencies on the 

effects to ESA-listed species and their critical habitat caused by the proposed rule's incorporation 

of wind and solar energy into the agency's BSER of carbon dioxide for fossil-fuel-fired power 

plants. 

The commenters stated that the proposed rule is a discretionary agency action for purposes of the 

ESA's consultation regulations and that the agency's action "may affect" a listed species or its 

critical habitat, indirectly or directly, and that the effects may be "caused by the proposed 

action...later in time, but still are reasonably certain to occur." The commenters added that 

contrary to EPA's assertion that the effects are not sufficiently certain, the threshold "for an 

agency action to trigger consultation ... is low," and "[a]ny possible effect, whether beneficial, 

benign, adverse, or of an undetermined character, triggers the formal consultation requirement" 
46

(Western Watersheds Project v. Kraayenbrink, 632 F.3d 472, 496). The commenters also point to 

references within the proposed rule as well as court cases, such as Defenders of Wildlife v. EPA 

(420 F.3d at 961-62), to support their view that it is reasonably foreseeable that EPA's rule 

encourages and will lead to expanded wind and solar energy generation, which in turn "may 

affect" listed species and their critical habitat. 

Commenters also stated that EPA inaccurately uses American Trucking Association v. EPA to 

support its conclusion of "no consultation required" because American Trucking's interpretation 

of the Regulatory Flexibility Act's scope is based on that Act's limitation to agency actions that 

directly affect or regulate small entities. The commenters stated that in contrast, the ESA's 

consultation provision does not contain any such limitation and expressly takes account of direct 

and indirect effects that "may affect listed species or critical habitat". The commenters also 

provided citations and examples of the direct and indirect impacts that wind and solar energy can 

have on ESA-protected species, such as collision deaths and habitat fragmentation.

Commenters added that EPA cannot avoid its consultation obligations, merely because the EPA 

makes states responsible for drafting and implementing plans, mirroring the EPA's standards of 

performance and guidelines, to reduce carbon dioxide emissions. Rather, according to the 

Commenters, it is clear that an agency action's direct or indirect effects on a listed species or its 

critical habitat must be considered under Section 7 of the ESA. 50 C.F.R. Section 402.02. The 

commenters stated there is no question that this Proposed Rule is an agency action with direct 

and/or indirect effects on listed species or their critical habitat, because it encourages the 

development of wind and solar power. See Florida Kay Deer v. Paulison, 522 F.3d 1133, 1143-

44 (11th Cir. 2011) (determining that an agency's administration of a statute, which encourages 

development may jeopardize listed species, thus requiring Section 7 consultation). Therefore, the 

commenters contended the EPA should withdraw its Proposed Rule and undergo formal 

consultation under Section 7 of the ESA.

Response 2: See section XI.B of the final rule preamble of the CPP for the EPA’s response to 

this comment. 

Comment 3: Commenters stated that the capacity of renewable energy generation zones in areas 

where conflicts with habitats are lowest are vast within Nevada, and the state can meet carbon 

reduction goals in these areas without conflicting with endangered species and other federal 

laws.

Response 3: The EPA acknowledges the comment.

8.4 ENERGY IMPACTS

Comment 1: Commenters stated that EPA should remove the interim goals from the proposed 

rule and rely on States to make the progress needed to achieve the 2030 emissions targets. The 

commenters listed reliability concerns detailed in the 2014 NERC Reliability Report as reasons 
47

to remove the interim goals, and recommended that EPA account for the impact of existing and 

anticipated domestic energy supply policies on implementation of the rule in order to maintain 

reliable affordable energy that allows a competitive advantage and to avoid dampening the 

continued expansion of the chemical industry.

Commenters stated that EPA must reconsider the decision to impose interim goals given that it is 

those goals that are driving the CPP related retirements and increasing the potential for blackouts 

as well as the harm to human health and welfare that blackouts cause. The commenters stated 

that reductions associated with building blocks 1 and 2 cannot be achieved so quickly, nor can 

RE and EE/DR measures be implemented in significant amounts until after 2020. The 

commenters cited NERC's statements regarding the reliability challenges posed by the proposed 

interim goals as well as NERC's concerns with Building Block 2. The commenters also cited 

MISO's proposal to eliminate interim goals and provided two examples of impacts from grid 

reliability incidents. The commenters recommended that progress towards the final goal can be 

assured by requiring states to identify "objective criteria" demonstrating that progress is being 

made based on what is reliably and cost-effectively achievable in the state.

Commenters stated that the interim compliance period should be eliminated because it is likely to 

result in reliability problems and uneconomic compliance decisions due to the short period of 

time available to develop and implement compliance plans. The commenters further stated that 

it is possible that actions required to meet the interim compliance targets would exceed what is 

required to meet the final 2030 targets. The commenters added that from an overall power 

system perspective, that almost a third of the coal-fired generating capacity available to meet 

demand in 2010 could be shut down by 2020. The commenters stated that the interim compliance 

period would deprive states and utilities of the ability to effectively manage this transition in a 

way that ensures reliability and mitigates cost impacts.

Commenters identified several passages in NERC's 2014 report supporting the commenters’ 

position. The commenters stated that it is clear from the NERC report that implementation of the 

Proposed Guidelines could present reliability problems for the bulk power system, especially 

given the extremely compressed implementation schedule. The commenters continued that it is 

prudent to expect that the retention of the interim compliance period, as proposed, will create 

reliability problems and the prudent path forward, would be to eliminate the interim compliance 

period to provide the time needed to meet the 2030 goals.

Commenters also noted MISO's concerns in a letter submitted to EPA regarding the timeline for 

reliable compliance: 1) that the interim emissions performance requirements create an untenable 

and infeasible timeline for reliable compliance, and would cause MISO member companies to 

make decisions on a severely truncated timeline, and 2) urges EPA to remove the 2020-2029 

interim emission performance period and levels from the final rule to allow sufficient time for 

reliable and efficient implementation of compliance strategies

Commenters stated that there are options for addressing reliability issues created by the 2020 

interim standards: 1)eliminate interim standards altogether and allow states to develop a glide 

path where as long as the state can demonstrate reasonable further progress toward the final 2030 

goal, the state will be in compliance; and 2) incorporation of a dispatch price adder for EGU 
48

CO2 emissions by a state could provide an optional best efforts "safe harbor" approach to 

establishing the glide path. 

Commenters highlighted issues on the gas demand and what that could mean for the secondary 

impacts for the home heating costs in Colorado Springs. The commenters asked the EPA 

consider a less stringent interim goal since the interim goal is virtually identical to the final 

goal. The commenters stated that this means customers will experience an immediate and 

significant rate impact in 2020, which, if the natural gas market responds with increased prices, 

customers will get it both ways, both on their power bill and their natural gas bill, their heating 

bill.

Commenters stated they would like to see a safety valve included to allow for unexpected rate or 

reliability impacts because 90 years in the natural gas markets have taught us that the natural gas 

markets are not predictable, and some sort of financial mechanism, a safety valve or an off ramp, 

needs to be provided if natural gas prices exceed a certain threshold.

Commenters stated that the interim targets will force many generators into early retirement at a 

time when the generation fleet is struggling to maintain reliable service and that the interim 

emission reduction goals should be eliminated to allow a more orderly, cost-effective and 

reliable transition to a lower carbon emitting power sector. As evidence, the commenters 

provided statistics of the effects of the 2013-2014 extreme cold in the mid-Atlantic region, the 

effect of MATS and the proposed rule on retirements, and economic impacts. The commenters 

noted the importance of ensuring a reliable electric grid cannot be overstated.

Response 1: The final rule features overall flexibility, a long planning and implementation 

horizon, and the widest possible range of options for states and affected EGUs to achieve the 

CO2 emissions goal. This design reflects, among other things, the EPA’s commitment to 

ensuring that the final rule does not interfere with the industry’s ability to maintain the reliability 

of the nation’s electricity supply. Comments from state, regional and federal reliability entities, 

power companies and others, as well as consultation with the Department of Energy (DOE) and 

Federal Energy Regulatory Commission (FERC), helped inform a number of changes made in 

this final rule to address reliability. Please see Chapter VIII.G.2 for a full discussion of electric 

reliability and the Clean Power Plan.

Comment 2: Commenters urged EPA to withdraw this proposal and consider a more commonsense approach that will be a true all-of-the-above energy strategy because of the prospect of 

threatening American jobs by nearly eliminating coal from the generation mix.

Commenters urged EPA to reconsider the proposal outlined in its Clean Power Plan and stated 

rather than pursuing a balanced approach that could reduce emissions while also ensuring 

consumers and business will continue to have access to affordable and reliable energy as the 

economy continues to recover from the worst recession in generations, EPA's Clean Power Plan

risks American energy affordability and reliability through sweeping rules that exceed the 

agency's legal authority.
49

Commenters stated that EPA should withdraw its proposed existing source performance 

standards (ESPS) because it will threaten grid reliability. The commenters stated further that the 

SPP warns of adverse impacts the CPP will impose on America's bulk electric system and unless 

the proposed CPP is modified significantly, there will be detrimental impacts on the reliable 

operation of the bulk electric system in the SPP region. The commenters also highlighted 

concerns by NERC.

Commenters stated that they request you withdraw this proposal and resubmit a proposal that 

complies with the Clean Air Act and states and be implemented under state laws. The 

commenters stated that the regulatory approach on these proposed rules goes well beyond the 

limits of Section 111(d) and that proposed rule infringes on state and local authority to regulate 

the utility business and the utility's ability to plan and operate the electric system in a reliable and 

cost-effective manner.

Commenters stated the proposal needs to be abandoned because it fails a basic cost-benefit test. 

The commenters said the cost on consumers and small businesses are substantial while the direct 

benefits are essentially non-existent. The commenters cited NERC stating the CPP would raise 

electricity prices by as much as 17 percent between 2017 and 2031, depending on which building 

blocks are available for compliance and force the retirement of as much as 169 gigawatts (GW) 

of coal-fired capacity, on top of the 60 GW projected to close because of, principally, EPA's 

Mercury and Air Toxics Standards (MATS) regulation. The commenters said the CPP and 

MATS would decimate the nation's coal fleet, shutting down roughly two-thirds of its existing 

capacity and impose about $366 billion in costs on the U.S. energy system between 2017 and 

2031. The commenters stated higher energy costs impose disproportionate economic impacts on 

small business owners, as electricity costs often constitute a small firm's biggest expenses. 

Response 2: EPA received over 4 million comments to the proposed rule and many of them 

were constructive, offering specific changes that were helpful in developing the final rule. The 

final rule, is designed to avoid disturbing the power industry’s ability to maintain electric 

reliability. In addition the impact on jobs is modest but positive, on electricity and fuel costs is 

very reasonable. Please see section Vlll.G.2 for a full discussion of the impact of the rule on 

reliability and Section XI and the Regulatory Impact Analysis for full discussions of the 

economic impact of the final rule. 

Comment 3: Summary of several previous comments.

Commenters summarized previous arguments and stated that EPA recognizes in the proposal that 

there is no technological option to reduce CO2 emissions from EGUs, therefore the CPP's BSER 

relies almost exclusively on reducing or eliminating coal generation to reduce CO2 emissions. 

The commenters stated that MATS and the Cross-State Air Pollution Rule (CSAPR) are forcing 

the retirement of approximately 47 - 75 GWs of coal units and the CPP is estimated to force the 

retirement of an additional approximately 40-48 GWs of coal capacity. The commenters stated 

that eliminating this much coal generation severely threatens the reliability of this country's 

electric grid. The commenters stated further that rural electric cooperatives are particularly 

vulnerable to impacts of reduced coal generation and that these impacts will fall on the poorest 
50

electric consumers in the country. The commenters stated that their ability to reliably serve 

members with low cost electricity will be compromised by the CPP.

Commenters stated that in addition to supporting jobs, coal also provides 40 percent of America's 

electricity. The commenters stated further that by imposing dramatic emissions standards on all 

existing power plants under the threat of crippling fines, more plant closures and an overreliance 

on natural gas to provide electricity are certain to follow.

Commenters stated several concerns regarding the proposed rule, with the concerns falling 

broadly into three categories - timeframe, cost, and reductions in power reliability and 

diversity. The commenters stated further that the resulting reduction in coal generation could 

reduce electric reserve margins and potentially affect grid reliability and power pricing.

Commenters stated that the entire security of the power grid is at risk with the implementation of 

the Clean Power Plan and that many non-partisan groups, such as NERC, the Congressional 

Research Service, and FERC, are voicing reliability concerns related to the proposed Clean 

Power Plan.

Response 3: EPA disagrees with these comments. See GHG Mitigation Measures TSD, RIA 

Chapter 3, and preamble sections V and VIII,G.2.

Comment 4: The CPP Will Reduce Diversity of Energy Supply

Commenters stated that all energy consumers, whether they be manufacturers, commercial 

enterprises, or residential households, benefit from a diverse energy supply and an "all-of-theabove" energy strategy. The commenters stated further that diversity of energy supply is not only 

critical in keeping energy costs reasonable, it is essential in ensuring steady and reliable streams 

of energy to power our factories and heat our homes. The commenters noted that for most 

Georgia industries, energy represents a major input cost, often second only to labor costs and that 

energy costs can often be a major factor in determining economic viability of an enterprise.

Commenters stated that in recent years, energy costs have been relatively advantageous for 

Georgia industry in large part because of the abundant and diverse supplies of affordable energy 

resources that are collectively keeping energy costs reasonable and supply reliable and provided 

several examples. The commenters further stated that if regulations such as the EPA's CPP force 

energy options off the table, energy prices will be more volatile, costs will increase, reliability 

will be threatened and ultimately Georgia's businesses and other U.S. firms will be less 

competitive in the global economy.

Commenters stated that consumers of energy, whether they are large manufacturers or individual 

households, benefit most from an all-of-the-above energy strategy and that diversity of energy 

supply is not only critical in keeping energy costs reasonable, it is essential in ensuring steady 

and reliable streams of energy to power our factories and heat our homes. The commenters stated 

further that for many businesses and industries that compete in a global economy, energy 

represents a major input cost that can ultimately determine viability. The commenters stated that 
51

as Georgia recovers from the Great Recession, ensuring stable and affordable costs and reliable 

electricity are even more crucial.

EPA's proposal is counter to an All-of-the-Above energy policy

Commenters said consumers of energy benefit most from an all-of-the-above energy strategy, 

and diversity of energy is critical in keeping energy costs reasonable and reliable. The 

commenters stated energy represents a major input cost that can ultimately determine viability is 

an advantage for many U.S. industries because of the abundant and diverse supplies of affordable 

energy resources and is spurring economic growth. The commenters stated EPA's calculations in 

the CCP are partially based on re-dispatch from coal-fired generation to natural gas -fired 

generation to the fullest extent possible prospectively, and EPA's own analysis of the impact of 

these rules would significantly curtail coal-fired generation, beyond retirements already seen or 

planned due to other environmental regulations such as the Mercury and Air Toxic Standards. 

The commenters said these rules, in combination with EPA's proposed New Source Performance 

Standards for coal -fired and natural gas -fired power plants that effectively would prohibit any 

new coal-fired power generation by requiring new plants to implement undemonstrated and 

prohibitively expensive carbon capture and sequestration technology, force energy options off 

the table. The commenters added that historical experience teaches that long-term energy prices 

and sources are unpredictable, and as a result, there are long-term costs to losing diversity in 

power production, both in the cost and reliability of the domestic power market. The commenters 

concluded saying, by forcing retirements of diverse energy sources, the Clean Power Plan would 

threaten the reliability and affordability of electricity in this country.

Commenters recommended the EPA work with Congress, other federal agencies, industry, 

environmentalists, and labor to propose a "Clean Power Plan" that not only acknowledges carbon 

pollution, but also takes into consideration the economic impact electric generating units have on 

our local communities, as well as the reliability of the electrical grid. The commenters stated 

further, the role coal-fired power generation plays in meeting the nation's baseload power needs 

must be distinguished, and only then can the EPA realize an "all of the above" energy portfolio.

Commenters stated that EPA has not addressed the vulnerability of natural gas and oil pipelines 

to natural as well as man-made disasters. Commenters stated historically gas supplies to Florida 

have been curtailed significantly during hurricanes in the Gulf. The commenters provided 

several examples of disruptions from hurricanes. In addition, the commenters stated that EPA 

has failed to consider the vulnerability of pipelines to potential terrorist attacks and to cyber 

attacks on supervisory control and data acquisition (SCADA) systems or attacks on electricity 

grids and communication networks. 

Commenters stated that Florida's current diverse mix of electric supply, including coal-fired 

generation, has allowed the mitigation of potential risk of natural gas disruption due to natural or 

man-made causes. The commenters further stated that "[c]oal on the ground" has been the key to 

Florida's energy reliability and that, as provided by the CAA, the State of Florida should have the 

right to develop an ESPS that addresses the gas supply disruption issues to assure Florida's 

electric reliability and security.
52

Commenters stated that EPA's Draft Clean Power Plan demonstrates that significant carbon 

dioxide emissions reductions might be feasible. The commenters continued that if EPA seeks to 

produce a Clean Power Plan that is viable under conditions of foreseeable risks from natural 

hazards and man-made threats to the electric grid, it will be essential to model mitigative 

measures that could offset degradations of electric grid reliability in the period 2015-2030 and 

thereafter.

Commenters stated further that EPA should bear in mind that intentional assaults on electric 

grids are becoming a current reality and gave some examples of attacks outside the U.S. The 

commenters referred to November 20, 2014 comments by the Director of the National Security 

Agency, Admiral Michael Rogers, testifying in public before the House Select Committee on 

Intelligence that more than one nation state, and perhaps non-state actors, had the capability to

attack the U.S. electric grid now or in future years and that it is a matter of 'when' not 'if'.

Commenters stated that EPA's proposed Clean Power Plan will cause disruptive changes in the 

region's well diversified electricity mix.

Commenters stated that they are concerned about the prospect of our nation becoming too reliant 

on a single source of fuel (i.e. natural gas) to supply the majority of its energy generation. The 

commenters stated that EPA should re-consider its rule to recognize the value of a more robust 

and varied fleet of fuel resources throughout the country, taking full advantage of each state's 

relative ability to take advantage of the resources readily available to it.

Commenters stated that rather than an "all of the above" energy strategy, the rule would anoint 

some clear winners and under the approach as proposed, carbon-based natural gas would become 

the backbone of the CPP. The commenters quoted results from studies by the HIS and 

CSIS. The commenters stated that given that the EPA-proposed CPP encourages substantial 

addition of intermittent generation from wind and solar generation, effects of the EPA proposed 

CPP on grid reliability and reserve margins must carefully be examined by appropriate Federal 

agencies in order to minimize any unintended consequences on the nation's electricity supply 

system.

Response 4: EPA disagrees with the commenters. As demonstrated in Chapter 3 of the RIA, 

under the illustrative compliance scenarios analyzed, the EPA projects that future demand will 

continue to be met with a diverse energy supply. See in particular Figure 3-3 (Generation Mix) 

in Chapter 3 of the RIA. Furthermore, as discussed in Chapter 3 of the RIA, the EPA projects 

small changes in electricity price as a result of the rule, within the range of historical price 

fluctuations.

Regarding the security of natural gas pipelines, the EPA does not project that this rule will have a 

significant impact on pipeline capacity. For more information, see the Resource Adequacy TSD.

Comment 5: Commenters stated that section 111(d) of the Clean Air Act provides states with 

significant discretion in terms of how they comply (market-based regulatory mechanisms, 

demand-side energy efficiency policies, renewable energy policies) with EPA's CO2 

performance targets. The commenters stated that working together, the grid planners and states 
53

can identify commonalities and conflicts among different state plans, and the grid planner can 

then create a regional transmission plan (updated on an annual basis) that helps to meet the 

states' CPP targets.

Commenters stated that states and utilities are responsible for vigorous, ongoing use of the 

regional grid planning process. The commenters stated that states can obtain ongoing system 

information and modeling projections to allow them to align their individual plans/goals more 

closely with regional needs, and they can direct utilities with state law obligations to engage 

more completely in the planning process. The commenters stated that State commissions and 

other state entities are responsible for implementing renewable energy standards.

Commenters stated that they agree with EPA that meaningful emission reductions can be 

achieved from the electric sector while maintaining electric system reliability. The commenters 

said while challenging, the proposed rule is designed to allow states great flexibility in 

developing their individual compliance plans, and they have been making investments in clean 

energy technologies over the last 15 years that have substantially reduced emissions from their 

generating fleet and saved customers billions of dollars in fuel costs while keeping electric rates 

low. The commenters stated the those benefits have been achieved while maintaining high 

reliability of service to our customers, and they anticipate that other power companies will have 

similar opportunities to improve their emissions profiles without compromising reliability and 

without shifting compliance costs to the customers of other utilities that have already undertaken 

significant efficiency and emissions improvements in their generating fleets.

Response 5: EPA agrees that there are multiple parties that can play a helpful role in the 

development of state plans including the state utility regulators, state energy offices, and grid 

operators. The structure, timing and flexibility in the state rule all encourage the engagement of 

these parties. 

Comment 6: Commenters stated that the compliance cliff imposed by a 2020 implementation 

milestone would likely have many adverse impacts, including the premature shutdown of many 

existing coal-fired EGUs. This outcome most likely occurs in those states that rely on coal-fired 

generation for a substantial fraction of their electricity sales. The commenters noted several 

examples, as set forth in Table 2 where coal supplies about one quarter or more of the electricity 

sold in a state and where EPA's has assumed that the re-dispatch to NGCC will result in a onethird reduction in the state's coal-fired generation by January 2020. The commenters continued 

that forcing the premature shutdown of these existing coal-fired EGUs in 2020 will result in 

billions of dollars in stranded assets with many of these units not close to the end of their useful 

lives and, in many cases, the units have recently installed expensive pollution control equipment 

to comply with newly adopted EPA regulations, such as the MATS Rule and the Regional Haze 

BART requirements. The commenters stated that consumers would likely incur higher 

electricity costs as a result of these stranded asset costs.

Commenters stated that MISO's analysis of the Proposed Rule projects that up to an additional 

14 GW of coal capacity could be at risk for retirement in addition to the 12.6 GW of coal 

capacity slated to retire by the end of 2016 to comply with EPA's MATS rule. The commenters 
54

stated further that MISO is already on record stating that it is not on pace to achieve its goal of 

14.5 percent reserve margins in 2016 largely due to planned coal retirements as a result of the 

MATS rule and that this projected shortfall does not take into account the 14 GW of coal 

capacity that could be at risk due to retirements caused by implementation of the Proposed Rule. 

The commenters noted that any additional retirements as a result of the Proposed Rule will 

reduce MISO's ability to meet reserve margins, which could negatively impact reliability.

Commenters stated EPA has made optimistic assumptions related to future fuel costs and ignored 

the impact of stranded costs on utilities, in particular publicly owned utilities and that EPA has 

not taken into account the additional costs for needed infrastructure to comply with the proposed 

rule, including new gas pipelines, additional underground storage, new gas gathering facilities, 

transmission lines and land acquisition. Commenters said their concerns include:

• Stranded Investments: Since most of the coal-fired units will not reach the end of 

their normal useful life until long after the 2020 implementation date of the ESPS, 

the utilities would be left with significant stranded assets which still must be paid 

for even if they do not generate electricity. In addition, the utilities will either 

have to acquire new debt for replacement generation or enter into power purchase 

agreements (PPAs) with other utilities. The combined impact of stranded costs 

and acquiring gas-fired generation to offset existing coal generation could result 

in average electric rate increases greater than 20%, without considering the rate 

impact of ESPS driven increased natural gas prices. 

• Future ESPS Driven Natural Gas Price Increases Understated: EPA's assumptions 

are very optimistic on the impact that the ESPS will have on future natural gas 

prices relative to a base case, and EPA's analysis indicates, with the exception of 

2020, that natural gas prices may actually decrease. The ESPS as proposed will 

radically change the generation mix of the county and shift greater dependency on 

natural gas. A study by the Aspen Environmental Group indicates that the 

elimination of coal-fired generation would increase the annual gas usage by the 

utility industry from less than 8 trillion cu. ft. per year to about 24 trillion cu. ft. 

meaning that two thirds of the natural gas produced in the US would serve electric 

power plants compared to one third currently. The Aspen study uncovered an 

inconsistency related to projected natural gas prices and gas production prepared 

by EIA and others with regard to hydraulic fracturing.

Commenters stated that it would be imprudent to not consider the strong potential for natural gas 

prices to double with the ESPS compared to a base case when estimating the rate impact of the 

proposed rule. 

Commenters stated that premature retirement of the units in their area would compromise the 

reliability and fuel source diversity of electric service and create risk to human health and safety 

as well as risk for property damage, creating unreasonable risks for area residents. The 

commenters stated that the limited availability of generation and transmission resources 

heightens the importance of each resource to reliability. The commenters also stated that 

geographic circumstances render the continued availability of coal of particular importance. The 
55

commenters stated that the importance of reliability should not be underestimated as it directly 

impacts the health and safety of residents in their frequently extreme climatic conditions.

Commenters stated EPA's proposal shuts down additional coal-fueled power plants and forces 

the use of higher-cost sources. The commenters stated the combined retirements (about 120,000 

megawatts) are enough to power half of America's households (about 60 million), and many that 

will be shutdown have recently received emission control upgrades costing billions of dollars 

nationwide, spanning several years of design, construction, and commissioning.

Response 6: The start date of the interim period is now 2022 under the final rule. Additionally, 

building block two is phased in over the interim period. See preamble section VIII.B. See RIA 

Chapter 3 for projected impacts of this final rule.

Regarding the assertion that EPA has not considered costs of infrastructure, EPA disagrees with 

this comment. The cost-effectiveness assessment of building block two does, in fact, consider 

the additional cost of pipeline construction as well as the impact on natural gas prices. See the 

GHG Mitigation Measures TSD.

Regarding the claim that projected gas price impacts under the rule are understated, EPA 

disagrees with this comment. The EPA’s analysis of both the proposed and final rule is informed 

by the Integrated Planning Model (IPM), developed by ICF Consulting, which is a state-of-theart, peer-reviewed, dynamic linear programming model. The model incorporates a detailed 

representation of the fossil-fuel supply system that is used to forecast equilibrium fuel prices. 

The model includes an endogenous representation of the North American natural gas supply 

system through a natural gas module that reflects a partial supply/demand equilibrium of the 

North American gas market accounting for varying levels of potential power sector gas demand 

and corresponding gas production and price levels. This module consists of 118 supply, demand, 

and storage nodes and 15 liquefied natural gas re-gasification facility locations that are tied 

together by a series of linkages (i.e., pipelines) that represent the North American natural gas 

transmission and distribution network. For more information, see RIA Chapter 3 and the IPM 

Documentation, available in the docket.

See section 4.7 and 5.11 of this document for EPA’s response to comments relating to stranded 

assets.

Comment 7: Commenters stated that EPA should consider the role of demand response and load 

management programs in optimizing the electric systems to utilize lower carbon generation 

resources. The commenters noted that they have had load management programs in place for 

more than 30 years and this system is capable of providing more than 300 megawatts of direct 

summer load control. The commenters provided an example of their electric thermal storage 

program and stated this program, and its alternatives, highlight the difference between "when" 

energy is consumed and "how much" energy is consumed.

Response 7: The EPA agrees that that a wide variety of demand-side energy efficiency measures 

(including demand response and load management programs) can be cost-effective strategies for 

reducing CO2 from affected EGUs. These measures are in widespread use across the country and 
56

can create multiple benefits beyond greenhouse gas mitigation including lower electric bills, 

positive investments and job creation, and reduction of other air pollutants from power plants. 

The EPA recognizes that a wide variety of demand-side energy efficiency measures have been 

achieving significant energy savings for years with additional opportunity to achieve energy 

savings in the future and to do so cost effectively. The EPA has determined not to include 

demand-side energy efficiency (building block four) in the BSER of this final rule and therefore 

we do not need to address it further here. This determination is discussed in section V.A of the 

final rule preamble of the CPP. Even though demand-side energy efficiency is not being included 

in the BSER in this final rule and, thus, not included in the determination of emission 

performance rates, the final rule provides states the flexibility to use demand-side energy 

efficiency measures in their state plans for compliance to meet the emission guidelines set forth 

in the final CPP, provided they meet the applicable requirements established in section VIII of 

the preamble for the CPP.

Comment 8: Commenters stated that the proposed CPP provides states and developers 

additional incentives to rapidly expand their non-hydro renewable capacity to displace existing 

coal generation. The commenters stated that the state calculations assume that non-hydro 

renewable capacity could grow rapidly by 5 percent per year, and that this incremental renewable 

generation represents well over twice the energy currently supplied by variable energy resources 

and would be dominated mostly by new wind, and to a lesser extent, new solar capacity. The 

commenters stated that successful large-scale storage solutions have not yet been 

commercialized, that these storage technologies support the reliability challenges that may be 

experienced when there is a large penetration of variable energy resources, and that their 

development should be expedited.

Commenters stated that some regions that depend upon long interstate gas pipelines have limited 

underground storage and increased risks of sustained electric blackout and that natural gas 

production is concentrated in the southern United States. The commenters stated further that 

adding to risks of long-distance energy transmission, geological factors prevent significant 

underground natural gas storage in about 40% of states. The commenters stated further that 

adding to risks of long-distance energy transmission, geological factors prevent significant 

underground natural gas storage in about 40% of states.

Response 8: See Chapter 4 of GHG Mitigation Measures TSD for a discussion of potential 

growth in renewable electricity generation under the final rule. Regarding gas pipeline and 

storage, see Resource Adequacy TSD.

Comment 9: Commenters stated that EPA has not demonstrated that all states can increase the 

utilization of existing natural gas combined cycled units to 70 percent and that shifting the way 

these units are operated will impact other forms of generation and the grid.

Response 9: EPA disagrees with this comment. See section V.D. of the preamble and Chapter 3 

of the GHG Mitigation Measures TSD.
57

Comment 10: Commenters stated that EPA has not properly taken into account the costs 

associated with the increase of natural gas usage. The commenters stated that while EPA 

estimated a modest increase in natural gas costs, an increase in delivery costs was not factored in.

Response 10: EPA considered delivery costs of gas. See Chapter 3 of the RIA and Chapter 10 

of the IPM Documentation.

Comment 11: Commenters requested that more information re: the agency's cost-benefit 

analysis for the proposed rule be provided - specifically, explain in greater detail how "social 

cost of carbon" estimates were calculated.

Response 11: See Chapter 4 of the RIA for details on how the ‘social cost of carbon’ estimates 

were calculated. Chapter 4 provides a detailed discussion about the calculation of the social cost 

of carbon and also references the social cost of carbon technical support documents for 

additional details, available at https://www.whitehouse.gov/omb/oira/social-cost-of-carbon. In 

addition, see response to comments in section 8.7.2, comment 1, for detailed discussion about the 

methodology used to estimate social cost of carbon. 

Comment 12: Commenters stated the single biggest winner of this rule is natural gas and by 

2030 the role of gas in our energy mix is expected to rise from 27 percent to 32 percent. The 

commenters further stated this should concern us for a number of reasons: the rule does not 

appropriately or accurately measure fugitive methane emissions, which when factored into a 

lifecycle analysis of gas, may make it even dirtier than coal; more reliance on natural gas means 

more fracking, which means more contamination of our air and our water, more predatory 

leasing practices, and more corporate money spilling into our local, state, and federal elections to 

help purchase favorable regulations; and the rule encourages more gas infrastructure, meaning 

pipelines, compressor stations, processing facilities, and gas fired plants.

Commenters stated increased reliance on natural gas will not reduce our emissions, but will only 

continue our dependence on dirty fossil fuels, and that the climate impacts of natural gas remain 

unclear and could be as bad as coal. The commenters also noted that additional natural gas 

would also require increased fracking, releasing high levels of toxins in the air near fracking 

wells that cause such health impacts, contaminates drinking water with billions of gallons of 

toxic waste each year, and could potentially result in an increase in earthquakes.

Response 12: On EPA’s estimates of methane emissions from natural gas systems, please see 

response to comment 18 in section 8.2 of this responses to comments.

Comment 13: Commenters provided examples and detailed explanations of how advanced 

technologies can ensure that the changes envisioned by the Proposed Rule will have no 
58

significant adverse impacts on grid reliability and cost, including those changes determined to be 

part of the BSER. The commenters discussed the reliability and flexibility benefits of energy 

storage and distributed resources, as well as how renewable energy and low-emission 

dispatchable NGCC can complement each other both technologically and economically, 

allowing the electricity system to provide reliable, low-carbon energy while hedging against 

future uncertainties. The commenters further stated that accelerating the modernization of the 

electric grid to integrate the various resources envisioned as part of BSER can actually improve 

reliability and decrease costs, for example, by cutting peak demand. The commenters also 

provided examples from New York and Colorado as well as cited studies that indicate advanced 

planning will ensure that the CPP does not create reliability concerns across the different state 

market structures. The commenters provided several references to support the detailed 

explanations and statements.

Commenters stated that some stakeholders are resistant to the plan because the grid can't handle 

distributed energy. The commenters suggested building a grid based on the constraints of 

centralized fossil fuel energy so it can be modified to support distributed energy.

Commenters stated the EPA has proposed rules that are not based on any existing technology 

that has been proven on a commercial scale, and we must continue to invest in innovative 

technologies, including clean coal and natural gas technologies, to ensure our energy supply 

remains accessible, affordable and reliable for all Americans. The commenters said our great 

country should be a leader in developing the technologies so that we can export them to the 

world, but it is unreasonable to require the use of technologies that do not yet work at the 

commercial scale.

Commenters stated that several recent studies have raised new questions about whether natural 

gas can form the cornerstone of a carbon-emissions reduction strategy in that abundant natural 

gas use displaces not only higher carbon coal-fired generation but also generation from 

renewable sources and nuclear power and as a result, substantially change the global energy 

system over the decades ahead without producing commensurate changes in emissions or climate 

forcing. The commenters stated that it is important to examine whether the CPP encourages 

states to move quickly enough to adopt renewable energy and energy-efficiency technologies and 

to look at the extent to which other state and federal policies may be needed to incentivize the 

deployment of these technologies.

Response 13: Thank you for your comment.

Comment 14: Commenters stated relying on power purchase agreements (PPAs) to replace the 

generation lost through retirement of Arizona's coal-fired power plants has limitations for the 

following reasons:

• PPAs are bilateral agreements and, as such, risk default, potentially leaving the 

utility without an anticipated resource. 

• PPAs are generally subject to additional regulatory procurement processes that 

require additional lead time and higher costs.
59

• Power procured through a PPA must be matched with transmission capacity to 

deliver that power to the load center, and such capacity does not currently exist.

Response 14: See preamble section V.D. While there may be limitations to PPA arrangements, 

the EPA believes that they can be a viable options depending on circumstances, and believes that 

the final rule provides the flexibility for sources to utilize many additional pathways to 

compliance.

Comment 15: Commenters discussed inconsistencies in the information in Tables 5, 6, 7 and 15 

of the RIA that impact the outcome of the analysis. Regarding Table 5, the commenters stated 

that amount of power generation from combustion turbines (CTs) as opposed to combined cycles 

is quite low in the modeling, and it is unclear if EPA's model took into account that CTs handle 

short-term load following and peak needs and have high heat rates compared to combined cycles. 

The commenters posited that if CTs produced on the order of 100 TWh instead of 20, it would 

mean that the emissions reductions from fuel switching would not be as great as the model 

predicted. Alternatively, if CTs operate less frequently than they do today, the commenters stated 

that this implies that the coal power fleet will have to accommodate load following duties, which 

will increase the CO2 emission rates of coal power plants. The commenters also pointed out an 

inconsistency in EPA's state goal computation spreadsheet. The total amount of power produced 

from coal plants is 1,098TWh or 21% less than what was used in the cost-benefit analysis which 

could impact the outcome of the cost-benefit analysis. 

Commenters further stated that additional details from EPA regarding Table 6 estimates would 

be useful. The commenters had the following observations: In 2012, there were 323GW of coalfired capacity as compared to the 211GW nationwide in 2020, which could be interpreted as a 

projection that approximately 35% of the existing coal fleet will be retired by 2020. If the base 

case for 2020 calls for 244GW of coal capacity, it seems to indicate only 33GW of retirements 

from the proposed rule, however it is unclear what occurs regarding the other 79GW. If 112GW 

of coal generating capacity is retired, it is unclear what capacity will replace it to ensure adequate 

reserve margins. Additionally, the commenters stated that Table 6 predicts there will be a total of 

251GW of NGCC in 2020 which is only 4GW more than existed in 2012. 

The commenters pointed out that Table 7's average capacity factor of 57% from the NGCC fleet 

in 2030 is significantly less than the 70% capacity factor premised in the proposed rule preamble, 

and less than the 64% used as the basis of the proposed state targets. 

Regarding Table 15, the commenters suggested EPA consider that natural gas prices may 

increase beyond 10% if, as predicted, the power sector's increase of natural gas increases by 

25%. The commenters stated that the price prediction has an impact on the overall cost of 

implementing the fuel switching strategy of Building Block 2.

Commenters stated that in the Regulatory Impact Assessment (RIA), EPA estimates an annual 

increase of 3.1% in electric rates by 2030, whereas NERA estimates the increase to be 12% 

annually for option 1 in the rule. The commenters also stated that the RIA indicates the modest 

increase in rates will be offset by reduced electric usage. The commenters further stated that the 
60

NERA study indicated that the cumulative cost of energy efficiency programs required for BB #4 

at $560 billion but it is very likely that the electric rate increases necessary to pay for BB #4 

energy efficiency programs will more than offset the savings from reduced electric usage by 

consumers.

Response 15: EPA’s modeling includes reasonable assumptions regarding the heat rates of 

combustion turbines. The cost-benefit analysis reasonably assess the impacts of the rule in a 

future year, and as such it is appropriate to use future demand forecasts rather than 2012.

Regarding retirements, the RIA appropriately reports projected retirements incremental to a base 

case, allowing for analysis of impacts related to the rule. Furthermore, EPA appropriately 

removed capacity from the model based on public announcements of future closures. Removal 

of such capacity pre-empts the model itself from making any decisions regarding that capacity’s 

future status or configuration; such capacity is simply no longer available for the model to 

consider in optimizing electricity supply to meet demand. 

The EPA believes that the gas prices projected both in the cost-effectiveness analysis of Building 

Block 2 as well as the impacts analysis presented in the RIA of the final rule are reasonable. See 

Chapter 3 of the GHG Mitigation Measures TSD and Chapter 3 of the RIA.

The EPA believes the retail price projections presented in the RIA for the final rule are 

reasonable estimates of the two illustrative compliance scenarios.

Comment 16: Commenters stated that "EPA's explanation of the energy requirements language 

in Section 111(d), as it relates solely to reliability and providing sufficient flexibility to enable 

affected sources to follow state energy plans, is more narrow than warranted." The commenters 

cited the 1990 Senate Committee Report which explained that "the incentives created by the 

allowance market should stimulate innovations and technologies and strategies used to reduce 

emissions. [T]he allowance market should encourage sources to exploit energy efficiency, 

enhanced emission reduction or control technologies; fuel-switching and least-emissions 

dispatching in order to maximize emission reductions." The commenters stated that it is therefore 

congressional intent for energy impacts to be considered at the source level, the industry level, 

and the national level over time and recommended that EPA design the final rule with 

this consideration to avoid simply switching from one fossil fuel source to another. The 

commenters added that, "while heat rate improvements for coal EGUs and integration of lower 

emitting natural gas combined cycle units might be essential in the interim for a number of states 

to lower their emissions levels drastically, exclusive reliance upon just those two building 

blocks, for purposes of compliance, would not address long-term considerations of fuel price 

risk, climate action, or system reliability."

Response 16: This rule does not require exclusive reliance on Building Block 1 and 2. See 

preamble section VIII.
61

Comment 17: Multiple commenters discussed impacts of the proposed rule on local and 

municipal entities.

Commenters stated that the proposed rule will increase wholesale and retail rates for their city in 

Minnesota. Commenters stated an analysis of the effect of the proposed rules indicates rate 

increases of nearly 20% ($35 million annually) in supplemental power supply costs. The 

commenters stated that the rate increase will put significant economic pressure on residential, 

commercial and industrial customers. The commenters further stated that EPA's projection that 

the overall effect of the rule will be a decrease in the cost of electricity to end users is flawed in 

many respects, and does not fully account for all of the costs required to comply with the 

proposal.

Commenters stated that transporting the large volume of water requires a relatively significant 

amount of electricity and electricity is a major portion of the cost incurred in delivering drinking 

water to customers. The commenters indicated that AECC has indicated that the Clean Power 

Plan can potentially raise electrical rates by as much as 30% and would have a significant impact 

on the rates charged to customers, both residential and industrial. The commenters stated that 

without electricity the water from the source cannot get to the plant, the water cannot be treated, 

and the drinking water cannot be delivered to customers. The commenters also noted that they 

have serious concerns about any plan that would jeopardize the reliability of the electrical grid.

Commenters stated that electric power customers in the Cincinnati region and Ohio confront 

immediate and extensive service issues with generators in the PJM system ready to shut down 

base-load coal plants, in response to EPA's MATS. The commenters stated further that the CPP 

does not seem likely to initiate the kind of investments and the scope of investments required to 

assure a robust electric supply in the Cincinnati region and Ohio. The commenters noted that this 

concern pertains to replacement and that new and additional generating capacity presents yet 

another major set of issues.

Commenters stated their concern over the impact of this proposal extending beyond the electric 

markets. The commenters stated this proposal will create significant new demand for natural gas 

and noted that their front range power plant, if it is run at full capacity, will consume as much 

natural gas in a year as the entire retail distribution load. The commenters stated that one power 

plant equals about a Colorado Springs' worth demand for natural gas for one power plant and 

want the EPA to be fully aware they use a lot of natural gas.

Commenters stated that with its diverse portfolio of energy assets electric reliability in the 

Lansing area has been maintained with minimal transmission support. The closure of generation 

in Lansing would make it very difficult to meet peak loads, and the Proposed Rule would 

compound the dilemma of inadequate power supply by indirectly restricting new generation from 

natural gas, and significant emphasis on greater wind and solar power, or some combination 

thereof.

Commenters stated that most IEE projects include other benefits, including on-site fossil fuel 

savings and reduction in water consumption. The commenters stated that IEE projects often 

reduce the consumption of water significantly below the consumption levels existing before the 

conservation measures are installed and since the movement of water is energy intensive, the 
62

water savings enabled by IEE projects create additional, ancillary GHG reductions by avoiding 

the energy consumption that would otherwise be needed to transport that water.

Response 17: The EPA disagrees with these comments. See RIA Chapter 3 for EPA’s 

projections of retail electricity price impacts, which the EPA estimates will be less than one 

percent on average in 2030. Additionally, as discussed in the same chapter of the RIA, EPA 

projects gas demand to decrease. Regarding reliability, see section 8.9 of this document.

Comment 18: Commenters stated that EPA fails to consider whether states will be able to attract 

some 103 gigawatts of new generation to replace the retired coal resources with the limited tools 

available to them. The commenters further stated that EPA arbitrarily and capriciously assumes 

that developers will respond to price signals and that all the need for new generation will be met 

accordingly, but if not, the states' limited powers may be insufficient to incentivize the amount 

new generation required to meet the emissions reductions targets. The commenters remarked that 

authority to adopt laws and regulations that promote utilization of certain types of generation 

facilities over others under the FPA may simply not be enough to attract the amount of new 

generation necessary to achieve the emissions reductions targets on the timeline required by the 

interim goals without compromising reliability. The commenters explained the limits and 

abilities of states under the FPA and stated that ultimately, "states may lack the ability to offer 

the type of incentives necessary to attract the amount of new generation needed to both meet the 

reductions targets and maintain reliability". The commenters provided the following example: 

"states could adopt a standard requiring that utilities purchase 100 percent of their power from 

NGCC units. However, if those NGCC units do not exist, states have little ability to directly 

require that utilities or private developers invest in new generation facilities. Courts have struck 

down state subsidies of facilities and rate subsidies. States are limited to using tools such as tax 

credits or in the case of regulated utilities, such measures as guaranteeing cost recovery". The 

commenters added that such tools are likely to be politically charged and unpopular and may 

insufficient to bring enough new generation online to replace the generation forced into 

retirement by the Proposed Rule.

Response 18: The EPA disagrees with this comment. Regarding new capacity, the EPA projects 

a decrease in new NGCC capacity and a moderate 17-20 GW increase in new renewable capacity 

by 2030 as a result of this rule. This increase, projected to occur over 15 years, is significantly 

less than the amount of new capacity that has been built historically (for example, the EIA Form 

860 reports more than 50 GW of new capacity built in 2002 alone). Regarding the technical 

feasibility of the amount of renewable energy included in BSER, see GHG Mitigation Measures 

TSD. Additionally, see section VIII for a discussion of state plans and the flexibilities available 

to states 

Also, EPA notes that it is unclear how the example regarding the requirement to purchase 100 

percent of power from NGCC that do not exist is relevant to the final rule, which is based on 

shifting generation to existing NGCC. For more information on BSER, see section V of the 

preamble. 
63

Comment 19: Commenters stated that seniors on fixed or diminishing incomes pay a 

disproportionate share of their modest income for utilities and believes our nation must preserve 

and grow the contribution of coal-based electricity. The commenters stated that future energy 

price increases are likely to outstrip real household incomes among the 63% of America's 65+ 

households with gross annual incomes less than $50,000 and that EPA's newest proposal to 

regulate greenhouse gas emissions from existing power plants will further strain the budgets of 

low- and fixed-income seniors.

Response 19: EPA disagrees with this comment. While the EPA projects that this rule may 

result in small increases in retail electricity rates, the EPA projects that average electricity bills 

will decrease due to demand-side energy efficiency. See Chapter 3 of the RIA.

Comment 20: Utility operation issues and challenges

Commenters listed the following operational issues and challenges for electric utilities as a result 

of the proposed rule: 

• States will have to undertake considerable analysis to determine the best way to 

meet their targets. 

• Use of a rate standard will require use of Evaluation, Management and 

Verification of reduction measures as part of their SIP, which is difficult and 

problematic, especially for efficiency projects. EPA will allow conversion of the 

rate standard to a mass emissions cap (in tons) standard but because the 

translation involves forecasting future generation levels and emissions, and the 

proposed rules themselves affect those levels, therefore selected methods may be 

controversial. Not properly accounting for demand growth in the conversion to a 

mass-based cap could make compliance more costly and difficult, as opposed to 

the rate cap which implicitly accounts for growth in emissions over time due to 

demand growth.

• Units are typically dispatched in economic merit order subject to reliability and 

security constraints. Since some renewables such as wind and solar have no fuel 

costs, they tend to also be used first, but since they are generally not-dispatchable, 

they are used as available assuming the system operator can do so reliably. Even 

when the opportunity for greater dispatch of NGCC is available, there will be cost 

consequences. These costs include the stranded costs of coal plants that will no 

longer be operated and thus may be shut down and for which owners will still 

have debt obligations to pay, the costs of operating out of merit order dispatch, 

and increases in the costs of natural gas as a result of increased demand.

• Operating NGCC plants at a much higher capacity factor will place significant 

wear and tear on these plants and require significantly more maintenance. If the 
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plants break down, their lost production may need to be met by less efficient 

plants, actually increasing emissions or possibly resulting in reliability problems.

• The CPP fails to take into account the long lead time needed for new electric 

transmission projects. The lead time for building new electric transmission 

usually exceeds the time needed to build new gas plants, so infrastructure may 

lag. For example, the Southwest Power Pool has estimated that the study, 

planning and construction process for new transmission facilities can take as 

much as eight and a half years. 

• Building block 2 is in direct conflict with building block 1 which expects coal 

units to achieve heat rate improvements. Dispatch preference to NGCC will 

necessarily require coal units to operate at lower capacity factors, resulting in 

average heat rates for coal plants that will decline compared to current levels. 

Giving such high dispatch preference to NGCC and the resulting increased use of 

coal for regulation could also require the system operator to carry more operating 

reserves in order to maintain sufficient regulation reserves, and in particular to 

provide the minimum ramp rates necessary to meet reliability standards.

• Many areas simply don't have alternatives to the current dispatch of coal.

Commenters stated that Michigan currently generates over 50 percent of its generation from coal, 

has a substantial amount of combined cycle capacity, faces an electric capacity shortfall in the 

near-term, and has a stringent interim goal under the CPP. The commenters raised key concerns 

for Michigan, including:

• Threats to Electric Reliability: Michigan already faces a shortage in electric 

capacity, and the CPP will add to that shortage by requiring a significant amount 

of curtailment of coal generation. State implementation plans will not be in place 

until at least 2017, leaving insufficient time to bring online by 2020 new capacity 

to compensate for the loss in coal capacity, threatening reliability. Temporary 

solutions such as postponing coal curtailments are rendered impractical because 

of the stringency of Michigan's interim CPP goals.

Commenters stated that the Texas Public Utilities Commissioners are concerned that the 

proposed rule will significantly degrade the reliability of the Texas electric grid, causing the grid 

to fail to maintain reliability standards established by the FERC. The commenters paraphrased 

remarks from the Texas Public Utilities (PUC) chairman to the Texas House of Representatives 

Committee on Environmental Regulation's hearing that the proposed rule 

• According to EPA, more than 40 coal and gas plants will need to retire in Texas. 

The proposed rule mandates a 52% reduction in coal generation. How will that 

effect reliability? Texas is in three transmission organizations. It is extremely 

difficult to try and figure out how to coordinate compliance with this rule. In the 

Southwest Power Pool's preliminary analysis, its algorithm could not produce 

results because of reactive deficiencies. And those deficiencies were the worst in 

Texas, Oklahoma, and Kansas. That means there will be significant loss of load or 
65

rolling outages. When SPP measured that impact on generation, its reserve margin 

would drop to 4.7% by 2020, and by 2024 it would drop to -4%. The current 

reserve margin in SPP is 13.6%.

Commenters also included remarks from a PUC commissioner regarding reliability and 

calculations in Block 3:

• In determining the BSER for Block 3, EPA uses a capacity factor for Texas wind 

of between 39% and 41%. For reliability purposes, ERCOT assigns wind an 8.7% 

wind capacity factor which is the estimated availability of wind during summer 

peak. ERCOT is late in the process of recalculating the effective load-carrying 

capability (ELCC) of wind and is expected to assign West Texas wind an ELCC 

of 14.2% and coastal wind and ELCC of 32.9%. Both figures are still 

substantially below the capacity factor the EPA assigns to Texas wind energy.

Commenters stated that Texas will not be able to meet the requirements of Block 3 (renewable) 

and that with reliability problems of natural gas (Block 2) and the technical infeasibility of coalfired efficiencies to the level sought by EPA (Block 1), all that remains is "demand management" 

or rolling blackouts. The commenters noted EPA has failed to examine the costs of forcing 

Texas to rely predominantly Block 4 demand management and that EPA has not calculated either 

the costs to the refinery industry or the effect of rolling blackouts on our industry (or any other 

industry).

Commenters recommended that EPA should withdraw the proposal until it adequately examines 

the implications of the loss in electric grid reliability and until it can ensure the nation's electric 

grid will maintain the reliability required by FERC.

Commenters stated that the analysis by SPP of the Proposed Rule is instructive to issues that 

could be faced by all regional transmission organizations. The commenters stated that in 

response to a question on the reliability concerns over EPA's Proposed Rule, SPP responded that 

it expects that "equipment overloads, low voltages, and dynamic stability issues will result from 

EPA-assumed fossil fuel generator retirements." SPP also states that if electric transmission 

upgrades are needed to facilitate the increased electricity production from Natural Gas Combined 

Cycle ("NGCC") units, it could take up to 8.5 years to construct at costs ranging between $1 

million and $2 million per mile, excluding substation cost.

Commenters stated the utility must continue its resource planning activities to meet the needs of 

its customers.

Commenters stated the impacts of regulations on BPA were unclear since BPA is subject to an 

array of federal statutes and regulation, there is an absence of new federal law in this area, and it 

is expected that states would be the implementing role. The commenters stated the rule and 

targets call for methods of state implementation that are not yet known which could implicate 

matters such as development and funding of new transmission lines, pipeline needs, new 

technologies, market proposals, cap and trade constructs, or other unknown policies. The 

commenters stated the importance of keeping the lines of jurisdiction clear, and to ensure that a 

Power Marketing Administration like BPA is not targeted to take on any added system risk.
66

Response 20: See the preamble for the updated performance rates and revised start date of the 

interim period. Additionally, see sections VI and VIII of the preamble, as well as the GHG 

Mitigation Measures TSD.

Comment 21 : Commenters stated that for states where building block 2 targets were adjusted to 

account for coal dependence, new gas plants and associated infrastructure in time is not likely 

possible and the costs will be exorbitant. The commenters also stated that it is not clear a 

regional trading system will help because if each state is tasked to meet its BSER-based emission 

limitations, there will not be much of a market to trade for lower emissions and reliability may be 

a concern, even in very large RTOs. The commenters added that individual utilities will have 

similar difficulties regarding costs, infrastructure and generation, and trading concerns. 

The commenters stated that appears to be seeking comments on increasing the requirements for 

coal dependent states based on the option of building new NGCC plants in these states, making 

building block 2 even more difficult to address. The commenters also cited statements from 

Southwest Power Pool, Mid-Continent ISO, ERCOT and NERC discussing reliability problems 

and cost issues, even assuming a regional solution, which may not be allowed: 

• Southwest Power Pool indicated increased thermal overloads and low voltages 

due to EPA's assumed retirements and peak cases are not solving under single 

contingency, which indicates low voltages due to lack of reactive support. 

• The Mid-Continent Independent System Operator found that the cost for the 

region of implementing building block 2 only was $53 per ton of carbon reduced, 

that gas use would increase from 5 to 26 percent, and that there is uncertainty as 

to whether parts of the system will have adequate reserves in 2016, even before 

implementation of the CPP. 

• ERCOT indicated that the will result in the retirement of between 3,300 MW and 

8,700 MW of coal generation capacity, could result in transmission reliability 

issues due to the loss of generation resources in and around major urban centers, 

will strain the ability to integrate new intermittent renewable generation 

resources, will also result in increased energy costs for consumers in the ERCOT 

region by up to 20% in 2020 before accounting for the costs of transmission 

upgrades, procurement of additional ancillary services, energy efficiency 

investments, capital costs of new capacity, and other costs associated with the 

retirement or decreased operation of coal-fired capacity in ERCOT. 

• NERC found that the proposed CPP requires comprehensive reliability 

assessments to identify changes in power flows and ERSs to maintain BPS 

reliability, and suggested that more time may be needed to accommodate changes 

in BPS. 

The commenters then discussed other commenters' views on building block 2 and stated that 

possible changes to the glide path of reduction targets between 2020 and 2030 and a phase-in of 
67

building block 2 might be helpful. The commenters added that many observers have suggested 

that FERC should also undertake or require reliability studies of the CPP proposal to determine 

the viability of the CPP and its potential impacts. The commenters noted FERC Chairman Cheryl 

LaFleur suggested that some type of reliability mechanism be incorporated into the final rule.

Commenters stated that unlike coal, the price of natural gas is very volatile and the impact of this 

volatility on electric bills is something that the electric consumer is experiencing today and will 

undoubtedly be exacerbated by the proposed ESPS. The commenters argued that EPA did not 

take into account the fact that Florida utilities are served by only two pipelines with gas coming 

primarily from the Gulf of Mexico and that these gas pipelines are nearly totally subscribed 

which means that a third pipeline would be required for Florida in order to meet the requirements 

of BB #2. The commenters further stated that the adequacy of even a third pipeline to satisfy the 

requirements of BB #2 and whether it can be completed in time to meet the ESPS deadlines is 

uncertain.

Response 21: See sections V and VIII of the preamble for timing of the final rule, including 

discussion of a glide path. Regarding Building Block 2, the EPA considered existing gas 

pipeline capacity. See Chapter 3 of GHG Mitigation Measures TSD and Resource Adequacy 

TSD. 

Comment 22: Difficulty integrating renewable sources into the grid

Commenters stated the Building Block 3 increases deployment of intermittent generation 

sources, and the growth of renewable generation is highly dependent upon permitting, financing, 

transmission, access, and technical challenges posed by integration of intermittent electricity 

sources into the grid. The commenters further stated they have not seen any indication how EPA 

is taking those factors into account.

Response 22: See preamble section V.E and Chapter 4 of the GHG Mitigation Measures TSD.

Comment 23: Unrealistic Building Block Costs. Should Consider cost of all four Building 

Blocks

Commenters stated EPA's technical memo on cost considers only Building Blocks 1 and 2. To be 

accurate and realistic, the commenters said EPA should consider costs for all four Building 

Blocks and include an estimate of the costs associated with stranded assets due to this 

rulemaking. The commenters added that the 2.7 - 4.4% electricity cost increases included in the 

technical memo as a result of 111(d) implementation are highly uncertain due to the complexity 

of the plan and length of implementation.

Commenters stated the application of any one of EPA's build blocks to the TS Power Plant are 

not reasonable and therefore cannot constitute BSER. The commenters said building block 1 

Heat Rate Improvements is not reasonable from a technical or cost perspective; TS Power Plant 

could not reasonably achieve and maintain a heat rate improvement of 6%. The commenters 
68

stated the EPA does not acknowledge that load factor is a very important determinant of heat rate 

for units with varying load, referring to Abatement Measures TSD at 2-25. The commenters also 

referred to the International Energy Agency (IEA) that reports a 10 percent change in load factor 

can result in a four percent change in heat rate 

(http://www.iea.org/ciab/papers/power_generation_from_coal.pdf). The commenters stated 

because TS Power Plant is not base loaded, the TS Power Plant cannot achieve the improvements 

in heat rate associated with load factors that EPA assumes are available for other utility EGUs.

Commenters stated the TS Power Plant operates under a Power Purchase and Sale Agreement 

with NV Energy, whereby power generated at the TS Power Plant is transmitted to Newmont 

mines with a corresponding benefit of an agreed pricing arrangement for power used at several 

Newmont mine sites in northern Nevada. The commenters stated the TS Power Plant is not a 

base-loaded unit; rather, the facility load is determined based on NV Energy load schedules 

submitted to the TS Power Plant on a day-ahead basis, and typically the load schedules involve 

the TS Power Plant shedding load during the evening hours and operating at higher loads during 

the daytime. The commenters stated the daily load change has a significant impact on heat rate, 

with much higher heat rate experienced at lower loads, when plant efficiencies are greatly 

diminished, i.e., in the TS Power Plant's experience, there is an inverse relationship between the 

load factor (or capacity factor) and the heat rate. To illustrate this, the commenters stated the 

hourly load and accompanying heat rate was examined for 2012, a year with 7,621 operating 

hours at the TS Power Plant. The commenters said during the year, load varied between the 

lowest sustainable operating loads and the highest design loads (a variation of between 80 MW 

and approximately 215 MW).

Commenters stated the boiler load for the year has been classified into three load bins, 

representing low, mid and high loads for the facility. 

Commenters stated that as indicated, average heat rate for the year is 10,677 Btu/KWh, and the 

variation in heat rate between the high and low loads is 1,949 Btu/KWh, with low load heat rates 

approximately 20% higher. The commenters said if the TS Power Plant were base loaded, a 

substantial improvement in annualized heat rate could occur; however, since the plant load at the 

TS Power Plant is determined by outside parties on a daily basis, the constantly varying load 

reduces opportunities for heat rate improvement that may occur in base-loaded plants. 

Commenters stated that the state-of-the-art Air Quality Control System (AQCS) at the TS Power 

Plant and includes low NOx burners, over-fire air and SCR for NOx controls; spray dry absorber 

for SO2 reduction; powdered activated carbon and calcium chloride injection for mercury 

removal; and a fabric filter baghouse for particulate matter removal, and that the systems were 

designed and operated to maintain compliance with some of the lowest emission limits in the 

country. The commenters said the continuous power demand associated with operating the 

AQCS is approximately 2 MW, or roughly 10% of the total parasitic load of the TS Power Plant, 

and there are virtually no opportunities to reduce the plant load associated with the AQCS 

without compromising compliance obligations under the facility's PSD permit.

Commenters stated that the proposed rule does not: 1) adequately consider and improperly 

dismisses the effects of, the CAA's new source review ("NSR") program on the cost and 

achievability of the proposed rule; 2) adequately consider whether it is feasible for multiple 
69

building blocks to be implemented at the same time in order to meet the EPA's reduction goals, 

and 3) adequately consider or explain the EPA's treatment of nuclear and hydroelectric 

generation.

Commenters stated EPA's Block 2 proposal is unreasonably costly and creates stranded costs for 

coal assets. The commenters said they utilized natural gas forecasts from the U.S. EIA; the base 

EIA natural gas forecast assumes that gas prices would be unaffected by the greatly increased 

gas usage demand, which may be optimistic. The commenters analysis assumed the following: 

• Additional firm gas transportation capacity (130,000 MMBtu/day) starting in 

2020

• Natural gas generation maximized

• Operating constraints removed from coal units, which is not operationally feasible 

• Co-firing the 4 Big Bend coal units, 70% coal 30% natural gas 

• Polk 1 IGCC operating as a natural gas combined cycle only (although EPA's 

proposal does not require IGCC units to limit dispatch in Block 2)

• Implemented environmental dispatch to minimize CO2 emissions

The commenters analysis was conducted through 2043 with no cost impact until the CPP 

proposal commences in 2020, and assuming natural gas prices are unaffected by increased 

demand, the net present customer impact value in 2014 dollars for the commenters to comply 

with Block 2 is $2.0 billion. The commenters said assuming gas prices are affected by increased 

demand, the net present customer impact value in 2014 dollars is approximately $5.3 billion. 

Commenters 23712 said despite maximizing re-dispatch of resources from coal to natural gas, 

which is operationally infeasible, the commenters best case result from Block 2 of 1,007 

lbs/MWh falls short of the CPP proposed limit of 740 lbs/MWh, and the 2030 average customer 

rate impact would increase approximately between 13 to 32 percent due to Block 2 impacts 

alone. The commenters said EPA should work with states to adjust the Block 2 goals to a level 

that complies with CAA 111(d)(1) remaining useful life considerations, recognizes early action, 

acknowledges the importance of fuel diversity, preserves the thousands of jobs at risk, and 

allows existing units to exist and operate as intended by the CAA. 

Response 23: See section V of the preamble for an evaluation of the cost-reasonableness of the 

combination of all three building blocks.

Regarding achievability of heat rate improvements, including consideration of load factor, see 

chapter 2 of the GHG Mitigation Measures TSD.

See for a discussion of NSR, see section X.A. of the preamble. Regarding hydro and nuclear, see 

section V.E. of the preamble and the GHG Mitigation Measures TSD.

The EPA disagrees with the comment regarding reasonableness of building block 2 costs. EPA’s 

analysis of the cost-effectiveness of building block two is based on modeling projections which 
70

account for future gas price increases that would likely result from an increase in natural gas 

demand. Additionally, note that in the final rule building block two is phased in starting in 2022. 

For more detail, see final rule preamble section V.D. and GHG Mitigation Measures TSD.

Regarding stranded costs, EPA disagrees. See section 5.11 of this document.

Comment 24: Commenters quoted Figures 4-14 in NERA's analyses of energy system impacts 

using scenarios covering all 4 building blocks and only using building blocks 1 and 2, such as 

increases in energy prices, capacity changes, increases in natural gas usage, increases in energy 

system costs by about $479 billion in present value terms over the period from 2017 through 

2031, and increases in generation impacts.

Response 24: The analysis referenced by the comment excludes new renewable energy and 

demand-side energy efficiency from compliance. EPA’s analysis presented in the RIA 

reasonably includes new renewable energy and demand-side energy efficiency, which are both 

allowable compliance measures.

Comment 25: Residential Consumers Are Disadvantaged by EPA's Energy Efficiency 

Assumptions

Commenters stated that the proposal does not address the well-established fact that EE measures 

undertaken in the residential sector are considerably less effective on a dollar-per-KWhreduction basis than those undertaken in the industrial and commercial sectors and instead, EPA 

erroneously applies one EE potential across the residential, commercial and industrial sectors.

Commenters stated that Building Block 4 imposes greater burdens on rural electric cooperatives 

and that the proposed EE targets would result in member transmission and distribution 

cooperatives incurring additional cost per rural electric cooperative member/ratepayer. The 

commenters stated that G&Ts serve the poorest, most rural areas of the country and the 

household electric usage tends to be higher in rural areas. The commenters stated that the 

challenges to successful EE programs are further exacerbated by the large size of G&T service 

territories and many G&Ts serve one member per mile of transmission line or less making EE 

projects even more challenging.

Response 25: The final rule does not include Building Block 4. See section V of the preamble.

Comment 26: Commenters stated that several recent analyses have been conducted on the 

economic benefits of using efficiency to comply with carbon pollution standards in Iowa. The 

commenters identified several studies and reported the economic benefits. The commenters 

stated that in addition to increasing the stringency of Building Block 4 by increasing Iowa's 

energy efficiency savings to 2% (from 1.0% - 1.5% over several years) annually and 
71

incorporating building codes and other efficiency opportunities into Building Block 4 target 

setting, EPA should also strengthen Building Block 4 by updating EPA's underlying cost data.

Response 26: The final rule does not include proposed Building Block 4. See section V of the 

preamble.

Comment 27: Commenters stated that by encouraging state governments to include nuclear 

power plants in their compliance plans, EPA would undermine the states' agility and 

resourcefulness in modernizing their electricity sectors to maximize carbon emission reductions 

and enabling grid resilience.

Commenters stated that EPA's proposed rule is arbitrary and capricious because it would reward 

aggressive bidding tactics and potential market manipulation by nuclear corporations that have 

intentionally over bid their reactors out of the electricity market thereby placing them at 

economic risk of shutdown. The commenters stated that stated that EPA's proposed rule seeks to 

preclude the shutdown of old and dangerous nuclear reactors. The commenters stated further 

that some nuclear corporations are intentionally overbidding the cost of electricity from nuclear 

plants and are seeking to leverage the EPA rule to garner bailouts from their electricity 

customers.

Commenters stated that nuclear corporations are gaming the electricity market and then turning 

to their legislatures looking for a bail out of the nuclear units they intentionally over bid.

Commenters stated that regardless of whether nuclear corporations colluded to manipulate the 

electricity market, the EPA's proposed rule should not function so as to reward these aggressive 

bidding strategies and encourage a moral hazard. The commenters stated that the EPA's proposed 

rule would better abate CO2 if it dropped nuclear power from the equation all together and given 

the declining cost of renewables and the necessity of the U.S. becoming more efficient in our use 

of energy, EPA's proposed rule has failed to make the case that CO2 reductions require either 

new nuclear reactors or the bailout of old and dangerous reactors.

Response 27: The EPA has decided not to finalized provisions that treated nuclear power 

differently from other low- and zero-emitting sources.

Comment 28: Commenters stated that electricity constitutes 80% of a refinery's energy input 

costs that NERC's analysis of the costs of the proposed rule estimates the price of electricity for 

industrial consumers will increase by 22% and will extinguish the profitability of most small and 

medium-sized refineries.

Commenters stated that a shift from coal to natural gas for electric generation further exacerbates 

the problem of increased electricity costs. The commenters also stated EPA has not included in 

its cost calculus the increased costs of refinery products associated with higher natural gas prices 

that will result from its proposal nor has EPA included the costs of rolling blackouts and full 

blackouts. The commenters stated further that EPA has not discussed the lack of natural gas 
72

pipeline capacity or the lack of reliable natural gas supply in cold. The commenters also noted 

that because the electric grid in Texas is not well interconnected to the rest of the nation and 

because natural gas pipeline capacity into Texas is insufficient, analysis of the proposed rule 

should have examined the impacts of the rule on Texas refineries.

Commenters stated further that proposed rule will directly injure the small and medium-sized 

refinery industry and the rule is fatally flawed (as discussed elsewhere in the commenters 

arguments), cannot be fixed, and unless withdrawn, EPA's actions will cause the refinery 

industry fatal injury.

Commenters stated that the impacts of natural gas prices and availability must also be included 

and have a huge impact on their industry (fired kilns). The commenters stated that they fear it 

will affect demand and therefore prices and possibly availability as well as changes in the Ozone 

Rule, which will also affect natural gas and availability.

Commenters stated that many businesses and industries will be directly affected by EPA's Clean 

Power Plan (CPP) rulemaking proposal. The commenters stated that they will be impacted by 

the CPP because energy is a critical business input and that for many businesses and industries 

who compete in the global economy, energy represents a major input cost that can ultimately 

determine both viability and profitability. The commenters stated that energy is a competitive 

advantage for many in large part because of the abundant and diverse supplies of affordable 

energy resources.

Commenters stated that they do not support EPA's decision to regulate greenhouse gas emissions 

under the Clean Air Act (CAA) or the regulatory overreach that EPA has embarked upon with its 

proposed Clean Power Plan (CPP).

Commenters stated that deep concerns with the uncertainty being generated by EPA's CPP and 

the expansive scope and reach of the CPP into areas that extend well beyond EPA's rulemaking 

authorities. The commenters expressed grave reservation at the substance of the CPP from the 

perspective of the impact on their respective business operations and has the following 

comments: 1) the US EPA Clean Power Plan is an overreach of that federal agency's authority 

and unworkable as written, and 2) the Clean Power Plan, as proposed, fairly spreads the burden 

of reducing CO2 emissions among the states. The commenters stated that the CPP will pose 

significant business risks to their operations. The commenters stated that these risks are 

associated with the clear potential for impacts on energy prices and reliability that, in turn, will 

impact the viability of business operations.

Commenters stated that energy costs are currently an advantage for the forging industry in large 

part because abundant and diverse supplies of energy resources are helping to keep energy costs 

reasonable and supply reliable. The commenters stated further that EPA's proposal would reduce 

the energy options available to everyone, resulting in increased volatility and cost and 

threatening reliability, ultimately making all U.S. manufacturing less competitive.

Commenters stated any Clean Power Plan should only be undertaken after full consideration of 

the impacts to the people and businesses that will bear its compliance costs and reliability risks. 
73

The commenters stated that the Proposed Regulation, as currently drafted, presents many cost, 

reliability, and legal concerns.

Commenters stated that they share several of the concerns their trade groups raise if the rule is 

finalized as proposed. The commenters stated that increased energy costs adversely can affect 

their competitiveness, particularly globally, creating uncertainties for the jobs and other 

economic and social benefits our operations provide.

Response 28: Commenters asserted that the CPP will have adverse impacts on secondary 

markets such as petroleum refining due to the increased business risk associated with potential

increases in electricity and natural gas prices and possible electricity reliability impacts. EPA 

disagrees with commenters assessments of the reliability risks associated with the CPP. Please 

see the Resource Adequacy and Reliability Analysis TSD and section 8.9 of this response to 

comment document for more information regarding EPA’s assessment of resource adequacy and 

reliability. 

EPA addresses potential energy market changes that may result from the CPP in chapter 3 of the 

RIA. Potential impacts for secondary markets such as industrial consumers are discussed in 

chapter 5 of the RIA. On average nationwide, EPA estimates that electricity prices will not 

change or increase less than 1 percent by 2030 from levels that would occur absent the CPP. 

Estimates for different regions of the country and for industrial consumers that negotiate 

electricity rates may differ from these nationwide averages. Natural gas prices are estimated to 

range from a decrease of about 2 percent to an increase of 2.5 percent in 2030 depending on the 

illustrative control scenario evaluated. The EPA notes that the estimates of potential price 

changes in electricity are significantly lower than those asserted by the commenters. Impacts to 

particular industrial consumers will depend upon a variety of factors that are discussed in chapter 

5 of the RIA. The price change estimates are based upon the illustrative control scenarios 

evaluated by EPA. States will develop implementation plans that may differ from those projected

by EPA and states will have the flexibility to consider circumstances relevant for their particular 

areas of the country in the development of those implementation plans.

Comment 29: Commenters stated that the proposed rule creates a jurisdictional conflict between 

USEPA and FERC. The commenters stated that the Federal Power Act empowers FERC to look 

at just and reasonableness when reviewing wholesale electric rates and market construct designs 

under RTOs, yet SIPs would be created to comply with the USEPA Section 111(d) standards 

with authority under the CAA. The commenters added that FERC currently reviews and 

approves tariffs for necessary stop gaps to ensure reliable electric supply, which may conflict 

with limitations or retirements due to CO2 reduction targets within an approved state plan. 

Commenters added that the alternative assignment of responsibility under the portfolio approach 

would place responsibility for achieving the state goals solely on the affected EGUs, and that 

Michigan must acknowledge the potential reliability issues in meeting future electric demand due 

to the closure of coal plants related to various USEPA rules. The commenters noted that MISO 

has determined a 3 gigawatt shortfall in generating capacity for what is needed for reliability and 

that NERC raised serious concerns about the proposed rule's impact on reliability.
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Commenters stated that the proposed rule creates inequities among the states, as different state 

goals will lead to differing implied carbon costs, which will flow through to electricity prices and 

that for the industrial sector, these inequities will lead to carbon leakage and trade exposure both 

within and beyond the U.S. borders.

Response 29: EPA disagrees with these comments. The final rule will not conflict with FERC 

jurisdiction or regulations. Commenters raise concerns about the final rule and FERC 

jurisdiction over grid reliability and wholesale market dispatch. There concerns are simply not 

valid; EPA regulations have successfully coexisted with FERC regulations to ensure that grid 

operations are both secure and environmentally sound, and will continue to do so under this rule. 

Contrary to these comments, the final rule is entirely consistent with continuing operation of 

security constrained economic dispatch in FERC jurisdictional markets, and does not prescribe 

anything resembling economic dispatch. On the contrary, the final rule assumes planning for 

transmission will occur along the lines of FERC transmission planning regulations, such as Order 

1000, which provides planning mechanisms to incorporate public policy initiative like this final 

rule.

EPA also relies on FERC designated or regulated entities, such as NERC and the Reliability 

Authorities, to provide information and assistance in ensuring that state planning considers 

reliability. EPA works closely with RTOs in implementing current EPA regulations such as 

MATS and expects to have a continuing coordination during the implementation of this rule. 

EPA has carefully considered reliability in the development of this rule, and does not believe 

there are conflicts between the rule and reliability. 

Comment 30: Commenters stated EPA's Clean Power Plan infringes on Montana's long term 

resource planning citing the 1992 Energy Policy Act section 111(d)(19). The commenters stated 

IRP planning unquestionably falls on Montana's side of the "bright line" dividing state and 

federal jurisdiction over the electric industry. The commenters stated IRP planning is a process 

by which many states decide on which power sources they will rely, and, pursuant to the Federal 

Power Act, the federal government "shall not have jurisdiction over facilities used for the 

generation of electric industry." 16 U.S.C. section 824(b)(1). As an example where federal 

energy regulators have disavowed any authority over a state's IRP process, the commenters 

referenced the FERC's landmark 2011 Order 1000 which included a disclaimer that "nothing is 

intended to preempt or otherwise conflict with State authority over integrated resource planning 

and similar processes." In contrast, the commenters stated EPA's Clean Power Plan expressly 

subsumes state IRP planning within the agency's regulatory ambit and cited the preamble of the 

proposed rule. The commenters stated to date, Montana utilities have performed integrated 

resource planning under the aegis of the Public Service Commission, which traditionally has 

judged utility IRPs based on reliability and affordability, free from federal government intrusion. 

EPA's Clean Power Plan would effectively commandeer this process, the Clean Power Plan 

would force the Public Service Commission to oversee utility resource planning in order to 

further the agency's climate change goals rather than the state's goals.

Response 30: EPA disagrees with this comment. The final rule does not conflict with state 

resource plans; as we state in the final rule preamble section V.C, states will be able to continue 
75

to develop those plans under the framework of the final rule. IRPs have historically incorporated 

environmental regulations in their planning, and nothing in the final rule will inhibit their 

continued ability to do that. 

Comment 31: Commenters stated that in addition to the coal-fueled plants and generating 

stations that will be shut down between 2016 and 2020 due to its Clean Power Plan, other power 

plants will retire between 2010 and 2020, for a total loss generation that could power 60 million 

homes due to other recent regulations and factors.

Response 31: The EPA is aware of closures that have occurred since 2010 and are expected to 

occur by 2020, and accounts for these closures in our analysis of the rule.

Comment 32: Commenters stated that their organization urges the EPA to formally require 

states to include transmission interests in the state implementation planning processes, so that 

technical and reliability impacts of changes such as voltage, thermal, and deliverability concerns 

are adequately considered. The commenters stated that the views of ISO and RTO experts in the

formulation of state or regional plans needs to be clearly expressed in any forthcoming rules.

Commenters stated that the transmission sector should be involved in the compliance process 

because identifying the transmission expansion options necessary for dispatching more natural 

gas-fired generation (Building Block 2) and interconnecting and more efficiently accessing 

renewable resources (Building Block 3) are central to the CPP. In addition, the commenters 

stated that State and regional resources can be instrumental in accelerating the formulation of 

state plans and in ensuring that the key transmission sector is included as a likely participant in 

reducing emission under three of the four Building Blocks.

Commenters stated that EPA should allow state compliance plans to realistically reflect the 

significant amount of time and resources that will be required to plan, site, permit, and bring 

these facilities into service in the interstate, bulk power markets.

Commenters stated that EPA cedes development of the state implementation plans to 

environmental agencies, including state air offices. The commenters stated that EPA has an 

important stake in ensuring that state plans are founded on an understanding of the technical 

requirements of the grid and not (at least entirely) on the resource preferences and utility cultures 

of individual states. The commenters stated that the end product of an integrated approach in 

planning can be a superior and more efficient approach to achieving the EPA's goals if EPA 

ensures reliability and economic regulatory expertise is enlisted in the effort.

Response 32: Each state must demonstrate as part of its state plan submission that it has 

considered electricity system reliability issues while developing its plan. See section 

VIII.D.2.a.(7)(d) of the preamble to the final rule. Electricity system reliability considerations for 

state plans are discussed in detail in section VIII.G.2 of the preamble to the final rule. 
76

The EPA has extended the beginning of the first plan performance period until the 2022. This, 

along with the multi-year interim and final plan performance periods, and the flexibility provided 

a state to implement different plan approaches based on the considerations in the state, will help 

address any potential electricity reliability concerns. 

As discussed in section VIII.E, state plans are submitted by the governor of a state or her or his 

designee. As a result, a state can involve multiple state agencies in the development of a state 

plan, at its discretion. 

Comment 33: Commenters stated that by limiting the amount of coal that could be used for 

electricity generation in each state, the Proposed Rule would place substantial burdens on the 

interstate transportation of coal to states throughout the country.

Response 33: The final rule does not impose a limit amount of coal that could be used for 

generation in each state. 

Comment 34: Challenges for rural providers.

Commenters stated concerns about the challenges the rule will pose for rural providers of 

electricity. The commenters stated that many rural generators are consumer-owned, not-forprofit, and were constructed at a time when federal energy policy encouraged coal generation 

which make them especially vulnerable to the proposed rule. The commenters cited the National 

Rural Electric Cooperative Association's (NRECA) prediction that the rule as proposed could 

result in premature closures, leading to increased demand and higher rates from the ones that 

remain. The commenters further stated it is wasteful and unfair to force this regulatory burden 

onto the country's rural communities because family farmers and ranchers could make more 

substantial contributions to climate change mitigation while preserving their economic wellbeing through emission offsets and full RFS volume targets.

Similarly, commenters stated EPA did not account for the not-for-profit nature of rural electric 

cooperatives and rural public power districts in which the consumer-owners bear all costs of 

generation and compliance with EPA regulations through their rates. The commenters stated 

expressed concerned that the plan does not have an economic safety valve or cost containment 

guidelines that would mitigate impacts to small utilities and their customers in the event that the 

costs to comply are much greater than anticipated or have a significant negative impact on 

electric generation markets.

Commenters stated they are troubled about the impact the existing source proposal would have 

on the reliability of the electric grid on rural providers such as cooperatives and that the proposal 

would jeopardize reliability by reducing the overall amount of power generation available at 

times of peak use. The commenters indicated that the proposal would force early retirement of 

many coal-fired power plants by making it economically unviable for those plants to remain in 

operation. The commenters indicated that if EPA pushes forward with the proposal, it may make 
77

it difficult for rural electric cooperatives to meet the demands of their customers, particularly 

during bouts of extreme heat or bitter cold.

Commenters stated that rural electric cooperative members pay a disproportionate price for 

energy, regulatory policy, which drives costs higher. The commenters stated that they know what 

the havoc such regulation is going to have on the households in my area, and encourage 

withdrawal of the rule, to evaluate more measures that are affordable, achievable, and 

reasonable. 

Commenters stated that serving its load from low cost coal units and not primarily NGCC is 

essential and most G&Ts does not own sufficient natural gas generation to serve its member 

load. The commenters stated that Building Block 2 re-dispatch simply forces them into the 

MISO spot energy market. The commenters stated that MISO projects that the CPP will result in 

a capacity deficit and generating resources will not be sufficient to serve peak demand. The 

commenters stated further that shifting energy sources from coal-fired generation to NGCC and 

RE will create a financial hardship on end users of electricity, a hardship that will be borne by 

those who already face significant economic difficulties.

Commenters stated that shifting energy sources from coal-fired generation to NGCC and RE will 

create a financial hardship on end users of electricity, a hardship that will be borne by those who 

already face significant economic difficulties.

Commenters stated that EPA's cost/benefit calculations take credit for phantom benefits and 

overstate cost savings from EE to reach the conclusion that electricity bills will be reduced eight 

percent by the CPP and that these rate increases will have real health impacts in rural service 

territories. The commenters stated that in rural service territories, rate increases result in service 

disconnection, voluntary underservice, use of alternative heating and other energy options like 

woodstoves with immediate impacts on human health as compared to CO2 reductions which 

have a questionable future impact on human health.

Commenters stated that Energy Venture Analysis (EVA) also evaluated the impact of the CPP 

and the annual residential electric bill in 2020 will increase 31% over the cost of a 2012 electric 

bill.

Commenters stated that a study conducted by NERA Economic Consulting of the proposed CPP 

on the U.S. Energy System looked at the economic impact of the CPP and found that it will drive 

up electricity prices which will have the most significant impact on those who already struggle to 

make ends meet. The commenters stated that NERA's figure omits several cost factors, such as 

infrastructure, pipelines, transmission, voltage support and ancillary services, will add to the 

impact and cost of the CPP.

Commenters stated that NERA concluded that for the period 2017-2031, assuming all four 

"Building Blocks" are used, to achieve an average of 22 percent reduction in CO2 emissions 45 

GW of coal units will be retired resulting in a 29 percent decline in coal-fired generation. The 

commenters stated that natural gas generation will only increase about five percent on average 

and the price of natural gas would increase about two percent on average. The commenters 

stated further that if the energy sector only employs Building Block 1 and 2, 169 GW of coal 
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units would be retired, natural gas prices would increase on average by 29 percent, and NERA 

projects that nationally the cost of delivered electricity would increase by 17 percent. The 

commenters stated that it is noteworthy that NERA's figure omits several factors, (including 

infrastructure, costs related to natural gas pipelines, electricity transmission, voltage support and 

ancillary services, costs associated with cycling coal plants, permitting delays) that will add to 

the impact and cost of the CPP.

Commenters stated that the CPP violates the RE Act's federal mandate that rural America receive 

reliable, low cost electric services because the proposed plan will essentially require either the 

significant reduction in the operation of or retirement of nearly all coal-fired generation units. 

The commenters stated that CPP's CO2 emissions goals will prevent them from generating 

sufficient power to continue to provide affordable and reliable service and EPA does not address 

or resolve this concern. The commenters stated that as proposed, the CPP will disproportionately 

adversely impact rural electric cooperatives and the CPP is unworkable, unachievable and illegal.

Commenters stated they have no natural gas combined cycle power plants for fuel switching, and 

they are unsure how this will impact their future operations if mandated to reduce our coal 

generation. The commenters said if the state is able to achieve the CPP goals by other 

participating utilities with NGCC plants, there is some uncertainty what financial or operational 

impacts will fall on utilities without the means for fuel switching.

Response 34: The EPA disagrees with these comments. See response to comment 30 in section 

8.5. Regarding the safety valve, see preamble section VIII.G.2. Regarding the impact analysis 

of the final rule, EPA’s estimate of costs and benefits are reasonable, as discussed in the RIA. 

See chapter 3 of the RIA for projections of retail price impacts, which the EPA estimates will be 

less than one percent in 2030.

Comment 35: Commenters stated that if we have a reliable energy source, we have natural gas 

that's going to help us with manufacturing, but why limit our energy sources, why eliminate the 

base load for the electric grid? The commenters stated that this seems like economic suicide for 

this country. The commenters stated further that we should try to have energy independence and 

not rely the Middle East for our energy needs. The commenters wondered what position we 

would be in and what would happen to our national security if we eliminate coal.

Commenters stated that legislation in Pennsylvania placed an energy portfolio on the books that 

required electric distribution companies to adopt plans to reduce energy demand and 

consumption within their service territories. The commenters stated that they are taking the right 

steps despite having the energy portfolio in place, but following the proposed rules would 

completely eliminate coal or significantly eliminate coal from the portfolio. The commenters 

noted that DEP (Department of Environmental Protection] testified that if the state follows the 

proposed rules, that by 2030, over 70 percent of coal consumption levels will decrease by over 

70 percent and go from 33 million tons to about 10 million tons. The commenters further noted 

they will go to a coal utilization rate of about 17 percent at the power plants, and believes there 

will be a lot of unintended consequences associated with this plan.
79

Response 35: The EPA does not project that the final rule will limit energy sources or eliminate 

coal-fired generation. See Chapter 3 of the RIA.

Comment 36: Commenters stated that by their own experience in reducing its fleet's carbon 

intensity without prompting by any of the impending actions under section 111 of the Clean Air 

Act, natural market forces over time lead to the efficiency gains (and displacement of fuel-using 

technologies) that reduce GHG emissions, market forces that could be disrupted as an unintended 

consequence of the rules as proposed. 

Commenters stated that EPA reports that the reduction of CO2 emissions under the Clean Power 

Plan is equivalent to 30 percent cut over 2005 emissions. However, EPA proposal gives no credit 

to states that already have reduced CO2 emissions due to market driven forces such as increased 

natural gas use, the retirement of older coal generating plants, and construction of new nuclear 

generation. The commenters stated further that since 2005 CO2 emissions from all fossil fueled 

plants have decreased by 13 percent, with many states highly dependent on coal-based 

generation having already achieved significant emission reductions but still facing additional 

burden of further reducing their CO2. The commenters further stated that the stringency of the 

stated reduction goals will have the effect of dictating for the first time how states regulate their 

generation and use of energy.

Commenters stated that the retirements of 41 to 49 gigawatts of coal generating capacity due to 

the rule are in addition to the 92 gigawatts of coal capacity that EPA is already projecting will 

shut down between 2012 and 2020 in large part to compliance with 2012 mercury and air toxic 

rules. The commenters added that they believe that losing around 130 gigawatts of base load 

coal capacity, nearly 40 percent of the nation's coal generation fleet in 2012, raises serious 

concerns for the future reliability of our electric power supplies and reliability concerns would no 

doubt become more urgent as existing base load nuclear units begin to retire upon the expiration 

of their already extended NRC operating licenses.

Commenters stated that for every coal plant that is retired prematurely because of the CPP, 

ratepayers will be forced to pay not only for the life that was remaining in the coal plant, but they 

also will pay for the replacement power plant so ratepayers will be paying roughly double for the 

same generation capacity. The commenters further stated that increases in costs for natural gas 

and for new infrastructure also are likely due to supply and demand constraints as a majority of 

the nation's coal plants are forced to shut down and replaced with new natural gas plants in a 

relatively short time period. The commenters further stated that those utilities that are able to 

obtain the infrastructure may be required to pay a significant premium.

Commenters stated EGUs in states that do not require reductions in emissions from these 

facilities would have a competitive advantage vis-a-vis EGUs in states that do directly regulate 

emissions from these sources. The commenters stated that if market-based approaches are 

implemented by some states but not all, or if the market-based approaches are not harmonized, 

the disparate carbon prices internalized in operating costs for generators across states would 

again result in a shift in generation and emissions to the state with relatively lower carbon costs. 

The commenters stated further that new resources would face lower operating costs in states that 
80

do not regulate these sources under their CPP implementation plans than in states that do and 

developers would thus have a strong incentive to site new fossil generation in states that do not 

include new resources in their implementation plans.

Commenters stated individual states may prioritize in-state emission reductions without 

consideration of the impacts on the broader regional electrical grid across multiple states and that 

distortions in power markets due to variations in GHG compliance costs faced by generating 

units in different states could create 'seams' issues across state lines and among balancing areas.

Response 36: Regarding the 2012 baseline for the final rule, see section V of the preamble. 

Regarding reliability concerns related to retirements, see Section VIII.G.2 of the preamble.

See section 5.11 of this document for EPA’s response to comments relating to stranded assets.

Regarding the concern that relying on state-specific goals and state-by-state planning could 

introduce complexity into the otherwise seamless integrated operation of affected EGUs across 

the multi-state grids on which system operators, states and utilities currently rely and intend to 

continue to rely, see preamble section I.

Comment 37: Commenters stated they have no quarrel with the objectives of the proposed rule, 

but have significant concerns of how we get there. The commenters further stated they are 

concerned that the proposed regulations will greatly disrupt our manufacturing economy through 

state-to-state disparities, higher electricity prices, price volatility, and grid destabilization. The 

commenters stated that coal provides affordable, reliable base load power and expressed concern 

that the regulations will have enormous impacts on coal-fired power. 

Commenters noted that although the proposal does not mandate any single method for meeting 

the CO2 target, it clearly directs states to adopt energy policies that shift electricity generation 

from coal to other sources such as renewables. At the same time, the commenters recognized the 

role that renewable resources can and should play. The commenters stated that these early 

actions are being used to support more aggressive targets for increasing amounts of renewable 

energy deployments in generation in the proposed rule and that nearly every Great Lakes state 

will need to at least double its deployment of renewable energy by 2029 from its 2012 levels, 

with Ohio and Pennsylvania having to increase theirs by nearly eight-fold, making these targets 

very difficult to meet and illustrate the uneven impacts of the proposed rule.

Commenters noted another troubling area is the 1-1/2 percent annual reduction target for energy 

consumption by state. The commenters stated that EPA believes that a 1-1/2 percent savings 

from efficiency policies is achievable but seems to be discounting the fundamental connection 

between economic growth and energy consumption. The commenters stated that as the state's 

economy improves, so too does energy consumption, which can lead to increased CO2 emissions 

and asked if the state be penalized if it has worked hard to build a growing economy.

Commenters stated EPA's Proposal would place grid reliability at risk while increasing energy 

costs and inflicting significant economic damage on Arizona communities.
81

Commenters stated that the proposed CPP contains CO2 emission "goals" for each state plan to 

meet, but in reality, these "goals" are state-by-state emission caps. The commenters stated that 

Kentucky will be forced to fundamentally alter the way energy is produced, priced, and 

consumed, and that conservative estimates are that the CPP would result in 14% to 17% 

increases in retail electricity prices for Kentuckians, which is not an acceptable outcome.

Commenters stated that power generation and capacity availability including Arizona's coalbased generation plays a significant role not only in the supply of electricity but is an integral 

part of the State's economy. The commenters stated that in recent years, coal generating 

facilities have been upgraded at a cost of hundreds of millions of dollars for additional 

generating capacity and required compliance related upgrades.

Commenters stated that a white paper examined the disproportionate financial harm to single 

asset coal-fired plants that would not be able to take advantage of emission rate averaging or a 

trading approach under the Proposed Rule. The commenters stated that merchant coal-fired 

generators would be adversely impacted by a rule similar to the Clean Power Plan because such 

generators will likely have few choices to reduce CO2 emissions, resulting in increased costs and 

decreased revenue.

Commenters stated that electricity energy demand growth has been declining since the 1950s, 

and this is not frequently discussed (average U.S. electricity demand growth was 9.3% in the 

1950s, 7.4% in the 1960s. 4.4% in the 1970s, 2.8% in the 1980s, 2.4% in the 1990s, and only 

1.0% from 2000 to 2010. The commenters said the EIA projects 0.7% electricity demand growth 

for the future, and in more recent years declining sales volumes are tied to a weak U.S. industrial 

economy, increased energy efficiency and conservation, especially in industry, slow, but steady 

growth in combined heat and power (CHP), along with any of the significant new impacts from 

customer owned (DG) behind the energy meter. 

Commenters stated nearly a quarter of the nation's coal power generation capacity could shut 

down by 2035, according to the GAO (13) who stated the power industry could retire between 15 

percent and 24 percent of its coal-fueled power generation capacity over the next 22 years. The 

commenters said the GAO report notes the two big trends affecting power company decisionmaking are the changing environmental regulations and shifts in the market conditions such as 

the decrease in the price of natural gas, and also points out the EPA has documented that coal 

used to generate electricity is associated with health and environmental concerns such as 

emissions of sulfur dioxide, a pollutant linked to respiratory illnesses, and carbon dioxide, a 

greenhouse gas. The commenters said the coal's share to electrical generation nationwide has 

dropped from 50 percent in 2002 to 42 percent in 2011; the combination of 50 years of energy 

demand decline and coal plant closures is a very significant pressure point on the traditional 

electric utility model. 

Commenters stated the utility business model is out of date - the money comes from sales of 

commodity electricity and measured by how much the utility has in capital assets - in the 

transformed utility world, success should come from the provision of services measured by the 

delivery of real value versus low interest sunken assets. The commenters said utilities have also 

over-built capacity based on speculation that electricity demand could grow which makes some 

facilities uneconomical. The commenters said new air emissions regulations which utilities must 
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meet through expensive redesign or rebuild of plants and cheap natural gas putting further 

pressure on uncompetitive coal plants lead to plant closures as these coal units shift from assets 

to liabilities.

Commenters stated the issue of utilities constrained by rules and regulators setting their prices 

are what public policy must address going forward as the last decade has seen the rise of smalldistributed generation companies, especially in the PV space, including bringing in new thirdparty vendors that can lease DG equipment to a homeowner and business. The commenters said 

some states basically prohibit third party energy vendors and in other states the utilities feel 

constrained from competing directly with companies taking away their customers. The 

commenters said third party distribution and net-metering laws are now subject to political 

power debates in several states, and net metering has been used as a policy instrument to 

encourage development of locally-produced renewable electricity connected to the electric grid.

Response 37: Regarding the technical achievability of the level of renewable generation in 

BSER, see preamble section V.E. and the GHG Mitigation Measures TSD.

The EPA is not including the proposed building block 4 in the BSER in this final rule.

The EPA projects that the final rule will have minimal impacts on retail electricity prices. See 

Chapter 3 of the RIA.

Regarding merchant generators, the EPA’s analysis shows that all types and sizes of affected 

EGUs in all locations are able to undertake the actions described as the BSER. See section V of 

the preamble.

Comment 38: Commenters stated that States should assign lower priority to alternatives that 

produce high environmental burdens and health risks in the aggregate, including fuel switching 

to natural gas, nuclear energy, and so called "more efficient" coal combustion. The commenters 

stated several arguments related to environmental justice issues.

Commenters stated that a recent study indicates that gas from hydraulic fracturing will not 

contribute in a meaningful way to the reduction of greenhouse gases and some of the analyses 

demonstrate that hydraulic fracturing may actually add to the carbon inventory. The commenters 

identified several environmental justice issues associated with hydraulic fracturing and that 

environmental justice communities will bear the burden of gas development.

Commenters stated that they urge EPA to remove nuclear energy from the rules altogether and 

that the preservation of nuclear capacity should not be included in the building blocks, nor 

should it be permitted as a compliance option. The commenters stated three are such perpetually 

unresolved issues as nuclear waste disposal, uranium mine pollution, and remediation. The 

commenters stated further that nuclear waste storage is another issue that directly affects 

environmental justice communities and Native American tribes in Nevada claim that Yucca 

Mountain is sacred land and have voiced their concerns throughout the past decades about 

nuclear waste being stored there. The commenters also stated that nuclear waste sites tend to be 

sited near marginalized populations that have difficulty finding a voice in decision making.
83

Commenters stated that while shifting to more efficient coal combustion may be a better 

alternative than current coal-fired power plants, the total environmental burden of coal remains 

the same. The commenters stated that in addition to health effects and environmental burdens 

placed on environmental justice communities, coal combustion is not economic and that recent 

air regulations issued by EPA, combined with the fact that most of the coal-fired generation is 

approaching retirement, make the construction of new coal plants inefficient.

Commenters stated that continued reliance on fossil fuels hampers the development of a clean 

energy economy and that market barriers and failures operate to limit the development of 

renewable energy due to commercialization barriers, price distortions, devaluing public benefits, 

inadequate information, high transaction costs, and clout by larger companies.

Response 38: As the EPA has outlined in section IX of the final rule preamble, actions are in 

place to ensure that vulnerable communities are not disproportionately impacted by this 

rulemaking. Additionally, in section IX.X.J. of the final CPP preamble the agency describes how 

it addressed environmental justice considerations in this rulemaking. Furthermore, the EPA 

cannot provide a response to the comment regarding the impacts of hydraulic fracking on 

communities as it is outside the scope of the CPP. 

Regarding emissions from gas development, see RIA Appendix 3A.

The EPA has decided not to finalized provisions that treated nuclear power differently from other 

low- and zero-emitting sources. 

Regarding the inclusion of fossil generation in BSER, see section V of the preamble.

Comment 39: Commenters stated the CPP Is Likely to Be Extraordinarily Costly

Commenters stated that the CPP will massively increase the price of electricity in Indiana, 

negating the supposed benefits of the proposed rule. Commenters stated that according to the 

U.S. Energy Information Administration, Indiana currently derives most of its electricity from 

coal-fired power plants. Commenters stated that as a result of carefully planned, 

environmentally-conscious investments made by Indiana businesses and taxpayers, Hoosiers also 

enjoy some of the lowest overall electricity prices in the country. Commenters stated that the 

CPP would result in a large number of coal-plant retirements in the near-term, leaving Indiana 

manufacturers and households to foot the bill for electricity from other sources.

Response 39: The projected impacts of two illustrative compliance scenarios are presented in the 

RIA. The EPA projects small increases in retail electricity rates, and decreases in electricity 

bills.

Comment 40: Commenters stated that 111(d) implementation could conflict with FPA 

requirements.
84

Commenters stated that once EPA approves Indiana's 111(d) Plan, the Plan will be federally 

enforceable. Commenters stated that at that point, plant owners and operators will be liable under 

the CAA for failing to operate in accordance with the terms of Indiana's Plan. Commenters 

stated that the Federal Power Act ("FPA") empowers the Secretary of Energy and FERC to order 

power plants to operate if doing so is necessary to preserve bulk power reliability. Commenters 

stated that were the Secretary of Energy or FERC to order an IUG member to operate a plant in a 

manner that violates Indiana's 111(d) Plan, that company might be either violating 111(d), or 

putting the reliability of the grid at risk and risking an enforcement action. Commenters stated 

that eventually, the courts will have to decide, but not before consumers of electricity and power 

providers bear the costs of all this legal confusion.

Commenters stated that given the aforementioned failure by EPA to consult with FERC or other 

entities charged with maintaining bulk power reliability in the process of writing the proposed 

rule, EPA should exclude Building Block 2 from consideration until the agency is able to address 

these concerns. 

Response 40: EPA disagrees with these comments where they suggest a conflict between FERC 

and this final rule. The final rule will not conflict with FERC jurisdiction or regulations. Their 

concerns are simply not valid; EPA regulations have successfully coexisted with FERC 

regulations to ensure that grid operations are both secure and environmentally sound, and will 

continue to do so under this rule. Contrary to these comments, the final rule is entirely consistent 

with FERC regulation and continuing operation of security constrained economic dispatch in 

FERC jurisdictional markets, and does not prescribe anything resembling economic dispatch. 

State plans On the contrary, the final rule assumes planning for transmission will occur along the 

lines of FERC transmission planning regulations, such as Order 1000, which provides planning 

mechanisms to incorporate public policy initiative like this final rule.

Comment 41: Commenters stated that rule should not minimize the use of Coal, which is a cost 

effective source.

Commenters stated that implementation would dramatically reduce use of coal, an abundant 

resource of low-cost energy that has helped to keep electricity and natural gas costs low. 

Commenters stated that coal is needed in the mix of generation energy alternatives to provide 

diversified, stable, and reliable base load energy, to provide voltage support, to provide one of 

the few sources of on-site "stored" energy in the supply mix, and to compete economically with 

natural gas. Commenters stated that with a significant reduction of coal in the mix, as natural gas 

prices rise, it will substantially drive up electricity prices. 

Response 41: EPA disagrees with these comments. As discussed in Chapter 3 of the RIA, the 

EPA does not project a dramatic reduction in the use of coal.

Comment 42: Commenters stated that rule increases use of natural gas with more volatile 

availability and cost. 
85

Commenters stated that implementation would dramatically increase dependence upon a single 

fossil fuel, natural gas. Commenters stated that natural gas availability and prices have a long 

history of volatility. Commenters stated that according to the Energy Information Administration 

(EIA), coal has a 300-year supply. Commenters stated that natural gas on the other hand, has 

only a 59-year supply at 2025 demand, according to the AEO 2014. Commenters stated that EIA 

says that proven reserves are only 9.6 years of supply at 2025 demand. Commenters stated that it 

is also troublesome, that EIA forecasts Henry Hub prices to increase by 76 percent by 2025 as 

compared to 2013, which means that electricity prices will also rise substantially.

Response 42: EPA disagrees with these comments. See Chapter 3 of the RIA for projected 

impacts on gas price, and Chapter 3 of the GHG Mitigation Measures TSD.

Comment 43: Commenters stated that they support alternative (wind) source 

Commenters stated that in 2011, Texas suffered through the worst one-year drought in its 

history. Commenters stated that demand for electricity was at an all-time high because of the 

heat, and the water needed to cool the state's power plants was in short supply. Commenters 

stated that in some places, water levels had dropped below intake pipes; in others, the available 

water was too hot to provide effective cooling. Commenters stated that Texans were warned that 

rolling blackouts were possible. Commenters stated that in the end, ERCOT, the grid operator, 

met demand without blackouts, though it came close. Commenters stated that a key factor in 

keeping the power flowing during the drought was that Texas had been aggressively developing 

wind power. Commenters stated that currently, Texas generates more power from the wind than 

any other state. Commenters stated that wind is a power source that requires no water, unlike 

coal.

Commenters stated that we see that coal generation declines by one-third while gas generation 

grows by 12 percent and wind generation quintuples. Commenters stated that by 2030, about 

one-third of total generation could be from wind. Commenters stated that these numbers for wind 

growth might seem extreme, but peak wind integration numbers for ERCOT jumped from 17 

percent to 30 percent between December 2011 and December 2013. Commenters stated that the 

potential for relatively inexpensive wind in Texas is multiples of future projected demand, and 

ERCOT expects that future capacity increases will primarily be wind. Commenters stated that as 

wind uses no water and releases no CO2, we find that water conservation and GHG mitigation in 

Texas looks favorable. Commenters stated that the new rules won't require Texas to make 

extraordinary adjustments to meet the targets. Commenters stated that because of the addition of 

end-use energy efficiency, demand is lower by 10 percent by 2029. Commenters stated that coal 

power drops further to just 56 percent of the 2012 number. Commenters stated that with less 

demand, wind and gas generation grow less than the baseline. 

Response 43: Thank you for your comments.

Comment 44: Commenters stated that implementation will lead to higher energy costs 
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Commenters stated that robust and comprehensive study of the potential electricity sector and 

broader economic impacts of the rule is necessary, but it does not take such an analysis to 

understand that a regulation of this scope and magnitude will negatively impact American 

families and businesses. Commenters stated that as the Wall Street Journal noted in a recent 

editorial, "it is impossible to raise the price of carbon energy without also raising costs across the 

economy. Commenters stated that the costs will ultimately flow to consumers and businesses."

Response 44: See Chapter 3 of the RIA for a discussion of projected electricity price and electric

impacts.

Comment 45: Commenters stated that rule requirements will lead to shut down of existing 

plants before replacement generation facilities can be built. 

Commenters stated that they support the North American Electric Reliability Corporation 

(NERC) comments in its Initial Reliability Review, dated November 2014. Commenters stated 

that if the Building Blocks are based upon conclusions that are not accurate, then additional 

renewable energy generation and reductions through energy efficiency efforts in building blocks 

3 and 4 will be required. Commenters stated that developing suitable replacement generation will 

take time. Commenters stated that compliance with the overall reduction goals could require 

additional shut-down of fossil-fuel generating plants leaving an absence of electric generating 

facilities and the ability to meet demand, most especially to meet reserve margin requirements. 

Response 45: EPA disagrees with this comment. See discussion of glide path and 2022 start 

date in the preamble to the final rule.

Comment 46: Commenters stated that costs of rule implementation are underestimated.

Commenters stated that the EPA's projection of annual incremental compliance costs of the 

proposed rule understates the likely disruption to the national economy, negative impact on 

energy system reliability and adverse impacts to U.S. energy security. Commenters stated that 

a North American Electric Reliability Corporation Economic Consulting study found that the 

Proposal's options would result in a 12-17 percent increase in electricity prices. 

Response 46: EPA disagrees with this comment. See Chapter 3 of the RIA for a discussion of 

the projected costs of the final rule.

Comment 47: Commenters stated that rule does not acknowledge impacts on transmission. 

Commenters stated that for them, about 38% of the current generation capacity is from 

coal. Commenters stated that their units are geographically situated adjacent to each 

other. Commenters stated that shuttering both plants, if in effect required to be retired 
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prematurely, may cause an imbalance in their grid and a remedy would require long term 

planning for replacement and stabilization.

Commenters stated that the CPP fails to capture any aspects of transmission base case 

constraints, not to mention contingency based constraints, and is thus not workable in a practical 

sense. Commenters stated that if the EPA's final approach with the CPP continues to consider the 

entire bulk electric system as the BSER "system", it must factor in all of the practical and realworld constraints associated with that "system".

Commenters stated that the electric transmission system consists of multiple voltages and 

transfer capabilities that have evolved over the years based on the normal transmission flows and 

location of generation resources. Commenters stated that the electric transmission system has 

been built, analyzed, and upgraded all based on this mode of operation. Commenters stated that 

the System has been studied and operated in accordance with all applicable NERC standards that 

provide acceptable reliability to our customers. Commenters stated that all this work and effort 

has been based on a transmission system with long term fixed resources and resulting flows.

Commenters stated that as large generation resources are displaced by other resources, the 

transmission flows may be altered significantly. Commenters stated that it is entirely possible 

that the transmission system that previously met all NERC standards would no longer be in full 

compliance nor would it provide acceptable reliability to our customers. Commenters stated that 

the transmission system may require modifications to existing facilities or the addition of new 

facilities to be fully compliant and provide an acceptable reliability at additional cost. 

Commenters stated that complex issues such as generation planning, permitting, construction and 

stability of the electric grid, forced by retirement or redispatch, are outside the jurisdiction of 

EPA, or at least they have been before the proposed CPP.

Response 47: EPA disagrees. EPA has consider the transmission network in the development of 

the rule and in the modeling and analysis. The rule is designed to be implemented within the 

existing framework of economic dispatch, and the modeling incorporates interregional limits in 

assessing the impacts of the rule. See the RIA and Section V of the Preamble for further 

description.

Comment 48: Commenters stated that reliably implementing state compliance plans cannot be 

accomplished by 2020. 

Commenters stated that EPA assumes that the proposed guidelines provide sufficient time and 

flexibility for states to manage the accelerated transition of the existing generating fleet that the 

rules envision. Commenters stated that this assumption is predicated on the idea that 

implementing the proposed Building Blocks will not require changes to the existing 

interconnected power system. Commenters stated that a change to any part of the interconnected 

power system "even one that appears relatively minor, such as increasing the generation 

produced by an existing unit" requires an analysis of the potential impacts on the rest of the 

system.
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Commenters stated that NERC notes that the proposed guidelines do not recognize the need to 

expand and enhance the transmission grid and that the guidelines do not address grid reliability 

issues associated with increased variable resources and retirement of fossil-based generation:

Commenters concluded that as a practical matter, this schedule does not allow adequate time for 

the needed reliability assessments and system changes to be accomplished before 2020. 

Commenters stated that the studies themselves can take several years to complete. Commenters 

stated that building new generation, new natural gas delivery infrastructure and new transmission 

lines can also take years to complete.

Response 48: In the final rule, the start of the interim period is now 2022 rather than 2020. See 

preamble for further discussion. 

Comment 49: Commenters stated that Increased Reliance on Gas-Fired Combined Cycle 

Generation Will Increase the Cost of Natural Gas and Could Potentially Create Reliability Issues 

Commenters stated that natural gas is one of the most price volatile commodities in existence. 

Commenters stated that greater use of natural gas for many applications will place upward 

pressure on the price of natural gas as the recently discovered new domestic gas supply reserves 

mature and decline. Commenters stated that the EPA's reliance on natural gas-fired combined 

cycle (NGCC) generation in its Clean Power Plan will increase the use of natural gas as states 

build additional NGCC plants. Commenters stated that this issue will be compounded by the fact 

that the Clean Power Plan includes the non-dispatchable resources of renewable energy and 

DSM energy efficiency, which will force states to build and utilize NGCC units as a replacement 

for base-load coal-fired units in order to ensure grid reliability. 

Commenters also stated that that reliance on a single source of fuel is, in and of itself, a 

reliability concern. Commenters stated that a basic tenet of electric system reliability is to use a 

diversified fuel mix in order to mitigate volatility in supply and pricing. Forcing the entire 

country to rely on gas-fired generation as a base load fuel is an exceptionally bad energy policy. 

Commenters stated that prior to the approval of any state compliance plans, a study should be 

undertaken that evaluates the impact on: (1) the supply and demand of natural gas; (2) natural 

gas prices; (3) current gas transmission pipelines; and (4) the need and timeline for constructing 

new gas transmission pipelines. Commenters stated that this study should be conducted by the 

Federal Energy Regulatory Commission with input solicited from states. 

Commenters stated that renewable energy is not a dispatchable resource. Commenters stated that 

renewable generation cannot be substituted for traditional dispatchable resources on a MW for 

MW basis. Commenters stated that the EPA's BSER effectively substitutes non-dispatchable 

renewable resources for base load coal units. Commenters stated that while some level of 

renewable resources is appropriate, renewable resources cannot provide base load generation or 

reliability to the grid and cannot be the sole substitute for coal-fired units. 

Commenters stated that additional variable resources, such as wind generation, will lead to 

increased cycling of fossil units, which will decrease their efficiency, which will lead to an 
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increase in CO2 emissions. Commenters stated that there are also technical challenges to 

integrating and managing large quantities of renewable generation into the transmission and 

distribution system, which will be compounded as the level of renewable energy grows. 

Commenters stated that the EPA's Clean Power Plan relies too heavily on renewable generation 

resources and DSM energy efficiency programs. Commenters stated that neither renewable 

generation resources nor DSM energy efficiency programs are dispatchable. Commenters stated 

that the EPA's reliance on renewables and DSM energy efficiency is another example of the 

EPA's lack of knowledge and experience in matters related to generation dispatch. Commenters 

stated that they will not recommend approval of any state compliance plan that may result in an

unreliable electrical system. 

Response 49: Regarding projected impacts of the final rule on natural gas demand and price, see 

Chapter 3 of the RIA. 

The final rule does not require reliance on any single fuel source.

Regarding the technical feasibility of the renewable generation potential quantified in building 

block 3, see final rule preamble section V.E. and the GHG Mitigation Measures TSD.

Regarding reliability and state plans, see section VIII.G.2 of the final rule preamble.

Regarding state compliance plans, we have already considered natural gas infrastructure and 

believe that it can readily accommodate the expanded NGCC utilization contemplated under 

BB2, and any potential expansion would not exceed the degree or rate of expansion 

demonstrated by the industry historically. See final rule preamble section V.D.

Comment 50: Commenters stated that rule will potentially, adversely impact Kentucky industry 

Commenters stated that the manufacturing sector in Kentucky and across the nation is a major 

energy consumer. Commenters stated that Kentucky is home to particularly energy-intensive 

manufacturing processes including aluminum smelting, automobile production, appliance 

manufacturing, iron and steel mills, paper mills, chemical production, and glass manufacturing. 

Commenters stated that according to the latest statistics published by the Kentucky Department 

of Energy Development and Independence, almost 96% of the Commonwealth's electricity is 

generated by fossil fuel-fired sources; 92.7% was generated through coal combustion alone. 

Commenters stated that the abundance, low cost (second lowest average electricity cost in the 

nation), and reliability of these energy sources has allowed Kentucky manufacturers to remain 

competitive in the global economy. Commenters stated that they are concerned that the proposed 

CPP could undermine the reliability of the U.S. electric grid and increase energy costs and deal a 

lethal blow to the competitiveness of Kentucky's energy-intensive manufacturing sector.

Commenters stated that the proposed CPP contains CO2 emission "goals" for each state plan to 

meet. Commenters stated that in reality, these "goals" are state-by-state emission caps. 

Commenters stated that under the proposal, Kentucky will be required to reduce CO2 emission 

rates from EGUs by 17-18%. In analyzing the mandated reduction in light of the amount of fossil 

fuel generation, Kentucky will be forced to fundamentally alter the way energy is produced, 
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priced, and consumed in the Commonwealth. Commenters stated that conservative estimates are 

that the CPP would result in 14% to 17% increases in retail electricity prices for Kentuckians. 

Response 50: The EPA projects that this final rule will have minor impacts on electricity prices. 

See Chapter 3 of the RIA. Regarding reliability, see section 8.9 of this document. 

Comment 51: Commenters stated that industry cannot transition from coal in such a short 

timeframe

Commenters stated that EPA projects an additional 49 GW of coal plants will retire under the 

proposed emission guidelines on top of the retirements already announced from previous EPA 

regulations. Commenters stated that this transition to a different energy supply portfolio in such a 

short period of time is very concerning. Commenters stated that the regional approaches 

proposed with the NODA will create an even greater energy transition raising the specter of 

significant costs arising from recent installation of environmental controls on coal-fired plants 

forced to retire under the emission guidelines.

Response 51: The start date of the interim compliance period is extended to 2022 in the final 

rule, and building block 2 is phased in over the interim period. Additionally, the final rule 

continues to give states significant flexibility in how they comply with requirements, including 

both BSER and non-BSER measures as a means to comply, and there are many ways in which 

states can develop plans that account for their potential reliability concerns. See final rule

preamble section VIII.

Comment 52: Commenters stated that cost and availability of electricity will be impacted.

Commenters stated that all of their electric utilities will be affected by the Proposal, since it 

would impact the cost and availability of base load generation and alter the dispatch of 

generation. The Building Blocks for renewable energy and energy efficiency could have a direct 

impact on each provider, depending on the state implementation plan. 

Response 52: For an analysis of the projected impacts of the final rule, see the RIA.

Comment 53: Rapid change to NGCC will result in reliability problems 

Commenters stated that shutting down coal-fired plants, particularly in the short period of time 

allowed by the glide path and the interim goals, means that there is less base load on the grid to 

provide vital ancillary services. Commenters stated that it will force more reliance on and buildout of NGCC. Commenters stated that the decrease in diversity is also a decrease in reliability, 

as well as a possible national security issue.
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Response 53: See preamble for a discussion of changes in timing to the final rule, including a 

2022 start date for the interim period as well as an emission reduction glide path.

Comment 54: Multiple commenters stated that schedule and demands of the rule would cause 

unacceptable risk and that states' authority is being intruded upon. 

Commenters stated that EPA's proposal, would cause unacceptable risk to the state's electricity 

system and the benefits it provides. The commenters stated that EPA should withdraw its 

proposal and redo it, within the limited legal authority that the Clean Air Act allows and without 

intruding on the sovereign authority of the state to determine how electricity is generated and 

distributed to its citizens, businesses, and farmers.

Response 54: The EPA disagrees with this comment. The final rule continues to give states 

significant flexibility in how they comply with requirements, including both BSER and nonBSER measures as a means to comply. See section VIII of the final rule preamble.

Comment 55: Commenters stated that prices will increase. 

Commenters stated that EPA's own estimates project that the Proposed Rule will cause 

nationwide electricity increases averaging between 6 and 7 percent in 2020, and up to 12 percent 

in some locations. Commenters stated that EPA estimates annual compliance costs between $5.4 

and $7.4 Billion in 2020, rising up to $8.8 Billion in 2030. 

Commenters stated that an analysis by NERA Economic Consulting indicated that average U.S. 

electricity prices would increase by 12% per year, and the total costs of the rule could be 

between $366 Billion and $479 Billion over a 15 year timeframe. Commenters stated that 

conservative estimates by Arkansas Electric Cooperative Corporation ("AECC"), indicate that 

the Proposed Rule will cause a 22 to 34% increase in electricity prices by 2025, and a further 

price increase between 17% and 32% by 2030. Commenters stated that coupled with other 

increases in costs projected by AECC, electricity prices will increase between 79% and 98% by 

2025, and between 105% and 132% by 2030. Commenters stated that he increased costs from the 

Proposed Rule and other EPA regulations affecting AECC's system will be extremely 

detrimental to NSA and NYS and their customers and suppliers, and could result in their steel 

not being as competitively priced as other sources or options available to their customers, 

including foreign sources not subject to the EPA Proposed Rule. Commenters stated that these 

costs will have to borne not only by NSA and NYS but also by all other residential, commercial 

and industrial energy consumers who will not only pay more for energy, but also could be forced 

to purchase new equipment under energy efficiency programs mandated by the Proposed Rule. 

Commenters stated that since 2001, energy costs for middle-income and lower-income families 

have increased by 27 percent nationally while their incomes have declined by 22 percent. 

Commenters stated that the Proposed Rule and EPA's Environmental Justice analysis fails to 

evaluate the economic impact of the Proposed Rule on low-income and minority communities, 

including for example, increased mortality among lower income and disadvantaged 

demographic groups associated with increases in electric rates. 
92

Response 55: See discussion of projected impacts on retail price and electricity bills in Chapter 

3 of the RIA.

Comment 56: Commenters stated that rule will adversely impact Wyoming economy. 

Commenters stated that Wyoming supplies 40% of the coal used in the United States -

distributed to 30 some states annually. The mining industry employs - directly and indirectly -

thousands of people in Wyoming. Coal production funds school construction, infrastructure 

projects and federal, state and local government functions. In addition to mining, Wyoming coal 

fired power plants produce affordable power for residents and businesses both in Wyoming and 

in other states. Commenters stated that the EPA's Proposal will create an unnecessary burden for 

Wyoming residents and businesses who receive 89% of their electricity from coal generation.

Commenters stated that this Proposal decreases fuel diversity. Commenters stated that utilities 

will be over-reliant on natural gas generation as coal is phased out. Commenters stated that 

power generation and home heating will compete for the resource. Commenters stated that 

individuals will pay both higher electricity bills and higher heating bills. Commenters stated that 

there is a real risk of insufficient supply of natural gas. 

Response 56: EPA disagrees with this comment. For projected impacts on electricity prices, gas 

prices, and electricity bills, see RIA Chapter 3.

Comment 57: Commenters stated that as the proposed rule introduces unworkable barriers to 

implementation on the state level and has raised significant concerns regarding system reliability. 

Commenters stated that these factors must be taken into account in the promulgation of a final 

rule. Commenters stated that otherwise the proposed rule should be withdrawn and re-proposed 

in a manner that adequately addresses these and other implementation and reliability concerns.

Response 57: EPA has addressed system reliability in the Resource Adequacy and Reliability 

TSD and in section 8.9 of this response to comment document.

Comment 58: Commenters stated that there will be insufficient time to meet goals.

Commenters stated that to determine the interim standard for each state, EPA assumed that all 

emission rate reductions from Building Blocks 1 and 2 could be achieved at the start of the tenyear interim compliance period. Commenters stated that as a consequence of this flawed 

assumption, for many states, almost all of the emission rate reductions that the Proposed Rule 

ultimately requires, must be achieved in the first year of the ten-year interim compliance period...

Commenters stated that they are left with little or no flexibility to determine a different 

compliance path to avoid the 2020 compliance cliff under EPA's proposed schedule for 

implementation. Commenters stated that EPA intends to finalize the Proposed Rule in mid-2015, 
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which means that the earliest state implementation plans would be approved by EPA is mid2017. Commenters stated that, at most, this schedule leaves 2-and-a-half years for electric 

generating companies to achieve aggressive emission reductions and states to make sweeping 

changes to their existing regulations and electric generation, transmission, and distribution 

systems. Commenters stated that given the stringency of the interim standards, the proposed 

implementation schedule will force states to rely on coal unit closures to achieve compliance. 

Commenters stated that eliminating state's compliance flexibility runs afoul of Section 111(d)'s 

requirement that states be able to consider units' remaining useful life in complying with 111(d). 

Commenters stated that the constricted timeline will prevent states from cushioning economic 

impacts from retirements. 

Response 58: In the final rule, the start of the interim period is now 2022 rather than 2020. See 

preamble for additional discussion of this change, which provides additional time.

Comment 59: Commenters stated that if Building Block 2 is implemented the CPP would 

unequivocally impact wholesale power markets by placing NGCC units at the front of the 

dispatch line, and coal-fired units at the back, distorting a marketplace that is based upon 

economic bidding and pricing.

Response 59: The final rule does not require any particular NGCC unit or group of NGCC units 

to achieve any particular utilization rate. See Section V of the preamble. 

Comment 60: commenters discuss the future of coal mining in the United States. 

Commenters provided discussion about the future of the U.S. coal supply. Commenters asserted 

that the coal reserves are considerably smaller than what is ordinarily understood.

Commenters stated that in order to be accurately classified as "reserves," coal resources should 

be able to be mined at a profit, but EIA has never analyzed what it terms "Estimated Recoverable 

Reserves" of US coal for economic profitability. Commenters stated that in 1997, the EIA 

acknowledged that what it terms coal "reserves" are not actually reserves, and that the 

widespread belief that the US has a "200 year supply" of easily mined coal is not true. 

Commenters stated that the likely truth is that the US is rapidly approaching the end of coal that 

can be mined at a profit with extremely serious implications for the US economy. Commenters 

provided several reports prepared by the commenters documenting these assertions and EIS and 

USGS publications discussing coal resource availability.

Commenters stated that as the U.S. approaches the end of economically recoverable coal, the 

cost of the EPA's Clean Power Plan is likely to be less than estimated because continuing the 

status quo of heavy reliance on coal to generate electricity will become increasingly costly as the 

remaining coal becomes more expensive to mine and the U.S. electric utility industry could 

begin to experience increasing constraints on coal supplies for the coal-fired power plants that 

currently produce large amounts of electricity for the U.S. economy. Commenters noted that coal 
94

supply constraints could have extremely serious consequences for the U.S. economy if adequate 

steps have not been taken to get the U.S. repowered for the 21st century.

Commenters discussed how the economic feasibility of extracting coal affects the ability of coal 

companies to profitably mine coal. Commenters noted that the top three U.S. coal companies 

have reported large negative net incomes in the years 2011 through 2013, which the commenters 

linked to the higher cost of recovering remaining coal. Commenters stated that as the financial 

strength of the top 3 U.S. coal companies continues to weaken, the assumptions underlying the 

Wood Mackenzie (used in the EPA IPM) future coal supply analysis (used in the EPA IPM) 

seem highly unlikely to be valid. Commenters provided discussion with supporting 

documentation regarding the commenter's assertion that coal production will not increase, and 

thus, the Wood Mackenzie coal supply model used in the EPA IPM model version 5.13 

overestimates future coal production.

Response 60: The EPA believes the coal supply assumptions utilized in IPM v.5.15 are 

reasonable. See Chapter 9 of the IPM Documentation.

8.5 COMPLIANCE COSTS

Comment 1: Commenters suggested that EPA should provide a clearer and more consistent 

economic analysis of its rules. The commenters stated that the preamble of the proposed rule 

presents cost information as total costs while the RIA presents the same costs as annualized costs 

and as annual incremental compliance costs, and that it is misrepresentative to present annualized 

costs as total costs. The commenters requested that EPA provide total costs over a defined period 

in addition to annualized costs so the public and other interested parties can properly consider the 

economic impacts of the EPA's proposed rule and make valid comparisons with their own cost 

estimates. The commenters also requested that EPA provide a clear explanation of exactly how 

cost estimates have been annualized.

Commenters stated that the analysis does not recognize investments that have already been made 

in Kansas.

Response 1: The RIA appropriately and transparently presents the annual cost and benefits of 

the two illustrative compliance scenarios. To estimate these annualized costs, EPA uses a 

conventional and widely-accepted approach that applies a capital recovery factor (CRF). For 

more detail, see Chapter 3 of the RIA.

EPA’s modeling of the final rule incorporates updates which include unit-level specifications 

(e.g., control investments). See Chapter 3 of the RIA.

Comment 2: Commenters recommended that a simple, uniform framework that would allow for 

least-cost compliance be developed to ease the compliance burden and increase certainty for all 

parties subject to the regulations, as provided by EPA for previous regulations. The commenters 
95

stated that utilities and power systems are already struggling with the complexities and that a 

holistic design approach should be used to ensure that the full merits of RE, EE, and CO2 actions 

work synergistically in a mutually beneficial manner to minimize compliance costs.

Response 2: See preamble to final rule which discusses the uniform framework incorporated 

into the final rule.

Comment 3: Commenters stated that EPA has underestimated compliance costs.

Commenters stated that the NERA study's estimated compliance costs, totaling $366 billion to 

$479 billion over the 2017 to 2031 period, are nearly ten times EPA's estimate. Commenters 

discussed the two main scenarios used by NERA to analyze the energy market impacts of the 

proposal which assumed each state would use the least expensive combination of the four 

Building Blocks; and that real world constraints would limit compliance options to just Building 

Blocks 1 and 2 due to the need for state legislation to increase renewables and demand-side 

energy efficiency. The commenters further cited the study's estimates that compliance costs 

would equate to double digit electricity rate increases in 43 states, with 14 of those states 

potentially experiencing peak-year electricity rate increases in excess of 20 percent. The 

commenters stated that the analysis predicts that annual average electricity prices in the four 

states encompassing their [the commenters] traditional operating company service territory will 

increase between 11 and 17 percent between 2017 and 2031. The commenters also discussed 

NERA's predictions that coal retirements will increase by at least 45,000 MW resulting in more 

than one-third of the U.S. coal-fired generating fleet retired by 2020 due to cumulative impacts 

of EPA's policies and that natural gas prices could increase by as much as 29 percent.

Commenters further cited the NERA study which concluded that even optimizing among the 

four Blocks would make the proposal the most costly rule ever created and that annual costs of 

compliance could be $41 billion or more per year nationally. Commenters stated that even with 

state flexibility, the absolute cost of implementing the EPA's BSER and an optimized economic 

compliance solution yields intolerably high compliance costs and customer rate increases. The 

commenters further stated that such a proposal cannot possibly reflect the "best" system of 

emission reduction and is at odds with the Administrator's obligation to regulate only as 

necessary to carry out her functions under the Act.

Commenters also cited a study by Florida Electric Power Coordinating Group concluding that 1) 

the overall Florida utility costs impacts would likely total in the billions of dollars due to the 

need for fuel switching and construction of significant, additional zero-emitting sources of 

energy (the equivalent of 5 to 20 GW) to meet compliance needs, 2) the proposed rule could 

potentially result in rate impacts approaching 25 to 50 percent, and 3) the impact and possible 

additional cost to expand Florida's transmission grid and limited natural gas pipeline 

infrastructure is unknown at this time. The commenters stated that the costs in the study far 

exceed EPA's estimates.

Commenters stated that the EPA's model assumes that renewable generation can be constructed, 

and placed into the electric grid, with little perceived complications or impediments; there is also 
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little consideration of the transmission constraints entailed in expanding renewable generation. 

Commenters stated that besides increasing compliance costs, constructing new transmission 

capacity will increase the time to comply with the Rule Proposal's renewable requirements. 

Commenters added the transmission line construction process takes years.

Commenters also cited preliminary estimates from the Florida Electric Power Coordinating 

Group, and stated that EPA may have grossly underestimated the potential range in its estimated 

direct and indirect costs. The commenters also stated that preliminary estimates show that 

average statewide retail rates could increase 25 to 50 percent by 2030 as a result of the Proposed 

Rule, however states and individual utilities cannot even begin to develop reliable estimates of 

compliance costs with the Proposed Rule without knowing the final requirements of an EPA 

approved State Implementation Plan. The commenters concluded that if EPA's proposed BSER 

is not revised, the stringent emission performance requirements will require substantial 

compliance costs for Florida, including compliance costs assumed in the Building Blocks and 

additional costs such as the building of new natural gas pipelines, the building of new generation, 

the possible improvements and/or building of new transmission lines, and the cost of stranded

assets resulting from the premature retirement of existing baseload generation. The commenters 

also stated that it is important to emphasize that pursuant to Florida Statutes, investor-owned 

electric utilities are entitled to recover prudently incurred costs in complying with environmental 

laws or regulations, including the Clean Air Act.

Commenters stated that EPA's Building Block assumptions are in most cases unrealistic and 

unachievable and that implementing the Building Blocks as designed will almost certainly cost 

more than EPA has estimated because of the Agency's unrealistic assumptions about 

achievability.

Commenters stated that EPA had underestimated compliance costs in Wisconsin, including 

underestimation of the cost of new transmission lines. The commenters also cited public 

opposition to transmission improvement projects, and the time necessary for construction of 

transmission lines (up to 8.5 years in Missouri, and up to 5 years in the ERCOT region).

Commenters stated that the global SCC value utilized is faulty, that EPA does not evaluate 

potential transmission reliability impacts as requested by NERC, and that EPA grossly 

underestimates the potential costs of the proposal while demonstrating no valid benefits. 

Commenters stated "Our preliminary analysis indicates EPA has overestimated greatly the 

monetized benefits for this rule and also underestimated the cost to the public."

Commenters stated that the EPA's annual cost estimates are based only on 'the change in electric 

power generation costs between the base case and the proposed rule . . . includ[ing] cost 

estimates for demand-side energy efficiency' and 'the amortized cost of capital investment, 

needed new capacity, shifts between or amongst various fuels, deployment of energy efficiency 

programs, and other actions associated with compliance.' Commenters stated that the EPA's 

estimate therefore does not appear to include the significant additional costs that will be incurred 

by the asset owners, the states and their ratepayers who will need to absorb the costs of stranded 

capital investments associated with the retirements and abandonments resulting from the 

proposed rule, nor does it include the costs of reliability improvements or infrastructure 
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investments needed to ensure a stable electric grid that will be required as a result of the 

proposed rule. Commenters stated that the EPA's analysis overestimated the cost of improving 

energy efficiency by using cost assumptions more than sixty percent above the costs observed in 

practice including costs observed in the assessments cited by EPA.

Commenters stated that the EPA must recognize the practical constraints that existing EGUs 

face. Commenters stated that capital improvements to EGUs take years for the planning, design, 

engineering, acquisition and installation of equipment. Commenters stated that as a result, 

electric utilities need reasonable time and, just as importantly, adequate certainty to make the 

type of costly investments necessary for compliance.

Commenters stated that the MISO estimates that in the state of Indiana transmission 

infrastructure ranges from $3.2 million/mile of line for 765 kV construction, to $560,000 per 

mile of line for 138 kV. Commenters stated that while the large capital cost of providing new 

electrical infrastructure to remote renewable facilities is certainly a substantial cost, what is not 

represented by the MISO study is the significant time required to procure right of ways and other 

time-consuming, costly permitting and siting requirements.

Commenters stated that the EPA's proposal simply does not address whether or how much 

transmission build-out will be needed to support the additional wind and renewable generation 

needed to meet its Building Block 3 target for Texas, and therefore assumes no incremental costs 

associated with transmission.

Commenters stated that the EPA simply cannot justify unilaterally implementing a rule with such 

dire financial consequences given the Agency's role in Section 111(d). Commenters stated that 

this rulemaking should be abandoned in favor of debate in and approval by Congress of any 

federal action in response to global climate change.

Commenters stated that the EPA may consider the costs of BSER at the source level, the industry 

level, and, in the case of the power sector, the national level in terms of the overall cost of 

electricity and the impact on the national economy over time. Commenters stated that costs must 

not be exorbitant and must not be 'greater than the industry could bear and survive.' Commenters 

stated that the proposed BSER envisions significant investments being made at coal-fired EGUs 

through emissions reductions required in building block 1 while, at the same time, projecting that 

the BSER across states and/or nationally would result in the elimination of a significant amount 

of base load power. Commenters stated that while EPA indicates there will still be coal affected 

EGUs in operation as of 2030, EPA's own modeling suggests that there will be significant 

retirements of affected coal EGUs. Commenters stated that this makes sense as the vast majority 

of the proposed BSER is directed at a dramatic reduction in power generation at coal affected 

EGUs. Commenters stated that it appears this presents the opportunity for stranded investments 

at coal affected EGUs and EPA has not indicated how the proposed BSER avoids this. 

Commenters stated that the EPA, as in many circumstances throughout the proposed guidelines, 

simply relies on the fact that states are not required to implement all measures included within 

BSER-they are just required to ensure the emissions reductions associated with application of all 

the measures are achieved. Commenters stated that the proposed guidelines also do not address 

costs and other constraints related to infrastructure needs and transmission construction and 

upgrades that would be necessary under the application of proposed BSER.
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Commenters stated that State implementation plans that lack coordination have the potential to 

increase costs relative to coordinated state plans in several ways. Commenters stated that many 

entities in the electricity sector, including generation asset owners, utilities, competitive retail 

providers, and power marketers operate in multiple states. Commenters stated that patchwork of 

individual state implementation plans means that these entities would have higher administrative 

costs due to the need to track and comply with different rules in different states. Commenters 

stated that entities that own generation or serve load in two or more states could face higher 

compliance costs when the states in which it operates do not develop coordinated plans. 

Commenters stated that these entities would not be able to take advantage of least cost emission 

reduction opportunities in different states, or average emissions across assets in different states.

Response 3: EPA’s analysis of two illustrative compliance approaches is a reasonable estimate 

of the costs and benefits of the final rule. See RIA Chapter 3.

Comment 4: Commenters stated that there will be significant electric transmission and gas 

infrastructure build-out required over a short amount of time to meet the 2020 interim goal of the 

CPP and that EPA should have considered the impact this build-out will have on the availability 

of the necessary materials and labor force in the development of the draft CCP. The commenters 

cited concerns surrounding whether there are sufficient materials and labor available to meet 

these standards and about the impacts this demand will create on the cost of labor and materials -

costs that will ultimately be borne by ratepayers.

Commenters stated that the necessary new NGGC that will be necessary to comply with the 

proposed rule increases the cost of compliance by $1.9 billion. Commenters further stated that 

the cost of new generation capacity, significant transmission investment could also be required 

depending on the location of the new capacity versus the load centers in the state.

Commenters stated that substantial transmission upgrades may be needed and transmission 

infrastructure studies will be needed to assess the impact. Commenters further stated that the 

significant cost impact of transmission grid improvements and the reliability issues posed if they 

are not implemented are not sufficiently addressed or considered by the proposed rule.

Commenters stated that depending upon the startup/shutdown cycles and load cycling type, from 

49 to 62 percent of the cycling cost results from increased capital and maintenance costs 

associated with increased maintenance frequency, inspections, and repairs. Commenters further 

stated that 23 to 29 percent of the cost increase results from forced outages requiring not only 

repairs (parts and labor), but also purchase of replacement power.

Commenters stated that the Mississippi Energy Institute estimates it would cost Mississippi 

utilities $14 billion to comply with these regulations. Commenters further stated that this $14 

billion will be diverted from growing our economy, creating jobs, improving our schools, 

infrastructure and more. 

Commenters stated that a study prepared by the Midwest Independent System Operator (MISO) 

indicates that the total cost of the rule could be as high as $83 billion in 20-year net present value 

costs.
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Response 4: The final rule eases the timeline and permits both more time and a revised 

compliance path to 2030 goals that will address major concerns over infrastructure development. 

Also see RIA for impacts on natural gas and Resource Adequacy and Reliability Analysis TSD 

for impacts on interregional transmission flows.

Comment 5: Multiple commenters stated that the compliance costs of the proposed rule are 

underestimated. 

Commenters stated that EPA grossly underestimates the potential costs of compliance, based on 

independent studies and a preliminary estimate of the cost of one of EPA's compliance scenarios. 

The commenters further stated that EPA's modeling is inadequate due to significant unit-level 

errors and inaccurate assumptions regarding fossil fuel-fired unit retirements and new generation. 

Commenters also provided a preliminary estimate of the cost of compliance based on the IPM 

predicted "Option 1 State Scenario", however the commenters noted that the ultimate impacts 

cannot be determined without the: structure, timing, and content of EPA's final guidelines; 

individual state implementation of these guidelines, including the potential that state 

implementation plans impose different standards; additional rulemaking activities in response to 

legal challenges and court decisions; the impact of future changes in generation and emissionsrelated technology and costs; the impact of future decisions regarding unit retirement and 

replacement, including the type and amount of any such replacement capacity; and the time 

periods over which compliance will be required. The commenters stated that the impacts would 

place more than $35 billion in upward pressure on company customer rates between 2016 and 

2030, only to achieve initial compliance. Additional significant costs would be expected every 

year beyond 2030 to maintain compliance. The commenters listed the following additional 

impacts:

• Retirement of 9,400 MW of coal-based generation by 2018 (beyond the 3,000 

MW of MATS retirements) resulting in significant local economic impacts and 

major disruption to system operations and reliability; 

• Six percent reduced heat rate of the remaining 8,400 MW of coal capacity level of 

reduction which is impossible to achieve, unsustainable at any cost, and not 

Adequately Demonstrated; 

• Replacement of over 5,400 MW of coal capacity with of new NGCC capacity and 

increased utilization of existing NGCC by 2020, significantly increasing the 

company's dependency on natural gas and stressing an already fully subscribed 

Southeastern pipeline system; and 

• Implementation and maintenance of DSEE at levels that grow to 11 percent of 

total MWh sales by 2030, ten times the level achieved by the Company system to 

date, the pursuit of which would require significant rebates, incentives, and cross 

subsidies between participating and non-participating customers. 
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Commenters stated that while already significant, this analysis does not reflect the second order 

rate impacts associated with the higher gas prices that would inevitably result from the 

significant shift in generation from coal to gas or other unpredictable factors such as capital 

costs, the costs of implementing specific actions of compliance scenarios, and shifts in the 

economy. The commenters added that this analysis does not factor in the costs of proactive steps 

taken by the Company subsidiaries to diversify their fleet or include the negative impacts that 

these higher electricity prices would have on the health of the state and national economy. 

Lastly, the commenters remarked that EPA improperly claims public health benefits and 

inappropriately relies on unsupported global benefits that should not be used in a national 

regulatory context. The commenters concluded that because the proposed rule provides no 

benefits to weigh against the exorbitant costs, it is therefore unjustified and unlawful. 

Commenters also stated that EPA has significantly underestimated the costs of the Proposed 

Guidelines because the Building Blocks are based on unreasonable assumptions and will be 

much more costly to implement than EPA assumes. The commenters added that the proposed 

rule is not justified by the purported benefits when those benefits are characterized properly, and 

that EPA has failed to accurately estimate the impacts of broad disruptions to the economy, 

energy security, and the reliability of the U.S. power system. 

Commenters stated that the total demand for coal (and the price) will not drop because of export 

demand so electricity prices will not fall as the EPA predicts. The commenters estimated that this 

will add $1.6 billion per year to the compliance cost.

Commenters stated that the IPM says that compliance will cost between $7.3 and $8.8 billion 

which may be too low as ERCOT just completed a $6 billion upgrade of their electric grid 

infrastructure to support 12 to 18 gigawatt hours of transmission from West Texas to East 

Texas. The commenters stated that based on his calculations the IPM estimate is about an order 

of magnitude low and needs to be revisited and recalculated.

Commenters estimated that the CPP as proposed would cost the state of Kansas $8.75 billion 

with a possible range of costs between $5 billion and $15 billion. The commenters estimated 

that the cost to Kansas associated with the additional generation resources will be $3.25 

billion. The commenters also estimated an additional $1 billion cost for new infrastructure to 

support water and/or natural gas pipeline capacity. The commenters estimated costs of $2 billion 

for additional transmission allocated to Kansas ratepayers as a result of the CPP.

Commenters stated that EPA's Regulatory Impact Analysis used annualized energy efficiency 

costs as part of their summary of compliance costs, which has the impact of pushing costs out 

into the future and making the compliance spending in 2020, 2025, and 2030 appear lower than it 

would actually be.

Commenters stated that the NODA proposes substantial modifications to the CPP which, if 

implemented, will have a crippling impact on EGUs within North Dakota and other states and 

that EPA has not met its obligation to account for these impacts (reliability of electricity 

production, economic volatility, loss of jobs). The commenters stated that the NODA risks 

destabilizing electricity production in North Dakota, which is particularly important during North 

Dakota's long winters due to fuel availability. The commenters cited a NERA study which 
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concluded that implementation of the CPP as written will cause a 12-17% increase nationwide 

(11-22% in North Dakota) in electricity prices for consumers. The commenters stated that EPA 

did not consider the additional costs created by ramping up its regulations with the modifications 

announced in the NODA.

Commenters stated that the data upon which EPA based its IPM modeling contained errors and 

false assumptions, resulting in inaccurate projections that do not reflect Florida's actual 

compliance costs. The commenters stated that EPA's IPM projections also do not consider the 

substantial stranded assets that would result from forcing units to retire prior to the end of their 

useful life, as well as the additional cost of developing the infrastructure and new generation to 

replace those units. The commenters stated that EPA should correct all errors and inaccurate 

assumptions in its data, take into account the costs associated with stranded assets and replacing 

retired units, re-model the Base Case and Policy Case scenarios to more accurately assess the 

proposal's impacts, and then give stakeholders an opportunity to comment on EPA's revised 

projections.

Commenters cited a NERA study estimating the costs of the proposed rule at $41 to $73 billion 

per year, and an increase in residential electricity rates in Ohio of 12 percent. The commenters 

cited a study by Energy Ventures that estimates that energy regulations, including the Clean 

Power Plan, cumulatively would increase the cost of electricity and natural gas by nearly $300 

billion nationally in 2020 compared with 2012, and that gas bills would increase in Ohio by 51 

percent and industrial electricity rates would increase 74 percent in nominal terms.

Commenters stated that EPA underestimated the costs of the proposed rule. The commenters 

stated that MISO, estimated that, just in the MISO region, the 20-year discounted compliance 

cost would be $55-$83 billion, even without considering the significant amount of transmission 

and natural gas pipeline development that the rule will make necessary and the billions of dollars 

in stranded pollution-control investments that the rule will create. The commenters stated that 

ERCOT forecasts 20% retail rate increases by 2020, "without accounting for the costs of 

transmission upgrades, procurement of additional ancillary services, energy efficiency 

investments, capital costs of new capacity, and other costs associated with the retirement or 

decreased operation of coal-fired capacity in ERCOT. The commenters stated that the Kansas 

Corporation Commission estimated $5-$15 billion in compliance costs, with a corresponding 

electric rate increase of between 10% and 30% over 13 years. The commenters cited an analysis 

by Energy Ventures Analysis (EVA), that estimated for the ten-year period of 2020-2030 

wholesale electricity costs will increase by $274 billion, non-power natural gas costs will 

increase by $ 80 billion and additional capital costs for replacement power will be $53 

billion. The commenters cited a NERA study which projected annual costs of $73 billion under 

a scenario that assumes that states do not have authority to undertake all four building blocks but 

would have to obtain their emission reductions through building blocks one and two and 

estimated that the proposed rule will cause double-digit electricity rate increases in 43 states.

Commenters stated that independent economic studies indicate that the actual cost of the 

Proposed Rule will be exponentially higher than EPA's estimates. The commenters cited a study 

by the U.S. Chamber of Commerce's Institute for 21st Century Energy that estimated that the 

Proposed Rule would reduce the nation's GDP by an average of $50 billion annually over the 

next seventeen years and cause an average annual decrease of over 200,000 jobs, driven by direct 
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compliance costs of $480 billion over fifteen years, as well as increases in electricity costs for 

ratepayers. The commenters stated that electricity prices would increase 11%-17% annually and 

total energy costs would increase by an average of 8%-11% each year for fifteen years.

Commenters stated that EPA's estimate of annual incremental cost ($4.3 billion to $8.8 billion 

depending on the year and compliance option selected) is understated, and cites estimates that 

compliance will cost $400 billion over ten years and $480 billion by 2030, driven by the lost 

return on investment of retiring coal-based generating capacity before the end of its 

economically useful life, as well as the costs of new generating capacity (particularly using 

natural gas) and related infrastructure. The commenters stated that a portion of the costs would 

be from the stranded investment of recent efforts by individual states and their utility companies 

to make coal-fired generation cleaner.

Commenters cited compliance cost estimates by Energy Ventures of $407 billion over a ten-year 

period for the mass-based option and NERA of $366 to $479 billion over a 15-year period for the 

rate based option. Commenters stated that these estimates do not include (1) new transmission 

investments to access more remote high wind areas and to react to changes in power flows; (2) 

additional transmission ancillary services to handle greater amounts of variable wind and solar 

generation; (3) higher gas rates from increasing costs for pipeline compression; and (4) GDP 

changes triggered by raising energy prices. Commenters stated that more than 40 states will see 

double digit increases in electricity prices and 14 or more states will experience increases that 

exceed 20 percent. Commenters stated that EPA's prediction of the impacts of the UMATS rule 

was inaccurate.

Commenters stated that EPA's proposal does not recognize approximately $10.5 billion in 

investments in clean renewable energy, and threatens Wisconsin's ability to continue to meet the 

energy needs of its citizens. The commenters estimated the cost of compliance with this proposal 

to be $3.3 to $13.4 billion for Wisconsin, not including any costs related to additional 

infrastructure needs associated with this rule, such as natural gas infrastructure necessitated by 

increased gas use contemplated under this proposal, or the need for new transmission lines. The 

commenters stated that the EPA's plan does not consider "stranded costs," which are those 

investments that have been made in coal-fired power plants that may need to be retired earlier 

than anticipated due to the requirements contained in this rule proposal.

Commenters stated that EPA's IPM projections do not consider the substantial Florida state-wide 

stranded assets that would result from forcing units to retire prior to the end of their useful life, 

as well as the additional cost of developing new generation to replace those units. The 

commenters stated that these costs will be substantial if, as EPA's IPM projections indicate, over 

90% of Florida's coal generation is forced to retire before the end of its useful life. The 

commenters stated that EPA should correct all errors and inaccurate assumptions in its data, rerun the model and then provide stakeholders an opportunity to comment on EPA's revised 

projections.

Commenters stated that under the Clean Power Plan, the generation from Kansas's coal-fired 

fleet must be significantly reduced or eliminated results in significant stranded costs to Kanas 

ratepayers. The commenters stated that Kansas ratepayers must continue to pay for coal-fired 

generation resources (including the recent environmental upgrades) that will either be curtailed 
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or forced to retire early as pay for the new generation, transmission, and DSM energy efficiency 

costs required under the Clean Power Plan. The commenters stated that because stranded 

investments are excluded, the EPA's projected compliance costs are significantly 

understated. The commenters stated that the EPA should grandfather (exclude) all of the Kansas 

coal-fired generation resources that have undergone environmental retrofits from the Clean 

Power Plan. The commenters stated that the law is clear that the remaining useful life of EGUs 

must be taken into account and that EPA cannot and should not ignore this factor.

Commenters stated that utilities have made significant investments in EGUs to continue their 

operation for the foreseeable future, and in response to the CAIR, CSAPR, BART, Visibility and 

MATS rules, the utilities have recently had considerable expenditures. The commenters stated 

that EPA must include current unpaid costs for individual EGUs in its costing analysis. The 

commenters stated that these expenditures will impact the way IPM dispatches resources or, at a 

minimum, affect the total cost of the proposed CO2 rule.

Commenters stated that EPA's analysis of the cost of its Clean Power Plan is significantly 

understated. The commenters stated that EPA estimates that the annual incremental cost of its 

plan could range from approximately $4 billion to almost $9 billion, yet independent analyses

estimate costs as much as $28 billion annually. The commenters stated that EPA estimated 

nationwide electricity prices would increase between 6 and 7 percent in 2020, but NERA 

estimated that average U.S. electricity prices actually would increase by 12% per year and the 

total costs of the rule could be between $366 billion to $479 billion over a 15 year timeframe. 

The commenters stated that energy cost increases disproportionately burden low and middleincome families, who spend a higher percentage of their income on energy costs and are the least 

capable of absorbing further increases. The commenters stated that EPA has not considered 

power plant retirements and fuel switching which would strand energy investments. The 

commenters stated that higher costs would also result in net job losses for the American 

economy and reduce the competiveness of American manufacturing. The commenters also cited 

the U.S. Chamber of Commerce's Institute for 21st Century Energy study.

Commenters the interim goals require duplicative/unnecessary capacity additions that are 

extremely costly to all customers, but are particularly burdensome to fixed and low-income 

customers.

Response 5: EPA’s analysis of two illustrative compliance approaches is a reasonable estimate 

of the costs and benefits of the final rule. This modeling reflects a number of updates, including 

revised unit-level specifications (e.g., control investments) and planned new power plant 

construction and closures. See Chapter 3 of the RIA.

Comment 6: Commenters stated that EPA's own analysis of the Proposed Rule's impacts, as 

well as analyses by independent consulting groups, indicates that the costs of the Proposed Rule 

are both exorbitant and excessive in relation to analogous rules in the power sector. The 

commenters stated that EPA projects that the Proposed Rule could increase retail electricity 

prices by 10% or more in some areas, eliminate employment opportunities for more than 80,000 

workers in the power generation, equipment, and fossil fuel sectors and that as much as 49 GW 
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of existing coal capacity will be retired. The commenters cited a NERA estimate that complying 

with the Proposed Rule will cost EGU owners and operators $366 - $479 billion over a 15-year 

period (or $24 - $32 billion per year), and increase electricity prices by as much as 17%. The 

commenters stated that EPA projects that average natural gas prices will increase by more than 

10% versus the base case which would represent an increase of more than 55% from 2012. The 

commenters stated that EPA's determination that the selected beyond-the-unit measures 

constitute BSER is arbitrary and capricious in light of the statutory and regulatory requirements 

that the BSER must be adequately demonstrated when considering costs.

Response 6: EPA’s analysis of two illustrative compliance approaches is a reasonable estimate 

of the costs and benefits of the final rule. The estimated retail price impacts of the two 

illustrative approaches analyzed in the final RIA are lower than projected for the proposed rule, 

less than one percent on average in 2030. Additionally, natural gas prices are projected to 

increase by less than 3 percent. For more detail, see RIA Chapter 3. 

EPA’s own estimate of the employment losses are more modest than the commenter suggests. 

Please see Chapter 6 of the RIA for more information.

See final rule preamble section V for full discussion of BSER.

Comment 7: Commenters stated that the proposed rule would cause utilities to increase their 

costs.

Commenters stated that the benefits of the rule outweigh the costs but there should be a 

mechanism in place for those who are hit by the costs to be helped.

Commenters stated that the utility customers may face staggering costs as a result of EPA's 

proposal.

Commenters stated that the Proposed Regulation, if approved, is likely to raise substantially both 

the electric rates and bills Virginians pay. Commenters stated that, using conservative 

assumptions, the incremental cost of compliance for one utility alone (Dominion Virginia Power) 

would likely be between $5.5 billion and $6.0 billion on a net present value basis and that 

compliance costs will increase the cost of providing electric service, which must be paid for by 

residents and businesses in Virginia. Commenters stated that Virginia residents and businesses 

would also be responsible for paying remaining costs for useful existing facilities forced to retire 

prematurely by the Proposed Regulation. Commenters stated that wholesale power costs would 

increase and that these costs would be passed on to the consumer. Commenters stated that the 

well-established state and federal requirements for reliable electric service at a reasonable cost to 

customers, however, cannot be reconciled with the carbon emission rates that the Proposed 

Regulation requires for Virginia.

Commenters stated that it is not evident that costs and cost-effectiveness were given serious 

consideration in the development of the proposed rules. Commenters stated that the final rule 

should require that compliance plans demonstrate that costs have been seriously considered, and 
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that consumer advocates, the state PSC, and utilities have participated in determining that the 

chosen strategies represent the lowest cost alternatives.

Commenters stated that the EPA cost effectiveness analysis shortfalls are further emphasized 

through recent Midcontinent Independent System Operator (MISO) interim analysis of the Clean 

Power Plan that models CPP compliance while providing for sustaining of MISO system 

reliability requirements for minimum capacity reserves and spinning reserves (EGEAS modeling 

September 17, 2014). Commenters further stated that the MISO study found that deployment of 

new generation resources was needed to support system reliability as environmental regulations 

compel additional existing coal and natural gas unit retirements. Commenters stated that the 

MISO has noted in its comments to the CPP Docket that deployment of these new generation 

resources or infrastructure provisions is not realistically delivered by 2020 and that timely 

deployment can still be a challenge for 2030 CPP compliance. Commenters stated that the MISO 

also found that additional coal generation would be idled (prospectively retired) to support CPP 

compliance, amounting to as much as 25% (14,000 MW) of remaining MISO coal generation 

capacity in addition to MISO's estimated 12,000 MW of coal unit retirements driven by 

compliance with other EPA regulations (e.g. the recently reinstated Cross-State Air Pollution 

Rule (CSAPR) and Mercury and Air Toxics Standard (MATS)). Commenters stated that the 

MISO interim analysis indicates that the cost per ton of CO2 reduction assigned to achieve CPP 

compliance at the state level across the MISO region is about 50% higher than EPA's $40 per 

metric tonne CO2 cost effectiveness criterion EPA used to set the state BSER targets (refer to 

EPA's Technical Support Documentation). Commenters concluded that the MISO found that 

EPA's CPP is not practical to implement and is unnecessary. Commenters stated that the CPP 

costs outweigh its benefits by a wide margin for the MISO states.

Commenters cited a NERA study estimating that the proposed Clean Power Plan would cost 

between $41 and $73 billion per year, and that electricity rates would increase between 13 

percent and 18 percent in Louisiana, 20 to 36 percent in Utah with industrial rates expected to 

increase 22 percent, 11 percent in Virginia, and 16 to 19 percent in Montana. Commenters cited 

an analysis performed by the Industrial Energy Consumers of America estimating that industrial 

rates would increase 29 percent. The commenters cited a projection by MISO that the 20-year 

discounted cost of rule within its 15-State footprint would be $55 and $83 billion. The 

commenters cited an analysis conducted by London Economics estimating that the Clean Power 

Plan would increase wholesale power prices by up to 40 percent in MISO states by the year 

2020.

Commenters cited that an analysis by Energy Ventures Analysis, Inc., estimating that EPA's 

energy regulations, including the Clean Power Plan, cumulatively would increase the cost of 

electricity and natural gas by nearly $300 billion in 2020 compared with 2012, and that that gas 

bills would increase in Virginia by 38 percent and industrial electricity rates would increase by 

30 percent.

Commenters cited an analysis performed by the Industrial Energy Consumers of America 

estimating that industrial rates are expected to increase 23 percent. Commenters cited a study by 

MISO that estimated the 20-year discounted cost of rule within its 15-State footprint at $55 to 

$83 billion. Commenters further cited an analysis conducted by London Economics estimating 
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that the Clean Power Plan would increase wholesale power prices by up to 40 percent in MISO 

by the year 2020.

Commenters stated that Florida utility cost impacts likely will total in the billions - and perhaps 

tens of billions - of dollars, which will be borne by the citizens of Florida. The commenters 

stated that rate impacts will vary by utility, depending on utility size and current generation mix 

and that average potential rate increases are estimated to be between 25 and 50 percent.

Commenters stated that Florida cannot meet EPA's Proposed Rule with current generation plants, 

regardless of how they are dispatched. The commenters stated that fuel switching alone is 

estimated to result in an average cost to Florida electric customers of $3/MWh to $20/MWh, and 

that this dispatch scenario would increase Florida's dependence on natural gas from 60% to 

around 80%, which would materially increase reliability risks resulting from over-reliance on a 

single fuel. The commenters stated that even with fuel switching, Florida's average emission rate 

would still be significantly greater than EPA's proposed requirement of 740 lbs/MWh by 2030 

(950 lbs/MWh in 2020, 900 lbs/MWh in 2030) and that if EPA's Proposed Rule is implemented 

according to the proposed schedule, severe fuel cost increases and reliability deterioration would 

occur.

Commenters estimated customer impacts of additional zero emission generation at $43/MWh-

$61/MWh (39%-56% increase) for biomass; $40/MWh-$59/MWh (37%-54% increase) for solar 

and $33/MWh-$51/MWh (30%-47% increase) for nuclear. The commenters stated that these 

costs would create a substantial and disproportionate economic burden to its customers and 

regional economy.

Commenters stated that the Brattle Group's ('Brattle') analysis of the Proposed Rule projects a 

compliance cost of $32 per ton of CO2 for Minnesota. Commenters stated that in a scenario 

where states meet their compliance goals without cooperation, Brattle projected a marginal CO2 

cost between $0 and $36 per ton for the MISO region. Commenters stated that Brattle also 

projected an energy price increase up to $40 per megawatt-hour ('MWh') if a coal unit is the 

marginal unit dispatched in MISO and up to $16 per MWh if a combined cycle gas unit is the 

marginal unit dispatched.

Commenters stated that the MISO's review also indicates that the interim targets in the proposed 

rule will require significant CO2 reductions in the 2020 timeframe. Commenters stated that this 

study indicates that this short timeline may not allow cost-effective, long-term planning. 

Commenters stated that if coal plant retirements are part of the compliance strategy for 2020, 

corresponding capacity additions (for reliability and resource adequacy) in a two-year window 

will be difficult if not impossible. Commenters stated that the MISO's experience is that new gas 

plant construction typically requires three to six years. Commenters stated that if new 

transmission and gas pipeline additions are needed to accommodate the capacity expansion, this 

timeline may be even longer. Commenters stated that this finding suggest that in order to meet 

the 10-year average identified in the proposed rule, it is likely that entities will need to take 

immediate action. Commenters stated that since it is possible that state plans will not be finalized 

until the 2018-19 timeframe, there will be little time for decisions and implementation for 

infrastructure changes before 2020.
107

Commenters stated that in Minnesota it invested significant amounts of capital in upgrading 

existing plants and reducing pollution over the past two decades. Commenters stated that most of 

the loans secured for those upgrades and environmental improvements were based on certain 

levels of production at those plants. Commenters stated that operating those plants at 

significantly reduced levels could conceivably threaten its ability to service existing debt and 

create millions of dollars of stranded assets.

Commenters stated that MP&W exists to serve the local community in Muscatine, Iowa. 

Commenters stated that as the municipal utility, there is only the local generating station that 

must bear the burden and cost of compliance with the proposed 111 (d) rule, not a fleet of units 

across a region. Commenters stated that regulation that impacts the local cost to produce reliable 

power is borne by our local residents and businesses.

Commenters stated that EPA's cost analysis is further flawed because it failed to consider lost 

revenue in its analysis. Commenters stated that in EPA's proposed rule for standards of 

performance for GHG emissions from new EGUs, EPA stated that a proper cost analysis must 

consider 'revenue enhancement.' Commenters stated that revenue enhancement is 'generated by 

the sales of any by-products of the control process.' Commenters stated that because EPA 

considers revenue enhancement an essential cost offset, it likewise must consider lost revenue of 

saleable by-product a cost deficit.

Commenters stated that the proposed rule threatens to substantially raise electric rates in 

Wyoming. Commenters stated that the incremental cost of compliance for Wyoming utilities 

would likely be several billion dollars on a net present value basis. Commenters stated that 

compliance costs will increase the cost of providing electric service, which costs will in tum be 

passed on to residents and businesses (including WMA's members) in Wyoming in the form of 

higher rates.

Commenters stated that proposed CPP will change the market dispatch of generating units by 

reducing the availability of the most economic generating resources. Commenters stated that 

such a shift will cause higher market clearing prices in the SPP region resulting in material 

adverse economic impacts on SPP customers. Commenters stated that the proposed CPP will 

increase reliance on renewables and generators fueled by natural gas, yet there has been no 

evaluation of additional operating and planning measures needed to support integration of 

significant additional renewables and of natural gas availability required to fuel the increased 

number of gas burning units in the SPP region.

Response 7: EPA’s analysis of two illustrative compliance approaches is a reasonable estimate 

of the costs and benefits of the final rule. The projected costs of compliance with the final rule 

amount to a 4 percent increase in the cost of meeting electricity demand, while securing public 

health and welfare benefits that are several times greater. Furthermore, retail electricity prices 

are projected to increase by less than one percent in 2030, and electricity bills are projected to 

decrease. See RIA Chapter 3.

Cost-effectiveness was, in fact, considered in the final rule. See Sierra Club v. Costle, 657 f 2d at 

337-38 (costs found to be reasonable under section 111 (a) based on considerations of cost 

effectiveness). As discussed in section V of the final rule preamble, the cost effectiveness of the 
108

CPP compares favorably to the cost effectiveness of the EPA standards controlling GHG 

emissions from light duty vehicles, and from heavy duty vehicles and engines, standards both 

EPA and the Department of Transportation have uniformly found to be highly costeffective. See 2012-2016 light duty standards (entire fleet) $50 ton CO2e in 2030; $40 per ton 

CO2e in 2050. 75 FR at 25515 (May 7. 2010); Phase 1 heavy duty pickups and vans $90 ton 

CO2e in 2030; 76 FR at 57228 (Sept 15, 2010); Phase 1 heavy duty vocational vehicle standards 

$20 ton CO2e in 2030; 76 FR at 57234; Phase 1 heavy duty engine standards $20 ton CO2e in 

2030. 76 FR at 57238; Phase 1 heavy duty tractor standards $20 ton CO2e in 2030. 76 FR at 

57213; Light duty trucks 2017-2025 $142 ton CO2e [$85 per ton in 2050] 77 FR at 62922 (Oct. 

15, 2012); Light duty cars 2017-2025 $128 ton CO2e [$80 in 2050] id. Combined fleet 

201702025 $132 ton CO2 e in 2030 and $82 ton CO2 e in 2050; id.

The final rule includes an extended start date of 2022, an emission reduction glide path, and the 

ability to average across time periods. See preamble for further discussion.

The final rule does not mandate unit-level requirements, and instead offers flexibility in the 

design of state plans. See Section VIII of the final rule preamble for further discussion of state 

plans.

EPA’s cost estimates are reasonable. The cost estimates presented in the RIA do are compared 

against a future baseline, and both cases incorporate costs net of revenue enhancement. These 

estimates include additional costs related to natural gas pipeline development required to fuel 

increased gas burning units.

See section 5.11 of this document for EPA’s response to comments relating to stranded assets.

Comment 8: Commenters states that the total demand for coal (and the price) will not drop 

because of export demand so electricity prices will not fall as the EPA predicts. The commenters 

estimates that this will add $1.6 billion per year to the compliance cost.

Commenters stated that the IPM, says that compliance will cost between $7.3 and $8.8 billion 

which may be too low as ERCOT just completed a $6 billion upgrade of their electric grid 

infrastructure to support 12 to 18 gigawatt hours of transmission from West Texas to East 

Texas. The commenters stated that based on his calculations the IPM estimate is about an order

of magnitude low and needs to be revisited and recalculated.

Commenters estimated that the CPP as proposed would cost the state of Kansas $8.75 billion 

with a possible range of costs between $5 billion and $15 billion. The commenters estimated 

that the cost to Kansas associated with the additional generation resources will be $3.25 

billion. The commenters also estimated an additional $1 billion cost for new infrastructure to 

support water and/or natural gas pipeline capacity. The commenters estimated costs of $2 billion 

for additional transmission allocated to Kansas ratepayers as a result of the CPP.
109

Commenters stated that EPA's Regulatory Impact Analysis used annualized energy efficiency 

costs as part of their summary of compliance costs, which has the impact of pushing costs out 

into the future and making the compliance spending in 2020, 2025, and 2030 appear lower than it 

would actually be.

Commenters stated EPA's Regulatory Impact Analysis (RIA) for the CPP projects national costs 

of $5.4 to $7.4 billion annually in 2020. Commenters further stated that the EPA's projections 

assume billions of dollars of offsetting annual savings from reductions of electric demand 

through widespread investments in energy efficiency measures.

Commenters stated that the NODA proposes substantial modifications to the CPP which, if 

implemented, will have a crippling impact on EGUs within North Dakota and other states and 

that EPA has not met its obligation to account for these impacts (reliability of electricity 

production, economic volatility, loss of jobs). The commenters stated that the NODA risks 

destabilizing electricity production in North Dakota, which is particularly important during North 

Dakota's long winters due to fuel availability. The commenters cited a NERA study which 

concluded that implementation of the CPP as written will cause a 12-17% increase nationwide 

(11-22% in North Dakota) in electricity prices for consumers. The commenters stated that EPA 

did not consider the additional costs created by ramping up its regulations with the modifications 

announced in the NODA.

Commenters stated that the data upon which EPA based its IPM modeling contained errors and 

false assumptions, resulting in inaccurate projections that do not reflect Florida's actual 

compliance costs. The commenters stated that EPA's IPM projections also do not consider the 

substantial stranded assets that would result from forcing units to retire prior to the end of their 

useful life, as well as the additional cost of developing the infrastructure and new generation to 

replace those units. The commenters stated that EPA should correct all errors and inaccurate 

assumptions in its data, take into account the costs associated with stranded assets and replacing 

retired units, re-model the Base Case and Policy Case scenarios to more accurately assess the 

proposal's impacts, and then give stakeholders an opportunity to comment on EPA's revised 

projections.

Commenters cited a NERA study estimating the costs of the proposed rule at $41 to $73 billion 

per year. Commenters cited a study by Energy Ventures that estimates that energy regulations, 

including the Clean Power Plan, cumulatively would increase the cost of electricity and natural 

gas by nearly $300 billion nationally in 2020 compared with 2012, and that gas bills would 

increase by 51 to 61 percent and industrial electricity rates would increase 74 percent in nominal 

terms.

Commenters stated that both the survey results and modeling analysis indicate that the 

environmental regulations evaluated in this assessment are likely to result in retirements of a 

significant amount of existing generation capacity. Commenters stated that the Clean Power Plan 

will also require significant amounts of generation from renewable sources to meet the proposed 

CO2 limits. Commenters stated that both unit retirements and new renewable generation could 

impact the ERCOT transmission system.
110

Commenters cited compliance cost estimates by Energy Ventures of $407 billion over a ten-year 

period for the mass-based option and NERA of $366 to $479 billion over a 15-year period for the 

rate based option. The commenters stated that these estimates do not include (1) new 

transmission investments to access more remote high wind areas and to react to changes in 

power flows; (2) additional transmission ancillary services to handle greater amounts of variable 

wind and solar generation; (3) higher gas rates from increasing costs for pipeline compression; 

and (4) GDP changes triggered by raising energy prices. The commenters stated that more than 

40 states will see double digit increases in electricity prices and 14 or more states will experience 

increases that exceed 20 percent. The commenters stated that EPA's prediction of the impacts of 

the UMATS rule was inaccurate.

Commenters stated that EPA's proposal does not recognize approximately $10.5 billion in 

investments in clean renewable energy, and threatens Wisconsin's ability to continue to meet the 

energy needs of its citizens. The commenters estimated the cost of compliance with this proposal 

to be $3.3 to $13.4 billion for Wisconsin, not including any costs related to additional 

infrastructure needs associated with this rule, such as natural gas infrastructure necessitated by 

increased gas use contemplated under this proposal, or the need for new transmission lines. The 

commenters stated that the EPA's plan does not consider "stranded costs," which are those 

investments that have been made in coal-fired power plants that may need to be retired earlier 

than anticipated due to the requirements contained in this rule proposal.

Commenters stated that EPA's IPM projections do not consider the substantial Florida state-wide 

stranded assets that would result from forcing units to retire prior to the end of their useful life, 

as well as the additional cost of developing new generation to replace those units. The 

commenters stated that these costs will be substantial if, as EPA's IPM projections indicate, over 

90% of Florida's coal generation is forced to retire before the end of its useful life. The 

commenters stated that EPA should correct all errors and inaccurate assumptions in its data, rerun the model and then provide stakeholders an opportunity to comment on EPA's revised 

projections.

Commenters stated that under the Clean Power Plan, the generation from Kansas's coal-fired 

fleet must be significantly reduced or eliminated results in significant stranded costs to Kansas 

ratepayers. The commenters stated that Kansas ratepayers must continue to pay for coal-fired 

generation resources (including the recent environmental upgrades) that will either be curtailed 

or forced to retire early as pay for the new generation, transmission, and DSM energy efficiency 

costs required under the Clean Power Plan. The commenters stated that because stranded 

investments are excluded, the EPA's projected compliance costs are significantly 

understated. The commenters stated that the EPA should grandfather (exclude) all of the Kansas 

coal-fired generation resources that have undergone environmental retrofits from the Clean 

Power Plan. The commenters stated that the law is clear that the remaining useful life of EGUs 

must be taken into account and that EPA cannot and should not ignore this factor.

Commenters stated that utilities have made significant investments in EGUs to continue their 

operation for the foreseeable future, and in response to the CAIR, CSAPR, BART, Visibility and 

MATS rules, the utilities have recently had considerable expenditures. The commenters stated 

that EPA must include current unpaid costs for individual EGUs in its costing analysis. The 
111

commenters stated that these expenditures will impact the way IPM dispatches resources or, at a 

minimum, affect the total cost of the proposed CO2 rule.

Commenters stated that EPA's analysis of the cost of its Clean Power Plan is significantly 

understated. Commenters stated that EPA estimates that the annual incremental cost of its plan 

could range from approximately $4 billion to almost $9 billion, yet independent analyses 

estimate costs as much as $28 billion annually. Commenters stated that EPA estimated 

nationwide electricity prices would increase between 6 and 7 percent in 2020, but NERA 

estimated that average U.S. electricity prices actually would increase by 12% per year and the 

total costs of the rule could be between $366 billion to $479 billion over a 15 year timeframe. 

Commenters stated that energy cost increases disproportionately burden low and middle-income 

families, who spend a higher percentage of their income on energy costs and are the least capable 

of absorbing further increases. Commenters stated that EPA has not considered power plant 

retirements and fuel switching which would strand energy investments. Commenters stated that 

higher costs would also result in net job losses for the American economy and reduce the 

competiveness of American manufacturing. Commenters cited a study by the U.S. Chamber of 

Commerce's Institute for 21st Century Energy estimating that the Clean Power Plan would 

reduce the nation's GDP by an average of $50 billion annually over the next seventeen years and 

cause an average decrease of over 200,000 jobs.

Commenters stated that it supports cost-effective action to reduce GHG emissions in a manner 

that will not impair manufacturing competitiveness.

Commenters stated that the Proposed Standard does not provide the certainty that producers need 

in order to assure that they will continue to receive an affordable and reliable supply of energy. 

Commenters stated that the EPA's estimates project that the Proposed Standard will cause 

nationwide electricity price increases averaging between 6 and 7 percent in 2020 and up to 12 

percent in some locations. Commenters stated that the EPA estimated annual compliance costs 

between $5.4 and $7.4 billion in 2020, rising up to $8.8 billion in 2030. Commenters stated that 

these are power sector compliance costs only and do not capture the subsequent adverse spillover 

impacts of higher electricity rates on overall economic activity.

Commenters stated that the EPA's so-called 'costs' are simply the costs of building block 4 

(energy efficiency program and customer costs) offset by the reduction in generating sector 

supply costs. Commenters stated that the EPA's view of costs for the entire United States ($7-9 

billion per year) is lower than the Texas costs projected by NERA ($10-11 billion per year). 

Commenters stated that the EPA's cost estimates are fundamentally flawed.

Commenters stated that the EPA's calculated costs are based on the EIA's levelized cost of 

electricity (LCOE) estimates, suggesting that the cost of energy substitutes can be measured 

solely through the LCOE metric. Commenters stated that the citation EPA used from the EIA, 

'The LCOE values for dispatchable and non-dispatchable technologies are listed separately in the 

tables, because caution should be used when comparing them to one another' (EIA, 2014). 

Commenters stated they do not believe the EPA exercised enough caution and consequently 

systematically underestimated the cost of implementation, reporting a low, narrow cost range of 

only $7.3 - $8.8 billion.
112

Commenters stated that during the years 2007-2012, there was approximately $1,038 million of 

investment in renewable energy and $353 million of investment in energy efficiency in the North 

Carolina. Commenters stated that this existing investment, together with anticipated investment, 

is projected to have a profound impact and positions North Carolina well to comply with the 

portions of Building Block 3 having to do with renewable generating capacity and Building 

Block 4. Commenters stated that prospective calculations based on cost performance of clean 

energy technologies under current North Carolina policies have shown that developing a robust 

clean energy economy will result in savings for consumers in North Carolina.

Commenters stated that the Pace Global's analysis of Arizona's compliance implications finds 

that the rule is neither flexible nor achievable and that implementation of this plan without 

modifications would result in severe impacts to the reliability of electric supply in the state and 

excessive cost implications for Arizona customers. The CPP is projected to increase fuel and 

purchased power costs by 40% and generation capital expenditures by 30%.

Response 8: EPA analysis projects a minor decrease to coal prices under the two illustrative 

compliance scenarios analyzed, and does not expect a significant increase in coal exports as a 

result of this rule. See Chapter 3 of the RIA

The presentation of annual costs in the RIA is appropriate. To estimate annualized costs, EPA 

uses a conventional and widely-accepted approach that applies a capital recovery factor (CRF) 

multiplier to capital investments and adds that to the annual incremental operating expenses.

The power industry’s “compliance costs” are represented in this analysis as the change in electric 

power generation costs between the base case and illustrative CPP scenarios, including the cost 

of demand-side energy efficiency programs and measures and monitoring, reporting, and 

recordkeeping (MR&R) costs.

EPA’s analysis of two illustrative compliance approaches is a reasonable estimate of the costs 

and benefits of the final rule. This modeling reflects a number of updates, including revised unitlevel specifications (e.g., control investments) and planned new power plant construction and 

closures. See Chapter 3 of the RIA.

EPA conducted an analysis of the impact of the CPP on employment in chapter 6 of the RIA. 

EPA projects there will be job-year losses in the fuel extraction industries such as coal mining, 

while there will be gains in jobs in energy efficiency industries. Secondary market impacts of the 

guidelines such as impacts on industrial customers are discussed in the RIA in chapter 5. 

The RIA presents a reasonable estimate of costs for two illustrative compliance scenarios. The 

projected power sector costs presented in the RIA rely on the generator cost and performance 

assumptions documented in Chapter 4 of the IPM documentation, and not solely on EIA’s LCOE 

estimates.

Comment 9: Commenters stated that States have enacted "Property Assessed Clean Energy" 

legislation on their own. The commenters stated that to the extent that implementation of 

structured financial products can be integrated as part of 111(d), or as part of an official tool kit 
113

for states, it will help states meet their emissions reduction goals in the most cost-effective 

manner.

Response 9: Thank you for your comment.

Comment 10: Commenters recommended changing state policies that keep the cost of power at 

the lowest possible levels and thus cause utilities to minimize staffing and retain obsolete 

equipment. The commenters stated that the costs of compliance should be shared and not borne 

entirely by the power producers but also by consumers. 

Commenters stated that EPA has purported to calculate general societal costs compared to 

world-wide benefits. The commenters stated that EPA should distinguish between regulated 

utilities and deregulated utilities as regulated utility rates must be set at a level that covers not 

only the cost of operations of a well-managed utility but an amount adequate for a return on, and 

replenishment of, capital.

Commenters stated that coal-fired EGUs would not experience EPA's predicted, average national 

costs, but would experience costs specific to their facilities. The commenters stated that EPA has 

not made a determination that the costs for Pennsylvania - or any other state - are reasonable, 

notwithstanding that the rule would require compliance on a state-by-state basis. The 

commenters stated that the Proposed Rule makes no allowance for the fact that the additional 

costs of controlling CO2 emissions come on top of previous environmental investments made by 

affected facilities and that imposing new costs can severely limit the ability of a facility to 

operate and generate needed revenue.

Commenters stated that EPA must ensure that costs incurred under any requirement for the "best 

system of emission reduction" (BSER) are minimized by providing states maximum flexibility in 

determining BSER and allowing maximum flexibility in compliance options. The commenters 

stated that States must be able to set compliance deadlines that allow utilities to pay off existing 

debt on their power plants and pollution control equipment. The commenters stated that since 

2000, Wisconsin utilities have invested over 3.2 billion dollars in air pollution control equipment 

and efficiency upgrades for existing power plants, and that setting fixed compliance dates could 

strand this debt and make the installation of new, cleaner replacement generation more costly.

Commenters stated that environmental compliance costs associated with the Clean Smokestacks 

Act, including early coal plant retirements, have not yet been fully recovered through utility 

rates. The commenters stated that to the extent that North Carolina utilities must retire additional 

coal plants to comply with the Proposed Rule, ratepayers will be required to bear the burden of 

additional environmental compliance costs and such retirements must necessarily occur at plants 

where significant costs have already been incurred to improve air quality, thus stranding the 

significant investment the utilities and their North Carolina ratepayers have made over the past 

decade.

Commenters stated that the negative impact to the utilities' associated with their ability to 

recover existing costs and the additional costs that they will incur to comply. Commenters also 

stated that the negative impact to the utilities associated with risk being added to their ability 
114

earn a fair returns and their ability to attract capital. Commenters further stated that the negative 

impact to the utilities associated with any responsibility they may experience due to being made 

responsible for unrecovered costs that are currently justified because the plants in question are 

used and useful, which would not be the case if plants are shuttered or if plant output is reduced.

Response 10: Regarding geographic scale of benefits, see section 8.7.2, comment 3.

The retail price estimates presented in Chapter 3 of the RIA do, in fact, distinguish between 

regulated and deregulated utilities.

For a discussion of cost-reasonableness of BSER, see section V of the preamble.

See section VIII of the preamble for a discussion of flexibilities available in state plans.

Comment 11: Commenters stated that EPA cost analysis is incomplete. 

Commenters questioned EPA's conclusion that the proposed rule is BSER because EPA does not 

provide a cost analysis of its proposed BSER for existing fossil-fired EGUs. The commenters 

stated that they estimated the total cost of collectively implementing EPA"s four Building Blocks 

may cost up to $1.1 trillion between 2020 and 2029, which cannot be considered reasonable. The 

commenters further stated that the proposal fails to be cost effective even after 2029, at which 

time EPA estimates the nation will spend an estimated $46 billion to achieve Building Block 4 

alone until all affected facilities are retired. 

Commenters stated that EPA has attempted to mask the cumulative cost of its BSER 

determination by only analyzing the costs of its individual components, that EPA's cost analysis 

fails to account for numerous costs associated with each of the proposed Building Blocks and 

that EPA has not evaluated the combined cost of the four Building Blocks as a system as 

required for a BSER determination. The commenters further stated that the cost analysis is 

therefore indefensible and EPA's BSER determination is legally deficient. 

Commenters stated that while analyzing the precise impacts of EPA's proposal is extremely 

difficult for reasons such as the uncertainty associated with the content of EPA's final guidelines 

and associated with the content and timing of state plans, EPA has incompletely, inadequately 

and grossly underestimated the potential cost of compliance. The commenters remarked that 

more accurate cost assessments cannot be compiled until state plans are approved and until there 

is clear guidance on ultimate compliance requirements, which will not occur until mid-2017 at 

the absolute earliest. 

Commenters suggested that IPM cost modeling should consider costs of required electricity 

transmission upgrades and pipeline upgrades beyond existing pipelines. The commenters stated 

that substantial new electricity transmission, which cost $2.3 million per mile, and pipeline 

investments, which cost close to $4 million per mile, will be required to implement Building 

Block 2 and maintain sufficient reliability safeguards. The commenters further stated that these 

costs are neither accounted for by the IPM nor assessed in EPA's RIA, that the infrastructure 

costs necessary to accommodate both locational shifts and shifts in fuel type such shifts are 
115

completely ignored, and that EPA's suggestion that states have the "flexibility" to undertake 

different measures if they find such costs to be too great is neither accurate nor defensible. The 

commenters concluded that EPA cannot simply impose burdens on the states without a full 

analysis of the costs of such burdens.

Commenters stated that EPA has not accounted for the costs of creating and maintaining a public 

recordkeeping database in the RIA of the proposed section 111(d) rule.

Commenters stated that consideration of "cost" in determining the BSER, should include all of 

the human costs of climate change born by the public, including but not limited to climaterelated costs to public health, ecosystem services, national security, and natural disasters. 

Commenters stated that total benefits would be less than $100 Billion but the total consumer 

energy costs would be in excess of $360 Billion, and the loss of disposable income under this 

rule will result in 30,000 premature deaths. The commenters stated that EPA did not consider all 

the benefits of increased levels of carbon dioxide, especially on crop production and resulting 

reduction in human suffering, starvation and disease.

Commenters stated that EPA's technical memo on cost considers only Building Blocks 1 and 2 

and EPA should consider costs for all four Building Blocks and include an estimate of the costs 

associated with stranded assets due to this rulemaking. The commenters stated that the 2.7 - 4.4% 

electricity cost increases included in the technical memo are highly uncertain due to the 

complexity of the plan and length of implementation.

Commenters stated that EPA must re-propose the rule for additional review, analysis and 

comment after refining requirements, because the rule as proposed contains ambiguity that 

prevents the PSCW from accurately assessing the total cost impact on Wisconsin citizens. The 

commenters stated that States must be allowed to fully understand the cost impacts based on 

clearly defined parameters before the rule is finalized. 

Response 11: Regarding commenters’ argument that EPA cannot impose burdens on states 

without a full analysis of the costs of such burdens, it should be noted that the costs realized by 

states to develop their state plans for the period 2016-2018 were developed and reported in the 

Supporting Statement for the proposed rule. Please refer to document EPA-HQ-OAR-0602-0438. 

In addition, costs were calculated for the compliance years of 2020, 2025 and 2030 and tabulated 

in the Regulatory Impact Analysis, Section 3.11, which can be found in the docket at EPA-HQOAR-0602-0391.

Regarding commenters’ argument that EPA has not accounted for the costs of creating and 

maintaining a public recordkeeping database, see RIA Chapter 3.

See section V of the final rule preamble for a discussion of cost-reasonableness of the building 

blocks.

Because of the range of choices available to states and the lack of a priori knowledge about the 

specific choices states will make in response to the final goals, the RIA presents two illustrative 

scenarios designed to achieve these goals. These results from these two approaches represent 

reasonable estimates of the impact of this rule. For further discussion, see RIA Chapter 3.
116

Cost-effectiveness was, in fact, considered in the final rule. See Sierra Club v. Costle, 657 f 2d at 

337-38 (costs found to be reasonable under section 111 (a) based on considerations of cost 

effectiveness). As discussed in section V of the final rule preamble, the cost effectiveness of the 

CPP compares favorably to the cost effectiveness of the EPA standards controlling GHG 

emissions from light duty vehicles, and from heavy duty vehicles and engines, standards both 

EPA and the Department of Transportation have uniformly found to be highly costeffective. See 2012-2016 light duty standards (entire fleet) $50 ton CO2e in 2030; $40 per ton 

CO2e in 2050. 75 FR at 25515 (May 7. 2010); Phase 1 heavy duty pickups and vans $90 ton 

CO2e in 2030; 76 FR at 57228 (Sept 15, 2010); Phase 1 heavy duty vocational vehicle standards 

$20 ton CO2e in 2030; 76 FR at 57234; Phase 1 heavy duty engine standards $20 ton CO2e in 

2030. 76 FR at 57238; Phase 1 heavy duty tractor standards $20 ton CO2e in 2030. 76 FR at 

57213; Light duty trucks 2017-2025 $142 ton CO2e [$85 per ton in 2050] 77 FR at 62922 (Oct. 

15, 2012); Light duty cars 2017-2025 $128 ton CO2e [$80 in 2050] id. Combined fleet 

201702025 $132 ton CO2 e in 2030 and $82 ton CO2 e in 2050; id.

Regarding the consideration of potential benefits of increased CO2 emissions, see 8.7.2, 

comment 1 for broad discussion about the integrated assessment models’ treatment of climate 

change impacts (positive and negative) and 8.7.2, comment 6 for discussion specific to the 

integrated assessment models’ treatment of carbon fertilization in the agriculture and forestry 

sectors.

With regard to the commenters that asserted EPA must reanalyze the impacts of the CPP and repropose the CPP, the EPA rejects this suggestion. EPA has conducted an in-depth analysis of the 

benefits and costs of both the proposal and final emission guidelines. This analysis is contained 

in the RIA for the proposal and final rule. Additional information is available in the GHG 

Mitigation Measures for the Final CPP TSD, the CO2 Emission Performance Rate and Goal 

Computation TSD for the CPP Final Rule, the Evaluation, Measurement and Verification 

Guidance for Demand-Side Energy Efficiency TSD, and in additional analyses conducted for the 

rulemaking included in the docket such as the IPM runs conducted for the rulemaking.

Comment 12: Commenters cited a 2013 University of Maryland study on energy efficiency 

grants showed free-ridership (recipients getting grants for something that they would have done 

anyway) at up to 89%. The commenters suggested that the energy efficiency cost savings should 

be revised to zero, and the net compliance cost increased to $52 billion.

Response 12: The EPA’s estimates of demand-side energy efficiency costs are based on 

expenditures and reported net savings (accounting for the effects of free-ridership) from an 

extensive survey of ratepayer-funded energy efficiency programs across the U.S. The analysis of 

demand-side energy efficiency costs, including a discussion of free ridership, is presented in the 

Demand-Side Energy Efficiency Technical Support Document.
117

Comment 13: Commenters stated that according to an analysis by NERA Economic Consulting, 

the proposed rule would conservatively cost the economy at least $41 billion per year in 

compliance and over $366 billion in cumulative costs from 2017- 2030. The commenters stated 

that EPA continues to recycle and double count the same public health co-benefits claimed under 

previous air quality rules in its zeal to shut down coal plants and apply them to the Section 

111(d) proposal in order to justify the exorbitant cost to the economy.

Response 13: The RIA presents costs and benefits incremental to a base case, which includes the 

costs and benefits of other air quality rules. As such, the estimated incremental costs and 

benefits are attributable solely to the illustrative compliance approaches analyzed. See RIA 

Chapter 3.

Comment 14: Commenters stated that construction decisions are made based on price signals 

and that reliability and adequacy could be affected if the revenue streams in the existing 

competitive market are disrupted.

Commenters stated that the SPP indicates that in its region, as many as eight years have been 

required to study, plan and construct new transmission facilities. Commenters stated that 

compliance with the proposed rules becomes an issue if new transmission facilities are required 

to meet capacity. Commenters stated that capital and financing needs, technical and logistical 

needs, site permitting and land lease agreement requirements are all issues or constraints that 

need to be addressed prior to any construction, whether it is construction of additional 

transmission lines, pipelines or generation facilities.

Response 14: EPA does not agree that revenue streams in competitive markets will be 

disrupted. EPA has designed the final rule to be consistent with economic dispatch and 

associated price signals, and believes these will continue to be the basis for competitive market 

developments. EPA has also extended the start of the compliance period and adjusted the path to 

the 2030 goals in the final rule; this will allow a longer timeframe for infrastructure development 

to align with any adjustments to current schedules. The rule also requires states to consult with 

relevant reliability entities in developing plans and has provided a reliability safety valve 

mechanism is plans breakdown unexpectedly in emergency situations (See Preamble Section 

VIII.G.2.)

Comment 15: Commenters noted that the guidelines do not address the fact that "states that have 

reduced emissions likely already have undertaken those reductions that were most cost effective 

and, in order to meet EPA's proposed goals, now must pursue more expensive reduction 

options." Commenters noted that actions "to deploy renewable generation, replace aging coal 

plants with NGCC units or invest in EE programs does not reduce the costs of expanding these 

efforts going forward." Commenters noted that "Those states have already 'picked the lowhanging fruit' and now must invest more to further reduce their emissions than their neighbors 

who have not already undertaken significant actions to reduce their emissions."
118

Commenters stated that the proposed standards are so stringent that if all of the building blocks 

proposed by EPA were successfully implemented in TEC's service territory to the fullest extent, 

TEC's CO2 emission rate could not be in compliance with EPA's proposed limit. The 

commenters cited an evaluation by FCG indicating that the entire state of Florida could not meet 

the limit utilizing the currently existing affected sources and that the only way to meet EPA's 

proposed numeric goal is to discontinue operating existing coal units and replace the energy with 

substantial new zero-emitting electricity generating technologies at great expense. Commenters 

stated that retiring these existing coal units would result in substantial stranded assets and thus 

substantial costs to customers, a result contrary to the EPA's objectives as stated by EPA 

leadership. Commenters stated that TEC's substantial CO2 reductions resulted from an 

agreement with EPA in the form of a consent decree and as a result of this agreement with EPA, 

its customers have made a substantial investment to make early reductions and EPA's Proposed 

Rule does not account for this bold and early action. Commenters stated that the proposed goal 

could not be reached by reasonable measures utilizing all blocks and is therefore devoid of the 

claimed flexibility.

Commenters stated that the EPA should withdraw its proposed existing source performance 

standards (ESPS) because alleged flexibility will result in the federal government picking 

winners and losers and merely hiding the costs through mandates, subsidies, taxes and other 

mechanisms that shift the costs to Americans.

Response 15: EPA disagrees with this comment. See preamble section V and GHG Mitigation 

Measures TSD for a discussion of cost-effective CO2 reduction potential.

Additionally, EPA believes that the final emission performance rates are achievable. See 

sections VI and VII of the final rule preamble.

Comment 16: Commenters stated that he costs that will be incurred by state agencies alone, 

attempting to administer this proposal, will be enormous and that the new program will take 

more than two staff persons per state. The commenters stated that the level of analysis, the level 

of reporting, and the staff time to address NSR and permitting issues will be a colossal drain on 

resources, and U.S. EPA is providing no additional funding to states to administer such an 

enormous project. The commenters stated that predicted electric power generation costs and 

annual incremental compliance cost (including monitoring, reporting and recordkeeping) seem 

staggering.

Response 16: EPA disagrees with this comment. See RIA Chapter 3 for a discussion of the 

costs of the final rule, including estimates for monitoring, reporting, and recordkeeping.

Comment 17: Commenters stated that much of the proposed rule relies on states to develop and 

implement state-specific plans and regulate areas that they have not in the past and that States are 

not staffed to implement the rule without additional funding and authority that would need to be 

appropriated through the legislative process.
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Commenters stated that Arkansas will require significant resources, which are not available at 

the state level, to develop and implement a successful Plan and needs EPA to provide additional 

financial resources to facilitate states' abilities to conduct their Section 111(d) planning and 

implementation.

Commenters further stated that EPA must provide financial assistance to help states with the 

development of state or multistate plans.

Commenters stated that EPA provide state and local agencies with the significant additional 

resources needed to make the Clean Power Plan a success. Commenters urged EPA to build upon 

its strong foundation of pre-proposal dialogue to develop resources to facilitate states' abilities to 

conduct their Section 111(d) planning.

Response 17: See response to comment 1 in section 9.4 of this response to comment document.

Comment 18: Commenters stated that in the absence of guidance from EPA, and assurance that 

reasonable coordination approaches and/or trading mechanisms will be acceptable and accounted 

for in determining future compliance, states will be forced to plan for standalone compliance, 

which may foreclose lower-cost compliance opportunities. The commenters stated that the Clean 

Power Plan contemplates a filing date as late as June 2018 for multi-state plans, and it is 

unknown how long it will take EPA to review and either approve or reject such plans. The 

commenters stated that compliance would require that certain efforts be in progress prior to EPA 

approval, and could entail irreversible actions, such as coal plant retirements, that would increase 

compliance costs and reduce opportunities for less-costly coordinated action.

Commenters stated that the proposal fails to address the critical issues of how the costs of the 

renewable resources needed to attain state goals will be allocated and who has the responsibility 

to mandate such allocations, and thus there can be no meaningful opportunity for comment on 

the implications of the Proposed Rule. The commenters stated that renewables take up to 5 to 10 

years to build. The commenters stated that time is needed for permits for associated 

environmental issues such as endangered species, permits to cross federal lands under the 

National Forest Management Act and/or the Federal Land Policy and Management Act, state 

water quality permits; fish, game, and other wildlife related permits, National Historic 

Preservation Act consultations, rights-of-way permits on tribal land and public lawsuits. The 

commenters stated that transmission infrastructure is subject to delays to resolve the mechanisms 

by which costs are recovered for new transmission and how they are divided among different 

users and customers and equity issues because customers and regulators in one State may object 

to paying for benefits that accrue to customers in another State. The commenters stated that 

renewable energy integration costs and bulk storage costs may be issues in the near future.

Response 18: EPA disagrees with this comment. See preamble section VIII for discussion of the 

range of available compliance flexibilities. Additionally, note that the start date of the interim 

period is 2022 in the final rule, allowing for additional time.

The comment on cost allocation is unclear. Regarding timing and achievability of new 

renewable generation, see section V.E. of the preamble and the GHG Mitigation Measures TSD.
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Comment 19: Commenters stated that the equivalent of 5,000 to 20,000 MW of new zeroemitting capacity will need to be added in Florida, which is a substantial increase, especially 

when compared to Florida's current total capacity of 55,000 MW. The commenters stated that 

the Proposed Rule does not provide sufficient time to site, construct, and optimize the operation 

of the requisite solar energy needed to meet the current targets.

Response 19: See preamble section V.E for discussion of BB3 under the final rule, and section 

VIII for a discussion of available flexibilities in state plan development.

Comment 20: Commenters stated that the EPA has not undertaken a state-by-state analysis of 

the costs and reliability impact of meeting the goal established for each state. The commenters 

stated that to ensure that the Clean Power Plan does not threaten adequacy or reliability of the 

electric power system, or place unreasonable cost impacts on electric consumers, the final rule 

should allow states the ability to analyze the effects and be given the flexibility to decrease the 

stringency of the emission rate goal within limits approved by EPA, or extend the compliance 

deadline, to mitigate significant adverse reliability or cost impact forecasted by such state 

analysis.

Response 20: EPA has addressed reliability in the final rule by requiring states to consult with 

relevant reliability entities in developing plans and by providing a reliability safety valve 

mechanism where unanticipated events conflict with the plan in emergency situation and cause 

reliability emergencies (See Preamble Section VIII.G.2.) See also the RIA for cost impacts and 

the Resource Adequacy and Reliability Analysis TSD for resource adequacy and potential 

concerns about reliability.

Comment 21: Commenters stated that when analyzing the economic impact of redispatch, EPA 

cannot rely on regional compliance to minimize the cost of compliance under Section 111(d). 

The commenters expanded that EPA/s authority under Section 111(d) is to provide guidance to 

the states in their efforts to establish performance standards for the sources subject to Section 

111(d) and EPA has no authority to compel states to enter into regional or multi-state compacts 

and, in many cases such compacts are politically unrealistic and economically impracticable. The 

commenters concluded that EPA's economic impact analysis must be based on compliance 

assumptions that are legally supportable and not on EPA's aspirational objectives of how states 

should behave.

Response 21: The economic impact analysis presented in the RIA includes two illustrative 

compliance approaches. In each of those approaches, affected EGUs in each state are required to 

meet the state goal without interstate trading. In the rate-based approach, states are able to 

procure generation from new renewables and demand-side energy efficiency. For more 

information, see Chapter 3 of the RIA.
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Comment 22: Commenters stated that When a State has a limited number of affected EGUs (in 

the case of South Dakota, only one), or when most or all of the EGUs are constructed in a short 

amount of time, the remaining useful lives of such facilities in such States may not be protected 

under 111(d)(1). The commenters stated that Forcing premature retirement by limiting hours of 

operation of these facilities that all have similar remaining useful lives will result in stranded 

investment and considerable premature and uneconomical investment in new resources and 

recommended allowing them to operate at an economical level through their remaining useful 

lives in exchange for a lower rate of emissions over the rest of the defined period of time. 

Commenters stated that the proposed rule reduces the costs of compliance by establishing a base 

year that coincides with a peak in emissions, a long implementation period, and a wide variety of 

allowed methods. The commenters stated that with these flexibilities, the proposed rule will 

require the replacement of only equipment with a long time in service (in many cases more than 

sixty years), not equipment recently purchased.

Commenters stated that expected retirements (about 120,000 megawatts) are enough to power 

about 60 million homes -- half of America's households. The commenters stated that many of 

these units recently received emission control upgrades costing billions of dollars nationwide, 

which means that investments customers have made in power plant emission controls to meet 

other EPA requirements will be prematurely lost.

Commenters stated that its business model includes a minimum original EGU funding structure 

of 30 years with modifications to this funding structure to account for efficiency improvements 

and that without the requirements of Section 112 of the CAA, its rate payers would receive a 

benefit of approximately 10 years of no debt payments for the final one to two decades of the life 

of its power plants. Commenters stated under the proposed rule the commenters would have to 

prematurely shut down its newest or youngest coal plants (1987 and 1996 vintage) and remaining 

debt would be borne by ratepayers. The commenters stated that the United States Congress set 

an energy policy which banned the use of natural gas for new baseload power generation 

(reversed in 1987) which was a consideration in the permitting, design and construction of its 

coal-fired units. The commenters stated that EPA's description of flexibility does not provide for 

the impact upon its rate payers of which 40% earn less than $35,000 annually. The commenters 

stated that it has been making significant investments to comply with the requirements of the 

UMAT's and CSAPR to continue to utilize its coal fleet. The commenters stated the CPP would 

prematurely close these plants at a great risk to reliability and cost to ratepayers. 

Response 22: See section 5.11 of this response to comment document for EPA’s response to 

comments relating to stranded assets.

Regarding the base year, see preamble VI for discussion of 2012 baseline. Note that the impacts 

analysis presented in the RIA estimates costs and benefits against a projected future base case in 

each year presented in the analysis (2020, 2025, and 2030).
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Comment 23: Commenters stated that a discount rate lower than the 3% discount used in the 

RIA might be appropriate and that the current low interest rates and high unemployment make 

GHG reduction favorable for the economy.

Commenters recommended the use of OMB guidelines which require a 7% discount rate and 

would raises the 2030 compliance cost from $43 billion to $52 billion, and the net cost from $9 

billion to $18 billion.

Response 23: See Chapter 3.3 of the RIA. In the modeling presented in the RIA, a discount rate 

is used to estimate the net present value of the intertemporal flow of the annualized capital and 

operating costs. The optimization model then identifies power sector investment decisions that 

minimize the net present value of all costs over the full planning horizon while satisfying a wide

range of demand, capacity, reliability, emissions, and other constraints. As explained in Chapter 

8 of the IPM documentation, the discount rate is derived as a weighted average cost of capital 

which is a function of capital structure, post-tax cost of debt, and post-tax cost of equity. While 

the detailed formulation of this rate is presented in the IPM documentation, the rate estimated 

and used in the analysis is 4.77 percent. EPA believes this rate is appropriate for power sector 

modeling. It is important to note that this discount rate is selected for the purposes of best 

simulating power sector behavior, and not for the purposes of discounting social costs or 

benefits.

Comment 24: Commenters stated that meeting EPA projected targets for energy efficiency will 

require a significant increase in statewide spending and that any attended benefits to customers 

would be outweighed by the dramatic increases in costs. The commenters stated that in order to 

reach EPA's energy efficiency savings growth rate of 1.5% of sales per year and the 9.91% 

cumulative savings target, the Joint Utilities' initial projections suggest that spending will 

necessarily increase to approximately $3.0 billion per year, or approximately 22 times the 

amount spent on energy efficiency in 2013. The commenters provided a figure and text 

explaining the Joint Utilities' assumptions and supporting evidence for estimating that program 

costs will rise from $250/MWh to $450/MWh in 2029. The commenters stated that Block 4 

alone would have a $3 billion impact to Texas's electric customers.

Commenters stated that utilities will pass compliance costs to customers who may face 

substantially higher rates as utilities seek to recover new environmental capital expenditures, 

new generation, and retrofits, as well as infrastructure investments such as electric transmission 

and natural gas pipelines. The commenters stated that unless the rule is rewritten to reward 

smart investments, Michigan faces a large and artificial competitive disadvantage.

Commenters stated that EPA's goal is to shrink electricity bills, roughly 8 percent, by increasing 

energy efficiency and reducing demand in the electricity system. The commenters stated that 

reducing energy demand, leaves the utilities further lacking the revenue they need for the 

efficiencies the government wants.

Response 24: The EPA has determined not to include demand-side energy efficiency (building 

block four) in the BSER of this final rule and therefore we do not need to address further 
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comments supporting the removal of DS-EE from BSER. This determination is discussed in 

section V.A of the final rule preamble of the CPP. Even though demand-side energy efficiency is 

not being included in the BSER in this final rule and, thus, not included in the determination of 

emission performance rates, the final rule provides states the flexibility to use demand-side 

energy efficiency measures in their state plans for compliance to meet the emission guidelines set 

forth in the final CPP, provided they meet the applicable requirements established in section VIII 

of the preamble for the CPP. Accordingly, the EPA is including a level of DS-EE as a 

component of our illustrative plan scenario that is the basis for the analysis discussed in Chapter 

3 of the RIA that supports the final CPP. EPA is reducing the level of DS-EE in the illustrative 

plan scenario from the level represented in the proposed CPP, from 1.5% annual incremental 

savings down to 1.0% annual incremental savings. The EPA has estimated electricity savings 

and costs associated with the illustrative DS-EE plan scenario. This analysis is presented in detail 

in the Demand-Side Energy Efficiency TSD. Within this TSD, support is provided for the 

estimated costs and the pace of increased spending on EE programs as represented in the 

illustrative plan scenario. The EPA finds the pace of increase in EE program spending 

represented in the plan scenario to be reasonable for this illustrative analysis as it is much lower 

than recent industry trends. The TSD also presents a discussion of utility regulatory models 

which are increasingly in use to support increased EE program efforts and associated impacts on 

revenues.

See RIA Chapter 3 for a discussion of projected retail price impacts, which appropriately 

consider compliance cost pass through.

Comment 25: Commenters stated that EGU heat rate improvement investments were reasonable 

and cost effective provided that they did not trigger additional costs as a result of New Source 

Review.

Response 25: See preamble section X.A. for a discussion of New Source Review.

Comment 26: Commenters stated that this is an ideal time to reduce carbon emissions because 

new supplies of natural gas from tight and shale formations appear to be ample and attractively 

priced, costs for solar panels and very energy efficient LED lighting are dropping dramatically 

and more efficient direct drive motors are becoming available.

Response 26: Thank you for your comment.

Comment 27: Commenters stated that the rule excessively impacted certain states.

Commenters stated that the proposed rule imposes vastly disparate impacts on states. The 

commenters stated that the proposed rule has dramatically different state emission reduction 

targets, based on a small number of assumed or administratively-determined factors, and that 

these factors appear likely to impose disproportionate costs of achieving the required emission 
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reductions on certain states, particularly among those that face the largest emission reductions. 

The commenters stated that this approach is inconsistent with the joint state-federal approach at 

the heart of the Clean Air Act.

Commenters stated that Arizona is one of only two states not to see a net benefit from the 

proposed rule, and it also has one the highest rates of reduction. The commenters were concerned 

that the proposed rule would expose Arizona rate payers to economic, health, and security risks 

that are unduly burdensome. 

Commenters stated that the Proposed Rule provides no analysis of the critical costs of 

compliance on a state-by-state basis. The commenters stated that this is a significant deficiency, 

especially when the proposed limits are vastly different from state to state and impose 

disproportionate costs upon states that have taken early action. The commenters stated that 

without a state-by-state analysis, there is no way any state can determine whether the costs of 

compliance are reasonable.

Commenters stated that Section 111 standards must reflect the degree of emission limitation 

achievable through application of the best system of emission reductions, taking into 

consideration cost, non-air impacts, and energy requirements. The commenters stated that 

independent analyses demonstrate that the rule's actual costs could be vastly higher than those 

EPA acknowledges. The commenters cited estimates of compliance costs of $480 billion by 

2030, an average annual negative impact on GDP of $50 billion, and an average annual net 

decrease in employment of over 200,000 jobs. The commenters stated that the South Atlantic 

census division - stretching from Delaware to Florida - "would be hit the hardest in terms of 

gross regional product and employment declines," followed by the Midwest.

Response 27: The final rule establishes nationally uniform emission standards. For more 

information, see section V of the preamble. EPA’s own estimate of the employment losses are 

more modest than the commenter suggests. Please see Chapter 6 of the RIA for more 

information.

Comment 28: Commenters stated that utilities are in a protected position with regulated and 

relatively predictable income streams unlike regular private industry, and that our decisions 

should prioritize public interest rather than mere profits.

Response 28: Thank you for your comment.

Comment 29: Commenters stated that by 2030 under the Clean Power Plan, the climate benefits 

alone from CO2 reductions amount to about 30 billion dollars annually and the corresponding 

health co-benefits are valued at up to twice as much as the climate benefit portion. The 

commenters stated that those annual total benefits accrue to a range between six and twelve 

times the accompanying and compliance costs. The commenters stated that, according to 

Syracuse and Harvard University's co-benefits report, model results consistently show air quality 
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improvements in western Pennsylvania projected to occur under this rule to be among the largest 

in the country.

Commenters quoted a manufacturing analysis, "Severe weather costs an auto assembly plant 

more in one hour than the EPA's standards will cost that plant in an entire year".

Commenters stated that the projected increase in electric costs of 7% is affordable and cost 

effective.

Commenters stated that EPA has not adequately accounted for the potential impacts of the 

proposed rule under a full range of possible future market conditions, effectively hiding the true 

potential costs of the proposed rule. Commenters further stated that the EPA needs to provide 

alternative scenarios assuming some variance of the achievable rate of energy efficiency, heat 

rate improvements, and renewable developments, to paint a full picture of the potential costs of 

this proposed regulation.

Commenters stated that EPA used unreasonably high and out-of-date cost assumptions for 

renewable energy and energy efficiency, substantially overstated the costs of compliance with 

the standard and underestimated the potential to make these critical carbon reductions. 

Commenters cited an NRDC study that found that by updating the cost and performance 

parameters for renewable generation and energy efficiency to be consistent with today's 

technologies.

Commenters stated that compliance could be achieved at net savings of $1.8 billion in 2020 and 

$6.6 billion in 2030. Commenters cited an analysis by NRDC using the IPM model indicating 

that that CO2 pollution from America's power plants could be decreased by 21 to 31 percent 

(relative to 2012 levels) by 2020, and 25 to 38 percent by 2025. Commenters stated that these 

reductions are equivalent to 470 million to 700 million short tons relative to the Reference case 

in 2020, and 560 million to 860 million short tons in 2025. The commenters estimated cost 

ranges from no increase over the Reference case to about $14.6 billion in 2020, and benefits (in 

saved lives, reduced illness, and climate change avoided) of $28 billion to $63 billion, far 

exceeding the estimated costs. The commenters stated that EPA can strengthen the CPP at 

reasonable cost. 

Commenters stated that there was no cost that should be equated to eliminating our moral 

obligation to help.

Commenters cited the Stern Review estimate that a 1% reduction in world GDP due to fossil 

energy restrictions would prevent a 5% reduction due to climate change. The commenters cited 

the IPCC that now gives the cost of mitigation at 0.6 percent of world GDP. 

Commenters stated that concern that has been raised by some stakeholders is that 

implementation of the proposed Clean Power Plan will be prohibitively expensive. Commenters 

stated that with regards to the portions of Building Block 3 having to do with renewable 

generating capacity and Building Block 4, there is strong evidence that supporting a robust clean 

energy economy will produce numerous economic benefits, including costing electric ratepayers 

less than a 'traditional' or 'conventional' approach to serving demand. Commenters stated that a 

2013 study conducted by RTI International and La Capra Associates indicates that in North 
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Carolina implementation of the portions of Building Block 3 having to do with renewable 

generating capacity and Building Block 4 will not increase costs borne by ratepayers.

Response 29: We agree that the climate and health co-benefits outweigh the costs of this 

rulemaking, see the RIA for details about the estimated costs and benefits of the final rulemaking

Regarding renewable generating capacity and demand-side energy efficiency, costs are updated 

in the final rule. See preamble section V.E. and Demand-Side Energy Efficiency Technical 

Support Document.

Comment 30: Commenters stated that despite EPA's promise that there is "flexibility" in the 

proposed program, the result of the proposal is to shut down the Arizona Electric Power 

Cooperative, Inc. ("AEPCO") Apache Generating Station and potentially other small cooperative 

power plants, imposing extravagant costs and potentially jeopardizing the cooperatives' vital role 

in delivering power to rural America. The commenters requested that EPA consider creating a 

separate category for "small public and cooperative electric generating units" within the 

framework of the larger proposal.

Commenters requested that EPA consider creating a separate category for "small public and 

cooperative utilities" that provides relief to these small entities, ensuring their ability to continue 

providing basic services, while also providing for reasonable reductions in carbon emission rate 

and mass. The commenters stated that its proposed small public and cooperative utility approach 

substantially reduces the impact of EPA's proposed Clean Power Plan on this sector, while still 

achieving significant carbon emissions reductions. The commenters stated that based upon its 

understanding of the small public and cooperative utility markets and economics, AEPCO 

believes that some of the other utilities in this sector would similarly benefit.

Commenters stated that AEPCO has only the patronage capital necessary to maintain financial 

stability is retained at the generation cooperative, and that any excess is required to be returned 

to the members. The commenters stated that AEPCO does not have the ability internally to raise 

capital. The commenters stated that AEPCO's net cash flows have been historically flat and 

frequently negative, and does not have the internal ability to finance the construction or purchase 

of new generation and pay down its existing debt load. The commenters stated that it does not 

believe that it can afford to expand debt to the extent necessary to accommodate the proposed 

Clean Power Plan's expedited retirement of AEPCO/s affected EGUs and provide for alternative 

power generation for AEPCO's members.

Commenters stated that If AEPCO adopts the "compliance option," its capacity charges, 

expressed in a $/KWMonth basis, will increase by 69.9% in 2020 and 78.1% in 2030 compared 

to base. The commenters stated that if they build new units subject to the proposed NSPS to 

replace all its exiting affected EGUs and exit the 111(d) program entirely, its capacity charges, 

expressed in a $/KW-Month basis, will increase by 62.9% in 2020 and 59.1% in 2030. The 

commenters stated that these are substantial increases, particularly when borne by the relatively 

small number of members and their customers. 
127

Commenters stated that that Apache EGU Station is non-viable with the added costs of Clean 

Power Plan upgrades. The commenters stated that unless changed, the capacity premium and 

energy charges resulting from compliance with the proposed rule may cause members to 

withdraw, leaving the Apache EGU Station as a stranded asset. The commenters stated that it is 

not clear that a purchased could be found for the assets.

Commenters cited a study showing that the emission rate trading disproportionally hurts small 

utilities and is devastating to non-diversified coops and municipals. The commenters stated that 

the rule creates stranded costs from plant shut downs. The commenters stated that EPA has 

recently ordered the installation of selective catalytic reduction at Laramie River Station, which 

will cost $750 million, and that one of the three plants could be closed, causing stranded costs. 

The commenters stated that they have no load in Wyoming and could only comply by building 

unneeded renewable energy facilities. The commenters estimated that closing Laramie River 

Station and replacing it with natural gas combined cycle at a different location could cause a 65 

percent increase in wholesale costs and a 35 percent increase in member retail rates.

Commenters stated that their preliminary analysis reveals that AECC's costs will increase 

primarily due to a shift in the fuel source used for AECC's power plants from coal to natural gas 

and that a typical residential member's bill will increase 10 percent to 30 percent compared to 

that same member's bill today, depending on the exact measures implemented.

Commenters stated that the proposed rule does not provide a reasonable timeline to comply and 

that has costs of compliance greater than any environmental benefit. The commenters stated that 

there was no consideration of our cooperative model, in which member owners bear all costs of 

generation and compliance.

Commenters stated that EPA cannot afford to ignore municipally-owned utilities and rural 

electric cooperatives and still hope to achieve the overall greenhouse gas emission reduction 

goals it has set. The commenters stated that distribution-only cooperatives, as well as municipal 

utilities that do not own or operate affected EGUs, will have no compliance obligations under the 

Clean Power Plan. The commenters stated that Generation & Transmission ("G&T") 

cooperatives serve a large majority of distribution cooperatives, and increase the effective size, 

diversity and geographic range over which grid optimizing decisions (e.g., dispatch changes, heat 

rate improvements, emission trading, renewable energy investments) can be made, and these 

larger markets give small rural collectives a greater opportunity to make the changes necessary to 

reduce greenhouse gas emissions. The commenters stated that Rural Utilities Service ("RUS"), a 

program operated by the U.S. Department of Agriculture, provides funding, loan guarantees, and 

administrative support to rural electric cooperatives to enable them to construct distribution, 

transmission, and generation facilities and cooperatives can also obtain funding from the 

National Rural Utilities Cooperative Finance Corporation, which raises funds from capital 

markets to supplement the loan programs offered by RUS. The commenters stated that the cost 

of capital for cooperatives is often lower than that available to investor-owned utilities.

Commenters stated that electric cooperatives are able to take advantage of the long payback 

timeframes that come with renewable energy installations, because they have access to unique 

financing mechanisms for renewable energy development, including the Clean Renewable 

Energy Bond ("CREB"), which is available to electric co-ops, and state and local government to 
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finance qualifying renewable energy facilities. The commenters stated that the National Rural 

Utilities Cooperative Finance Corporation recently partnered with the Federated Rural Electric 

Insurance Exchange and the National Renewables Cooperative Organization to enable 

cooperatives to access tax equity financing for the development of community solar 

programs. The commenters stated that cooperatives tend to be concentrated in rural, open areas 

of the Midwest and plains states down to northern Texas, which happen to be the areas of higher 

onshore wind potential in the United States, and that these cooperatives are able to take 

advantage of the lowest wind prices in the country.

Commenters stated that running coal units less than 10 percent below their operational norm on a 

continuing basis may keep G&Ts from generating enough revenue to service the outstanding 

debt on the unit and that loan defaults will result in further cost impacts that threaten the ability 

of G&T's to continue to effectively operate. The commenters stated that all costs are borne by 

rates and that increased rates will have a devastating impact on the communities served by the 

G&T Cooperative Fossil Group. The commenters stated that G&Ts will have the most difficult 

time shifting generation from coal to NGCC and RE and aggressively promoting EE to end 

users. The commenters stated that EPA's model presumes that the Tri-State Generation and 

Transmission Association, Inc., (Tri-State) coal-fired facility, Springerville Unit 379 in Arizona 

will dispatch at such a low level due to the CPP that its continuing operation will no longer be 

economically viable. The commenters stated that Tri-State built the 417 MW Powder River 

Basin coal plant in 2006 and invested just under one billion dollars in it and the expected 

remaining useful life of the plant extends until 2066. The commenters other examples of 

premature retirements of EGUs operated by coops and resulting stranded costs, and financial 

impacts.

Commenters stated that the reduction in rate revenue and the cost of filling the generation gap 

resulting from reduced coal generation will have a financial impact on EKPC's Owner-Members. 

The commenters cited (1) unrealistic heat rate improvement goals laid out in the proposal; (2) the 

additional cost of environmental dispatch of coal and gas operation under Building Block 2 

without regard to economics or reliability; (3) the cost of RE and the market gap between the 

installation cost and market value of RE capacity and energy; and (4) the cost of EE that EKPC's 

distribution member cooperatives will incur to try and meet savings targets from rural service 

territories as causes. Commenters stated that these costs will challenge G&Ts ability to service 

debt and that significant rate increases (up to 35%) that will result from the CPP will have a 

major impact on the rural communities served by EKPC. Commenters cited NERA projections 

that there will be an 18 percent increase in coal unit retirement (as compared to 2014 retirement 

numbers) and using only Building Blocks 1 and 2, NERA estimates that there will be a 68 

percent increase in coal unit retirements through 2031 (as compared to 2014), with the greatest 

impact on the central and southeast region.

Commenters stated that the proposed rule would result in the early retirement of SMEPA's coal 

fired generating facility, Plant Morrow as a result of decreased capacity factor and unobtainable 

RE and EE targets. The commenters estimated the present estimated value adverse impact on 

SMEPA is $366.5 Million, due to higher cost of replacement energy for reduced Plum Point 

output., reduction in Plum Point Capacity revenues due to an effective 81 MW reduction in 

capacity, plant Morrow higher amortization cost (stranded asset due to closing) and loss of Plant 

Morrow capacity revenues. The commenters stated that there would likely be other transmission 
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investments necessary to accomplish removing Plant morrow as an energy source to SMEPA's 

transmission system. The commenters stated that that the effect on its financial position flowing 

from implementation of the Clean Power Plan will materially weaken its credit standing. The 

commenters stated that SMEPA currently plans to invest up to $650 Million for 15% ownership 

of the Kemper IGCC Project which will be the cleanest coal plant in the country, but in the EPA 

Clean Power Plan, SMEPA does not receive any credit whatsoever for these investments. The 

commenters stated that the investments simply lower the CO2 baseline reference point and 

thereby increase the difficulty in meeting reduction targets in 2020 and 2030, thus EPA's 

evaluation criteria effectively penalize the Association for making these investments that have 

substantial environmental benefits.

Commenters requested that EPA work with cooperatives to develop G and T mitigation 

measures to ease the significant financial burdens associated with stranded assets 

and replacement power and transmission requirements. The commenters suggested federal debt 

forgiveness elimination of prepayment penalties and other financing needs as possible areas for 

discussion. 

Response 30: EPA disagrees with these comments. As discussed in sections V.A.4 and V.A.5 of 

the final rule preamble, all types of owners of affected EGUs have access to means for 

complying with emissions limits reflective of the BSER. Our approach to subcategorization 

under this rule appropriately follows our traditional approach and considers relevant physical and 

operational differences among affected EGUs, as discussed in section V.A.2. Further, as we note 

in those discussions of subcategorization and elsewhere in the preamble, a state has the 

flexibility in developing its state plan to establish emission limits that vary among the state’s 

EGUs in order to account for differences in those EGUs’ circumstances, which at the state’s 

option could include differences in ownership.

Comment 31: Commenters stated that if individual states choose to go beyond EGUs to achieve 

emissions reductions under the proposal, small businesses, particularly industrial and 

manufacturing facilities, could be faced with the expenses associated with reducing emissions 

from their facilities.

Response 31: The EPA is establishing final emission guidelines for states to follow in 

developing plans to reduce CO2 emissions from existing fossil fuel-fired electric generating 

units. The CPP does not require that states go beyond EGUs to achieve emission reductions as 

the commenters suggested. These emissions reductions are achievable by the affected sources, 

as discussed in section V of the final rule preamble.

Comment 32: Commenters stated that EPA should not compel the creation of multi-state 

collaborations, but should allow states to voluntarily provide for cooperative agreements for CPP 

compliance if they determine it is mutually agreeable and EPA determines that equivalent 

environmental performance is delivered. The commenters stated that EPA should not establish 
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CPP targets that are not economic or feasible within each state or based on an assumption of 

state collaborations.

Commenters stated that many Missouri electric utilities own electric generating units that are not 

located in Missouri and that this will be a factor in regional carbon emissions. The commenters 

stated that in a multi-state plans individual state performance goals would be replaced with an 

equivalent multi-state performance goal which require clarification in the final rules.

Response 32: The final rule does not compel creation of multi-state collaborations. See section 

VIII of the final rule preamble. Furthermore, the final rule does not require individual state 

performance goals.

Comment 33: Commenters stated that preliminary MISO regional modeling results show that 

the model did not choose energy efficiency (even assuming U.S. EPA's EE costs which are lower 

than Indiana's actual EE costs) when the model was allowed to optimize CO2 reduction options 

at the least cost. The commenters stated that energy efficiency does not appear to be part of the 

least cost solution to meet CO2 goals for Indiana.

Response 33: The EPA has determined not to include demand-side energy efficiency (building 

block four) in the BSER of this final rule and therefore we do not need to address further 

comments supporting the removal of DS-EE from BSER. This determination is discussed in 

section V.A of the final rule preamble of the CPP. Even though demand-side energy efficiency is 

not being included in the BSER in this final rule and, thus, not included in the determination of 

emission performance rates, the final rule provides states the flexibility to use demand-side 

energy efficiency measures in their state plans for compliance to meet the emission guidelines set 

forth in the final CPP, provided they meet the applicable requirements established in section VIII 

(State Plans) of the preamble for the CPP. Accordingly, the EPA is including a level of DS-EE as 

a component of our illustrative plan scenarios that are the basis for the analysis discussed in 

Chapter 3 of the RIA that supports the final CPP. EPA is reducing the level of DS-EE in the 

illustrative demand-side energy efficiency plan scenario relative to the level represented in the 

proposed CPP, from 1.5% annual incremental savings down to 1.0% annual incremental savings. 

The EPA generally believes that DS-EE at these levels are cost-effective and part of a least cost 

strategy for states. Based upon more up-to-date and extensive data, the EPA is slightly modifying 

our approach to DS-EE costs from that used for the proposed CPP. The support for the DS-EE 

costs supporting the final CPP is provided in the Demand-Side Energy Efficiency TSD and is the 

basis for DS-EE costs represented in the RIA for the final CPP. The EPA continues to believe EE 

will play a substantial and cost-effective role in state strategies, and that the levels represented in 

the DS-EE plan scenario are low cost. Because EPA’s modeling platform for the power system 

does not allow for the endogenous representation of DS-EE, the RIA cost estimates may slightly 

overestimate compliance costs by not allowing for the use of non-EE strategies in instances 

where they may be lower cost. The EPA disagrees the DS-EE will not substantially contribute to 

a least cost solution or that the RIA’s estimates of compliance costs are not reasonable.
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Comment 34: Commenters stated that the EPA has not demonstrated that imposition of Building 

Block 2 by 2020 nationwide can be accomplished at a reasonable cost, because the agency has 

not modeled the impact of full compliance with Building Block 2. Commenters further stated 

that EPA's modeling predicts much smaller changes in the generation mix, and therefore 

presumably in the costs, resulting from Building Block 1 and Building Block 2, than a 

straightforward application of Building Block 2 alone to the 2012 baseline. Commenters 

believed that this discrepancy may arise in part because the 'Baseline Case' for EPA's modeling 

apparently predicts that dramatic shifts in the national generation mix will occur by 2020 in the 

absence of the CPP.

Response 34: In the final rule, the timing of building block 2 is revised to start in 2022 and 

gradually phase in over the interim period. Additionally, EPA considered the cost-effectiveness 

of building block 2. For more information, see final rule preamble section V.D and the GHG 

Mitigation Measures TSD.

Comment 35: Commenters stated that the current infrastructure will not support the need to redispatch coal-fired units to NGCC. Commenters stated that it does not have the financial 

resources to replace its coal capacity with new NGCC. Commenters further stated that in 

addition to the higher fuel cost of NGCC, the added capital cost would place a severe burden on 

smaller entities.

Response 35: EPA disagrees with this comment. See final rule preamble section V.D. and GHG 

Mitigation Measures TSD.

Comment 36: Commenters stated that the recent demand for new natural gas pipeline capacity is 

driving costs even higher. Commenters further stated that because of the limited number of 

companies that install new natural gas pipelines, the cost and time for installation is escalating as 

demand continues to grow.

Commenters stated that Pace Study reviewed the new construction requirements necessary to 

meet service and reserve requirements and concluded that Arizona will need to install 

approximately $1.9 billion in additional natural gas generation capacity. Commenters stated that 

more than $3 billion of utility investments would be stranded in 2020 due to premature 

retirement of coal-fired power plants.

Commenters stated that the northern leg of El Paso Natural Gas pipeline is likely to become 

highly constrained by 2020 and in need of expansion. Commenters further stated that at a 

minimum, the 330 mile length of El Paso in Northern Arizona, which varies between a 30 and 36 

inch diameter and averages approximately 2.5 Bcf/d in throughput capacity, would need to be 

expanded by 500 MMcf/d no later than 2023 at a likely maximum cost of $335 million. If a 12 

inch or smaller diameter pipeline can be used (which has a median $45k/mile cost, according to 

the same Oil and Gas Journal study), then at a minimum the additional infrastructure cost would 

be $97 million. Commenters further stated that the range for a gas pipeline infrastructure upgrade 
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on the most affected portion of pipeline (El Paso Arizona North) is between $97 and $335 

million dollars. Commenters further stated that this estimate is illustrative of one expansion 

required for major a major pipeline and not exhaustive of all other upgrades that would be 

required for both major pipelines and smaller distribution systems.

Response 36: EPA does not agree that the rule will cause significant additional requirements for 

natural gas pipeline construction. This comment only relates to current capacity requirements in 

a single location. While EPA agrees that these types of limitations can occur without the rule, 

the rule provides multiple alternatives for compliance and does leads only to small overall 

increases in pipeline capacity. See the RIA Chapter 3.

Comment 37: Commenters stated that the debt and its associated investment is largely 

associated with major coal-based facilities, and represents substantial investment-backed 

expectations in private property, none of which was constructed or financed with the expectation 

that EPA or any other governmental authority would order the early curtailment or retirement of 

these assets. Commenters stated that there are many additional costs associated with forced 

retirement or premature closure of coal-based facilities. Commenters further stated that when 

plants are forced to close before there expected life, numerous collateral consequences follow, 

including breaches of existing contracts for coal supplies, power purchase agreements, etc.

Response 37: See section 5.11 of this response to comments document for EPA’s response to the 

stranded asset comments.

Comment 38: Commenters stated that under the proposed Clean Power Plan the states will have 

different implementation plans to meet vastly different targets for emission rate limits even for 

states within the same RTO/ISO footprint, and the steps in these plans will likely include 

measures beyond emissions control equipment, it is incumbent on both federal and state 

regulators as well as wholesale market operators (RTO/ISO's) to work on ways to implement 

greenhouse gas reductions without undermining the economic dispatch function and reliability of 

competitive wholesale electricity markets. Commenters further stated that coordination must 

occur between RTO/ISO states and other regions of the country not in a RTO/ISO footprint. 

Commenters stated that the final rule should include options that allow states to preserve the 

current price-dispatch model while reflecting the cost of complying with the environmental 

regulations within that model. Commenters stated that the in other words, EPA should look for 

ways to facilitate price-based compliance using existing well-developed structures.

Response 38: The proposed rule was designed to be consistent with environmental dispatch and 

the final rule makes it clear that trading is an important tool available for compliance with the 

rule. See the state plan sections of the final rule preamble for ways that states can coordinate to 

facilitate implementation of the rule across state and regional boundaries (section VIII.)
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Comment 39: Commenters stated that the proposed rule is a method of taxation without 

representation.

Response 39: EPA disagrees with this comment.

Comment 40: Commenters stated that the Erickson Station houses a single coal-fired 159 MW 

Electric Generating Unit (ORIS 1832). Commenters stated that the plant began operation in 1973 

and is a critical asset for the BWL's plan for power production in the future. Commenters stated 

that the Erickson is critical to the BWL's ability to maintain electric reliability in the Lansing 

area. Commenters stated that the Proposed Rule threatens the continued existence of Erickson 

Station and such a loss would cripple the BWL. Commenters stated that the process of deciding 

whether to build new generation may well lead to the conclusion that it is too costly to maintain 

any meaningful role in the power generation business. Commenters stated that the principal 

options available to BWL to replace its generating capacity are (i) new natural gas-fired 

generation, (ii) additional renewable generating capacity, and (iii) abandoning the business of 

generating power altogether.

Commenters stated that Minnesota and the MISO region rely on a diverse portfolio of resources 

to provide different services to the grid. Commenters stated that this building block upends the 

diverse portfolio that has been built over the past few decades, exposing everyone in the market 

to greater financial and reliability risks.

Response 40: See final rule preamble section V. The EPA projects that the national generation 

mix will continue to be diverse under the final rule. See RIA Chapter 3 for EPA’s projections of 

generation mix under two illustrative compliance scenarios.

Comment 41: Commenters stated that the EPA should revise its cost-benefit analysis to 

incorporate the direct costs required for rule compliance and to re-calculate its benefits analysis 

by revising the current global scope of estimated benefits to a state or regional scope that more 

closely matches the geographical scope of the estimation of direct costs. Commenters stated that 

the EPA's cost-benefit analysis is flawed, both because it fails to incorporate the direct costs 

required to comply with a carbon-emissions reduction of the size the proposed regulation 

contemplates and because it overstates the value of avoiding those carbon emissions. 

Commenters stated that even while understating the direct costs associated with the rule, EPA 

has overstated the degree to which benefits will obtain from the rule. Commenters stated that 

carbon-dioxide emissions may have a cost associated with them, although there remains 

disagreement on this point. Commenters stated that the EPA's Regulatory Impact Analysis 

(RIA), through its incorporation by reference to the Social Cost of Carbon technical support 

document, measures benefits inasmuch as they avoid "the worldwide damages caused by carbon 

dioxide emissions in order to reflect the global nature of the problem."

Response 41: EPA disagrees with this comment. The RIA appropriately captures and reports 

the incremental costs projected to be incurred by the power sector as a result of two illustrative 
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compliance approaches analyzed. Regarding the scope of benefits estimated in the RIA, see 

Response to Comments section 8.7.2, comment 3, and section 8.7.2, comment 1.

Comment 42: Commenters stated that the EPA offers no analysis as to the combined costs and 

feasibility of all of these programs on the power generation industry. Commenters stated that the 

EPA even attempts to place the onerous task of coordinating EPA regulations, compliance 

options and timing requirements on states that will regulate these entities stating states will have 

ample opportunity to design Section 111(d) plans that coordinate with these other regulations 

"...and to do so in a manner that will help reduce cost and ensure reliability, while also ensuring 

that all applicable environmental requirements are met." Commenters stated that the state air 

quality agencies have never been given the authority or responsibility, nor do they have the 

knowledge, to ensure reliability of the power system.

Response 42: EPA disagrees. EPA does not expect state air quality offices to be the guarantors 

of reliability and fully recognizes that responsibility for reliability lies with the designated 

authorities. That is why states are required in the final rule to coordinate with reliability entities 

in plans, and provided states with flexibility so that there reliability conflicts will be highly 

unlikely. In the event of unlikely unanticipated events trigger emergency conflict between 

compliance with the rule and reliability, the rule also provides a reliability safety valve 

mechanism (See Preamble Section VIII.G.2.)

Comment 43: Commenters stated that the engineering economic analyses that provided the 

initial evidence for the efficiency gap showed that saving energy was significantly less costly 

than consuming it. Commenters stated that ex ante analyses indicated that there would be 

substantial net benefits from including technologies to reduce energy consumption in consumer 

durables. Commenters stated that as these policies to spur investment in and deployment of 

energy savings technologies were implemented, ex post analyses were conducted to ascertain 

whether the ex ante expectations were borne out.

Response 43: Thank you for your comment.

Comment 44: Commenters stated that because efficiency plays such a large part in carbon 

reduction in the policy case, the cost of efficiency makes up the bulk of the cost of the policy. 

Commenters stated that the EPA includes not only the resource cost of efficiency, but also the 

program costs of implementing policies to achieve the higher levels of efficiency. Commenters 

stated that the EPA assumes that program costs are equal to resource costs. Commenters stated 

that the estimate of the current cost of efficiency with program costs is $55/MWH. Commenters 

stated that the EPA then assumes a substantial increase in the cost of efficiency, which ends at 

almost $89/MWH. Commenters stated that there is no evidence to support the assumption that 

the cost of saved energy will rise in real terms. Commenters stated that the likelihood that the 

cost of saved energy will not rise is reinforced by the fact that much of the increase in saved 

energy will come from states that have not had vigorous programs to tap this resources. 
135

Commenters stated that at least for the period that the EPA rule covers, efficiency gains still 

involve a lot of low hanging fruit. Commenters stated that the experience in the electricity sector 

should also lower the startup costs, of utility programs as effective models have been worked out 

over decades in the leading states. Commenters stated that the States that worry about the cost of 

implementation can copy the successful programs.

Response 44: The EPA has determined not to include demand-side energy efficiency (building 

block four) in the BSER of this final rule and therefore we do not need to address further 

comments supporting the removal of DS-EE from BSER. This determination is discussed in 

section V.A of the final rule preamble of the CPP. Even though demand-side energy efficiency is 

not being included in the BSER in this final rule and, thus, not included in the determination of 

emission performance rates, the final rule provides states the flexibility to use demand-side 

energy efficiency measures in their state plans for compliance to meet the emission guidelines set 

forth in the final CPP, provided they meet the applicable requirements established in section VIII 

(State Plans) of the final rule preamble for the CPP. Accordingly, the EPA is including a level of 

DS-EE as a component of our illustrative plan scenarios that are the basis for the analysis 

discussed in Chapter 3 of the RIA that supports the final CPP. EPA is reducing the level of DSEE in the illustrative demand-side energy efficiency plan scenario relative to the level 

represented in the proposed CPP, from 1.5% annual incremental savings down to 1.0% annual 

incremental savings. The EPA generally believes that DS-EE at these levels are cost-effective 

and part of a least cost strategy for states. Based upon more up-to-date and extensive data, the 

EPA is slightly modifying our approach to DS-EE costs from that used for the proposed CPP. 

The EPA agrees with the commenters that EE costs are likely to decline at higher savings levels, 

at least up to the 1.0% target used for the illustrative plan scenarios and the revised cost estimates 

reflect this change. The support for the DS-EE costs supporting the final CPP is provided in the

Demand-Side Energy Efficiency TSD and is the basis for DS-EE costs represented in the RIA 

for the final CPP.

Comment 45: Commenters stated that the CPP evaluation does not take into consideration the 

cost suppression effect of the federal Production Tax Credit and the Investment Tax Credit, 

which expire at the end of 2013 and 2014, respectively. Commenters stated that as RPS 

requirements continue to grow over time, it is possible that RE may be difficult or infeasible to 

procure due to the technical or economic availability of RE resources. Commenters stated that 

most states address these potential constraints through RPS policies containing force majeure

and annual compliance payment provisions that address resource availability, as well as cost cap 

provisions that address unusual pressure for cost increases to ratepayers.

Response 45: EPA disagrees with this comment. EPA’s evaluation of the impacts of the rule 

does, in fact, consider the expiration of the PTC. Furthermore, EPA expects the level of 

renewable generation quantified as BSER to be achievable. For more information, see section 

V.E. of the preamble and the GHG Mitigation Measures TSD.
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Comment 46: Commenters stated that the Base Plan reflects some level of future CO2 emissions 

limits, the indicative cost analysis considers the Base Plan as a reference point for estimating the 

incremental costs of meeting the proposed emissions limits for Virginia. Commenters stated that 

the Base Plan, it should be noted, is itself expected to produce significant reductions in the 

expected CO2 emissions rates for Dominion's EGUs. Commenters stated that the expected 

average Base Plan emissions rate reflects a 28% reduction compared to the 2012 baseline 

emissions rate used in the EPA's development of Virginia's Mandatory Goals. Commenters 

stated that the emissions rate resulting from the Base Plan would effectively meet the carbon 

emission rates that EPA proposes for 24 other states. Commenters stated that despite this 

significant reduction and the significant net present value incremental cost of the Base Plan, this 

plan would fall well short of meeting the Mandatory Goals assigned to Virginia.

Response 46: See preamble section VII for a discussion of the finalized emission rate 

performance goals.

Comment 47: Commenters stated that the projected costs for the IEP may range from $16 to 

$25/MMBtu and may be one-third more expensive than coal. Commenters stated that whether 

natural gas comes to the FNSB from the North Slope or Cook Inlet may merit further review (as 

advocates debate the issue, particularly as it pertains to cost differences). Commenters stated that 

if the IEP is delayed, there is a real probability that buying potential "stop-gap" natural gas 

powered electricity from South-central may cost more than coal-fired electrical generation in the 

Interior. Commenters stated that this probability, aligned with previous sunk-costs for GVEA, 

may create a potential adverse economic effect to Interior ratepayers.

Response 47: This comment indicates the issues cited apply to Alaska; however Alaska is not 

included in the final rule.

Comment 48: Commenters stated that the EPA analysis of the likely cost of the proposed rule is 

flawed, in that it over-estimates the availability of cheap, available coal, and under-estimates the 

cost of delivered coal to utilities. Commenters stated that the costs of alternative, clean energy 

solutions like energy efficiency, wind and solar energy are weighed against an overly optimistic 

assessment of electricity generated by coal-fired power plants. Commenters asserted the 

evidence is clear that the delivered cost of coal in Nebraska and other states will continue to rise 

more rapidly than inflation, and it appears the models the EPA is relying on over-state likely 

available coal resources and under-state their likely costs.

Response 48: EPA disagrees with this comment. EPA’s analysis of both the proposed and final 

rule is informed by the Integrated Planning Model (IPM), developed by ICF Consulting, which is 

a state-of-the-art, peer-reviewed, dynamic linear programming model. The model incorporates a 

detailed representation of the fossil-fuel supply system that is used to forecast equilibrium fuel 

prices. The model includes an endogenous representation of the North American natural gas 

supply system through a natural gas module that reflects a partial supply/demand equilibrium of 

the North American gas market accounting for varying levels of potential power sector gas 
137

demand and corresponding gas production and price levels. This module consists of 118 supply, 

demand, and storage nodes and 15 liquefied natural gas re-gasification facility locations that are 

tied together by a series of linkages (i.e., pipelines) that represent the North American natural gas 

transmission and distribution network.

IPM also endogenously models the partial equilibrium of coal supply and EGU coal demand 

levels throughout the continental U.S., taking into account assumed non-power sector demand 

and imports/exports. IPM reflects 36 coal supply regions, 14 coal grades, and the coal transport 

network, which consists of over four thousand linkages representing rail, barge, and truck and 

conveyer linkages. The coal supply curves in IPM, which are publicly available, were developed 

during a thorough bottom-up, mine-by-mine approach that depicts the coal choices and 

associated supply costs that power plants would face if selecting that coal over the modeling time 

horizon. The IPM documentation outlines the methods and data used to quantify the 

economically recoverable coal reserves, characterize their cost, and build the 36 coal regions 

curves. The coal supply curves were developed in consultation with Wood Mackenzie, one of the 

leading energy consulting firms and specialists in coal supply. These curves have been 

independently reviewed by industry experts and have been made available for public review 

prior to this rulemaking process. For more information, see the IPM Documentation, available in 

the docket and also at: http://www.epa.gov/airmarkets/powersectormodeling.html. 

Comment 49: Commenters expressed grave concern that, even though EPA has claimed to 

create an ESPS with great flexibility and with different emphasis for each state for the four BBs, 

the EPA has actually created de-facto "one size fits all" guidelines for the states that go far 

beyond traditional source-specific standards. The commenters stated that the statute dictates that 

Section 111(d) emissions standards be designed to be cost-effective and achievable at each 

specific source or electric generating unit (EGU) and not based on statewide emission limiting 

goals. The commenters argued that each state's electric generating system is unique and this rule 

does not adequately address those differences. 

The commenters stated that if EPA persists in pursuing a regulatory framework that is outside 

the constraints of the CAA, it is critical that EPA's ESPS rule take into consideration each state's 

unique energy and economic situation as well as the technological feasibility and most 

importantly, the cost of EPA's compliance building blocks for each state. The commenters stated 

that the EPA has failed to do this by modeling the costs on a national basis and renewable energy 

and energy efficiency on a regional basis. The commenters argued that each state should have a 

far greater role in the design of the standards than has been afforded by EPA, particularly since 

EPA has designed standards for many states that are simply unachievable in the allotted time 

frame. Further, the commenters argued that the EPA needs to allow states the flexibility to adjust 

emission limiting standards, implementation dates and to exempt certain facilities on a case by 

case basis as provided by the statute.

Response 49: EPA disagrees with this comment. See final rule preamble section V. Regarding 

the impact analysis of the final rule, see Chapter 3 of the RIA. This analysis of two illustrative 

compliance scenarios in the final rule is based on detailed bottom-up modeling assumptions. See 

Chapter 4 of the IPM documentation for a summary of the regional cost and performance 
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assumptions for renewable generation. See Demand-Side Energy Efficiency Technical Support 

Document for more information on demand-side energy efficiency.

Comment 50: Commenters expressed concerns about the establishment of a minimum floor for 

NGCC, which would create market distortions and prevent a utility from providing the least-cost 

resources to its consumers, especially during times of natural gas price volatility. The 

commenters stated that market distortions would increase prices in states such as Kentucky. The 

commenters further suggested that an NGCC floor could affect reliability in areas that have not 

historically relied on NGCC and would require a significant build out of electricity generation 

and transmission, as well as the natural gas infrastructure necessary to serve those generators. 

The commenters indicated that the planning horizon for such investments is long, and it is not 

clear that the assets would be in place by 2020 or even 2030 in some cases.

The commenters then discussed the use of a regional approach to set the NGCC floor as 

indicated in the NODA and stated that it limits a state's flexibility. The commenters further stated 

that the regions identified do not match dispatch or market regions, creating seams, which 

introduce inefficiencies and that the NODA does not consider the transmission needs necessary 

to move power across the region, which introduces reliability, timing, and siting concerns and 

higher costs of electricity. 

The commenters then stated that "changes to the goal-setting equation not only introduce 

uncertainty but also do not reflect the realities of the electricity system. Fossil fuel-fired baseload 

units cannot be replaced with intermittent RE generation and EE. The backup generation needed 

would likely be natural gas, which would diminish CO2 reductions and lead to more investment 

for natural gas capacity and therefore higher electricity prices."

Response 50: EPA disagrees with this comment. The final rule does not establish a minimum 

utilization floor for NGCC. Additionally, see section V of the final rule preamble for discussion 

of the building block phase-in, regional approach, and backup generation for new renewables.

Comment 51: Cost effectiveness models inform selection of choices.

Commenters urged the EPA and state governments to consult IEER's "Climate Protection 

Scenario" in Section V.C of the IEER Comments. Commenters said that IEER presents 

individual models for carbon reductions for every state (except VT, AK, HI and the District of 

Columbia), and these models demonstrate that states can achieve greater carbon reductions than 

the targets proposed by the EPA, relying primarily on efficiency and renewable energy. 

Commenters stated that this can be done at costs of carbon reduction per metric ton of CO2 

equivalent that are generally lower than those in the Clean Power Plan. Despite 2030 emission 

reductions being over 2-1/2 times greater (relative to 2012), commenters said that the IEER 

Climate Protection Plan would cost only about $3.3 billion more in 2030, or about $9 per person. 

Benefits, in terms of reduced health costs and lower damages in other areas would increase by 

tens of billions of dollars commenters concluded.
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Response 51: As discussed in section IV of the preamble, the requirements of this rule are 

consistent with section 111 of the Clean Air Act.

Comment 52: Commenters discussed limitations with the IPM model used by EPA in the 

regulatory impact analysis.

Commenters discussed the IPM model used in the regulatory impact analysis in detail and 

provided the following limitations, biases and recommendations based on the commenters 

analysis of the model and its outcomes: 

• Detailed dispatch becomes increasingly important as renewable energy 

deployment increases, which typically occurs in later decades of the time horizon, 

making the use of maintain eight representative annual segments for later model 

years problematic.

• The resource adequacy and reliability analysis TSD does not sufficiently 

demonstrate potential operational challenges associated with the capacity mixes 

resulting from the proposed rules because IPM does not represent unit 

commitment and dispatch in a detailed manner. 

• Energy efficiency is not modeled as a resource and the method of forcing in 

energy efficiency exogenously leads to a bias in cost estimates. 

The commenters provided several reasons that the model may lead to bias. The commenters 

recommended that EPA examine its model to take into account the cost and quantity assumptions 

based upon recent historical experience, estimate end-use capital stocks by state, explicitly assess 

the available resource based upon those estimates, and forecast of how technological 

improvements into the future could increase that resource. In addition, the commenters 

recommended that energy efficiency be modeled as a technology option that competes against 

other technologies to meet load, both in the Clean Power Plan scenarios and the reference 

scenario, and suggested a methodology to serve as a guide to how this can be done in a capacity 

investment model.

Commenters discussed IPM model used by EPA and stated that EPA has concluded that Rule 

111(d) will not affect resource adequacy because the IPM model does not let it affect resource 

adequacy. The commenters further stated that this assumption is not supportable, does not reflect 

how electricity markets actually operate, and that the proposed rule will have a very real and 

significant effect on reliability. 

Commenters stated that costs in regions with RTO markets will increase due to the proposed 

rule. The commenters stated that RTO markets are far from perfectly competitive markets and 

that prices and actual costs often diverge and at times, such as during periods of constrained 

supply. The commenters provided an example and cited the Market Monitor for PJM that found 

that the "behavior of some participants during the high demand periods raises concerns about 

economic withholding". The commenters also stated concerns about market power, citing a $77 
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million auction price increase resulting from the retirement of a coal fired plant and reduced 

capacity concerns, and about costs of implementing the Proposal within the RTO markets which 

may be exacerbated by frequent changes in market rules, often to the advantage of the merchant 

generators. The commenters also stated that "Merchant generation owners have a financial 

interest in constraining the supply of resources as a means to keep prices high. For example, the 

tightening of Minimum Offer Price Rules (MOPR) and the removal of the state and self-supply 

exemptions in the PJM region, were a direct result of a generator complaint in response to stateinitiated efforts to procure new, more efficient natural gas fired units. It is likely that as new, low 

or non-CO2 emitting resources attempt to enter the markets, there is a potential for additional 

rule changes to impede such entry."

The commenters also cited the Navigant Paper that noted a result of significant reductions in 

CO2 is likely to be that "the effects of energy efficiency improvements on capacity prices will 

likely be substantial, depressing prices for many years, and calls for further changes to capacity 

markets to reduce this effect might be expected." The commenters stated that "To the extent that 

merchant generators are able to erect additional barriers to new construction of natural gas 

generation, renewable resources, and energy efficiency, so too will the capacity and energy 

market costs increase beyond what was modeled by the IPM."

Commenters noted several concerns with EPA's use of IPM to determine achievable carbon 

reductions.

Commenters stated that the IPM cannot correctly determine the achievable carbon reductions 

through its use by EPA as a substitute model for re-dispatch. The commenters noted that 

dispatch models are non-linear and require tremendous amounts of actual historical operating 

data to solve for multiple variables in order to determine optimal dispatch. The commenters 

stated that any attempt by the EPA to re-dispatch individual states through the use of the IPM 

using national data will inherently create reliability issues for the electric grid. The commenters 

itemized some of the model's limitations as follows: "(1) IPM only dispatches on a seasonal 

basis: summer (May 1-September 30) and winter (October 1-April 30), (2) IPM does not include 

the detailed intraregional transmission and distribution necessary to evaluate the effects of the 

Clean Power Plan at numerous local levels, (3) IPM has an algorithm which aggregates plants; it 

does not treat each plant as a separate geographical entity. Transmission and distribution 

congestion happen at the local geographic level. For grid reliability analysis, generation and 

natural gas infrastructure geographical location is paramount, (4) IPM has a natural gas module 

that is primarily designed to estimate the demand and supply of natural gas. IPM also has the 

same seasonality as the dispatch seasonality noted in Item No. 1 above as well as an interregional 

gas transmission network. However, it does not capture the complexity of intraregional 

transportation constraints."

The commenters noted that the structure of the IPM means that renewable resources cannot be 

adequately modeled because to adequately simulate the effect of wind and solar generation on 

the grid, a dispatch model must contain random weather inputs so that the intermittence of 

renewable resources can affect the model and to simulate renewable resources' intermittent effect 

on the grid, the dispatch model must dispatch on an hourly basis. The commenters stated that 

modeling multiple years of random weather on an hourly dispatch model can indicate where 

transmission constraints might occur within the grid and noted that the IPM cannot do any of 
141

these tasks and as such cannot estimate the cost of retaining grid reliability. The commenters 

added that because the IPM does not have a detailed, local map of the grid or a detailed local 

map of natural gas infrastructure, it cannot estimate the cost of shutting down an existing coal 

plant or the cost and reliability impact on the grid of simply significantly reducing the use of a 

coal plant. The commenters concluded that because EPA relied on flawed IPM as its simulation 

tool, it cannot demonstrate the reliability of the grid or reasonably forecast the cost of its Clean 

Power Plan.

Commenters stated that the IPM purports to account for inter-zonal transmission constraints but 

does not account for transmission limitations that may exist between an EGU and load centers 

within states. The commenters noted that the massive and abrupt shift of generation from coalfired plants to NGCC plants or simple cycle combustion turbines (CTs) firming additional 

renewable resources within the state will require significant changes in transmission 

infrastructure as well as changes in how the grid is operated. The commenters also noted that 

EPA did not indicate what inter-area transfers there might be during the evening hours, when 

renewable output subsides. The commenters further stated that the model does not realistically

represent economic dispatch, as the IPM output files show that at least one unit at SGS would be 

mothballed for a number of years, and that several of the units would operate at 30 percent 

capacity factor, which appears to represent operation as a peaking unit. The commenters found 

this conclusion to be unrealistic.

Commenters did not agree with EPA's assessment of "retired" units in its IPM. The commenters 

noted that units that show "retired" are assumed by EPA to be retired prior to 2020 in order to 

comply with the EPA rule or other applicable EPA regulations. The commenters noted that they 

have no plans to retire several of their coal or steam gas units by 2020.

Response 52: The EPA disagrees with this comment. The analysis detailed in the RIA is a 

reasonable estimate of the impacts of two illustrative compliance scenarios modeled. The 

demand-side energy efficiency plan scenario in the RIA represents a reasonable assumption 

about the level of demand-side energy efficiency investments that may be encouraged in 

response to the final CPP. See RIA Chapter 3.

Regarding planned retirements in EPA modeling, the inventory of generating capacity was 

updated, based on the most up-to-date information and/or public comments received by EPA, 

include unit-level specifications (e.g., pollution control configurations), planned new power plant 

construction and closures. See RIA Chapter 3 and the IPM Documentation.

Comment 53: Commenters said that, the EPA has failed to demonstrate that the BSER is not 

"exorbitantly costly," but rather sets standards of performance based on a "crystal ball inquiry." 

(79 Fed. Reg. at 34,850). Commenters said that, EPA underestimates various costs and fails to 

account for other costs that are intimately related to implementation of the four blocks. 

Commenters said that, EPA underestimates the actual cost of compliance with these regulations 

and their impact on energy markets (Energy Ventures Analysis, Energy Market Impacts of 

Recent Federal Regulations on the Electric Power Sector, 4 (Nov. 2014) ("EVA Study")). 
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Commenters said that, under BSER Building Block One, the EPA proposes coal-fired power 

plants improve their heat rate by 6 percent-irrespective of previous heat rate improvements or 

current levels. (79 Fed. Reg. at 34,926). Commenters said that, BSER Building Block One is 

flawed because it does not consider the major factors which cause some plants to be more 

efficient than others. Commenters said that, certain coal-fired power plants may expend 

exorbitant amounts in attempting to improve heat rates, which may be unattainable. Commenters 

said that, these energy costs would likely be passed onto consumers through more expensive 

goods and higher utility bills. Commenters said that, EPA's proposal to reduce the operating 

levels of coal-fired power plants "would reduce any proposed heat rate efficiencies," and actually 

produce more carbon dioxide. Commenters said that, this is unreasonable, illogical, and 

inefficient. Commenters said that, the EPA fails "to take into account the time required to preengineer, permit, engineer, procure and construct gas generation and transmission." Commenters 

said that, the EPA provides certain timeframes for states to draft a plan and reach interim and 

final emissions goals; however, it is unclear if the EPA factored in other cumbersome 

administrative hurdles that are already in place at both the state and federal levels. Commenters 

said that, these related regulatory requirements will also cost coal-fired power plants money and 

impact the electricity market.

Response 53: With respect to building block 1, the EPA responds to this comment in section 

V.C of the final rule preamble of the CPP and Chapter 2 of the GHG Mitigation Measures TSD 

supporting the final CPP. EPA disagrees with the commenters’ assertions that EPA did not 

consider the cost of heat rate improvements in estimating the cost of the emission guidelines, 

potential changes in electricity prices, and costs to consumers. See section V of the preamble for 

the final rule for an analysis of the costs associated with BSER and the building blocks of the 

final CPP. The EPA analyzes the benefits and costs of illustrative compliance scenarios in the 

RIA. Time required for engineering, permitting, procurement, and infrastructure and associated 

costs are considered in development of the illustrative compliance scenarios in the RIA. The 

EPA uses the Integrated Planning Model version 5.15 to model expected heat rate improvements 

and other actions for the compliance scenarios and this analysis is described in chapter 3 of the 

RIA. Potential impacts for secondary markets such as industrial consumers are discussed in 

chapter 5 of the RIA. On average nationwide, EPA estimates that electricity prices will not 

change or increase less than 1 percent by 2030 from levels that would occur absent the 

CPP. Estimates for different regions of the country and for industrial consumers that negotiate 

electricity rates may differ from these nationwide averages. Natural gas prices are estimated to 

range from a decrease of about 2 percent to an increase of 2.5 percent in 2030 depending on the 

illustrative control scenario evaluated. Impacts to particular industrial consumers will depend 

upon a variety of factors that are discussed in chapter 5 of the RIA. The price change estimates 

are based upon the illustrative control scenarios evaluated by EPA. States will develop 

implementation plans that may differ from those projected by EPA and states will have the 

flexibility to consider circumstances relevant for their particular areas of the country in the 

development of those implementation plans.
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8.6 ECONOMIC AND EMPLOYMENT IMPACTS

This section has been structured such that comments are placed in multiple general 

question/summary categories. For example if a comment addresses modeling issues and jobs 

analysis, it would be addressed in both comment 1 and comment 5 below. This approach allows 

for the comments to be fully discussed and addressed within each comment summary section.

Comment 1: Comments asserted that the energy markets, including gas, coal, and electricity, are 

incorrectly modeled, and commenters expressed concerns regarding the EPA's IPM modeling.

1.a. Commenters asserted that EPA modeling does not adequately reflect source-specific 

or regional considerations. 

Commenters stated that they were concerned that Nebraska's public power districts may be 

unduly affected by EPA's proposed Clean Power Plan. Commenters said that Nebraska is the 

only state who, by statute, meets all of its power needs through a public power system. 

Commenters said all power in Nebraska is delivered by entities governed by independently 

elected boards. Commenters said this system continues to be extremely effective in meeting the 

needs of Nebraska citizens by delivering reliable, low-cost electricity. Commenters said that as it 

stands, the Nebraska public power districts may need to reduce capacity and reliance on existing 

units in order to comply with this proposal. 

Commenters stated that in the last 10 years, Nebraska's population has grown only by 0.7 

percent. Commenters said that since 2000, 69 of our 93 counties have experienced a decline in 

population, while our urban areas have experienced the added challenge of serving an increasing 

population. Commenters said both create unique population dynamics that the power districts 

must be ready to serve and sustain. Commenters said the proposed Clean Power Plan, in concert 

with other already enacted regulatory issues facing Nebraska utilities such as the Mercury and 

Air Toxics Rule, the Cross State Air Pollution Rule; and the Sulfur Dioxide standard/consent 

decree, has the potential to disproportionately impact Nebraska's public power system. 

Commenters said the Nebraska public power sector is being required to implement many costly 

compliance measures over such a short period of time. 

Commenters stated that EPA has not thoroughly analyzed anticipated cost impacts on a case-bycase basis, and that the expected benefits to Mississippi of the proposed rule are justified by the 

magnitude of the expected costs that Mississippi ratepayers will bear under the Clean Power 

Plan. The commenters stated that the proposed rule would impose a disproportionate burden on 

Mississippi by effectively mandating elimination of low-cost coal generation, and the impacts 

will also have a magnified effect on the state GDP. The commenters stated that the Clean Power 

Plan would effectively require elimination of coal generation in Mississippi, causing a radical 

shift in resource mix and reliance on NGCC units to provide baseload service. The commenters 

stated that EPA has neither evaluated the impacts of such a significant shift in resource roles, nor 

whether the resulting mix of baseload, intermediate, and peaking resources is feasible. The 

commenters stated that the proposed rule is estimated to cost Mississippi ratepayers $14 billion 

by 2030, not including fuel costs. The commenters also cited impacts on industry and job 
144

creation. The commenters estimated that using all four building blocks, Mississippi retail 

ratepayers will experience an 11 percent increase in average delivered electricity prices over the 

2017-2031 time period, using only Building Blocks 1 and 2, this figure is 14 percent, and that 

wholesale rates could increase 20-25 percent. The commenters projected an increase in 

electricity production cost of 177 percent increase from 2012 to 2020, measured in real 2012 

dollars. The commenters predicted total electricity cost is would increase 57 percent from 2012 

to 2020 (measured in real 2012 dollars), residential electricity bills were estimated to increase 35 

percent, and industrial electricity rates were expected to increase 69 percent (measured in real 

2012 dollars). The commenters predicted an increase in natural gas demand by 2020 and an 

increase in the price of natural gas of 114 percent from 2012 to 2020 (measured in real 2012 

dollars). 

Commenters stated that the traditional methodology used for ESPS is for EPA to conduct a 

bottom-up analysis to determine what emissions reductions are "achievable" and "adequately 

demonstrated" that can be done at the source at affordable costs for existing units throughout the 

country. The commenters stated that, EPA has inappropriately analyzed costs at the national 

level, and the regional level for renewable energy, and not for what is affordable and achievable 

at the source. The commenters stated that the reduction goals in the CPP appear to be the result 

of pre-determined Presidential GHG reductions goals, not the product of a bottom-up source 

specific economic and technical analysis as required by Section 111. The commenters stated that 

national cost analysis ignores local impacts creating the opportunity for significant arbitrary 

localized outcomes that cannot be sustained as a matter of Administrative law. 

Commenters stated that 48% of the total national reductions are achieved in only six states: 19% 

Texas, 8% Florida, 6% Georgia, 5% Pennsylvania, 5% Arkansas, and 5% West Virginia. The 

commenters stated that these states made up approximately 28% of the total national electric 

generation as of 2012. The commenters stated that a state like West Virginia will be hit 

disproportionately hard, since the state had 16 coal plants operating in 2012, which generated 

96% of the state's electricity. The commenters stated that West Virginia's economy was bolstered 

by selling this energy: 58% of West Virginia's total 2012 electric generation was exported to 

surrounding states. The commenters stated that the wholesale reduction of the coal market, along 

with the costs associated with implementing the Plan, will result in wide-ranging harm to state 

and local economies, triggering job loss, shrinking tax bases, a decline in manufacturing, and a 

decline in overall economic competitiveness and social stability. The commenters stated that the 

Midwest Independent System Operator, a regional power grid operator, estimated that its 20-year 

discounted compliance cost of the rule will be $55-$83 billion. The commenters stated that some 

national estimates claim the Plan will cost $41-73 billion per year to implement, causing double 

digit electricity rate increases in 43 states, with 14 states facing peak year electricity price 

increases that could exceed 20%. The commenters cited other estimates that wholesale electricity 

costs will increase by $274 billion; that non-power natural gas costs will increase by $80 billion; 

and that replacement power will be needed costing $53 billion. 

Commenters cited EVA that Texas would be amongst the states with the largest economic 

penalty, and that in Texas, annual household electricity and gas bills would increase by more 

than $1,050 in 2020, compared to 2012 representing a 54% increase. The commenters stated that 

the impacts of the proposal to Texas alone exceed many of the cost impacts EPA projects under 

the proposal for the entire country. 
145

Commenters stated that affordable and reliarble electric power is essential to the continued 

recovery of Indiana's manufacturing economy, which accounts for about 500,000 high-paying 

jobs in the State, in addition to 28,000 in the coal industry. The commenters stated that Indiana 

will experience a disproportionate share of rate hikes, not just because the state is so reliant on 

coal for its electricity, but also because Indiana has average retail electricity prices below the 

national average. The commenters cited NERA estimates that the actual increase in rates for 

Indiana could be close to 12 percent. The commenters stated that with 1.3 million lower- and 

middle-income households in Indiana, spending an average of 19 percent of their after-tax 

income on energy, it State is vulnerable to rate hikes. 

Commenters stated that Indiana is particularly vulnerable to the economic impacts of the GHG 

ESPS. The commenters stated that NERA estimates that Indiana's electricity rates will be 12% 

more costly each year compared to EPA's projections. The commenters stated that with cost 

increases like those driven by the GHG ESPS, Indiana will lose manufacturing and agriculture 

jobs to overseas competitors and the overall Indiana economy will endure great hardship. 

Commenters cited an ERCOT study stating that the inclusion of carbon prices resulted in higher 

average locational marginal prices (LMPs) compared to the baseline scenario. The commenters 

stated that in the $20/ton carbon price scenario, the average LMP in ERCOT was $66.17 in 2020 

and $81.13 in 2029 -- 34% and 13% above the baseline scenario LMPs for those years. The 

commenters stated that in the $25/ton carbon price scenario, the average LMP was $73.58 in 

2020 and $84.28 in 2030 -- 49% and 17% above the baseline scenario estimates. The 

commenters stated that model results indicate that generators' variable costs by 2029 will 

increase by 15 to 18% in the $20/ton CO2 and $25/ton CO2 scenarios, respectively, compared to 

the baseline. 

Commenters stated that the impacts of the CPP, coupled with the proposed 111(b) regulations, 

would lead to the premature retirement of many coal-fired generation units, and would preclude 

any likelihood of another coal generation facility being built. The commenters stated that this 

would increase costs for Ohio's consumers dramatically. The commenters stated that this would 

harm Ohio's economy and the entire wholesale market within PJM. The commenters stated that 

the CPP would have major cost impacts due to increased capacity pricing and likely transmission 

upgrades. The commenters stated that coal plants must run less in order for natural gas plants to 

run more that coal plants cannot physically or economically operate as an efficient loadfollowing resource. The commenters stated that coal-fired generators receiving less revenue due 

to less frequent dispatch, places tremendous pressure on existing coal-fired EGUs which would 

make many of the coal-fired generators that survived MATS vulnerable to retirement, threaten 

reliability of the grid and costs would increase for consumers. The commenters stated that the 

combined impact of increased energy market pricing, increased capacity market pricing and 

transmission upgrades would likely result in Ohio consumers paying exorbitantly higher 

electricity bills. 

Commenters stated that an unrealistic and unduly expensive EPA rule will pass through directly 

to the LPC ratepayers. The commenters stated that the citizens of the TVA region, a region with 

lower per capita income, higher poverty rates and higher percentage of elderly and Social 

Security recipients than most of the rest of the nation, would thus be obligated to fulfill the 

financial obligations that will be imposed as a result of EPA's proposed rule. 
146

Commenters cited a study by Energy Ventures Analysis, that the average annual Wisconsin 

household will see electricity and gas bills increase by more than $485 in 2020. The commenters 

stated that modeling studies performed by PSCW confirm that this rule will increase electricity 

rates by up to 29%, excluding upgrades to necessary transmission and gas supply infrastructure. 

The commenters stated that double digit rate increases attributable to this rule will have a 

detrimental impact on this sector of the economy and as a result, impact family budgets across 

our state.

Commenters stated that the GHG ESPS will reduce demand for Indiana coal and result in losses 

of good paying jobs in rural communities. The commenters stated that manufacturing and 

agriculture are significant users of electricity in Indiana and will suffer significant losses if the 

proposed GHG ESPS is promulgated. The commenters stated that manufacturing and agriculture 

in Indiana are dependent on the low cost of electricity. The commenters stated that state's utility 

rate forecasting experts have predicted electrical rates in Indiana will rise by more than 30% over 

the next decade- prior to considering the impacts of the GHG ESPS. The commenters cited 

NERA projections that rates will be 12% more costly each year compared to EPA's projections. 

The commenters cited an Energy Ventures Analysis prediction that electric rates for industrial 

customers will increase by 50% by 2020, and natural gas costs in Indiana will increase by 108%. 

Commenters stated that in 2020, the average annual West Virginia household electricity and gas 

bills will increase by $750-a 38% increase-and the total annual cost of power and gas in West 

Virginia will grow from $2.7 billion to over $4 billion. The commenters stated that in 2020, the 

average annual U.S. household electricity and gas bills will increase by $680 in 2020-a 35% 

increase-and the total annual cost of power and gas in the U.S. will grow from $475 billion to 

over $750 billion. The commenters stated that U.S. compliance costs could total upwards of 

$366 billion, with 43 states facing double-digit electricity price increases, and CO2 

concentrations would be reduced by less than one-half of a percent, which would result in 

reducing the average global temperature by less than 2/100th of a degree and reducing the sea 

level by 1/100th of an inch. The commenters stated that EPA has failed to consider adequately 

the potential economic impact of its Proposed Rule due to the rise in electricity prices. The 

commenters cited NERA's conclusions that the rule would cost at least $41 billion per year, and 

under one scenario, $73 billion per year, with a total projected cost of $366 billion to $479 

billion over a 15-year period. The commenters stated that the Proposed Rule would cause 43 

states to see a double-digit electricity rate increase, and that nationwide, the proposal would 

cause a 12% to 17% average increase in electricity prices. The commenters stated that fourteen 

states face peak year electricity price increases that could exceed 20%. 

Commenters stated that electricity rates will rise under this rule because using existing sources of 

electricity is less expensive than building new sources. The commenters stated that the average 

cost of electricity from existing coal plants is only $36.4 per mWh compared to new natural gas 

costing $66.3 per mWh, new wind costing $80 per mWh, and new solar costing $80.3 per mWh. 

The commenters cited Energy Ventures Analysis, that power and natural gas costs for customers 

would likely increase by 60 percent in 2020 compared to 2012--a cost hike of $284 billion. The 

commenters cited NERA estimates that, when all four of the building blocks are options for the 

states, electricity prices would increase by 12 percent on average between 2017 and 2031, and 

when states' options are limited by their resources, electricity prices would rise by as much as 17 

percent. The commenters stated that EPA would thus functionally mandate that Americans use 
147

less electricity. The commenters cited NERA estimates that, when the consumer share of energy 

efficiency costs is included, the total costs related to electricity rise. The commenters stated that 

in the case in which states can use all four building blocks, electricity-related costs are projected 

to rise by about $34 billion per year between 2017 and 2031, where states are limited by their 

resources that figure shoots up to $48 billion per year. The commenters stated that Americans' 

electricity bills could rise by as much as $210 annually because of the proposed rulemaking. The 

commenters cited Policy Navigation Group that local governments will have to spend more 

money buying electricity to power schools, water treatment plants, municipal buildings, and 

other local government-provided services; municipal governments' fee revenues will likely 

decrease, as consumers spend more on electricity and less on goods and services in the local area 

and therefore do not pay as much in local government fees; and local governments' tax revenues 

will decline, as consumers spend more on electricity and less money on taxable goods and 

services. The commenters cited the Virginia SCC staff estimate that costs for Dominion Virginia 

Power "would likely be between $5.5 billion and $6.0 billion on a net present value basis, and 

several billions of dollars of investments in existing coal facilities that were made to satisfy 

existing rules would be placed at risk. 

Commenters stated that they had used a mathematical model which included load growth and 

calculated annual cost of compliance for South Carolina, excluding costs of natural gas pipeline

construction required to source additional generation in the state with reliable fuel supply with 

regard to any scenarios. The commenters provided model outputs predicting 2030 electricity cost 

increases of 12%, 16%, and 22% for residential, small commercial and industrial customers to 

meet a 772 lb/MWh goal in the current economy. The commenters provided model outputs 

predicting 2030 electricity cost increases of 5%, 7%, and 10% for residential, small commercial 

and industrial customers to meet a 990 lb/MWh goal in the current economy. The commenters 

provided model outputs predicting 2030 electricity cost increases of 22%, 28%, and 38% for 

residential, small commercial and industrial customers to meet a 772 lb/MWh goal in a "strong" 

economy. The commenters provided model outputs predicting 2030 electricity cost increases of 

15%, 19%, and 27% for residential, small commercial and industrial customers to meet a 990 

lb/MWh goal in a "strong" economy. 

Commenters stated that according to South Dakota's economic modeling, it is apparent that EPA 

has misstated the fact that annual electric bills will be reduced for consumers as a result of the 

Clean Power Plan. The commenters stated that some consumers may take advantage of energy 

efficiency programs and help reduce their total energy consumption, however not all consumers 

will do so based on certain energy efficiency market barriers (e.g. more efficient technologies are 

too costly or replacement of existing technology is not yet needed), and that the impacts will be 

even greater for those consumers that are unable to invest in energy efficient technology. The 

commenters stated that SD PUC's modeling identifies there will be adverse rate impacts in the 

state as a result of the Clean Power Plan, that rates will increase drastically and annual electric 

bills for customers will rise as a result. 

Commenters stated that EPA grossly under-estimates the overall cost of the proposed rule, and 

cited a recent study estimating the compliance cost of the CPP at least $366 billion. The 

commenters stated that if the CPP, with its interim rate-based targets, were enacted as proposed, 

Ameren Missouri would need to construct NGCC capacity prematurely, and that the new NGCC 

capacity would be dispatched solely for the purpose of the CPP and outside of normal plant 
148

economic dispatch, resulting in increased cost to customers. The commenters stated that the 

resource changes resulting from the interim goals of the CPP would have an estimated cost to 

Ameren Missouri customers of $4 billion due to the new generation and acceleration of other 

new capacity additions and costs associated with uneconomic dispatch. The commenters stated 

that the Agency can mitigate the harmful economic impact of its regulatory program by 

foregoing mandatory interim goals and instead should only set final goals. The commenters 

stated that the overall implementation cost of the CPP in terms of energy prices and reduced 

economic growth is enormous and will be borne by customers and the states for decades to 

come. The commenters stated that if EPA persists with a rule that requires early and significant 

progress toward the final goal, all deadlines should be deferred and made contingent upon SIP 

approval. 

Commenters stated that there is uncertainty as to the form compliance with the Clean Power Plan 

will take in Texas, and it is not possible to identify unit-specific compliance actions and 

associated costs at this time. The commenters stated, based on ERCOT analyses, that if 

wholesale power is 40% of the consumer bill, increases in average locational marginal price 

(LMP) would result in a retail energy price increase of 14% to 20% in 2020, and 5% to 7% in 

2029. The commenters stated that the increase in wholesale and consumer energy costs 

compared to the baseline decreases by 2029 due to the addition of new solar capacity, which has 

virtually no variable costs, and the accrual of energy efficiency savings. The commenters 

estimated increases, due in large part to the CO2 emissions price, which in 2029 imposed a cost 

of $3.8 billion in the $20/ton CO2 scenario. 

Commenters stated that PJM experienced a significant increase in deactivation of coal-fired 

generation resources driven largely by environmental regulations and the improved 

competitiveness of natural gas over coal as a fuel source. The commenters stated that generation 

deactivations, as of October 1, 2014, amounted to 20,069 MW of generation dating back to 2002 

with the majority of retirements since 2011. The commenters stated that PJM is also proposing 

significant future generation deactivations through 2018 of about 12,831 MW. The commenters 

stated that generators in Pennsylvania participate in a wholesale competitive capacity and energy 

market subject to the provisions of the FPA, regulation by the FERC and management of PJM, 

and the costs to comply with state plans implementing the CAA Section 111(d) emissions 

guidelines cannot be directly passed on to the customers in this restructured regulatory scheme. 

The commenters stated that generators participating in a traditional vertically integrated electric 

market can directly recover the costs of compliance through rates approved by their public utility 

commission under a traditional rate base/rate of return model. 

Commenters stated that no decrease in electricity bills or electricity rates would result from the 

proposed rule, but instead, there will be a substantial increase in the electricity cost for MEAG, 

the 49 public power communities that it supplies, and the residential and business electricity 

consumers in those communities. The commenters cited NERA that nationally, the delivered 

electricity price in cents per kWh would increase by 12%. The commenters cited an alternative 

analysis that considered only two building blocks ("BB 1-2"), it which NERA found that the 

delivered electricity price would increase by 17%. The commenters cited NERA findings that the 

resulting national increase in energy cost to consumers would be $366 billion to $479 billion (in 

2013 dollars) over the same period, and that for Georgia, the delivered electricity price in cents 

per kWh over the 2017-2031 period would increase by 12% to 13% for the two cases. 
149

Commenters stated that in 2013, almost 89% of electricity generation in Wyoming came from 

coal and about 10% came from renewable energy resources, primarily wind. The commenters 

stated that Wyoming had the third lowest average price for electrical power of any state in 2013. 

The commenters stated that as the Clean Power Plan forces the existing coal power plants to 

close, replacement renewable or gas power plants will have to be built to accommodate energy 

efficiencies required by this plan. The commenters stated that the resulting increase in energy 

rates are estimated to be as high as 26%. The commenters stated that in addition to rate increases 

due to building new gas or renewable energy power plants, rates will need to be increased to pay 

for the millions of dollars of pollution control upgrades previously installed by existing power 

plants in order to meet other EPA air quality requirements. The commenters stated that this is 

especially true if these power plants are forced to shut down before they can successfully 

amortize these pollution upgrades over their useful operational life. 

Commenters cited a 2012 study conducted by Kadrmas, Lee and Jackson for the North Dakota 

Industrial Commission showing that North Dakota will need an additional 2000 megawatts of 

generation between 2012 and 2032, and the region - including North Dakota - will require an 

additional 2,500 megawatts. The commenters stated that if the proposed rule is not reworked to 

provide flexibility and allow North Dakota coal plants and other energy sources to meet this 

need, prices will inevitable go up and reliability will falter. 

Commenters cited Energy Ventures Analysis that by 2020 Colorado residential average annual 

power bills will increase more than $250 and average home gas heating bills will rise by over 

$350 forcing the average family to pay $2,164 for heat and power. The commenters stated that 

industrial rates for electricity will increase by 52% by 2020. The commenters stated that a few 

years ago hotel guests experienced an "energy charge" on their bill at check-out, reflecting thenskyrocketing costs for heating and cooling powered by electricity and natural gas. The 

commenters stated that the result of changing the power generation mix too quickly will be felt 

among all Colorado citizens as well as in the highly-touted tourism industry. 

Commenters cited Energy Ventures that Arkansas would see, on average, a 19% increase in 

wholesale energy prices as a result of the CPP and its carbon regulation. The commenters stated 

that another study has concluded that certain Arkansas residential ratepayers could incur up to a 

40% increase in their electric bills as a result of Clean Power Plan implementation. The 

commenters stated that the mass replacement of low-cost coal generation will require the United 

States to spend an additional $17.6 billion by 2020 to be spent in compliance and another $53 

billion by 2030. The commenters stated that industrial electricity costs would increase from 

about $65.1 billion in 2013 to $165.6 billion in 2030-a total of 154% by 2030 as a result of the 

CPP. 

Commenters stated that MISO has issued a study finding that the GHG Rule will cut the amount 

of energy MISO generated from coal from 69% to 33% by 2030, with little evidence that natural 

gas, renewables and reduced demand can reliably replace the coal-fired generating units 

expected to retire due to the GHG Rule in either the short or long term. The commenters stated 

that the proposal will significantly drive up energy costs at a time when we are working our way 

out of the longest recession in US history, with negligible impact on global carbon emissions. 
150

Commenters stated that any loss of wholesale revenues through permit imposed operating hour 

or annual MWh restrictions will result in increased revenue requirement from ratepayers. The 

commenters stated that for OMU ratepayers, the loss of capacity revenues associated with ESGS 

Unit 1 would result in a 5-7% rate increase across all rate classes. The commenters stated that 

considerable heat rate penalties would be associated with generation levels below design which 

would increase the number of MWhs that would have to be reduced. The commenters stated that 

at a minimum, the loss of wholesale revenues associated with the proposed 18% reduction would 

result in an electric rate increase greater than 12%. The commenters stated that OMU projects 

residential rates to increase by over 15% (non-inflation adjusted) between 2015 and 2020 

without considering impacts of proposed the Proposed Rule, and that compliance with GHG 

legislation could increase the potential rate increase for OMU's customers by an additional 40%. 

The commenters stated that EPA's cost analysis in the RIA does not address secondary price 

effects corresponding to the increased costs of goods produced in manufacturing intensive states 

such as Kentucky. The commenters stated that the Kentucky Energy and Environment Cabinet's 

modeling projects that a 10% increase in the price of electricity (10% is conservative) would 

result in a 1.1% reduction in Kentucky's GDP - a loss of $2 billion to the state of Kentucky.

Commenters stated that residential rates in Minnesota are projected to increase by 11 percent to 

14 percent, industrial rates are projected to increase 22 percent, and gas bills are expected to 

increase by 45 percent. The commenters cited MISO projections that the 20-year discounted cost 

of rule within its footprint would be between $55 and $83 billion. The commenters cited an 

analysis conducted by London Economics that the Clean Power Plan would increase wholesale 

power prices by up to 40 percent in MISO by the year 2020. 

Commenters cited a November 2014 report, "Energy Market Impacts of Recent Federal 

Regulations on the Electric Power Sector," prepared by Energy Ventures Analysis that found that 

between 2012 and 2020, all electric and gas customers would spend 60 percent (in nominal 

terms; 37 percent in real terms) more in energy costs. The commenters stated that residential 

increases would be 35 percent (nominal; 15 percent real) while industrial customers would 

experience electric and gas increases of 92 percent (nominal; 64 percent real). For Kentucky 

residents, annual electric and natural gas spending would increase by 45 percent (nominal; 23 

percent real). The commenters cited a study prepared by IHS Energy, "The Value of US Power 

Supply Diversity" that concluded that the loss of fuel diversity in the production of electricity

will increase retail electricity prices by 25 percent and will reduce the average American 

household's disposal income by dollar 2,100. The commenters cited a study prepared by NERA 

Economic Consulting, "Potential Energy Impacts of the EPA Proposed Clean Power Plan" (Oct. 

2014), that Kentuckian's can expect 12 percent increases in delivered electricity prices under a 

"state unconstrained scenario" and 21 percent under a "state constrained scenario". The 

commenters cited "ERCOT Analysis of the Impacts of the Clean Power Plan" findings that 

ERCOT consumers could expect retail energy price increases of 14 percent to 20 percent in 2020 

and 5 percent to 7 percent in 2029. The commenters stated that increases in utility rates resulting 

from the proposed CPP compound the affordability issue for WKU and create additional barriers 

to upward educational attainment for our younger generation. 

Commenters cited NERA Economic Consulting projections that the CPP alone will cause a 12-

13 percent increase in retail electricity prices in Georgia plus significant costs that electricity 

consumers would need to spend to reduce their electricity use. The commenters cited Energy 
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Ventures Analysis estimates that the annual energy costs for households in Georgia, including 

both electricity and natural gas, to increase by 31% from 2012 to 2020. The commenters stated 

that EPA's compliance cost estimates do not capture the subsequent adverse spillover impacts of 

higher electricity rates on overall economic activity. 

Commenters cited NERA estimates that the proposed Clean Power Plan would cost between $41 

and $73 billion per year, and cause electricity rates to increase between 13 percent and 14 

percent in New Mexico. The commenters cited an analysis conducted by Industrial Energy 

Consumers of America estimating that the Clean Power Plan would increase wholesale power 

prices in the State by up to 23 percent. 

Commenters stated that hurdles to construction in Wyoming include limited site acquisition 

potential and complex endangered species issues. The commenters stated that assuming the 

construction of natural gas generation could be done by 2020 is an unrealistic assumption, given 

engineering, permitting, transmission and construction timelines. The commenters stated that 

even assuming the completion of an NGCC plant sometime in the near future, the cost to do so 

will also have an impact on MRES and its members, as shutting down a unit and replacing it 

with an NGCC plant would cause an additional increase in wholesale costs of 20%, over and 

above the 10% cost increase caused by the installation of the SCRs. The commenters stated that 

as a result, its member community of Pella, Iowa, which receives 100% of its power from 

MRES, will experience an increase in its wholesale costs of 30% just after we have undertaken 

major projects to reduce CO2: Pella has retired its local coal plant and MRES is constructing a 

new 36 MW hydroelectric facility near Pella. The commenters stated that rate increases of this 

magnitude endanger economic development and present a very real potential that electricity will 

become unaffordable for the poorest among us and make electricity more expensive for facilities 

in the United States and potentially cause companies to abandon plants and relocate overseas. 

Commenters stated that prices are projected to increase if Montana ultimately adopts any of the 

compliance scenarios recently identified by the Montana Department of Environmental Quality 

("MDEQ"). The commenters stated that MDEQ ignored the required build-out of the 

transmission grid to support the required increase in renewable energy generation and assumed 

that wholesale market prices would fully compensate Montana developers for their costs. The 

commenters stated that the net cost to Montana retail customers would range from $1.7 to $2.7 

billion (2013 NPV), with price increases ranging from 13% to 21%. The commenters stated that 

EPA did not disclose its pricing models in the Proposed Rule. 

Commenters stated that Ohio electricity prices that were 9% below the national 2013 average, 

but many Ohio families are struggling with high energy prices. The commenters stated that 53% 

of low to middle income households spend an average of 20% of their after-tax income on 

energy and increased energy prices will further strain these families. The commenters stated that 

projected rate increases will have a devastating impact on manufacturing in Ohio and that EPA 

has drastically underestimated these prices as reputable sources have reported increases as high 

as 39%. 

Commenters cited NERA Economic Consulting that Ohio would see average annual electricity 

rates increase by 12 percent, and across the entire United States, these increases are expected to 

result in a total of $366 billion in new expenditures for consumers.
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Commenters stated that under localized marginal pricing (LMP) pricing used in the PJM region 

where Virginia is situated, the clearing price for marginal generation units is paid to all 

generators located in a geographic area. The commenters stated that if the output of an economic 

unit is restricted and replaced by a more expensive natural gas unit, the higher incremental cost 

of a non-economic unit will be reflected in LMP pricing that is charged to load-serving entities 

that, in turn, pass those costs onto their customers. The commenters stated that the higher 

payments by customers could also be received by the economic unit if its output is not lowered 

to zero during a restricted period. The commenters stated that the Proposed Regulation fails to 

address the compounding impact of LMP pricing.

Commenters stated that forcing Minnesota to reduce its carbon emissions by 41% by 2030 is not 

fair, as midwestern states do not have to reduce by such a high percentage. The commenters 

stated that this will force the shutdown of many coal power plants, eliminate thousands of jobs in 

Minnesota, drive the cost of power up and create a terrible burden on lower income families. The 

commenters stated that it would like to see No. 3 generating plant stay online to keep some of the 

support and jobs in Becker, MN. 

Commenters stated that use of a state-wide emissions guideline creates cross-subsidy issues 

between Kansas ratepayers, and the state-wide emissions guideline, in conjunction with the 

multi-state option, creates cross-subsidy issues between states. 

Commenters stated that EPA has not fully considered the complexity involved in this type of 

multi-state coordination, which has the potential to create confusion and uncertainty for BPA 

customers and the potential for exposure to higher costs. 

Commenters stated that in Texas the Public Utility Commission cannot simply set a price for 

electricity that will provide an incentive to build new gas-fired power plants to replace coal-fired 

plants. The commenters stated that it is uncertain that Texas' electric market structure will be 

able to react as EPA assumes it can under any requirement to replace coal-fired with gas-fired 

generation. The commenters stated that the proposed reduction in the ozone national ambient air 

quality standard (NAAQS) can potentially bring large areas of Texas, including the major oil and 

gas production areas, into nonattainment status for ozone, and without a clearer picture of what a 

revised ozone NAAQS will be, what areas will be determined to be nonattainment and how such 

designation and subsequent ozone control measures will affect natural gas exploration and 

production, availability and price, it is impossible at this time to make assumptions that can 

dispel the many legitimate concerns about the loss of coal-fired electric capacity in Texas. 

Commenters stated that the proposed rule would force Mississippi utilities to generate more 

electricity from natural gas, even ahead of lower-cost options. The commenters stated that 

increasing customers' exposure to volatile natural gas prices is bad for business and business 

owners, as well as individual ratepayers. The commenters cited the American Coalition for Clean 

Coal Electricity that the adoption of these regulations will lead to an increase of electricity rates 

of 14-19 percent in Mississippi and would place 3,400 direct and indirect coal jobs in jeopardy of 

being eliminated. 

Commenters cited a NERA study projecting an increase in total consumer energy costs of 

between $366 billion and $479 billion over the period 2017-2031, which includes an increase 
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between 13 and 15 percent in electricity prices for residential customers. The commenters further 

stated that retirements are likely to impose significant costs on ordinary citizens throughout the 

country but will be heaviest in the West, with Texas projected to suffer as much as a 54% 

increase in prices across all sectors. Commenters Reference: NERA Economic Consulting, on 

behalf of American Coalition for Clean Coal Electricity et al., Potential Energy Impacts of the 

EPA Proposed Clean Power Plan (October 2014).

Response 1.a.: Commenters asserted that EPA modeling does not adequately reflect sourcespecific or state-specific concerns. A number of commenters stated that the CPP will impact 

particular states and sources disproportionately compared to others. Commenters contended that 

states more heavily dependent on coal generation will have greater impacts that are not 

adequately considered in the design of the CPP. The EPA disagrees with these commenters. 

EPA has directly considered differences that exist in state, locality, and source circumstances in 

its development of the CPP and has built into the rule flexibilities that will allow states to make 

optimal planning choices. The IPM modeling conducted for the CPP does consider source, 

locality, and state circumstances to estimate emission reductions, costs, and economic impacts of 

the CPP, and this modeling is discussed in the IPM documentation available at: 

http://www.epa.gov/airmarkets/powersectormodeling.html, in the RIA, and in the GHG 

Mitigation Measures TSD for the CPP Final Rule.

The EPA has translated the emission performance rates into equivalent state-level rate-based and 

mass-based CO2 goals in order to maximize the range of choices, including application of 

statewide policy measures instead of source-specific requirements, that states will have in 

developing their plans. States will play a key role in ensuring that emission reductions are 

achieved at a reasonable cost. States will have the flexibility to choose from a range of plan 

approaches and measures, including numerous measures beyond those considered in setting the 

emission performance rates. The final rule allows and encourages states to choose effective, 

lower cost solutions. The June 2014 proposal featured several important elements: the building 

block approach for the Best System of Emission Reductions (BSER); state-specific, rather than 

source-specific goals; a 10-year interim goal that could be met “on average” over the 10-year 

period between 2020 and 2029; and a “portfolio” option for state plans. These features were 

intended to maximize the range of choices that states and utilities could select in order to achieve 

their emission limitations at low cost while ensuring electric system reliability. The building 

block approach is a key feature of the proposal that EPA is retaining in the final rule. The state 

goals reflected an approach to the BSER that was intended to capture both the unique 

interconnected nature of the utility power sector and the set of actions, strategies and programs 

that are already under way at the state and utility level that have been resulting in CO2 emission 

reductions. They also reflected the fact that each state has its own energy profile, state-specific 

policies and needs relative to the production and use of electricity. 

The final guidelines continue to embrace the basic approach of the proposal, but they also 

incorporate significant changes that respond directly to the comments, requests, and concerns of 

states and other stakeholders, while better serving the critical objectives of the basic approach of 

the proposal. The most significant changes in these final guidelines are: 1) the period for 

mandatory emission reductions beginning in 2022 instead of 2020 and a gradual application of 

the BSER over the 2022-2029 interim period, such that a state has substantial latitude in 

selecting its own emission reduction trajectory or “glide path” over that period, 2) a revised 
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BSER determination that focuses on narrower generation options that do not include demandside energy efficiency measures and that includes refinements to the building blocks, more 

complete incorporation in the BSER of the realities of electricity operations over the three 

regional interconnections, and up-to-date information about the cost and availability of clean 

generation options, 3) establishment of source-specific CO2 emission performance rates that are 

uniform across the two fossil fuel-fired subcategories covered in these guidelines, as well as rateand mass-based state goals, to facilitate emission trading, including interstate trading and, in 

particular, mass-based trading, 4) a variation on the proposal’s “portfolio” option for state plans 

– called here the “state measures” approach - that continues to provide states flexibility while 

ensuring that all state plans have federally enforceable measures as a backstop, 5) additional, 

more flexible options for states and utilities to adopt multi-state compliance strategies, 6) an 

extension of up to two years available to all states for submittal of their final compliance plans 

following making initial submittals in 2016, 7) provisions to encourage actions that achieve early 

reductions, including a Clean Energy Incentive Program, 8) a combination of provisions 

expressly designed to ensure electric system reliability, 9) the addition of employment 

considerations for states in plan development, and 10) the expansion of considerations and 

programs for low-income and vulnerable communities. See the preamble for more discussion of 

the changes made to the final rule. These modifications add to the flexibilities available to states 

when developing implementation plans and to sources complying with the CPP.

Some commenters stated that reductions of the coal market, along with the costs associated with 

implementing the Plan, will result in ‘wide-ranging harm to state and local economies, triggering 

job loss, shrinking tax bases, a decline in manufacturing, and a decline in overall economic 

competitiveness and social stability’. Responses to these comments are discussed in responses to 

section 8.6 comments 2, 3, 5, and 7 below.

Commenters stated that, EPA has inappropriately analyzed costs at the national level, and the 

regional level for renewable energy, and not for what is affordable and achievable at the source. 

The commenters stated that a national cost analysis ignores local impacts. The EPA disagrees 

that the analysis undertaken analyzes costs at the national level and ignores local impacts. The 

costs of the rulemaking were developed using the Integrated Planning model and the analysis 

conducted addresses state, regional and local impacts of the rule. Please see the EPA analysis of 

costs of the CPP in section V of the preamble for the final rule and the GHG Mitigation 

Measures Technical Support Document and for compliance costs for the illustrative scenarios see

the Regulatory Impact Analysis Chapter 3, for further discussion of the modeling conducted for 

the rulemaking and costs associated with the rule. 

1.b. Commenters discussed that energy markets including coal, natural gas, and electricity 

are incorrectly modeled. 

Commenters stated that nuclear reactors are the most expensive electric generators available. The 

commenters stated that the cost of retaining nuclear generation has not been analyzed. The 

commenters stated that new nuclear generation is also exceedingly expensive requiring both 

federal and state subsidies for construction, putting a burden on consumers many times the costs 

of renewables. The commenters stated that since there was no analysis associated with non-air 

quality health and environmental issues, there should be no inclusion of nuclear as part of the 

renewable block and no credits for nuclear generation should be permitted in the carbon rule. 
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Commenters stated that the replacement generation and transmission needed to maintain 

reliability, and the increased use of alternate fuels, will cost more, ultimately increasing the price 

of electricity for individuals, businesses, and our community. 

Commenters stated that if natural gas is used to supply the majority of energy needs, price 

volatility will become extreme.

Commenters stated that using EIA's projections of future coal and natural gas prices, switching a 

steam EGU's fuel from coal to gas typically would more than double the EGU's fuel cost per 

MWh of generation. The commenters stated that that natural gas is traded in a global commodity 

market, which is the most volatile commodity market in the world, and that the cost and price 

volatility of electricity will follow.

Commenters cited an EPA estimate that actual electricity bills received by consumers will 

increase anywhere from 1.1 percent to 3.2 percent in 2020, then decrease several percentage 

points in 2025 and by as much as 8.7 percent in 2030, reflecting "the combined effects of 

changes in both average retail rates (driven by the effects of all four building blocks) and lower 

electricity demand (driven by the fourth building block, demand-side energy efficiency)." The 

commenters stated that agency's optimistic outlook is based on a vague notion that everything 

will work out the way EPA thinks it will, but that the utility industry and TAUC contractor 

members know that almost never happens. The commenters stated that EPA offers no remedy to 

consumers during the initial electricity price spikes in 2020. 

Commenters stated that the CPP will lead to uneconomic dispatch because surviving coal-fired 

units (i.e., coal-fired units that are not forced to retire under the Clean Power Plan) will be used 

much less in order to meet the aggressive CO2 emissions limits proposed by the EPA and higher 

cost units such as NGCC will be dispatched more than the lower cost coal units. The commenters 

stated that it does not appear the EPA has factored in the additional cost of uneconomic 

dispatch.

Commenters stated that utilities in our region are investing hundreds of millions of dollars to 

meet current EPA regulations yet the prescribed move from coal to natural gas would force the 

retirement or restrict the use of the plants which provide our most reliable and economic 

power. The commenters stated that the replacement generation and transmission needed to 

maintain reliability, and the increased use of alternate fuels, will cost more, ultimately increasing 

the price of electricity.

Commenters stated that EPA's data show that the proposed rule would cause the closure of as 

much as 49 Gigawatts of coal-based electric generating capacity by 2020, and lead to a 25% or 

greater reduction in the amount of coal produced for electric generation in that year. The 

commenters stated that including the MATS rule, the U.S. is facing the loss of 126 GW of coalbased generating capacity between 2010 and 2020, more than 10% of the nation's electric 

generating fleet, and approaching 40% of the nation's coal-fired capacity. The commenters 

stated that reduced power supply from retired plants will lead to increased electricity prices, 

spreading the economic impact to consumers and businesses. The grid will be at increased risk of 

brownouts and blackouts during peak electric demand periods, endangering the public.
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Commenters stated that fuels used to generate electricity, especially fossil fuels, are often subject 

to significant price volatility and that natural gas historically has been highly subject to such 

volatility. The commenters stated that relatively small changes in excess of EPA's projections for 

the price of natural gas will have immediate impacts on consumers and its conclusion that price 

increases will be only modest. 

Commenters stated that the proposal will result in increases in electricity prices that are likely to 

be substantial in a number of states on top of steadily increasing prices to consumers that are 

projected by the federal government to continue upward even without the implementation of this 

proposal. The commenters stated that the cost of producing and delivering electricity has been 

increasing, and is projected to continue to do so even if EPA does not implement this 

proposal. The commenters cited EIA predictions that costs to residential customers will continue 

to rise despite the deployment over the past decades of energy efficiency programs that help 

offset some of the increase on customers' bills. 

Commenters stated that the costs of the capital investment needed for the development of new 

generation sources and transmission projects will be borne by commercial, industrial, and 

residential ratepayers. 

Commenters stated that during the cold winter of 2014, electricity generation from coal-fueled 

plants was key to insulating many customers from even higher electric bills. The commenters 

stated that Southern Company set an all-time winter peak of 39,130 MW of electricity generation 

in Q1 2014 and reported $100 million in fuel cost savings for its customers during the quarter, 

relying heavily on increased coal generation and reduced natural gas generation versus Q1 2013. 

The commenters stated that as New England has shifted away from coal to natural gas for 

electricity generation, its exposure to natural gas price volatility has increased. The commenters 

cited the Energy Information Administration that U.S. residential retail electricity prices 

increased 3.2% for the first half of 2014 versus the same period in 2013, the highest year over 

year growth for the first half of the year since 2009, and that New England customers, with less 

coal generating their electricity than for customers in many other parts of the country, incurred 

the greatest price increases at 11.8%. The commenters stated that the proposed rule is at odds 

with robust, competitive energy markets and affordable, reliable electricity in America. The 

commenters cited an ERCOT estimate that the CPP will result in rate increases of up to 20% in 

2020, not including the costs of transmission upgrades, natural gas supply infrastructure 

upgrades, energy efficiency improvements, capital costs of new capacity, and other costs 

associated with the retirement or decreased operation of coal generation capacity in ERCOT. 

Commenters stated that EPA seriously underestimates the cost of complying with the rule and 

the impact of the rule on consumer electricity and natural gas prices. The commenters cited 

Energy Ventures Analysis (EVA) analysis of the impact of the rule that estimated wholesale 

electricity costs will increase by $274 billion, non-power natural gas costs will increase by $80 

billion, and additional capital costs for replacement power will be $53 billion. The commenters 

stated that these costs excluded investments in natural gas pipeline and electric transmission the 

rule will require. The commenters stated that forty-four states will see double-digit increases in 

their wholesale power prices, with 24 states facing increases close to or in excess of 20 

percent. The commenters cited a NERA projection that the total cost of the proposal would be 

$366 billion to $479 billion over a 15-year period. The NERA study cited by the commenters 
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found that the proposal will cause double-digit electricity rate increases in 43 states, and a 12% 

to 17% average increase in electricity prices Nationwide, with fourteen states facing peak year 

electricity price increases that could exceed 20%. 

Commenters stated that the impacts of the CPP, coupled with the proposed 111(b) regulations, 

would lead to the premature retirement of many coal-fired generation units, and would preclude 

any likelihood of another coal generation facility being built. The commenters stated that this 

would increase costs for Ohio's consumers dramatically. The commenters stated that this would 

harm Ohio's economy and the entire wholesale market within PJM. The commenters stated that 

the CPP would have major cost impacts due to increased capacity pricing and likely transmission 

upgrades. The commenters stated that coal plants must run less in order for natural gas plants to 

run more that coal plants cannot physically or economically operate as an efficient loadfollowing resource. The commenters stated that coal-fired generators receiving less revenue due 

to less frequent dispatch, places tremendous pressure on existing coal-fired EGUs which would 

make many of the coal-fired generators that survived MATS vulnerable to retirement, threaten 

reliability of the grid and costs would increase for consumers. The commenters stated that the 

combined impact of increased energy market pricing, increased capacity market pricing and 

transmission upgrades would likely result in Ohio consumers paying exorbitantly higher 

electricity bills. 

Commenters stated that TVA has moved to close some of the most economic and efficient units 

on its system in response to EPA regulation and that studies have shown that Tennessee 

residential rates and industrial rates may rise as much as 31 percent by 2020 as a result recent 

EPA rulemakings, including the Proposed Carbon Rule. The commenters stated that the 

proposed rule facially conflicts with existing federal law and may singlehandedly undo 80 years 

of economic development and progress directly attributable to the TVA Act and the New Deal.

Commenters stated that manufacturers operate in a highly competitive global market and cannot 

automatically pass on higher raw material and energy costs to consumers and still remain 

competitive. The commenters stated that in addition to the compliance costs utilities will pass on, 

the proposal would further increase energy costs. The commenters cited an analysis that 

projected annual costs of $73 billion under a likely scenario and projected total costs of the 

proposal to be $366 billion to $479 billion over a 15-year period. The commenters stated that this 

analysis projected that nationwide, the proposal would cause a 12 to 17 percent average increase 

in electricity prices, excluding natural gas infrastructure and electrical transmission facilities. 

The commenters stated that increased use of natural gas by the power sector to comply with 

GHG emission standards will put upward pressure on natural gas costs. The commenters stated 

that increased costs and continued uncertainty around the treatment of biogenic emissions will 

adversely affect U.S. manufacturers of paper and benefits they provide for their communities. 

Commenters stated that under the proposed rule the cost of power would increase substantially 

more than EPA's estimates due to higher fuel costs, the resulting capacity factor for existing 

coal-based units would impose substantial stranded costs, an over-reliance on natural gas (33% 

increase in dependence) creates cost and reliability concerns, and unprecedented amounts of 

costly zero-emitting sources would be required in an extremely short timeframe. (See section 8.9 

for reliability discussion)
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Commenters stated that requiring NGCC EGUs to operate at a 70% capacity factor could create 

an enormous economic disadvantage to ratepayers if natural gas prices increase sharply. The 

commenters stated that ratepayers would be paying higher costs for this energy rather than being 

able to obtain cheaper energy in the wholesale market. The commenters stated that EGUs may 

have to bid on natural gas electric generation at a loss to ensure that the RTO dispatches it over 

coal in order to ensure a 70% utilization rate, and that this will create a much larger economic 

impact on the ratepayers and utilities than is currently used in costing information by EPA in the 

proposed rule.

Commenters stated that EPA's cost/benefit calculations take credit for phantom benefits and 

overstate cost savings from EE to reach the conclusion that electricity bills will be reduced 8% 

by the CPP. The commenters cited NERA estimates that for the period 2017-2031, assuming that 

all four Building Blocks are used to achieve an average of 22% reduction in CO2 emissions, a 

minimum of 45 GWs of coal units will be retired, resulting in a 29% decline in coal-fired 

generation. The commenters stated that natural gas generation will only increase about 5% on 

average and the price of natural gas will increase by about 2% on average. The commenters cited 

NERA estimates that the cost of delivered electricity will increase by 12% without considering 

the cost of necessary infrastructure, imposing a significant hardship on much of the 

population. The commenters cited NERA estimates that to comply with the CPP's CO2 goals, 

employing only Building Blocks 1 and 2, 169 GW of coal units will be retired, natural gas prices 

will increase by 29%, on average, and the cost of delivered electricity will increase by 17%. The 

commenters cited NERA estimates that the central region and southeast region will experience 

the greatest impact from these retirements, and even if reliable electricity can be provided, the 

cost of generating the electricity will prohibit many who live in rural America from being able to 

purchase it.

Commenters stated that the Proposed Rule would lead to a significant price increase of electricity 

and in the longer term would significantly increase the cost of energy to domestic manufacturers 

above business-as-usual. The commenters stated that these electricity and natural gas cost 

increases would have a significant impact on the energy cost of U.S. manufacturing operations. 

The commenters stated that based on internal analysis of Caterpillar facilities in the three states 

where we have the highest energy usage, we expect the Proposed Rule would increase our costs 

by at least $12 million to $40 million over business-as-usual from 2020 to 2030. The 

commenters cited NERA estimates of a national average annual electricity price increase of 12 

percent over the 2017-2031 period relative to business-as-usual, and even higher increases in 

states where Caterpillar has key manufacturing facilities, such as a 15 percent increase in Illinois. 

The commenters cited NERA estimates that natural gas price increases in the near term and 

prices in 2030 that are in line with business-as-usual projections resulting in "higher consumer 

cost for direct consumption of natural gas" of $15 billion nationally over the 2017-2031 period.

Commenters cited an analysis by NERA that average U.S. electricity prices would increase by 12 

percent per year and the total costs of the rule could be between $366 billion to $479 billion over 

a 15 year timeframe. The commenters stated that EPA should perform more detailed analyses 

about the impacts of this rule which, if finalized, would prevent all of our domestic energy 

sources from playing a role in a true all-of-the-above energy strategy. 
159

Commenters cited NERA estimates that the rule would cost between $41 and $73 billion per 

year, and cause retail electricity rates in Ohio to rise by 12 percent. The commenters cited EVA 

estimates that EPA's suite of energy regulations, including the Clean Power Plan, cumulatively 

would increase the cost of electricity and natural gas by nearly $300 billion in 2020 compared 

with 2012, that gas bills would increase in Ohio by 51 percent and that industrial electricity rates 

would increase 74 percent in nominal terms.

CPP will increase Arizona fuel and purchased power costs by up to 40%. The commenters cited 

NERA conclusions that the cost of delivered electricity for 2017-2031 nationally will increase by 

12% without factoring in transmission system upgrades, natural gas infrastructure requirements 

or the impact on natural gas prices. The commenters stated that this conclusion was based on the 

assumption that all four Building Blocks will be used to achieve an average of 22% reduction in 

CO2 emissions with a minimum retirement of 45 GWs of coal units, resulting in a 29% decline 

in coal-fired generation. The commenters stated that if the energy market only utilizes Building 

Blocks 1 and 2 delivered electricity cost will increase 17%, 169 GW of coal units would be 

retired and natural gas prices would increase by 29%.

Commenters stated that EPA's regulations will increase the cost of electricity and natural gas by 

nearly $300 billion in 2020 compared with 2012, and that the typical household's annual 

electricity and natural gas bills would increase by $680, or 35 percent, from 2012 compared to 

2020, escalating each year thereafter as EPA regulations grow more stringent.

Commenters cited ERCOT estimates that "energy costs for consumers may increase by up to 

20% in 2020" under EPA's proposal, without accounting for transmission and natural gas supply 

infrastructure and other costs. The commenters cited NERA estimates that the proposal could 

cause average 2020 to 2030 delivered electricity prices to jump by 27% relative to a base case 

without the rule, and that the weighted average price increase across all customer classes 

(Residential, Commercial, and Industrial) is projected to be 2.8 cents per kilowatt-hour under the 

proposed standards. The commenters stated that EPA's proposal could cause average 2020 to 

2030 delivered electricity prices to jump by 27% relative to a base case without the rule. The 

weighted average price increase across all customer classes (Residential, Commercial, and 

Industrial) is projected to be 2.8 cents per kilowatt-hour under the proposed standards. The 

commenters stated that residential rates could increase by approximately 3.3 cents per kilowatthour under the proposed standards, a 25% increase, relative to a base case without the rule, 

equivalent to an increase in average household electric bills of $33 per month or nearly $400 per 

year which would impact all Texans but is particularly harmful for those with marginal income, 

such as elderly customers on fixed incomes or low-income customers. 

Commenters stated that EPA understates the costs of the proposal on ERCOT electricity 

consumers. The commenters stated that EPAs modeling implies a 9.9% retail price increase for 

ERCOT by 2020, falling to 3.9% by 2030, however, the NERA analysis estimates that average 

2020 to 2030 delivered electricity prices could jump by 25% or more. 

Commenters stated that the current building block plan would cost electric ratepayers up to 40% 

more in fuel and purchased power costs between 2020 and 2030 as a result of fuel switching and 

expected increases in natural gas prices over time. The commenters stated that increases in 

natural gas demand resulting from implementation of the Clean Power Plan are likely to raise gas 
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prices and overall consumer prices nationally and in Arizona. The commenters stated that the 

impact of an additional gas demand required for compliance would come at a time when exports 

(liquefied natural gas and pipeline exports to Mexico) are also growing rapidly. The commenters 

stated that the price increase under the Clean Power Plan is around $1.35 on average between 

2020 and 2030, with deltas in the $1.50-2.00/MMBtu range by the end of the 2020s. The 

commenters stated that the market has recently seen a sharp increase in the volatility of market 

prices in regions where shale gas development has outstripped the infrastructure capability to 

deliver to markets where the gas is needed. Price spikes in the northeast last winter, for example, 

exceeded $123.50/MMBtu.

Commenters stated that current market power prices in competitive markets do not support 

making some capital investments such as a number of heat rate improvements, and this could 

lead to further shut downs of coal plants beyond EPA's assumptions. The commenters stated that 

in the regulated markets, additional costs, if approved by the state PUC, will be passed on to the 

customer through higher prices. 

Commenters stated that it was very concerned about the affordability, stability and reliability of 

the supply of electricity in the wake of current and planned power plant retirements and 

especially, proposed reductions in carbon emissions in the U.S. Environmental Protection 

Agency's (EPA) Clean Power Plan. 

Commenters stated that the four Building Blocks EPA has based the rule on suffer from 

technical and economic problems that will result in this regulation costing far more than EPA

projects. The commenters cited NERA projections that electricity prices will experience rate 

increases from a low of 12% to 17% over the period 2017 through 2031, and natural gas prices 

will increase from 2% to 29% depending on the scenarios that are executed. The commenters 

cited Energy Ventures Analysis estimates that electricity and natural gas costs for residential, 

commercial, and industrial customers will increase by 60% by 2020 because of the GHG ESPS, 

the MATS rule and other EPA regulations aimed at the electric power sector. The commenters 

stated that this will cost $284 billion dollars by 2020, with the total cost increasing with each 

additional year of implementation and residential energy costs will increase by $680 per year by 

2020. The commenters stated that total energy costs for industry will increase by 64%, a $200 

billion increase that will be passed on to their customers or result in factory closures and 

operations moving overseas.

Commenters stated that it is concerned about the increased electricity costs that a re-dispatch of 

the power market could precipitate. The commenters stated that electricity cost increase 

estimates that range from 7% to 17% and that regional costs can significantly as in the New 

England area over the past winter, where lack of transport coupled with regionally higher 

demand and little supply caused spot market pricing fifteen times over normal regional pricing 

and twenty times over pricing nationally. The commenters stated that local road blocks to 

innovation such as those raised against coastal wind farms clearly demonstrate that switching to 

alternate energy sources will not be easily or quickly implemented. The commenters stated that 

as a manufacturer in a global marketplace, competitive pressures are high and increasing 

production costs in one region of the world can shift production to other regions with lower 

costs, which will not decrease global carbon emissions. 
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Commenters stated that over-reliance on any one fuel source creates extraordinary volatility and

risks for consumers and the economy. The commenters stated that when 8,358 MW of coal 

generation are forced to retire (as per EPA's estimates for 2020) as a result of Block 2, numerous 

Texas jobs will be lost and the resulting increase in natural gas price will create more volatility 

and significantly higher retail prices for Texas electric consumers. 

Commenters cited NERA Economic Consulting projections that the CPP will cause a 12-13% 

increase in retail electricity prices in Georgia, plus the significant costs that electricity consumers 

would need to spend to reduce their electricity use. The commenters cited a projection by Energy 

Ventures Analysis that the annual energy costs for households in Georgia, including both 

electricity and natural gas would increase by 31% from 2012 to 2020. The commenters cited the 

North American Electricity Reliability Corporation (NERC) conclusion that the agency's 

proposed regulatory deadlines "would increase the use of controlled load shedding and potential 

for wide-scale, uncontrolled outages." The commenters stated that during the 2014 polar vortex, 

some regions of the country experienced a price spike on the electricity spot market and demand 

for natural gas in excess of supply, which would have led to interruptions of electricity service if 

other generating resources - particular those powered by coal - were not there. 

Commenters stated that as result of area-wide changes in wholesale and retail electric supply, 

there is currently a very competitive marketplace for the sale of capacity and energy. The 

commenters stated that determining the "market rate" for capacity is a constantly changing and 

dynamic exercise. The commenters stated that Valley Electric Association obtained a forward 

power estimate from ACES Power Marketing showing on-peak power demand increases 

from the 2017-2018 to 2028, however, the market implied heat rate will decline from 2018 to 

2020.

Commenters stated that the proposal overestimates what is technically feasible, and/or entails 

costs significantly higher than those projected by EPA. The commenters stated that if finalized in 

its current form, the proposal would substantially increase the rates Wyoming consumers, 

including WIEC's members, pay for their electricity, and could significantly impact the 

reliability of the electrical service they receive. 

Commenters stated that the rule as proposed will result in significant electricity rate increases 

and additional energy costs for consumers which will fall most heavily on the elderly, the poor, 

and those on fixed incomes. The commenters cited a U.S. Chamber of Commerce study 

indicating that a plan of this type would increase America's electricity bills, decrease a family's 

disposable income, and result in job losses. 

Commenters cited NERA Economic Consulting conclusions that the proposed rule would cost 

$366 to $479 billion over a 15 -year period. The commenters cited Energy Ventures Analysis 

estimates that it would cost $407 billion over a ten-year period. The commenters stated that these 

projections do not include the additional costs of: (1) new transmission investments to access 

more remote high wind areas and to react to changes in power flows; (2) additional transmission 

ancillary services to handle greater amounts of variable wind and solar generation; (3) higher gas 

rates from increasing costs for pipeline compression; and (4) GDP changes triggered by raising 

energy prices. The commenters stated that more than 40 states will see double digit increases in 

electricity prices and 14 or more states will experience increases that exceed 20 percent. The 
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commenters stated that this past winter cold temperatures brought the cost of electricity above 

$1,000 per megawatt-hour on spot markets as compared to the average wholesale cost of $42 per 

megawatt-hour for that region. The commenters cited a study showing that if we experience 

another cold winter wholesale power prices would jump 27-55 percent across different regions 

and businesses and households would pay $35 billion more for natural gas. The commenters 

stated that a combination of another cold winter followed by a warmer than usual summer would 

cost consumers $100 billion in higher electricity and natural gas prices. The commenters stated 

that most of the lost base load generating capacity caused by this proposal will be replaced by 

new fossil-fuel capacity that will not be regulated and the combination of emissions from 

"unregulated sources" and increased emissions from existing sources will off-set at least onethird of the reductions EPA projects from existing units in the power sector.

Commenters stated that replacing coal-powered generators with natural gas generators will 

increase the cost of electricity for consumers, increase the volatility of electric prices, and 

decrease overall system reliability. The commenters stated that by shifting Arkansas's baseload 

energy fuel from coal to natural gas, electric reliability will be dependent on the ability of natural 

gas generators to contract for firm natural gas transmission rights and subject to the increased 

costs associated with these rights. 

Commenters stated that the proposed rule threatens its viability. The commenters stated that 

EPA's Regulatory Impact Analysis indicates that the rule would cause Appalachian coal 

production for electric generation to decline from 140 million tons in the 2020 base case to 87-91 

million tons, versus 246 million tons of coal in 2009. The commenters stated that decreased coal 

production will result in significant job dislocations, income losses, and diminished tax bases. 

The commenters stated that each coal job has a 5 to 1 multiplier effect on the mine services, 

consumable supplies, and the local communities where the mines and mine employees spend the 

revenues and household income generated from coal sales. The commenters stated that the 

proposed re-dispatching of coal generation to natural gas combined-cycle units, unrealistic 

energy efficiency goals, and new renewable energy targets would create a cycle of increasing 

coal fired power plant and mine closures, direct and indirect job losses, and higher electricity 

prices adversely impacting manufacturing and other key job-intensive sectors. 

Commenters stated that the proposed rule will severely impact coal industry members, workers 

in allied industries such as rail transportation, equipment sales and manufacturing, and the 

communities where those activities are located. The commenters stated that this regulation will 

put Colorado citizens at risk for lost jobs and higher electricity costs. The commenters stated that 

by reducing the U.S. fleet of coal-fired generating units by more than one-third by 2020, the 

regulation will place U. S. consumers at risk of "rolling blackouts" and service disruptions. 

Commenters stated that the proposal has the potential, based on EPA 2025 IPM, to shutter over 

13,000 MW of the 22,000 MW of coal fired generation in the state of Texas, including San 

Miguel. The commenters stated that if the EPA's IPM is correct, there are 350 power plant and 

mine workers at San Miguel that will be put out of work due to this rule - a full 20 years before 

the useful life of the unit has been reached. 

Commenters stated that the CPP would have the effect of significantly reducing power 

generation from coal-fired EGUs, which would immediately threaten the supply of power 
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available for distribution to consumers and force the retirement of hundreds of power plants. The 

commenters stated that hundreds of thousands of coal miners and supporting employees would 

face layoffs due to the decrease in coal demand. The commenters stated that due to the 

significance and size of the coal industry, enactment of the CPP would push the national 

economy along a similar trajectory as the coal industry itself. The commenters stated that by 

2030, some 114 GW of existing capacity will be removed from the grid due to closures of coalfired EGUs The commenters stated that most analysts predict that the cost of electricity will 

increase significantly, amounting to an aggregate increase of nearly $300 billion by 2030. The 

commenters stated that in cases of power shortages, which are a distinct possibility due to 

increased reliance on redispatch to NGCC, price spikes in excess of 10 times the average rate are 

likely. The commenters stated that costs are particularly significant for lower-income 

households, which the CPP is expected to disproportionately impact.

Commenters stated that EPA did not conduct a rigorous cost/benefit analysis, and therefore has 

likely under-estimated the costs to many states' economies. The commenters stated that the 

Regulatory Impact Assessment (RIA) did not incorporate the price risk associated with increased 

reliance on historically price-volatile natural gas. The commenters estimated that state GDP 

would be reduced by $2 billion with a ten percent increase in the cost of electricity. The 

commenters stated that the final rule should include a "safety net" provision that would allow 

states that have increased exposure to natural gas price volatility to be able to dispatch their 

remaining coal-fueled fleet, if doing so will offset rate impacts that exceed ten percent. 

Commenters stated that it is unclear if the IPM model incorporates stranded costs or ancillary 

transmission and other investment costs into its projections of electricity rates impacts. The 

commenters stated that ratepayers would still be required to pay the costs associated with retired 

units in addition to the costs of any other measures that would have to be deployed in response to 

the rule. 

Commenters stated that the proposed rule needs more explicit and robust economic forecasting 

for impacts to the natural gas infrastructure to ensure system requirements can be met and that 

increasing NGCC capacity factors for all states will require a significant increase in natural gas 

supply through drilling and distribution infrastructure. 

Commenters stated that it is unreasonable for EPA to base its analysis of the costs of the 

proposed greenhouse gas New Source Performance Standards on a range of natural gas prices no 

wider than the most recent forecasts and that actual prices are very likely to fall outside these 

bounds. The commenters stated that the Energy Information Administration (EIA) states that it 

cannot forecast the future price of natural gas. The commenters stated that forecasts of natural 

gas prices have proven to be poor predictors of actual prices, with large forecast errors and biases 

in the most widely used forecasts. 

Commenters stated that the difficulty in extrapolating based on past and current trends is that 

structural changes in the natural gas market can make past trends and correlations 

irrelevant. The commenters stated that forecasters of natural gas prices have not only missed 

every historic turning point in long term trends, they have acknowledged their inability to predict

when future turning points would occur. The commenters stated that using structural models to 

forecast requires an ability to identify all the exogenous factors that might cause a shift in trends 
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and a basis for forecasting how they will change in the future and that natural gas price 

forecasters have had little or no success in doing so. 

Commenters stated that the EIA's history of forecasting is exemplary of the difficulties in 

predicting future natural gas prices. The commenters stated that throughout the 1980s, EIA 

consistently forecasted the bubble bursting, but each year the increase was postponed as 

observed prices stubbornly refused to increase. The commenters stated that in 1995, EIA made a 

fundamental change in its forecasting methodology and began predicting flat prices in the $3 -

4/Mcf range, but they were too late to capture the earlier lower trend and did not accurately 

anticipate how the contemporary natural gas market was changing: it was exactly at this time that 

the prices began a rapid escalation. The commenters stated that EIA's predictions from 2003 up 

to 2008 were that high initial prices would be followed by swift descents. The commenters stated 

that in 2008 EIA changed the direction of its forecasts again and began to predict that natural gas 

prices would remain high and increase over time. The commenters stated that as a result of 

expansive shale development and the economic downturn, natural gas prices began a rapid 

downward movement with which EIA has tried to catch up since 2009. The commenters stated 

that the averages of the percentage error by projection distance shows that the EIA forecasts in a 

given year erred on average by about 29%. This error ranges from 10% to 47% depending upon 

how far into the future the AEO is forecasting. The absolute value of the error on average is 

$2.68/Mcf and varies between -$6.44/Mcf and $3.85/Mcf. The commenters stated that a 

projection distance as small as 2 years out yields forecast errors as extreme as plus or minus 

$5/Mcf. By eleven years out, the difference ranges from $17/Mcf to -$5/Mcf. 

Commenters stated the NPC projections appear to be more accurate for 1-2 years out but in the 

long term they are as inaccurate as those of EIA. The commenters stated that A retrospective 

analysis of the NYMEX future prices indicates that on average NYMEX future prices were in 

error by about 20% or $2.28/MMBtu and the error steadily grows as the forecast looks further 

out in time from $0.82/MMBtu in the first month to $3.17/MMBtu in the 36th month 

demonstrating that the accuracy of the forecasts become increasingly poor over time. The 

commenters stated that forecasts of natural gas prices made by entities that had significant 

financial incentives to make an accurate forecast still have proven to differ greatly from realized 

prices. The commenters stated that long with the rest of the nation, investors in LNG import 

facilities failed to foresee the drop in natural gas prices brought about by both unexpected 

technological improvements, particularly related to the development of shale gas, and the 

economic downturn of 2008.

Commenters stated that natural gas prices are affected by economic activity, prices of other 

energy goods, regulatory policies, and changes in technology and that the evolution of all of 

these inputs is highly uncertain and for the most part unpredictable. The commenters stated that 

some examples of unforeseen and unpredictable events such as shocks in the marketplace 

include: the September 11th terrorist attacks, the bursting of the high technology bubble in 2000 

and more recently the Financial Crisis. The commenters stated that a decline in crude oil prices 

causes less oil drilling to occur. As a result, associated natural gas production, which is 

coproduced with crude oil, also declines. The commenters stated that regulations limiting air 

emissions from power plants (e.g., the Mercury and Air Toxics Standard Rule) could increase 

demand for cleaner burning natural gas and a Clean Energy Standard could also increase demand 

for natural gas. The commenters stated that technological breakthroughs in any part of the 
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natural gas value chain have been nearly impossible to predict accurately. The commenters stated 

that a temporary or permanent ban on the use of fracking would end development of the large 

shale gas potential upon which current low natural gas price forecasts rely. The commenters 

stated that with carbon dioxide being considered a pollutant to be regulated by the EPA, future 

policies and regulations can further alter the course that natural gas prices may take. The 

commenters stated that restrictive legislation aimed at curbing CO2 emissions may reduce the use 

of coal for electricity generation leading to higher demand for natural gas, but natural gas also 

emits CO2 and thus could also be impacted negatively by future regulations. The commenters 

stated that one of the reasons that there is such controversy about the value and accuracy of 

forecasts is the failure to accompany each forecast with a statement about its likely error 

bounds. The commenters stated that given the signal failure of past forecasts of natural gas 

prices to capture discontinuous changes in trends, any evaluation of future investments and 

policy impacts should be based on an appropriately wide range of alternative scenarios. The 

commenters stated that EPA failed to consider all the likely consequences of the rule, and the 

most likely outcome is that natural gas prices will be outside the bounds that were tested for 

much of the forecast period.

Commenters stated that by relying on an unrealistically limited range of forecasts, regulators will 

steer the market to make decisions that are only desirable under the limited range of outcomes 

considered and potentially excessively costly under other conditions. The commenters stated that 

regulations based on a narrow set of forecasts would reduce the diversification of decisions that 

the market would likely make on its own, and estimates of the cost of such regulations will 

ignore the cost of the added risk the economy bears if outcomes fall outside the chosen range of 

forecasts. The commenters stated that basing a regulation on such a narrow range of forecasts 

amounts to substituting the regulator's opinion on future prices for those of private sector 

investors.

Commenters stated that the impact of higher natural gas pricing goes well beyond the cost of 

electricity however as many manufacturing industries use gas as a fuel or raw material and 

recommended that EPA include these secondary cost impacts to manufacturing, as well as the 

heating cost impact for commercial and residential natural gas users, in the economic impact 

assessment for the proposed rule. The commenters stated that between 2002 and 2011, natural 

gas used for electricity generation was four times as expensive as coal and the U.S. Energy 

Information Administration (EIA) projects real natural gas prices to increase 31% between 2010 

and 2030. The commenters stated that those states with lower energy cost structures will be 

most at risk for higher rate increases and most energy intensive manufacturing is also located in 

states with low energy cost structures. The commenters recommended that EPA allow states the 

flexibility to mitigate the impact on energy intense industries, including flexible incentives for 

energy efficiency or cost offsets for increased energy prices. 

Commenters stated that the significant switch of generating capacity from coal to natural gas 

driven by this rule coupled with the accelerating manufacturing use of natural gas and the 

expected future significant export of natural gas for geopolitical considerations has the potential 

to fundamentally alter the natural gas supply supply/demand equation, increase natural gas 

pricing volatility, and impair the US manufacturing renaissance from its full potential as a jobcreating engine of economic growth. The commenters stated that these pressures in the US 

would have a significant detrimental affect not only on the broad US manufacturing base but 
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specifically on the production of secondary (recycled) aluminum given the role natural gas as a 

key input into the secondary aluminum recycling process. 

Commenters stated that the increase in natural gas consumption directly attributable to the 

Proposal would result in price increases averaging approximately $1.35 per million British 

thermal unit (MMBtu) between 2020 and 2030, and surging as high as $2.00/MMBtu at times.

Commenters stated that EPA's economic impact analysis may be flawed. The commenters stated 

that EPA assumes that natural gas prices will remain relatively flat through 2030 and fails to 

consider the historical price volatility of natural gas and the potential for demand for natural gas 

by other industries, including transportation and manufacturing to impact natural gas prices. The 

commenters stated that further investments in energy efficiency will be much more costly, 

increasing the cost of electricity for retail customers. The commenters stated that the proposed 

rule should include mechanisms to provide cost certainty for utilities to protect consumers from 

excessive prices and price volatility. 

Commenters cited EVA projections that average annual household gas and power bills would 

increase by 35 percent from 2012 to 2020 if these regulations are finalized. The commenters 

stated that EPA's proposal to increase the use of natural gas derived electricity without increasing 

its cost is unrealistic. The commenters stated that EPA's assumption that gas-fired CCGTs can 

operate at an average utilization rate of 70 percent does not reflect real-world experience or 

reasonable modeling of the U.S. power markets. 

Commenters cited PACE Global estimates that this incremental increase in national consumption 

levels would result in Henry Hub price increases close to $3/MMBtu over a non-carbon scenario. 

The commenters stated that volatility could be very significant with growth in power sector 

natural gas demand projected under the CPP.

Commenters stated that the proposed rule does not sufficiently allow for population growth, or 

economic growth. The commenters stated that the proposed rule will result in higher natural gas

prices and therefore electric rates to customers, which in turn may stifle growth. 

Commenters stated that there are long-term costs to losing diversity in power production. The 

commenters cited the Orlando Utilities Commission that the required "shift to the use of natural 

gas as [the] primary fuel source" in the state "would cause a significant shift away from fuel 

diversity for the state," and consequently risk an end to "rate stability for all ratepayers, 

especially at times of volatility in the natural gas market." The commenters stated that energy 

shortages and price shocks could occur in an insufficiently diversified energy system. 

Commenters stated that the proposed rule will greatly increase the cost for electricity, natural 

gas, and LPG, and threaten the steady supply of these resources - all to the detriment of Indiana 

farmers and agricultural businesses. The commenters stated that the proposed rule will decrease 

the available supply of natural gas, which will drive up costs for farms and agricultural products 

that farms utilize. The commenters cited NERA projected compliance costs of $41 billion to $73 

billion per year and total costs between 2017 and 2031 of $366 billion to $479 billion (in 2013 

dollars). The commenters stated that EPA ignores the impact of higher natural gas and LPG 

prices that will be created by this rule on other economic sectors, such as residential, commercial 
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and industrial heating, agricultural use, and as feedstock in chemical manufacturing. The 

commenters stated that farmers and agricultural businesses are particularly sensitive to increases 

in natural gas costs since they are both significant users of natural gas and LPG, and because 

they are significant users of products such as fertilizers which use natural gas as a chemical 

feedstock. The commenters cited NERA projections under option 1 that electricity prices will 

experience rate increases from a low of 12% to a high of 17% over the period 2017 through 

2031. The commenters stated that natural gas will be in greater demand for electricity generation, 

which leaves questions regarding pipeline capacity and the impact on supplies for residential 

heating, agricultural use, chemical feedstocks and other common uses. The commenters stated 

that the current diversity of energy sources for electrical generation in the United States provides 

a balance of cost, supply, availability, risk and other factors that ensure we have a steady stream 

of relatively low cost electricity and natural gas. The commenters stated that building Blocks 2 

and 3 will disrupt that balance and do not provide the mechanisms needed to ensure costeffective development of new energy sources. The commenters stated that the variability in 

market pricing for gas reflects the intangible nature of the fuel, and that a transition towards 

greater usage of these fuels will increase the nation's vulnerability to reliability problems. The 

commenters stated that existing natural gas pipelines are operating at near capacity today, and 

some regions have inadequate capacity. The commenters stated that in order to create an 

infrastructure to ensure it remains consistently cost-effective the country will need to invest in 

thousands of miles of pipelines and millions of cubic feet of storage capacity and that EPA has 

not included the billions of dollars needed for these investments in their cost estimates. The 

commenters stated that natural gas prices are sure to rise above today's lower-than-average levels 

because of increased demand for gas created by new NGCC generation and natural gas supplies 

are prone to rapid price changes due to shortages which lead to incalculable costs. The 

commenters stated that it is uncommon to find natural gas supply contracts that extend for more 

than one year. The commenters stated that because natural gas prices were at or near historical 

lows when the proposed rules were drafted, any supply or demand issues will drive prices further 

upward. The commenters stated that it is dangerous public policy for EPA to base regulatory 

decisions on the highly volatile economics of natural gas prices, particularly when the current 

prices are on the low side of the volatility curve. 

Commenters stated that natural gas-fired electric generation throughout the United States will far 

exceed that which EPA anticipates in its CPP and that prices will spike as a result of the CPP 

The commenters stated that natural gas-fired generation in Oklahoma will more than double by 

2020, which will place significant upward pressure on natural gas commodity and transportation 

prices. The commenters stated that the EPA has failed to fully assess the direct and substantial 

indirect impacts the CPP will have on the economy as well as the day-to-day functioning of 

society thereby disregarding these price impacts. 

Commenters stated that should natural gas prices return to the volatility seen in past years, the 

diminution of resource diversity from abruptly shuttering the coal plants will increase risk in 

Arizona's electricity market and destabilize electricity prices for consumers. 

Commenters stated that manufacturers and others who use natural gas for purposes other than 

electric generation will also see projected cost increases up to $50 billion. The commenters 

stated that 187,000 direct and indirect job will be lost in the utility, rail, and coal industries alone 

by 2020 and these sectors will lose cumulative wages and benefits of $208 billion by 2035. The 
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commenters stated that by forcing the retirement of a significant portion of the state's electric 

generation capacity, the rule puts at risk the reliability of Texas' electric grid, the failure of which 

can have extremely dramatic financial impacts, as well as public health and safety impacts. 

Commenters stated that EPA is creating conflicting messages with the goal of making coal plants 

more efficient and then limiting its production and efficiency, with a predilection for natural gas 

generation. The commenters stated that the proposed CPP will change the market dispatch of 

generating units by changing the most economic generating resource to the most environmental 

friendly resource creating a significant cost shift; such a shift in market prices will have an 

adverse impact on consumers. The commenters stated that we will be more dependent on the cost 

of natural gas and although the long term market appears to be stable due to the science of 

fracking, switching fuels to a single source becomes risky and opens the door for price 

fluctuations to the consumers as a result of natural gas prices. The commenters stated that they 

expect to see more development of natural gas plants as long as natural gas is abundant and 

priced competitively. 

Commenters stated that EPA should not be claiming benefits that have already been achieved, 

but rather should be limited to those benefits that are anticipated from the implementation of the 

proposed rule. The commenters stated that with respect to the cost of implementing the proposed 

rule, EPA estimates only 5.4 to 8.8 billion dollars. The commenters stated that first, these costs 

are unrealistically low because EPA assumes that the utilities can easily switch fuels for existing 

sources and build new power plants that rely on natural gas and renewable energy. The 

commenters further stated that EPA also minimizes the cost of the proposed rule because it

unrealistically assumes that the price of natural gas will remain at its historically low levels for 

the next 25 years; and in addition, higher energy costs and disruption in energy delivery and 

capacity will impose significant new costs on all energy consumers. The commenters suggested 

that when these reasonably anticipated costs are considered, the cost of the proposed rule could 

increase tenfold. 

The commenters stated, as EPA has recognized, compliance flexibility is both necessary and 

appropriate in the context of section 111(d) rules for power plants. The commenters stated 

although the electric system is constructed and operated to accommodate fluctuations in power 

demand and supply, the changes EPA proposes to require in the power sector will lead to

significant reliability, transmission, and natural gas supply issues -particularly if states are not 

given broad flexibility to design workable plans for their EGUs that will protect ratepayers from 

significant rate increases, prevent potentially significant stranded costs for affected EGU owners, 

and ensure the continued reliability of the electric system. In addition,the commenters stated 

broad compliance flexibility will help to ameliorate the otherwise significant potential that 

compliance costs stemming from the Proposed Rule will lead to economic upheaval in electricity 

and fuel markets. 

Commenters stated that dispatch is the short-run means by which the BES meets three 

constraints essential to its reliable operation: Matching generation from power plants with energy 

consumption by end users in real time across the entire country; avoiding combinations of power 

plant operation and energy consumption that exceed the design capability of the transmission 

system; and avoiding configurations of generation and consumption that lead or could allow 

unstable operating conditions for the power plants and other key elements of the grid. The 
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commenters stated that dispatch must also support: the synchronized and stable operation of all 

generating equipment; voltage and reactive power maintained at appropriate levels throughout 

the entire system; and ensuring the entire system is configured so it can quickly return to these 

equilibrium conditions after a disturbance, such as a short circuit, loss of generation, or loss of a 

transmission element. The commenters stated that under security constrained economic dispatch, 

the variable operating costs of power plants - including the cost of any emission allowances or 

permits they must buy - influence their operation. The commenters stated that most existing cap 

and trade systems have various kinds of safety valves, cost containment reserves, or other pricebuffering policy features, and that imposing a strict absolute limit on emissions, and requiring the 

dispatch to respect that limit as an absolute constraint, can lead to extremely high allowance and 

power prices. 

Commenters stated that adoption of the proposed rule will result in a resource portfolio that is 

unreasonably leveraged toward natural gas-fired generation, and added such a shift would be 

imprudent from economic, security, and reliability standpoints. The commenters stated that the 

diversification of Arizona utilities' resource portfolios not only affects reliability but directly 

impacts rate base. The commenters stated that the rates that ratepayers ultimately pay include the 

utilities' costs to provide service.

Commenters stated that conservatively, the delivered cost of coal was assumed to be stable, even 

though demand for the product would go down significantly as a result of the Rule. Commenters 

stated that the net effect over the period 2020 through 2030 was a cost increase to our 

communities of $77 million. 

Commenters stated that in total, complying with the Proposed Rule may cost Montana electricity 

consumers $1.12 billion (2013 NPV). Commenters stated that for their projects, for point of 

reference, the Proposed Rule would result in a 9% increase in average retail prices; that said, at 

this stage it is very difficult to project the percentage increase expected for wholesale prices. 

Commenters stated that however, they anticipate that wholesale prices will rise substantially, 

given the impact of the Proposed Rule on both regulated and unregulated electric generators.

Response 1.b.: Commenters disagreed with the modeling of energy markets used by the EPA to 

develop the CPP. A number of commenters asserted that increased electricity generation from 

natural gas will cause natural gas prices to rise, resulting in economic impacts. Commenters 

stated that EPA has not fully considered the potential volatility and increases in natural gas 

prices that will occur in the future potentially resulting in higher costs to consumers of electricity 

and natural gas. Some commenters asserted that EPA had not fully considered pipeline 

infrastructure and transmission requirements of the CPP. Others stated that EPA had not 

considered market structure within the electricity market nor capital market requirements 

associated with retirements and new power plants. Commenters also discussed that electricity 

prices will rise as a result of the CPP. Commenters also took issue with the proposed treatment of 

nuclear power generation. In the final rule, the EPA made refinements to the building blocks, and 

these are reflected in the final BSER, including the exclusion of the proposed nuclear generation 

components. Comments relating to the impact of CPP on system reliability are discussed in 

section 8.9 of this response to response to comments document.
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EPA believes that it has fully considered the impact of the CPP on energy markets in developing 

the final rule, including changes relating to the generation mix. EPA used the Integrated Planning 

Model (IPM), developed by ICF International, to evaluate the impact of the CPP on energy 

markets. The IPM electricity demand projections are based on projections from the Energy 

Information Administration (EIA), adjusted for demand-side energy efficiency measures that can 

be reasonably anticipated to occur under the Clean Power Plan. The IPM modeling conducted 

for the CPP is discussed in detail in the RIA Chapter 3 and in the GHG Mitigation Measures

technical support document. IPM modeling of natural gas prices uses both short- and long-term 

price signals to balance supply and demand for the fuel across the modeled time horizon. As 

such, it should be understood that the pattern of IPM natural gas price projections over time is 

not a forecast of natural gas prices incurred by end-use consumers at any particular point in time. 

The natural gas market in the United States has historically experienced some degree of price 

volatility from year to year, between seasons within a year, and during short-lived weather events 

(such as cold snaps leading to short-run spikes in heating demand). These short-term price 

signals are fundamental for allowing the market to successfully align immediate supply and 

demand needs. However, end-use consumers are typically shielded from experiencing these 

rapid fluctuations in natural gas prices by retail rate regulation and by hedging through longerterm fuel supply contracts by the power sector. IPM assumes these longer-term price 

arrangements take place “outside of the model” and on top of the “real-time” shorter-term price 

variation necessary to align supply and demand. Therefore, the model’s natural gas price 

projections should not be mistaken for traditionally experienced consumer price impacts related 

to natural gas, but a reflection of expected average price changes over the period of time

represented by the modeling horizon. The modeling conducted by EPA does consider gas 

pipeline infrastructure needs and additional transmission requirements. The modeling conducted 

by EPA also considers retirements and capital requirements associated with power plant needs. 

The EPA recognizes that states will ultimately design implementation plans and that actual 

compliance by affected sources may differ from that modeled by EPA. Flexibilities built into the 

CPP will allow for states to consider strategies that may lower costs and potential impacts of 

compliance. 

1.c. Commenters cited studies that report large cost and economic impacts will result from 

implementation of the Clean Power Plan 

Commenters stated that the proposed rule will increase energy costs and reduce the diversity of 

growth. The commenters stated that EPA estimates annual compliance costs between $5.4 and 

$7.4 billion in 2020, hitting $8.8 billion in 2030; but these numbers include only future power 

sector compliance costs, failing to capture the residual impacts of higher electricity rates on 

overall economic activity. Citing a recent Wall Street Journal editorial and an HIS study, the 

commenters stated that raising the price of carbon energy will also raise costs across the 

economy, which will ultimately flow to consumers and businesses resulting in slower economic 

growth, job losses, and less disposable income. The commenters stated that the IHS estimates 

that the rule will result in an additional $289 billion in cumulative electricity payments by 

consumers from 2014 through 2030; a loss of 224,000 jobs on average through 2030; more than 

$50 billion in average annual GDP loss through 2030, with a peak GDP loss of nearly $104 

billion in 2025; and from 2014 through 2030, a cumulative reduction of $586 billion in 

disposable income. The commenters stated that families will have less disposable income as they 
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spend more to light and heat their homes, with middle-income and lower-income Americans 

being hit the hardest. According to the commenters, in 2001, lower-income households spent 16 

percent of their after-tax income on energy and in 2014, these households will spend 26 percent 

of their budgets on energy (before taking into account any energy assistance programs). The 

commenters stated that lower-income families are especially vulnerable because energy costs 

represent a larger portion of their budgets and reduce the amount of income they can spend on 

food, housing, health care, and other necessities.

Commenters stated that EPA understated the Proposed Guidelines' likely disruption to the 

national economy, the negative impact on the reliability of the U.S. energy system, and the 

adverse impact to U.S. energy security. The commenters cited a study by NERA which found 

that implementing Option 1 would cause 45 GW of coal-fired EGUs to retire, cause coal-fired 

generation to decline 29 percent, with natural gas-fired generation increasing 5 percent, and 

cause gas prices to increase 2 percent and electricity prices to increase 12 percent over the 2017-

2031 period. The commenters stated that state energy efficiency programs which would cost 

about $560 billion in present value from 2017 through 2031 and that electricity costs would 

increase by an average of $34 billion per year from 2017 through 2031 with the largest of the 

increases going to residential and commercial consumers. The commenters stated that NERA 

estimated that Option 1 utilizing only Building Blocks 1 and 2 would have more significant 

negative impacts. The commenters stated that a full accounting of the costs of the Proposed 

Guidelines would examine the multiplier effects on other sectors of the economy. 

Commenters stated that the Integrated Planning Model (IPM), which was integral to modeling 

CSAPR, MATS, and the current proposal, does not appear to have accurately forecasted past 

coal retirements. The commenters stated that there will be more than 100 plants, resulting in 

51.7 GW of coal retirements by 2020, and that one company alone retired nearly 6 GW of 

capacity from recent regulations, making IPM models of 9.5 GW of retirements appear seriously 

flawed. The commenters stated that EPA projects approximately 49 GW of additional 

retirements, or roughly one-fifth of all coal-fired capacity, however, NERA recently projected 

that the proposed rule could retire anywhere from 45 GW of coal capacity, to more than 160 GW 

(65 percent of coal capacity). The commenters stated that with these additional retirements, total 

coal retirements from this decade could easily force approximately 100 GW of coal into 

retirement.

Commenters stated that the cost analysis EPA used to evaluate the proposed Clean Power Plan 

was inadequate as highlighted in an ERCOT 2014 report, which stated that accelerated resource 

mix changes will require major improvement to ERCOT's transmission system, posing 

significant costs not considered in EPA's Regulatory Impact Analysis. The commenters stated 

that the proposed rule incorporates generic and unsupported expectations of levels of integrated 

renewable generation and energy efficiency that are ambitious, unachievable, and uneconomic 

under traditional standards. According to the commenters, the rule will remove the current 

diversity in our electricity supplies, diversity which saves consumers more than $93 billion in 

lower electricity costs, according to a study by HIS Energy, and which also reduces the 

variability of monthly utility bills by half. The commenters stated that several studies (Energy 

Ventures Analysis and NERA Economic Consulting), show that the EPA plan will cost $366 to 

$479 billion over a 10- to 15-year period, raising electricity costs in more than 40 states, some 

with increases exceeding 20 percent; a study by the National Mining Association shows that if 
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we experience another cold winter like the winter of 2013-2014, we can expect wholesale power 

prices to jump 27-55 percent across different regions, in all states, and businesses and households 

to pay $35 billion more for natural gas. The commenters stated that a combination of another 

cold winter followed by a warmer than usual summer would cost consumers $100 bill ion in 

higher electricity and natural gas prices. The commenters stated that the WPSC also uncovered 

significant errors in the cost of complying that had been calculated by EPA and that WSPC 

comments state that the CPP irrationally discriminates against western mine mouth EGUs as 

mine mouth EGUs located near Gillette, Wyoming, depended on low cost fuel to offset the 

expense of air cooling; measures which undermine an original cost advantage undermine the 

economics of the entire plant. The commenters stated that the EPA analysis did not take into 

account the decline in public health and welfare that its proposed rule will cause by the increased 

amount of money consumers will have to pay for electricity and natural gas.

Commenters cited the U.S. Chamber of Commerce estimated economic impacts. Commenters 

opposed the proposed regulation due to the estimated economic impacts to businesses, 

employees and the nation as a result of requirements that will force the closure of coal-fired 

EGUs. The commenters listed the following impacts, which have been projected to lower the US 

GDP by $51 billion annually through 2030 per the U.S. Chamber of Commerce: 

• 224,000 jobs lost annually through 2030 by the U.S. Chamber of Commerce; 

• increased cost of living via higher electricity rates, a devastating impact on lowerincome families in Kentucky and other states dependent on coal-fired electricity 

generation; 

• increased cost for industrial and manufacturing businesses upon which the 

economy of Kentucky is highly dependent; and 

• increased volatility and uncertainty regarding future electricity costs for families 

and businesses due to a forced migration to highly volatile natural gas-fired and 

intermittent wind and solar electricity generation. 

Commenters cited the U.S Chamber of Commerce's estimates on increases in electricity costs 

($17 billion increase annually, $289 billion by 2030), losses in disposal annual income 

($3,400.00 decrease in typical household annually, $586 billion by 2030), losses in investments 

and GDP (over $50 billion annually), and increases in compliance costs for electricity providers 

($28 billion annually, $480 billion by 2030). The commenters also cited the Heritage 

Foundation's estimates that aggregate GDP losses would reach $2.23 trillion by 2023. The 

commenters further stated that EPA's estimated $5.5 billion annual compliance cost is 

unrealistic. Additionally, the commenters stated that low income families and fixed-income 

seniors would be disproportionately affected and that compliance costs would be passed on to 

consumers or shareholders in the form of reduced return on investments. 

Commenters also cited the U.S. Chamber of Commerce annual and cumulative compliance costs 

and losses in GDP, and stated that lower income families would be disproportionately affected, 

jobs would be lost and energy rates would increase. The commenters also noted the discrepancy 

between the U.S. Chamber of Commerce and EPA compliance cost estimates. 
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Commenters also cited the U.S. Chamber of Commerce annual and cumulative GDP, job loss, 

total disposable income and electricity cost impacts and stated that the impacts would be the 

greatest on the poor, the elderly, small business, and domestic manufacturing. The commenters 

then provided cost estimates of the recently repealed carbon tax in Australia -$8.5 billion annual 

economic impact and $500 increased electricity costs to families- as a comparison. 

Commenters stated that EPA Seriously Underestimates the Cost of Complying with the Rule and 

the Impact of the Rule on Consumer Electricity and Natural Gas Prices. The commenters cited 

Energy Ventures Analysis (EVA) analysis of the impact of the rule that estimated wholesale 

electricity costs will increase by $274 billion, non-power natural gas costs will increase by $80 

billion, and additional capital costs for replacement power will be $53 billion. The commenters 

stated that these costs excluded investments in natural gas pipeline and electric transmission the 

rule will require. The commenters stated that forty-four states will see double-digit increases in 

their wholesale power prices, with 24 states facing increases close to or in excess of 20 

percent. The commenters cited a NERA projection that the total cost of the proposal would be to 

be $366 billion to $479 billion over a 15-year period. The NERA study cited by the commenters 

found that the proposal will cause double-digit electricity rate increases in 43 states, and a 12% 

to 17% average increase in electricity prices Nationwide, with fourteen states facing peak year 

electricity price increases that could exceed 20%. 

Commenters stated that EPA Seriously Underestimates the Cost of Complying with the Rule and 

the Impact of the Rule on Consumer Electricity and Natural Gas Prices. The commenters cited 

Energy Ventures Analysis (EVA) analysis of the impact of the rule that estimated wholesale 

electricity costs will increase by $274 billion, non-power natural gas costs will increase by $80 

billion, and additional capital costs for replacement power will be $53 billion. The commenters 

stated that these costs excluded investments in natural gas pipeline and electric transmission the 

rule will require. The commenters stated that forty-four states will see double-digit increases in 

their wholesale power prices, with 24 states facing increases close to or in excess of 20 

percent. The commenters cited a NERA projection that the total cost of the proposal would be to 

be $366 billion to $479 billion over a 15-year period. The NERA study cited by the commenters 

found that the proposal will cause double-digit electricity rate increases in 43 states, and a 12% 

to 17% average increase in electricity prices Nationwide, with fourteen states facing peak year 

electricity price increases that could exceed 20%. 

Commenters stated the significant cost and compliance hurdles associated with this Proposal are 

frightening. Commenters cited NERA (National Economic Research Associates) projections that 

the Proposal will carry annual compliance costs ranging from $41-$73 billion and that 43 states 

will see double-digit increases in the price of electricity.

Commenters cited two NERA analyses - one assuming states could fully implement all four 

building blocks, and another where states could only implement Building Blocks 1 and 2. The 

commenters stated that the results indicated a 13 percent and 17 percent rate increase for Florida. 

The commenters stated that IPM modeling considers the proposal's impact only on individual 

units within the electric generation industry, whereas the proposal's impacts are much broader 

and would affect Florida's entire economy, as well as the U.S. economy. The commenters stated 

that it is widely accepted that a 10 percent increase in electricity prices results in a one percent 

reduction in GDP. The commenters stated that coal is the least expensive form of electric 
174

generation and would have to be replaced by higher-cost electricity sources, and as a result, the 

proposal would result in higher electricity costs for Florida, and thus have a negative impact on 

Florida's economy. 

Commenters cited EVA estimates of a $284 billion increase in annual power and gas costs for 

residential, commercial and industrial customers beginning in 2020 compared to 2012, 

representing a 60% increase over current costs with annual power and gas costs further 

increasing each year post-2020. The commenters cited EVA estimates that annual residential 

power and gas costs would increase by $102 billion beginning in 2020 compared to 2012 and 

would continue to escalate in subsequent years. The commenters cited EVA estimates that 

average annual household gas and power bills will increase by $680 or 35% from 2012 to 2020 

and continue to escalate year-after-year as EPA's proposed rule grows more stringent. The 

commenters cited EVA estimates that annual average home gas heating bills will increase 

roughly $340 or 50% from 2012 to 2020, annual average electricity bills will increase roughly 

$340 or 27% response from 2012 to 2020, and that cost increases would significantly affect the 

U.S. industrial sector nationwide, as the total cost for electricity and natural gas would increase 

92% from 2012. 

Commenters stated that the cost estimates fail to reflect or capture the subsequent adverse 

spillover impacts of higher electricity rates on our nation's overall economic activity. The 

commenters cited an analysis by NERA Economic Consulting indicating that average U.S. 

electricity prices would increase by 12% per year and the total costs of the rule could be between 

$366 billion and $479 billion over a 15-year timeframe. The commenters stated that many of 

these costs will have to be absorbed by residential, commercial and industrial energy consumers. 

The commenters stated that higher energy prices disproportionately harm low-income and 

middle-income families. The commenters stated that the Proposed Rule would result in a direct 

loss of 52,000 jobs in the electric utility, mining and rail sectors due to plant closures. The 

commenters stated that an additional 100,000 indirect jobs are at risk for loss in communities 

affected by the closures, and that job losses would be concentrated in, "relatively poor, rural 

areas that are least able to afford the loss of high-wage skilled jobs." 

Response 1.c.: A number of commenters stated that EPA’s cost estimates and the economic 

impacts of the CPP are understated. These commenters referenced studies conducted by HIS, 

NERA, EVA, the Chamber of Commerce, and other organizations. The EPA believes the studies 

referenced incorporate modeling assumptions that differ greatly from those used by EPA leading 

to erroneous conclusions. See responses to section 8.6, comment 5 of this Response to Comment 

document for responses to these referenced studies. The EPA believes that the modeling and 

analyses conducted by the EPA fully analyze the cost and economic impacts of the CPP and is a 

reasonable representation of the actions states make take in the design of their implementation 

plans. See section V of the preamble, the RIA and the GHG Mitigation Measures Technical 

Support Document for more information about the methods and modeling assumptions used by 

EPA to develop the cost and economic impacts of the CPP.

1.d. Commenters disagreed with EPA IPM modeling and modeling assumptions. 
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American Action Forum: Commenters cited an American Action Forum estimate that if the new 

EPA regulations go into effect, Americans could see their electric bills increase annually by 

more than 10 percent - $150 for the average consumer- by the end of the decade.

Commenters stated that the proposal overestimates what is technically feasible, and/or entails 

costs significantly higher than those projected by EPA. The commenters stated that if finalized in 

its current form, the proposal would substantially increase the rates Wyoming consumers, 

including WIEC's members, pay for their electricity, and could significantly impact the 

reliability of the electrical service they receive. 

Commenters stated that the Proposed Rule relies on the faulty assumption that all states can 

order the "re-dispatch" of natural gas units, which would in practice fundamentally transform the 

economic underpinnings of competitive electricity markets from a least-cost "economic 

dispatch" model to an "environmental dispatch" model and greatly compromise the integrity of 

those markets. 

Commenters stated that EPA has omitted the lost employment costs from retired coal and 

drastically underestimated the green energy investment needed to create 78,800 jobs by 2020. 

The commenters stated that if EPA's employment projections of 78,800 are true, the cost of 

installing zero carbon energy will cost the economy $30.7 billion in 2020, a figure never 

mentioned in the RIA. 

Commenters stated that the IPM model improperly assumes that compliance actions related to 

existing generating assets and construction of new generating assets could be deployed in 2016 

and does not consider the time necessary to put in place accompanying regulatory, legislative 

and compliance decisions. The commenters stated that virtually all of the reductions in CO2 

emissions from affected EGUs come from reduced utilization of coal-fired EGUs and that EPA 

must determine the diminution in asset value to the owners of those existing sources, and the 

local and regional economic disruption and unemployment that would result from the proposal. 

Commenters stated that it is unclear if the IPM model incorporates stranded costs or ancillary 

transmission and other investment costs into its projections of electricity rates impacts. The 

commenters stated that ratepayers would still be required to pay the costs associated with retired 

units in addition to the costs of any other measures that would have to be deployed in response to 

the rule. 

Commenters asked that the EPA "should not assume in its modeling that any new NGCCs can be 

built earlier than June 2023 to June 2025, six years after state plans are approved." The 

commenters noted the following:

• the commenters estimated approximately six years to bring an NGCC unit online

• the commenters noted that installation of new generation would need to occur 

after state plans are finalized 

Commenters stated that 48% of the total national reductions are achieved in only six states: 19% 

Texas, 8% Florida, 6% Georgia, 5% Pennsylvania, 5% Arkansas, and 5% West Virginia. The 

commenters stated that these states made up approximately 28% of the total national electric 
176

generation as of 2012. The commenters stated that a state like West Virginia will be hit 

disproportionately hard, since the state had 16 coal plants operating in 2012, which generated 

96% of the state's electricity. The commenters stated that West Virginia's economy was bolstered 

by selling this energy: 58% of West Virginia's total 2012 electric generation was exported to 

surrounding states. The commenters stated that the wholesale reduction of the coal market, along 

with the costs associated with implementing the Plan, will result in wide-ranging harm to state 

and local economies, triggering job loss, shrinking tax bases, a decline in manufacturing, and a 

decline in overall economic competitiveness and social stability. The commenters stated that the 

Midwest Independent System Operator, a regional power grid operator, estimated that its 20-year 

discounted compliance cost of the rule will be $55-$83 billion. The commenters stated that some 

national estimates claim the Plan will cost $41-73 billion per year to implement, causing double 

digit electricity rate increases in 43 states, with 14 states facing peak year electricity price 

increases that could exceed 20%. The commenters cited other estimates that wholesale electricity 

costs will increase by $274 billion; that non-power natural gas costs will increase by $80 billion; 

and that replacement power will be needed costing $53 billion. 

Commenters stated that for a number of years, numerous states and organizations have expressed 

concerns regarding U.S. EPA's IPM modeling and concerns of its accuracy and appropriateness 

for developing important policy and regulatory programs. The commenters stated that the 

concerns identified below clearly identify inherent problems with U.S. EPA's over reliance on 

IPM and EIA which provides a false sense of security. The commenters strongly advocated that 

U.S. EPA should do its due diligence by consulting appropriate federal agencies and using 

established modeling and analysis mechanisms. 

The commenters stated that they, working jointly with other states through the Lake Michigan 

Air Directors Consortium (LADCO) have expressed these concerns in the past. The commenters 

stated that on June 30th 2014, LADCO submitted comments regarding U.S. EPA's 2018 

Modeling Platform and use of IPM. The commenters stated that the same concerns seem to 

resurface. The commenters stated that concerns regarding the economic optimization of the IPM 

model specifically with respect to the power system, which is not completely governed by 

economics. The commenters stated that reliability, emissions credit trading, and 

corporate/organizational inertia can all influence where companies select to generate power. The 

commenters stated that the juxtaposition of these two ideas are best manifested and illustrated in 

the handling of a single large oil burning unit in Virginia called Possum Point. The commenters 

noted that on peak days Possum Point has significant generation, also the unit runs during the 

spring maintenance periods of the nuclear plants in Virginia. The commenters noted that this 

example illustrates the inherent problem with using a national model such as IPM that cannot 

take into account the potential state and local reliability issues that arise.

The commenters expressed serious reservations concerning the ability of the IPM to accurately 

predict and demonstrate grid reliability under the proposed rule. The commenters understood that 

the IPM model is a deterministic linear programming model, which, for specified periods of 

time, determines the least-cost method of meeting energy and peak demand requirements. The 

commenters noted that IPM is categorically not a dispatch model, and is limited in multiple ways 

in its reliability assessment capabilities. The commenters noted that among these limitations are 

seasonal only dispatch, lack of the necessary finely-detailed transmission and distribution 

information required to accurately model intra-regional dispatch, and the treatment of generating 
177

units as aggregates (as opposed to individual, geographically located entities within the 

transmission grid), which fails to represent congestion at the local geographic level.

The commenters stated that furthermore, IPM inadequately represents solar, wind, and other 

forms of intermittent renewable generation which are reliant on favorable meteorological 

conditions; IPM does not account for meteorology through either past observed weather data or 

random meteorological data generation. The commenters stated that accurate and reliable 

transmission modeling of the type conducted routinely by RTOs and other entities concerned 

with grid reliability can only be accomplished with sophisticated dispatch models. The 

commenters stated that models of this type are nonlinear, rely on historical operating data to 

achieve optimal dispatch, correctly treat generating units as specific, geographically located 

entities, and are capable of identifying congestion at the proper level of detail. The commenters 

contended that absent independent, transparent and open dispatch modeling, implementing the 

proper dispatch modeling tools, reliability under the proposed rule has not been adequately 

demonstrated by U.S. EPA via IPM modeling results. The commenters stated that given the farreaching impacts of the proposed rule and the grave consequences of grid reliability issues, if 

U.S. EPA insists on moving forward with this proposal, the commenters urged U.S. EPA to 

engage in outreach with the various RTOs, FERC, NERC, and other entities capable of 

adequately modeling dispatch scenarios under the proposed rule. The commenters believed that a 

fully optimized economics based projection tool is an inappropriate mechanism for building 

future policy frameworks or setting policy budgets.

The commenters stated that the U.S. EPA relied on results generated by IPM in the development 

of the proposal and the assessment of the economic, reliability, and technical feasibility. The 

commenters expressed serious concerns with this approach, based on a number of assumptions 

and results that do not seem technically sound, feasible, or reasonable. The commenters 

conducted an analysis of the limited parsed IPM results made available on the docket as well as 

those IPM scenarios for which parsed files were not made available, analyzing specifically 

Option 1, State-specific compliance policy case, the Regional Plan scenario, State Plan Blocks 1 

and 2 only, and the base case scenario.

The commenters stated that their primary concern is that a decrease of between 4 and 7 million 

tons of CO2 (dependent upon which scenario is in question) was predicted between the base and 

policy cases in 2025. Overall, the commenters noted that IPM projects a ~26% decrease in 

CO2 tonnage from 2005 levels in Ohio. The commenters stated that this will be extremely 

challenging and practically impossible for several reasons. The commenters noted that as a 

deregulated state, implementation of the proposal would likely involve an extensive 

reconstruction of the power grid and electric distribution both within Ohio and across the entire 

PJM reliability region. The commenters understood that the creation of a plan in accordance with 

the proposal would be an intensive, complex, and costly process for many states. The 

commenters stated that it found it difficult to reconcile the considerable expenditure of resources 

and effort that would be necessary under the proposal to realize a net benefit of 4 to 7 million 

tons of CO2, relative to the base case scenario by 2025, especially because they expect to already 

achieve significant reductions absent this proposal.

The commenters expressed significant concerns on the projected capacities at new and existing 

renewable resources. The commenters stated that comparing IPM projections for hydro to 
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historical eGRID data, the commenters has identified that the capacity factors projected by IPM 

for O'Shaughnessy and Hamilton Hydro plants are approximately 5 times their historical values 

under the 2025 state compliance plan. The commenters stated that such heavy utilization at these 

units is unlikely given historical precedence and no announced plans for expansion. The 

commenters noted that IPM projects 3,001 MW of new wind capacity in 2025 under the state 

compliance option, and 4,955 MW under the regional compliance plan. The commenters stated 

that this is not realistic and in addition, these new units are projected to operate between 30 and 

36% capacity, significantly greater than existing wind turbines in the state, which typically 

operate at approximately 20 to 25% capacity. The commenters stated that these projected 

capacity factors also reveal that very little emphasis was placed on the difference between 

technologies capable of supplying base-load power and those units which supply electricity only 

when available to do so.

Commenters stated that EPA has yet to make available all the documentation the public needs to 

assess whether the proposed rule is reasonable, including 21 of the 25 IPM modeling runs EPA 

relies on to argue that the Building Blocks are achievable. 

The commenters stated that review of the limited modeling results leaves many questions, for 

example, regarding the appropriateness of how energy efficiency is represented in the model 

(both characteristics and cost), the appropriateness of modeled transmission investment, and the 

treatment of any "remaining plant balance" associated with modeled retiring plants. The 

commenters stated that it is not clear from the limited modeling results presented, how the 

Building Blocks are integrated into the cases.

The commenters stated that IPM's assumption that a 100% load factor (full reductions in all 

hours of each year) for EE resources is unreasonable. For example, the commenters stated that an 

energy efficiency program involving residential light bulbs only generated reductions when the 

lights are normally on, likely something far less than 100% of the time. The commenters stated 

or, consider a residential refrigerator EE program that results in savings only when the old 

refrigerator was normally running (i.e. more efficient operation, fewer hours of each day) again, 

far less than 100% of the time. The commenters stated that examples similarly continue in the 

industrial sector with HVAC programs with less than 100% load factor and even industrial 

lighting and/or motors which would only approach 100% load factor results in the most efficient 

24/7 manufacturing facilities.

The commenters stated that it is not clear from the limited results and documentation provided 

by EPA whether the assumed $44B cost for EE is consistent with "one for one" programs with 

less than a 100% load factor (in which case the modeling assumptions are not appropriate) or 

alternately, the $44B cost assumption may be understating the spend necessary to accomplish 

this magnitude of energy reductions. 

Commenters stated that systematic biases and major omissions in EPA's limited evaluation 

produced a cost-benefit analysis divorced from reality. The commenters stated that EPA's RIA 

fails to assess whether the proposed rule will achieve meaningful benefits and, more importantly, 

whether the benefits are with the heavy cost. The commenters stated that the EPA has failed to 

adequately consider the impacts of the CPP. The commenters stated that without public access to 

all underlying assumptions, modeling mechanisms, and results, it is impossible to know whether 
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the Agency has connected core deficiencies that have resulted in the gross underestimation of 

impacts in previous rules. 

Commenters stated that EPA must conduct a thorough analysis on the costs and direct domestic 

benefits of any final guidelines. The rule as proposed simply double counts co-benefits of 

emissions reductions from domestic power plants and cited only immeasurable global climaterelated benefit. The commenters said that the EPA should also work with the Department of 

Energy to analyze any proposed impacts on federal and private sector investment in clean coal 

technology and the resulting impacts on GHG emissions. (Please see section 8.7.2, comment 3, 

for EPA’s response to the comments on the scope of the climate benefits, including the 

justification and use analysis of global estimates of the social cost of carbon.) 

Response 1.d.: Commenters asserted the energy markets including gas, coal and electricity are 

incorrectly modeled by EPA. Commenters discussed concerns about the Integrated Planning 

Model (IPM) modeling completed to support the CPP. Some commenters disagreed with the 

assumptions used in the modeling, while others express concern about the ability of the model to 

adequately reflect factors such as reliability, infrastructure needs, and various aspects of 

electricity generation. Some commenters also contend that documentation of IPM is inadequate.

EPA disagrees with these comments. EPA used the Integrated Planning Model (IPM) version 

5.15 to estimate the illustrative costs, emission reductions, and economic impacts of the CPP. 

IPM is a multi-regional, dynamic, deterministic linear programming model of the continental 

U.S. electric power sector. It provides forecasts of least-cost capacity expansion, electricity 

dispatch, and emission control strategies while meeting energy demand and environmental, 

transmission, dispatch, and reliability constraints. EPA has used IPM for over two decades to 

better understand power sector behavior under future business-as-usual (i.e. baseline) conditions 

and evaluate the economic and emission impacts of prospective environmental policies. The 

model is designed to reflect electricity markets as accurately as possible. EPA uses the best 

available information from utilities, industry experts, gas and coal market experts, financial 

institutions, and government statistics as the basis for the detailed power sector modeling in IPM. 

The model documentation provides additional information on the assumptions discussed here as 

well as all other model assumptions and inputs.3 EPA used IPM to project likely future 

electricity market conditions with and without the rule. The level of energy efficiency-driven 

reductions in electricity demand, and their associated costs, are reported in chapter 3 of the RIA. 

Within the IPM analysis reported in the RIA, cost impacts on the electric markets of needed 

additional gas pipeline infrastructure, transmission system upgrades, and other infrastructure 

investments as well as capital costs of new capacity, and other costs associated with retirement of 

generating units are considered. Additional demand-side energy efficiency measures that may be 

adopted in response to the regulation, and the resulting changes to future demand projections, are 

also accounted for in the illustrative compliance scenarios. The costs of energy efficiency 

programs are also incorporated into the illustrative cost estimates of the emission guidelines

discussed in the RIA. See the Resource Adequacy and Reliability technical support document for 

 

3

Detailed information and documentation of EPA’s Base Case using IPM (v5.15), including all 

the underlying assumptions, data sources, and architecture parameters can be found on EPA’s 

website at: http://www.epa.gov/airmarkets/powersectormodeling.html.
180

additional analysis and discussion of the reliability analysis conducted by EPA for the CPP. 

Additionally, see IPM documentation available at: 

http://www.epa.gov/airmarkets/powersectormodeling.html See section V of the preamble for a 

discussion of costs of the final guidelines.

Comment 2: The impact of price changes in energy markets are severe for consumers. 

Commenters discussed impacts to American refineries, manufacturing, other businesses and 

hardworking American consumers such as less affordable and less reliable energy, loss of jobs, 

and elimination of fuel diversity. The commenters stated that the proposed EPA rule ignores the 

successful example of our free market and guarantees adverse consequences for nearly every 

consumer and business in the U.S. The commenters further stated that the proposed rule 

threatens our industry's international competitiveness due to higher energy costs.

Commenters noted financial impact of previous EPA decisions and the current investments made 

by the utilities to reduce carbon emissions that are already being paid for by New Mexicans as 

part of their electric rates. The commenters stated that ratepayers have seen rates increase with 

new renewable sources coming on line as well as conversions from coal to other sources used for 

power production; and in addition, there are other significant increases pending with the final 

implementation of plans at SJGS and FCPP. 

Commenters stated that the high cost of new carbon capture technology will mean significantly 

higher electric bills in Alaska where monthly energy bills can be as high as or higher than a 

homeowner's mortgage payment. 

Commenters stated that utility ratepayers will bear the burden of the Proposed Rule and 

consequently, it will have an inordinate financial impact on utility customers in Central Florida. 

Commenters cited NERA estimates that if all four Building Blocks were implemented, Colorado 

would experience a 17 percent rate increase, Nebraska would experience a 15 percent rate 

increase, New Mexico would experience a 16 percent rate increase, and Wyoming would 

experience a 22 percent rate increase. The commenters cited NERA estimates that if only 

Building Blocks 1 and 2 were implemented, electricity prices would increase by 27 percent in 

Colorado, 26 percent in Nebraska, 16 percent in New Mexico, and 42 percent in Wyoming. The 

commenters stated that EPA's estimates of the increases in the price of retail electricity have 

been understated. 

Commenters stated that raising costs on electricity would unfairly hurt those people that cannot 

utilize other fuels, such as natural gas, to heat their homes, or run their pumps.

Commenters stated the Plan callously disregards the impact of increased energy costs that have a 

domino impact on every step in the supply chain resulting increased costs of our goods and 

services, reduced competiveness and job losses.

Commenters cited a study by the Heritage Foundation that EPA's energy regulations would cost 

hundreds of thousands of jobs and cause a significant decline in personal income while having a 
181

minimal impact on global warming. The commenters stated that these regulations would reduce 

aggregate gross domestic product by more than $2.5 trillion between now and 2030, and 

employment would track nearly 300,000 jobs below the no-carbon-regulation baseline in an 

average year, with some years seeing an employment deficit of more than 1 million jobs. The 

commenters cited a NERA study estimating that the costs to comply with EPA's proposed plan 

could total $366 billion, or more and finds that 43 states will have double-digit electricity price 

increases. 

Commenters stated that the CPP would have the effect of significantly reducing power 

generation from coal-fired EGUs, which would immediately threaten the supply of power 

available for distribution to consumers and force the retirement of hundreds of power plants. The 

commenters stated that hundreds of thousands of coal miners and supporting employees would 

face layoffs due to the decrease in coal demand. The commenters stated that due to the 

significance and size of the coal industry, enactment of the CPP would push the national 

economy along a similar trajectory as the coal industry itself. The commenters stated that by 

2030, some 114 GW of existing capacity will be removed from the grid due to closures of coalfired EGUs. The commenters stated that the Plan is projected to result in a peak loss of 442,000 

jobs occurring in 2022, amounting to a decline of nearly $104 billion to the US GDP. The 

commenters stated that most analysts predict that the cost of electricity will increase 

significantly, amounting to an aggregate increase of nearly $300 billion by 2030. The 

commenters stated that in cases of power shortages, which are a distinct possibility due to 

increased reliance on redispatch to NGCC, price spikes in excess of 10 times the average rate are 

likely. The commenters stated that costs are particularly significant for lower-income 

households, which the CPP is expected to disproportionately impact.

Commenters stated that under the CPP, leakage is likely to occur on a national level and also on 

a state level, and that New York and New York facilities will be at a significant disadvantage. 

The commenters stated that energy-intensive trade-exposed (EITE) industries require a level 

playing field to prevent GHG leakage. The commenters stated that total industrial sector 

electricity costs would rise from about $65.1 billion in 2013 to 165.6 billion in 2030, a 154 

percent increase. 

Commenters quoted SWEPCO that because their territory is perpetually disadvantaged, they 

expect continued difficulty motivating customers to pay for more expensive energy efficiency 

improvements such as HVAC upgrades and weatherization measures. The commenters estimated 

that a residential customer will see average charges for energy efficiency rise to nearly $9.00 per 

month, possibly higher for some customers, far more than the average monthly cost of 

approximately $0.80 seen in 2013. The commenters stated that rural, noncontiguous areas and 

sparsely populated areas of Texas have encountered difficulty attracting energy efficiency 

service providers. The commenters stated that residential customers in El Paso's territory rely 

very little on refrigerated air conditioning and consume far less energy than the state average, 

which has contributed to low participation in that sector. The commenters stated that much of the 

burden of achieving the EPAs target cumulative savings may fall to the larger utilities serving 

densely populated areas that have more potential for growth in their energy efficiency 

portfolios. The commenters stated the proposal that would introduce an important fairness issue 

that customers in more densely populated areas should have to pay more for energy efficiency 
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programs than customers living outside of these areas, because of the aggressive requirements of 

Block 4. 

Commenters stated that Terre Haute has several manufacturing businesses that rely on low cost 

energy to keep costs affordable. The commenters stated that if the proposed rule is approved, 

many coal-fired plants will be forced to shut down and switch to natural-gas generation, costing 

ratepayers who ultimately pay the price for new power plants. The commenters stated that gas 

prices are volatile. The commenters stated that seniors and those living on fixed incomes will be 

hit the hardest and that wholesale electricity prices are projected to increase between 27 and 55 

percent over the next two years as more coal-fired plants shut down due to other EPA rules. 

Commenters stated that the estimated electricity price increase to ratepayers is expected to be 

approximately 30 percent by 2025, and asked that EPA consider the negative consequences of 

power price increases that might result from the CPP. 

Commenters stated that the CPP is likely to increase substantially the amount Americans pay for 

electricity.

Commenters stated that should the EPA proceed with the proposed Clean Power Plan it expects 

that Kansas ratepayers will face a future of exorbitantly high electricity costs and unreliable 

electric service.

Commenters stated that residential electric bills will increase almost $270 a year, and some large 

industrial customers will see an increase of over $3 million a year if a proposal by the 

Environmental Protection Agency to limit carbon dioxide emissions is adopted.

Commenters stated that the CPP will significantly increase the cost of electricity to all consumers 

due to the fact that it requires the use of less economically efficient forms of generation and that 

those costs will ultimately be passed through to the consumer. 

Commenters cited EVA estimates that the costs of implementing the proposed rule will increase 

North Carolina wholesale power rates by 13.9%. The commenters stated that there is never a 

good time for US manufacturers to be faced with significantly higher electric power rates. 

Commenters stated that the cost of electricity would rise because customers would have to pay 

not only the cost of the imported energy, but the additional service fees imposed for delivering 

energy from distant locations as well.

Commenters stated that EPA's assessment that customer bills will actually decrease under the 

proposed program cannot be correct if the overall cost to America's utility industry exceeds $10 

billion per year. The commenters stated that rate impacts of this magnitude will have their 

severest impacts on the less fortunate among residential customers who are least able to absorb 

the increases or to change their consumption patterns through conservation. The commenters 

stated that if utility costs go up, then utility bills will go up as well -- an outcome that will affect 

all customers. 

Commenters stated concern regarding the negative impact to ratepayers of having to pay higher 

rates associated with the utilities' needs to recover existing costs and the additional costs that 
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they will incur to comply; the negative impact to ratepayers of having to pay higher rates 

associated with utilities requiring higher returns to compensate them for the additional risks that 

the utilities will face; and the negative impact to ratepayers associated with paying higher rates 

for any responsibility they may experience due to being made responsible for unrecovered costs 

if plants are shuttered or if plant output is reduced. 

Commenters expressed concern that the South Carolina goal of 772 lbs CO2/MWh cannot be 

achieved solely through renewable generation and EE. The commenters predicted that if underconstruction nuclear does not count toward compliance, despite the costs of overcoming current 

capacity constraints, electricity providers will turn to natural gas-fired generation as the means of 

satisfying their obligation to serve and to meet the emission goal. The commenters stated that the 

capital investments required to plan, site, permit, and build new interstate natural gas pipeline 

infrastructure will likely displace capital available for renewables and EE, and utilities would 

pursue the economies of scale of natural gas to the detriment of the other Building Blocks. 

Commenters stated that the SPP region has spent in excess of $8 billion on transmission 

investments, of which Kansas electric customers are paying for approximately 20 percent, and 

that these investments may not have been needed based on where SPP's projected new 10,100 

MWs of generation are located, but that Kansas' ratepayers will still be required to pay for these 

investments regardless of whether they are needed in the future. The commenters stated that the 

KCC can address cross-subsidy issues within the context of setting rates for a single utility but 

the state-wide emissions guideline will create cross-subsidy issues between the customers of 

separate utilities. The commenters stated that the Clean Power Plan identifies the specific utilities 

who own the affected EGUs, but does not address how a state should determine which utilities 

will build new NGCC or renewable energy, nor does the plan identify what DSM energy 

efficiency programs should be used. The commenters stated that the KCC does not have 

statutory authority to allocate the costs associated with the Clean Power Plan to all ratepayers in 

Kansas because a large number of utilities are not rate-regulated by the KCC. The commenters 

stated that if a non-jurisdictional utility does not agree to a compliance plan, the KCC would be 

forced to require jurisdictional utilities to take additional measures to meet the overall emissions 

guideline and subsidize the costs of compliance for non-jurisdictional ratepayers. The 

commenters stated that the EPA has created a high likelihood that cross-subsidization will occur 

between ratepayers of the utilities in the state and that this concern carries over to the EPA's 

proposed multi-state option. The commenters stated that the average cost for Kansas consumers 

will still increase as other states move to a more expensive generation mix and that this subsidy 

will be exacerbated because Kansas' coal units have been retrofitted with pollution controls and 

may remain in service for an extended period. The commenters stated that the EPA does not 

define how a determination would be made as to which states should be held accountable should 

the multi-state plan fail to achieve the region's target emission rate. The commenters stated that 

the CPP, creates significant reliability issues within Kansas and the SPP region and that a 

market-based approach will interject too much uncertainty and risk into the planning process 

used to determine new generation and transmission projects. The commenters stated that Cap and 

Trade programs are subject to changes in the market structure and that it does not believe that a 

market-based approach - such as a Cap and Trade Program - is an appropriate mechanism to 

achieve the significant emission reductions necessary under the CPP, as proposed. The 

commenters stated that it is also possible that the market price of emission limits could escalate 

to a high enough level that certain EGUs would become uneconomic overnight, and that this 
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situation could lead to the need for new generation and transmission investment, stranded costs, 

and reliability issues. 

Commenters stated that the system operator generally utilizes a bid-based merit order to dispatch 

generation - that is, supply resources such as power plants submit economic offers which the 

system operator uses to commit and dispatch particular resources from least cost to more 

expensive in sufficient quantities to meet electricity demand, subject to out of merit adjustments 

for reliability based on system and security constraints. The commenters stated that RTO/ISO 

footprints often cross but do not always comport with state boundaries. The commenters stated 

that in some cases one state may have two RTOs/ISOs located within it (e.g., Illinois), only parts 

of some states may be in a RTO/ISO (e.g. Kentucky and North Carolina), and even what appear 

to be single state RTOs/ISOs (e.g., California and New York ISOs) rely on exports and imports 

of power which flow across state lines. The commenters stated that each state will be assigned 

varying emissions targets notwithstanding the substantial interstate nature of regional wholesale 

power markets, and unless regional coordination among states is encouraged and facilitated with 

enough time for implementation, there may be unintended market consequences and potentially 

costly inefficient market incentives with respect to how power plants are dispatched. The 

commenters stated that facilitating regional cooperation will allow for the continued cooptimization of cost and reliability that is central to the organized markets that have served 

customers well. 

Commenters stated that use of a state-wide emissions guideline creates cross-subsidy issues 

between Kansas ratepayers, and the state-wide emissions guideline, in conjunction with the 

multi-state option, creates cross-subsidy issues between states. 

Commenters stated that EPA has not fully considered the complexity involved in this type of 

multi-state coordination, which has the potential to create confusion and uncertainty for BPA 

customers and the potential for exposure to higher costs. 

Commenters stated that one of the many benefits of hydropower imports which our U.S. utility 

customers and their rate payers’ value is long-term price certainty. The commenters stated that 

utilities see value in purchasing hydroelectricity from Manitoba Hydro through long-term 

contracts as a way to limit their exposure to fluctuating natural gas prices and potential costs 

associated with changes in regulatory requirements tied to emissions.

Commenters cited findings from a national survey that a majority believe the United States 

cannot afford new costs and potential job losses resulting from the EPA regulations; nearly half 

of those polled say they are not willing to pay a single dollar more in their energy bill to 

accommodate the new EPA regulations; and 47 percent oppose the regulations. The commenters 

stated that these findings are mirrored on a state level in Arkansas, and the Proposed Rule is 

dependent in many instances on changes in state law and state regulations, and elected state and 

local officials will not be willing to enact legislation or approve regulations that result in such 

far-reaching and expensive effects on their constituents. 

Commenters stated that the draft rule summarily discards billions of dollars in investment 

Georgians have made in state-of-the-art emissions controls on coal-fired units, and EPA’s 

proposal assumes that Georgia will retire another 3900 megawatts of coal-fired generation in 
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response to this rule, thereby stranding the investment in those generating units, including 

billions of dollars' worth of environmental controls. 

Commenters stated that the premature shutdown of existing coal plants with a remaining 

economic life will likely cause higher electric rates and increased costs for the nation's electricity 

consumers than EPA has projected. The commenters stated that the net present value cost 

impacts range from about $7 billion to almost $430 billion, with associated rate increases of 5.47 

to 55.4 percent. 

Commenters stated that EPA must consider the economic consequences of stranded assets and 

tailor the Proposed Rule to minimize these impacts. The commenters stated that Building Block 

2's emission reductions requirements assume increased NGCC usage and massive retirement of 

existing coal and oil/gas steam generation, and that these stranded costs would be borne either by 

the plants' owners or by ratepayers where the stranded assets have yet to be fully amortized. The 

commenters stated that the proposed rule would place an unreasonable burden on electric 

consumers who would be forced to cover the cost of prematurely retiring these units plus the cost 

of the new NGCC units needed to replace them. 

Commenters stated that coal job losses and rising electricity prices pose a threat to Kentucky 

consumers and our essential industrial manufacturing economy. The commenters stated that it is 

irresponsible for EPA to suggest that a $2 billion loss to our state gross domestic product coupled 

with a ten percent increase in electricity costs is "modest". The commenters stated that the 

proposed rule would strand another $4.5 billion previously invested in existing assets to achieve 

compliance with the existing mercury and air toxins standard. The commenters stated that EPA

must consider reasonable safety net provisions. 

Commenters stated that the IPM model improperly assumes that compliance actions related to 

existing generating assets and construction of new generating assets could be deployed in 2016 

and does not consider the time necessary to put in place accompanying regulatory, legislative 

and compliance decisions. The commenters stated that virtually all of the reductions in CO2 

emissions from affected EGUs come from reduced utilization of coal-fired EGUs and that EPA 

must determine the diminution in asset value to the owners of those existing sources, and the 

local and regional economic disruption and unemployment that would result from the proposal. 

Commenters stated that EPA failed to takes into account the costs of stranded investment and 

cited examples from Arizona, Florida, Mississippi and Kansas. The commenters stated that EPA 

estimated that MATS alone would drive the installation of 20 GW of dry scrubbers, 44 GW of 

direct sorbent injection, 102 GW of fabric filters, 63 GW of scrubber upgrades, and 34 GW of 

electrostatic precipitator upgrades, with projected capital and operating costs of these 

installations of $9.4 billion annually. The commenters stated that with EPA now predicting an 

additional 49 GW of retirements in addition to the MATS-caused retirements, a great deal of this 

investment is likely to be stranded. The commenters stated that it is consistent with Section 

111(d)(1)(B), for states to determine that sources that have extended their useful lives by 

installing long-lived and expensive pollution control systems should not be required to 

prematurely retire and leave electric ratepayers with tens or hundreds of millions of dollars in 

unamortized investments. The commenters stated that EPA does not explain whether, if a state 

goal would be made less stringent because of stranded investment, the state would be required to 
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make additional and compensating GHG reductions either in 2020 or later that decade. The 

commenters stated that EPA should permit states to exempt sources from EPA's requirements to 

the extent the states determine that compliance would create stranded investment. 

Commenters stated that EPA's regulations on coal-fired plants have forced and will continue to 

force closures of generation facilities that have already been retrofitted with pollution controls. 

The commenters stated that customers would see a rate shock if these plants shutdown or are 

underutilized because they will continue to pay for the stranded costs of the environmental 

investments in addition to new investments associated with the replacement resources required 

from plant closures. 

Commenters stated that Nebraska is the only state whose power system is entirely publicly 

owned and managed. The commenters stated that its public power boards have a statutory duty to 

provide the lowest possible cost energy and that the implementation of the Clean Power Plan 

would critical investments at risk. 

Commenters stated that some coal plants have been retrofitted with billions of dollars' worth of 

emission equipment stemming from other EPA rules, and it is socially and economically 

suboptimal to close a majority of these plants before their useful lifetime. Commenters stated 

that if, as predicted, EPA's proposal forces coalfired units to completely shut down before their 

useful lives have run, the Florida utilities' enormous, undepreciated investment in these units will 

be rendered worthless, and will leave the utilities with "stranded assets", with significant 

remaining economic value and outstanding indebtedness. The commenters stated that these 

Florida utilities arguably will be legally entitled to recover the costs to be incurred under this 

proposed government regulation. The commenters stated that the proposal would have a 

devastating economic impact on several Florida utilities, forcing them to completely and finally 

shut down several coal-fired units, and stripping these Florida utilities of all economically-viable 

use of their property at the affected power plants. The commenters stated that when the 

government encouraged the use of coal and prohibited the use of oil and natural gas, these 

Florida utilities reasonably expected that the coal-fired generating units would not be regulated 

out of the market. The commenters stated that if EPA finalizes the emission guidelines as 

proposed, it effectively amounts to a regulatory taking of these and other coal-fired power plants, 

and Florida utilities would be entitled to recover the hundreds of millions of dollars of the 

remaining value of these units as a result of the total loss of their remaining economic value. The 

commenters stated that EPA's economic impact analysis fails to consider both the real costs from 

forced closure of existing, useful power plants that will result directly from its proposal and how 

those costs must be recovered following the adoption of any final rule. 

Commenters stated that EPA has underestimated the proposal's impact on electricity prices. The 

commenters stated that the proposal would accelerate the retirement schedule and increase the 

costs associated with the transition from existing coal-fired EGU capacity to other sources of 

electricity. The commenters stated that there will be a significant cost in the form of stranded 

assets that will result in significant economic harm by premature retirement. The commenters 

stated that the proposal would change the market dispatch of generating units by reducing the 

availability of the most economic generating resources. The commenters cited a study by Energy 

Ventures Analysis Inc. that on a percentage basis, the U.S. industrial sector would be affected 
187

most severely with a 64 to 92% increase in electricity and gas, affecting energy intensive 

industries in the U.S. such as aluminum, steel and chemicals manufacturing. 

Commenters stated that the compliance cliff imposed by the interim compliance period will 

likely have many adverse impacts, including creating substantial stranded investment from the 

premature shutdown of many existing coal-fired EGUs that could be forced to stop operating by 

2020 given the front-loading of Building Blocks 1 and 2 and the steep reduction in the CO2 

emissions required at the start of the interim compliance program. The commenters stated that 

that consumers would have to pay for the same electricity generating stations twice, first the 

billions of dollars they are already paying or will be paying for the pollution controls that were 

previously installed or are being installed, and second for the replacement capacity that will be 

required. The commenters stated that this can be avoided by eliminating the interim compliance 

period. 

Commenters stated that the four BBs that are the basis of the mandatory standards for the states 

assure that many utilities will have to prematurely shut down capital intensive, low cost coal 

plants, many with long remaining operating lives and unpaid debt, which will cause major 

stranded investment costs to consumers. The commenters stated that these stranded asset costs 

were not included in the national cost assessment developed by EPA, and that EPA also failed to 

assess the costs of building new gas pipelines and transmission lines that would be required by 

the closure of so many coal plants. The commenters stated that the approach threatens continuing 

electric reliability. 

Commenters stated that reduced demand for electricity does not translate into reduced electricity 

prices. The commenters stated that the proposed rule will shift generation away from Ohio's 

well-controlled and economical coal-fired fleet to more expensive generating technologies, and 

force the dispatch of electricity away from economic models to environmental ones. The 

commenters stated that in response to the Mercury and Air Toxics standards, the remaining coalfired fleet in Ohio will be well controlled, efficient, and economic, and many plants have 

installed environmental controls in the last decade at substantial costs. The commenters stated 

that there is potential under the proposed rule that these units will become uneconomical, and 

thus represent significant "stranded costs" to Ohio rate-payers. 

Commenters stated that EPA did not consider remaining useful life as required under the CAA, 

nor does its proposal allow the states to consider it. The commenters stated that Arizona has 

virtually no flexibility. 

Commenters stated that EPA's proposed guidance will require coal-fired power plants, currently 

installing hundreds of millions of dollars of air pollution control equipment (to comply with the 

federal Regional Haze Program and Mercury and Air Toxics standard) to shutdown early and 

strand invested assets. The commenters stated that utility companies will be forced to recover the 

cost of abandoned air pollution control devices while at the same time recovering replacement 

generation costs from customers. The commenters stated that EPA should abandon state goals 

and allows states to base the best system of emission reduction on the affected electric generating 

units within their jurisdiction. 
188

Commenters stated that if adopted as a stand-alone standard of performance, the application of 

BB2 as proposed would require the retirement of Arizona's entire coal fleet, which makes up 

approximately 36 percent of Arizona's generation mix, by 2020. The commenters stated that the 

retirement of the entire fleet by 2020 would result in unreasonable costs in the form of enormous 

stranded investments and rate payers, would end up paying twice for the same generation: once 

to retire the debt on the prematurely retired assets and again to fund replacement generation. 

Commenters stated that utilities that would be required to prematurely close viable coal plants 

with years of remaining operating life, and given the limited time period for re-dispatch, would 

be forced to purchase energy (that may not be available) from other utilities. The commenters 

stated that their consumers would lose the investment in the capital intensive coal plants and, at 

the same time, be forced to pay for new transmission lines and pipelines to other utilities to buy 

electricity from gas generation plants they do not own while their own units sit idle. The 

commenters stated that the four building blocks that are the basis of the mandatory standards for 

the states assure that many utilities will have to prematurely shut down capital intensive, low cost 

coal plants, many with long remaining operating lives and unpaid debt, including debt from 

recently installed emissions controls to meet Maximum Achievable Technology Standards 

(MATS) and other environmental requirements, which will cause major stranded investment 

costs to consumers. The commenters stated that these stranded asset costs were not included in 

the national cost assessment developed by EPA, and that EPA also failed to assess the costs of 

building new gas pipelines and transmission lines that would be required by the closure of so 

many coal plants. 

Commenters stated that the electric bill savings projected by EPA in the Proposed Rule may not 

materialize and that EPA's analysis is devoid of any analysis with respect to the cost of early 

retirement of used and useful plant that has not been fully paid for through utility rates. The 

commenters stated that if the Final Rule forces premature retirement of facilities in the service 

territories of one of the state's three IOUs, North Carolina ratepayers will likely bear some or all 

of these costs. 

Commenters stated that EPA failed to appropriately account for the more than 70,000 MW of 

facilities that have already been retired since the 2012 baseline or may be scheduled to retire 

during the interim compliance period or shortly thereafter. The commenters stated that States 

must either identify other emission reductions - for example by accelerating implementation of 

RPS or EERS programs - or require costly over-compliance later in the interim period which will 

ultimately prove unnecessary to achieve the final emission reduction targets. The commenters 

stated that it is unreasonable to suggest that all the coal-fired EGUs that EPA projects will retire 

by 2030 will have reached the end of their useful lives and would have been retired even in the 

absence of this rulemaking, and if States were permitted to consider the remaining useful life of 

existing sources when setting standards of performance, they may impose less stringent 

standards that would avoid the premature closure of coal-fired EGUs. The commenters stated 

that many coal-fired EGUs that would be forced to retire under the proposal would be unable to 

recoup their capital investments and there will remain a serious question of who should be 

responsible for bearing the economic burden of the stranded assets that will result from the 

premature closure of these coal-fired EGUs.
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Commenters stated that Arizona has a relatively new coal-fired fleet and several of the coal-fired 

units recently have been equipped with expensive pollution control technology. The commenters 

stated that the value of the assets that could become stranded in 2020 is $3.8 billion, and that the 

impact of this stranded investment is exacerbated by the fact that new generation would have to 

be built to replace the stranded assets, thus compounding the cost impact to Arizona customers. 

Commenters stated that failure to amend the state emission limits will almost certainly result in 

forced early retirements, which would constitute a taking of private property in contravention of 

the Fifth Amendment to the United States Constitution. The commenters stated that the 

economic impact of forcing Newmont to close the TS Power Plant, which has more than 20 

years of remaining useful life, would be devastating on two fronts: (1) the closure of the TS 

Power Plant would result in stranded assets of approximately $450 million; and (2) closure of the 

TS Power Plant would leave Newmont without a reliable source of power in an area of northern 

Nevada with both limited generation and transmission capacity. The commenters stated that the 

burden placed on coal-fired assets, including the TS Power Plant, is too great to justify any 

unquantified purported benefits served under the Proposed Rule. 

Commenters stated that the communities supplied by MEAG will remain contractually obligated 

to pay for generation which EPA has unilaterally decided cannot be utilized in the future. The 

commenters stated that the communities that comprise MEAG have committed to fund over $ 

400 million for flue gas desulfurization systems, selective catalytic reduction systems, and 

sorbent injection and baghouse systems for mercury control at these units to meet EPA and 

Georgia environmental requirements. The commenters stated that the resulting stranded costs of 

these investments will be borne over the next 25 years by ratepayers in the communities. 

Commenters stated that it would be an economic disaster for our customers and the State of 

Nebraska if EPA's Clean Power Plan would force closure of NPPD (a low cost generation 

source) or require the investment of significant funds to meet the Plan as proposed and raise the 

costs of this plant. The commenters stated that its diverse generation mix has evolved to include 

natural gas, hydro, nuclear and wind in addition to coal, and allows NPPD to produce 42 percent 

of their generation carbon free. 

Commenters stated that investments in air pollution controls (APCs) may become stranded costs, 

depending upon the final GHG Rule. The commenters stated that Dallman Unit 4 won accolades 

from engineering and environmental groups alike, and has some of the most advanced APCs of 

any power plant in the country, exceeding the controls of much larger neighboring investorowned utilities. The commenters stated that in 2007, an Energy Assessment of Dallman units 31, 

32 and 33 was performed to determine ways to improve efficiency and reduce energy loss, and 

CWLP then implemented many of the recommendations. The commenters stated that having 

recently assessed and implemented such recommendations will make attaining an additional 6% 

heat rate improvement economically if not physically impossible. 

Commenters stated that the county as a whole could also see a devastating effect if the coal-fired 

plant which has received more than $600 million in clean technology upgrades in the last decade 

were deemed to be insufficient to meet the proposed standards. 
190

Commenters stated that the proposed emissions reductions will be impossible for Arizona's rural 

Electric Cooperative members to attain. The commenters stated that the impact to the citizens of 

this state and the economy cannot be overstated. 

Commenters stated that the original cost of its ownership interest in Colstrip Unit 4 will not be 

fully depreciated until 2043. The commenters stated that any scenario resulting in the need to 

replace our Colstrip generation with, for example, a combination of renewables and associated 

balancing/regulation requirement (i.e. simple cycle gas plant generation), would mean our 

customers would be paying for the remaining investment in Colstrip Unit 4 and the replacement 

generation. The commenters stated that by the end of 2015, NorthWestern Energy, Otter Tail 

Power Company and Montana-Dakota Utilities Company will have completed installation of an 

approximately $400 million air quality control system which will reduce nitrogen oxide, sulfur 

dioxide, particulate matter and mercury by about 90%. The commenters stated that the 

assumptions in the proposed Clean Power Plan reduce the capacity factor of the Big Stone Plant 

to 23%, a level which would result in stranding the $400 million air quality control system as 

well as the remaining unrecovered costs of each owner in the plant. The commenters stated that 

the plain language in Section 111(d) precludes EPA from exercising any discretion with respect 

to restricting the states' ability to incorporate remaining useful life and other factors into 

standards of performance as guaranteed by Congress. 

Commenters stated that the proposal will retire or significantly reduce the operation of 

Seminole's facilities (both SGS and MGS), resulting in severe economic impacts on Seminole. 

The commenters stated that a forced retirement prior to the end of their useful life will result in 

substantial stranded debt, as well as additional costs associated with generation to replace these 

units. The commenters stated that IPM also projects that the proposal would have dramatic 

impacts on the NGCC and peaking units at MGS. The commenters stated that the IPM Policy 

Case projects that these units will operate in 2025 at a capacity factor of just 16.1 percent, 

representing a two-thirds reduction in generation from 2012 to 2025. The commenters stated that 

EPA has not considered, and must account for, the severe economic impacts Seminole would 

face if the NGCC and peaking units at MGS are forced to reduce generation. 

Commenters stated that costs associated with the premature retirement of a significant number of 

coal-fired EGUs and the rushed construction of replacement infrastructure, in the form of 

natural-gas and renewable-energy generation units, transmission & pipeline will ultimately be 

borne by Oklahoma and its ratepayers. The commenters stated that a coal-fired unit for which 

Building Block 1's heat-rate improvement investment is made will then be forced to run at the 

reduced output level EPA data suggests in order to accommodate shifts to NGCCs and RE 

sources contemplated by Building Blocks 2 and 3. The commenters stated that it defies both 

fundamental economics and common sense to require utilities to make significant capital 

investments to improve heat-rate efficiency only to nullify the benefits accrued by forcing the 

displacement or closure of those same coal-fired units through a mandatory shift to NGCCs. 

Commenters stated that forcing the premature closure of power plants that have years - and in 

many cases, decades - of remaining useful life creates significant costs to utilities that will be 

borne by consumers and the economy. 
191

Commenters stated that the Proposed Rule threatens to substantially raise electric rates in 

Montana. The commenters stated that compliance costs will increase the cost of providing 

electric service, which costs will in turn be passed on to residents and businesses (including 

LCG's members) in Montana in the form of higher rates (both retail and wholesale). The 

commenters stated that Montana residents and businesses may also simultaneously be saddled 

with financial responsibility for assets that are stranded as a result of premature retirement, even 

when these assets still have remaining useful lives and value. The commenters stated that the 

Proposed Rule raises significant electric reliability concerns. The commenters stated that the 

Proposed Rule incorporates generic and unsupported expectations of levels of integrated 

renewable generation and EE that, when applied to Montana, are extremely ambitious, almost 

certainly unachievable, and uneconomic under traditional standards.

Commenters stated that in 2013 the Neal 4 plant underwent a substantial environmental project 

of which Bancroft's share was approximately $850,000. The commenters stated that if the use of 

the Neal 4 unit is decreased to comply with the proposed plan additional resources will need to 

be added to replace it. The commenters stated that the stranded cost of the environmental 

upgrade and the cost of new resources places a great risk on the 732 residents of Bancroft. 

Commenters stated that if, as the EPA' s IPM model indicates, the State of Louisiana will likely 

find its best compliance option to be to direct the retirement of RPS-2, Lafayette Utilities System 

(LUS) would be required to replace more than 50% of its generating capacity and more than 63% 

of its energy requirements with other generation alternatives. The commenters further stated that 

this would take new legislation, as neither LUS nor the municipalities that comprise the 

Louisiana Energy and Power Authority ("LEPA"), are subject to Louisiana Public Service 

Commission ("LPSC") regulation, and this requirement would have a crushing impact on a 

relatively small municipally-owned utility (and its customers, not shareholders) which has very 

recently invested over $70 million for MATS compliance measures at RPS-2. The commenters 

noted that the analysis and financing for this project assumed planning for the unit until 2032. 

The commenters described in a table (titled: "Projected Rodemacher Environmental Compliance 

Costs") that the estimates for replacing RPS-2 with a similar amount of combined cycle capacity 

will result in a $738 million (20 year net present value (NPV)) increase in electricity costs, 

resulting in an average cost increase of 36.5 mills/kWh (an approximate increase of 43% for both 

residential and commercial customers). The commenters assumed that average monthly 

residential usage of 1266 kWh (estimate based on 2012-2013 actual residential billings) 

continues, this would increase the average LUS residential utility bill by over $550 per year, or 

more than 1 % of the average Lafayette area family's annual income, a very significant amount to 

the nearly 17% of Lafayette's population living below the poverty level. The commenters added 

that all of this additional cost will be incurred on in addition to the LUS rate increase already 

required to support LUS' 50% share of the nearly $140 million recently expended for MATS 

compliance projects. The commenters stated that the LUS' economic models project that 

replacement of RPS-2 energy with generation from existing resources would be even more 

expensive due to: a) the need for investor-owned utilities, which now own nearly all of the 

NGCC capacity in Louisiana, to make a profit on their investments; and b) anticipated NAAQS 

compliance costs in the early 2020s. Furthermore, the commenters stated that as pointed out by 

the Louisiana Department of Environmental Quality ("LDEQ") in comments filed on September 

14, 2014, the amount of existing NGCC capacity available has been significantly over-estimated 

by the EPA. Therefore the commenters noted, the cost of securing existing capacity is expected 
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to be even more expensive, driving LUS even more strongly toward replacing RPS-2 if emission 

reduction requirements are not reduced to reflect the reality of the state's situation. 

Commenters stated that EPA focuses only on whether EGUs may be required to make substantial 

capital investments late in the useful life of an EGU and fails to recognize that many owners 

made prior investment decisions based on expected future operations. The commenters remarked 

that PPL Energy Supply's plants in Pennsylvania and Montana, and others like them operating in 

competitive power markets, are not nearing the end of their useful lives. The commenters stated 

that EPA's proposal, if implemented, could result in premature plant shut downs, translating into 

millions of dollars of sunk costs, and the forced retirement of coal-fired units will have 

particularly severe consequences for merchant generators like PPL Energy Supply. The 

commenters contended that because coal-fired assets would have very little salvage value, forced 

retirement of coal-fired generation could well mean bankruptcy and dissolution for many 

merchant plants, generating companies and ancillary services. 

Commenters stated that all the nuclear, wind, and solar capacity calculations assume that, by 

2020, coal-fired energy production in Virginia is reduced by two-thirds from 2012 levels. The 

commenters stated that maintaining coal-fired generation in Virginia that is greater than onethird of 2012 levels - including production from plants with significant investments which if 

retired would result in stranded costs to Virginia residents and businesses - would require even 

more new zero-carbon generation. The commenters stated that from 2005 to 2012, carbon 

emissions from Virginia generation facilities were reduced by approximately 40%. The 

commenters stated that nuclear uprates, heat rate improvements, unit retirements, energy 

efficiency, and the addition of significant new natural gas facilities, have significantly lowered 

carbon emissions in the Commonwealth. The commenters stated that the EPA's goal of providing 

States with flexibility to minimize stranded costs directly conflicts with carbon emission rates 

that, for Virginia, are set so low that compliance options are extremely limited. The commenters 

stated that a more aggressive displacement of existing resources will increase stranded costs, 

which is almost certain to contribute to increased, not decreased, electricity prices in regulated 

States. The commenters stated that Virginia ratepayers served by Appalachian Power Company, 

whose generation facilities are located primarily in West Virginia, face stranded costs associated 

with the carbon emission rates that the EPA proposes for West Virginia. Virginia and West 

Virginia ratepayers have only recently begun paying for more than $2 billion in environmental 

controls necessary for Appalachian Power Company to comply with a 2007 EPA Consent 

Decree. 

Commenters stated that because the proposal would likely result in the premature closure of 

existing power plants, the proposal's requirements amount to a regulatory taking requiring 

compensation because of the uneconomic curtailment it will require. 

Commenters stated that the significant switch of generating capacity from coal to natural gas 

driven by this rule coupled with the accelerating manufacturing use of natural gas and the 

expected future significant export of natural gas for geopolitical considerations has the potential 

to fundamentally alter the natural gas supply supply/demand equation, increase natural gas 

pricing volatility, and impair the US manufacturing renaissance from its full potential as a jobcreating engine of economic growth. The commenters stated that these pressures in the US 

would have a significant detrimental affect not only on the broad US manufacturing base but 
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specifically on the production of secondary (recycled) aluminum given the role natural gas as a 

key input into the secondary aluminum recycling process. 

Commenters stated that the proposed rule would force Mississippi utilities to generate more 

electricity from natural gas, even ahead of lower-cost options. The commenters stated that 

increasing customers' exposure to volatile natural gas prices is bad for business and business 

owners, as well as individual ratepayers. The commenters cited the American Coalition for Clean 

Coal Electricity that the adoption of these regulations will lead to an increase of electricity rates 

of 14-19 percent in Mississippi and would place 3,400 direct and indirect coal jobs in jeopardy of 

being eliminated.

Commenters stated that manufacturers and others who use natural gas for purposes other than 

electric generation will also see projected cost increases up to $50 billion. The commenters 

stated that 187,000 direct and indirect job will be lost in the utility, rail, and coal industries alone 

by 2020 and these sectors will lose cumulative wages and benefits of $208 billion by 2035. The 

commenters stated that by forcing the retirement of a significant portion of the state's electric 

generation capacity, the rule puts at risk the reliability of Texas' electric grid, the failure of which 

can have extremely dramatic financial impacts, as well as public health and safety impacts. 

Commenters suggested that EPA's proposal threatens Pennsylvania's biggest competitive 

advantage, which is low energy prices, and threatens to drastically change the way Pennsylvania 

produces and uses energy. The commenters further stated that the proposed rule will significantly 

economic impact the business community as well as threaten reliability across the grid.

Commenters stated that wholesale electricity prices are rising at an even faster rate in regions of 

the country where the wholesale markets are administered by RTOs subject to jurisdiction of 

FERC.

Commenters estimated costs associated with using all four of the Building Blocks. The 

commenters noted that delivered electricity prices would increase by about 12% on average over 

2017 through 2031. The commenters added that there are other factors that could add to impacts 

and costs:

• Potential infrastructure costs related to natural gas pipelines, electricity 

transmission, and voltage support or ancillary services

• Low projected capacity utilization of non-retired coal units would lead to 

decreases in efficiency (i.e., increases in heat rates)

• additional wear and tear costs from operating coal units in a cycling mode, and 

potentially 

• additional retirements, none of which are included in our modeling

• Costs related to unit ramp rate constraints, minimum load constraints, and delays 

in new build or retirement permitting 
194

Commenters stated that ratepayers will be forced to pay for the retirement of over 3000 

megawatts (MW) of coal production, for new generation sources, and for previously installed 

environmental compliance measures for units that will have to be retired. 

Commenters also stated that the assumption that the capacity factor at all NGCC units can be 

raised to 70% is an overreach into the resource planning authority of utility regulators. The 

commenters noted that rearrangement of fleet dispatch will place additional upward pressure on 

rates.

Commenters noted that EPA has not considered the cost of stranded assets due to investment in 

generation fleets that will now be retired. According to the commenters, these costs will be 

reflected in consumers paying for utility investments that will not be used. 

Commenters also noted that EPA has failed to consider the costs associated with the remaining 

useful life of electric generating units that will be retired. 

Commenters stated that delay in getting pipelines built will drive up Michigan's gas cost and 

increase gas deliverability challenges. The commenters stated that gas customers will be paying 

about $800 million more annually by 2025 due to higher gas prices and Michigan's electric 

customers will pay about $2.4 billion more annually by 2025 due to the displacement of coal by 

gas and up to $2 billion in capital costs associated with building new capacity to maintain 

reliability in light of CPP-driven coal capacity derates and retirements.

Commenters stated that the proposed rules will increase both wholesale and retail rates for 

electricity, and their supplemental power supplier, Missouri River Energy Services (MRES), has 

analyzed the effect of the proposed rule and has informed them that compliance with the carbon 

rule is likely to cause an increase of nearly 20%, which is $35 million annually in our 

supplemental power supply costs. The commenters stated that this is in addition to an increase of 

almost 10%, which is $15 million per year caused by Environmental Protection Agency (EPA) 

requirements for Regional Haze compliance, resulting in a total increase in wholesale power 

supply costs of $50 million annually just to comply with these two rules. The commenters further 

stated that the retail rates will have to be raised to cover these increased costs, putting significant 

economic pressure on residential, commercial and industrial customers. The commenters 

concluded that EPA's projection that the overall effect of the rule will be a decrease in the cost of 

electricity to end- users is flawed in many respects and does not fully account for all of the costs 

required to comply with the proposal. 

Commenters noted that Arkansas has a large manufacturing and industrial base which requires a 

large amount of electricity, and it is important that any new regulation does not drive up 

electricity rates for Arkansas consumers and businesses. The commenters estimated that 

implementing the Clean Power Plan as proposed would increase Arkansas's electricity rates by 

18 percent by 2020, and the commenters concluded that this would be unacceptable. 

Commenters stated that if the proposed rule is approved, Wyoming will revamp nearly all 

aspects of its electricity generation, changing the way utilities regulated by the Commission 

select generation resources, dispatch and operate those resources, consider the useful and 

remaining lives of existing resources, invest in generation and transmission infrastructure, and in 
195

turn, deliver that electricity to consumers within Wyoming. The commenters stated that with 

these sweeping changes come with a host of unintended consequences, including significant cost 

and potential risk in the form of increased rates for electricity and potentially compromised 

reliability of electric service (NERA Economic Consulting projects that the proposed rule will 

cause a 22 percent increase in electricity prices for Wyoming consumers). The commenters 

stated that another study estimates similar impacts, including a peak wholesale electricity price 

increase of 28.2 percent for Wyoming consumers. The commenters stated that NERA goes on to 

say that if Wyoming consumers do not significantly reduce their electricity use, electricity prices 

in Wyoming could increase by 42 percent; they also projects double-digit electricity price 

increases in 42 other states which would result in $560 billion that consumers nationwide will 

have to spend to reduce their electricity use.

Commenters stated that the proposed rule threatens to substantially raise electric rates throughout 

the country as compliance costs will increase the cost of providing electric service, which will in 

turn be passed on to residents and businesses in the form of higher rates. The commenters stated 

that not only will consumers be at risk of funding new investment required by the proposed rule, 

but residents and businesses may also be financially responsible for assets that are stranded as a 

result of premature retirement, even when these assets still have remaining useful lives. The 

commenters stated that the proposed rule places at risk several billions of dollars of investments 

in existing coal fired facilities (including coal leases) that state ratepayers have funded and have 

only partially paid off. 

Commenters stated that the cost analysis EPA used to evaluate the proposed Clean Power Plan 

was inadequate as highlighted in an ERCOT 2014 report, which stated that accelerated resource 

mix changes will require major improvement to ERCOT's transmission system, posing 

significant costs not considered in EPA's Regulatory Impact Analysis. The commenters stated 

that the proposed rule incorporates generic and unsupported expectations of levels of integrated 

renewable generation and energy efficiency that are ambitious, unachievable, and uneconomic 

under traditional standards. According to the commenters, the rule will remove the current 

diversity in our electricity supplies, diversity which saves consumers more than $93 billion in 

lower electricity costs, according to a study by HIS Energy, and which also reduces the 

variability of monthly utility bills by half. The commenters stated that several studies (Energy 

Ventures Analysis and NERA Economic Consulting), show that the EPA plan will cost $366 to 

$479 billion over a 10- to 15-year period, raising electricity costs in more than 40 states, some 

with increases exceeding 20 percent; a study by the National Mining Association shows that if 

we experience another cold winter like the winter of 2013-2014, we can expect wholesale power 

prices to jump 27-55 percent across different regions, in all states, and businesses and households 

to pay $35 billion more for natural gas. The commenters stated that a combination of another 

cold winter followed by a warmer than usual summer would cost consumers $100 bill ion in 

higher electricity and natural gas prices. The commenters stated that the WPSC also uncovered 

significant errors in the cost of complying that had been calculated by EPA and that WSPC 

comments state that the CPP irrationally discriminates against western mine mouth EGUs as 

mine mouth EGUs located near Gillette, Wyoming, depended on low cost fuel to offset the 

expense of air cooling; measures which undermine an original cost advantage undermine the 

economics of the entire plant. The commenters stated that the EPA analysis did not take into 

account the decline in public health and welfare that its proposed rule will cause by the increased 

amount of money consumers will have to pay for electricity and natural gas.
196

Commenters stated that a recent study by Energy Ventures Analysis indicates that the impact of 

the proposal will cause a projected increase in the average homeowner's power bill of 41 percent 

from the year 2012 to the year 2020; further increases would occur as the CPP is implemented 

over the following 10 years. The commenters stated that total energy costs across the residential, 

commercial, and industrial sectors for the same period are projected to rise by 104 percent, an 

unacceptable increase. 

Commenters noted that BPA is subject to multiple federal statutes and regulations. The 

commenters stated that the proposed rule and statewide targets require state implementation that 

is not yet defined, and will likely require coordinated action. The commenters were concerned 

that the EPA has not fully considered the complexity involved in this type of multi-state 

coordination, which has the potential to create confusion and uncertainty for BPA customers and 

the potential for exposure to higher costs. 

Commenters stated concerns that the Proposed Rule will result in large electric rate increases and 

will negatively affect reliability within the Midcontinent Independent System Operator region in 

which Great River Energy operates. The commenters also stated that these concerns are based on 

analyses conducted by various consultants and stakeholders, and including EPA itself. 

Commenters recommended that EPA should incorporate a mandate in the final rule for a periodic 

review of the impact of implementation to consumer rates and a mechanism to mitigate the rule's 

impact on electric consumers. Commenters cited EPA's Regulatory Impact Analysis and that 

EPA projected a 7 percent increase in 2020, a 5.7 percent increase in 2025, and a 4.3 percent 

increase in 2030 for the Midwest Reliability Organization - West region. The commenters 

remarked that these rate increases are in addition to any business-as-usual rate increases 

implemented by utilities annually, and that the average annual retail rate increase for Great River 

Energy's member cooperatives has been 4.04 percent between 2004 and 2013. The 

commenters projected that EPA's estimated rate increase would be more than double the rate 

increases members' customers would otherwise experience. Commenters stated that all 

projections regarding the consumer rate impact of the Proposed Rule are guesses, and that the 

Proposed Rule is extraordinarily complex and the permutations of how compliance will be 

achieved are virtually infinite. The commenters remarked that the positive contributions of 

inexpensive electricity to our national economy cannot be overstated, and that many consumers, 

including those in the territories served by electric cooperatives, are already struggling with 

increased utility bills. The commenters recommended that the final rule include a mandate to 

monitor and analyze its costs and benefits, and provide for a mechanism to pare back the rule's 

requirements in the event those who predict manageable cost increases are not correct. 

Commenters stated that the resulting expense to electricity rates, will have the effect of 

increasing poverty, and reducing business efficiency. 

Commenters stated "EPA's proposal will provide no real benefits to Louisiana or the nation" and 

"The Proposal's positive impact on climate effects is not sufficiently demonstrated." "Despite the 

lack of any significant benefits, modeling by NERA Economic Consulting indicates the Proposal 

will be very costly to Louisiana rate payers. The modeling by NERA indicates the Proposal will 

cause a 16% increase in retail electricity prices for Louisiana consumers with a peak year 

increase of 20%." 
197

Commenters stated that reducing coal utilization at existing power plants will likely result in 

more volatile and expensive electricity prices, but that EPA does not show that these regulations 

will significantly reduce global greenhouse gas emissions. The commenters stated that the EPA's 

proposal would likely make these foreign power producers more attractive to some industries, 

encouraging greater utilization of unregulated coal power plants abroad. The commenters stated 

that 60,104 megawatts of electricity from 381 coal units in 36 states are scheduled for retirement. 

Commenters cited EVA projections that average annual household gas and power bills would 

increase by 35 percent from 2012 to 2020 if these regulations are finalized. The commenters 

stated that EPA's proposal to increase the use of natural gas derived electricity without increasing 

its cost is unrealistic. The commenters stated that EPA's assumption that gas-fired CCGTs can 

operate at an average utilization rate of 70 percent does not reflect real-world experience or 

reasonable modeling of the U.S. power markets. 

Commenters stated that the proposed rule will greatly increase the cost for electricity, natural 

gas, and LPG, and threaten the steady supply of these resources - all to the detriment of Indiana 

farmers and agricultural businesses. The commenters stated that the proposed rule will decrease 

the available supply of natural gas, which will drive up costs for farms and agricultural products 

that farms utilize. The commenters cited NERA projected compliance costs of $41 billion to $73 

billion per year and total costs between 2017 and 2031 of $366 billion to $479 billion (in 2013 

dollars). The commenters stated that EPA ignores the impact of higher natural gas and LPG 

prices that will be created by this rule on other economic sectors, such as residential, commercial 

and industrial heating, agricultural use, and as feedstock in chemical manufacturing. The 

commenters stated that farmers and agricultural businesses are particularly sensitive to increases 

in natural gas costs since they are both significant users of natural gas and LPG, and because 

they are significant users of products such as fertilizers which use natural gas as a chemical 

feedstock. The commenters cited NERA projections under option 1 that electricity prices will 

experience rate increases from a low of 12% to a high of 17% over the period 2017 through 

2031. The commenters stated that natural gas will be in greater demand for electricity generation, 

which leaves questions regarding pipeline capacity and the impact on supplies for residential 

heating, agricultural use, chemical feedstocks and other common uses. The commenters stated 

that the current diversity of energy sources for electrical generation in the United States provides 

a balance of cost, supply, availability, risk and other factors that ensure we have a steady stream 

of relatively low cost electricity and natural gas. The commenters stated that building Blocks 2 

and 3 will disrupt that balance and do not provide the mechanisms needed to ensure costeffective development of new energy sources. The commenters stated that the variability in 

market pricing for gas reflects the intangible nature of the fuel, and that a transition towards 

greater usage of these fuels will increase the nation's vulnerability to reliability problems. The 

commenters stated that existing natural gas pipelines are operating at near capacity today, and 

some regions have inadequate capacity. The commenters stated that in order to create an

infrastructure to ensure it remains consistently cost-effective the country will need to invest in 

thousands of miles of pipelines and millions of cubic feet of storage capacity and that EPA has 

not included the billions of dollars needed for these investments in their cost estimates. The 

commenters stated that natural gas prices are sure to rise above today's lower-than-average levels 

because of increased demand for gas created by new NGCC generation and natural gas supplies 

are prone to rapid price changes due to shortages which lead to incalculable costs. The 

commenters stated that it is uncommon to find natural gas supply contracts that extend for more 
198

than one year. The commenters stated that because natural gas prices were at or near historical 

lows when the proposed rules were drafted, any supply or demand issues will drive prices further 

upward. The commenters stated that it is dangerous public policy for EPA to base regulatory 

decisions on the highly volatile economics of natural gas prices, particularly when the current 

prices are on the low side of the volatility curve. 

Commenters stated that natural gas fired electric generation throughout the United States will far 

exceed that which EPA anticipates in its CPP and that prices will spike as a result of the CPP.

The commenters stated that natural gas-fired generation in Oklahoma will more than double by 

2020, which will place significant upward pressure on natural gas commodity and transportation 

prices. The commenters stated that the EPA has failed to fully assess the direct and substantial 

indirect impacts the CPP will have on the economy as well as the day-to-day functioning of 

society thereby disregarding these price impacts. 

Commenters stated that should natural gas prices return to the volatility seen in past years, the 

diminution of resource diversity from abruptly shuttering the coal plants will increase risk in 

Arizona's electricity market and destabilize electricity prices for consumers. 

Commenters stated that EPA is creating conflicting messages with the goal of making coal plants 

more efficient and then limiting its production and efficiency, with a predilection for natural gas 

generation. The commenters stated that the proposed CPP will change the market dispatch of 

generating units by changing the most economic generating resource to the most environmental 

friendly resource creating a significant cost shift; such a shift in market prices will have an 

adverse impact on consumers. The commenters stated that we will be more dependent on the cost 

of natural gas and although the long term market appears to be stable due to the science of 

fracking, switching fuels to a single source becomes risky and opens the door for price 

fluctuations to the consumers as a result of natural gas prices. The commenters stated that they 

expect to see more development of natural gas plants as long as natural gas is abundant and 

priced competitively. 

Commenters stated that EPA should not be claiming benefits that have already been achieved, 

but rather should be limited to those benefits that are anticipated from the implementation of the 

proposed rule. The commenters stated that with respect to the cost of implementing the proposed 

rule, EPA estimates only 5.4 to 8.8 billion dollars. The commenters stated that first, these costs 

are unrealistically low because EPA assumes that the utilities can easily switch fuels for existing 

sources and build new power plants that rely on natural gas and renewable energy. The 

commenters further stated that EPA also minimizes the cost of the proposed rule because it 

unrealistically assumes that the price of natural gas will remain at its historically low levels for 

the next 25 years; and in addition, higher energy costs and disruption in energy delivery and 

capacity will impose significant new costs on all energy consumers. The commenters suggested 

that when these reasonably anticipated costs are considered, the cost of the proposed rule could 

increase tenfold. 

Commenters cited the U.S. Chamber of Commerce estimated economic impacts. Commenters 

opposed the proposed regulation due to the estimated economic impacts to businesses, 

employees and the nation as a result of requirements that will force the closure of coal-fired 
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EGUs. The commenters listed the following impacts, which have been projected to lower the US 

GDP by $51 billion annually through 2030 per the U.S. Chamber of Commerce: 

• 224,000 jobs lost annually through 2030 by the U.S. Chamber of Commerce; 

• increased cost of living via higher electricity rates, a devastating impact on lowerincome families in Kentucky and other states dependent on coal-fired electricity 

generation; 

• increased cost for industrial and manufacturing businesses upon which the 

economy of Kentucky is highly dependent; and 

• increased volatility and uncertainty regarding future electricity costs for families 

and businesses due to a forced migration to highly volatile natural gas-fired and 

intermittent wind and solar electricity generation. 

Commenters stated that the costs of the capital investment needed for the development of new 

generation sources and transmission projects will be borne by commercial, industrial, and 

residential ratepayers. 

Commenters stated that the WVPSC has determined that the proposed section 111(d) guidelines 

will result in significant price increases and reduce the availability of economical and reliable 

power to West Virginia business customers. 

Commenters stated that the proposed rule will impose new costs and have an economic impact 

on electricity prices affecting commercial, industrial, and residential rates. The commenters 

stated that the costs of the capital investment needed for the development of new generation 

sources and transmission projects will be borne by ratepayers. 

Commenters stated that the proposal overestimates what is technically feasible, and/or entails 

costs significantly higher than those projected by EPA. The commenters stated that if finalized in

its current form, the proposal would substantially increase the rates Wyoming consumers, 

including WIEC's members, pay for their electricity, and could significantly impact the 

reliability of the electrical service they receive. 

Commenters stated that as a rural electric cooperative, the dramatic increase in rates from the 

CPP will exacerbate the difficulty that poor Americans already face with the cost of electricity. 

The commenters stated they are providing EPA with comments on the special considerations of 

the impact of the proposed CPP on the ability of rural electric cooperatives to comply with the 

REA federal mandate that EPA should factor into promulgation of a final rule, if any is issued. 

The commenters stated that they have invested billions of dollars in retrofitting their fossil units 

with state of the art emissions controls and installing new, very low emission generation in order 

to comply with other CAA regulations and members must still pay for them even though the CPP 

will restrict the operation of or force the retirement of this generation. 

Commenters cited EVA that Texas would be amongst the states with the largest economic 

penalty, and that in Texas, annual household electricity and gas bills would increase by more 

than $1,050 in 2020, compared to 2012 representing a 54% increase. The commenters stated that 
200

the impacts of the proposal to Texas alone exceed many of the cost impacts EPA projects under 

the proposal for the entire country. 

American Action Forum Commenters cited an American Action Forum estimate that if the new 

EPA regulations go into effect, Americans could see their electric bills increase annually by 

more than 10 percent - $150 for the average consumer- by the end of the decade. Commenters 

cited an EPA estimate that actual electricity bills received by consumers will increase anywhere 

from 1.1 percent to 3.2 percent in 2020, then decrease several percentage points in 2025 and by 

as much as 8.7 percent in 2030, reflecting "the combined effects of changes in both average retail 

rates (driven by the effects of all four building blocks) and lower electricity demand (driven by 

the fourth building block, demand-side energy efficiency)." The commenters stated that agency's 

optimistic outlook is based on a vague notion that everything will work out the way EPA thinks 

it will, but that the utility industry and TAUC contractor members know that almost never 

happens. The commenters stated that EPA offers no remedy to consumers during the initial 

electricity price spikes in 2020. 

Commenters cited an EPA estimate that actual electricity bills received by consumers will 

increase anywhere from 1.1 percent to 3.2 percent in 2020, then decrease several percentage 

points in 2025 and by as much as 8.7 percent in 2030, reflecting "the combined effects of 

changes in both average retail rates (driven by the effects of all four building blocks) and lower 

electricity demand (driven by the fourth building block, demand-side energy efficiency)." The 

commenters stated that agency's optimistic outlook is based on a vague notion that everything 

will work out the way EPA thinks it will, but that the utility industry and TAUC contractor 

members know that almost never happens. The commenters stated that EPA offers no remedy to 

consumers during the initial electricity price spikes in 2020. 

Commenters stated that EPA's data show that the proposed rule would cause the closure of as 

much as 49 Gigawatts of coal-based electric generating capacity by 2020, and lead to a 25% or 

greater reduction in the amount of coal produced for electric generation in that year. The 

commenters stated that including the MATS rule, the U.S. is facing the loss of 126 GW of coalbased generating capacity between 2010 and 2020, more than 10% of the nation's electric 

generating fleet, and approaching 40% of the nation's coal-fired capacity. The commenters 

stated that reduced power supply from retired plants will lead to increased electricity prices, 

spreading the economic impact to consumers and businesses. The grid will be at increased risk of 

brownouts and blackouts during peak electric demand periods, endangering the public. 17088, 

17091 (1, See Section 8.9 for discussion of reliability.)

Commenters stated that EPA Seriously Underestimates the Cost of Complying with the Rule and 

the Impact of the Rule on Consumer Electricity and Natural Gas Prices. The commenters cited 

Energy Ventures Analysis (EVA) analysis of the impact of the rule that estimated wholesale 

electricity costs will increase by $274 billion, non-power natural gas costs will increase by $80 

billion, and additional capital costs for replacement power will be $53 billion. The commenters 

stated that these costs excluded investments in natural gas pipeline and electric transmission the 

rule will require. The commenters stated that forty-four states will see double-digit increases in 

their wholesale power prices, with 24 states facing increases close to or in excess of 20 

percent. The commenters cited a NERA projection that the total cost of the proposal would be to 

be $366 billion to $479 billion over a 15-year period. The NERA study cited by the commenters 
201

found that the proposal will cause double-digit electricity rate increases in 43 states, and a 12% 

to 17% average increase in electricity prices Nationwide, with fourteen states facing peak year 

electricity price increases that could exceed 20%. 

Commenters stated that in 2020, the average annual West Virginia household electricity and gas 

bills will increase by $750-a 38% increase-and the total annual cost of power and gas in West 

Virginia will grow from $2.7 billion to over $4 billion. The commenters stated that in 2020, the 

average annual U.S. household electricity and gas bills will increase by $680 in 2020-a 35% 

increase-and the total annual cost of power and gas in the U.S. will grow from $475 billion to 

over $750 billion. The commenters stated that U.S. compliance costs could total upwards of 

$366 billion, with 43 states facing double-digit electricity price increases, and CO2 

concentrations would be reduced by less than one-half of a percent, which would result in 

reducing the average global temperature by less than 2/100th of a degree and reducing the sea 

level by 1/100th of an inch. The commenters stated that EPA has failed to consider adequately 

the potential economic impact of its Proposed Rule due to the rise in electricity prices. The 

commenters cited NERA's conclusions that the rule would cost at least $41 billion per year, and 

under one scenario, $73 billion per year, with a total projected cost of $366 billion to $479 

billion over a 15-year period. The commenters stated that the Proposed Rule would cause 43 

states to see a double-digit electricity rate increase, and that nationwide, the proposal would 

cause a 12% to 17% average increase in electricity prices. The commenters stated that fourteen 

states face peak year electricity price increases that could exceed 20%. 

Commenters stated that electricity rates will rise under this rule because using existing sources of 

electricity is less expensive than building new sources. The commenters stated that the average 

cost of electricity from existing coal plants is only $36.4 per mWh compared to new natural gas 

costing $66.3 per mWh, new wind costing $80 per mWh, and new solar costing $80.3 per mWh. 

The commenters cited Energy Ventures Analysis, that power and natural gas costs for customers 

would likely increase by 60 percent in 2020 compared to 2012 -a cost hike of $284 billion. The 

commenters cited NERA estimates that, when all four of the building blocks are options for the 

states, electricity prices would increase by 12 percent on average between 2017 and 2031, and 

when states' options are limited by their resources, electricity prices would rise by as much as 17 

percent. The commenters stated that EPA would thus functionally mandate that Americans use 

less electricity. The commenters cited NERA estimates that, when the consumer share of energy 

efficiency costs is included, the total costs related to electricity rise. The commenters stated that 

in the case in which states can use all four building blocks, electricity-related costs are projected 

to rise by about $34 billion per year between 2017 and 2031, where states are limited by their 

resources that figure shoots up to $48 billion per year. The commenters stated that Americans' 

electricity bills could rise by as much as $210 annually because of the proposed rulemaking. The 

commenters cited Policy Navigation Group that local governments will have to spend more 

money buying electricity to power schools, water treatment plants, municipal buildings, and 

other local government-provided services; municipal governments' fee revenues will likely 

decrease, as consumers spend more on electricity and less on goods and services in the local area 

and therefore do not pay as much in local government fees; and local governments' tax revenues 

will decline, as consumers spend more on electricity and less money on taxable goods and 

services. The comment cited the Virginia SCC staff estimate that costs for Dominion Virginia 

Power "would likely be between $5.5 billion and $6.0 billion on a net present value basis, and 
202

several billions of dollars of investments in existing coal facilities that were made to satisfy 

existing rules would be placed at risk. 

Commenters stated that they had used a mathematical model which included load growth and 

calculated annual cost of compliance for South Carolina, excluding costs of natural gas pipeline 

construction required to source additional generation in the state with reliable fuel supply with 

regard to any scenarios. The commenters provided model outputs predicting 2030 electricity cost 

increases of 12%, 16%, and 22% for residential, small commercial and industrial customers to 

meet a 772 lb/MWh goal in the current economy. The commenters provided model outputs 

predicting 2030 electricity cost increases of 5%, 7%, and 10% for residential, small commercial 

and industrial customers to meet a 990 lb/MWh goal in the current economy. The commenters 

provided model outputs predicting 2030 electricity cost increases of 22%, 28%, and 38% for 

residential, small commercial and industrial customers to meet a 772 lb/MWh goal in a "strong" 

economy. The commenters provided model outputs predicting 2030 electricity cost increases of 

15%, 19%, and 27% for residential, small commercial and industrial customers to meet a 990 

lb/MWh goal in a "strong" economy. 

Commenters cited EVA estimates of a $284 billion increase in annual power and gas costs for 

residential, commercial and industrial customers beginning in 2020 compared to 2012, 

representing a 60% increase over current costs with annual power and gas costs further 

increasing each year post-2020. The commenters cited EVA estimates that annual residential 

power and gas costs would increase by $102 billion beginning in 2020 compared to 2012 and 

would continue to escalate in subsequent years. The commenters cited EVA estimates that 

average annual household gas and power bills will increase by $680 or 35% from 2012 to 2020 

and continue to escalate year-after-year as EPA's proposed rule grows more stringent. The 

commenters cited EVA estimates that annual average home gas heating bills will increase 

roughly $340 or 50% from 2012 to 2020, annual average electricity bills will increase roughly 

$340 or 27% from 2012 to 2020, and that cost increases would significantly affect the U.S. 

industrial sector nationwide, as the total cost for electricity and natural gas would increase 92% 

from 2012. 

Commenters stated that according to South Dakota's economic modeling, it is apparent that EPA 

has misstated the fact that annual electric bills will be reduced for consumers as a result of the 

Clean Power Plan. The commenters stated that some consumers may take advantage of energy 

efficiency programs and help reduce their total energy consumption, however not all consumers 

will do so based on certain energy efficiency market barriers (e.g. more efficient technologies are 

too costly or replacement of existing technology is not yet needed), and that the impacts will be 

even greater for those consumers that are unable to invest in energy efficient technology. The 

commenters stated that SD PUC's modeling identifies there will be adverse rate impacts in the 

state as a result of the Clean Power Plan, that rates will increase drastically and annual electric 

bills for customers will rise as a result. 

Commenters stated that EPA grossly under-estimates the overall cost of the proposed rule, and 

cited a recent study estimating the compliance cost of the CPP at least $366 billion. The 

commenters stated that if the CPP, with its interim rate-based targets, were enacted as proposed, 

Ameren Missouri would need to construct NGCC capacity prematurely, and that the new NGCC 

capacity would be dispatched solely for the purpose of the CPP and outside of normal plant 
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economic dispatch, resulting in increased cost to customers. The commenters stated that the 

resource changes resulting from the interim goals of the CPP would have an estimated cost to 

Ameren Missouri customers of $4 billion due to the new generation and acceleration of other 

new capacity additions and costs associated with uneconomic dispatch. The commenters stated 

that the Agency can mitigate the harmful economic impact of its regulatory program by 

foregoing mandatory interim goals and instead should only set final goals. The commenters 

stated that the overall implementation cost of the CPP in terms of energy prices and reduced 

economic growth is enormous and will be borne by customers and the states for decades to 

come. The commenters stated that if EPA persists with a rule that requires early and significant 

progress toward the final goal, all deadlines should be deferred and made contingent upon SIP 

approval. 

Commenters cited ERCOT estimates that "energy costs for consumers may increase by up to 

20% in 2020" under EPA's proposal, without accounting for transmission and natural gas supply 

infrastructure and other costs. The commenters cited NERA estimates that the proposal could 

cause average 2020 to 2030 delivered electricity prices to jump by 27% relative to a base case 

without the rule, and that the weighted average price increase across all customer classes 

(Residential, Commercial, and Industrial) is projected to be 2.8 cents per kilowatt-hour under the 

proposed standards. The commenters stated that EPA's proposal could cause average 2020 to 

2030 delivered electricity prices to jump by 27% relative to a base case without the rule. The 

weighted average price increase across all customer classes (Residential, Commercial, and 

Industrial) is projected to be 2.8 cents per kilowatt-hour under the proposed standards. The 

commenters stated that residential rates could increase by approximately 3.3 cents per kilowatthour under the proposed standards, a 25% increase, relative to a base case without the rule, 

equivalent to an increase in average household electric bills of $33 per month or nearly $400 per 

year which would impact all Texans but is particularly harmful for those with marginal income, 

such as elderly customers on fixed incomes or low-income customers. 

Commenters stated that EPA understates the costs of the proposal on ERCOT electricity 

consumers. The commenters stated that EPAs modeling implies a 9.9% retail price increase for 

ERCOT by 2020, falling to 3.9% by 2030, however, the NERA analysis estimates that average 

2020 to 2030 delivered electricity prices could jump by 25% or more. 

Commenters stated that current market power prices in competitive markets do not support 

making some capital investments such as a number of heat rate improvements, and this could 

lead to further shut downs of coal plants beyond EPA's assumptions. The commenters stated that 

in the regulated markets, additional costs, if approved by the state PUC, will be passed on to the 

customer through higher prices. 

Commenters stated that no decrease in electricity bills or electricity rates would result from the 

proposed rule, but instead, there will be a substantial increase in the electricity cost for MEAG, 

the 49 public power communities that it supplies, and the residential and business electricity 

consumers in those communities. The commenters cited NERA that nationally, the delivered 

electricity price in cents per kWh would increase by 12%. The commenters cited an alternative 

analysis that considered only two building blocks ("BB 1-2"), it which NERA found that the 

delivered electricity price would increase by 17%. The commenters cited NERA findings that the 

resulting national increase in energy cost to consumers would be $366 billion to $479 billion (in 
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2013 dollars) over the same period, and that for Georgia, the delivered electricity price in cents 

per kWh over the 2017-2031 period would increase by 12% to 13% for the two cases. 

Commenters stated that in 2013, almost 89% of electricity generation in Wyoming came from 

coal and about 10% came from renewable energy resources, primarily wind. The commenters 

stated that Wyoming had the third lowest average price for electrical power of any state in 2013. 

The commenters stated that as the Clean Power Plan forces the existing coal power plants to 

close, replacement renewable or gas power plants will have to be built to accommodate energy 

efficiencies required by this plan. The commenters stated that the resulting increase in energy 

rates are estimated to be as high as 26%. The commenters stated that in addition to rate increases 

due to building new gas or renewable energy power plants, rates will need to be increased to pay 

for the millions of dollars of pollution control upgrades previously installed by existing power 

plants in order to meet other EPA air quality requirements. The commenters stated that this is 

especially true if these power plants are forced to shut down before they can successfully 

amortize these pollution upgrades over their useful operational life. 

Commenters cited a 2012 study conducted by Kadrmas, Lee and Jackson for the North Dakota 

Industrial Commission showing that North Dakota will need an additional 2000 megawatts of 

generation between 2012 and 2032, and the region - including North Dakota - will require an 

additional 2,500 megawatts. The commenters stated that if the proposed rule is not reworked to 

provide flexibility and allow North Dakota coal plants and other energy sources to meet this 

need, prices will inevitable go up and reliability will falter. 

Commenters stated that current market power prices in competitive markets do not support 

making some capital investments such as a number of heat rate improvements, and this could 

lead to further shut downs of coal plants beyond EPA's assumptions. The commenters stated that 

in the regulated markets, additional costs, if approved by the state PUC, will be passed on to the 

customer through higher prices. 

Commenters stated that it was very concerned about the affordability, stability and reliability of 

the supply of electricity in the wake of current and planned power plant retirements and 

especially, proposed reductions in carbon emissions in the U.S. Environmental Protection 

Agency's (EPA) Clean Power Plan. 

Commenters cited Energy Ventures Analysis that by 2020 Colorado residential average annual 

power bills will increase more than $250 and average home gas heating bills will rise by over 

$350 forcing the average family to pay $2,164 for heat and power. The commenters stated that 

industrial rates for electricity will increase by 52% by 2020. The commenters stated that a few 

years ago hotel guests experienced an "energy charge" on their bill at check-out, reflecting thenskyrocketing costs for heating and cooling powered by electricity and natural gas. The 

commenters stated that the result of changing the power generation mix too quickly will be felt 

among all Colorado citizens as well as in the highly-touted tourism industry. 

Commenters cited Energy Ventures that Arkansas would see, on average, a 19% increase in 

wholesale energy prices as a result of the CPP and its carbon regulation. The commenters stated 

that another study has concluded that certain Arkansas residential ratepayers could incur up to a 

40% increase in their electric bills as a result of Clean Power Plan implementation. The 
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commenters stated that the mass replacement of low-cost coal generation will require the United 

States to spend an additional $17.6 billion by 2020 to be spent in compliance and another $53 

billion by 2030. The commenters stated that industrial electricity costs would increase from 

about $65.1 billion in 2013 to $165.6 billion in 2030-a total of 154% by 2030 as a result of the 

CPP. 

Commenters stated that MISO has issued a study finding that the GHG Rule will cut the amount 

of energy MISO generated from coal from 69% to 33% by 2030, with little evidence that natural 

gas, renewables and reduced demand can reliably replace the coal-fired generating units 

expected to retire due to the GHG Rule in either the short or long term. The commenters stated 

that the proposal will significantly drive up energy costs at a time when we are working our way 

out of the longest recession in US history, with negligible impact on global carbon emissions. 

Commenters stated that any loss of wholesale revenues through permit imposed operating hour 

or annual MWh restrictions will result in increased revenue requirement from ratepayers. The 

commenters stated that for OMU ratepayers, the loss of capacity revenues associated with ESGS 

Unit 1 would result in a 5-7% rate increase across all rate classes. The commenters stated that 

considerable heat rate penalties would be associated with generation levels below design which 

would increase the number of MWhs that would have to be reduced. The commenters stated that 

at a minimum, the loss of wholesale revenues associated with the proposed 18% reduction would 

result in an electric rate increase greater than 12%. The commenters stated that OMU projects 

residential rates to increase by over 15% (non-inflation adjusted) between 2015 and 2020 

without considering impacts of proposed the Proposed Rule, and that compliance with GHG 

legislation could increase the potential rate increase for OMU's customers by an additional 40%. 

The commenters stated that EPA's cost analysis in the RIA does not address secondary price 

effects corresponding to the increased costs of goods produced in manufacturing intensive states 

such as Kentucky. The commenters stated that the Kentucky Energy and Environment Cabinet's 

modeling projects that a 10% increase in the price of electricity (10% is conservative) would 

result in a 1.1% reduction in Kentucky's GDP - a loss of $2 billion to the state of Kentucky.

Commenters stated that residential rates in Minnesota are projected to increase by 11 percent to 

14 percent, industrial rates are projected to increase 22 percent, and gas bills are expected to 

increase by 45 percent. The commenters cited MISO projections that the 20-year discounted cost 

of rule within its footprint would be between $55 and $83 billion. The commenters cited an 

analysis conducted by London Economics that the Clean Power Plan would increase wholesale 

power prices by up to 40 percent in MISO by the year 2020. 

Commenters cited a November 2014 report, "Energy Market Impacts of Recent Federal 

Regulations on the Electric Power Sector," prepared by Energy Ventures Analysis that found that 

between 2012 and 2020, all electric and gas customers would spend 60 percent (in nominal 

terms; 37 percent in real terms) more in energy costs. The commenters stated that residential 

increases would be 35 percent (nominal; 15 percent real) while industrial customers would 

experience electric and gas increases of 92 percent (nominal; 64 percent real). For Kentucky 

residents, annual electric and natural gas spending would increase by 45 percent (nominal; 23 

percent real). The commenters cited a study prepared by IHS Energy, "The Value of US Power 

Supply Diversity" that concluded that the loss of fuel diversity in the production of electricity 

will increase retail electricity prices by 25 percent and will reduce the average American 
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household's disposal income by dollar 2,100. The commenters cited a study prepared by NERA 

Economic Consulting, "Potential Energy Impacts of the EPA Proposed Clean Power Plan" (Oct. 

2014), that Kentuckian's can expect 12 percent increases in delivered electricity prices under a 

"state unconstrained scenario" and 21 percent under a "state constrained scenario". The 

commenters cited "ERCOT Analysis of the Impacts of the Clean Power Plan" findings that 

ERCOT consumers could expect retail energy price increases of 14 percent to 20 percent in 2020 

and 5 percent to 7 percent in 2029. The commenters stated that increases in utility rates resulting 

from the proposed CPP compound the affordability issue for WKU and create additional barriers 

to upward educational attainment for our younger generation. 

Commenters cited NERA Economic Consulting projections that the CPP alone will cause a 12-

13 percent increase in retail electricity prices in Georgia plus significant costs that electricity 

consumers would need to spend to reduce their electricity use. The commenters cited Energy 

Ventures Analysis estimates that the annual energy costs for households in Georgia, including 

both electricity and natural gas, to increase by 31% from 2012 to 2020. The commenters stated 

that EPA's compliance cost estimates do not capture the subsequent adverse spillover impacts of 

higher electricity rates on overall economic activity. 

Commenters cited NERA estimates that the proposed Clean Power Plan would cost between $41 

and $73 billion per year, and cause electricity rates to increase between 13 percent and 14 

percent in New Mexico. The commenters cited an analysis conducted by Industrial Energy 

Consumers of America estimating that the Clean Power Plan would increase wholesale power 

prices in the State by up to 23 percent. 

Commenters stated that the four Building Blocks EPA has based the rule on suffer from 

technical and economic problems that will result in this regulation costing far more than EPA 

projects. The commenters cited NERA projections that electricity prices will experience rate 

increases from a low of 12% to 17% over the period 2017 through 2031, and natural gas prices 

will increase from 2% to 29% depending on the scenarios that are executed. The commenters 

cited Energy Ventures Analysis estimates that electricity and natural gas costs for residential, 

commercial, and industrial customers will increase by 60% by 2020 because of the GHG ESPS, 

the MATS rule and other EPA regulations aimed at the electric power sector. The commenters 

stated that this will cost $284 billion dollars by 2020, with the total cost increasing with each 

additional year of implementation and residential energy costs will increase by $680 per year by 

2020. The commenters stated that total energy costs for industry will increase by 64%, a $200 

billion increase that will be passed on to their customers or result in factory closures and 

operations moving overseas.

Commenters stated that hurdles to construction in Wyoming include limited site acquisition 

potential and complex endangered species issues. The commenters stated that assuming the 

construction of natural gas generation could be done by 2020 is an unrealistic assumption, given 

engineering, permitting, transmission and construction timelines. The commenters stated that 

even assuming the completion of an NGCC plant sometime in the near future, the cost to do so 

will also have an impact on MRES and its members, as shutting down a unit and replacing it 

with an NGCC plant would cause an additional increase in wholesale costs of 20%, over and 

above the 10% cost increase caused by the installation of the SCRs. The commenters stated that 

as a result, its member community of Pella, Iowa, which receives 100% of its power from 
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MRES, will experience an increase in its wholesale costs of 30% just after we have undertaken 

major projects to reduce CO2: Pella has retired its local coal plant and MRES is constructing a 

new 36 MW hydroelectric facility near Pella. The commenters stated that rate increases of this 

magnitude endanger economic development and present a very real potential that electricity will 

become unaffordable for the poorest among us and make electricity more expensive for facilities 

in the United States and potentially cause companies to abandon plants and relocate overseas. 

Commenters stated that over-reliance on any one fuel source creates extraordinary volatility and 

risks for consumers and the economy. The commenters stated that when 8,358 MW of coal 

generation are forced to retire (as per EPA's estimates for 2020) as a result of Block 2, numerous 

Texas jobs will be lost and the resulting increase in natural gas price will create more volatility 

and significantly higher retail prices for Texas electric consumers. 

Commenters cited NERA Economic Consulting projections that the CPP will cause a 12-13% 

increase in retail electricity prices in Georgia, plus the significant costs that electricity consumers 

would need to spend to reduce their electricity use. The commenters cited a projection by Energy 

Ventures Analysis that the annual energy costs for households in Georgia, including both 

electricity and natural gas would increase by 31% from 2012 to 2020. The commenters cited the 

North American Electricity Reliability Corporation (NERC) conclusion that the agency's 

proposed regulatory deadlines "would increase the use of controlled load shedding and potential 

for wide-scale, uncontrolled outages." The commenters stated that during the 2014 polar vortex, 

some regions of the country experienced a price spike on the electricity spot market and demand 

for natural gas in excess of supply, which would have led to interruptions of electricity service if 

other generating resources - particular those powered by coal - were not there.

Commenters stated that prices are projected to increase if Montana ultimately adopts any of the 

compliance scenarios recently identified by the Montana Department of Environmental Quality 

("MDEQ"). The commenters stated that MDEQ ignored the required build-out of the 

transmission grid to support the required increase in renewable energy generation and assumed 

that wholesale market prices would fully compensate Montana developers for their costs. The 

commenters stated that the net cost to Montana retail customers would range from $1.7 to $2.7 

billion (2013 NPV), with price increases ranging from 13% to 21%. The commenters stated that 

EPA did not disclose its pricing models in the Proposed Rule. 

Commenters cited NERA Economic Consulting that Ohio would see average annual electricity 

rates increase by 12 percent, and across the entire United States, these increases are expected to 

result in a total of $366 billion in new expenditures for consumers.

Southwest Power Pool Commenters stated that replacing coal-powered generators with natural 

gas generators will increase the cost of electricity for consumers, increase the volatility of 

electric prices, and decrease overall system reliability. The commenters stated that by shifting 

Arkansas's baseload energy fuel from coal to natural gas, electric reliability will be dependent on 

the ability of natural gas generators to contract for firm natural gas transmission rights and 

subject to the increased costs associated with these rights. 

Commenters stated that adoption of the proposed rule will result in a resource portfolio that is 

unreasonably leveraged toward natural gas-fired generation. Such a shift would be imprudent 
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from economic, security, and reliability standpoints. The commenters stated that the 

diversification of Arizona utilities' resource portfolios not only affects reliability but directly 

impacts rate base. The commenters stated that the rates that ratepayers ultimately pay include the 

utilities' costs to provide service. 

Commenters stated that the lion's share of the cost to generate electricity is the fuel cost and that 

historically, coal price annual increases have been modest but gas prices have fluctuated wildly 

over the past 40 years.

Commenters stated the EPA's bad policy will result in increased costs to be shouldered by every 

man, woman and child in the United States, which will ultimately make us all losers in the end.

Only five source categories have been subject to regulation under section 111(d). Where EPA 

has regulated existing sources under section 111(d), the impact of the rule was generally limited. 

In one rule, EPA regulated a source category that contained as few as 31 sources. In another, 

affected source categories existed in only a limited number of states. The only previous 

application of section 111(d) to regulate a common source category was projected to impose 

annual costs of about $90 million. EPA's current section 111(d) proposal, with an annualized of 

over $8.8 billion and affecting 1,228 sources, will have a substantially greater impact than any of 

these past section 111(d) regulations.

Commenters stated that since 2005, CO2 emissions from all fossil fuel plants have decreased by 

13 percent, and many states highly dependent on coal based generation have already achieved 

significant emission reductions, but still face the additional burden of further reducing the CO2

emissions on the short time table set by the EPA's proposed rule. Commenters recognized that 

the states will have flexibility in developing the measures to achieve the CO2 emission reduction 

goals called for by the Clean Power Plan; however, the stringency of the state reduction goals 

will nonetheless have the effect of dictating for the first time how states regulate the generation 

use of energy. Commenters continued that EPA projects that the proposed CO2 reductions would 

reduce U.S. coal production for electric generation by 35 percent from 2009 levels by the year 

2020, with a comparable reduction of coal based electric generation, and even larger regional 

coal production reductions are projected by 2020 for Appalachia, a 63 percent reduction in the 

west, a 47 percent reduction. 

Commenters said as proposed, the Clean Power Plan could leave residential, commercial, and 

industrial U.S. consumers exposed to less reliable, more expensive, and more volatile electric 

markets in the future.

Commenters stated that by usurping the role of states under 111(d) and justifying reductions at 

the source category with outside-the-fence measures at unregulated entities, EPA's CPP sets 

dangerous precedent for other source categories. Commenters stated that EPA should not 

proceed with additional GHG standards of performance for other source categories for the 

following reasons: EPA has no legal obligation to do so; source categories in the manufacturing 

sector require consideration of impact by a broad range of factors that EPA has not considered 

and in some cases has not had to consider in its proposal for power plants, such as industry 

economics, geography, federal and state incentives, transportation systems, ownership structures, 

foreign competition, profit margins, and customer bases; regulating GHG emissions from the 
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manufacturing sector is neither necessary nor sensible at this time, particularly given that so 

many industries have already been reducing GHG emissions through voluntary and extensive 

energy efficiency initiatives; imposing uniform GHG standards of performance on other source 

categories could disadvantage these sectors by making them less competitive on the global stage 

and will translate into significant job losses and reductions in economic activity without actually 

reducing GHG emissions. 

Response 2: Comments on electricity price impacts focused on higher estimates of price 

increases. The comments also mentioned group and regions where increases may be more 

onerous. For example, areas with fewer options for alternative energy sources for heating and 

cooling may be more impacted. People with lower income or who live in more extreme climates 

may experience greater impacts. Comments expressed concern that home energy prices may be 

more volatile because of the rule. 

Under the Clean Power Plan, states will have the ability to mitigate particular impacts for groups 

and regions by choosing how to meet the guidelines. In the RIA chapter 3, the EPA provides

estimates of potential retail electricity price changes. Because states will ultimately make the 

decisions as to implementation of the guidelines, the RIA reflects illustrative estimates of price 

change estimates. These estimates vary by option, region, and year. In the RIA chapter 3,

national average electricity prices in 2030 are not expected to change or rise by less than one 

percent depending upon the control scenario analyzed. Regional estimates of electricity price 

changes range from a price decrease of about 10 percent to a price increase of about 6 percent in 

2030 depending upon the region of the country. These estimates are also reported in chapter 3 of 

the RIA and are comparisons to baseline prices that would occur absent the CPP. EPA also 

estimates the change in electricity bills for consumers taking into consideration potential energy 

efficiency savings. The national average electricity bill is expected to decrease in 2025 by about 

2.7 to 3.8 percent and in 2030 to decrease by 7 to 7.7 percent, again the range depending upon 

the control scenario analyzed.

Commenters also asserted that increases in natural gas prices will occur because of the CPP and 

that those increased prices will be a burden to consumers. In the RIA, natural gas prices are 

estimated to range from a decrease of about 2 percent to an increase of 2.5 percent in 2030 

depending on the illustrative control scenario evaluated. The EPA notes that the EPA estimates 

of potential price changes in electricity and natural gas are significantly lower than those asserted 

by the commenters. See Comment 9 in section 8.6 for EPA’s response to comments stating that 

the CPP will have impacts on low and middle income individuals. Impacts to particular industrial 

consumers will depend upon a variety of factors that are discussed in chapter 5 of the RIA. The 

EPA’s price change estimates are based upon the illustrative control scenarios evaluated by EPA. 

States will develop implementation plans that may differ from those projected by EPA and states 

will have the flexibility to consider circumstances and priorities relevant for their particular areas 

of the country in the development of those implementation plans. 

Comment 3: The impact of changes in energy markets are harmful to other markets. 
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Commenters discussed impacts to American refineries, manufacturing, other businesses and 

hardworking American consumers such as less affordable and less reliable energy, loss of jobs, 

and elimination of fuel diversity. The commenters stated that the proposed EPA rule ignores the 

successful example of our free market and guarantees adverse consequences for nearly every 

consumer and business in the U.S. The commenters further stated that the proposed rule 

threatens our industry's international competitiveness due to higher energy costs. 

Commenters stated that EPA fails to use full economy modeling in order to address impacts 

experience by other industries that rely on coal industries or the communities supported by coal. 

The commenters also added that this failure intrudes on states to make its own decisions on the 

appropriate costs. 

Commenters suggested that EPA now claims economic growth does not require commensurate 

electric energy growth despite economic principles and the EPA regulatory impact analysis 

observations that growth and the availability of electric power in this country has closely 

paralleled the growth in our economy for decades. The commenters stated that states such as 

Missouri that still build cars, process or produce aluminum, process meat and lumber, or have 

other energy intensive industries will be impacted by changes in the electric energy base load. 

Commenters questioned how a reduction in coal could result in a job growth of 28,000 jobs in 

the fuel extraction sector in 2020, as estimated by EPA. The commenters suggested that "when 

the health and welfare of people are adversely affected by the actions of man, some positive 

action is sometimes justified when very limited negative economic activity might occur". 

However the commenters stated that the rule will result in severe economic hardships the 

proposed rule will result in job losses in coal mining states based upon unproven theories of 

climate change and should therefore not be accepted. 

Commenters stated that the GHG ESPS will reduce demand for Indiana coal and result in losses 

of good paying jobs in rural communities. The commenters stated that manufacturing and 

agriculture are significant users of electricity in Indiana and will suffer significant losses if the 

proposed GHG ESPS is promulgated. The commenters stated that manufacturing and agriculture 

in Indiana are dependent on the low cost of electricity. The commenters stated that state's utility 

rate forecasting experts have predicted electrical rates in Indiana will rise by more than 30% over 

the next decade- prior to considering the impacts of the GHG ESPS. The commenters cited 

NERA projections that rates will be 12% more costly each year compared to EPA's projections. 

The commenters cited an Energy Ventures Analysis prediction that electric rates for industrial 

customers will increase by 50% by 2020, and natural gas costs in Indiana will increase by 108%. 

Commenters stated that foreign direct investment (FDI) has also led to the creation of 2,118 new 

direct jobs in 2014, or 45 percent of new announced jobs. The commenters stated that this 

investment will be jeopardized by rising energy costs due to the proposed rule. The commenters 

stated that they were concerned both about their ability to attract new businesses, as well as 

about the ability of current businesses to continue to operate. 

Commenters opined that the Administration's actions have already begun affecting Alabamians, 

and just recently Alabama Power cited federal regulations as the impetus behind its decision to 

alter operations at seven operating units located within three power plants across the state. The 

commenters stated that as part of these transitions, two coal-fired units at the Green County 
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Electric Generating Plant will be converted to gas-powered units, reducing electric generating 

capacity by a third and eliminating sixty jobs located in the heart of the Black Belt. The 

commenters stated further that these job losses have serious consequences in a region which has 

faced declining populations, high unemployment rates, as well as a host of infrastructure 

challenges. The commenters stated concern that the EPA's proposal, if finalized, would impose 

enormous costs and burdens on Alabama workers and their families, and would hinder our global 

economic competitiveness. The commenters also stated that the impact will be felt the deepest in 

states-like ours-where fossil fuels provide a significant share of our electricity generation. The 

commenters also opined that the Administration's claims that energy costs will not be impacted 

by this proposal ring hollow, and that simple economics suggest that the EPA's plan will 

undoubtedly increase electricity prices, which will hinder-not help-economic growth. The 

commenters stated that Alabama has historically seen lower than average energy costs, in part 

because our state has been blessed with an abundance of natural resources that can be harnessed 

to power our homes and businesses and to make life better for our citizens. 

Commenters stated that there was potential for the impacts of this rule to cascade through the 

state's regional economy and impact farmers, regional small businesses and communities hardest 

of all as these groups have the least market power to identify, fund and introduce economically 

viable solutions and management alternatives in a manner that is both timely and able to offset 

business, employment and community disruption.

Commenters stated that to cope with the increased energy costs this proposed rule will bring, 

existing businesses in Terre Haute may layoff employees, move to other states or overseas or 

shut their doors, and that new businesses may be deterred from coming to Terre Haute, affecting 

jobs, local tax revenue and the overall economic health of Terre Haute. 

Commenters stated they are very concerned that the CPP will place a major stumbling block in 

front of the progress seen in manufacturing and the economy generally over the past few years. 

The commenters stated that affordable and reliable energy supply has lowered costs for 

businesses and households across the country while spurring economic growth and job creation. 

The commenters stated that EPA needs to more carefully consider the economic impact of the 

CPP and the damage it could do to our ongoing recovery and economic prosperity in the decades 

to come.

Commenters stated that EPA should consider the costs to manufacturers, consumers, and the 

economy against the limited benefits to the environment when proposing rules and regulations. 

The commenters stated that business and consumers are not opposed to the programs that benefit 

the environment, but oppose efforts that produce an undue burden on the economy. 

Commenters expressed concern that the South Carolina goal of 772 lbs CO2/MWh cannot be 

achieved solely through renewable generation and EE. The commenters predicted that if underconstruction nuclear does not count toward compliance, despite the costs of overcoming current 

capacity constraints, electricity providers will turn to natural gas-fired generation as the means of 

satisfying their obligation to serve and to meet the emission goal. The commenters stated that the 

capital investments required to plan, site, permit, and build new interstate natural gas pipeline 

infrastructure will likely displace capital available for renewables and EE, and utilities would 

pursue the economies of scale of natural gas to the detriment of the other Building Blocks. 
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Commenters stated that 100 percent of California, the state from which we receive 90 percent of 

all the fruits and vegetables grown in this country, has been in severe or exceptional drought 

since May. The commenters stated that the USDA retail price report on fruits and vegetables 

dated July 25th shows retail prices in June on most items up 11 to 20 percent over a year ago, 33 

percent up on plums. The commenters cited NPR reports that the wholesale price of coffee has 

doubled since January, due in large part to the continuing drought in Brazil and Vietnam. 

Commenters stated that the costs utilities will incur in order to comply with the new standards 

will be passed on to their customers - in many cases, farmers and ranchers. The commenters 

stated that farmers and ranchers are price takers and not price makers, so they lack the ability of 

many other sectors of recouping their costs. The commenters stated that the Proposed Standard 

will negatively affect all Americans, including farmers and ranchers, who are already committed 

to producing cleaner, renewable fuels. The commenters stated that farmers and ranchers, and 

agriculture in general, are particularly disadvantaged, however, because of the energy intensive 

nature of producing food, feed, and fiber. The commenters stated that the Proposed Standard will 

increase the cost of doing business and create very limited environmental benefit. The 

commenters stated that farmers will not only be impacted by higher electricity and natural gas 

prices in the future, but will get hit with higher prices for other important inputs. The 

commenters stated that increases in other energy prices, fertilizer and machinery, will hold 

negative consequences for agriculture while at the same time making U.S. farmers and ranchers 

less competitive internationally. The commenters stated that in many cases, higher production 

costs due to increased energy prices lower net producer returns and farmers will respond by 

reducing overall production. 

Commenters stated that the costs utilities will in incur in order to comply with the new standards 

will be passed on to their customers including farmers and ranchers. The commenters stated that 

farmers and ranchers are price takers and lack the ability of many sectors of recouping their costs 

by passing them on to the customers. The commenters stated that higher energy costs for farmers 

and ranchers means higher input costs.

Commenters stated that a diverse energy supply keeps energy costs reasonable, which for many 

farmers competing in a global economy, may mean the difference between success and failure of 

their livelihoods. The commenters stated that the rule will raise nationwide electricity prices 

between 6 and 7 percent in 2020 and up to 12 percent in some locations, and annual compliance 

costs will range from $5.4 to $7.4 billion in 2020, and up to $8.8 billion in 2030. The 

commenters stated that the costs utilities will incur to comply with the new standards will be 

passed on to their customers, including farmers. The commenters stated that the rule stands to 

further burden Michigan residents, especially farmers who may not live in the dense residential 

areas where utilities often focus programs incentivizing energy efficiency and alternative energy 

production. The commenters stated that loss of productivity in the vital agricultural sector due to 

higher energy prices would have a profound impact on Michigan. 

Commenters stated that farmers and ranchers are primarily end-users of the products from power 

plants and, thus, must completely depend on those who operate and own them. The commenters 

stated that the Proposed Standard would cause severe economic hardship not only for Kansas 

farmers and ranchers but also for our middle- and low-income neighbors across the state.
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Commenters cited NERA estimates of increases of twelve percent on delivered electricity prices 

to Georgia consumers as a result of the proposed rule. The commenters stated that these costs 

will be passed on to, and farmers have no way to recoup that increase in energy costs.

Commenters stated that the rule will put many farmers in a position to make difficult business 

decisions and could put some out of business. The commenters stated that EPA's plan would do 

little to address the problem it seeks to solve (merely reducing fossil fuel emissions without 

producing a measurable impact on world temperature or climate) and especially harm the 

agricultural sector because of the energy-intensive nature of most types of farming.

Commenters stated that agriculture has been doing its part in supporting energy independence 

and leading the way to a cleaner renewable energy future. The commenters stated that farmerowned cooperatives and limited liability companies account for nearly half of the ethanol 

production in the United States and many have made substantial commitments to bio-energy by 

investing in ethanol, biodiesel, biomass and advanced biofuels facilities and building additional 

terminal storage for renewable fuels in strategic geographic locations. The commenters stated 

that major investments by the agriculture sector also have occurred with the installation of 

methane digesters and greater use of wind energy, yet the proposed standard will negatively 

affect all Americans, including farmers and ranchers, who area already committed to producing 

cleaner, renewable fuels. 

Commenters stated that agriculture is often energy-intensive and depends on the availability of 

reliable, affordable energy, and a diverse energy supply keeps energy costs reasonable and 

reliable. The commenters stated that natural gas is used to power irrigation pumps and in the 

fertilizer used to produce crops; diesel is used in our farm equipment, propane is used to heat 

poultry and hog houses and to dry corn and soybeans once they have been harvested, and coal is 

used predominately by electric cooperatives, powering farms, ranches and communities all 

across rural America. The commenters stated that policies addressing carbon emissions would 

have vast, wide-ranging impacts both on America's farmer cooperatives, particularly food 

processors and on individual farmers, ranchers and growers. The commenters stated that farmer 

cooperatives and their member-owners are very concerned that regulatory programs to reduced 

greenhouse gas emissions will result in higher business costs, especially those related to energy, 

fuel, and fertilizer and if increased costs are passed along to the consumer, American agriculture 

will lose its competitive edge in the global marketplace. The commenters stated that they do not 

support adopting policies that would impose new costs on U.S. agriculture producers while 

letting our foreign competitors avoid such costs and believe that farmer cooperatives or their 

producer-owners will not continue to receive an affordable and reliable supply of energy. 

Commenters stated that by the end of this century, the northeast region is expected to see an 

additional 57 days per year, nearly two full months of temperatures over 95 degrees. The 

commenters stated that agriculture currently employees more people in Pennsylvania than the 

extraction of coal, oil and gas combined, and it is projected to suffer from the extreme heat, 

droughts and storms and can shed many thousands of jobs.

Commenters stated that Americans will be hit repeatedly with higher prices as businesses pass 

higher costs onto consumers. The commenters stated that if a company had to absorb the costs, 

high energy costs would shrink profit margins and prevent businesses from investing and 
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expanding. The commenters stated that cutbacks result in less output, fewer new jobs, and less 

income. The commenters stated that the impact of a revenue-neutral carbon tax starting at $37 

per ton in 2015 through 2030 would be substantial, including an average employment shortfall of 

nearly 300,000 jobs; a peak employment shortfall of more than 1 million jobs; 500,000 jobs lost 

in manufacturing; an aggregate GDP loss of more than $2.5 trillion (inflation-adjusted); and a 

total income loss of more than $7,000 per person (inflation-adjusted). The commenters stated 

that the Energy Information Administration (EIA) has analyzed the economic impact of a 

$25/ton carbon tax using essentially the same model and found more than $2 trillion in lost GDP 

from 2014 to 2030 and a peak employment differential of 1 million lost jobs. 

Commenters stated that manufacturers rely on secure and affordable energy to compete in a 

tough global economy, and that manufacturers' recent gains are largely due to the abundance of 

affordable energy we now enjoy. The commenters stated that manufacturers across CSX's 23-

state network, have invested more than $14 billion in rail-served facilities, creating more than 

14,000 jobs over the last five years. The commenters stated that in 2013, $3 billion in customer 

investments generated more than 1,600 new job opportunities. The commenters stated that 

economic productivity and environmental progress could be undermined by the Proposed Rule 

and EPA's failure to analyze foreseeable economic impacts. 

Commenters stated that the proposed rule will severely impact coal industry members, workers 

in allied industries such as rail transportation, equipment sales and manufacturing, and the 

communities where those activities are located. The commenters stated that this regulation will 

put Colorado citizens at risk for lost jobs and higher electricity costs. The commenters stated that

by reducing the U.S. fleet of coal-fired generating units by more than one-third by 2020, the 

regulation will place U. S. consumers at risk of "rolling blackouts" and service disruptions. 

Commenters stated that the CPP will drive manufacturing and jobs out of state and overseas. The 

commenters stated that the proposed rule will impose costs on U.S. businesses in numerous ways 

without meaningfully reducing global GHG emissions. 

Commenters stated that the cost estimates fail to reflect or capture the subsequent adverse 

spillover impacts of higher electricity rates on our nation's overall economic activity. The 

commenters cited an analysis by NERA Economic Consulting indicating that average U.S. 

electricity prices would increase by 12% per year and the total costs of the rule could be between 

$366 billion and $479 billion over a 15-year timeframe. The commenters stated that many of 

these costs will have to be absorbed by residential, commercial and industrial energy consumers. 

The commenters stated that higher energy prices disproportionately harm low-income and 

middle-income families. The commenters stated that the Proposed Rule would result in a direct 

loss of 52,000 jobs in the electric utility, mining and rail sectors due to plant closures. The 

commenters stated that an additional 100,000 indirect jobs are at risk for loss in communities 

affected by the closures, and that job losses would be concentrated in, "relatively poor, rural 

areas that are least able to afford the loss of high-wage skilled jobs." 

Commenters stated that water and wastewater utilities consume at least 1.8% of electricity 

nationwide and will face at least $414 million in increased electricity costs by 2020 due to the 

CPP. The commenters stated that an increase in the cost of electricity to water utilities from the 

CPP means that fewer funds will be available for other high priority activities (such as 
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infrastructure repair) and/or that water and wastewater rates and charges will need to increase to 

offset the increased power cost. The commenters stated that a win-win scenario of reducing the 

financial challenges and furthering the overall goals of the CPP can be achieved by encouraging 

states to offer financial assistance/incentives to the water sector. 

Commenters stated that the SPP region has spent in excess of $8 billion on transmission 

investments, of which Kansas electric customers are paying for approximately 20 percent, and 

that these investments may not have been needed based on where SPP's projected new 10,100 

MWs of generation are located, but that Kansas' ratepayers will still be required to pay for these 

investments regardless of whether they are needed in the future. The commenters stated that the 

KCC can address cross-subsidy issues within the context of setting rates for a single utility but 

the state-wide emissions guideline will create cross-subsidy issues between the customers of 

separate utilities. The commenters stated that the Clean Power Plan identifies the specific utilities 

who own the affected EGUs, but does not address how a state should determine which utilities 

will build new NGCC or renewable energy, nor does the plan identify what DSM energy 

efficiency programs should be used. The commenters stated that the KCC does not have 

statutory authority to allocate the costs associated with the Clean Power Plan to all ratepayers in 

Kansas because a large number of utilities are not rate-regulated by the KCC. The commenters 

stated that if a non-jurisdictional utility does not agree to a compliance plan, the KCC would be 

forced to require jurisdictional utilities to take additional measures to meet the overall emissions 

guideline and subsidize the costs of compliance for non-jurisdictional ratepayers. The 

commenters stated that the EPA has created a high likelihood that cross-subsidization will occur 

between ratepayers of the utilities in the state and that this concern carries over to the EPA's 

proposed multi-state option. The commenters stated that the average cost for Kansas consumers 

will still increase as other states move to a more expensive generation mix and that this subsidy 

will be exacerbated because Kansas' coal units have been retrofitted with pollution controls and 

may remain in service for an extended period. The commenters stated that the EPA does not 

define how a determination would be made as to which states should be held accountable should 

the multi-state plan fail to achieve the region's target emission rate. The commenters stated that 

the CPP, creates significant reliability issues within Kansas and the SPP region and that a 

market-based approach will interject too much uncertainty and risk into the planning process 

used to determine new generation and transmission projects. The commenters stated that Cap and 

Trade programs are subject to changes in the market structure and that it does not believe that a 

market-based approach - such as a Cap and Trade Program - is an appropriate mechanism to 

achieve the significant emission reductions necessary under the CPP, as proposed. The 

commenters stated that it is also possible that the market price of emission limits could escalate 

to a high enough level that certain EGUs would become uneconomic overnight, and that this 

situation could lead to the need for new generation and transmission investment, stranded costs, 

and reliability issues. 

Commenters stated that the system operator generally utilizes a bid-based merit order to dispatch 

generation - that is, supply resources such as power plants submit economic offers which the 

system operator uses to commit and dispatch particular resources from least cost to more 

expensive in sufficient quantities to meet electricity demand, subject to out of merit adjustments 

for reliability based on system and security constraints. The commenters stated that RTO/ISO 

footprints often cross but do not always comport with state boundaries. The commenters stated 

that in some cases one state may have two RTOs/ISOs located within it (e.g., Illinois), only parts 
216

of some states may be in a RTO/ISO (e.g. Kentucky and North Carolina), and even what appear 

to be single state RTOs/ISOs (e.g., California and New York ISOs) rely on exports and imports 

of power which flow across state lines. The commenters stated that each state will be assigned 

varying emissions targets notwithstanding the substantial interstate nature of regional wholesale 

power markets, and unless regional coordination among states is encouraged and facilitated with 

enough time for implementation, there may be unintended market consequences and potentially 

costly inefficient market incentives with respect to how power plants are dispatched. The 

commenters stated that facilitating regional cooperation will allow for the continued cooptimization of cost and reliability that is central to the organized markets that have served 

customers well. 

Commenters stated that forest products facilities are energy-intensive and operate in a highly 

competitive global market, face fierce international competition, and cannot automatically pass 

on higher raw material and energy costs to consumers and still remain competitive. The 

commenters stated that increased costs will adversely affect U.S. forestry products' global 

competitiveness, and the jobs and other economic and social benefits they provide for their 

communities. The commenters stated that European nations and others fully recognize bioenergy 

as carbon neutral in their GHG reduction schemes, highlighting the adverse competitiveness 

impacts of the uncertainty around biogenic emissions. 

Commenters stated that the rule presents a significant threat to American jobs and the economy. 

The commenters stated that increases in electricity costs will place an immense burden on U.S. 

businesses for which affordable energy provides a critical operating advantage in competitive 

global markets. 

Commenters stated that the effective ban on coal-based power will cause the loss of thousands of 

jobs, directly and indirectly. The commenters stated that in order to absorb higher electricity 

costs, businesses will be forced to reduce their workforce and increase the prices of their 

products, leading to an overall rise in the cost of living. The commenters stated that the potential 

combination of price increases and job losses constitutes an unacceptable hardship for Georgia 

families. The commenters stated that relying on less fuel sources is a grave threat to our grid 

security. The commenters stated that effectively eliminating coal from our energy portfolio will 

impede global competitiveness. 

Commenters stated that the delivery of reliable, affordable and environmentally responsible 

energy services to our customers, with the explicit recognition that our energy intensive 

industrial customers need to remain cost competitive in international markets, is a key tenant to 

the economic vitality of its region. The commenters stated that more than half of Minnesota 

Power's electric output is consumed by thirteen large energy-intensive customers, chiefly in the 

iron mining sector.

Commenters cited a National Association of Manufacturers estimate that the EPA rule could 

single-handedly eliminate the U.S. competitive advantage over foreign competitors by removing 

reliable and abundant sources of energy from our nation's energy mix.

Commenters stated that the U.S. should not risk rising electricity prices and diminished fuel 

diversity in the absence of legally binding commitments from China, India, and other major 
217

developing nations. Commenters stated doing so would increase domestic job losses and 

accelerate off-shoring of energy-sensitive industries. 

Commenters stated that EPA estimates do not capture the subsequent spillover impacts of higher 

electricity rates on overall economic activity. The commenters stated that these increases will 

place an immense burden on U.S. businesses, and could eliminate the critical competitive 

advantage that affordable and reliable electricity provides to the American economy. The 

commenters stated that the United Mine Workers Association has estimated that the rule will 

result in 187,000 direct and indirect job losses in the utility, rail, and coal industries in 2020, and 

cumulative wage and benefit losses from these sectors of $208 billion between 2015 and 2035. 

Commenters stated that lacking competitive, stable electricity prices, manufacturers and 

businesses will be driven offshore or out of business. The commenters stated that if industry is 

driven away from the U.S. due to EPA regulations, it will likely be to countries with cheaper 

energy, lower labor costs, and less stringent environmental requirements and thus will have the 

unintended and ironic consequence of raising global carbon emissions and overall emissions. 

The commenters cited Philip Moeller, that EPA is essentially capping the amount of national 

electricity consumption in 2030. The commenters stated that the impacts of carbon reduction 

policies in other advanced economies around the world including Australia and Europe caused 

economic harm and job loss from excessive regulations. 

Commenters stated that U.S.-based energy intensive industries may be less competitive, and 

growth in those industries would be encouraged outside the U.S. The commenters stated that if 

coal consumption in the USA decreases, then coal pricing is likely to follow, making U.S. coal 

more economically attractive by world standards. The commenters stated that without specific 

restrictions, this coal will likely be exported and the goal of reducing the coal usage by U.S. 

utilities will produce little net benefit for GHG emissions on a worldwide basis. The 

commenters stated that EPA should allow and encourage states to take GHG leakage concepts 

into account when developing their State Implementation Plans (SIPs) to adjust reduction targets 

when they would impose an undue cost burden on Energy Intensive Trade Exposed (EITE) 

companies.

Commenters stated that the CPP will diminish our global competiveness. The commenters stated 

that regulations such as this proposal threaten to remove this competitive advantage by 

restricting the available energy sources. The commenters stated that as energy prices become 

more volatile and reliability diminishes, U.S. firms will be less competitive, and those firms 

looking for a new home in the U.S. will look elsewhere. The commenters stated that the 

proposal is unlawful and will be detrimental to the Nation and the State of Wisconsin, 

particularly to our manufacturing industries.

Commenters stated that increased electricity and natural gas prices will decrease manufacturing 

competitiveness, increase the competitive advantage of our offshore competitors, decrease U.S. 

jobs, increase imported manufactured goods and cause a larger trade deficit. The commenters 

stated that the shifting of manufacturing jobs offshore and to countries that have less stringent 

laws and regulations governing the emissions of greenhouse gases and other pollutants entails 

the deterioration of domestic employment and economic activity, as well as increased overall 

emissions worldwide.
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Commenters stated that a number of foreign steel producers are receiving below market rates for 

electricity purchases, and above market rates for excess electricity sales, which constitute a 

subsidy. The commenters stated that policies that raise energy costs on domestic companies 

threaten the competitiveness of the steel industry, which operates in the U.S. under tight margins 

with substantial subsidized competition from overseas.

Commenters stated that it competes in global markets, and its U.S. manufacturing base depends 

on various strategies to control costs, including energy costs. The commenters stated that low 

relative energy costs are a critical element for the global competitiveness of U.S. manufacturers, 

and that significant energy cost increases would put domestic manufacturing at a competitive 

disadvantage relative to competitors in other countries. The commenters stated that the proposed 

rule would increase both electricity and natural gas costs for manufacturing operations and that 

independent analysis suggests that EPA has underestimated the projected costs.

Commenters stated that the proposed rule is designed to drive 115,000 MW of coal-fired 

electricity generating capacity into retirement by 2030. The commenters cited a study that 

indicated that due only to the projected retirements in coal-fired electricity generating capacity 

within the next decade electricity prices would rise in the range of 16-28%. The commenters 

stated that the electricity and related price increases resulting from the proposed rule will 

severely disadvantage energy intensive, trade-exposed industries that operate in the US such as 

primary aluminum production. The commenters stated that electricity accounts for 

approximately one third of the input costs for primary aluminum and increases in electricity cost 

and uncertainty regarding the future supply and predictable cost of electricity arising from the 

proposed rule will fundamentally affect the business prospects for US aluminum smelting. The 

commenters stated that much of the shuttered US production has been supplanted globally by 

new production capacity added in China that is powered by coal- fired electricity generation and 

this rule will likely further exacerbate that trend.

Commenters cited EVA that by 2020 these regulations, along with other changes in energy 

prices, will increase residential electricity and natural gas costs by 27 and 50 percent, 

respectively, from a 2012 baseline. The commenters stated that EVA expects the average 

electricity rate for industrial power to increase from 6.7 cents in 2012 to 10.5 cents in 2020, an 

increase of 56 percent. The commenters stated that such cost increases would put American 

goods and services at even greater competitive disadvantage, and that if electricity rates become 

too high, businesses with operations in the U.S. could conceivably relocate to other countries in 

the world with more affordable electricity rates.

Commenters stated that one important effect of regulating carbon emissions is that energyintensive industries will move to countries where carbon emissions are not regulated and the 

price of energy is lower. The commenters stated that this migration away from the United States, 

known as "carbon leakage," results in both a drain on the United States economy and a reduction 

in the rule's projected carbon benefits. The commenters stated that EPA's cost-benefit analysis 

fails entirely to take carbon leakage into account. The commenters stated that carbon leakage is 

not limited to electricity generators, and that raising the cost of energy by regulating power 

plants puts pressure on energy-intensive industries-not just energy generators-to move overseas 

where energy is cheaper. 
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Commenters stated that if EPA adopts policies that substantially increase the cost of energy, 

thereby, decreasing the competitiveness of United States industries, investments and emissions 

will be sent to other, less efficient countries with higher CO2 emissions intensities. The 

commenters stated that overly restrictive and costly United States policies to reduce emissions 

will not only be offset by the rapidly increasing emissions from other countries, but could 

actually result in a net increase in global emissions. 

Commenters stated that if regulations such as the Proposed Rule force energy options off the 

table, such as by the forced early retirement of coal-fired power plants, energy prices will 

become more volatile, costs will increase, reliability will be threatened and ultimately U.S. firms 

and facilities such as NYS and NYS will be less competitive. The commenters stated that this 

will negatively affect the ability of American manufacturers to sell their products in foreign 

countries, and also give foreign imports further unfair advantages in the U.S. market. The 

commenters stated that if the Administration adopts policies that substantially increase the cost 

of energy - thereby decreasing the competitiveness of U.S. industries - investments and 

emissions will be sent to other, less efficient countries with higher CO2 emission intensities. The 

commenters stated that, overly restrictive and costly U.S. policies to reduce emissions will not 

only be offset by the rapidly increasing emissions from other countries, but could actually result 

in a net increase in global emissions. 

Commenters stated that the EPA should consider a reasonable path forward that does not exceed 

EPA's statutory authority, that supports American jobs and the economy, that maintains electric 

reliability, that does not place American industry at a competitive disadvantage with industry in 

other countries, that is based on a realistic global plan that is practically enforceable, and that 

allows all our energy sources to play in a role in America's energy future while maintaining 

America's low cost energy competitive advantage. The commenters stated that NSA and NYS 

produce steel with much lower emission rates per unit of output, including for greenhouse gases, 

than many other integrated domestic and foreign steel mills, including Chinese, Russian and 

Indian steel mills. 

Commenters stated that because Texas businesses compete on a global scale, rising electricity 

prices resulting from the proposed standards will place the state, and the nation, at a 

disadvantage globally. The commenters stated that some businesses would choose to move 

overseas, taking their emissions - which will be less controlled or uncontrolled altogether - and 

their jobs with them. 

Commenters stated that since energy is commonly one of the highest costs and key inputs to 

energy intensive industrial companies, any regulation which increases electricity prices while 

reducing electricity reliability will necessarily harm the international competitiveness of U.S. 

industry and ultimately cost good, family sustaining jobs. 

Commenters stated that compliance with the proposed rule will significantly increase the cost of 

producing manufactured goods in the US, make US manufacturers less competitive with foreign 

manufacturers, and result in loss of American jobs. The commenters cited Energy Ventures 

Analysis findings of many flaws in EPA's underlying assumptions about power plant process 

efficiency improvements, non-hydro renewable energy expansion and rapid growth in consumer 

energy efficiency that were used to calculate state emission rate limitations. The commenters 
220

stated that EVA also found that EPA's assumptions are contrary to power industry practices and 

outside projections by the U.S Department of Energy (DOE) and other independent forecasts. 

Commenters stated that the Clean Power Plan does not address the leakage problem, that higher 

energy rates lead to higher production costs and most industries cannot easily pass along those 

higher costs to their customers; thus making US industries less competitive and vulnerable to 

foreign competition. The commenters stated that the EPA's plan would make it economically 

infeasible for numerous businesses to remain in the US; thus causing potential massive job 

dislocation. The commenters stated that the evidence points to regulations that were drafted by 

wealthy climate activists and special interest groups without regard for the impact these overzealous regulations would have on American families and businesses. The commenters stated 

that there does not appear to be a scientific-based justification for the EPA's 30% CO2 reduction 

proposal. 

Commenters stated that if the CPP is adopted the substantial increase in the cost of energy could 

threaten the competitiveness of American manufacturing, and the result would be an incentive 

for manufacturing investment, and associated CO2 emissions will migrate to other, less efficient 

countries with higher CO2 emissions intensities. The commenters stated that overly restrictive 

and costly U.S. policies to reduce emissions will not only be offset by the rapidly increasing 

emissions from other countries, but could actually result in a net increase in global emissions.

Commenters stated that the manufacturing sector consumes 26% of U.S. electricity and 29% of 

U.S. natural gas, and requires affordable energy prices to compete with global competition, 

create jobs, and to generate economic growth. The commenters stated that as electricity and 

natural gas prices rise, manufacturing facilities move overseas to remain competitive. The 

commenters stated that jobs as well as GHG also move overseas, referred to as "GHG leakage." 

The commenters stated that by creating such a costly and burdensome regulation, the EPA will 

effectively send U.S. jobs overseas thus causing GHG to instead migrate. The commenters stated 

that unless the measures set forth in the CPP are addressed and actually implemented with 

consideration of potential international impacts, all that the CPP will accomplish is to harm the 

U.S. economy by causing job losses or job relocations and increased overall emissions. 

Commenters stated that because the costs of doing business in the United States will be 

expensive, domestic investment is discouraged while investment in developing countries is 

encouraged. The commenters stated that while the United States may demonstrate its leadership 

by reducing our nation's impact on climate change, the price we would pay would be enormous.

Commenters stated that the CPP might make the cost of doing business in the U.S. so high that 

companies move their operations overseas to countries with fewer environmental regulations 

than the U.S. The commenters stated that EPA does no analysis to account for potential 

economic "leakage" that may occur as a result of the CPP and the Agency's assessment of the 

CPP's effect on emissions is incomplete and hopelessly optimistic. The commenters cited the 

Maguire Energy Institute that regulatory burdens of this sort imposed on energy prices and 

energy supply cause plant closures and maximize the potential that manufacturing jobs will 

move overseas. The commenters cited the International Energy Agency that such leakage can 

result in the increase in emissions outside a region as a direct result of the policy to cap emission 

in this region. 
221

Commenters stated that regulating GHG emissions from the manufacturing sector is neither 

necessary nor sensible at this time, particularly given that so many industries have already been 

reducing GHG emissions through voluntary and extensive energy efficiency initiatives. The 

commenters stated that imposing uniform GHG standards of performance on non-EGU source 

categories could disadvantage these sectors by making them less competitive on the global stage. 

The commenters stated that new regulations with high compliance costs that do not account for 

trade exposure will translate into significant job losses and reductions in economic activity 

without actually reducing GHG emissions. 

Commenters stated that U.S. industries are some of the most efficient in the world both in terms 

of energy use and GHG emissions and that in 2010, the GHG emission intensity of the U.S. 

economy, measured by total carbon dioxide emissions divided by GDP, was 31 percent below 

the worldwide average and 67 percent below that of nations that are not part of the Organization 

for Economic Cooperation and Development. The commenters stated that based on current 

projections, worldwide energy-related CO2 emissions will rise approximately 20 percent by 

2035 while U.S. emissions are projected to be relatively flat; thus, the carbon intensity of the 

U.S. economy is set to drop even further when compared to worldwide averages and non-OECD 

nations. The commenters stated that if the Administration adopts policies that substantially 

increase the cost of energy - thereby decreasing the competitiveness of U.S. industries -

investments and emissions will be sent to other, less efficient countries with higher CO2 

emissions intensities and, as a result, overly restrictive and costly U.S. policies to reduce

emissions will not only be offset by the rapidly increasing emissions from other countries, but 

could actually result in a net increase in global emissions. The commenters recommended that a 

more effective policy approach for lowering global GHG concentrations would be to promote 

on-shoring of jobs and production from more carbon intensive countries to the less carbon 

intensive U.S. economy. 

Commenters stated that a report by NERA Economic Consulting estimates that the combined 

effects of the CPP's complete overhaul of Indiana's electricity generation mix will be doubledigit rate hikes, even assuming the Agency's assumptions about each individual component of 

the CPP are indeed accurate. The commenters also stated that Indiana manufacturers rely on lowcost electricity to stay competitive, and the CPP will likely result in layoffs, plant closures, and 

reduced economic competitiveness. The commenters stated that as Indiana Department of 

Environmental Management Commissioner Tom Easterly has testified before the U.S. Congress, 

plant closures will lead to Indiana's manufacturing activity being relocated overseas. The 

commenters concluded that because other countries operate less efficiently than the U.S., the net 

effect of this shift will be an overall increase in carbon pollution as foreign-manufactured goods 

are transported back to the United States. 

Commenters believed EPA completely overlooks that if we don't use our own coal, other 

countries will and that the proposed CPP would sound a death knell for coal-fired power plants 

in the U.S. However, the commenters stated that this does not mean the coal will stay in the 

ground; instead of selling it to U.S. utilities, coal producers will simply export their product to 

foreign countries, where demand for energy is at an all-time high. The commenters explained 

that U.S. coal exports increased by more than 60 percent from 2005 to 2011, and that percentage 

is only expected to increase as energy-hungry countries around the world grow at a rapid pace. 

The commenters noted that many of the countries buying our coal have far less stringent 
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environmental regulations than the U.S. The Clean Power Plan will cause more coal to be 

shipped to these countries - ironically resulting in more air pollution, not less. 

Furthermore, commenters believed that because so many manufacturers compete on a global 

scale, the electricity and related price increases resulting from EPA's rule could be particularly 

harmful to Ohio's energy intensive, trade-exposed industries. Commenter stated such 

circumstances may not actually serve to reduce carbon emissions, but instead simply move them 

to other countries that have not implemented similar restrictions. 

Commenters stated "The scientifically flawed SCC computational process attempts to compute

the future global warming damage to the entire world-wide population that would be avoided by 

each ton of CO2 not emitted by U.S. sources and count that highly uncertain world-wide avoided 

damage as a benefit of the regulation. But the SCC cost/benefit analysis only burdens the U.S. 

economy and population (not the entire world) with the immediate cost impacts from issuance of 

the regulations. This will result in much higher US energy costs and loss of jobs to other 

countries with lower coal-produced energy costs that do not choose to bear the burden of CO2 

emissions control." 

Commenters stated that EPA's projections likely understate the significance of the price 

increases associated with the rule. The commenters stated that even without considering costs 

associated with transmission upgrades and natural gas infrastructure upgrades, ERCOT has 

projected that electricity costs to consumers may increase by as much as 20%. The commenters 

stated that the manufacturing and industrial sectors may face significant price increases both in 

electricity and in other necessary feedstocks, making them vulnerable to international 

competition. The commenters stated that the impact of the proposed rule is further exacerbated 

for industrial sectors that, in addition to being energy intensive, are also trade exposed, that face 

stiff competition from overseas. The commenters stated that actions that adversely affect the 

competitiveness of trade exposed industries are also inconsistent with broader policy priorities to 

increase exports and attract foreign direct investment. The commenters stated that a regulation 

that reduces demand for coal by 25% or more will have a similar effect on petroleum coke, and 

petroleum coke-producers will be harmed both by the lack of demand for petroleum coke and by 

the accompanying price reduction that will result from oversupply. The commenters stated that 

for many industries reliable electricity is an absolute business necessity and electricity outages 

cannot be tolerated, thus they will have to develop contingency plans to prepare for that 

potential. The commenters stated that such plans - and the necessary investments in alterative 

electricity supply options - will also prove costly and add to the economic harm that the proposed 

rule would cause if finalized. The commenters stated that it would be harmed if EPA adopts a 

portfolio approach that allows States to directly regulate entities other than affected EGUs. The 

commenters urged EPA to discourage States from relying on mandatory energy efficiency 

programs aimed solely at industrial facilities in their implementation plans. 

Commenters were concerned that this proposal, if finalized, will directly increase its operating 

costs and shift its capital planning away from spending on projects that will grow its business.

Commenters cited Cleveland State University's Center for Economic Development and Energy 

Policy Center analysis indicating that electricity price had a statistically significant negative 

effect on manufacturing productivity across the states from 1990 to 2010, leading to the 
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conclusion that higher industrial electricity rates in Ohio will most likely be associated with 

lower manufacturing productivity. The commenters stated concerns about how far components 

of this plan, such as EE requirements, will impact manufacturing let alone the impact increased 

costs of electricity will have on an already strained industry. The commenters stated that the 

costs of discovering and implementing EE programs at large manufacturing and industrial 

facilities can be substantial. The commenters stated that EPA is attempting to forever change the 

landscape of how EE programs are implemented, turning it into a federally enforceable program 

with arbitrary approval mechanisms. 

Commenters stated that in order to meet the 2020 targets, utilities will be forced to accelerate 

plans to retire certain coal-fired EGUs before the end of their remaining useful life and will have 

to accelerate plans to construct alternative generating capacity to replace them. The commenters 

stated that the proposal would force the rapid acceleration of coal-fired EGUs retirements, 

costing billions of dollars more than any retirement schedule based on the actual remaining 

useful life of the coal-fired EGUs. The commenters stated that he projected costs of this rule -

along with the multitude of other rules recently issued by EPA - pose a significant risk to the 

future of industrial sectors. The commenters stated that energy intensive, trade exposed 

industries including chemical, plastics, steel, iron ore, aluminum, paper, food and beverage, 

nitrogen fertilizer, glass, industrial gases, oil refining, and cement consume 80% of all energy 

within manufacturing sector and 15.8% of overall U.S. energy consumption. The commenters 

stated that manufacturing consumes 29% of U.S. natural gas and will also be directly harmed if, 

as EPA projects, increased use of natural gas for electricity generation raises the price for natural 

gas. The commenters stated that if the costs of implementation negatively affect the 

competitiveness of trade exposed U.S. industrial and manufacturing sectors, emissions will 

simply shift to foreign countries where there may be even fewer environmental controls and less 

efficient use of energy. The commenters stated that the rule could increase, rather than decrease 

overall GHG emissions.

Commenters stated that in Texas, the state will have to rely nearly exclusively on Building 

Blocks 1 and 2 because the potential for increases use of renewable energy is limited by the 

necessary availability of back-up natural gas generation. The commenters cited a NERA estimate 

that electricity rates for industrial users would rise by about 22 percent.

Commenters stated that the proposed rule will increase demand for natural gas in a relatively 

short period of time, threatening the shale gas portion of the promise of a U.S. manufacturing 

renaissance. The commenters stated that the proposed rule poses a significant risk to the 

continued shale gas stimulus of the U.S. manufacturing sector, and recommended that it be 

improved such that U.S. manufacturing is not disadvantaged. The commenters stated the rule 

will have a detrimental impact on the U.S. manufacturing renaissance by increasing the demand 

for natural gas at the same time when supplies are most likely to be constrained because of 

increased industrial demand, and believe that this will result in price increases and greater 

volatility that will hurt energy-intensive, trade-exposed manufacturers.

Commenters expressed concern that the CPP will lead to higher costs of electricity to large 

industrial customers like steel, while potentially lessening the quality and reliability of the 

electric supply that is essential for the steel industry to operate and succeed. The commenters 

stated that the CPP will have a disproportionate impact on coal-fired utilities, and there is a high 
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correlation between the service areas of those utilities and the location of steel production 

facilities.

Commenters cited the EIA that the most natural gas-intensive industries are food, paper, bulk 

chemicals, and glass. The commenters cited studies showing evidence of a straightforward 

production decline when natural gas prices to the bulk chemicals industry increase, but finding 

that the relationship does not appear to apply to the less natural gas-intensive cement industry. 

The commenters stated that EPA did not attempt to quantify the potentially largest cost impact of 

the proposed rule. The commenters stated that it appears that EPA attributed no quantifiable 

costs to markets outside the electricity sector.

Commenters stated that potentially higher energy costs and challenges to the reliability of 

consistent energy supply arising out of the proposed rule's inappropriate constraints on the utility 

sector's choice of fuel and design will injure the members of both the utility and refining sectors. 

The commenters stated that in order to provide the nation critical fuels, petroleum products, and 

chemicals in a cost-effective manner, access to reliable and affordable energy is critical.

Commenters stated that manufacturing facilities that are reliant on the electrical grid will be 

affected if the rule is adopted due to impacts on the price of electricity, potential interruptions in 

service, and increased prices of fuel and other manufacturing inputs that also are affected 

negatively by the proposed EGU NSPS. 

Commenters stated that the rule presents a significant threat to American jobs and the economy, 

and that electricity price increases will place an immense burden on U.S. businesses for which 

affordable energy provides a critical operating advantage in competitive global markets, 

particularly energy-intensive and trade-exposed industries.

Commenters stated that forcing the closure of coal-fired power plants will also put upward 

pressure on domestic natural gas prices, hurting the influx of energy-intensive and manufacturing 

companies that have come to the United States as a result of the shale gas boom.

Commenters stated that the Kentucky Energy and Environment Cabinet has projected that a 10 

percent increase in Kentucky electricity prices could result in a $2 billion decrease in state GDP 

and significant job loss in the mining and energy-sensitive manufacturing sectors. The 

commenters stated that "levelization" of the original target to increase its stringency would 

disregard EPA's prior assessment of reasonably available reductions and saddle the state's 

residents and businesses with a tremendous economic burden.

Commenters stated that the CPP has serious implications for the manufacturing sector and 

particularly for those energy intensive industries such as forest products, chemicals, metals, 

minerals processing, food processors, pulp and paper, brick and refining. The commenters stated 

that for these industries, energy costs can represent up to 80% of operating costs, which means 

that relatively small increases to energy costs can have significant impacts on the ability to 

compete and retain or increase jobs and investment.

Commenters stated that estimated compliance costs, which it believes to be unrealistically low, 

will certainly be passed down to retail electricity consumers, and directly create economic 

hardships for individuals and companies alike, such as ready mixed concrete producers. The 
225

commenters stated that the estimated 9% decrease in 2030 is merely based on unfounded 

assumptions that energy efficiency increases will eventually offset increases in energy prices, 

due to less energy use. The commenters stated that when taking into consideration the energy 

cost increases stemming from the proposal, the cost of purchasing and mixing key ingredients for 

ready mixed concrete will be inevitably higher and will result in staggering and unnecessary 

overall price increases. The commenters cited a November 2014 study that found that the cost of 

electricity and gas prices for households will actually increase by 35% between 2012 and 2020, 

instead of EPA's estimated 4% to 7%. The commenters stated that for industry the increase is 

92% from 2012 to 2020. The commenters stated that EPA has not adequately determined how 

the proposal will impact the electric utility sector, and thus the American public.

Commenters stated that EPA's proposed Minnesota CPP target would shift increasing demand on 

natural gas and renewable based electric generation, creating a primary cost impact on 

commercial and industrial customers. The commenters stated that Minnesota businesses use 

natural gas for process and energy needs. The commenters stated that EPA must consider and 

allow maximum compliance flexibility, assure cost effectiveness, allow Minnesota businesses to 

compete nationally and globally and ensure that Minnesota jobs and the state economy are 

protected. 

Commenters stated that the proposed rule will result in substantially higher energy prices and 

weaken the reliability of energy supplies and higher energy costs will impact U.S. forgers' global 

competitiveness disproportionately. The commenters cited an analysis by NERA Economic 

Consulting indicated that average U.S. electricity prices would increase by 12% per year and the 

total costs of the rule could be between $366 billion to $479 billion over a 15 year timeframe. 

The commenters stated that many of these costs will have to be absorbed by residential, 

commercial and industrial energy consumers who will not only pay more for energy but also 

could be forced to purchase new equipment. The commenters stated that the same study predicts 

an overall increase in natural gas prices as high as 29%, which would harm the forging industry 

disproportionately. The commenters stated that that higher energy costs will negatively impact 

the cost of other raw materials used in forging, such as steel and aluminum, which are also 

energy-intensive products. 

Commenters stated that the proposed rule will result in energy rationing, pitting power plants 

against refineries, chemical plants, and paper mills, for the ability to operate when coming up 

against EPA's emissions requirements. The commenters stated that eliminating access to 

abundant, affordable power puts U.S. manufacturing at a competitive disadvantage. 

Commenters stated that the key to sustaining this continued growth in the manufacturing sector 

in West Virginia is access to dependable and low-cost energy. The commenters stated that the 

EPA's plan to limit carbon emissions from new and existing power plants severely jeopardizes 

manufacturers' ability to reap the advantages of coal. The commenters stated that the proposed 

standards are unnecessary, not technologically attainable, and will cause operating costs will rise, 

putting manufacturing jobs, investment, and associated economic growth in West Virginia on the 

line. 

Commenters stated that industrials consume nearly half of the electricity in Indiana and the cost 

of electricity is a major component in the cost of production. The commenters stated that 
226

industrial businesses in Indiana, moreover, operate in intensely competitive national and global 

markets. The commenters stated that the cost of electricity, consequently, has a strong and direct 

impact on economic conditions and growth opportunities in Indiana. The commenters stated that 

from 2003 to 2013, Indiana's industrial electricity prices increased by nearly 70%. The 

commenters stated that the price impact of the proposed new regulations will hit Indiana 

industrials on top of the 30% increase already projected for the next ten years. The commenters 

stated that over 85% of Indiana's total generation in 2012 came from coal-fired units and the 

economic impact of the proposed regulations will fall much heavier on Indiana than other states 

that have less dependence on coal generation. The commenters stated that the market could well 

experience price impacts exceeding the projections for increased utilization of natural gas for 

electric generation. The commenters stated that industrial operations rely on cost-effective 

supplies of natural gas as well as electricity, and therefore the price impacts on both are 

important to industrial productivity and growth. 

Commenters stated that they, along with other large commercial printing companies, are in an 

energy-intensive business and changes in the energy marketplace have a disproportional impact 

on our company; in 2013, they consumed 1,479,360,850 kWh at a cost of $110 million. The 

commenters stated that if, as EPA has projected, that the proposed rule will increase electricity 

prices by as much as seven percent, they are likely to face at least that cost increase, since many 

of its facilities operate 24 hours a day/seven days a week and, therefore, they consume a very 

high percentage of coal-fired baseload energy compared to the typical energy user. The 

commenters stated that even if their costs are limited to the seven percent average predicted by 

EPA, the rule will cost them nearly $8 million/year, which will be on top of other increased costs 

as utilities work to comply with numerous environmental regulations both at the national and 

state levels. The commenters stated that these substantial energy cost increases will have a 

tremendous impact on their ability to maintain and grow our U.S. - based business and related 

American job opportunities. The commenters stated that this is especially true because of the 

very low margins in the printing industry and, therefore, its inability to maintain or grow 

operations while absorbing significant additional operational costs; moreover, unlike many other 

industries, printing companies simply cannot off-shore energy-intensive manufacturing 

operations while keeping less energy-intensive service operations in the United States. 

According to the commenters, the logistics of shipping printed products back to the United States 

from another country creates delivery delays that our customers simply will not accept. The 

commenters stated that the proposed rule will drive more publishers and marketers to other 

digital options and away from print; thus, carbon reductions will occur but at the expense of an 

industry that accounts for over $1 trillion of U.S. economic activity and provides over 8 million 

American jobs.

Commenters stated that manufacturing accounts for 12.6 percent of jobs and 17.1 percent of the 

Gross State Product in Ohio. The commenters stated that the proposed regulations will have a 

negative impact on manufacturers. The commenters stated that accelerating the retirement of 

coal-fired power plants will increase the burden on, and costs for, electric generating industries 

and these costs will be passed on to manufacturers, effectively increasing their cost of doing 

business and forcing them to pass these regulatory costs to consumers. 

Commenters stated that after closely reviewing the proposed rule, they are significantly 

concerned about the economic harm for negligible environmental benefit of the proposed rules 
227

that it will face as a result of the arbitrary and capricious nature of this proposed rulemaking. The 

commenters remarked that the proposed rules, if implemented, will result in more costly, less 

reliable and less secure energy that is so vital to the safe and dependable operations of Marathon 

Petroleum and our nation's economy. Commenters also stated that their petroleum-based 

business will be facing the loss of product markets, increased electricity and natural gas costs, 

and potential transportation fuel production disruptions as a result of this regulation. The 

commenters noted that their business manufactures products for sale to existing EGUs and will 

be directly harmed by a decrease in coal-fired EGU generation. The commenters also noted that 

they are a large consumer of electricity, and last year paid approximately $400 million for 

electricity. The commenters cited EPA projections that the rule will increase electricity prices by 

as much as 7 percent (79 Fed. Reg. at 34,934); however, the commenters remarked that analysis 

by IECA and others project much higher costs: EPA's proposed guidelines will likely increase 

electricity costs significantly. The commenters suggested that as a result, implementation of 

these guidelines will increase the costs of manufacturing transportation fuels which will directly 

impact their ability to compete in the refining sector. Additionally, the commenters stated they 

own and operate an existing combined heat and power (CHP) unit that will be directly impacted 

by this EPA action as an affected EGU. Lastly, the commenters stated that EPA background 

support materials and third party analysis provide that there will be increased risk to the 

reliability of the electric grid, and increased electric power outages have adverse impacts on 

petroleum manufacturing operations. The commenters explained that the unplanned electrical 

outages can lead to interrupted operations which can lead to supply disruptions, and unplanned 

power outages at refineries can also result in increased emissions, as well as create other 

potentially dangerous safety hazards. The commenters stated that increasing costs of electricity, 

natural gas and spending more to be able to run out refineries after unplanned shutdowns 

translates into increasing manufacturing costs. 

Commenters stated that the new regulatory costs, increased energy costs, potential disruptions in 

the electricity grid and significant job losses caused by the proposed rule will have a negative 

impact on the metal casting industry in Indiana and nationwide. The commenters remarked that 

because the U.S. metal casting companies operate under extremely tight profit margins, the 

proposed rule and the associated increased cost could be devastating for the metal casting 

industry. The commenters stated that the metal casting industry is a vital part of the Indiana and 

U.S. economy, and INCMA is concerned that this proposed rule could cause foundry closures, 

loss of high-wage manufacturing jobs, and loss of business to global competition. The 

commenters remarked that a strong state and U.S. metal casting industry is critical for national 

security given its role in the production of military vehicles and aircraft, weapons systems, 

ordnance, and ship components. Further, the commenters stated that eroding the U.S. metal

casting industry's global competitive position could force off-shoring of defense casting 

suppliers, thereby leaving the U.S. potentially vulnerable to producing much needed military 

equipment in a timely, efficient and cost-effective manner. In addition, the commenters stated 

that the metal casting industry is a leader in developing energy efficient castings and 

technologies; for example, metal casters are a critical player in the production of components for 

many renewable energy products such as wind, solar, nuclear, geothermal, and bio- and gasturbine generation. The commenters concluded that the loss of U.S. metal casting capacity from 

the proposed rule, could damage the domestic capacity to promote such energy efficient 

technologies. 
228

Commenters stated that EPA's assumptions on heat rate improvement are particularly flawed for 

plants in merchant markets like Pennsylvania's and Montana's. The commenters remarked that 

over the past decade or so, PPL Energy Supply has already implemented all realistically 

achievable efficiency improvements at its coal-fired power plants in these states. The 

commenters also noted that PPL Energy Supply's coal fleet in Pennsylvania is substantially more 

efficient than most others in the industry, and with those investments already made, very little 

additional improvement is available and only at a very high cost - significantly higher than the 

$100/MW assumed by EPA. The commenters stated that certainly such investment could not be 

justified in the current pricing environment in either Pennsylvania or Montana; furthermore, the 

owners of existing coal-fired generation in restructured states would not find any such 

investment to be economic in light of the agency's assumed forced redispatch of coal plants in 

favor of more NGCC operation to achieve carbon emission targets. 

Commenters stated that the resulting expense to electricity rates, will have the effect of 

increasing poverty, and reducing business efficiency. 

Commenters stated that the difficulty in extrapolating based on past and current trends is that 

structural changes in the natural gas market can make past trends and correlations 

irrelevant. The commenters stated that forecasters of natural gas prices have not only missed 

every historic turning point in long term trends, they have acknowledged their inability to predict 

when future turning points would occur. The commenters stated that using structural models to 

forecast requires an ability to identify all the exogenous factors that might cause a shift in trends 

and a basis for forecasting how they will change in the future and that natural gas price 

forecasters have had little or no success in doing so. 

Commenters stated that the impact of higher natural gas pricing goes well beyond the cost of 

electricity however as many manufacturing industries use gas as a fuel or raw material and 

recommended that EPA include these secondary cost impacts to manufacturing, as well as the 

heating cost impact for commercial and residential natural gas users, in the economic impact 

assessment for the proposed rule. The commenters stated that between 2002 and 2011, natural 

gas used for electricity generation was four times as expensive as coal and the U.S. Energy 

Information Administration (EIA) projects real natural gas prices to increase 31% between 2010 

and 2030. The commenters stated that those states with lower energy cost structures will be 

most at risk for higher rate increases and most energy intensive manufacturing is also located in 

states with low energy cost structures. The commenters recommended that EPA allow states the 

flexibility to mitigate the impact on energy intense industries, including flexible incentives for 

energy efficiency or cost offsets for increased energy prices. 

Commenters stated that by simultaneously overestimating the potential benefits of the proposal 

and underestimating the costs, EPA claims (in error) that the proposed rule will produce 

economic benefits. The commenters stated that EPA's reliance on the "social cost of carbon" is 

wholly inappropriate because that calculation has not been subject to a rigorous and transparent 

rulemaking process. The commenters stated that the analysis fails to properly address 

international benefits and costs. The commenters stated that EPA fails to use full-economy 

modeling to evaluate employment impacts. The commenters stated that EPA's reliance on cobenefits from simultaneous reductions in pollutants other than GHGs is misplaced and must be 

revised to reflect the health benefits that would actually be attributable to this proposed rule. (13, 
229

Please see section 8.7.2, comment 1, for EPA’s response to the comments on the rigor of the 

SCC; 8.7.2, comment 5 for EPA’s response to comments on the rigor and transparency of the 

process used to estimate the SCC; and 8.7.2, comment 3 for EPA’s response to comments on the 

use of global SCC estimates.)

Commenters cited EVA estimates of a $284 billion increase in annual power and gas costs for 

residential, commercial and industrial customers beginning in 2020 compared to 2012, 

representing a 60% increase over current costs with annual power and gas costs further 

increasing each year post-2020. The commenters cited EVA estimates that annual residential 

power and gas costs would increase by $102 billion beginning in 2020 compared to 2012 and 

would continue to escalate in subsequent years. The commenters cited EVA estimates that 

average annual household gas and power bills will increase by $680 or 35% from 2012 to 2020 

and continue to escalate year-after-year as EPA's proposed rule grows more stringent. The 

commenters cited EVA estimates that annual average home gas heating bills will increase 

roughly $340 or 50% from 2012 to 2020, annual average electricity bills will increase roughly 

$340 or 27% from 2012 to 2020, and that cost increases would significantly affect the U.S. 

industrial sector nationwide, as the total cost for electricity and natural gas would increase 92% 

from 2012. 

Commenters stated that any loss of wholesale revenues through permit imposed operating hour 

or annual MWh restrictions will result in increased revenue requirement from ratepayers. The 

commenters stated that for OMU ratepayers, the loss of capacity revenues associated with ESGS 

Unit 1 would result in a 5-7% rate increase across all rate classes. The commenters stated that 

considerable heat rate penalties would be associated with generation levels below design which 

would increase the number of MWhs that would have to be reduced. The commenters stated that 

at a minimum, the loss of wholesale revenues associated with the proposed 18% reduction would 

result in an electric rate increase greater than 12%. The commenters stated that OMU projects 

residential rates to increase by over 15% (non-inflation adjusted) between 2015 and 2020 

without considering impacts of proposed the Proposed Rule, and that compliance with GHG 

legislation could increase the potential rate increase for OMU's customers by an additional 40%. 

The commenters stated that EPA's cost analysis in the RIA does not address secondary price 

effects corresponding to the increased costs of goods produced in manufacturing intensive states 

such as Kentucky. The commenters stated that the Kentucky Energy and Environment Cabinet's 

modeling projects that a 10% increase in the price of electricity (10% is conservative) would 

result in a 1.1% reduction in Kentucky's GDP - a loss of $2 billion to the state of Kentucky.

Commenters stated that the four Building Blocks EPA has based the rule on suffer from 

technical and economic problems that will result in this regulation costing far more than EPA 

projects. The commenters cited NERA projections that electricity prices will experience rate 

increases from a low of 12% to 17% over the period 2017 through 2031, and natural gas prices 

will increase from 2% to 29% depending on the scenarios that are executed. The commenters 

cited Energy Ventures Analysis estimates that electricity and natural gas costs for residential, 

commercial, and industrial customers will increase by 60% by 2020 because of the GHG ESPS, 

the MATS rule and other EPA regulations aimed at the electric power sector. The commenters 

stated that this will cost $284 billion dollars by 2020, with the total cost increasing with each 

additional year of implementation and residential energy costs will increase by $680 per year by 

2020. The commenters stated that total energy costs for industry will increase by 64%, a $200 
230

billion increase that will be passed on to their customers or result in factory closures and 

operations moving overseas.

Commenters stated that they are concerned about the increased electricity costs that a re-dispatch 

of the power market could precipitate. The commenters stated that electricity cost increase 

estimates that range from 7% to 17% and that regional costs can significantly as in the New 

England area over the past winter, where lack of transport coupled with regionally higher 

demand and little supply caused spot market pricing fifteen times over normal regional pricing 

and twenty times over pricing nationally. The commenters stated that local road blocks to 

innovation such as those raised against coastal wind farms clearly demonstrate that switching to 

alternate energy sources will not be easily or quickly implemented. The commenters stated that 

as a manufacturer in a global marketplace, competitive pressures are high and increasing 

production costs in one region of the world can shift production to other regions with lower 

costs, which will not decrease global carbon emissions. 

Commenters stated that Ohio electricity prices that were 9% below the national 2013 average, 

but many Ohio families are struggling with high energy prices. The commenters stated that 53% 

of low to middle income households spend an average of 20% of their after-tax income on 

energy and increased energy prices will further strain these families. The commenters stated that 

projected rate increases will have a devastating impact on manufacturing in Ohio and that EPA 

has drastically underestimated these prices as reputable sources have reported increases as high 

as 39%. 

Commenters stated that the significant switch of generating capacity from coal to natural gas 

driven by this rule coupled with the accelerating manufacturing use of natural gas and the 

expected future significant export of natural gas for geopolitical considerations has the potential 

to fundamentally alter the natural gas supply supply/demand equation, increase natural gas 

pricing volatility, and impair the US manufacturing renaissance from its full potential as a jobcreating engine of economic growth. The commenters stated that these pressures in the US 

would have a significant detrimental affect not only on the broad US manufacturing base but 

specifically on the production of secondary (recycled) aluminum given the role natural gas as a 

key input into the secondary aluminum recycling process. 

Commenters stated that given the physical requirements of the metalcasting process (i.e., energy 

needed to reach temperatures sufficient to melt metals) and the potential threats to global 

competitiveness, EPA should, as part of this rulemaking, recognize metalcasting as an energyintensive, trade-exposed industry and give special consideration to such industries in the 

requirements for developing state-specific plans to reduce statewide carbon dioxide emissions as 

part of this rule. Commenters explained that any carbon dioxide emissions standards for an 

energy-intensive, trade-exposed industry, if necessary, should be developed specifically for that 

industry while considering its unique characteristics and potential impacts to global 

competitiveness.

Response 3: Commenters stated that the EPA failed to use economy-wide modeling to look at 

the impacts of changes in energy prices on the rest of the economy. Commenters mentioned 
231

particular sectors and regions where the impact might be expected to be greater. Agriculture and 

manufacturing were frequently cited as being particularly dependent on energy prices. Problems 

for goods exported from this country if energy prices are higher were cited. Increased export of 

coal was mentioned as a likely result. Energy intensive goods competing in a global market were 

cited as facing problems. Water treatment plants were given as an example of energy intensive 

products and services delivered by governmental entities that may have to charge more.

The EPA provided a qualitative discussion of secondary market impacts for the proposal and 

final RIAs, see Chapter 5. Commenters focused on the implications of increases in energy 

prices. In the final RIA, we present the price changes for natural gas, coal, and electricity. There 

are projected energy price decreases as well as increases across these energy categories. These 

projected energy price changes will differ by region and market. Commenters focused on the 

possible impact of energy price increases while ignoring the possible impact of energy price 

decreases.

To support the Transport Rule proposed in the summer of 2010, among other rulemakings, the 

EPA used the Economic Model for Policy Analysis (EMPAX) to estimate the effect of impacts 

projected by the Integrated Planning Model (IPM) on markets outside the electricity sector. 

EMPAX is a dynamic computable general equilibrium (CGE) model that forecasts a new 

equilibrium for the entire economy after a policy intervention. While the external Council on 

Clean Air Compliance Analysis (Council) peer review of this study stated that inclusion of 

benefits in an economy-wide model, specifically adapted for use in that study, “represent[ed] a 

significant step forward in benefit-cost analysis,” EPA recognizes that serious technical 

challenges remain when attempting to evaluate the benefits and costs of potential regulatory 

actions using economy-wide models. Consistent with the Council’s advice regarding the 

importance of including benefit-side effects demonstrated by the 1990 to 2020 Clean Air Act 

study, and the lack of available multi-year air quality projections needed to include these benefitside effects, EPA has not conducted CGE modeling for this final rule.

However, the EPA recognizes that serious technical challenges remain when attempting to 

evaluate the impacts of potential regulatory actions using economy-wide models. The EPA has 

therefore established a Science Advisory Board (SAB) panel on economy-wide modeling to 

consider the technical merits and challenges of using this analytical tool to evaluate costs, 

benefits, and economic impacts in regulatory development. The EPA will use the 

recommendations and advice of this panel as an input into its process for improving benefit-cost 

and economic impact analyses that are used to inform decision-making at the agency. The panel 

will also be asked to identify potential paths forward for improvements that could address the 

challenges posed when economy-wide models are used to evaluate the effects of regulations. 

The advice from the SAB panel formed specifically to address the subject of economy-wide 

modeling will not be available in time for this promulgation. Given the ongoing SAB panel on 

economy-wide modeling, the uncertain nature of the ultimate energy price impacts due to the 

compliance flexibility for states, and the ongoing challenges of accurately representing costs, 

energy efficiency savings, and economic benefits in economy-wide modeling, the RIA for the 

CPP proceeds by presenting the energy impacts associated with the illustrative scenarios 

analyzed in the RIA (presented in Chapter 3), and then presents a qualitative discussion of the 
232

factors that will, in part, determine the timing and magnitude of effects in other markets (Chapter 

5). 

Comment 4: The impact of changes in energy markets resulting from the Clean Power Plan will 

impact US international trade. 

Commenters stated that the proposed regulations are likely to increase worldwide greenhouse gas 

emissions by decreasing the international competitiveness of U.S. businesses due to increased 

energy costs and moving businesses to areas with less efficient and more carbon intensive energy 

supplies. The commenters further stated that under this proposal the total cost of the products 

produced in the U.S. will need to increase, eroding our international competitiveness and 

resulting in the loss of U.S. Manufacturing jobs, despite businesses investing in cost effective 

energy savings activities for decades. 

Commenters discussed impacts to American refineries, manufacturing, other businesses and 

hardworking American consumers such as less affordable and less reliable energy, loss of jobs, 

and elimination of fuel diversity. The commenters stated that the proposed EPA rule ignores the 

successful example of our free market and guarantees adverse consequences for nearly every 

consumer and business in the U.S. The commenters further stated that the proposed rule 

threatens our industry's international competitiveness due to higher energy costs.

Commenters stated that additional closures would drive up electricity rates across the country, 

reduce the competitiveness of U.S. manufacturers on the international stage, and cause enormous 

damage to the economies of countless coal communities. The commenters stated that such 

closures would undermine the reliability of the grid, reduce fuel diversity, and damage U.S. 

energy security. The commenters stated that the proposal arbitrarily fails to consider these 

important issues. 

Commenters stated that Indiana is particularly vulnerable to the economic impacts of the GHG 

ESPS. The commenters stated that NERA estimates that Indiana's electricity rates will be 12% 

more costly each year compared to EPA's projections. The commenters stated that with cost 

increases like those driven by the GHG ESPS, Indiana will lose manufacturing and agriculture 

jobs to overseas competitors and the overall Indiana economy will endure great hardship. 

Commenters opined that the Administration's actions have already begun affecting Alabamians, 

and just recently Alabama Power cited federal regulations as the impetus behind its decision to 

alter operations at seven operating units located within three power plants across the state. The 

commenters stated that as part of these transitions, two coal-fired units at the Green County 

Electric Generating Plant will be converted to gas-powered units, reducing electric generating 

capacity by a third and eliminating sixty jobs located in the heart of the Black Belt. The 

commenters stated further that these job losses have serious consequences in a region which has 

faced declining populations, high unemployment rates, as well as a host of infrastructure 

challenges. The commenters stated concern that the EPA's proposal, if finalized, would impose 

enormous costs and burdens on Alabama workers and their families, and would hinder our global 

economic competitiveness. The commenters also stated that the impact will be felt the deepest in 
233

states-like ours-where fossil fuels provide a significant share of our electricity generation. The 

commenters also opines that the Administration's claims that energy costs will not be impacted 

by this proposal ring hollow, and that simple economics suggest that the EPA's plan will 

undoubtedly increase electricity prices, which will hinder-not help-economic growth. The 

commenters stated that Alabama has historically seen lower than average energy costs, in part 

because our state has been blessed with an abundance of natural resources that can be harnessed 

to power our homes and businesses and to make life better for our citizens. 

Commenters stated that manufacturers operate in a highly competitive global market and cannot 

automatically pass on higher raw material and energy costs to consumers and still remain 

competitive. The commenters stated that in addition to the compliance costs utilities will pass on, 

the proposal would further increase energy costs. The commenters cited an analysis that 

projected annual costs of $73 billion under a likely scenario and projected total costs of the 

proposal to be $366 billion to $479 billion over a 15-year period. The commenters stated that this 

analysis projected that nationwide, the proposal would cause a 12 to 17 percent average increase 

in electricity prices, excluding natural gas infrastructure and electrical transmission facilities. 

The commenters stated that increased use of natural gas by the power sector to comply with 

GHG emission standards will put upward pressure on natural gas costs. The commenters stated 

that increased costs and continued uncertainty around the treatment of biogenic emissions will 

adversely affect U.S. manufacturers of paper and benefits they provide for their communities. 

Commenters stated that EPA's analysis of the employment impacts of the Proposed Rule was 

arbitrary and capricious because EPA only evaluated employment impacts in a few select 

industries. The commenters stated that EPA's partial economy model failed to address impacts 

in the communities that support coal-fired electricity generation and on consumers of electricity. 

The commenters stated that a whole economy model must include employment across a wide 

range of sectors, sufficient detail at the regional level to identify changes in the regional 

distribution of output and employment, international trade flows to evaluate how regulations will 

affect tradable sectors and dynamic analyses to examine adjustments in labor and capital markets 

in response to regulations over time. 

Commenters stated that EPA's assessment of labor impacts ignores the largest labor impacts, 

which are the indirect jobs impacted as a result of higher energy costs. The commenters stated 

that higher natural gas prices and electric rates will result in the economic dislocation of some 

industries, particularly those industries that are energy intensive, as they are unable to fully pass 

thru the higher cost of electricity and natural gas to their consumers and customers. The 

commenters stated that EPA must consider these indirect job impacts in the RIA. 

Commenters stated that manufacturers rely on secure and affordable energy to compete in a 

tough global economy, and that manufacturers' recent gains are largely due to the abundance of 

affordable energy we now enjoy. The commenters stated that manufacturers across CSX's 23-

state network, have invested more than $14 billion in rail-served facilities, creating more than 

14,000 jobs over the last five years. The commenters stated that in 2013, $3 billion in customer 

investments generated more than 1,600 new job opportunities. The commenters stated that 

economic productivity and environmental progress could be undermined by the Proposed Rule 

and EPA's failure to analyze foreseeable economic impacts. 
234

Commenters stated that the CPP will drive manufacturing and jobs out of state and overseas. The 

commenters stated that the proposed rule will impose costs on U.S. businesses in numerous ways 

without meaningfully reducing global GHG emissions. 

Commenters stated that China is investing heavily in advanced coal technologies, and failure to 

keep up would put America at a competitive disadvantage. The commenters stated that carbon 

capture and sequestration (CCS) can protect coal jobs in West Virginia and create a whole new 

opportunity for American job growth, developing and perfecting CCS technology to meet global 

demand. 

Commenters stated that NERA did not separately represent the gas-intensive components of the 

manufacturing sector, but grouped gas-intensive manufacturing with a much larger subset of 

manufacturing. The commenters stated that this grouping produced a weighted average 

representation that muted the impact of sectors highly sensitive to changes in gas prices. The 

commenters stated that the result from NERA's overestimations was that LNG would be 

exported only under extreme scenarios of supply and/or demand shocks, and that this finding is 

contrary to market signals. The commenters stated that the unintended consequences of high 

LNG export scenarios are lower economic benefits of GDP, employment, and trade balance, and 

that if left unmonitored, high LNG exports could prevail at the cost of the broader economy. 

Commenters stated that if electricity and natural gas costs rise because of a state's 

implementation plan, industrial GHG leakage will shift GHG emissions to either other states or 

to a foreign country. The commenters stated that a cost safety valve would allow states the 

flexibility to complete a cost impact analysis on an annual basis and determine what revisions are 

necessary to limit cost increases to less than 2 percent in future years. 

Commenters stated that forest products facilities are energy-intensive and operate in a highly 

competitive global market, face fierce international competition, and cannot automatically pass 

on higher raw material and energy costs to consumers and still remain competitive. The 

commenters stated that increased costs will adversely affect U.S. forestry products' global 

competitiveness, and the jobs and other economic and social benefits they provide for their 

communities. The commenters stated that European nations and others fully recognize bioenergy 

as carbon neutral in their GHG reduction schemes, highlighting the adverse competitiveness 

impacts of the uncertainty around biogenic emissions. 

Commenters stated that reducing coal utilization at existing power plants will likely result in 

more volatile and expensive electricity prices, but that EPA does not show that these regulations 

will significantly reduce global greenhouse gas emissions. The commenters stated that the EPA's 

proposal would likely make these foreign power producers more attractive to some industries, 

encouraging greater utilization of unregulated coal power plants abroad. The commenters stated 

that 60,104 megawatts of electricity from 381 coal units in 36 states are scheduled for retirement. 

Response 4: Commenters stated that higher energy prices would decrease the international 

competitiveness of U.S. businesses. Manufacturing, agriculture, and forestry products were cited 

as sectors that would face a disadvantage due to higher energy costs.
235

The EPA did not quantitatively project the impact of the emission guidelines on international 

trade. The commenters focused on energy cost increases and did not mention potential 

advantages in global competitiveness when energy costs decrease. Without quantitative trade 

estimates, it is difficult to say much about international competitiveness. The competitive 

position of some industries will suffer, while others will be enhanced. See chapter 5 of the RIA 

for a discussion of potential secondary market impacts.

Comment 5: Jobs will be lost (or gained) as a result of the Clean Power Plan.

5.a. Commenters state that the Clean Power Plan will result in loss of jobs related to coal

Commenters suggested that EPA now claims economic growth does not require commensurate 

electric energy growth despite economic principles and the EPA regulatory impact analysis 

observations that growth and the availability of electric power in this country has closely 

paralleled the growth in our economy for decades. The commenters stated that states such as 

Missouri that still build cars, process or produce aluminum, process meat and lumber, or have 

other energy intensive industries will be impacted by changes in the electric energy base load. 

Commenters questioned how a reduction in coal could result in a job growth of 28,000 jobs in 

the fuel extraction sector in 2020, as estimated by EPA. The commenters suggested that "when 

the health and welfare of people are adversely affected by the actions of man, some positive 

action is sometimes justified when very limited negative economic activity might occur". 

However, the commenters stated that the rule will result in severe economic hardships the 

proposed rule will result in job losses in coal mining states based upon unproven theories of 

climate change and should therefore not be accepted.

Commenters opposed the Clean Power Plan as proposed because it will lead to the closure of 41 

to 49 gigawatts of coal fired generated capacity by 2020, resulting in the loss of 52,000 

permanent direct jobs in the utility, rail, and coal mining sectors and an additional 100,000 direct 

jobs. Commenters further stated that EPA's number must be viewed with suspicion because EPA 

claimed the MATS rule would close only 4.7 gigawatts of coal generation, but experts have now 

confirmed that 56 gigawatts of coal generation will be lost by 2016. Taken together, the 

commenters stated that the MATS and the Clean Air Plan will close approximately 40 percent of 

today's coal fleet and result in a loss of over 400,000 American jobs at a time when the nation 

continues to recover from the worst recession since the Great Depression.

Commenters stated that with 63,896 employees, the combined employment impacts of the coal 

industry, associated transportation and power generation industries account for 11.3 percent of 

employment by private industry in West Virginia. The commenters stated that at $6 billion, the 

combined direct impacts amount to nearly 9 percent of GSP and including the multiplier effect of 

spending by these industries and households employed by the industry, the impact amounts to 

$8.8 billion or 12.7 percent of GSP. The commenters stated that taxes paid by the coal industry 

are estimated at $638 million in 2012, including property taxes, severance taxes, workers' 

compensation, net income, and personal income taxes paid by industry employees and others.
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Commenters cited research at the University of Nebraska-Lincoln that coal as a generating 

resource for electricity, combined with its transportation, primarily by rail, generates about $4.9 

billion in output, including $1.4 billion in labor income, and more than 22,800 jobs for the state. 

Commenters discussed the potential for job losses as a result of the rule. Commenters stated that 

EPA failed to meaningfully consider employment impacts of Clean Air Act regulations by not 

using whole economy modeling that would have captured a much more accurate picture of the 

likely job losses from this proposal. The commenters further stated that EPA failed to undertake 

an employment analysis under Section 321A of the Clean Air Act, which requires the continuous 

review of potential job losses and shifts in employment due to the implementation of the act. 

Commenters stated that the onslaught of overregulation and lack of certainty in the coal industry 

has contributed to the loss of 7,000 coal jobs since President Obama took office as opposed to 

the increase in 3,500 coal jobs that occurred in the previous administration according to EIA and 

Kentucky Energy and Environment Cabinet. Commenters stated that the proposed rule will lead 

to the closure of coal-burning power plants and the loss of more than 52,000 jobs in the coal, 

utility and railroad industries by 2020, and an additional 65,000 job losses by 2030. Commenters 

further stated that the proposed rule will lead to direct and indirect employment losses of over 

208,000 jobs by 2030. Commenters urged the EPA to withdraw its proposal for new emissions 

regulations on the basis of the direct job losses in the coal industry, the indirect economic 

impacts to communities as a result of coal industry overregulation, and the lack of overall 

environmental benefit. The commenters cited EPA's emission reductions assessments and stated 

that the proposal will result in a meaningless 1 percent reduction in atmospheric CO2 

concentrations, an insignificant reduction in global average temperature of 0.016 degrees 

Fahrenheit. The commenters noted that a study will be conducted by DMME and CCER (no 

abbreviation definition provided) to report on the effect of increased energy prices on lower 

income populations and the negative economic impacts to coal country, including job loss, in 

order to show how damaging these new regulations are to the economy. Commenters also stated 

that all of the public forums have been far from coal country, making it prohibitive for those 

affected to speak to their plight. 

Commenters stated that the proposed rule threatens its viability. The commenters stated that 

EPA's Regulatory Impact Analysis indicates that the rule would cause Appalachian coal 

production for electric generation to decline from 140 million tons in the 2020 base case to 87-91 

million tons, versus 246 million tons of coal in 2009. The commenters stated that decreased coal 

production will result in significant job dislocations, income losses, and diminished tax bases. 

The commenters stated that each coal job has a 5 to 1 multiplier effect on the mine services, 

consumable supplies, and the local communities where the mines and mine employees spend the 

revenues and household income generated from coal sales. The commenters stated that the 

proposed re-dispatching of coal generation to natural gas combined-cycle units, unrealistic 

energy efficiency goals, and new renewable energy targets would create a cycle of increasing 

coal fired power plant and mine closures, direct and indirect job losses, and higher electricity 

prices adversely impacting manufacturing and other key job-intensive sectors. 

Commenters stated that EPA may have underestimated closure of coal-fired EGUs and resulting 

employment loss and cited underestimates associated with the MATS rule. The commenters 

stated that, taken together, MATS and the Clean Power Plan will close approximately 40 percent 

of today's coal fleet and result in the loss of approximately 400,000 American jobs. 
237

Commenters stated that EPA notes the average delivered coal price is expected to decrease 16 to 

17% in 2020 and 18% in 2030, and coal production is predicted to decline by 25 to 27% in 2020 

and 30 to 32% in 2030. The commenters stated that the goal of this plan is to reduce utilization 

of coal-fired EGUs, and this will result in displacement of those in the coal mining industry. 

Commenters stated that the primary concern of the IUOE is that the regulation could cause job 

loss for its members, eliminating high-quality, family-sustaining jobs, which could affect broader 

swaths of the economy and drag down overall economic performance. 

Commenters estimated that roughly 6% of its members will lose their jobs if the Clean Power 

Plan is finalized in its current form. The commenters stated that local power plants provide jobs 

for hundreds, and often times, thousands of workers. The commenters stated that the CPP will 

influence the cost of electricity for residents and businesses, impacting regional growth, 

employment, taxes, and wages. The commenters predicted that more than 500 coal-fired power 

plants will be shut down, and 41GW-49GW of coal-based electric generating capacity would be 

closed by 2020. 

Commenters stated that during the period 2001-2013, while its energy costs escalated, California 

lost 650,000 manufacturing jobs--approximately one-third of all California manufacturing jobs. 

The commenters stated that 34 percent of the nation's welfare recipients live in California. The 

commenters stated that California has shown the disastrous consequences of abandoning coal as 

an energy source and pushing jobs for the working class out of its borders, often to Mexico and 

other countries. The commenters stated that that Missouri is at the crossroads between the South 

and Midcontinent Independent System Operator power regions, which are expected to incur 

"over half the U.S. total costs during the 2014-30 timeframe," and "will shoulder more of the 

economic consequences of compliance." 

Commenters stated that EPA failed to analyze the Proposed Rule's state-level employment and 

other economic impacts of [Building Block 1 and] Building Block 2. The commenters contended 

that the retirements that Building Block 2 in particular precipitates could have dramatic local 

economic impacts; for example, if any of our coal-fired plants were forced to shut down it would 

mean the loss hundreds of high-wage jobs in rural areas where there are few or no alternative 

employment options, devastating the local economies. Further, the commenters believed that 

these areas would remain hard hit even if new NGCC facilities were constructed close by as the 

siting, permitting, financing and construction of NGCCs would take several years and require 

less than a third of the staff required to operate coal-fired power plants. Coal mine and craft labor 

job losses should also be expected. Commenters also stated that despite the extensive local 

economic impacts caused by Building Block 2, EPA's Regulatory Impact Assessment (RIA) only 

analyzes national employment impacts. The commenters also stated that while the employment 

impacts from some aspects of the Proposed Rule may be felt across all states (e.g., demand-side 

energy efficiency), the employment impact from coal plant retirements assuredly would not. The 

commenters recommends that to appropriately analyze the Proposed Rule's economic impact, 

EPA should determine state-specific employment effects. 

Commenters stated that EPA impermissibly calculated health benefits due to reductions in 

criteria pollutant concentrations to below the level of the NAAQS, and dramatically skewed the 

climate benefits by presenting global benefits rather than just U.S. benefits. The commenters 
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stated that mining job losses in West Virginia were underestimated because less productive 

mines would be closed first. The commenters stated that coal-fired EGU job losses in West 

Virginia were underestimated. 

Commenters stated that EPA appears to have grossly exaggerated the benefits from the proposed 

rule, particularly because most reductions in carbon dioxide emissions have already occurred 

since 2005.The commenters stated that EPA should not be claiming benefits that have already 

been achieved, but rather should be limited to those benefits that are anticipated from the 

implementation of the proposed rule. The commenters stated the costs are underestimated 

because EPA assumes that the utilities can easily switch fuels for existing sources and build new 

power plants that rely on natural gas and renewable energy. The commenters stated that EPA 

also minimizes the cost of the proposed rule because it unrealistically assumes that the price of 

natural gas will remain at its historically low levels for the next 25 years. The commenters stated 

that forcing 50 percent of coal-fired power plants to retire would equate to the loss of 

approximately 500,000 jobs nationwide, and that the number of new "green" jobs will not offset 

the anticipated job losses. 

Commenters stated that the RIA overstates benefits and underestimates costs, by double counting 

benefits of energy efficiency and inappropriate netting of market-driven and state programdriven efficiency, not counting integration costs of intermittent renewable technology, 

overestimating emission reductions associated with renewable technology and practical conflicts 

with grid operation, not including reliability impacts, and not counting net employment impacts. 

The commenters stated that the RIA includes gross employment effects of energy efficiency and 

renewable energy programs, not net estimates accounting for jobs lost due to higher energy 

prices. The commenters stated that overall, U.S. carbon intensity has declined over the last 

decade and half (or longer), largely as a result of autonomous changes in fuel sources and that 

such improvements are likely to continue, yet the CPP claims credit for future reductions that 

would occur in the absence of the CPP. The commenters stated that each state has a unique 

economic structure, with various productive activities contributing to each one's economy. The 

commenters stated that energy policy and regulation should not dictate "acceptable" industrial 

sector makeup, through regulatory actions that artificially inflate energy costs. The commenters 

stated that such regulation interferes with the natural, market-driven changes in state economies. 

The commenters stated that this is an area where the CPP underestimates costs of the impacts 

imposed on other industries that are not the direct target of the proposed regulation. 

Commenters stated that it reviewed data from 93 plants in 31 states, with an average CO2/MWh 

rate of 2,626, or roughly 20 percent less efficient than the average coal plant. The commenters 

stated that these 93 plants employ at least 8,000 employees and have a nameplate capacity of 

approximately 50 GW.The commenters stated that Pennsylvania is the most affected state, with 

13 plants in danger of retirement, followed by Michigan, with seven possible retirements, and 

Illinois with six. The commenters stated that there are 14 states that could force at least three 

plants into early retirement. The commenters stated that Jonathan Masur and Eric Posner 

examined several past RIAs from EPA and found that had the analyses monetized the job losses, 

the costs of the regulations would have exceeded the benefits. The commenters stated that using 

a central estimate of $100,000 per displaced worker, the monetized costs for this rulemaking 

would total $4.2 billion, and that this would bring topline compliance cost to $13 billion. 
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Commenters stated that in addition to increased costs of the proposed rule, significant job losses 

are expected from the proposed rule, and electric utilities and the electric workers union have 

estimated that the closure of coal-fired power plants will result in significant job losses; for 

example, forcing 50 percent of coal-fired power plants to retire would equate to the loss of 

approximately 500,000 jobs nationwide. The commenters stated that additional closures of coalfired plants will result in even higher job losses and Indiana would be disproportionately 

impacted given the states historical reliance on this natural resource. Furthermore, the 

commenters stated that the increased energy costs and decreased reliability of electricity capacity 

and delivery will likely have a ripple effect and lead to further job losses from energy consumers 

and operators of coal-fired combustion units such as the metal casting industry. The commenters 

stated that while it is true that some new "green jobs" will be created with natural gas and 

renewable energy power plants, the number of new jobs will not even come close to offsetting 

the anticipated job losses, and this assertion is consistent with recent experience with the creation 

of new "green jobs" resulting from new regulatory requirements. The commenters stated that

typically, the creation of new "green jobs" has significantly lagged behind the expectations and 

predictions in EPA's regulatory impact analysis, and to assess the potential costs of the proposed 

rule fairly, EPA must consider the increased energy costs, the disruption in electricity capacity 

and delivery, and the significant number of job losses anticipated. 

Commenters stated that 48% of the total national reductions are achieved in only six states: 19% 

Texas, 8% Florida, 6% Georgia, 5% Pennsylvania, 5% Arkansas, and 5% West Virginia. The 

commenters stated that these states made up approximately 28% of the total national electric 

generation as of 2012. The commenters stated that a state like West Virginia will be hit 

disproportionately hard, since the state had 16 coal plants operating in 2012, which generated 

96% of the state's electricity. The commenters stated that West Virginia's economy was bolstered 

by selling this energy: 58% of West Virginia's total 2012 electric generation was exported to 

surrounding states. The commenters stated that the wholesale reduction of the coal market, along 

with the costs associated with implementing the Plan, will result in wide-ranging harm to state 

and local economies, triggering job loss, shrinking tax bases, a decline in manufacturing, and a 

decline in overall economic competitiveness and social stability. The commenters stated that the 

Midwest Independent System Operator, a regional power grid operator, estimated that its 20-year 

discounted compliance cost of the rule will be $55-$83 billion. The commenters stated that some 

national estimates claim the Plan will cost $41-73 billion per year to implement, causing double 

digit electricity rate increases in 43 states, with 14 states facing peak year electricity price 

increases that could exceed 20%. The commenters cited other estimates that wholesale electricity 

costs will increase by $274 billion; that non-power natural gas costs will increase by $80 billion; 

and that replacement power will be needed costing $53 billion. 

Commenters stated that affordable and reliable electric power is essential to the continued 

recovery of Indiana's manufacturing economy, which accounts for about 500,000 high-paying 

jobs in the State, in addition to 28,000 in the coal industry. The commenters stated that Indiana 

will experience a disproportionate share of rate hikes, not just because the state is so reliant on 

coal for its electricity, but also because Indiana has average retail electricity prices below the 

national average. The commenters cited NERA estimates that the actual increase in rates for 

Indiana could be close to 12 percent. The commenters stated that with 1.3 million lower- and 

middle-income households in Indiana, spending an average of 19 percent of their after-tax 

income on energy, it State is vulnerable to rate hikes. 
240

Commenters stated that over-reliance on any one fuel source creates extraordinary volatility and 

risks for consumers and the economy. The commenters stated that when 8,358 MW of coal 

generation are forced to retire (as per EPA's estimates for 2020) as a result of Block 2, numerous 

Texas jobs will be lost and the resulting increase in natural gas price will create more volatility 

and significantly higher retail prices for Texas electric consumers. 

Response 5.a.: The EPA recognizes that as older fossil-fuel fired power plants – chiefly coalfired power plants – retire, demand for coal will decrease, along with the jobs operating the 

closed plants and extracting coal. The EPA also recognizes that coal miners and coal plant 

operators have been facing ongoing job losses because of shifts in the market from coal to 

natural gas, and that there is likely to be additional job loss in sectors related to coal attributable 

to implementation of the CPP. Impacts on employment are estimated in the RIA for the CPP, see 

Chapter 6. However the EPA encourages states to work with affected communities to tailor their 

compliance programs with local jobs concerns in mind. The CPP offers flexibilities that 

guarantee a continued reliance on a diverse energy mix, and also allows for a long 

implementation period in order to ease the transition to a lower carbon energy mix. 

On the other hand, the EPA expects that there will be new jobs in the power sector associated 

with both improving the efficiency of fossil-fuel fired power plants and construction of new 

natural gas-fired plants and renewable power production. In addition, the EPA expects that there 

will be new jobs in renewable energy and in the demand-side energy efficiency sector. These are 

jobs helping users of electricity - our homes, businesses, public buildings, and industrial facilities 

– to use less energy overall. This includes, for example, the machinists that manufacture energy 

efficient appliances and equipment, construction workers who build efficient homes and 

buildings or weatherize existing ones, service providers who conduct energy audits and install 

new efficient technologies, and engineers and programmers who design and improve building 

energy management systems.

With regard to the comment mentioning section 321(a), EPA disagrees with this comment. 

Section 321(a) does not require EPA to conduct employment evaluations as part of the 

rulemaking process or as a prerequisite to the issuance of a rule. The broad language of Section 

321(a) does not address the scope, frequency, or timing of employment evaluations, leaving 

these matters to the discretion of EPA. In the exercise of its discretion, however, EPA does 

routinely evaluate employment impacts when it conducts new rulemaking. Indeed, EPA 

conducted a robust employment analysis for this action, including a discussion of economic 

theory and employment, recent employment trends, and projected sectoral employment changes 

due to the Guidelines. See Chapter 6 of the RIA for the proposed rule and Chapter 6 of the RIA 

accompanying this final rule. EPA has conducted similar assessments for other rulemakings and 

continues to evaluate employment impacts generally and to refine its employment-analysis 

methods. Together, these efforts constitute “continuing evaluations of potential loss or shifts in 

employment” for the purposes of Section 321(a). 

To the extent that the commenters is suggesting that Section 321(a) requires EPA to evaluate the 

cumulative employment impacts of all its rules, Section 321(a) contains no such requirement. 

Nevertheless, in EPA’s continuing effort to advance the evaluation of costs, benefits, and 

economic impacts associated with environmental regulation, EPA has formed a panel of experts 

as part of its Science Advisory Board SAB to advise the Agency on the technical merits and 
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challenges of using economy-wide economic models to evaluate the impacts of regulations. The 

panel of experts will consider a variety of issues related to the use of economy-wide modeling,

including their technical appropriateness for assessing employment impacts. Answers from the 

panel of experts will help EPA assess whether economy-wide models can be used to evaluate 

employment and other economic impacts in the future.

5.b. Commenters state that the Clean Power Plan will cause job loss in specific locations.

Commenters cited EPA's projections that five of the seven coal units in Arkansas and all of the 

coal units in Arizona would shut down as a result of the proposed rule. As such, the commenters 

stated that these high wage job losses would devastate local economies, even in areas where new 

NGCCs are constructed because NGCCs require less than one-third of the staff required to 

operate a coal fired plant.

Commenters urged EPA to consider the economic, social and reliability impact that would result 

from three local generating plants shutting their doors including the loss of 330 jobs and over 

$20 million in wages before benefits, the loss of tax revenue, sales tax and the need for increased 

government assistance to feed families. In addition, the commenters stated that the job skills of 

the workers cannot be easily transferred to other occupations, and other employees in 

management, contracting, supplying, railroad, mining, electrical and service will also lose their 

jobs.

Commenters stated that, in addition to the impact on electric rates, these retirements will cause 

jobs to be lost and will have adverse impacts on local economies and local government tax 

revenues. The commenters stated that these impacts have already been seen in the local 

economies of the areas where plants have already been shut down. Commenters stated that 

closing this much generation in such a short timeframe also raises serious concerns about the 

ability to maintain reliability and meet peak demand, especially during extreme weather. The 

commenters assumed there are still federal requirements that a utility maintain an adequate 

generation reserve, so reliability is attained. 

Commenters stated that as plants close or scale back operations, the loss of jobs and tax income 

in communities across the region will be a significant blow to the economy at the local level -

impacting families, businesses, schools, roads and essential services. 

The commenters stated that many families could lose permanent, high paying, high quality jobs 

in the rural communities where EPA has identified potential power plant retirements and that 

families in coal mining communities will experience the same devastating loss of income. 

Commenters stated that the effect of Block 2 would force many of Texas' lignite power plants to 

close, directly harming the employees and communities of the co-located lignite mines. The 

commenters stated that since these power plants are mine-mouth plants, there is little if any 

potential to seek other uses for this lignite, requiring the shutdown of the mine. The commenters 

stated that this would lead to significant job losses, stranded resources at these power plants and 

serious reliability risks across the entire state. 

Commenters stated that based on Arizona-specific modeling, the State of Arizona and Apache 

County in particular, will be severely impacted if two coal fired power plants cease operation. 
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The commenters stated that Apache County could lose 2,700 FTE job years employment, just 

under $600 million in annual gross state product and $170 million real disposable personal 

income. The commenters cited estimates that 56% of Apache County's property tax value could 

be eliminated, including two-thirds to three-quarters of the property value that supports the local 

school districts. The commenters stated that with limited alternative employment opportunities, 

the associated exodus of plant employees from the region could potentially result in a drop in 

housing values, shuttering of local businesses, and closing of schools as the remaining 

population is left with the full financial burden of schools, medical centers, library districts, fire 

districts, etc., currently born by the utilities and their employees. 

Commenters stated that two power plants employ 218 and 332 full-time equivalent (FTE) staff, 

and contribute to approximately 4,000 jobs per year in the state of Arizona, nearly 70% of which 

are located in Apache County. The commenters stated that if these plants are closed Apache 

County could lose 2,700 FTE jobs, $600 million in annual gross state product, half of its 

property tax value to be eliminated and two thirds to three quarters of the property tax value that 

supports the local school districts. The commenters stated that when Building Block 2 is applied 

in the state, Arizona has no ability to retain newer or upgraded EGUs that have significant 

remaining asset value. The commenters urged EPA to provide Arizona with the same level of 

flexibility to achieve state goals that is afforded to the rest of the nation. 

Commenters stated that EPA's cost effectiveness evaluation did not take into account the 

financial impacts to communities that depend on the direct and indirect economic contribution 

from nearby coal-fired power plants. The commenters stated that Apache County Arizona could 

lose 2,700 jobs and $600 million in annual gross state product, over half of Apache County's 

property tax value could be eliminated, including two thirds to three quarters of the property tax 

value that supports the local school districts, and the associated exodus of plant employees from 

the region could potentially result in a drop in housing values, shuttering of local businesses, and 

closing of schools. 

Commenters stated that if Gibbons Creek were to close down in anticipation of the proposed 

Greenhouse Gas Rule coming on top of the other environmental regulations affecting coal-fired 

power plants there would be direct impacts to TMPA's Member Cities, to their ratepayers, to the 

employees of TMPA, and to the communities surrounding the Gibbons Creek power plant. The 

commenters stated that the impacts to the Member Cities and their ratepayers are associated with 

stranded costs of investment in the plant and its facilities and the costs of replacing the lost 

power. The commenters stated that the loss of employment of the approximately 100 TMPA 

employees would affect the employees and their dependents. The commenters stated that the loss 

to the local communities would be significant as TMPA is a major contributor to the county and 

three school districts through payments in lieu of taxes (PILOT) totaling approximately $1 

million per year. 

Commenters stated that EPA has not thoroughly analyzed anticipated cost impacts on a case-bycase basis, and that the expected benefits to Mississippi of the proposed rule are justified by the 

magnitude of the expected costs that Mississippi ratepayers will bear under the Clean Power 

Plan. The commenters stated that the proposed rule would impose a disproportionate burden on 

Mississippi by effectively mandating elimination of low-cost coal generation, and the impacts 

will also have a magnified effect on the state GDP. The commenters stated that the Clean Power 
243

Plan would effectively require elimination of coal generation in Mississippi, causing a radical 

shift in resource mix and reliance on NGCC units to provide baseload service. The commenters 

stated that EPA has neither evaluated the impacts of such a significant shift in resource roles, nor 

whether the resulting mix of baseload, intermediate, and peaking resources is feasible.The 

commenters stated that the proposed rule is estimated to cost Mississippi ratepayers $14 billion 

by 2030, not including fuel costs. The commenters also cited impacts on industry and job 

creation. The commenters estimated that using all four building blocks, Mississippi retail 

ratepayers will experience an 11 percent increase in average delivered electricity prices over the 

2017-2031 time period, using only Building Blocks 1 and 2, this figure is 14 percent, and that 

wholesale rates could increase 20-25 percent. The commenters projected an increase in 

electricity production cost of 177 percent increase from 2012 to 2020, measured in real 2012 

dollars. The commenters predicted total electricity cost is would increase 57 percent from 2012 

to 2020 (measured in real 2012 dollars), residential electricity bills were estimated to increase 35 

percent, and industrial electricity rates were expected to increase 69 percent (measured in real 

2012 dollars). The commenters predicted an increase in natural gas demand by 2020 and an 

increase in the price of natural gas of 114 percent from 2012 to 2020 (measured in real 2012 

dollars). 

Commenters stated that the GHG ESPS will reduce demand for Indiana coal and result in losses 

of good paying jobs in rural communities. The commenters stated that manufacturing and 

agriculture are significant users of electricity in Indiana and will suffer significant losses if the 

proposed GHG ESPS is promulgated. The commenters stated that manufacturing and agriculture 

in Indiana are dependent on the low cost of electricity. The commenters stated that state's utility 

rate forecasting experts have predicted electrical rates in Indiana will rise by more than 30% over 

the next decade- prior to considering the impacts of the GHG ESPS. The commenters cited 

NERA projections that rates will be 12% more costly each year compared to EPA's projections. 

The commenters cited an Energy Ventures Analysis prediction that electric rates for industrial 

customers will increase by 50% by 2020, and natural gas costs in Indiana will increase by 108%. 

Commenters stated that the proposed interim goal for Arizona would require Arizona to achieve 

greater emission reductions by 2020 than any other state affected by the Proposed Rule, and that 

meeting this interim goal would require a dramatic and abrupt shift in generation from coal-fired 

plants to natural gas combined cycle ("NGCC") facilities. The commenters stated that EPA's 

Integrated Planning Model assumes that all of Arizona's coal-fired power plants would cease 

operating by 2020. The commenters stated that these plants are important sources of high-wage 

employment, and most are located in rural areas where there are few or no alternative 

employment options. The commenters stated that this raised questions about EPA's authority to 

dictate to the Arizona Corporation Commission the non-economic dispatch of generation and the 

effect of such requirements on rates and reliability. 

Commenters stated that union laborers are participating in the conversions of coal plants to 

natural gas, they are building the pipeline infrastructure to meet the needs of the growing natural 

gas demand, they are building three of the five nuclear reactor units under construction, and they 

are building wind farms and solar fields at unprecedented scale. The commenters stated that the 

loss of outage work in coal-intensive areas creates a disproportionate burden on the working 

families of these communities. The commenters stated that the City of Miamisburg stands to lose 

7.4% of its property tax base with the closing of the O.H. Hutchings Power Station and the 
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closing of AEP's Muskingum River Power Plant will cost each of the Frye and Wolf Creek 

School Districts 10% of their operation funds. The commenters stated that the proposed rule 

would place an additional 1,675 operations workers (150-200 FTE Laborers alone) and hundreds 

more Laborer outage workers at risk at the nine remaining Ohio coal plants subject to regulation.

The commenters stated that EPA in their guidance to states should recognize the need to require 

provisions for displaced workers, that these policies are designed to maximize construction job 

creation (preferably in the energy sector) and assist workers in transitioning to them, and that all 

new programs created in pursuit of demand side or energy efficiency construction require 

responsible standards to guarantee that as new sectors emerge they provide family-sustaining 

jobs. The commenters stated that one avenue for providing policy solutions for displaced 

workers would be for EPA to require components in the state planning process such as an 

economic impact report relevant to the power sector. 

Commenters stated that foreign direct investment (FDI) has also led to the creation of 2,118 new 

direct jobs in 2014, or 45 percent of new announced jobs. The commenters stated that this 

investment will be jeopardized by rising energy costs due to the proposed rule. The commenters 

stated that they were concerned both about their ability to attract new businesses, as well as 

about the ability of current businesses to continue to operate. 

Commenters stated that coal-fired power plants are an important source of high wage 

employment and most are located in rural areas that have few or no alternative employment 

options. The commenters stated that the abrupt closure of existing coal-fired power plants would 

devastate these communities; even areas that might receive some re-employment benefit from 

the construction of new NGCCs would face economic hardship, because NGCCs require less 

than a third of the staff required to operate comparable coal-fired power plants. The commenters 

stated that EPA's RIA fails to adequately consider the costs of compliance for state and local 

economies and, instead, inappropriately focuses on national level impact; this analysis is 

inapposite to the proposed rule, which proposes emission rate goals on a state-by-state basis. 

Commenters opined that the Administration's actions have already begun affecting Alabamians, 

and just recently Alabama Power cited federal regulations as the impetus behind its decision to 

alter operations at seven operating units located within three power plants across the state. The 

commenters stated that as part of these transitions, two coal-fired units at the Green County 

Electric Generating Plant will be converted to gas-powered units, reducing electric generating 

capacity by a third and eliminating sixty jobs located in the heart of the Black Belt. The 

commenters stated further that these job losses have serious consequences in a region which has 

faced declining populations, high unemployment rates, as well as a host of infrastructure 

challenges. The commenters stated concern that the EPA's proposal, if finalized, would impose 

enormous costs and burdens on Alabama workers and their families, and would hinder our global 

economic competitiveness. The commenters also states that the impact will be felt the deepest in 

states-like ours-where fossil fuels provide a significant share of our electricity generation. The 

commenters also opines that the Administration's claims that energy costs will not be impacted 

by this proposal ring hollow, and that simple economics suggest that the EPA's plan will 

undoubtedly increase electricity prices, which will hinder-not help-economic growth. The 

commenters stated that Alabama has historically seen lower than average energy costs, in part 

because our state has been blessed with an abundance of natural resources that can be harnessed 

to power our homes and businesses and to make life better for our citizens. 
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Commenters stated cost considerations: besides the rate increases already experienced from early 

adoption actions, the implementation of this initiative will further increase rates. The 

commenters also stated that it is imperative to consider the significant job losses in New Mexico 

due to the reduced use of coal. The commenters noted that this has been detrimental to many, but 

has had the greatest impact on the Native American population who has historically held the 

greatest percentage of jobs at both the coal mines and the power plants. The commenters noted 

that New Mexico continues to rank among the very poorest states in the nation, and the extreme 

poverty rates make any electric rate increase detrimental to our citizens. The commenters opines 

that these actions will necessarily increase rates. The commenters concludes that the state's 

economy and New Mexico household costs should not be threatened by substantial increases in 

electric costs and further job losses. 

Commenters stated that thousands of Montanans are employed in high-paying jobs related to 

extraction, use, and distribution of coal and these jobs support families as well as communities. 

The commenters stated that it is critical that any plan be designed to protect and maintain these 

jobs while meeting the new environmental standards. The commenters stated that they do not 

believe that jobs and the environment are automatically contrary to one another and they strongly 

support having the choice on how to meet the proposed rule. The commenters stated that it is 

important to find the right combination of "inside-the-fence" measures - like heat-rate 

improvement and installing new technologies, like carbon sequestration - and "outside-the-fence" 

measures - like deploying more renewable energy and improving energy grid efficiency. The 

commenters stated that the rule must create more economic opportunity for Montana's working 

families and ensure that news jobs are jobs of good quality. The commenters stated that this rule 

could bolster emerging sectors of the economy and re-establish manufacturing centers in the 

United States dedicated to supplying the needs of an expanded energy economy. The 

commenters stated that to maximize the benefit of any net job creation it is essential that these 

new jobs are good jobs that provide family-sustaining, prevailing wages and benefits as well as 

support Buy American policies.

Commenters stated that new GHG emission requirements will have a large and immediate 

impact on the job climate across our state, and much of that impact will be felt in my community 

where a large portion of the economic activity relies on coal-based energy production. The 

commenters further stated that Indiana County and the neighboring areas are home to a number 

of affected EGUs (including Conemaugh Generating Station, Keystone Generating Station, 

Seward Generating Station, and the Homer City Generating Station) and that these power plants 

serve as lynchpins of the local economy, with extensive direct, indirect, and downstream 

economic impacts. The commenters referred to the Homer City Generating Station, which is 

located in the middle of the district, as an example of how important all of these power plants are 

to the local economy. The commenters noted that in terms of direct employment, this facility 

employs more than 250 local men and women, and many of these employees are unionized and 

receive significant family-sustaining benefits packages. The commenters stated that the indirect 

economic activity generated by the Homer City Generating Station supports the companies that 

provide services and products for the plant's operations, including coal mines, the coal truck 

operators, the rail transportation infrastructure that carries coal to the power plant, the scrubber 

byproduct processing facilities, and a water treatment facility to process the plant's wastewater. 

The commenters estimated that the nearby Homer City Coal Cleaning Plant employs 50; the 

related coal mining operations employ between 350 and 450 individuals; and between 250 and 
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350 coal truck drivers deliver coal to the power plant. However, the commenters stated that it is 

the downstream impact that best demonstrates the power plant's importance to the community, 

and the economic ripple effect extends well beyond the hundreds of employees who report to 

work each day. The commenters estimated that the facility is responsible for the purchase of 

$395 million worth of goods and services every year in the local area, and that figure represents a 

significant amount of economic activity for any locale, much less in our portion of Western 

Pennsylvania. The commenters stated that every dollar spent in the community is recycled many 

times, supporting everything from direct vendors to the power plants and their suppliers to 

byproduct processing companies to the local restaurants, and that the taxes generated from this 

economic activity create tax revenue that is critical to municipal governments and school 

districts. The commenters noted that the ongoing installation of a scrubber system underscores 

the importance of the Homer City Generating Station, with a cost of nearly $750 million, and the 

project demonstrates a long-term commitment to the environment, the needs of the power grid, 

and the local community. 

Commenters stated that the retirements Building Block 2 precipitates would have dramatic local 

economic impacts. The commenters stated that shutting down the Coronado and Springerville 

Generating Stations in Apache County, Arizona, would cause over 4,000 individuals to lose their 

jobs, nearly 70 percent of which are located in Apache County, and cut $600 million in annual 

gross state product from Apache County. The commenters stated that with limited alternative 

employment opportunities, the resulting exodus of plant employees would depress County 

housing values, shutter local businesses, and county services would be curtailed as remaining 

County residents would be unable to alone shoulder the entire financial burden of supporting 

communal services, such as schools, medical centers, library districts, and fire districts. The 

commenters stated that the RIA only analyzes national employment impacts. The commenters 

stated that the Proposed Rule must give the states greater discretion in determining the 

appropriate performance standards for affected units. 

Commenters stated that the proposal would have tremendous impacts on the communities where 

Tri-State owns and operates coal-fired EGUs if those EGUs are forced to shut down or to curtail 

their operations severely. The commenters stated that when indirect impacts of Craig Station are 

taken into account, the plant is responsible for $489.6 million in regional total output. The 

commenters stated that Craig Station is responsible for providing three of Moffat County's top 

ten employers: Tri-State, the Trapper Mine, and the Colowyo Coal Mine, and that Craig Station 

supports 100 percent of the employees at the Trapper Mine and the Colowyo Mine. The 

commenters stated that mining accounts for better than 18 percent of the annual labor income 

generated in Moffat County, and Tri-State accounts for better than 18 percent of the property tax 

revenue in the county. 

Commenters stated that the State of Arizona and Apache County in particular will be severely 

detrimentally impacted if both Coronado and Springerville power plants are forced to cease 

operation. The commenters stated that Coronado and Springerville combined account for 4,009 

direct, indirect, and induced jobs in all private non-farm employment sectors in the State of 

Arizona (in CY2013), including 2,740 jobs in Apache County alone, and that these jobs alone 

equate to $713.5 million (2013 $) real GSP, including $230.2 million (2013 $) RDPI for the 

State of Arizona in CY2013. The commenters stated that Apache County could lose 2,700 FTE 

job years employment, just under $600 million in gross state product, and $170 million real 
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disposable personal income. The commenters estimated that over half (56%) of Apache County's 

property tax value could be eliminated, including two-thirds to three-quarters of the property 

value that supports the local school districts, and with limited alternative employment 

opportunities, the associated exodus of plant employees from the region could potentially result 

in a drop in housing values, shuttering of local businesses, and closing of schools as the 

remaining population is left with the full financial burden of schools, medical centers, library 

districts, fire districts, etc., currently born by the utilities and their employees. 

Commenters stated that if the proposed Clean Power Plan requires the Jim Bridger Power Plant 

to shut its doors, approximately 350 power plant employees would lose their jobs, and an 

estimated 400 employees from the Jim Bridger Coal Mine and 185 employees from the Black 

Butte Coal Mine would also lose their jobs. The commenters stated that as a result of this 

proposed plan, 935 Sweetwater County employees directly employed in the power generation 

and coal mining industries could be become unemployed. The commenters stated that the closing 

of the Jim Bridger Power Plant and Jim Bridger and Black Butte Coal Mines could result in 

indirect employment and economic impacts on numerous local, regional and national service 

companies that depend on the viability of these operations. The commenters stated that ad 

valorem tax revenues for these operations represent approximately 11 % of property taxes paid in 

Sweetwater County. The commenters stated that if these power plant and coal related tax 

revenues are lost along with the tax revenues generated by the associated residential, business 

and industrial sectors of the economy, there will be devastating consequences for the Sweetwater 

County Memorial Hospital, the Sweetwater County Events Complex, Southwest Counseling 

Service, the maintenance of 1200 miles of roads, the provision of an effective level of law 

enforcement and others. 

Commenters stated that the proposed rule will result in increased energy costs that will further 

stymy economic activity and result in additional hardship on our population, especially the 

14.7% that are already living below the poverty level. The commenters stated that its county 

unemployment hovers around 10% annually and the loss of this plant would be devastating. The 

commenters stated that a large-scale retirement of coal-fired plants across the country would 

result in massive job losses, tax base loss, increase in energy costs. 

Commenters stated that closure of the coal generating stations in Arizona would devastate the 

economies of our rural communities, where the plants support high-wage employment and 

provide a critical tax base for schools and local governments. The commenters stated that rate 

increases resulting from the Proposed Rule would disproportionally affect rural consumers and 

exacerbate the growing problem of poverty in these areas. 

Commenters stated that EPA failed to analyze the Proposed Rule's state-level employment and 

other economic impacts of [Building Block 1 and] Building Block 2. The commenters contended 

that the retirements that Building Block 2 in particular precipitates could have dramatic local 

economic impacts; for example, if any of our coal-fired plants were forced to shut down it would 

mean the loss hundreds of high-wage jobs in rural areas where there are few or no alternative 

employment options, devastating the local economies. Further, the commenters believed that 

these areas would remain hard hit even if new NGCC facilities were constructed close by as the 

siting, permitting, financing and construction of NGCCs would take several years and require 

less than a third of the staff required to operate coal-fired power plants. Commenters stated coal 
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mine and craft labor job losses should also be expected. Commenters also stated that despite the 

extensive local economic impacts caused by Building Block 2, EPA's Regulatory Impact 

Assessment (RIA) only analyzes national employment impacts. The commenters also stated that 

while the employment impacts from some aspects of the Proposed Rule may be felt across all 

states (e.g., demand-side energy efficiency), the employment impact from coal plant retirements 

assuredly would not. The commenters recommended that to appropriately analyze the Proposed 

Rule's economic impact, EPA should determine state-specific employment effects. 

Commenters stated that the proposed rule will destroy the pensions and healthcare of tens of 

thousands of future retirees, current retirees, widows and dependents in coalfield communities 

across the country.

Commenters noted that the statement about jobs that are lost or gained, they believe are 

incomplete in the proposed rules. The commenters stated disbelief that the number of retirees 

that will lose their pensions and health benefits was considered, and that there is no way that this 

is fair, meets the requirement for human dignity, or does not have a disruptive effect on persons 

that have worked their entire lives in coal mines for pensions and health benefits. The 

commenters stated that the U.M.W.A. pensions are a multi-employer pension that is funded by 

working miners to pay for the retiree's benefits. 

Commenters stated that to cope with the increased energy costs this proposed rule will bring, 

existing businesses in Terre Haute may layoff employees, move to other states or overseas or 

shut their doors, and that new businesses may be deterred from coming to Terre Haute, affecting 

jobs, local tax revenue and the overall economic health of Terre Haute. 

Commenters stated that forcing Minnesota to reduce its carbon emissions by 41% by 2030 is not 

fair, as midwestern states do not have to reduce by such a high percentage. The commenters 

stated that this will force the shutdown of many coal power plants, eliminate thousands of jobs in 

Minnesota, drive the cost of power up and create a terrible burden on lower income families. The 

commenters stated that it would like to see No. 3 generating plant stay online to keep some of the 

support and jobs in Becker, MN. 

Commenters stated that requiring Minnesota to reduce carbon emissions by 41% by 2030 is cost 

prohibitive, too aggressive, and will hurt our economy. The commenters stated that this will 

force the shutdown of many coal power plants and result in the loss of thousands of jobs 

(including many in his legislative district) and will drive the cost of power up, which will create 

a burden on all Minnesota families and especially low income families. 

Commenters stated that EPA recognized localized negative impacts of the proposed rule in its 

RIA. The commenters stated that the first coal mining jobs to be lost will be those at mines that 

produce the highest priced coal - notably, mines in eastern Kentucky and that the impact of this 

proposal will almost guarantee the broadening and deepening of the poverty already dominant in 

eastern Kentucky. 

Commenters stated that many coal-fired power plants, including Tri-State plants, are located in 

rural areas where the entire community is supported by the power plant. The commenters stated 

that the job loss will extend far beyond the jobs in the plants and mines themselves and that 
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power plants are often a major source of employment and revenue for the communities in which 

they are located. 

Commenters stated that should the EPA's Existing-Source Proposal be finalized, Seminole's 

coal-fired power plant will be forced to close - leaving 300 skilled employees and as many as 

600 contractors without a job. The commenters stated that Seminole is also the largest taxpayer 

in Putnam County, and paid more than $5 million in property taxes in both 2013 and 2014. The 

commenters stated that Putnam County cannot afford to lose Seminole's coal-fired power plant 

or any of the jobs associated with the facility. 

Commenters stated that the proposed rule will severely impact coal industry members, workers 

in allied industries such as rail transportation, equipment sales and manufacturing, and the 

communities where those activities are located. The commenters stated that this regulation will 

put Colorado citizens at risk for lost jobs and higher electricity costs. The commenters stated that 

by reducing the U.S. fleet of coal-fired generating units by more than one-third by 2020, the 

regulation will place U. S. consumers at risk of "rolling blackouts" and service disruptions. 

Commenters stated that the proposal has the potential, based on EPA 2025 IPM, to shutter over 

13,000 MW of the 22,000 MW of coal fired generation in the state of Texas, including San 

Miguel. The commenters stated that if the EPA's IPM is correct, there are 350 power plant and 

mine workers at San Miguel that will be put out of work due to this rule - a full 20 years before 

the useful life of the unit has been reached. 

Commenters stated that in Utah, coal-fueled electricity is responsible for meeting approximately 

80% of the state's energy needs, and it is crucial that Utah maintains the economic development 

competitiveness that coal provides. The commenters stated that the coal mining industry is one 

of the most important industries in the State of Utah, due not only to the number of jobs 

supported by the coal industry, but also to the economic linkages with other sectors of the 

economy and the high wages in the mining industry relative to other sectors of the Utah 

economy. The commenters stated that these high-paying coal mining jobs are located in a rural 

part of the state in which it would be difficult, if not impossible, to replace them. 

Commenters stated that the CPP will drive manufacturing and jobs out of state and overseas. The 

commenters stated that the proposed rule will impose costs on U.S. businesses in numerous ways 

without meaningfully reducing global GHG emissions. 

Commenters stated that to cope with the increased energy costs this proposed rule will bring, 

existing businesses in Terre Haute may lay off employees, move to other states or overseas or 

shut their doors, and that new businesses may be deterred from coming to Terre Haute, affecting 

jobs, local tax revenue and the overall economic health of Terre Haute. 

Commenters stated that coal job losses and rising electricity prices pose a threat to Kentucky 

consumers and our essential industrial manufacturing economy. The commenters stated that it is 

irresponsible for EPA to suggest that a $2 billion loss to our state gross domestic product coupled 

with a ten percent increase in electricity costs is "modest". The commenters stated that the 

proposed rule would strand another $4.5 billion previously invested in existing assets to achieve 
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compliance with the existing mercury and air toxins standard. The commenters stated that EPA 

must consider reasonable safety net provisions. 

Commenters stated that the IPM model improperly assumes that compliance actions related to 

existing generating assets and construction of new generating assets could be deployed in 2016 

and does not consider the time necessary to put in place accompanying regulatory, legislative 

and compliance decisions. The commenters stated that virtually all of the reductions in CO2 

emissions from affected EGUs come from reduced utilization of coal-fired EGUs and that EPA 

must determine the diminution in asset value to the owners of those existing sources, and the 

local and regional economic disruption and unemployment that would result from the proposal. 

Commenters stated that the dedicated Union Mine Forest at the Deserato Coal Mine in Western 

Colorado, is the largest employer in the county and that part of the state. Commenters stated that 

community relies on that coal plant and coalmine and the only market for the coal from that mine 

is the Bonanza Plant. Commenters stated that reductions in output at the Bonanza Plant mean 

reductions at the coalmine and those miners and their family have invested in years of mortgages 

for their homes and need careers that will last.

Commenters stated that, in addition to the impact on electric rates, these retirements will cause 

jobs to be lost and will have adverse impacts on local economies and local government tax 

revenues. The commenters stated that these impacts have already been seen in the local 

economies of the areas where plants have already been shut down. Commenters stated that 

closing this much generation in such a short timeframe also raises serious concerns about the 

ability to maintain reliability and meet peak demand, especially during extreme weather. The 

commenters assumed there are still federal requirements that a utility maintain an adequate 

generation reserve, so reliability is attained. 

Commenters noted that the elimination of coal plants will impact the pension and health care 

benefits of retired coal miners and their families.

Response 5.b.: While the EPA expects that there is likely to be additional job loss in sectors 

related to coal attributable to implementation of the CPP, many jobs in this field are expected to 

remain. For example, the Department of the Interior continues to work on an environmental 

impact statement to evaluate the potential environmental impacts of extending the operation of 

the Navajo Generating Station (NGS) and production of coal at the nearby Kayenta Mine for an 

extra 25 years, through 2044.

The EPA recognizes that the coal miner or coal plant worker who loses his or her job is not 

necessarily going to find a new job in energy efficiency or renewable energy. In response to the 

transition from coal to natural gas already underway due to lower natural gas prices, many states 

are implementing replicable programs to transition their workforces – by working in publicprivate partnerships with their community colleges and businesses - to secure an economic 

advantage as they transition to a lower carbon energy mix. In addition, a new federal initiative 

began in 2015: the Partnerships for Opportunity and Workforce and Economic Revitalization 

(POWER). It leverages a wide variety of federal economic and workforce development resources 

with the specific goal of providing assistance to communities negatively affected by recent and 
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future shifts in the coal industry and power sector. As part of the initiative, the Department of 

Commerce, Department of Labor, Small Business Administration, and the Appalachian Regional 

Commission have together created an initiative to issue grants to partnerships of regionallydriven economic development and workforce development organizations in impacted coal 

communities.4 In addition, the Department of the Interior has publically committed in the July 

2014 Technical Working Group Agreement to facilitate the development of approximately 

26,975,000 MWh of clean energy by December 31, 2035 in the Four Corners area. The EPA 

expects this commitment to support energy-sector and other jobs in the region.

The EPA recognizes the contribution of power plants and coal mines to the economies of the 

Navajo Nation, the Hopi Tribe and surrounding communities in Arizona and New Mexico, as 

well as many other communities nationwide. The ten year timeframe of the CPP from plan 

development to plan implementation allows states, utilities and other stakeholders the ability to 

work together to tailor their plans in the ways that best support their communities, so that they 

can not only reduce their greenhouse gas emissions, but also ease the transition of their 

workforces to the low carbon economy. 

5.c. Commenters state generally that the Clean Power Plan will result in job loss.

Commenters proposed that implementation of the rule would cause serious economic harm, 

reduce energy diversity, increase electricity prices, jeopardize grid reliability, result in major job 

losses, hinder coal technology advances and fail to achieve the administration and EPA's goal of 

global leadership on CO2.

Commenters expressed concern that the rule would substantially increase electricity and natural 

gas costs, create liability problems, put the manufacture sector at risk, and reduce good paying 

jobs with relatively small global climate impact. The commenters cited EPA’s estimates that the 

proposed rule would reduce 730 million metric tons of carbon by 2030 but then stated that China 

increased its emissions nearly that same amount in one year. 

Similarly, commenters stated that the proposed regulations are likely to increase worldwide 

greenhouse gas emissions by decreasing the international competitiveness of U.S. businesses due 

to increased energy costs and moving businesses to areas with less efficient and more carbon 

intensive energy supplies. The commenters further stated that under this proposal the total cost of 

the products produced in the U.S. will need to increase, eroding our international 

competitiveness and resulting in the loss of U.S. Manufacturing jobs, despite businesses 

investing in cost effective energy savings activities for decades. 

Commenters discussed impacts to American refineries, manufacturing, other businesses and 

hardworking American consumers such as less affordable and less reliable energy, loss of jobs, 

and elimination of fuel diversity. The commenters stated that the proposed EPA rule ignores the 

successful example of our free market and guarantees adverse consequences for nearly every 

 

4 See https://www.whitehouse.gov/the-press-office/2015/03/27/fact-sheet-partnershipsopportunity-and-workforce-and-economic-revitaliz.
252

consumer and business in the U.S. The commenters further stated that the proposed rule 

threatens our industry's international competitiveness due to higher energy costs.

Commenters stated that electric utilities need more time to build replacement generation and 

make significant investments in transmission and other mitigation to maintain reliability. The 

commenters recall when our overall environment was nowhere near the quality we have now, 

and the soot in the air represented progress. The commenters also recalled that back then, 

thoughts of the long term ramifications were not paramount, that we are now much smarter, and 

we have made great strides in cleaning up our emissions. However, the commenters noted that 

now is not the time to make these draconian demands on our country's energy infrastructure. The 

commenters stated that the loss of jobs, coupled with the drastic increases in electricity rates, will 

create a huge burden on our citizens. Commenters felt that we should strive to continue the 

technological advances that have already provided us with a much cleaner environment; 

however, arbitrary deadlines and unproven benefits will only harm our still fragile economy. 

Commenters stated that under the proposed guidelines, EPA projects that its proposed Clean 

Power Plan will increase electricity prices by a nationwide average of 4 percent to 7 percent, will 

increase natural-gas prices by 9 percent to 12 percent, and will cause the retirement of 46,000 

megawatts to 49,000 megawatts of coal-fueled electric-generating capacity. The commenters 

stated that the EPA's proposal will have a major impact on energy resources, electric ratepayers, 

jobs, and the economy of the Midwest region. 

Commenters stated that the 16 states in the Southern States Energy Board region currently 

produce over 50 percent of the U.S. energy supply, and $5 trillion of the nation's $16 trillion 

economic output with a commensurate number of high quality jobs in the manufacturing and 

agriculture sectors with much lower electricity rates and higher economic growth than states with 

self-imposed carbon limits. 

Commenters cited findings from a national survey that a majority believe the United States 

cannot afford new costs and potential job losses resulting from the EPA regulations; nearly half 

of those polled say they are not willing to pay a single dollar more in their energy bill to 

accommodate the new EPA regulations; and 47 percent oppose the regulations. The commenters 

stated that these findings are mirrored on a state level in Arkansas, and the Proposed Rule is 

dependent in many instances on changes in state law and state regulations, and elected state and 

local officials will not be willing to enact legislation or approve regulations that result in such 

far-reaching and expensive effects on their constituents. 

Commenters stated that foreign direct investment (FDI) has also led to the creation of 2,118 new 

direct jobs in 2014, or 45 percent of new announced jobs. The commenters stated that this 

investment will be jeopardized by rising energy costs due to the proposed rule. The commenters 

stated that they were concerned both about their ability to attract new businesses, as well as 

about the ability of current businesses to continue to operate. 

Commenters stated that the cost of this rule is additive to the costs from several other EPA rules, 

such as the Mercury MACT rule, the Refinery Sector Rule proposal and the Cross State Air 

Pollution Rule. Further still, the EPA will implement lower ozone standards by 2015. The 

commenters stated that even before the regulation's requirements are taken into account, seven of 
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the EPA's final or pending regulations are projected to cost the economy more than $60 billion 

per year in lost GDP and will cause the annual loss of nearly 900,000 jobs. 

Commenters stated that the rule presents a significant threat to American jobs and the economy. 

The commenters stated that increases in electricity costs will place an immense burden on U.S. 

businesses for which affordable energy provides a critical operating advantage in competitive 

global markets. 

Commenters stated that the effective ban on coal-based power will cause the loss of thousands of 

jobs, directly and indirectly. The commenters stated that in order to absorb higher electricity 

costs, businesses will be forced to reduce their workforce and increase the prices of their 

products, leading to an overall rise in the cost of living. The commenters stated that the potential 

combination of price increases and job losses constitutes an unacceptable hardship for Georgia 

families. The commenters stated that relying on less fuel sources is a grave threat to our grid 

security. The commenters stated that effectively eliminating coal from our energy portfolio will 

impede global competitiveness. 

Commenters stated that the EPA should consider a reasonable path forward that does not exceed 

EPA's statutory authority, that supports American jobs and the economy, that maintains electric 

reliability, that does not place American industry at a competitive disadvantage with industry in 

other countries, that is based on a realistic global plan that is practically enforceable, and that 

allows all our energy sources to play in a role in America's energy future while maintaining 

America's low cost energy competitive advantage. The commenters stated that NSA and NYS 

produce steel with much lower emission rates per unit of output, including for greenhouse gases, 

than many other integrated domestic and foreign steel mills, including Chinese, Russian and 

Indian steel mills. 

Commenters stated that since energy is commonly one of the highest costs and key inputs to 

energy intensive industrial companies, any regulation which increases electricity prices while 

reducing electricity reliability will necessarily harm the international competitiveness of U.S. 

industry and ultimately cost good, family sustaining jobs. 

Commenters stated that regulating GHG emissions from the manufacturing sector is neither 

necessary nor sensible at this time, particularly given that so many industries have already been 

reducing GHG emissions through voluntary and extensive energy efficiency initiatives. The 

commenters stated that imposing uniform GHG standards of performance on non-EGU source 

categories could disadvantage these sectors by making them less competitive on the global stage. 

The commenters stated that new regulations with high compliance costs that do not account for 

trade exposure will translate into significant job losses and reductions in economic activity 

without actually reducing GHG emissions. 

Commenters stated that the U.S. should not risk rising electricity prices and diminished fuel 

diversity in the absence of legally binding commitments from China, India, and other major 

developing nations. Doing so would increase domestic job losses and accelerate off-shoring of 

energy-sensitive industries. 
254

Commenters stated that lacking competitive, stable electricity prices, manufacturers and 

businesses will be driven offshore or out of business. The commenters stated that if industry is 

driven away from the U.S. due to EPA regulations, it will likely be to countries with cheaper 

energy, lower labor costs, and less stringent environmental requirements and thus will have the 

unintended and ironic consequence of raising global carbon emissions and overall emissions. 

The commenters cited Philip Moeller, that EPA is essentially capping the amount of national 

electricity consumption in 2030. The commenters stated that the impacts of carbon reduction 

policies in other advanced economies around the world including Australia and Europe caused 

economic harm and job loss from excessive regulations. 

Commenters stated that increased electricity and natural gas prices will decrease manufacturing 

competitiveness, increase the competitive advantage of our offshore competitors, decrease U.S. 

jobs, increase imported manufactured goods and cause a larger trade deficit. The commenters 

stated that the shifting of manufacturing jobs offshore and to countries that have less stringent 

laws and regulations governing the emissions of greenhouse gases and other pollutants entails 

the deterioration of domestic employment and economic activity, as well as increased overall 

emissions worldwide. 

Commenters stated that the Clean Power Plan does not address the leakage problem, that higher 

energy rates lead to higher production costs and most industries cannot easily pass along those 

higher costs to their customers; thus making US industries less competitive and vulnerable to 

foreign competition. The commenters stated that the EPA's plan would make it economically 

infeasible for numerous businesses to remain in the US; thus causing potential massive job 

dislocation. The commenters stated that the evidence points to regulations that were drafted by 

wealthy climate activists and special interest groups without regard for the impact these overzealous regulations would have on American families and businesses. The commenters stated 

that there does not appear to be a scientific-based justification for the EPA's 30% CO2 reduction 

proposal. 

Commenters stated that the manufacturing sector consumes 26% of U.S. electricity and 29% of 

U.S. natural gas, and requires affordable energy prices to compete with global competition, 

create jobs, and to generate economic growth. The commenters stated that as electricity and 

natural gas prices rise, manufacturing facilities move overseas to remain competitive. The 

commenters stated that jobs as well as GHG also move overseas, referred to as "GHG leakage." 

The commenters stated that by creating such a costly and burdensome regulation, the EPA will 

effectively send U.S. jobs overseas thus causing GHG to instead migrate. The commenters stated 

that unless the measures set forth in the CPP are addressed and actually implemented with 

consideration of potential international impacts, all that the CPP will accomplish is to harm the 

U.S. economy by causing job losses or job relocations and increased overall emissions. 

Commenters stated that the CPP might make the cost of doing business in the U.S. so high that 

companies move their operations overseas to countries with fewer environmental regulations 

than the U.S. The commenters stated that EPA does no analysis to account for potential 

economic "leakage" that may occur as a result of the CPP and the Agency's assessment of the 

CPP's effect on emissions is incomplete and hopelessly optimistic. The commenters cited the 

Maguire Energy Institute that regulatory burdens of this sort imposed on energy prices and 

energy supply cause plant closures and maximize the potential that manufacturing jobs will 
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move overseas. The commenters cited the International Energy Agency that such leakage can 

result in the increase in emissions outside a region as a direct result of the policy to cap emission 

in this region.

Commenters stated that U.S. industries are some of the most efficient in the world both in terms 

of energy use and GHG emissions and that in 2010, the GHG emission intensity of the U.S. 

economy, measured by total carbon dioxide emissions divided by GDP, was 31 percent below 

the worldwide average and 67 percent below that of nations that are not part of the Organization 

for Economic Cooperation and Development. The commenters stated that based on current 

projections, worldwide energy-related CO2 emissions will rise approximately 20 percent by 

2035 while U.S. emissions are projected to be relatively flat; thus, the carbon intensity of the 

U.S. economy is set to drop even further when compared to worldwide averages and non-OECD 

nations. The commenters stated that if the Administration adopts policies that substantially 

increase the cost of energy - thereby decreasing the competitiveness of U.S. industries -

investments and emissions will be sent to other, less efficient countries with higher CO2 

emissions intensities and, as a result, overly restrictive and costly U.S. policies to reduce 

emissions will not only be offset by the rapidly increasing emissions from other countries, but 

could actually result in a net increase in global emissions. The commenters recommended that a 

more effective policy approach for lowering global GHG concentrations would be to promote 

on-shoring of jobs and production from more carbon intensive countries to the less carbon 

intensive U.S. economy. 

Commenters stated "The scientifically flawed SCC computational process attempts to compute 

the future global warming damage to the entire world-wide population that would be avoided by 

each ton of CO2 not emitted by U.S. sources and count that highly uncertain world-wide avoided 

damage as a benefit of the regulation. But the SCC cost/benefit analysis only burdens the U.S. 

economy and population (not the entire world) with the immediate cost impacts from issuance of 

the regulations. This will result in much higher US energy costs and loss of jobs to other 

countries with lower coal-produced energy costs that do not choose to bear the burden of CO2 

emissions control." 

Commenters stated that because Texas businesses compete on a global scale, rising electricity 

prices resulting from the proposed standards will place the state, and the nation, at a 

disadvantage globally. The commenters stated that some businesses would choose to move 

overseas, taking their emissions - which will be less controlled or uncontrolled altogether - and 

their jobs with them. 

Commenters suggested that the proposed rule does not strike a balance between climate change 

goals and economic impacts such as job losses, trade balances, and costs of electricity, goods and 

services. Commenters stated that policies must ensure that low and fixed income consumers are 

not disproportionately impacted and further suggested that all sources of GHG and economic 

sectors should be included in initiatives to reduce emissions. Commenters urged the EPA to 

think about the economic calamity we face around the world if the lights went out, if electricity 

became too costly for families who are struggling to pay their bills every month or seniors who 

spend more time in their homes than most but cannot afford excessive heating or cooling bills. 

The commenters stated that businesses rely more than ever before on electric power to boot their 

computers, charge their technology and power equipment to be successful. 
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Commenters cited a US Chamber of Commerce estimate that through 2030, new carbon 

regulations would, on average, lower U.S. Gross Domestic Product by $51 billion annually, with 

a peak decline of over $100 billion in 2025; result in the loss of more than 220,000 jobs annually, 

peaking at 422,000 in 2022; and lower U.S. household total disposable income by more than 

$580 billion. 

Commenters cited NERA estimates of an average nationwide electricity rate hike of 12 

percent. The commenters stated that EPA left several important cost inputs out of its modeling 

efforts, including the cost of new electricity and gas transmission projects that will be required to 

satisfy the requirements of the CPP. The commenters cited independent experts statements that 

EPA may have overestimated the degree of heat rate efficiency improvements achievable at 

power plants by as much as a factor of three, that EPA made optimistic projections about the 

feasibility of increased natural gas use, that EPA failed to include the need for excess natural gas 

capacity to fill-in for intermittent renewable energy resources, and that EPA made across-theboard assumptions about the future of energy efficiency based entirely on past achievements and 

not at all on the feasibility of future realizations. The commenters stated that higher energy prices 

will produce a ripple effect throughout the U.S. economy that will shutter businesses, deter 

hiring, cause layoffs, increase the price of essential goods and services, and increase the cost-ofliving for all Americans, particularly people living on fixed incomes. The commenters cited 

studies showing that unemployment, and economic malaise more generally, take an appreciable 

toll on the health and well-being of Americans by increasing the likelihood of hospital visits and 

illnesses, raising healthcare costs, and putting stress on families. 

Commenters stated that the rulemaking notice severely underestimates direct compliance costs. 

The commenters stated that the agency has made no effort to assess the Proposed Rule's full 

effect on economic productivity and employment. The commenters stated that more 

comprehensive analyses predict compliance costs of $480 billion by 2030, an average annual 

negative impact on GDP of $50 billion, and an average annual net decrease in employment of 

over 200,000 jobs. 

Response 5.c.: The EPA disagrees with commenters who assert that electricity prices are going 

to rise so dramatically as to cause widespread job loss, or to cause U.S. industries to be driven 

overseas. Below in section 8.6 comment 5 (titled: Commenters cite results from specific reports 

issued by stakeholder groups), the EPA discusses problems with the analyses in specific reports 

that make such assertions. The EPA acknowledges that there will be additional job loss in certain 

sectors of the economy associated with fossil fuel, and that is discussed earlier in section 8.6, 

comment 5 (titled: Commenters state that the Clean Power Plan will result in loss of jobs related 

to coal as well as Commenters state that the Clean Power Plan will cause job loss in specific 

locations) and in the RIA.

5.d. Commenters state that energy efficiency creates more jobs than gas or coal.

Commenters stated that a popular measure is to estimate jobs per dollar invested. The 

commenters stated that in the electricity space, a comparative analysis of efficiency compared to 

generation found that efficiency created twice as many jobs per dollar spent on nuclear power 

and 50% more jobs than coal and gas generation, and these large increases in economic activity 

lead to increases in employment. The commenters stated that the effect is magnified by the fact 
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that the non-energy sectors of the economy are substantially more labor intensive than energy 

production, and the energy sector is less than half as labor intensive as the rest of the economy. 

The commenters puts forward that this effect is compounded where energy is imported (as in the 

U.S. transportation sector), and as consumers substitute away from energy, the goods and 

services they purchase stimulate economic and disproportionately large job growth. The 

commenters remarked that these efforts to model the economic impact of energy efficiency have 

proliferated with different models being applied to different geographic units, including states 

and nations. The commenters stated that the results differ across studies because the models are 

different, the impact varies according to the size of the geographic unit studied and because the 

assumptions about the level and cost of energy savings differ. The commenters noted that these 

differences are not an indication that the approach is wrong; on the contrary, all of the analyses 

conclude that there will be increases in economic activity and employment, and given that there 

are different regions and different policies being evaluated, we should expect different results. 

The commenters stated that, taken together, the overestimation of costs and underestimation of 

benefits lead to a substantial and systematic underestimation of the net benefits of efficiency 

gains, and because the impact of the efficiency improvements depends on (a) the size of the 

improvement and (b) the type of consumer durable being studied, (c) the sector in which it 

occurs and (d) the region being analyzed, one cannot offer a single, simple estimate. The 

commenters stated that the exact calculation of costs and benefits is likely to underestimate the 

benefit/cost ratio by a factor of at least two because of the failure to reflect the macroeconomic 

benefits and cost reducing trends, both of which are positive externalities of the adoption of 

performance standards. 

Response 5.d.: The EPA recognizes that studies assessing implementation of energy efficiency 

measures across the country have shown increases in employment, and that many measures taken 

to increase efficiency are labor-intensive. For example, weatherizing buildings directly employs 

energy auditors and construction workers. While it is difficult to precisely estimate, much of the 

economic activity that is created it does increase employment directly. For example, there may 

be more machinists to manufacture new energy efficient appliances and equipment, construction 

workers to weatherize homes and buildings, service providers to conduct energy audits, and 

engineers and programmers to improve building energy management systems. 

5.e. Commenters state that the Clean Power Plan should have analyzed state and local 

effects.

Commenters stated that EPA failed to analyze the Proposed Rule's state-level employment and 

other economic impacts of Building Block 1 and Building Block 2. The commenters contended 

that the retirements that Building Block 2 in particular precipitates could have dramatic local 

economic impacts; for example, if any of our coal-fired plants were forced to shut down it would 

mean the loss hundreds of high-wage jobs in rural areas where there are few or no alternative 

employment options, devastating the local economies. Further, the commenters believes that 

these areas would remain hard hit even if new NGCC facilities were constructed close by as the 

siting, permitting, financing and construction of NGCCs would take several years and require 

less than a third of the staff required to operate coal-fired power plants. Coal mine and craft labor 

job losses should also be expected. Commenters also stated that despite the extensive local 

economic impacts caused by Building Block 2, EPA's Regulatory Impact Assessment (RIA) only 
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analyzes national employment impacts. The commenters also stated that while the employment 

impacts from some aspects of the Proposed Rule may be felt across all states (e.g., demand-side 

energy efficiency), the employment impact from coal plant retirements assuredly would not. The 

commenters recommends that to appropriately analyze the Proposed Rule's economic impact, 

EPA should determine state-specific employment effects. 

Response 5.e.: Because states have broad flexibility in tailoring programs to meet their goals, we 

cannot predict exactly where specific impacts will occur, although we know they are not spread 

evenly across the country. 

The national jobs estimates we have provided are illustrative – they represent one possible 

implementation scenario. The analysis relies on projections and costing analysis from the IPM 

model, which uses industry-specific data and assumptions to estimate costs and energy impacts 

of the CPP. The EPA uses IPM to predict coal generating capacity that is likely to undertake 

improvements in heat rate efficiency, and also to predict impacts of the CPP on fuel use, 

retirement of existing units, and construction of new ones. The IPM expenditure predictions are 

distributed across different labor categories. The EPA does, however, recommend that states in 

designing their state plans, consider the effects of their plans on employment and overall 

economic development to assure that the opportunities for economic growth and jobs that the 

plans offer are manifest. See Section VIII.G.3 of the preamble. The IPM model makes specific 

choices that may or may not match what states decide to do. For example, IPM assumes that 

units slated to retire will tend to all retire by 2020. In the real world, states and utilities will have 

the flexibility to change the timing and magnitude of retirement decisions, as long as they can 

meet their goals. In addition, the EPA anticipates positive employment impacts – job gains – in 

many areas as a result of increased investment in demand-side energy efficiency and renewable 

energy.

5.f. Commenters state that the Clean Power Plan will have a variety of negative ripple effects 

through the economy.

Commenters stated the Plan callously disregards the impact of increased energy costs that have a 

domino impact on every step in the supply chain resulting increased costs of our goods and 

services, reduced competiveness and job losses.

Commenters stated that new GHG emission requirements will have a large and immediate 

impact on the job climate across our state, and much of that impact will be felt in my community 

where a large portion of the economic activity relies on coal-based energy production. The 

commenters further stated that Indiana County and the neighboring areas are home to a number 

of affected EGUs (including Conemaugh Generating Station, Keystone Generating Station, 

Seward Generating Station, and the Homer City Generating Station) and that these power plants 

serve as lynchpins of the local economy, with extensive direct, indirect, and downstream 

economic impacts. The commenters referred to the Homer City Generating Station, which is 

located in the middle of the district, as an example of how important all of these power plants are 

to the local economy. The commenters noted that in terms of direct employment, this facility 

employs more than 250 local men and women, and many of these employees are unionized and 

receive significant family-sustaining benefits packages. The commenters stated that the indirect 

economic activity generated by the Homer City Generating Station supports the companies that 
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provide services and products for the plant's operations, including coal mines, the coal truck 

operators, the rail transportation infrastructure that carries coal to the power plant, the scrubber 

byproduct processing facilities, and a water treatment facility to process the plant's wastewater. 

The commenters estimated that the nearby Homer City Coal Cleaning Plant employs 50; the 

related coal mining operations employ between 350 and 450 individuals; and between 250 and 

350 coal truck drivers deliver coal to the power plant. However, the commenters stated that it is 

the downstream impact that best demonstrates the power plant's importance to the community, 

and the economic ripple effect extends well beyond the hundreds of employees who report to 

work each day. The commenters estimated that the facility is responsible for the purchase of 

$395 million worth of goods and services every year in the local area, and that figure represents a 

significant amount of economic activity for any locale, much less in our portion of Western 

Pennsylvania. The commenters stated that every dollar spent in the community is recycled many 

times, supporting everything from direct vendors to the power plants and their suppliers to 

byproduct processing companies to the local restaurants, and that the taxes generated from this 

economic activity create tax revenue that is critical to municipal governments and school 

districts. The commenters noted that the ongoing installation of a scrubber system underscores 

the importance of the Homer City Generating Station, with a cost of nearly $750 million, and the 

project demonstrates a long-term commitment to the environment, the needs of the power grid, 

and the local community. 

Commenters stated that the retirements Building Block 2 precipitates would have dramatic local 

economic impacts. The commenters stated that shutting down the Coronado and Springerville 

Generating Stations in Apache County, Arizona, would cause over 4,000 individuals to lose their 

jobs, nearly 70 percent of which are located in Apache County, and cut $600 million in annual 

gross state product from Apache County. The commenters stated that with limited alternative 

employment opportunities, the resulting exodus of plant employees would depress County 

housing values, shutter local businesses, and county services would be curtailed as remaining 

County residents would be unable to alone shoulder the entire financial burden of supporting 

communal services, such as schools, medical centers, library districts, and fire districts. The 

commenters stated that the RIA only analyzes national employment impacts. The commenters 

stated that the Proposed Rule must give the states greater discretion in determining the 

appropriate performance standards for affected units. 

Commenters stated that the proposal would have tremendous impacts on the communities where 

Tri-State owns and operates coal-fired EGUs if those EGUs are forced to shut down or to curtail 

their operations severely. The commenters stated that when indirect impacts of Craig Station are 

taken into account, the plant is responsible for $489.6 million in regional total output. The 

commenters stated that Craig Station is responsible for providing three of Moffat County's top 

ten employers: Tri-State, the Trapper Mine, and the Colowyo Coal Mine, and that Craig Station 

supports 100 percent of the employees at the Trapper Mine and the Colowyo Mine. The 

commenters stated that mining accounts for better than 18 percent of the annual labor income 

generated in Moffat County, and Tri-State accounts for better than 18 percent of the property tax 

revenue in the county. 

Commenters stated that the State of Arizona and Apache County in particular will be severely 

detrimentally impacted if both Coronado and Springerville power plants are forced to cease 

operation. The commenters stated that Coronado and Springerville combined account for 4,009 
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direct, indirect, and induced jobs in all private non-farm employment sectors in the State of 

Arizona (in CY2013), including 2,740 jobs in Apache County alone, and that these jobs alone 

equate to $713.5 million (2013 $) real GSP, including $230.2 million (2013 $) RDPI for the 

State of Arizona in CY2013. The commenters stated that Apache County could lose 2,700 FTE 

job years employment, just under $600 million in gross state product, and $170 million real 

disposable personal income. The commenters estimated that over half (56%) of Apache County's 

property tax value could be eliminated, including two-thirds to three-quarters of the property 

value that supports the local school districts, and with limited alternative employment 

opportunities, the associated exodus of plant employees from the region could potentially result 

in a drop in housing values, shuttering of local businesses, and closing of schools as the 

remaining population is left with the full financial burden of schools, medical centers, library 

districts, fire districts, etc., currently born by the utilities and their employees. 

Commenters stated that if the proposed Clean Power Plan requires the Jim Bridger Power Plant 

to shut its doors, approximately 350 power plant employees would lose their jobs, and an 

estimated 400 employees from the Jim Bridger Coal Mine and 185 employees from the Black 

Butte Coal Mine would also lose their jobs. The commenters stated that as a result of this 

proposed plan, 935 Sweetwater County employees directly employed in the power generation 

and coal mining industries could be become unemployed. The commenters stated that the closing 

of the Jim Bridger Power Plant and Jim Bridger and Black Butte Coal Mines could result in 

indirect employment and economic impacts on numerous local, regional and national service 

companies that depend on the viability of these operations. The commenters stated that ad 

valorem tax revenues for these operations represent approximately 11 % of property taxes paid in 

Sweetwater County. The commenters stated that if these power plant and coal related tax 

revenues are lost along with the tax revenues generated by the associated residential, business 

and industrial sectors of the economy, there will be devastating consequences for the Sweetwater 

County Memorial Hospital, the Sweetwater County Events Complex, Southwest Counseling 

Service, the maintenance of 1200 miles of roads, the provision of an effective level of law 

enforcement and others. 

Commenters stated that for many coal-fired plants, reaching these extreme goals in such a short 

period of time will prove either economically unfeasible or physically impossible (or both), thus 

forcing their premature retirements. The commenters stated that the proposed rule will end up 

slashing not CO2 emissions, but thousands of good-paying middle-class jobs instead. The 

commenters cited projections of retirement of about 12 percent to 19 percent of all coal-fired 

capacity projected to be in service in the base case) by 2020 under the range of scenarios 

analyzed, and its impact on well over 135,000 stable, well-paying jobs for middle-class families 

that the industry provides. The commenters stated the most obvious consequence of the 

widespread closure of coal-fired power plants will be massive job losses. The commenters stated 

that the agency's plans also would result in the loss of some 52,000 permanent direct jobs in 

utilities, mining and rail and at least another 100,000 jobs in related industries.

Commenters stated that as plants close or scale back operations, the loss of jobs and tax income 

in communities across the region will be a significant blow to the economy. 

Commenters stated that a shift away from coal will significantly increase the cost of electricity, 

and that in turn will have a very significant cascading impact on GDP. The commenters stated 
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that that increased costs of electricity will translate into fewer jobs for Americans in all sectors of 

the economy. 

Commenters stated that the proposed rule will severely impact coal industry members, workers 

in allied industries such as rail transportation, equipment sales and manufacturing, and the 

communities where those activities are located. The commenters stated that this regulation will 

put Colorado citizens at risk for lost jobs and higher electricity costs. The commenters stated that 

by reducing the U.S. fleet of coal-fired generating units by more than one-third by 2020, the 

regulation will place U. S. consumers at risk of "rolling blackouts" and service disruptions.

Commenters stated that these job losses will have a ripple effect in the communities throughout 

the coalfields and beyond, where more than 208,000 jobs will be lost by 2030. 

Response 5.f.: The EPA agrees that plant closures affect other businesses that provide them with 

materials and fuels, and that closures also affect businesses in local communities where their 

employees spend their pay. However, the Clean Power Plan employment analysis illustrates not 

only declines in employment in some sectors (such as coal generated power) but also an increase 

in employment in other sectors (such as demand-side energy efficiency). The sectors 

experiencing growth will positively affect their suppliers and positively affect businesses where 

their employees spend their pay.

The power sector of the 21st century is going to look somewhat different from the power sector 

of the 20th century, and the EPA recognizes that the transition is not going to affect everyone 

equally. That is why, as stated above, the CPP provides a ten-year timeframe from plan 

development to plan implementation. The ten-year timeframe allows states, utilities, and other 

stakeholders to work together to tailor their plans in the ways that best support their 

communities, so that they can not only reduce their greenhouse gas emissions, but also ease the 

transition of their workforces to the low carbon economy.

5.g. Commenters state that EPA should have done economy-wide modeling for the Clean 

Power Plan.

Commenters stated that EPA's analysis of the employment impacts of the Proposed Rule was 

arbitrary and capricious because EPA only evaluated employment impacts in a few select 

industries. The commenters stated that EPA's partial economy model failed to address impacts 

in the communities that support coal-fired electricity generation and on consumers of electricity. 

The commenters stated that a whole economy model must include employment across a wide 

range of sectors, sufficient detail at the regional level to identify changes in the regional 

distribution of output and employment, international trade flows to evaluate how regulations will 

affect tradable sectors and dynamic analyses to examine adjustments in labor and capital markets 

in response to regulations over time. 

Commenters stated that EPA's assessment of labor impacts ignores the largest labor impacts, 

which are the indirect jobs impacted as a result of higher energy costs. The commenters stated 

that higher natural gas prices and electric rates will result in the economic dislocation of some 

industries, particularly those industries that are energy intensive, as they are unable to fully pass 
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thru the higher cost of electricity and natural gas to their consumers and customers. The 

commenters stated that EPA must consider these indirect job impacts in the RIA. 

Commenters stated that manufacturers rely on secure and affordable energy to compete in a 

tough global economy, and that manufacturers' recent gains are largely due to the abundance of 

affordable energy we now enjoy. The commenters stated that manufacturers across CSX's 23-

state network, have invested more than $14 billion in rail-served facilities, creating more than 

14,000 jobs over the last five years. The commenters stated that in 2013, $3 billion in customer 

investments generated more than 1,600 new job opportunities. The commenters stated that 

economic productivity and environmental progress could be undermined by the Proposed Rule 

and EPA's failure to analyze foreseeable economic impacts. 

Commenters stated that EPA failed to meaningfully consider employment impacts of Clean Air 

Act regulations by not using whole economy modeling that would have captured a much more 

accurate picture of the likely job losses from this proposal. The commenters further stated that 

EPA failed to undertake an employment analysis under Section 321A of the Clean Air Act, 

which requires the continuous review of potential job losses and shifts in employment due to the 

implementation of the act.

Commenters stated that the RIA does not capture various indirect employment impacts and 

provided an economy-wide assessment of the rule's impact on employment that captured the 

employment impacts of the rule not only for directly affected industries (similar to EPA) but also 

for industries that may be indirectly affected by the rule. The commenters estimated that the 

GDP and employment effects of the rule are small but positive. The commenters stated that by 

2025, total employment would increase by more than 200,000 and increase by 263,000 by 2040. 

The commenters stated that the increases in electricity efficiency brought about by the rule 

represent increases in multi-factor productivity, which stimulates the economy by raising its 

potential supply (how much output can be produced with given resources). The commenters 

stated that the efficiency investments are a cost to some industries and consumers, but represent 

increased demand for the industries producing the goods and services necessary to accomplish 

those investments. The commenters stated that reductions in electricity demand have negative 

impacts on employment and investment in the electric power industry, as well as on output and 

jobs in the coal and gas producing industries. The commenters estimated that carbon emissions 

would fall to 5104 million tons by 2040 under the proposed rule, compared with 5710 million 

tons in the reference case, with most of the reduction is in the electric power sector. 

Commenters stated that EPA failed to adequately or reliably analyze the potential costs and 

benefits of the proposed CPP; by simultaneously overestimating the potential benefits of the 

proposal and underestimating the costs, EPA claims (in error) that the proposed rule will produce 

economic benefits. According to the commenters, if done properly, a cost-benefit analysis of the 

CPP would reveal significant costs in both the short term and the long term. The commenters 

stated that first, EPA' s reliance on the social cost of carbon is wholly inappropriate because that

calculation has not been subject to a rigorous and transparent rulemaking process, and it fails to 

address properly international benefits and costs; second, EPA fails to use full-economy 

modeling to evaluate employment impacts, which fails to account for the negative impact on 

employment likely to be experienced by other industries that support or rely upon coal 

generation and the communities surrounding them; and finally, EPA's reliance on co-benefits 
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from simultaneous reductions in pollutants other than GHGs is misplaced and must be revised to 

more appropriately reflect the health benefits that would actually he attributable to this proposed 

rule. 

Response 5.g.: To support the Transport Rule proposed in the summer of 2010, among other 

rulemakings, the EPA used the Economic Model for Policy Analysis (EMPAX) to estimate the 

effect of impacts projected by the Integrated Planning Model (IPM) on markets outside the 

electricity sector. EMPAX is a dynamic computable general equilibrium (CGE) model that 

forecasts a new equilibrium for the entire economy after a policy intervention. While the external 

Council on Clean Air Compliance Analysis (Council) peer review of this study stated that 

inclusion of benefits in an economy-wide model, specifically adapted for use in that study, 

“represent[ed] a significant step forward in benefit-cost analysis,” EPA recognizes that serious 

technical challenges remain when attempting to evaluate the benefits and costs of potential 

regulatory actions using economy-wide models. Consistent with the Council’s advice regarding 

the importance of including benefit-side effects demonstrated by the 1990 to 2020 Clean Air Act 

study, and the lack of available multi-year air quality projections needed to include these benefitside effects, EPA has not conducted CGE modeling for this final rule.

However, the EPA recognizes that serious technical challenges remain when attempting to 

evaluate the impacts of potential regulatory actions using economy-wide models. The EPA has 

therefore established a Science Advisory Board (SAB) panel on economy-wide modeling to 

consider the technical merits and challenges of using this analytical tool to evaluate costs, 

benefits, and economic impacts in regulatory development. The EPA will use the 

recommendations and advice of this panel as an input into its process for improving benefit-cost 

and economic impact analyses that are used to inform decision-making at the agency. The panel 

will also be asked to identify potential paths forward for improvements that could address the 

challenges posed when economy-wide models are used to evaluate the effects of regulations.

While the purpose of the SAB process is not to peer review any particular economy-wide model, 

it is worth noting that one of the charge questions to the SAB asks if there other economy-wide 

modeling approaches that EPA could consider in conjunction with CGE models.

The advice from the SAB panel formed specifically to address the subject of economy-wide 

modeling will not be available in time for this promulgation. Given the ongoing SAB panel on 

economy-wide modeling, the uncertain nature of the ultimate energy price impacts due to the 

compliance flexibility for states, and the ongoing challenges of accurately representing costs, 

energy efficiency savings and economic benefits in economy-wide modeling, the RIA for the 

CPP proceeds by presenting the energy impacts associated with the illustrative scenarios 

analyzed in the RIA (presented in Chapter 3), and then presents a qualitative discussion of the 

factors that will, in part, determine the timing and magnitude of effects in other markets (Chapter 

5). 

With respect to the requirements of section 321A of the Clean Air Act, EPA disagrees with this 

comment. Section 321(a) does not require EPA to conduct employment evaluations as part of the 

rulemaking process or as a prerequisite to the issuance of a rule. The broad language of Section 

321(a) does not address the scope, frequency, or timing of employment evaluations, leaving 

these matters to the discretion of EPA. In the exercise of its discretion, however, EPA does 

routinely evaluate employment impacts when it conducts new rulemaking. Indeed, EPA 
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conducted a robust employment analysis for this action, including a discussion of economic 

theory and employment, recent employment trends, and projected sectoral employment changes 

due to the Guidelines. See Chapter 6 of the RIA for both the proposed and final rules. EPA has 

conducted similar assessments for other rulemakings and continues to evaluate employment 

impacts generally and to refine its employment-analysis methods. Together, these efforts 

constitute “continuing evaluations of potential loss or shifts in employment” for the purposes of 

Section 321(a). 

To the extent that the commenters is suggesting that Section 321(a) requires EPA to evaluate the 

cumulative employment impacts of all its rules, Section 321(a) contains no such requirement. 

Nevertheless, in EPA’s continuing effort to advance the evaluation of costs, benefits, and 

economic impacts associated with environmental regulation, EPA has formed a panel of experts 

as part of its Science Advisory Board SAB to advise the Agency on the technical merits and 

challenges of using economy-wide economic models to evaluate the impacts of regulations. The 

panel of experts will consider a variety of issues related to the use of economy-wide modeling, 

including their technical appropriateness for assessing employment impacts. Answers from the 

panel of experts will help EPA assess whether economy-wide models can be used to evaluate 

employment and other economic impacts in the future.

5.h. Commenters take issue with the job-estimation approach in the Clean Power Plan.

Commenters stated that EPA has omitted the lost employment costs from retired coal and 

drastically underestimated the green energy investment needed to create 78,800 jobs by 2020. 

The commenters stated that if EPA's employment projections of 78,800 are true, the cost of 

installing zero carbon energy will cost the economy $30.7 billion in 2020, a figure never 

mentioned in the RIA. (1)

Commenters cited that the EPA estimates that employment could increase between 57,000 and 

78,800 jobs, rely on a jobs multiplier with no basis in reality. The commenters stated that EPA 

concedes, "Employment impacts of demand-side energy efficiency programs have not been 

extensively studied in the peer-reviewed, published economic literature." The commenters cited 

the EPA's use of a multiplier of 2.56 energy efficiency jobs per million dollars of spending, or 

$390,625 per job. The commenters stated that the earnings for the median worker are $30,454. 

The commenters stated that EPA's multiplier of $1 million in investment to create 2.56 jobs 

strains credibility, and compares it to the work of Richard Morgenstern, who found that $1 

million in environmental spending translates into roughly 1.5 new jobs. The commenters stated 

that EPA also relies on models of green investment spending in states, which multiplied by 

EPA's 2.56 jobs per $1 million in investment, yields roughly 78,800 jobs, meaning that the 

nation will spend more than $30.7 billion on energy efficiency investments by 2020. The 

commenters stated that this figure is not contained in EPA's RIA, but instead EPA claims from 

$8 billion to $12.3 billion "demand-side" energy efficiency costs by 2020. The commenters 

stated that EPA underestimates demand-side costs by threefold, and that a similar extrapolation 

for 2030 costs would approach $150 billion. The commenters stated that EPA's multiplier is 

significantly higher than past estimates and $30 billion in energy efficiency spending by 2020 is 

three times what EPA reports. 
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Response 5.h.: The EPA has analyzed employment impacts in the coal industry (see chapter 6 of 

the RIA). The EPA fully recognizes that any displaced worker suffers costs, and, similarly, job 

search costs stop when newly hired workers start work. However, there is no agreement in the 

economics literature to date on whether we should, or how best to monetize employment 

impacts, both negative and positive. EPA has revised the demand-side energy efficiency jobs 

multiplier from the proposal and now uses a range, rather than a single estimate. In addition, 

EPA has included other estimates of demand-side energy efficiency jobs multipliers, from 

government sources. A bar chart and discussion within the RIA show EPA’s estimates in the 

context of these other multipliers.

5.i. Commenters cite results from specific reports issued by stakeholder groups.

Commenters cited the following reports in expressing concern about the potential for high costs, 

high electricity prices, and large numbers of jobs lost. Commenters stated these reports make a 

variety of assumptions that do not match the proposed or final Clean Power Plan, and do not 

consider the benefits of the Clean Power Plan, including job creation. Below is discussion of 

some major highlights of each report.

5.i.1. US Chamber of Commerce / Institute for 21st Century Energy report:

Commenters cited the U.S. Chamber of Commerce's findings that the EPA's rules would result in 

225,000 jobs lost and an annual loss of $50 billion to the gross domestic product. The 

commenters stated that electric industry analysts suggest increases of 10-15 mills/kWh at current 

gas prices and the impact could escalate significantly if gas prices increase more than projected. 

Commenters cited a US Chamber of Commerce calculation of economy-wide job losses of 

224,000 per year through 2030.

Commenters cited an Institute for 21st Century Energy projection of an annual average of 

approximately 225,000 fewer jobs under the Proposed Rule. The commenters stated that in 2022, 

the loss would be more than 440,000 jobs. 

Commenters cited the United Mine Workers of America prediction that there will be 75,000 

direct coal generation jobs lost by 2020 and 152,000 by 2030. The commenters cited the 

International Brotherhood of Electrical Workers that the agency's plans also would result in the 

loss of some 52,000 permanent direct jobs in utilities, mining and rail and at least another 

100,000 jobs in related industries, and that high-skill, middle-class jobs would be lost, falling 

heavily in rural communities that have few comparable employment opportunities. The 

commenters cited the US Chamber of Commerce projections that there will be 224,000 jobs lost 

on average each year through 2030, and the rule will result in a loss of $50 billion in GDP on 

average. The commenters cited Dr. Gabriel Calzada Alvarez, who examined the impact of 

renewable energy policies in Spain, found that 2.2 jobs were lost for every one job created. 

Commenters stated that the CPP would have the effect of significantly reducing power 

generation from coal-fired EGUs, which would immediately threaten the supply of power 

available for distribution to consumers and force the retirement of hundreds of power plants. The 

commenters stated that hundreds of thousands of coal miners and supporting employees would 

face layoffs due to the decrease in coal demand. The commenters stated that due to the 
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significance and size of the coal industry, enactment of the CPP would push the national 

economy along a similar trajectory as the coal industry itself. The commenters stated that by 

2030, some 114 GW of existing capacity will be removed from the grid due to closures of coalfired EGUs. The commenters stated that the Plan is projected to result in a peak loss of 442,000 

jobs occurring in 2022, amounting to a decline of nearly $104 billion to the US GDP. The 

commenters stated that most analysts predict that the cost of electricity will increase 

significantly, amounting to an aggregate increase of nearly $300 billion by 2030. The 

commenters stated that in cases of power shortages, which are a distinct possibility due to 

increased reliance on redispatch to NGCC, price spikes in excess of 10 times the average rate are 

likely. The commenters stated that costs are particularly significant for lower-income 

households, which the CPP is expected to disproportionately impact.

Commenters stated that by drastically increasing the cost of energy, the proposed rule will inhibit 

economic development and hamper growth at a time when many communities continue to feel 

the negative effects of a prolonged economic downturn. The commenters cited a recent IHS 

study for the U.S. Chamber of Commerce predicting that proposed EPA CO2 rules will cause the 

loss of 224,000 jobs annually, increase electricity costs by $289 billion, and lower household 

incomes by over $500 billion. The commenters stated that the Mississippi Energy Institute 

projects that the minimum incremental capital cost for Mississippi to comply with the proposed 

rule will be $14.2 billion, which will primarily consist of constructing generating facilities not 

likely to be built unless compelled by federal mandate. The commenters stated that the rule will 

almost certainly cause the premature closure of existing coal plants in Mississippi, which will 

reduce energy diversity, security, and reliability, and will place upward pressure on electricity 

prices. 

Response 5.i.1.: The Chamber of Commerce report was issued before the Clean Power Plan was 

proposed. The Chamber reports costs that far exceed the Clean Power Plan’s projected costs; job 

losses that dwarf those estimated in the Clean Power Plan; and zero benefits or job gains. 

The report’s starting point is a set of policies resulting in a 42 percent drop in carbon dioxide 

emissions, which is significantly more stringent than the 30 percent reduction expected from the 

proposed Clean Power Plan. The resulting higher costs are further inflated by assuming that new 

natural gas-fired power plants would be required to apply carbon capture and storage (CCS), 

which is not the basis of BSER. On the other hand, no job gains are assigned to construction or 

operation of those plants. 

In general, spending on compliance is incorrectly assumed to be an unproductive use of capital, 

precipitating a loss in GDP, an effect for which real world evidence has never been produced. 

This “GDP loss” is then tied to prediction of significant job losses. 

The report also understates the likely implementation of energy efficiency measures. Its results 

include electricity demand growth (1.2%/year) that significantly exceeds the projections in the 

EIA 2014 Reference Case used by EPA (0.9%/year). The Chamber also assigns $50 billion of 

cost to energy efficiency implementation, while at the same time assuming no jobs will be 

created to implement those efficiency measures. It also assumes that states will only meet 50 

percent of their own state-level Energy Efficiency Resource standards, thereby assigning 

additional implementation cost (but no jobs) to the CPP.
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5.i.2. NERA/NMA/ACCCE report:

Commenters stated that Federal regulations have already forced two plants in his district to close 

over the last two years. The commenters cited a National Mining Association projection that 

more than 300 plants would retire nation-wide due to EPA rules over the next six years. The 

commenters cited a Heritage Foundation study predicting that the EPA's anti-coal policies could 

terminate 600,000 American jobs by 2023 while causing economic growth to drop by more than 

$2 trillion. 

Commenters stated that the GHG ESPS will reduce demand for Indiana coal and result in losses 

of good paying jobs in rural communities. The commenters stated that manufacturing and 

agriculture are significant users of electricity in Indiana and will suffer significant losses if the 

proposed GHG ESPS is promulgated. The commenters stated that manufacturing and agriculture 

in Indiana are dependent on the low cost of electricity. The commenters stated that state's utility 

rate forecasting experts have predicted electrical rates in Indiana will rise by more than 30% over 

the next decade- prior to considering the impacts of the GHG ESPS. The commenters cited 

NERA projections that rates will be 12% more costly each year compared to EPA's projections. 

The commenters cited an Energy Ventures Analysis prediction that electric rates for industrial 

customers will increase by 50% by 2020, and natural gas costs in Indiana will increase by 108%. 

Commenters stated that the proposed rule would force Mississippi utilities to generate more 

electricity from natural gas, even ahead of lower-cost options. The commenters stated that 

increasing customers' exposure to volatile natural gas prices is bad for business and business 

owners, as well as individual ratepayers. The commenters cited the American Coalition for Clean 

Coal Electricity that the adoption of these regulations will lead to an increase of electricity rates 

of 14-19 percent in Mississippi and would place 3,400 direct and indirect coal jobs in jeopardy of 

being eliminated. 

Commenters stated that the cost estimates fail to reflect or capture the subsequent adverse 

spillover impacts of higher electricity rates on our nation's overall economic activity. The 

commenters cited an analysis by NERA Economic Consulting indicating that average U.S. 

electricity prices would increase by 12% per year and the total costs of the rule could be between 

$366 billion and $479 billion over a 15-year timeframe. The commenters stated that many of 

these costs will have to be absorbed by residential, commercial and industrial energy consumers. 

The commenters stated that higher energy prices disproportionately harm low-income and 

middle-income families. The commenters stated that the Proposed Rule would result in a direct 

loss of 52,000 jobs in the electric utility, mining and rail sectors due to plant closures. The 

commenters stated that an additional 100,000 indirect jobs are at risk for loss in communities 

affected by the closures, and that job losses would be concentrated in, "relatively poor, rural 

areas that are least able to afford the loss of high-wage skilled jobs." 

Response 5.i.2.: National Economic Research Associates (NERA) Economic Consulting issued 

its report after proposal of the CPP. NERA reports costs that far exceed the Clean Power Plan’s 

projected costs, sharp electricity prices increases inconsistent with EPA’s projections, and zero 

benefits. NERA does not report estimates for jobs gained or lost; its model assumes full 

employment across the economy. However, appendix A to the report suggests a method that 

could be used to derive “job-equivalents” from the model’s output.
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The NERA report show results from several different implementation cases. The highest costs 

come from a case wherein NERA assumes that building block 3 and 4 (renewable energy and 

energy efficiency) are not available due to legal challenges. These costs are frequently cited by 

commenters.

NERA derives its relatively high cost estimates by changing some key assumptions. For building 

block 1, instead of the 6 percent heat rate improvement for coal-fired plants that represent BSER 

in the proposed Clean Power Plan, NERA assumes a maximum improvement of 1.5 percent is 

possible, with other groups of units achieving either 1 percent improvement or no improvement.

For proposed building block 3 (renewable energy), NERA does not report the cost assumptions 

in its model.

For proposed building block 4 (demand-side energy efficiency), NERA uses a range of 

efficiency improvement costs significantly higher than the Clean Power Plan. Where the CPP 

uses a range of $550-770 dollars/MW-hour, NERA uses a range of 896-1,253 dollars/MW-hour.

The combination of all of these choices made by NERA is overestimated negative impacts.

5.i.3. Energy Ventures Analysis report:

Commenters stated that the GHG ESPS will reduce demand for Indiana coal and result in losses 

of good paying jobs in rural communities. The commenters stated that manufacturing and 

agriculture are significant users of electricity in Indiana and will suffer significant losses if the 

proposed GHG ESPS is promulgated. The commenters stated that manufacturing and agriculture 

in Indiana are dependent on the low cost of electricity. The commenters stated that state's utility 

rate forecasting experts have predicted electrical rates in Indiana will rise by more than 30% over 

the next decade- prior to considering the impacts of the GHG ESPS. The commenters cited 

NERA projections that rates will be 12% more costly each year compared to EPA's projections. 

The commenters cited an Energy Ventures Analysis prediction that electric rates for industrial 

customers will increase by 50% by 2020, and natural gas costs in Indiana will increase by 108%. 

Commenters stated that compliance with the proposed rule will significantly increase the cost of 

producing manufactured goods in the US, make US manufacturers less competitive with foreign 

manufacturers, and result in loss of American jobs. The commenters cited Energy Ventures 

Analysis findings of many flaws in EPA's underlying assumptions about power plant process 

efficiency improvements, non-hydro renewable energy expansion and rapid growth in consumer 

energy efficiency that were used to calculate state emission rate limitations. The commenters 

stated that EVA also found that EPA's assumptions are contrary to power industry practices and 

outside projections by the U.S Department of Energy (DOE) and other independent forecasts. 

Response 5.i.3.: The Energy Ventures Analysis (EVA) study reports costs that exceed the Clean 

Power Plan’s projected costs, sharp electricity prices increases inconsistent with EPA’s 

projections, and zero benefits. EVA makes several analytic decisions that differ sharply from 

EPA’s. First, EVA assumes that there will be no heat rate improvements possible at coal-fired 

EGUs (building block 1). 
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EVA also relies on its own internally-derived forecast of state renewable power development, 

and appears to assume that some states will not meet their own state-level renewable portfolio 

standards (building block 3). In reality, most states with renewable portfolio standards are on 

track to meet them or have already met them.5

For energy efficiency (proposed building block 4), EVA’s energy efficiency results represent 

minimal improvement over EPA’s 2013 baseline (AEO 2013); therefore they report far less 

energy efficiency savings than EPA has estimated is achievable.

5.i.4. Heritage Foundation report:

Commenters stated that Federal regulations have already forced two plants in his district to close 

over the last two years. The commenters cited a National Mining Association projection that 

more than 300 plants would retire nation-wide due to EPA rules over the next six years. The 

commenters cited a Heritage Foundation study predicting that the EPA's anti-coal policies could 

terminate 600,000 American jobs by 2023 while causing economic growth to drop by more than 

$2 trillion. 

Commenters cited a study by the Heritage Foundation that EPA's energy regulations would cost 

hundreds of thousands of jobs and cause a significant decline in personal income while having a 

minimal impact on global warming. The commenters stated that these regulations would reduce 

aggregate gross domestic product by more than $2.5 trillion between now and 2030, and 

employment would track nearly 300,000 jobs below the no-carbon-regulation baseline in an 

average year, with some years seeing an employment deficit of more than 1 million jobs. The 

commenters cited a NERA study estimating that the costs to comply with EPA's proposed plan 

could total $366 billion, or more and finds that 43 states will have double-digit electricity price 

increases. 

Commenters stated that Americans will be hit repeatedly with higher prices as businesses pass 

higher costs onto consumers. The commenters stated that if a company had to absorb the costs, 

high energy costs would shrink profit margins and prevent businesses from investing and 

expanding. The commenters stated that cutbacks result in less output, fewer new jobs, and less 

income. The commenters stated that the impact of a revenue-neutral carbon tax starting at $37 

per ton in 2015 through 2030 would be substantial, including an average employment shortfall of 

nearly 300,000 jobs; a peak employment shortfall of more than 1 million jobs; 500,000 jobs lost 

in manufacturing; an aggregate GDP loss of more than $2.5 trillion (inflation-adjusted); and a 

total income loss of more than $7,000 per person (inflation-adjusted). The commenters stated 

that the Energy Information Administration (EIA) has analyzed the economic impact of a 

$25/ton carbon tax using essentially the same model and found more than $2 trillion in lost GDP 

from 2014 to 2030 and a peak employment differential of 1 million lost jobs. 

 

5 “Renewables Portfolio Standards in the United States: A Status Update”, Galen Barbose, 

Lawrence Berkeley National Laboratory, Presentation given at Renewable Energy Markets 2014, 

December, 2014.
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Response 5.i.4.: The Heritage Foundation report was issued after the Clean Power Plan was 

proposed, but it does not analyze the proposed CPP. Instead it posits a national carbon tax. 

Heritage also reports job losses that dwarf those estimated in the Clean Power Plan; and zero 

benefits or job gains. 

The Heritage Foundation uses its own proprietary “input-out” model, the Heritage Energy Model 

(HEM) which is explained to be a derivative of EIA’s National energy Model System (NEMS). 

As noted in NEMS documentation, the model link between the energy sector and the rest of the 

economy requires a large number of modeling assumptions and choices. These modeling choices 

are important for understanding their results, but were not reported in the Heritage study.

This modeling approach generally considers how higher production costs impact employment, 

but does not include the ability for firms to do things they would do in the real world, such as 

substitute materials used in the manufacturing process or innovate and create new, cleaner 

production processes. Therefore, it is likely to overstate job loss in the regulated sector. 

In addition, the Heritage report only focused on the manufacturing sector and did not account for 

sectors that may have positive employment impacts associated with implementation of the CPP. 

EPA’s employment analysis for the proposed Clean Power Plan included, in addition to the 

power sector and upstream industries such as coal and natural gas extraction, job gains resulting 

from new economic activity due to heat rate improvements, renewable energy and demand-side 

energy efficiency activities. 

5.i.5. UMWA/IBEW report:

Commenters cited the United Mine Workers of America prediction that there will be 75,000 

direct coal generation jobs lost by 2020 and 152,000 by 2030. The commenters cited the 

International Brotherhood of Electrical Workers that the agency's plans also would result in the 

loss of some 52,000 permanent direct jobs in utilities, mining and rail and at least another 

100,000 jobs in related industries, and that high-skill, middle-class jobs would be lost, falling 

heavily in rural communities that have few comparable employment opportunities. The 

commenters cited the US Chamber of Commerce projections that there will be 224,000 jobs lost 

on average each year through 2030, and the rule will result in a loss of $50 billion in GDP on 

average. The commenters cited Dr. Gabriel Calzada Alvarez, who examined the impact of 

renewable energy policies in Spain, found that 2.2 jobs were lost for every one job created. 

Commenters stated that EPA's carbon regulations could cause serious harm to the U.S. economy, 

raising energy prices, and costing jobs. The commenters cited United Mine Workers of America 

estimates that the rule will result in 187,000 direct and indirect job losses in the utility, rail, and 

coal industries in 2020, and cumulative wage and benefit losses from these sectors of $208 

billion between 2015 and 2035. The commenters stated that higher energy prices 

disproportionately harm low-income and middle-income families. The commenters cited a 

Center for Strategic and International Studies (CSIS) analysis that the proposal could result in 

nationwide costs of up to $32 billion per year; and average electricity rate increases of up to 9.9 

percent per year. The commenters cited the Wall Street Journal that the rule is a huge indirect tax 

and wealth redistribution scheme and that costs will ultimately flow to consumers and 
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businesses. 23244 (9). Commenters cited an analysis by Eugene Trisko, counsel to the United 

Mine Workers of America that the CPP would destroy 187,000 direct and indirect jobs. 

Commenters stated that the CPP rule will lead to the closure of coal-burning power plants 

throughout the United States, resulting in the loss of more than 52,000 jobs in the coal, utility 

and railroad industries by 2020, and further direct job losses in those industries will reach 65,000 

by 2030 as a result of this rule.

Commenters stated that the drastic reduction in coal generation will cost 52,000 direct and 

100,000 indirect jobs. The commenters stated that MATS and the CPP will close 40% of the coal 

generation that exists today, and eliminate 400,000 or more irreplaceable American jobs. The 

commenters stated that under the CPP Colorado will not receive credit for plant closures already 

made and will be forced to close at least three additional coal-fired plants. The commenters 

stated that in at least 22 other states the impact of the CPP will not be limited to the coal sector. 

Commenters stated that these job losses will have a ripple effect in the communities throughout 

the coalfields and beyond, where more than 208,000 jobs will be lost by 2030. 

Commenters stated that EPA estimates do not capture the subsequent spillover impacts of higher 

electricity rates on overall economic activity. The commenters stated that these increases will 

place an immense burden on U.S. businesses, and could eliminate the critical competitive 

advantage that affordable and reliable electricity provides to the American economy. The 

commenters stated that the United Mine Workers Association has estimated that the rule will 

result in 187,000 direct and indirect job losses in the utility, rail, and coal industries in 2020, and 

cumulative wage and benefit losses from these sectors of $208 billion between 2015 and 2035. 

Commenters stated that manufacturers and others who use natural gas for purposes other than 

electric generation will also see projected cost increases up to $50 billion. The commenters 

stated that 187,000 direct and indirect job will be lost in the utility, rail, and coal industries alone 

by 2020 and these sectors will lose cumulative wages and benefits of $208 billion by 2035. The 

commenters stated that by forcing the retirement of a significant portion of the state's electric 

generation capacity, the rule puts at risk the reliability of Texas' electric grid, the failure of which 

can have extremely dramatic financial impacts, as well as public health and safety impacts. 

Response 5.i.5.: Summary materials on the UMWA analysis were available to the EPA, but the 

full report was not, and does not seem to be available publicly. From the summary materials, the 

UMWA analysis appears to attribute all changes in the use of coal for electricity generation from 

2009 until 2030 entirely to the MATS and CPP rules, ignoring the significant drop in natural gas 

prices from 2009 to 2013, and fact that demand for electricity has been almost flat since 2009 

(EIA, AEO 2013 and AEO 2014). 

In addition, the UMWA materials cite job losses due to the changes in electricity generation, and 

appear to calculate future job losses by multiplying job-years6 by the number of jobs in each 

year, a practice that inflates the job loss numbers. UMWA also does not discount the dollars 

 

6 A job-year refers to the amount of work done by the equivalent of one person in one year.
272

underlying the job-years calculations over time, which also artificially inflates job losses. 

Additionally, it does not address benefits. Finally, it does not appear to address job gains such as 

employment related to natural gas, renewable energy, or energy efficiency (such as employment 

weatherizing buildings, conducting building energy audits, constructing and installing renewable 

energy, programming building energy management systems, etc.).

5.j. Commenters state that the clean power industry protects and creates jobs.

Commenters stated that the proposed rule will create jobs. Commenters supported the Clean 

Power Plan and stated that it will save jobs, help protect farming, fishing, forestry and other rural 

resources undeniably impacted by carbon pollution, and reduce the job-killing impacts of carbon 

pollution. The commenters further stated that the solar energy employs roughly twice as many 

people as the coal mining industry, and added that other renewable resources also add jobs. 

Commenters also supported the Clean Power Plan because it provides an opportunity for more 

research, manufacturing and construction jobs, more efficient and less costly energy, cleaner air, 

improved health outcomes and more. 

Commenters stated that energy efficiency will help the economy through job creation and 

reduced energy expenditures, and cited a study by Southface which found that over 4,100 

Georgians were employed full-time in the energy-efficiency and building sciences sector in 

2013. 

Similarly, commenters stated that even in coal's brightest day in Georgia when it was producing 

about 70 percent of electricity, it only accounted for 2,700 jobs in Georgia whereas in 2012, 

there are already 10,000 jobs in the solar, wind, and energy efficiency industries.

Commenters stated that the potential positive impacts of capping carbon pollution in Colorado 

could add $622 million to the economy and create over 9,000 jobs.

Commenters stated that there are significant benefits in addition to GHG emission reductions 

that can be achieved with energy efficiency programs and that energy efficiency programs can be 

deployed at a level consistent with EPA's assumed levels for the fourth building block. The 

commenters stated that in Rhode Island, 544.73 full-time equivalent (FTE) employees had work 

in 2013 as a result of its investments in energy efficiency programs to electricity and natural gas 

customers, and since most of those jobs were tied to installations at customer homes or 

businesses, the jobs were grown locally. 

Commenters stated that Minnesota is on a clean energy path that is generally consistent with 

EPA's plan, and clean energy efforts in Minnesota have already resulted in some 15,000 jobs 

accounting for over $1 billion in annual wages. The commenters stated that EPA should work 

with states to help provide clean energy training opportunities where appropriate. 

Commenters stated that compliance with the Clean Power Plan will generate additional jobs and 

spur business growth in North Carolina. The commenters cited an analysis prepared by ICF 

International, Inc. for the Natural Resources Defense Council, the Clean Power Plan can create 
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approximately 6,700 jobs in North Carolina. The commenters stated that there are now more 

Americans working in the solar industry than are currently working as coal miners. 

Commenters stated that based on an expanded analysis of the proposed rule which included 

several indirect effects not included in the EPA analysis it estimates a net gain of 134,000 jobs in 

2020, and projects that these employment gains will increase to 263,000 by 2040. 

Commenters stated that the RIA does not capture various indirect employment impacts and 

provided an economy-wide assessment of the rule's impact on employment that captured the 

employment impacts of the rule not only for directly affected industries (similar to EPA) but also 

for industries that may be indirectly affected by the rule. The commenters estimated that the 

GDP and employment effects of the rule are small but positive. The commenters stated that by 

2025, total employment would increase by more than 200,000 and increase by 263,000 by 2040. 

The commenters stated that the increases in electricity efficiency brought about by the rule 

represent increases in multi-factor productivity, which stimulates the economy by raising its 

potential supply (how much output can be produced with given resources). The commenters 

stated that the efficiency investments are a cost to some industries and consumers, but represent 

increased demand for the industries producing the goods and services necessary to accomplish

those investments. The commenters stated that reductions in electricity demand have negative 

impacts on employment and investment in the electric power industry, as well as on output and 

jobs in the coal and gas producing industries. The commenters estimated that carbon emissions 

would fall to 5104 million tons by 2040 under the proposed rule, compared with 5710 million 

tons in the reference case, with most of the reduction is in the electric power sector. 

Commenters stated that three years after Missouri's Renewable Energy Standard was enacted, 

there were over 68,000 clean energy related jobs in the state. The commenters stated that the 

solar industry alone in Missouri supports 3,700 jobs statewide. The commenters stated that with 

the added influence of the EPA's Clean Power Plan this number is sure to grow and have a 

positive impact on Missouri. The commenters stated that raising Missouri's goal of 21% by 2030 

and including strong standards for enforcement will only help grow Missouri's economy and 

keep our workforce employed. The commenters stated that lowering the rate of unemployment in 

Missouri will increase the tax base and reduce the number of people filing unemployment 

claims, creating an insurgence of funds for schools, parks, libraries, roads, and other necessary 

areas of public spending in the state. The commenters stated that Missouri will benefit greatly 

from reducing its reliance on out-of-state coal. The commenters stated that Missouri spends $1.6 

billion importing coal from surrounding states and does not mine any of its own fuels. The 

commenters stated that the Farmers City Wind Power Project in Atchison County is a 146 

megawatt wind farm that created 150 jobs during construction, generated up to $1 million in 

local tax revenue, and pays $365,000 annually to the landowners who leased their property to the 

wind developer. The commenters stated that in Holt County, Missouri, another $400 million 

project is expected to come online in 2015, creating another 300 jobs in rural Missouri and 

lessening our reliance on imported coal.

Commenters stated that the cost of doing nothing is far greater than that of the CPP, exceeding 

the capacity of local communities and our economy. The commenters stated that the expansion 

of energy efficiency and renewable energy generation will spur economic growth and create jobs 

in installation and maintenance which cannot be outsourced abroad. 
274

Commenters stated that the Clean Power Plan rule will boost bottom lines and help create jobs as 

states look to comply with the standards and achieve reductions through various measures. The 

commenters supported the compliance flexibility inherent in the rule. The commenters cited an 

American Council for an Energy Efficient Economy (ACEEE) report finding that energy 

efficiency investments alone could increase national gross domestic product by $17.2 billion in 

2030, and produce a net gain of about 611,000 jobs, with all 50 states seeing net job creation, all 

at no net cost. The commenters stated that a review of the Northeast's Regional Greenhouse Gas 

Initiative (RGGI) program by the Analysis Group found that over the first three years, the 

program created more than 16,000 additional jobs with each of the 10 states showing net job 

additions. The commenters stated that 56 percent of small business owners still support EPA's 

regulations even if it would cause utility rates to rise. The commenters stated that small 

businesses are strategically positioned to help states achieve their carbon reduction goals, 

igniting job creation opportunities and cost savings along the way. The commenters stated that 

business opportunities exist with respect to modernizing inefficient power plants and buildings as 

well as operation new, cleaner and more efficient power plants; conducting energy audits and 

retrofitting residential as well as commercial buildings to be more energy efficient; and 

developing new and innovative technologies throughout the supply chain. The commenters 

stated that ACEEE conducted an analysis and found that by 2030 the rule could induce over 

$625 billion of investment in various energy efficiency industries and behaviors, and create an 

average of over 400,000 jobs per year both directly and throughout the economy. The 

commenters cited an Analysis Group report that while the Regional Greenhouse Gas Initiative 

(RGGI) program costs initially increased electricity rates, the impact of energy efficiency 

investments (using RGGI allowance revenues) significantly reduced commercial and residential 

electricity use, placing downward pressure on rates over time, and combined with lower 

consumption, tended to generate on average much lower electricity bills. 

Commenters stated that the exponential growth of renewable energy is both a cause and a 

product of rapidly falling costs. The commenters stated that as the renewable energy market has 

increased in scale, costs have come down. The commenters stated that wind and solar costs have 

come down at a much faster rate than conventional sources and as the renewable energy market 

continues to increase in scale, even more cost reduction is a confident expectation. The 

commenters stated that the wind-power industry employs over 80,000 workers in the U.S., a 

number that can double with the right policies. The commenters stated that the U.S. solar 

industry employed 142,698 Americans as of November 2013, a 19.9% growth in employment 

since September 2012. The commenters stated that the geothermal industry supports over 20,147 

jobs. The commenters stated that America's biomass and waste-to-energy industries provide 

25,000 jobs nationwide. The commenters stated that energy storage systems (ESS) technologies 

are key to addressing the variability of renewable resources not managed by intelligent systems 

by allowing power to be stored and then deployed as needed, thereby foregoing the need for 

fossil-fuel powered back-up generation facilities, and ESS could also provide critical backup 

power to the grid in times of peak usage or outages without the need for fossil-fired backups. The 

commenters stated that the Department of Energy has set a conservative estimate of 5 GW of 

new storage by 2022 and expects the ESS industry to grow by several billion dollars. The 

commenters stated that others have found that the potential for 47 GW (including 25 GW of 

battery storage) of ESS by 2030.
275

Commenters stated that the U.S. has an estimated 3.4 million clean jobs as of 2013 - a number 

which is steadily growing. The commenters stated that in the last two years it has tracked nearly 

600 clean energy and clean transportation project announcements that could create more than 

210,000 jobs when completed. The commenters stated that over the last four years, wind 

generation has doubled and solar capacity has grown by a factor of five, and both have reduced 

costs by close to 40 percent. The commenters stated that the Clean Power Plan will accelerate 

this growth if designed to maximize private and public investment. The commenters stated that 

since 2008, the states participating in RGGI gained more than $1.6 billion in economic value, 

consumers saved $1.1 billion on electric bills, and over 16,000 jobs were created. 

Commenters stated that Louisville is the number one urban heat island in the nation. The 

commenters stated that dependency on a coal-based energy economy have made Kentuckians 

exceptionally vulnerable and coal mining in Kentucky has collapsed, with a loss of 40% of the 

state's coal mining jobs since 2011. The commenters stated that new jobs in energy efficiency 

and renewables could create significant employment opportunities for the state. The commenters 

cited a study conducted by the Mountain Association for Community Economic Development 

(MACED) found that the Clean Energy Opportunity Act, a proposed state legislation, would 

require investments in renewable energy and energy efficiency and would result in over 28,000 

jobs over the course of its ten-year implementation period. The commenters stated that the EPA 

targets are modest and that there are alternatives that can result in much deeper carbon cuts. The 

commenters stated that EPA needs to promulgate the strong regulations to start addressing the 

reality of climate change in Kentucky. 

Commenters stated that replacing coal with clean energy resources will help spur job creation 

across Montana. The commenters stated that clean energy sectors could create nearly 4,000 

additional good paying jobs over the next 20 years if Montana develops its wind, solar, and 

energy efficiency potential. The commenters stated that unlike centralized coal plants, where 

jobs are limited to just one location, energy efficiency, rooftop solar, and backyard wind systems 

can provide jobs in every single community and rural area in Montana. The commenters stated 

that renewable energy projects in Montana have already created over 1,000 jobs and 300 

permanent jobs across the state. The commenters stated that the wind industry employs 80,000 

people across the United States, and the solar industry directly employs over 140,000 people, 

compared to about 130,000 people employed nationally at coal mines and coal-fired power 

plants. The commenters stated that on average, solar and wind generation employ a little over 

twice as many people per megawatt as coal generation. 

Commenters stated that China is investing heavily in advanced coal technologies, and failure to 

keep up would put America at a competitive disadvantage. The commenters stated that carbon 

capture and sequestration (CCS) can protect coal jobs in West Virginia and create a whole new 

opportunity for American job growth, developing and perfecting CCS technology to meet global 

demand. 

Commenters stated that nuclear plant construction can be viewed as SCE&G's plan for reducing 

carbon emissions by reducing the need for new coal plants and enabling older coal plants to be 

retired. The commenters stated that the cost to consumers for this private utility effort to "reduce 

carbon emissions" has been an increase in rates of 11.82 percent since 2009, and additional rate 

increases are expected. The commenters stated that South Carolina consumers, residential and 
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commercial, have seen a 37 percent hike in electricity rates in the last 5 years. The commenters 

stated that South Carolina has the fastest growing economy on the East Coast and the lowest 

unemployment rate in six years. The commenters stated that heavy investments in alternative 

energy can be done without hurting the economy, even when electricity rates increase 

dramatically, and that high-paying construction jobs created by investing in nuclear energy have 

helped South Carolina's economy. The commenters stated that these investments in alternative 

energy will protect us from the future negative effects of climate change that are guaranteed to 

hurt our economy and cost jobs. 

Commenters stated that solar power systems are expected to generate more than 20,000 GWh in 

2014, and in the Southeast alone, there is nearly one gigawatt of solar capacity currently 

operating. The commenters stated One GWh of solar generation eliminates 690 metric tons of 

CO2 emissions; across the nation, solar generation is expected to avoid 13.8 million metric tons 

of CO2 emissions in 2014. The commenters stated that solar technologies consume no fuel, 

thereby shielding customers from the fuel price volatility risks associated with fossil fuel 

generation. The commenters stated that solar photovoltaic consumes no water, and solar energy 

provides substantial air and water quality benefits. The commenters stated that the 515 MW of 

new utility scale solar for which Georgia Power Company is currently seeking PSC approval 

were offered at an average price of less than 6.5 cents per kWh, well below utility's avoided costs 

- providing, in the utility's words, "overwhelming benefit" to customers in the form of cost 

savings. The commenters stated that solar power investments create jobs and increase economic 

investment. The commenters stated that there are nearly 143,000 Americans working in the solar 

industry, a 20 percent increase since 2012 and that there are now more Americans working in the 

solar industry than mining coal. 

Commenters stated that investment in renewable energy and energy efficiency will drive job 

creation. Increased renewable energy generation and energy efficiency investments will lower 

utility bills for households and businesses, who will then spend the savings on other goods and 

services, stimulating the economy. Commenters stated that energy efficiency investments can 

reduce carbon pollution while also lowering utility bills, creating jobs, and stimulating the 

economy. The commenters stated that states with strong energy efficiency programs are already 

experiencing this effect. 

Response 5.j.: The EPA acknowledges the job growth opportunities discussed by the 

commenters. Chapter 6 of the RIA provides information on job growth that may occur in the 

energy efficiency sectors as a result of the CPP. The Clean Power Plan encourages individual 

states to tailor their energy choices to suit their individual needs and circumstances, as long as 

goals are met. The EPA agrees that renewable energy will be an increasingly important building 

block in constructing our low carbon future. 

5.k. Commenters stated that reduction in GHG emissions led to increased employment.

Commenters stated that from 2006 to 2011, greenhouse gas emissions citywide fell 12% while 

population and workforce each grew by 6%. The commenters stated that it is important a 

significant share of those GHG reductions can be attributed to the shift to less carbon intensive 

electricity generation throughout the region.
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Commenters stated that replacing coal with clean energy will help spur job creation across 

Montana. According to the commenters, the coal industry directly employs about 1,700 people in 

the state. The commenters stated that transitioning these jobs to the energy efficiency and 

renewable energy sectors could create nearly 4,000 additional good - paying jobs over the next 

20 years if Montana develops its wind, solar, and energy efficiency potential as well as provide 

jobs that are geographically dispersed across Montana. The commenters stated that unlike 

centralized coal plants, where jobs are limited to just one location, energy efficiency, rooftop 

solar, and backyard wind systems can provide jobs in every single community and rural area in 

Montana. The commenters stated that renewable energy projects in Montana have already 

created over 1,000 jobs and 300 permanent jobs across the state. The commenters stated that 

energy efficiency sector jobs are broadly defined as anyone employed by a business that puts in 

new energy efficient windows, lighting, or adding insulation to a home or business works in the 

energy efficiency sector. The commenters stated that while exact energy efficiency employment 

numbers are difficult to obtain, this sector easily employs at least several hundred people across 

Montana. 

Commenters stated that jobs created by renewable energy resources nationally reflect the 

significant job creation potential of renewable energy compared to coal-fired power with the 

wind industry employing 80,000 and the solar industry employing over 140,000 people, a total of 

over 200,000 people compared to about 130,000 people employed nationally at coal mines and 

coal-fired power plants. The commenters stated that this impressive considering that solar and 

wind makes up about 8 percent of the electricity generation in the U.S (75 gigawatts), compared 

with the 40 percent currently generated by coal (310 gigawatts); on average, solar and wind 

generation employ a little over twice as many people per megawatt as coal generation. The 

commenters stated that if carbon emissions from coal are reduced and renewable energy 

potential developed, the state will reap significant economic, job, public health, and climate 

benefits.

Commenters stated that, for economic reasons, insulation jobs are almost completely domestic; 

from the raw materials, to the manufacturing process, to the installation, every job associated 

with the product is provided by U.S. labor. The commenters stated that manufacturing jobs are 

well-paying jobs. The commenters stated that the United States has lost over two million 

manufacturing jobs since 2004; construction jobs are also down although the numbers are slowly 

rebounding, thanks to a better housing market. The commenters stated that EPA has the 

opportunity to incentivize states to enhance and increase their existing programs that support 

energy efficiency and in particular insulation and the jobs associated with it. The commenters 

stated that they believe that if states are given maximum flexibility to incentivize and credit 

energy efficiency improvements, it will lead to job growth as energy efficiency is simply the 

most cost effective way to reduce energy production from existing power plants and insulation is 

the most cost effective to gain energy efficiency.

Commenters stated that over the past few years, the coal mining in Kentucky has collapsed, with 

a loss of 40 percent of the state's coal mining jobs since 2011, and now coal-related jobs are less 

than 1 percent of statewide employment, with out-of-state companies primarily driving the 

mining of coal. The commenters stated that the state has been taking the position that the plan 

must slow down so that coal jobs are protected, but the jobs are already gone and a delay in 

diversifying our energy resources will only delay new opportunities for job creation. The 
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commenters cited a study conducted by the Mountain Association for Community Economic 

Development (MACED) which found that the Clean Energy Opportunity Act, a proposed state 

legislation that involves energy efficiency and renewable incentives, would require investments 

in renewable energy and energy efficiency and would result in over 28,000 jobs over the course 

of its ten-year implementation period. The commenters stated that this is just one consideration 

that challenges the comments submitted by Kentucky's Energy and Environment Cabinet that 

contend the Clean Power Plan will result in a net loss of jobs if we diversify and modernize our 

energy sector. 

Response 5.k.: The EPA agrees that investment in energy efficiency and renewable energy has 

created and will continue to create a significant number of jobs. Our analysis in the Regulatory 

Impact Assessment (RIA) for this rule estimates the potential employment benefits of the CPP. 

We also agree that most of the jobs installing and operating renewable energy, and making 

energy efficiency improvements to buildings, are by definition American jobs. Employment in 

energy efficiency and renewable energy includes employment in construction and installation, 

some of which is short-term, and employment in operating existing power systems, most of 

which is long-term. (See chapter 6 of the RIA for this rule.)

5.l. Commenters stated that limiting climate change will protect jobs related to outdoor 

recreation.

Commenters stated concern over impacts of climate change on avian species. The commenters 

stated that America's 46 million birdwatchers spend roughly 32 billion dollars every year, 

generating 85 billion dollars in overall economic output, and 13 billion dollars in tax revenues. 

The commenters stated that bird-watching, hunting and other outdoor activities enjoyed by more 

than 80 million Americans support over 2.6 million jobs, and these jobs are at risk if EPA does 

not effectively control carbon emissions. 

Commenters states that their family members work in the winter ski industry in Lake Tahoe and 

their jobs may disappear due to diminished snowfall patterns.

Response 5.l.: The EPA agrees that jobs related to outdoor recreation are an important part of 

the economy, and that climate change poses risks to wildlife habitat. In addition, many of these 

jobs are not located in major population centers, but in rural areas with fewer employment 

options -- near national parks, forests, and other class I areas, as well as near state parks and 

outdoor recreation areas.

5.m. Commenters stated that there will be a need for worker assistance and retraining and 

that new jobs created need to be good jobs

Commenters stated that union laborers are participating in the conversions of coal plants to 

natural gas, they are building the pipeline infrastructure to meet the needs of the growing natural 

gas demand, they are building three of the five nuclear reactor units under construction, and they 

are building wind farms and solar fields at unprecedented scale. The commenters stated that the 

loss of outage work in coal-intensive areas creates a disproportionate burden on the working 

families of these communities. The commenters stated that the City of Miamisburg stands to lose 

7.4% of its property tax base with the closing of the O.H. Hutchings Power Station and the 
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closing of AEP's Muskingum River Power Plant will cost each of the Frye and Wolf Creek 

School Districts 10% of their operation funds. The commenters stated that the proposed rule 

would place an additional 1,675 operations workers (150-200 FTE Laborers alone) and hundreds 

more Laborer outage workers at risk at the nine remaining Ohio coal plants subject to regulation. 

The commenters stated that EPA in their guidance to states should recognize the need to require 

provisions for displaced workers, that these policies are designed to maximize construction job 

creation (preferably in the energy sector) and assist workers in transitioning to them, and that all 

new programs created in pursuit of demand side or energy efficiency construction require 

responsible standards to guarantee that as new sectors emerge they provide family-sustaining 

jobs. The commenters stated that one avenue for providing policy solutions for displaced 

workers would be for EPA to require components in the state planning process such as an 

economic impact report relevant to the power sector. 

Commenters stated that thousands of Montanans are employed in high-paying jobs related to 

extraction, use, and distribution of coal and these jobs support families as well as communities. 

The commenters stated that it is critical that any plan be designed to protect and maintain these 

jobs while meeting the new environmental standards. The commenters stated that they do not 

believe that jobs and the environment are automatically contrary to one another and they strongly 

support having the choice on how to meet the proposed rule. The commenters stated that it is 

important to find the right combination of "inside-the-fence" measures - like heat-rate 

improvement and installing new technologies, like carbon sequestration - and "outside-the-fence" 

measures - like deploying more renewable energy and improving energy grid efficiency. The 

commenters stated that the rule must create more economic opportunity for Montana's working 

families and ensure that news jobs are jobs of good quality. The commenters stated that this rule 

could bolster emerging sectors of the economy and re-establish manufacturing centers in the 

United States dedicated to supplying the needs of an expanded energy economy. The 

commenters stated that to maximize the benefit of any net job creation it is essential that these 

new jobs are good jobs that provide family-sustaining, prevailing wages and benefits as well as 

support Buy American policies.

Commenters stated that infrastructure, plant construction, and/or maintenance performed as a 

result of the CPP must be made by qualified individuals installing domestically-manufactured 

products and technology, and that in order to make these updates and upgrades as safe and 

smooth as possible individuals employed should have completed or tested-out of a federally 

registered apprenticeship program. The commenters stated that for those individuals performing 

construction and maintenance on nuclear generating facilities, it is important the training they 

complete meet the standards of the Nuclear Mechanic Apprenticeship Process. 

Commenters added that when EPA looks back at the comprehensive energy and climate 

legislation that passed in June of 2009, EPA actually had a recognition that some parts of the 

country were going to be more adversely affected. EPA had workforce energy worker training 

programs. EPA had -- addressing the issues of workers displaced due to emissions regulations 

and grants for colleges and universities to retool and retrain folks.

Response 5.m.: The EPA agrees that there will be a need for workforce retraining as part of the 

transition to a lower carbon economy. As noted above, we have been seeing many states 

implementing replicable programs to transition their workforces – by working in public-private 
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partnerships with their community colleges and businesses - to secure an economic advantage as 

they transition local economies. In addition the Department of Commerce, Department of Labor, 

Small Business Administration, and the Appalachian Regional Commission have together 

created an initiative to issue grants to partnerships of regionally-driven economic development 

and workforce development organizations in impacted coal communities.7

 

The timeframe of the CPP from plan development to plan implementation affords states, utilities 

and other stakeholders the ability to work together to tailor their plans in the ways that best 

support their communities. The EPA strongly encourages states to put effort into workforce 

development and creation of safe, good paying jobs, in order to help communities transition to a 

lower carbon economy.

5.n. Commenters stated that biomass co-firing would create many additional jobs and should 

be included in the Clean Power Plan

Commenters stated that the inclusion of forest-derived biomass feedstocks in the Clean Power 

Plan creates economic development opportunities across many sectors and throughout the supply 

chain. The commenters stated that an increase in biomass feedstocks coming from sustainably 

managed forests would provide economic stimulus and job growth beginning with the individual 

forest owner and carrying through the logging, transportation and electricity generation 

industries. 

Commenters stated that biomass co-firing in the U.S. Southeast is estimated to create 6 times the 

jobs lost from reduced coal demand, due to the increased labor needed for biomass supply 

chains. The commenters stated that a 500MW coal plant supports 2,540 direct jobs, while a

500MW biomass plant supports 3,480 jobs. 

Response 5.n.: The EPA acknowledges the commenters remarks on the job creation potential of 

biomass co-firing. A discussion regarding the use of some biomass feedstocks for compliance 

purposes can be found in section VIII.I.2.c and Section VIII.K.1 of the final rule preamble. A 

discussion regarding employment and economic development can be found in section VIII.G.3 

and in Section XI.E.

Comment 6: Plant closures resulting from the Clean Power Plan will have negative economic 

impacts. 

Commenters discussed the impacts that may occur should the proposed rule to lead to plant 

closures. Commenters stated that Pennsylvania's electric generators operate in a competitive 

market, not a rate-based market, and will have to incorporate the costs of facility improvements 

into their bidding price when they compete for the ability to provide electricity on an economic 

basis. The commenters stated that the combination of upfront capital costs to achieve these 

 

7 See https://www.whitehouse.gov/the-press-office/2015/03/27/fact-sheet-partnershipsopportunity-and-workforce-and-economic-revitaliz.
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improvements, paired with tremendous uncertainty about the ability to ever recover them, may 

lead to a decision to close the plants that will translate to a significant economic impact to all 

consumers of energy, including business, in the state. 

Commenters stated that additional plant closures will continue to have a real and negative impact 

on state and local economies and that higher electricity costs are akin to a regressive tax that 

cannot easily be absorbed. Commenters encouraged EPA to withdraw the proposal to avoid the

closure of coal fired power plants that strengthen local economies and provide electricity at 

reasonable rates. The commenters stated that environmental regulations have weakened the 

American economy by driving businesses overseas and that the benefits of the proposed rule 

cannot be assured or monetized. 

Commenters cited EPA's projections that five of the seven coal units in Arkansas and all of the 

coal units in Arizona would shut down as a result of the proposed rule. As such, the commenters 

stated that these high wage job losses would devastate local economies, even in areas where new 

NGCCs are constructed because NGCCs require less than one-third of the staff required to 

operate a coal fired plant.

Commenters urged EPA to consider the economic, social and reliability impact that would result 

from three local generating plants shutting their doors including the loss of 330 jobs and over 

$20 million in wages before benefits, the loss of tax revenue, sales tax and the need for increased 

government assistance to feed families. In addition, the commenters stated that the job skills of 

the workers cannot be easily transferred to other occupations, and other employees in 

management, contracting, supplying, railroad, mining, electrical and service will also lose their 

jobs. 

Commenters opposed the Clean Power Plan as proposed because it will lead to the closure of 41 

to 49 gigawatts of coal fired generated capacity by 2020, resulting in the loss of 52,000 

permanent direct jobs in the utility, rail, and coal mining sectors and an additional 100,000 direct 

jobs. Commenters further stated that EPA's number must be viewed with suspicion because EPA 

claimed the MATS rule would close only 4.7 gigawatts of coal generation, but experts have now 

confirmed that 56 gigawatts of coal generation will be lost by 2016. Taken together, the 

commenters stated that the MATS and the Clean Air Plan will close approximately 40 percent of 

today's coal fleet and result in a loss of over 400,000 American jobs at a time when the nation 

continues to recover from the worst recession since the Great Depression.

Commenters stated that EPA's alternative BSER may result in the shutdown of all coal and oilfired units and up to 80% of NGCC units in New Jersey. The commenters stated that the 

shutdown of many NGCC units in New Jersey would result in greater reliance on out-of-state 

coal units, resulting in higher CO2 and NOx emissions. 

Commenters stated that, in addition to the impact on electric rates, these retirements will cause 

jobs to be lost and will have adverse impacts on local economies and local government tax 

revenues. The commenters stated that these impacts have already been seen in the local 

economies of the areas where plants have already been shut down. Commenters stated that 

closing this much generation in such a short timeframe also raises serious concerns about the 

ability to maintain reliability and meet peak demand, especially during extreme weather. The 
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commenters assumed there are still federal requirements that a utility maintain an adequate 

generation reserve, so reliability is attained. 

Commenters stated that to the extent power plants are forced to close in my county, our county 

tax revenues would be diminished, as would our ability to pay for the services our citizens rely 

upon the county to provide. 

Commenters stated that as plants close or scale back operations, the loss of jobs and tax income 

in communities across the region will be a significant blow to the economy at the local level -

impacting families, businesses, schools, roads and essential services. 

Commenters stated that the effect of Block 2 would force many of Texas' lignite power plants to 

close, directly harming the employees and communities of the co-located lignite mines. The 

commenters stated that since these power plants are mine-mouth plants, there is little if any 

potential to seek other uses for this lignite, requiring the shutdown of the mine. The commenters 

stated that this would lead to significant job losses, stranded resources at these power plants and 

serious reliability risks across the entire state. 

Commenters stated that two power plants employ 218 and 332 full-time equivalent (FTE) staff, 

and contribute to approximately 4,000 jobs per year in the state of Arizona, nearly 70% of which 

are located in Apache County. The commenters stated that if these plants are closed Apache 

County could lose 2,700 FTE jobs, $600 million in annual gross state product, half of its 

property tax value to be eliminated and two thirds to three quarters of the property tax value that 

supports the local school districts. The commenters stated that when Building Block 2 is applied 

in the state, Arizona has no ability to retain newer or upgraded EGUs that have significant 

remaining asset value. The commenters urged EPA to provide Arizona with the same level of 

flexibility to achieve state goals that is afforded to the rest of the nation. 

Commenters stated that EPA's cost effectiveness evaluation did not take into account the 

financial impacts to communities that depend on the direct and indirect economic contribution 

from nearby coal-fired power plants. The commenters stated that Apache County Arizona could 

lose 2,700 jobs and $600 million in annual gross state product, over half of Apache County's 

property tax value could be eliminated, including two thirds to three quarters of the property tax 

value that supports the local school districts, and the associated exodus of plant employees from 

the region could potentially result in a drop in housing values, shuttering of local businesses, and 

closing of schools. 

Commenters stated that additional closures would drive up electricity rates across the country, 

reduce the competitiveness of U.S. manufacturers on the international stage, and cause enormous 

damage to the economies of countless coal communities. The commenters stated that such 

closures would undermine the reliability of the grid, reduce fuel diversity, and damage U.S. 

energy security. The commenters stated that the proposal arbitrarily fails to consider these 

important issues. 

Commenters stated that if Gibbons Creek were to close down in anticipation of the proposed 

Greenhouse Gas Rule coming on top of the other environmental regulations affecting coal-fired 

power plants there would be direct impacts to TMPA's Member Cities, to their ratepayers, to the 
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employees of TMPA, and to the communities surrounding the Gibbons Creek power plant. The 

commenters stated that the impacts to the Member Cities and their ratepayers are associated with 

stranded costs of investment in the plant and its facilities and the costs of replacing the lost 

power. The commenters stated that the loss of employment of the approximately 100 TMPA 

employees would affect the employees and their dependents. The commenters stated that the loss 

to the local communities would be significant as TMPA is a major contributor to the county and 

three school districts through payments in lieu of taxes (PILOT) totaling approximately $1 

million per year.

Commenters stated that union laborers are participating in the conversions of coal plants to 

natural gas, they are building the pipeline infrastructure to meet the needs of the growing natural 

gas demand, they are building three of the five nuclear reactor units under construction, and they 

are building wind farms and solar fields at unprecedented scale. The commenters stated that the 

loss of outage work in coal-intensive areas creates a disproportionate burden on the working 

families of these communities. The commenters stated that the City of Miamisburg stands to lose 

7.4% of its property tax base with the closing of the O.H. Hutchings Power Station and the 

closing of AEP's Muskingum River Power Plant will cost each of the Frye and Wolf Creek 

School Districts 10% of their operation funds. The commenters stated that the proposed rule 

would place an additional 1,675 operations workers (150-200 FTE Laborers alone) and hundreds 

more Laborer outage workers at risk at the nine remaining Ohio coal plants subject to regulation. 

The commenters stated that EPA in their guidance to states should recognize the need to require 

provisions for displaced workers, that these policies are designed to maximize construction job 

creation (preferably in the energy sector) and assist workers in transitioning to them, and that all 

new programs created in pursuit of demand side or energy efficiency construction require 

responsible standards to guarantee that as new sectors emerge they provide family-sustaining 

jobs. The commenters stated that one avenue for providing policy solutions for displaced 

workers would be for EPA to require components in the state planning process such as an 

economic impact report relevant to the power sector. 

Commenters stated that coal-fired power plants are an important source of high wage 

employment and most are located in rural areas that have few or no alternative employment 

options. The commenters stated that the abrupt closure of existing coal-fired power plants would 

devastate these communities; even areas that might receive some re-employment benefit from 

the construction of new NGCCs would face economic hardship, because NGCCs require less 

than a third of the staff required to operate comparable coal-fired power plants. The commenters 

stated that EPA's RIA fails to adequately consider the costs of compliance for state and local 

economies and, instead, inappropriately focuses on national level impact; this analysis is 

inapposite to the proposed rule, which proposes emission rate goals on a state-by-state basis. 

Commenters stated that the retirements Building Block 2 precipitates would have dramatic local 

economic impacts. The commenters stated that shutting down the Coronado and Springerville 

Generating Stations in Apache County, Arizona, would cause over 4,000 individuals to lose their 

jobs, nearly 70 percent of which are located in Apache County, and cut $600 million in annual 

gross state product from Apache County. The commenters stated that with limited alternative 

employment opportunities, the resulting exodus of plant employees would depress County 

housing values, shutter local businesses, and county services would be curtailed as remaining 

County residents would be unable to alone shoulder the entire financial burden of supporting 
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communal services, such as schools, medical centers, library districts, and fire districts. The 

commenters stated that the RIA only analyzes national employment impacts. The commenters 

stated that the Proposed Rule must give the states greater discretion in determining the 

appropriate performance standards for affected units. 

Commenters stated that the proposal would have tremendous impacts on the communities where 

Tri-State owns and operates coal-fired EGUs if those EGUs are forced to shut down or to curtail 

their operations severely. The commenters stated that when indirect impacts of Craig Station are 

taken into account, the plant is responsible for $489.6 million in regional total output. The 

commenters stated that Craig Station is responsible for providing three of Moffat County's top 

ten employers: Tri-State, the Trapper Mine, and the Colowyo Coal Mine, and that Craig Station 

supports 100 percent of the employees at the Trapper Mine and the Colowyo Mine. The 

commenters stated that mining accounts for better than 18 percent of the annual labor income 

generated in Moffat County, and Tri-State accounts for better than 18 percent of the property tax 

revenue in the county. 

Commenters stated that in the face of rising costs and lower revenue, municipal governments in 

the short-term must either raise taxes and fees to offer the same level of services or reduce their 

level of services. Commenters stated these services provide citizens with other public goods such 

as public education, public safety, public recreation, public roads, public health, and others. 

Commenters stated that the State of Arizona and Apache County in particular will be severely 

detrimentally impacted if both Coronado and Springerville power plants are forced to cease 

operation. The commenters stated that Coronado and Springerville combined account for 4,009 

direct, indirect, and induced jobs in all private non-farm employment sectors in the State of 

Arizona (in CY2013), including 2,740 jobs in Apache County alone, and that these jobs alone 

equate to $713.5 million (2013 $) real GSP, including $230.2 million (2013 $) RDPI for the 

State of Arizona in CY2013. The commenters stated that Apache County could lose 2,700 FTE 

job years employment, just under $600 million in gross state product, and $170 million real 

disposable personal income. The commenters estimated that over half (56%) of Apache County's 

property tax value could be eliminated, including two-thirds to three-quarters of the property 

value that supports the local school districts, and with limited alternative employment 

opportunities, the associated exodus of plant employees from the region could potentially result 

in a drop in housing values, shuttering of local businesses, and closing of schools as the 

remaining population is left with the full financial burden of schools, medical centers, library 

districts, fire districts, etc., currently born by the utilities and their employees. 

Commenters stated that if the proposed Clean Power Plan requires the Jim Bridger Power Plant 

to shut its doors, approximately 350 power plant employees would lose their jobs, and an 

estimated 400 employees from the Jim Bridger Coal Mine and 185 employees from the Black 

Butte Coal Mine would also lose their jobs. The commenters stated that as a result of this 

proposed plan, 935 Sweetwater County employees directly employed in the power generation 

and coal mining industries could be become unemployed. The commenters stated that the closing 

of the Jim Bridger Power Plant and Jim Bridger and Black Butte Coal Mines could result in 

indirect employment and economic impacts on numerous local, regional and national service 

companies that depend on the viability of these operations. The commenters stated that ad 

valorem tax revenues for these operations represent approximately 11 % of property taxes paid in 
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Sweetwater County. The commenters stated that if these power plant and coal related tax 

revenues are lost along with the tax revenues generated by the associated residential, business 

and industrial sectors of the economy, there will be devastating consequences for the Sweetwater 

County Memorial Hospital, the Sweetwater County Events Complex, Southwest Counseling 

Service, the maintenance of 1200 miles of roads, the provision of an effective level of law 

enforcement and others. 

Commenters stated that closure of the coal generating stations in Arizona would devastate the 

economies of our rural communities, where the plants support high-wage employment and 

provide a critical tax base for schools and local governments. The commenters stated that rate 

increases resulting from the Proposed Rule would disproportionally affect rural consumers and 

exacerbate the growing problem of poverty in these areas. 

Commenters stated that the loss, or a major scale back, of the Flint Creek Power would result in 

the loss of jobs and tax income in my community and would possibly devastate the Gentry 

School District. The commenters stated that the loss or diminishing of operations of the other 

coal fired plants in Arkansas would have an immediate and lasting effect on all Arkansas Public 

Schools.

Commenters stated that Federal regulations have already forced two plants in his district to close 

over the last two years. The commenters cited a National Mining Association projection that 

more than 300 plants would retire nation-wide due to EPA rules over the next six years. The 

commenters cited a Heritage Foundation study predicting that the EPA's anti-coal policies could 

terminate 600,000 American jobs by 2023 while causing economic growth to drop by more than 

$2 trillion. 

Commenters stated that under the proposed guidelines, EPA projects that its proposed Clean 

Power Plan will increase electricity prices by a nationwide average of 4 percent to 7 percent, will 

increase natural-gas prices by 9 percent to 12 percent, and will cause the retirement of 46,000 

megawatts to 49,000 megawatts of coal-fueled electric-generating capacity. The commenters 

stated that the EPA's proposal will have a major impact on energy resources, electric ratepayers, 

jobs, and the economy of the Midwest region. 

Commenters stated that the CPP rule will lead to the closure of coal-burning power plants 

throughout the United States, resulting in the loss of more than 52,000 jobs in the coal, utility 

and railroad industries by 2020, and further direct job losses in those industries will reach 65,000 

by 2030 as a result of this rule.

Commenters stated that these job losses will have a ripple effect in the communities throughout 

the coalfields and beyond, where more than 208,000 jobs will be lost by 2030. 

Commenters stated that the proposed rule threatens its viability. The commenters stated that 

EPA's Regulatory Impact Analysis indicates that the rule would cause Appalachian coal 

production for electric generation to decline from 140 million tons in the 2020 base case to 87-91 

million tons, versus 246 million tons of coal in 2009. The commenters stated that decreased coal 

production will result in significant job dislocations, income losses, and diminished tax bases. 

The commenters stated that each coal job has a 5 to 1 multiplier effect on the mine services, 
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consumable supplies, and the local communities where the mines and mine employees spend the 

revenues and household income generated from coal sales. The commenters stated that the 

proposed re-dispatching of coal generation to natural gas combined-cycle units, unrealistic 

energy efficiency goals, and new renewable energy targets would create a cycle of increasing 

coal fired power plant and mine closures, direct and indirect job losses, and higher electricity 

prices adversely impacting manufacturing and other key job-intensive sectors. 

Commenters stated that forcing Minnesota to reduce its carbon emissions by 41% by 2030 is not 

fair, as midwestern states do not have to reduce by such a high percentage. The commenters 

stated that this will force the shutdown of many coal power plants, eliminate thousands of jobs in 

Minnesota, drive the cost of power up and create a terrible burden on lower income families. The 

commenters stated that it would like to see No. 3 generating plant stay online to keep some of the 

support and jobs in Becker, MN. 

Commenters stated that requiring Minnesota to reduce carbon emissions by 41% by 2030 is cost 

prohibitive, too aggressive, and will hurt our economy. The commenters stated that this will 

force the shutdown of many coal power plants and result in the loss of thousands of jobs 

(including many in his legislative district) and will drive the cost of power up, which will create 

a burden on all Minnesota families and especially low income families. 

Commenters stated that for many coal-fired plants, reaching these extreme goals in such a short 

period of time will prove either economically unfeasible or physically impossible (or both), thus 

forcing their premature retirements. The commenters stated that the proposed rule will end up 

slashing not CO2 emissions, but thousands of good-paying middle-class jobs instead. The 

commenters cited projections of retirement of about 12 percent to 19 percent of all coal-fired 

capacity projected to be in service in the base case) by 2020 under the range of scenarios 

analyzed, and its impact on well over 135,000 stable, well-paying jobs for middle-class families 

that the industry provides. The commenters stated the most obvious consequence of the 

widespread closure of coal-fired power plants will be massive job losses. The commenters stated 

that the agency's plans also would result in the loss of some 52,000 permanent direct jobs in 

utilities, mining and rail and at least another 100,000 jobs in related industries.

Commenters stated that as plants close or scale back operations, the loss of jobs and tax income 

in communities across the region will be a significant blow to the economy. 

Commenters stated that EPA recognized localized negative impacts of the proposed rule in its 

RIA. The commenters stated that the first coal mining jobs to be lost will be those at mines that 

produce the highest priced coal - notably, mines in eastern Kentucky and that the impact of this 

proposal will almost guarantee the broadening and deepening of the poverty already dominant in 

eastern Kentucky. 

Commenters stated that many coal-fired power plants, including Tri-State plants, are located in 

rural areas where the entire community is supported by the power plant. The commenters stated 

that the job loss will extend far beyond the jobs in the plants and mines themselves and that 

power plants are often a major source of employment and revenue for the communities in which 

they are located. 
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Commenters cited the United Mine Workers of America prediction that there will be 75,000 

direct coal generation jobs lost by 2020 and 152,000 by 2030. The commenters cited the 

International Brotherhood of Electrical Workers that the agency's plans also would result in the 

loss of some 52,000 permanent direct jobs in utilities, mining and rail and at least another 

100,000 jobs in related industries, and that high-skill, middle-class jobs would be lost, falling 

heavily in rural communities that have few comparable employment opportunities. The 

commenters cited the US Chamber of Commerce projections that there will be 224,000 jobs lost 

on average each year through 2030, and the rule will result in a loss of $50 billion in GDP on 

average. The commenters cited Dr. Gabriel Calzada Alvarez, who examined the impact of 

renewable energy policies in Spain, found that 2.2 jobs were lost for every one job created. 

Commenters stated that the drastic reduction in coal generation will cost 52,000 direct and 

100,000 indirect jobs. The commenters stated that MATS and the CPP will close 40% of the coal 

generation that exists today, and eliminate 400,000 or more irreplaceable American jobs. The 

commenters stated that under the CPP Colorado will not receive credit for plant closures already 

made and will be forced to close at least three additional coal-fired plants. The commenters 

stated that in at least 22 other states the impact of the CPP will not be limited to the coal sector. 

Commenters estimated that roughly 6% of its members will lose their jobs if the Clean Power 

Plan is finalized in its current form. The commenters stated that local power plants provide jobs 

for hundreds, and often times, thousands of workers. The commenters stated that the CPP will 

influence the cost of electricity for residents and businesses, impacting regional growth, 

employment, taxes, and wages. The commenters predicted that more than 500 coal-fired power 

plants will be shut down, and 41GW-49GW of coal-based electric generating capacity would be 

closed by 2020. 

Commenters stated that during the period 2001-2013, while its energy costs escalated, California 

lost 650,000 manufacturing jobs--approximately one-third of all California manufacturing jobs. 

The commenters stated that 34 percent of the nation's welfare recipients live in California. The 

commenters stated that California has shown the disastrous consequences of abandoning coal as 

an energy source and pushing jobs for the working class out of its borders, often to Mexico and 

other countries. The commenters stated that that Missouri is at the crossroads between the South 

and Midcontinent Independent System Operator power regions, which are expected to incur 

"over half the U.S. total costs during the 2014-30 timeframe," and "will shoulder more of the 

economic consequences of compliance." 

Commenters stated that the proposal has the potential, based on EPA 2025 IPM, to shutter over 

13,000 MW of the 22,000 MW of coal fired generation in the state of Texas, including San 

Miguel. The commenters stated that if the EPA's IPM is correct, there are 350 power plant and 

mine workers at San Miguel that will be put out of work due to this rule - a full 20 years before 

the useful life of the unit has been reached. Commenters stated that in Utah, coal-fueled 

electricity is responsible for meeting approximately 80% of the state's energy needs, and it is 

crucial that Utah maintains the economic development competitiveness that coal provides. The 

commenters stated that the coal mining industry is one of the most important industries in the 

State of Utah, due not only to the number of jobs supported by the coal industry, but also to the 

economic linkages with other sectors of the economy and the high wages in the mining industry 

relative to other sectors of the Utah economy. The commenters stated that these high-paying coal 
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mining jobs are located in a rural part of the state in which it would be difficult, if not 

impossible, to replace them. 

Commenters stated concern regarding the negative impact to ratepayers of having to pay higher 

rates associated with the utilities' needs to recover existing costs and the additional costs that 

they will incur to comply; the negative impact to ratepayers of having to pay higher rates 

associated with utilities requiring higher returns to compensate them for the additional risks that 

the utilities will face; and the negative impact to ratepayers associated with paying higher rates 

for any responsibility they may experience due to being made responsible for unrecovered costs 

if plants are shuttered or if plant output is reduced. 

Commenters stated that the draft rule summarily discards billions of dollars in investment 

Georgians have made in state-of-the-art emissions controls on coal-fired units, and EPA’s 

proposal assumes that Georgia will retire another 3900 megawatts of coal-fired generation in 

response to this rule, thereby stranding the investment in those generating units, including 

billions of dollars' worth of environmental controls. 

Commenters stated that the premature shutdown of existing coal plants with a remaining 

economic life will likely cause higher electric rates and increased costs for the nation's electricity 

consumers than EPA has projected. The commenters stated that the net present value cost 

impacts range from about $7 billion to almost $430 billion, with associated rate increases of 5.47 

to 55.4 percent. 

Commenters stated that EPA must consider the economic consequences of stranded assets and 

tailor the Proposed Rule to minimize these impacts. The commenters stated that Building Block 

2's emission reductions requirements assume increased NGCC usage and massive retirement of 

existing coal and oil/gas steam generation, and that these stranded costs would be borne either by 

the plants' owners or by ratepayers where the stranded assets have yet to be fully amortized. The 

commenters stated that the proposed rule would place an unreasonable burden on electric 

consumers who would be forced to cover the cost of prematurely retiring these units plus the cost 

of the new NGCC units needed to replace them. 

Commenters stated that coal job losses and rising electricity prices pose a threat to Kentucky 

consumers and our essential industrial manufacturing economy. The commenters stated that it is 

irresponsible for EPA to suggest that a $2 billion loss to our state gross domestic product coupled 

with a ten percent increase in electricity costs is "modest". The commenters stated that the 

proposed rule would strand another $4.5 billion previously invested in existing assets to achieve 

compliance with the existing mercury and air toxins standard. The commenters stated that EPA 

must consider reasonable safety net provisions. 

Commenters stated that the IPM model improperly assumes that compliance actions related to 

existing generating assets and construction of new generating assets could be deployed in 2016 

and does not consider the time necessary to put in place accompanying regulatory, legislative 

and compliance decisions. The commenters stated that virtually all of the reductions in CO2 

emissions from affected EGUs come from reduced utilization of coal-fired EGUs and that EPA 

must determine the diminution in asset value to the owners of those existing sources, and the 

local and regional economic disruption and unemployment that would result from the proposal. 
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Commenters stated that it is unclear if the IPM model incorporates stranded costs or ancillary 

transmission and other investment costs into its projections of electricity rates impacts. The 

commenters stated that ratepayers would still be required to pay the costs associated with retired 

units in addition to the costs of any other measures that would have to be deployed in response to 

the rule. 

Commenters stated that EPA failed to takes into account the costs of stranded investment and 

cited examples from Arizona, Florida, Mississippi and Kansas. The commenters stated that EPA 

estimated that MATS alone would drive the installation of 20 GW of dry scrubbers, 44 GW of 

direct sorbent injection, 102 GW of fabric filters, 63 GW of scrubber upgrades, and 34 GW of 

electrostatic precipitator upgrades, with projected capital and operating costs of these 

installations of $9.4 billion annually. The commenters stated that with EPA now predicting an 

additional 49 GW of retirements in addition to the MATS-caused retirements, a great deal of this 

investment is likely to be stranded. The commenters stated that it is consistent with Section 

111(d)(1)(B), for states to determine that sources that have extended their useful lives by 

installing long-lived and expensive pollution control systems should not be required to 

prematurely retire and leave electric ratepayers with tens or hundreds of millions of dollars in 

unamortized investments. The commenters stated that EPA does not explain whether, if a state 

goal would be made less stringent because of stranded investment, the state would be required to 

make additional and compensating GHG reductions either in 2020 or later that decade. The 

commenters stated that EPA should permit states to exempt sources from EPA's requirements to 

the extent the states determine that compliance would create stranded investment. 

Commenters stated that EPA's regulations on coal-fired plants have forced and will continue to 

force closures of generation facilities that have already been retrofitted with pollution controls. 

The commenters stated that customers would see a rate shock if these plants shutdown or are 

underutilized because they will continue to pay for the stranded costs of the environmental 

investments in addition to new investments associated with the replacement resources required 

from plant closures. 

Commenters stated that Nebraska is the only state whose power system is entirely publicly 

owned and managed. The commenters stated that its public power boards have a statutory duty to 

provide the lowest possible cost energy and that the implementation of the Clean Power Plan 

would critical investments at risk. 

Commenters stated that EPA has underestimated the proposal's impact on electricity prices. The 

commenters stated that the proposal would accelerate the retirement schedule and increase the 

costs associated with the transition from existing coal-fired EGU capacity to other sources of 

electricity. The commenters stated that there will be a significant cost in the form of stranded 

assets that will result in significant economic harm by premature retirement. The commenters 

stated that the proposal would change the market dispatch of generating units by reducing the 

availability of the most economic generating resources. The commenters cited a study by Energy 

Ventures Analysis Inc. that on a percentage basis, the U.S. industrial sector would be affected 

most severely with a 64 to 92% increase in electricity and gas, affecting energy intensive 

industries in the U.S. such as aluminum, steel and chemicals manufacturing. 
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Commenters stated that the compliance cliff imposed by the interim compliance period will 

likely have many adverse impacts, including creating substantial stranded investment from the 

premature shutdown of many existing coal-fired EGUs that could be forced to stop operating by 

2020 given the front-loading of Building Blocks 1 and 2 and the steep reduction in the CO2 

emissions required at the start of the interim compliance program. The commenters stated that 

that consumers would have to pay for the same electricity generating stations twice, first the 

billions of dollars they are already paying or will be paying for the pollution controls that were 

previously installed or are being installed, and second for the replacement capacity that will be 

required. The commenters stated that this can be avoided by eliminating the interim compliance 

period. 

Commenters stated that the four BBs that are the basis of the mandatory standards for the states 

assure that many utilities will have to prematurely shut down capital intensive, low cost coal 

plants, many with long remaining operating lives and unpaid debt, which will cause major

stranded investment costs to consumers. The commenters stated that these stranded asset costs 

were not included in the national cost assessment developed by EPA, and that EPA also failed to 

assess the costs of building new gas pipelines and transmission lines that would be required by 

the closure of so many coal plants. The commenters stated that the approach threatens continuing 

electric reliability. 

Commenters stated that reduced demand for electricity does not translate into reduced electricity 

prices. The commenters stated that the proposed rule will shift generation away from Ohio's 

well-controlled and economical coal-fired fleet to more expensive generating technologies, and 

force the dispatch of electricity away from economic models to environmental ones. The 

commenters stated that in response to the Mercury and Air Toxics standards, the remaining coalfired fleet in Ohio will be well controlled, efficient, and economic, and many plants have 

installed environmental controls in the last decade at substantial costs. The commenters stated 

that there is potential under the proposed rule that these units will become uneconomical, and 

thus represent significant "stranded costs" to Ohio rate-payers. 

Commenters stated that EPA has underestimated the proposal's impact on electricity prices. The 

commenters stated that the proposal would accelerate the retirement schedule and increase the 

costs associated with the transition from existing coal-fired EGU capacity to other sources of 

electricity. The commenters stated that there will be a significant cost in the form of stranded 

assets that will result in significant economic harm by premature retirement. The commenters 

stated that the proposal would change the market dispatch of generating units by reducing the 

availability of the most economic generating resources. The commenters cited a study by Energy 

Ventures Analysis Inc. that on a percentage basis, the U.S. industrial sector would be affected 

most severely with a 64 to 92% increase in electricity and gas, affecting energy intensive 

industries in the U.S. such as aluminum, steel and chemicals manufacturing. 

Commenters stated that the compliance cliff imposed by the interim compliance period will 

likely have many adverse impacts, including creating substantial stranded investment from the 

premature shutdown of many existing coal-fired EGUs that could be forced to stop operating by 

2020 given the front-loading of Building Blocks 1 and 2 and the steep reduction in the CO2 

emissions required at the start of the interim compliance program. The commenters stated that 

that consumers would have to pay for the same electricity generating stations twice, first the 
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billions of dollars they are already paying or will be paying for the pollution controls that were 

previously installed or are being installed, and second for the replacement capacity that will be 

required. The commenters stated that this can be avoided by eliminating the interim compliance 

period. 

Commenters stated that the four BBs that are the basis of the mandatory standards for the states 

assure that many utilities will have to prematurely shut down capital intensive, low cost coal 

plants, many with long remaining operating lives and unpaid debt, which will cause major 

stranded investment costs to consumers. The commenters stated that these stranded asset costs 

were not included in the national cost assessment developed by EPA, and that EPA also failed to 

assess the costs of building new gas pipelines and transmission lines that would be required by 

the closure of so many coal plants. The commenters stated that the approach threatens continuing 

electric reliability. 

Commenters stated that reduced demand for electricity does not translate into reduced electricity 

prices. The commenters stated that the proposed rule will shift generation away from Ohio's 

well-controlled and economical coal-fired fleet to more expensive generating technologies, and 

force the dispatch of electricity away from economic models to environmental ones. The 

commenters stated that in response to the Mercury and Air Toxics standards, the remaining coalfired fleet in Ohio will be well controlled, efficient, and economic, and many plants have 

installed environmental controls in the last decade at substantial costs. The commenters stated 

that there is potential under the proposed rule that these units will become uneconomical, and 

thus represent significant "stranded costs" to Ohio rate-payers. 

Commenters stated that EPA did not consider remaining useful life as required under the CAA, 

nor does its proposal allow the states to consider it. The commenters stated that Arizona has 

virtually no flexibility. 

Commenters stated that EPA's proposed guidance will require coal-fired power plants, currently 

installing hundreds of millions of dollars of air pollution control equipment (to comply with the 

federal Regional Haze Program and Mercury and Air Toxics standard) to shutdown early and 

strand invested assets. The commenters stated that utility companies will be forced to recover the 

cost of abandoned air pollution control devices while at the same time recovering replacement 

generation costs from customers. The commenters stated that EPA should abandon state goals 

and allows states to base the best system of emission reduction on the affected electric generating 

units within their jurisdiction. 

Commenters stated that if adopted as a stand-alone standard of performance, the application of 

BB2 as proposed would require the retirement of Arizona's entire coal fleet, which makes up 

approximately 36 percent of Arizona's generation mix, by 2020. The commenters stated that the 

retirement of the entire fleet by 2020 would result in unreasonable costs in the form of enormous 

stranded investments and rate payers, would end up paying twice for the same generation: once 

to retire the debt on the prematurely retired assets and again to fund replacement generation. 

Commenters stated that utilities that would be required to prematurely close viable coal plants 

with years of remaining operating life, and given the limited time period for re-dispatch, would 

be forced to purchase energy (that may not be available) from other utilities. The commenters 
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stated that their consumers would lose the investment in the capital intensive coal plants and, at 

the same time, be forced to pay for new transmission lines and pipelines to other utilities to buy 

electricity from gas generation plants they do not own while their own units sit idle. The 

commenters stated that the four building blocks that are the basis of the mandatory standards for 

the states assure that many utilities will have to prematurely shut down capital intensive, low cost 

coal plants, many with long remaining operating lives and unpaid debt, including debt from 

recently installed emissions controls to meet Maximum Achievable Technology Standards 

(MATS) and other environmental requirements, which will cause major stranded investment 

costs to consumers. The commenters stated that these stranded asset costs were not included in 

the national cost assessment developed by EPA, and that EPA also failed to assess the costs of 

building new gas pipelines and transmission lines that would be required by the closure of so 

many coal plants. 

Commenters stated that the electric bill savings projected by EPA in the Proposed Rule may not 

materialize and that EPA's analysis is devoid of any analysis with respect to the cost of early 

retirement of used and useful plant that has not been fully paid for through utility rates. The 

commenters stated that if the Final Rule forces premature retirement of facilities in the service 

territories of one of the state's three IOUs, North Carolina ratepayers will likely bear some or all 

of these costs. 

Commenters stated that EPA failed to appropriately account for the more than 70,000 MW of 

facilities that have already been retired since the 2012 baseline or may be scheduled to retire 

during the interim compliance period or shortly thereafter. The commenters stated that States 

must either identify other emission reductions - for example by accelerating implementation of 

RPS or EERS programs - or require costly over-compliance later in the interim period which will 

ultimately prove unnecessary to achieve the final emission reduction targets. The commenters 

stated that it is unreasonable to suggest that all the coal-fired EGUs that EPA projects will retire 

by 2030 will have reached the end of their useful lives and would have been retired even in the 

absence of this rulemaking, and if States were permitted to consider the remaining useful life of 

existing sources when setting standards of performance, they may impose less stringent 

standards that would avoid the premature closure of coal-fired EGUs. The commenters stated 

that many coal-fired EGUs that would be forced to retire under the proposal would be unable to 

recoup their capital investments and there will remain a serious question of who should be 

responsible for bearing the economic burden of the stranded assets that will result from the 

premature closure of these coal-fired EGUs. 

Commenters stated that Arizona has a relatively new coal-fired fleet and several of the coal-fired 

units recently have been equipped with expensive pollution control technology. The commenters 

stated that the value of the assets that could become stranded in 2020 is $3.8 billion, and that the 

impact of this stranded investment is exacerbated by the fact that new generation would have to 

be built to replace the stranded assets, thus compounding the cost impact to Arizona customers. 

Commenters stated that failure to amend the state emission limits will almost certainly result in 

forced early retirements, which would constitute a taking of private property in contravention of 

the Fifth Amendment to the United States Constitution. The commenters stated that the 

economic impact of forcing Newmont to close the TS Power Plant, which has more than 20 

years of remaining useful life, would be devastating on two fronts: (1) the closure of the TS 
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Power Plant would result in stranded assets of approximately $450 million; and (2) closure of the 

TS Power Plant would leave Newmont without a reliable source of power in an area of northern 

Nevada with both limited generation and transmission capacity. The commenters stated that the 

burden placed on coal-fired assets, including the TS Power Plant, is too great to justify any 

unquantified purported benefits served under the Proposed Rule. 

Commenters stated that the communities supplied by MEAG will remain contractually obligated 

to pay for generation which EPA has unilaterally decided cannot be utilized in the future. The 

commenters stated that the communities that comprise MEAG have committed to fund over $ 

400 million for flue gas desulfurization systems, selective catalytic reduction systems, and 

sorbent injection and baghouse systems for mercury control at these units to meet EPA and 

Georgia environmental requirements. The commenters stated that the resulting stranded costs of 

these investments will be borne over the next 25 years by ratepayers in the communities. 

Commenters stated that it would be an economic disaster for our customers and the State of 

Nebraska if EPA's Clean Power Plan would force closure of NPPD (a low cost generation 

source) or require the investment of significant funds to meet the Plan as proposed and raise the 

costs of this plant. The commenters stated that its diverse generation mix has evolved to include 

natural gas, hydro, nuclear and wind in addition to coal, and allows NPPD to produce 42 percent 

of their generation carbon free. 

Commenters stated that investments in air pollution controls (APCs) may become stranded costs, 

depending upon the final GHG Rule. The commenters stated that Dallman Unit 4 won accolades 

from engineering and environmental groups alike, and has some of the most advanced APCs of 

any power plant in the country, exceeding the controls of much larger neighboring investorowned utilities. The commenters stated that in 2007, an Energy Assessment of Dallman units 31, 

32 and 33 was performed to determine ways to improve efficiency and reduce energy loss, and 

CWLP then implemented many of the recommendations. The commenters stated that having 

recently assessed and implemented such recommendations will make attaining an additional 6% 

heat rate improvement economically if not physically impossible. 

Commenters stated that the county as a whole could also see a devastating effect if the coal-fired 

plant which has received more than $600 million in clean technology upgrades in the last decade 

were deemed to be insufficient to meet the proposed standards. 

Commenters stated that the proposed emissions reductions will be impossible for Arizona's rural 

Electric Cooperative members to attain. The commenters stated that the impact to the citizens of 

this state and the economy cannot be overstated. 

Commenters stated that the original cost of its ownership interest in Colstrip Unit 4 will not be 

fully depreciated until 2043. The commenters stated that any scenario resulting in the need to 

replace our Colstrip generation with, for example, a combination of renewables and associated 

balancing/regulation requirement (i.e. simple cycle gas plant generation), would mean our 

customers would be paying for the remaining investment in Colstrip Unit 4 and the replacement 

generation. The commenters stated that by the end of 2015, NorthWestern Energy, Otter Tail 

Power Company and Montana-Dakota Utilities Company will have completed installation of an 

approximately $400 million air quality control system which will reduce nitrogen oxide, sulfur 
294

dioxide, particulate matter and mercury by about 90%. The commenters stated that the 

assumptions in the proposed Clean Power Plan reduce the capacity factor of the Big Stone Plant 

to 23%, a level which would result in stranding the $400 million air quality control system as 

well as the remaining unrecovered costs of each owner in the plant. The commenters stated that 

the plain language in Section 111(d) precludes EPA from exercising any discretion with respect 

to restricting the states' ability to incorporate remaining useful life and other factors into 

standards of performance as guaranteed by Congress. 

Commenters stated that the proposal will retire or significantly reduce the operation of 

Seminole's facilities (both SGS and MGS), resulting in severe economic impacts on Seminole. 

The commenters stated that a forced retirement prior to the end of their useful life will result in 

substantial stranded debt, as well as additional costs associated with generation to replace these 

units. The commenters stated that IPM also projects that the proposal would have dramatic 

impacts on the NGCC and peaking units at MGS. The commenters stated that the IPM Policy 

Case projects that these units will operate in 2025 at a capacity factor of just 16.1 percent, 

representing a two-thirds reduction in generation from 2012 to 2025. The commenters stated that 

EPA has not considered, and must account for, the severe economic impacts Seminole would 

face if the NGCC and peaking units at MGS are forced to reduce generation. 

Commenters stated that costs associated with the premature retirement of a significant number of 

coal-fired EGUs and the rushed construction of replacement infrastructure, in the form of 

natural-gas and renewable-energy generation units, transmission & pipeline will ultimately be 

borne by Oklahoma and its ratepayers. The commenters stated that a coal-fired unit for which 

Building Block 1's heat-rate improvement investment is made will then be forced to run at the 

reduced output level EPA data suggests in order to accommodate shifts to NGCCs and RE 

sources contemplated by Building Blocks 2 and 3. The commenters stated that it defies both 

fundamental economics and common sense to require utilities to make significant capital 

investments to improve heat-rate efficiency only to nullify the benefits accrued by forcing the 

displacement or closure of those same coal-fired units through a mandatory shift to NGCCs. 

Commenters stated that forcing the premature closure of power plants that have years - and in 

many cases, decades - of remaining useful life creates significant costs to utilities that will be 

borne by consumers and the economy. 

Commenters stated that the Proposed Rule threatens to substantially raise electric rates in 

Montana. The commenters stated that compliance costs will increase the cost of providing 

electric service, which costs will in turn be passed on to residents and businesses (including 

LCG's members) in Montana in the form of higher rates (both retail and wholesale). The 

commenters stated that Montana residents and businesses may also simultaneously be saddled 

with financial responsibility for assets that are stranded as a result of premature retirement, even 

when these assets still have remaining useful lives and value. The commenters stated that the 

Proposed Rule raises significant electric reliability concerns. The commenters stated that the 

Proposed Rule incorporates generic and unsupported expectations of levels of integrated 

renewable generation and EE that, when applied to Montana, are extremely ambitious, almost 

certainly unachievable, and uneconomic under traditional standards. 
295

Commenters stated that in 2013 the Neal 4 plant underwent a substantial environmental project 

of which Bancroft's share was approximately $850,000. The commenters stated that if the use of 

the Neal 4 unit is decreased to comply with the proposed plan additional resources will need to 

be added to replace it. The commenters stated that the stranded cost of the environmental 

upgrade and the cost of new resources places a great risk on the 732 residents of Bancroft. 

Commenters stated that if, as the EPA' s IPM model indicates, the State of Louisiana will likely 

find its best compliance option to be to direct the retirement of RPS-2, Lafayette Utilities System 

(LUS) would be required to replace more than 50% of its generating capacity and more than 63% 

of its energy requirements with other generation alternatives. The commenters further statedthat 

this would take new legislation, as neither LUS nor the municipalities that comprise the 

Louisiana Energy and Power Authority ("LEP A"), are subject to Louisiana Public Service 

Commission ("LPSC") regulation, and this requirement would have a crushing impact on a 

relatively small municipally-owned utility (and its customers, not shareholders) which has very 

recently invested over $70 million for MATS compliance measures at RPS-2. The commenters 

noted that the analysis and financing for this project assumed planning for the unit until 2032. 

The commenters described in a table (titled: "Projected Rodemacher Environmental Compliance 

Costs") that the estimates for replacing RPS-2 with a similar amount of combined cycle capacity 

will result in a $738 million (20 year net present value (NPV)) increase in electricity costs, 

resulting in an average cost increase of 36.5 mills/kWh (an approximate increase of 43% for both 

residential and commercial customers). The commenters assumed that average monthly 

residential usage of 1266 kWh (estimate based on 2012-2013 actual residential billings) 

continues, this would increase the average LUS residential utility bill by over $550 per year, or 

more than 1 % of the average Lafayette area family's annual income, a very significant amount to 

the nearly 17% of Lafayette's population living below the poverty level. The commenters added 

that all of this additional cost will be incurred on in addition to the LUS rate increase already 

required to support LUS' 50% share of the nearly $140 million recently expended for MATS 

compliance projects. The commenters stated that the LUS' economic models project that 

replacement of RPS-2 energy with generation from existing resources would be even more 

expensive due to: a) the need for investor-owned utilities, which now own nearly all of the 

NGCC capacity in Louisiana, to make a profit on their investments; and b) anticipated NAAQS 

compliance costs in the early 2020s. Furthermore, the commenters stated that as pointed out by 

the Louisiana Department of Environmental Quality ("LDEQ") in comments filed on September 

14, 2014, the amount of existing NGCC capacity available has been significantly over-estimated 

by the EPA. Therefore, the commenters noted, the cost of securing existing capacity is expected 

to be even more expensive, driving LUS even more strongly toward replacing RPS-2 if emission 

reduction requirements are not reduced to reflect the reality of the state's situation. 

Commenters stated that EPA focuses only on whether EGUs may be required to make substantial 

capital investments late in the useful life of an EGU and fails to recognize that many owners 

made prior investment decisions based on expected future operations. The commenters remarked 

that PPL Energy Supply's plants in Pennsylvania and Montana, and others like them operating in 

competitive power markets, are not nearing the end of their useful lives. The commenters stated 

that EPA's proposal, if implemented, could result in premature plant shut downs, translating into 

millions of dollars of sunk costs, and the forced retirement of coal-fired units will have 

particularly severe consequences for merchant generators like PPL Energy Supply. The 

commenters contended that because coal-fired assets would have very little salvage value, forced 
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retirement of coal-fired generation could well mean bankruptcy and dissolution for many 

merchant plants, generating companies and ancillary services. 

Commenters stated that all the nuclear, wind, and solar capacity calculations assume that, by 

2020, coal-fired energy production in Virginia is reduced by two-thirds from 2012 levels. The 

commenters stated that maintaining coal-fired generation in Virginia that is greater than onethird of 2012 levels - including production from plants with significant investments which if 

retired would result in stranded costs to Virginia residents and businesses - would require even 

more new zero-carbon generation. The commenters stated that from 2005 to 2012, carbon 

emissions from Virginia generation facilities were reduced by approximately 40%. The 

commenters stated that nuclear uprates, heat rate improvements, unit retirements, energy 

efficiency, and the addition of significant new natural gas facilities, have significantly lowered 

carbon emissions in the Commonwealth. The commenters stated that the EPA's goal of providing 

States with flexibility to minimize stranded costs directly conflicts with carbon emission rates 

that, for Virginia, are set so low that compliance options are extremely limited. The commenters 

stated that a more aggressive displacement of existing resources will increase stranded costs, 

which is almost certain to contribute to increased, not decreased, electricity prices in regulated 

States. The commenters stated that Virginia ratepayers served by Appalachian Power Company, 

whose generation facilities are located primarily in West Virginia, face stranded costs associated 

with the carbon emission rates that the EPA proposes for West Virginia. Virginia and West 

Virginia ratepayers have only recently begun paying for more than $2 billion in environmental 

controls necessary for Appalachian Power Company to comply with a 2007 EPA Consent 

Decree. 

Commenters stated that because the proposal would likely result in the premature closure of 

existing power plants, the proposal's requirements amount to a regulatory taking requiring 

compensation because of the uneconomic curtailment it will require. 

Commenters stated that the proposed rule threatens to substantially raise electric rates throughout 

the country as compliance costs will increase the cost of providing electric service, which will in 

turn be passed on to residents and businesses in the form of higher rates. The commenters stated 

that not only will consumers be at risk of funding new investment required by the proposed rule, 

but residents and businesses may also be financially responsible for assets that are stranded as a 

result of premature retirement, even when these assets still have remaining useful lives. The 

commenters stated that the proposed rule places at risk several billions of dollars of investments 

in existing coal fired facilities (including coal leases) that state ratepayers have funded and have 

only partially paid off. 

Commenters estimated costs associated with using all four of the Building Blocks. The 

commenters noted that delivered electricity prices would increase by about 12% on average over 

2017 through 2031. The commenters added that there are other factors that could add to impacts 

and costs:

• Potential infrastructure costs related to natural gas pipelines, electricity 

transmission, and voltage support or ancillary services
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• Low projected capacity utilization of non-retired coal units would lead to 

decreases in efficiency (i.e., increases in heat rates)

• additional wear and tear costs from operating coal units in a cycling mode, and 

potentially 

• additional retirements, none of which are included in our modeling

• Costs related to unit ramp rate constraints, minimum load constraints, and delays 

in new build or retirement permitting 

Commenters stated that ratepayers will be forced to pay for the retirement of over 3000 

megawatts (MW) of coal production, for new generation sources, and for previously installed 

environmental compliance measures for units that will have to be retired. 

Commenters noted that EPA has not considered the cost of stranded assets due to investment in 

generation fleets that will now be retired. According to the commenters, these costs will be 

reflected in consumers paying for utility investments that will not be used. 

Commenters also noted that EPA has failed to consider the costs associated with the remaining 

useful life of electric generating units that will be retired. 

Commenters stated that EPA rules that result in the premature retirement of existing coal plants 

can lead to higher utility rates via direct replacement power costs and through higher borrowing 

costs if the retirements have negative impacts on utility credit ratings. The commenters stated 

that credit ratings can be affected because the need for replacement power will likely lead to 

higher levels of debt, and/or other fixed obligations, rate increases that public power utilities 

must implement to recover higher replacement costs can compound the effects of other factors 

(e.g., macroeconomics, energy efficiency, net metering and other distributed generation 

initiatives) that lead to reduced sales and higher rates, and a reduction in fuel diversity (by 

eliminating coal as a portfolio option) exposes utilities to greater fuel price risks. The 

commenters cited a Fitch Outlook report that homogenizing the power generation fleet will leave 

utilities less able to manage fuel price risks, and in so far as rating agencies believe an affected 

utility will be unwilling or unable to pass on the costs of potential price spikes to customers, that 

utility's credit rating will be downgraded. The commenters stated that new environmental 

regulation that leads to premature retirement of existing coal-fired resources, or significant 

increases in the costs to operate these facilities, will translate into higher costs to utility 

customers through direct expenditures for replacement resources and potentially through higher 

borrowing costs. 

Commenters stated that, in addition to the impact on electric rates, these retirements will cause 

jobs to be lost and will have adverse impacts on local economies and local government tax 

revenues. The commenters stated that these impacts have already been seen in the local 

economies of the areas where plants have already been shut down. Commenters stated that 

closing this much generation in such a short timeframe also raises serious concerns about the 

ability to maintain reliability and meet peak demand, especially during extreme weather. The 
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commenters assume there are still federal requirements that a utility maintain an adequate 

generation reserve, so reliability is attained. 

Commenters stated that because the proposal would likely result in the premature closure of 

existing power plants, the proposal's requirements amount to a regulatory taking requiring 

compensation because of the premature closures and uneconomic curtailment it will require. The 

commenters stated that this is especially true considering that many electric cooperatives, 

including those in Mississippi, constructed coal fired generating facility in accordance with the 

Fuel Use Act, in which the federal government required that no new base load electric generating 

plants be constructed without the capability to use coal. 

Commenters stated that with the current Wyoming 2030 emissions reduction goal, the four EPA 

Building Blocks are unattainable and do not consider the low population in Wyoming, the nature 

of its power plants, the lack of gas fired power plants within Wyoming and the structure of its 

renewable energy industry. The commenters stated that if Wyoming could successfully negotiate 

with the EPA to reduce its 2030 emissions goal to a more attainable level, Wyoming may be able 

to achieve plan compliance though the implementation of the EPA Building Blocks, however, 

without a substantial reduction in the EPA emissions goal, Wyoming may be forced to close 

many of its coal fired power plants which would be devastating to national, state and local 

economies. 

Response 6: Commenters attributed a reduction in taxes and an increase in the cost of 

government assistance for feeding families to plant closures. Commenters stated that co-located 

mines might also be forced to close. Commenters stated that closures may result in lower 

property values and other impacts on a local area that loses a substantial part of its workers. 

Commenters asserted that plant closures in an area of deep poverty might increase that poverty. 

Commenters cited cases of stranded capital with a special focus on stranded capital for pollution 

control. Commenters expressed the opinion that some of the resulting closures might be 

considered a “regulatory taking” requiring compensation from the government.

The RIA for the Final Clean Power Plan presents in Chapter 3 information regarding potential 

plant retirements. The RIA estimates that relative to the base case between 23 and 29 GW of 

additional coal-fired capacity is projected to be uneconomic to maintain by 2015, increasing to 

between 27 and 38 GW in 2030. This is approximately between 11 and 19 percent of all coalfired capacity projected to be in service in the base case. However, coal will continue to be a 

very relevant fuel source for the generation of electricity in the US. In 2030, the EPA estimates 

that about 28 percent of electricity generation domestically will continue to be provided by coalfired power plants under the illustrative control scenarios modeled by EPA. While coal use in 

electricity generation is estimated to decrease as a result of the emission guidelines, other goods 

and services may see expansions (e.g., energy efficiency industries and renewable generation). 

The RIA for the CPP presents illustrative strategies that states may consider when developing 

plans. Because the States can choose how to comply with the rule, they might choose to avoid 

requirements that result in particular closures and related economic impacts. 

Regarding stranded assets assertions by commenters, see section 5.11 of this response to 

comments document for EPA’s response to this comment. The EPA has included a number of 

conditions to help ensure that vulnerable communities will not be disproportionately impacted by 
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this rulemaking. These considerations are outlined in section IX of the preamble of the final 

rulemaking. See comment 9 of section 8.6 of this response to comments document for EPA’s 

response to comments involving environmental justice. The EPA’s response to commenters’ 

hypothetical regulatory takings claim is addressed in the Legal Memorandum accompanying the 

final rule.

Comment 7: Plant closures will have negative tax revenue impacts on governmental units.

Commenters estimated that roughly 6% of its members will lose their jobs if the Clean Power 

Plan is finalized in its current form. The commenters stated that local power plants provide jobs 

for hundreds, and often times, thousands of workers. The commenters stated that the CPP will 

influence the cost of electricity for residents and businesses, impacting regional growth, 

employment, taxes, and wages. The commenters predicted that more than 500 coal-fired power 

plants will be shut down, and 41GW-49GW of coal-based electric generating capacity would be 

closed by 2020. 

Commenters stated that should the EPA's Existing-Source Proposal be finalized, Seminole's 

coal-fired power plant will be forced to close - leaving 300 skilled employees and as many as 

600 contractors without a job. The commenters stated that Seminole is also the largest taxpayer 

in Putnam County, and paid more than $5 million in property taxes in both 2013 and 2014. The 

commenters stated that Putnam County cannot afford to lose Seminole's coal-fired power plant 

or any of the jobs associated with the facility. 

Commenters stated that the CPP would have the effect of significantly reducing power 

generation from coal-fired EGUs, which would immediately threaten the supply of power 

available for distribution to consumers and force the retirement of hundreds of power plants. The 

commenters stated that hundreds of thousands of coal miners and supporting employees would 

face layoffs due to the decrease in coal demand. The commenters stated that due to the

significance and size of the coal industry, enactment of the CPP would push the national 

economy along a similar trajectory as the coal industry itself. The commenters stated that by 

2030, some 114 GW of existing capacity will be removed from the grid due to closures of coalfired EGUs. The commenters stated that the Plan is projected to result in a peak loss of 442,000 

jobs occurring in 2022, amounting to a decline of nearly $104 billion to the US GDP. The 

commenters stated that most analysts predict that the cost of electricity will increase 

significantly, amounting to an aggregate increase of nearly $300 billion by 2030. The 

commenters stated that in cases of power shortages, which are a distinct possibility due to 

increased reliance on redispatch to NGCC, price spikes in excess of 10 times the average rate are 

likely. The commenters stated that costs are particularly significant for lower-income 

households, which the CPP is expected to disproportionately impact. 

Commenters stated that EPA did not conduct a rigorous cost/benefit analysis, and therefore has 

likely under-estimated the costs to many states' economies. The commenters stated that the 

Regulatory Impact Assessment (RIA) did not incorporate the price risk associated with increased 

reliance on historically price-volatile natural gas. The commenters estimated that state GDP 

would be reduced by $2 billion with a ten percent increase in the cost of electricity. The 
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commenters stated that the final rule should include a "safety net" provision that would allow 

states that have increased exposure to natural gas price volatility to be able to dispatch their 

remaining coal-fueled fleet, if doing so will offset rate impacts that exceed ten percent. 

Commenters stated that this proposed rule could place New Mexico's utility ratepayers, 

employees, businesses, tax base and economy in jeopardy and could harm the wellbeing of New 

Mexico families and the "public interest" of the State of New Mexico. The commenters stated 

that the risk to these constituencies easily eclipses and outweighs the health risk that EPA claims 

New Mexico's citizens may experience associated with improving New Mexico's existing coal 

fired generation emissions. 

Commenters stated that 48% of the total national reductions are achieved in only six states: 19% 

Texas, 8% Florida, 6% Georgia, 5% Pennsylvania, 5% Arkansas, and 5% West Virginia. The 

commenters stated that these states made up approximately 28% of the total national electric 

generation as of 2012. The commenters stated that a state like West Virginia will be hit 

disproportionately hard, since the state had 16 coal plants operating in 2012, which generated 

96% of the state's electricity. The commenters stated that West Virginia's economy was bolstered 

by selling this energy: 58% of West Virginia's total 2012 electric generation was exported to 

surrounding states. The commenters stated that the wholesale reduction of the coal market, along 

with the costs associated with implementing the Plan, will result in wide-ranging harm to state 

and local economies, triggering job loss, shrinking tax bases, a decline in manufacturing, and a 

decline in overall economic competitiveness and social stability. The commenters stated that the 

Midwest Independent System Operator, a regional power grid operator, estimated that its 20-year 

discounted compliance cost of the rule will be $55-$83 billion. The commenters stated that some 

national estimates claim the Plan will cost $41-73 billion per year to implement, causing double 

digit electricity rate increases in 43 states, with 14 states facing peak year electricity price 

increases that could exceed 20%. The commenters cited other estimates that wholesale electricity 

costs will increase by $274 billion; that non-power natural gas costs will increase by $80 billion; 

and that replacement power will be needed costing $53 billion. 

Commenters stated that electricity rates will rise under this rule because using existing sources of 

electricity is less expensive than building new sources. The commenters stated that the average 

cost of electricity from existing coal plants is only $36.4 per mWh compared to new natural gas 

costing $66.3 per mWh, new wind costing $80 per mWh, and new solar costing $80.3 per mWh. 

The commenters cited Energy Ventures Analysis, that power and natural gas costs for customers 

would likely increase by 60 percent in 2020 compared to 2012--a cost hike of $284 billion. The 

commenters cited NERA estimates that, when all four of the building blocks are options for the 

states, electricity prices would increase by 12 percent on average between 2017 and 2031, and 

when states' options are limited by their resources, electricity prices would rise by as much as 17 

percent. The commenters stated that EPA would thus functionally mandate that Americans use 

less electricity. The commenters cited NERA estimates that, when the consumer share of energy 

efficiency costs is included, the total costs related to electricity rise. The commenters stated that 

in the case in which states can use all four building blocks, electricity-related costs are projected 

to rise by about $34 billion per year between 2017 and 2031, where states are limited by their 

resources that figure shoots up to $48 billion per year. The commenters stated that Americans' 

electricity bills could rise by as much as $210 annually because of the proposed rulemaking. The 

commenters cited Policy Navigation Group that local governments will have to spend more 
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money buying electricity to power schools, water treatment plants, municipal buildings, and 

other local government-provided services; municipal governments' fee revenues will likely 

decrease, as consumers spend more on electricity and less on goods and services in the local area 

and therefore do not pay as much in local government fees; and local governments' tax revenues 

will decline, as consumers spend more on electricity and less money on taxable goods and 

services. The comment cited the Virginia SCC staff estimate that costs for Dominion Virginia 

Power "would likely be between $5.5 billion and $6.0 billion on a net present value basis, and 

several billions of dollars of investments in existing coal facilities that were made to satisfy 

existing rules would be placed at risk.

Response 7: Commenters attributed plant closings to a reduction in tax revenues. Commenters 

stated that a power plant likely to close is the largest tax payer in the county. The RIA for the 

CPP illustrates potential scenarios that states could use to comply with the CPP. Ultimately, 

states will make the decisions as to how to comply with the emission guidelines and have the 

ability to mitigate impacts associated with the guidelines. States may choose to avoid 

requirements that could result in particular power plant closures.

Comment 8: Producers and consumers of coal will be negatively affected by the Clean Power 

Plan.

Commenters stated that the economic and fiscal impacts of the coal mining industry, the 

manufacture of activated carbon, and coal-fired electricity in Texas are staggering and are at risk 

if the proposal is not withdrawn, modified, and re-proposed to reflect the realities of states' 

electric generation markets and the authority provided to EPA by the Clean Air Act. 

Commenters cited a University of Nebraska study that the existing coal industry generates $4.9 

billion in economic output annually and provides 22,800 good jobs for our state. The 

commenters stated that coal use offsets $142 million in taxes annually, and that reduction in this 

tax revenue would be passed onto our consumers, in addition to the increased energy prices. The 

commenters stated that rural communities that are already struggling will be further hurt by this 

rule.

Commenters stated that 48% of the total national reductions are achieved in only six states: 19% 

Texas, 8% Florida, 6% Georgia, 5% Pennsylvania, 5% Arkansas, and 5% West Virginia. The 

commenters stated that these states made up approximately 28% of the total national electric 

generation as of 2012. The commenters stated that a state like West Virginia will be hit 

disproportionately hard, since the state had 16 coal plants operating in 2012, which generated 

96% of the state's electricity. The commenters stated that West Virginia's economy was bolstered 

by selling this energy: 58% of West Virginia's total 2012 electric generation was exported to 

surrounding states. The commenters stated that the wholesale reduction of the coal market, along 

with the costs associated with implementing the Plan, will result in wide-ranging harm to state 

and local economies, triggering job loss, shrinking tax bases, a decline in manufacturing, and a 

decline in overall economic competitiveness and social stability. The commenters stated that the 

Midwest Independent System Operator, a regional power grid operator, estimated that its 20-year 

discounted compliance cost of the rule will be $55-$83 billion. The commenters stated that some 
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national estimates claim the Plan will cost $41-73 billion per year to implement, causing double 

digit electricity rate increases in 43 states, with 14 states facing peak year electricity price 

increases that could exceed 20%. The commenters cited other estimates that wholesale electricity 

costs will increase by $274 billion; that non-power natural gas costs will increase by $80 billion; 

and that replacement power will be needed costing $53 billion. 

Commenters stated that the rule would be devastating to the coal and lignite generating and 

mining industry, the regional economies that these industries support, and the communities that 

depend on the affordable electricity generated by coal- and lignite-fired generation. The 

commenters stated that much of the coal used in power generation in Mississippi and Texas 

comes from lignite mines located immediately near the plants, allowing little opportunity to find 

another market for the lignite fuel. The commenters stated that the proposal would result in 

stranded costs at coal- and lignite-fired power plants across the country, many with recent 

installations of significant controls and that these stranded costs may be born disproportionately 

at the regional level, where many communities rely on coal- and lignite-fired power plants as 

their sole economic driver. The commenters stated that Block 2 of the proposal models that all 

coal generation in Mississippi will be shut down, including includes Plant Daniel, which is in the 

process of installing a $660 million upgrade to reduce emissions by 90%. The commenters stated 

that these millions of dollars of control improvements will now be stranded costs. 

Commenters stated that the regional inequities developed by this proposed rule would clearly 

have disparate and deleterious impacts to workers in states with carbon-intensive energy 

portfolios. 

Commenters stated that EPA estimates suggest significant upheaval in the coal extraction 

industry with real associated economic costs to the communities dependent on this critical 

economic activity. The commenters cited NERA projections of a 29 percent decrease in coal 

generation in 2020 and a 36 percent decrease by 2029. The commenters stated that this reduced 

generation contributes to 45 GW of incremental coal plant retirements through 2031 compared to 

business-as-usual, and that coal consumption is expected to decrease approximately 35 percent 

from business-as-usual by 2030.

Commenters stated that coal producing states will be especially hard hit and the EPA is not able 

to provide the resources or support necessary to help disproportionately impacted regions to 

attract new investment or diversify their economy to minimize the economic and social impacts 

of the decline in demand for coal.

Commenters stated that four to five major state infrastructure programs are funded 100% with 

coal taxes, and if coal production were to be internally or externally reduced, Montana would not 

be able to replace such funding. 

Commenters stated that the economic impact would likely fall disproportionately on the states 

served by CSX, especially in the Southeast. The commenters stated that because of the high 

emission-reduction targets and current reliance on coal-based electricity, this region will be 

forced more than other area to abandon and replace current generating capacity well before it 

would be otherwise retired. 
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Commenters stated that in Missouri, more than 80 percent of electricity is generated by coalfired plants, and that moving rapidly and without justification away from coal toward unproven 

or highly variable energy sources, such as natural gas, solar, and wind, will be incredibly costly 

and result in much higher utility bills, lost jobs and an electric grid that may not stand up to 

ongoing energy needs. The commenters stated that the economic burdens of the Proposed Rule 

thus fall most severely on states like Missouri that rely on coal. 

Commenters agreed that Arkansas and the country can do more to increase energy efficiency and 

weatherize homes and businesses, and that Arkansas can also produce more electricity from 

natural gas and renewables; however, for the foreseeable future, the commenters opined that 

Arkansas still needs coal for baseload power.

Commenters stated that because of the abundance of, and necessary reliance on, fossil fuel 

resources in West Virginia, and particularly coal, the rates that WVEUG and WVMA members 

pay to FirstEnergy and AEP are largely dictated and highly dependent upon the cost that these 

resources, to include environmental controls and regulations, have on electric generation. The 

commenters stated that as captive ratepayers in a regulated utility environment, WVEUG and 

WVMA members therefore have significant concerns over the potential impact that any federal 

regulations governing carbon emissions may have on retail rates. The commenters stated that 

experience in WV PSC proceedings demonstrates that aggressive environmental regulations such 

as those proposed by the EPA can have a substantial and deleterious impact on industrial and 

manufacturing customers, as the cost of compliance with such regulations can be passed through 

to customers in the form of fuel cost and environmental surcharges. The commenters stated that 

this is particularly problematic for WVEUG and WVMA members, as they have had to absorb a 

barrage of monumental rate increases for electric service in the last several years. The 

commenters stated that every cost element that places upward pressure on West Virginia retail 

electric rates threatens their competitive viability. The commenters stated that they have 

considerable concerns that these regulations could create an irrevocably damaging retail 

electricity rate burden for West Virginia industry and manufacturing; in fact, EPA's own 

estimates portend electric rate increases of as much as 12 percent; on top of the already inflated 

electric rates of AEP and FirstEnergy in West Virginia, this could only result in the further 

degradation of West Virginia's business and industry. The commenters urged the EPA to very 

carefully weigh the impact that the proposed regulations may have on retail rates in fossil-fuel 

dependent states such as West Virginia. 

Commenters stated that the retirements Building Block 2 precipitates would have dramatic local 

economic impacts. The commenters stated that shutting down the Coronado and Springerville 

Generating Stations in Apache County, Arizona, would cause over 4,000 individuals to lose their 

jobs, nearly 70 percent of which are located in Apache County, and cut $600 million in annual 

gross state product from Apache County. The commenters stated that with limited alternative 

employment opportunities, the resulting exodus of plant employees would depress County 

housing values, shutter local businesses, and county services would be curtailed as remaining 

County residents would be unable to alone shoulder the entire financial burden of supporting 

communal services, such as schools, medical centers, library districts, and fire districts. The 

commenters stated that the RIA only analyzes national employment impacts. The commenters 

stated that the Proposed Rule must give the states greater discretion in determining the 

appropriate performance standards for affected units. 
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Commenters stated that the proposal would have tremendous impacts on the communities where 

Tri-State owns and operates coal-fired EGUs if those EGUs are forced to shut down or to curtail 

their operations severely. The commenters stated that when indirect impacts of Craig Station are 

taken into account, the plant is responsible for $489.6 million in regional total output. The 

commenters stated that Craig Station is responsible for providing three of Moffat County's top 

ten employers: Tri-State, the Trapper Mine, and the Colowyo Coal Mine, and that Craig Station 

supports 100 percent of the employees at the Trapper Mine and the Colowyo Mine. The 

commenters stated that mining accounts for better than 18 percent of the annual labor income 

generated in Moffat County, and Tri-State accounts for better than 18 percent of the property tax 

revenue in the county. 

Commenters stated that in the face of rising costs and lower revenue, municipal governments in 

the short-term must either raise taxes and fees to offer the same level of services or reduce their 

level of services. These services provide citizens with other public goods such as public 

education, public safety, public recreation, public roads, public health, and others. 

Commenters stated that the State of Arizona and Apache County in particular will be severely 

detrimentally impacted if both Coronado and Springerville power plants are forced to cease 

operation. The commenters stated that Coronado and Springerville combined account for 4,009 

direct, indirect, and induced jobs in all private non-farm employment sectors in the State of 

Arizona (in CY2013), including 2,740 jobs in Apache County alone, and that these jobs alone 

equate to $713.5 million (2013 $) real GSP, including $230.2 million (2013 $) RDPI for the 

State of Arizona in CY2013. The commenters stated that Apache County could lose 2,700 FTE 

job years employment, just under $600 million in gross state product, and $170 million real 

disposable personal income. The commenters estimated that over half (56%) of Apache County's 

property tax value could be eliminated, including two-thirds to three-quarters of the property 

value that supports the local school districts, and with limited alternative employment 

opportunities, the associated exodus of plant employees from the region could potentially result 

in a drop in housing values, shuttering of local businesses, and closing of schools as the 

remaining population is left with the full financial burden of schools, medical centers, library 

districts, fire districts, etc., currently born by the utilities and their employees. 

Commenters stated that with 63,896 employees, the combined employment impacts of the coal 

industry, associated transportation and power generation industries account for 11.3 percent of 

employment by private industry in West Virginia. The commenters stated that at $6 billion, the 

combined direct impacts amount to nearly 9 percent of GSP and including the multiplier effect of 

spending by these industries and households employed by the industry, the impact amounts to 

$8.8 billion or 12.7 percent of GSP. The commenters stated that taxes paid by the coal industry 

are estimated at $638 million in 2012, including property taxes, severance taxes, workers' 

compensation, net income, and personal income taxes paid by industry employees and others.

Commenters cited research at the University of Nebraska-Lincoln that coal as a generating 

resource for electricity, combined with its transportation, primarily by rail, generates about $4.9 

billion in output, including $1.4 billion in labor income, and more than 22,800 jobs for the state. 

Commenters discussed the potential for job losses as a result of the rule. Commenters stated that 

EPA failed to meaningfully consider employment impacts of Clean Air Act regulations by not 
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using whole economy modeling that would have captured a much more accurate picture of the 

likely job losses from this proposal. The commenters further stated that EPA failed to undertake 

an employment analysis under Section 321A of the Clean Air Act, which requires the continuous 

review of potential job losses and shifts in employment due to the implementation of the act. 

Commenters stated that the onslaught of overregulation and lack of certainty in the coal industry 

has contributed to the loss of 7,000 coal jobs since President Obama took office as opposed to 

the increase in 3,500 coal jobs that occurred in the previous administration according to EIA and 

Kentucky Energy and Environment Cabinet. Commenters stated that the proposed rule will lead 

to the closure of coal-burning power plants and the loss of more than 52,000 jobs in the coal, 

utility and railroad industries by 2020, and an additional 65,000 job losses by 2030. Commenters 

further stated that the proposed rule will lead to direct and indirect employment losses of over 

208,000 jobs by 2030. Commenters urged the EPA to withdraw its proposal for new emissions 

regulations on the basis of the direct job losses in the coal industry, the indirect economic 

impacts to communities as a result of coal industry overregulation, and the lack of overall 

environmental benefit. The commenters cited EPA's emission reductions assessments and stated 

that the proposal will result in a meaningless 1 percent reduction in atmospheric CO2 

concentrations, an insignificant reduction in global average temperature of 0.016 degrees 

Fahrenheit. The commenters noted that a study will be conducted by DMME and CCER (no 

abbreviation definition provided) to report on the effect of increased energy prices on lower 

income populations and the negative economic impacts to coal country, including job loss, in 

order to show how damaging these new regulations are to the economy. Commenters also stated 

that all of the public forums have been far from coal country, making it prohibitive for those 

affected to speak to their plight. 

Commenters stated that Federal regulations have already forced two plants in his district to close 

over the last two years. The commenters cited a National Mining Association projection that 

more than 300 plants would retire nation-wide due to EPA rules over the next six years. The 

commenters cited a Heritage Foundation study predicting that the EPA's anti-coal policies could 

terminate 600,000 American jobs by 2023 while causing economic growth to drop by more than 

$2 trillion. 

Commenters stated that under the proposed guidelines, EPA projects that its proposed Clean 

Power Plan will increase electricity prices by a nationwide average of 4 percent to 7 percent, will 

increase natural-gas prices by 9 percent to 12 percent, and will cause the retirement of 46,000 

megawatts to 49,000 megawatts of coal-fueled electric-generating capacity. The commenters 

stated that the EPA's proposal will have a major impact on energy resources, electric ratepayers, 

jobs, and the economy of the Midwest region. 

Commenters stated that these job losses will have a ripple effect in the communities throughout 

the coalfields and beyond, where more than 208,000 jobs will be lost by 2030. 

Commenters stated that the proposed rule threatens its viability. The commenters stated that 

EPA's Regulatory Impact Analysis indicates that the rule would cause Appalachian coal 

production for electric generation to decline from 140 million tons in the 2020 base case to 87-91 

million tons, versus 246 million tons of coal in 2009. The commenters stated that decreased coal 

production will result in significant job dislocations, income losses, and diminished tax bases. 

The commenters stated that each coal job has a 5 to 1 multiplier effect on the mine services, 
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consumable supplies, and the local communities where the mines and mine employees spend the 

revenues and household income generated from coal sales. The commenters stated that the 

proposed re-dispatching of coal generation to natural gas combined-cycle units, unrealistic 

energy efficiency goals, and new renewable energy targets would create a cycle of increasing 

coal fired power plant and mine closures, direct and indirect job losses, and higher electricity 

prices adversely impacting manufacturing and other key job-intensive sectors. 

Commenters stated that requiring Minnesota to reduce carbon emissions by 41% by 2030 is cost 

prohibitive, too aggressive, and will hurt our economy. The commenters stated that this will 

force the shut down of many coal power plants and result in the loss of thousands of jobs 

(including many in his legislative district) and will drive the cost of power up, which will create 

a burden on all Minnesota families and especially low income families. 

Commenters stated that for many coal-fired plants, reaching these extreme goals in such a short 

period of time will prove either economically unfeasible or physically impossible (or both), thus 

forcing their premature retirements. The commenters stated that the proposed rule will end up 

slashing not CO2 emissions, but thousands of good-paying middle-class jobs instead. The 

commenters cited projections of retirement of about 12 percent to 19 percent of all coal-fired 

capacity projected to be in service in the base case) by 2020 under the range of scenarios 

analyzed, and its impact on well over 135,000 stable, well-paying jobs for middle-class families 

that the industry provides. The commenters stated the most obvious consequence of the 

widespread closure of coal-fired power plants will be massive job losses. The commenters stated 

that the agency's plans also would result in the loss of some 52,000 permanent direct jobs in 

utilities, mining and rail and at least another 100,000 jobs in related industries.

Commenters stated that EPA recognized localized negative impacts of the proposed rule in its 

RIA. The commenters stated that the first coal mining jobs to be lost will be those at mines that 

produce the highest priced coal - notably, mines in eastern Kentucky and that the impact of this 

proposal will almost guarantee the broadening and deepening of the poverty already dominant in 

eastern Kentucky. 

Commenters stated that EPA's analysis of the employment impacts of the Proposed Rule was 

arbitrary and capricious because EPA only evaluated employment impacts in a few select 

industries. The commenters stated that EPA's partial economy model failed to address impacts 

in the communities that support coal-fired electricity generation and on consumers of electricity. 

The commenters stated that a whole economy model must include employment across a wide 

range of sectors, sufficient detail at the regional level to identify changes in the regional 

distribution of output and employment, international trade flows to evaluate how regulations will 

affect tradable sectors and dynamic analyses to examine adjustments in labor and capital markets 

in response to regulations over time. 

Commenters stated that EPA notes the average delivered coal price is expected to decrease 16 to 

17% in 2020 and 18% in 2030, and coal production is predicted to decline by 25 to 27% in 2020 

and 30 to 32% in 2030. The commenters stated that the goal of this plan is to reduce utilization 

of coal-fired EGUs, and this will result in displacement of those in the coal mining industry. 
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Commenters stated that the proposed rule will severely impact coal industry members, workers 

in allied industries such as rail transportation, equipment sales and manufacturing, and the 

communities where those activities are located. The commenters stated that this regulation will 

put Colorado citizens at risk for lost jobs and higher electricity costs. The commenters stated that 

by reducing the U.S. fleet of coal-fired generating units by more than one-third by 2020, the 

regulation will place U. S. consumers at risk of "rolling blackouts" and service disruptions. 

Commenters stated that 40 percent of all freight railroad cars in America are coal cars, and coal 

continues to provide the money necessary to expand and maintain our rail infrastructure. The 

commenters stated that America's railroads will spend approximately $25 billion in 2014 to 

maintain and expand infrastructure and hire 14,000 employees. 

Commenters stated that 48% of the total national reductions are achieved in only six states: 19% 

Texas, 8% Florida, 6% Georgia, 5% Pennsylvania, 5% Arkansas, and 5% West Virginia. The 

commenters stated that these states made up approximately 28% of the total national electric 

generation as of 2012. The commenters stated that a state like West Virginia will be hit 

disproportionately hard, since the state had 16 coal plants operating in 2012, which generated 

96% of the state's electricity. The commenters stated that West Virginia's economy was bolstered 

by selling this energy: 58% of West Virginia's total 2012 electric generation was exported to 

surrounding states. The commenters stated that the wholesale reduction of the coal market, along 

with the costs associated with implementing the Plan, will result in wide-ranging harm to state 

and local economies, triggering job loss, shrinking tax bases, a decline in manufacturing, and a 

decline in overall economic competitiveness and social stability. The commenters stated that the 

Midwest Independent System Operator, a regional power grid operator, estimated that its 20-year 

discounted compliance cost of the rule will be $55-$83 billion. The commenters stated that some 

national estimates claim the Plan will cost $41-73 billion per year to implement, causing double 

digit electricity rate increases in 43 states, with 14 states facing peak year electricity price 

increases that could exceed 20%. The commenters cited other estimates that wholesale electricity 

costs will increase by $274 billion; that non-power natural gas costs will increase by $80 billion; 

and that replacement power will be needed costing $53 billion. 

Commenters stated that the proposed rule represents a reversal of decades of a bipartisan federal 

policy emphasizing increased use of domestic coal to achieve U.S. energy independence, reduce 

imported foreign oil, and provide the nation with reliable and affordable electricity. Commenters 

noted that this administration has favored advanced coal technologies.

Response 8: Commenters emphasized the contribution coal makes to the economy of the United 

States. Commenters expressed concerns about regional and state inequities because of the 

geographic distribution of coal mining. Comments also asserted a reduction in coal mining will 

reduce tax revenues from coal mining in affected local governments and some states with major 

infrastructures totally funded by coal tax revenues. Commenters contend that of railroads will be 

impacted because railroad freight cars are used to transport coal. 

Chapter 2 of the RIA shows historically the trend in coal and petroleum electricity generation has 

been declining over the 2002 to 2013 period while natural gas and renewable energy have 

increased. This trend is in part due to regulatory actions, but is also the result of aging coal units 

and economic market conditions favoring increased natural gas electricity production due to 
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falling natural gas prices associated with the increased unconventional production of natural gas 

domestically. The RIA for the Final Clean Power Plan presents in Chapter 3 information 

regarding potential plant retirements. The RIA estimates that relative to the base case between 

23 and 29 GW of additional coal-fired capacity is projected to be uneconomic to maintain by 

2015, increasing to between 27 and 38 GW in 2030. This is approximately between 11 and 19 

percent of all coal-fired capacity projected to be in service in the base case. However, coal will 

continue to be a very relevant fuel source for the generation of electricity in the US. In 2030, 

EPA estimates that about 28 percent of electricity generation domestically will continue to be

provided by coal-fired power plants under the illustrative control scenarios modeled by EPA. At 

the same time coal use in electricity generation is estimated to decrease as a result of the 

emission guidelines, other goods and services are projected to see expansions (e.g., energy 

efficiency industries and renewable generation).

The EPA recognizes the impacts that transitioning to a lower carbon intense electric power 

system will result in related shifts in the economy and possible secondary market impacts are 

discussed in chapter 5 of the RIA. The EPA recognizes that a coal miner or coal plant worker 

who loses his or her job is not necessarily going to find a new job in energy efficiency or 

renewable energy. In response to the transition from coal to natural gas already underway due to 

lower natural gas prices, many states are implementing replicable programs to transition their 

workforces – by working in public-private partnerships with their community colleges and 

businesses - to secure an economic advantage as they transition to a lower carbon energy mix. In 

addition the Department of Commerce, Department of Labor, Small Business Administration, 

and the Appalachian Regional Commission have together created an initiative to issue grants to 

partnerships of regionally-driven economic development and workforce development 

organizations in impacted coal communities.8 In addition, the Department of the Interior has 

publically committed in the July 2014 Technical Working Group Agreement to facilitate the 

development of approximately 26,975,000 MWh of clean energy by December 31, 2035 in the 

Four Corners area. The EPA expect this commitment to support energy-sector and other jobs in 

the region. The EPA recognizes the contribution of power plants and coal mines to the 

economies of the Navajo Nation, the Hopi Tribe and surrounding communities in Arizona and 

New Mexico, as well as many other communities nationwide. The timeframe of the CPP from 

plan development to plan implementation allows states, utilities and other stakeholders the 

ability to work together to tailor their plans in the ways that best support their communities, so 

that they can not only reduce their greenhouse gas emissions, but also ease the transition of their 

workforces to the low carbon economy. 

States will make the ultimate plans as to how the CPP will be implemented by the electricity 

sector. These final emission guidelines will be implemented by emission sources within each 

state upon the EPA’s approval of a state plan. The EPA has included a number of conditions to 

help ensure that vulnerable communities will not be disproportionately impacted by this 

 

8 See https://www.whitehouse.gov/the-press-office/2015/03/27/fact-sheet-partnershipsopportunity-and-workforce-and-economic-revitaliz.
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rulemaking. These considerations are outlined in section IX of the preamble of the final 

rulemaking.

Comment 9: Low and middle income individuals will be more heavily impacted by increased 

energy prices resulting from the Clean Power Plan. 

Commenters stated that EPA's carbon regulations could cause serious harm to the U.S. economy, 

raising energy prices, and costing jobs. The commenters cited United Mine Workers of America 

estimates that the rule will result in 187,000 direct and indirect job losses in the utility, rail, and 

coal industries in 2020, and cumulative wage and benefit losses from these sectors of $208 

billion between 2015 and 2035. The commenters stated that higher energy prices 

disproportionately harm low-income and middle-income families. The commenters cited a 

Center for Strategic and International Studies (CSIS) analysis that the proposal could result in 

nationwide costs of up to $32 billion per year; and average electricity rate increases of up to 9.9 

percent per year. The commenters cited the Wall Street Journal that the rule is a huge indirect tax 

and wealth redistribution scheme and that costs will ultimately flow to consumers and 

businesses. 

Commenters stated that based on Arizona-specific modeling, the State of Arizona and Apache 

County in particular, will be severely impacted if two coal fired power plants cease operation. 

The commenters stated that Apache County could lose 2,700 FTE job years employment, just 

under $600 million in annual gross state product and $170 million real disposable personal 

income. The commenters cited estimates that 56% of Apache County's property tax value could 

be eliminated, including two-thirds to three-quarters of the property value that supports the local 

school districts. The commenters stated that with limited alternative employment opportunities, 

the associated exodus of plant employees from the region could potentially result in a drop in 

housing values, shuttering of local businesses, and closing of schools as the remaining 

population is left with the full financial burden of schools, medical centers, library districts, fire 

districts, etc., currently born by the utilities and their employees. 

Commenters stated that low income states will be disproportionately affected by the economic 

impacts of the proposed rule. Commenters stated that EPA's estimated annual costs of carbon 

regulation to be between $4.2 billion and $8.8 billion and the estimated six to seven percent 

increase in electricity prices in 2020 will result in reduced grid reliability, reduced global 

competitiveness among U.S. businesses, and disproportionate impacts between states, and 

disproportionate impacts to lower and middle class families. 

Commenters stated that low income states will be disproportionately affected by increased 

electricity costs. The commenters recommended that the proposed rule be revised to equitably 

share the cost of implementation across states.

Commenters stated that the proposed rule is predicted to have a particularly severe impact on 

Northwest Arkansas due to few non-fossil fuel energy sources being available. 

Commenters remarked upon the lack of EPA listening sessions in the 10 states that most heavily 

rely on coal for electrical generation. The commenters stated the frustration and decline in 
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morale associated with not providing listening sessions in West Virginia to discuss the impacts to 

their communities and businesses, and noted that, for example, a fabrication and machine 

manufacturer has seen a significant drop in business with the coal industry. The commenters 

stated that the proposal would condemn mining families to lives of poverty and despair and make 

it difficult for companies that rely on electricity to keep businesses afloat. 

Commenters stated cost considerations: besides the rate increases already experienced from early 

adoption actions, the implementation of this initiative will further increase rates. The 

commenters also stated that it is imperative to consider the significant job losses in New Mexico 

due to the reduced use of coal. The commenters noted that this has been detrimental to many, but 

has had the greatest impact on the Native American population who has historically held the 

greatest percentage of jobs at both the coal mines and the power plants. The commenters noted 

that New Mexico continue to rank among the very poorest states in the nation, and the extreme 

poverty rates make any electric rate increase detrimental to our citizens. The commenters opine 

that these actions will necessarily increase rates. The commenters concluded that the state's 

economy and New Mexico household costs should not be threatened by substantial increases in 

electric costs and further job losses. 

Commenters stated that new GHG emission requirements will have a large and immediate 

impact on the job climate across our state, and much of that impact will be felt in my community 

where a large portion of the economic activity relies on coal-based energy production. The 

commenters further stated that Indiana County and the neighboring areas are home to a number 

of affected EGUs (including Conemaugh Generating Station, Keystone Generating Station, 

Seward Generating Station, and the Homer City Generating Station) and that these power plants 

serve as lynchpins of the local economy, with extensive direct, indirect, and downstream 

economic impacts. The commenters referred to the Homer City Generating Station, which is 

located in the middle of the district, as an example of how important all of these power plants are 

to the local economy. The commenters noted that in terms of direct employment, this facility 

employs more than 250 local men and women, and many of these employees are unionized and 

receive significant family-sustaining benefits packages. The commenters stated that the indirect 

economic activity generated by the Homer City Generating Station supports the companies that 

provide services and products for the plant's operations, including coal mines, the coal truck 

operators, the rail transportation infrastructure that carries coal to the power plant, the scrubber 

byproduct processing facilities, and a water treatment facility to process the plant's wastewater. 

The commenters estimated that the nearby Homer City Coal Cleaning Plant employs 50; the 

related coal mining operations employ between 350 and 450 individuals; and between 250 and 

350 coal truck drivers deliver coal to the power plant. However, the commenters stated that it is 

the downstream impact that best demonstrates the power plant's importance to the community, 

and the economic ripple effect extends well beyond the hundreds of employees who report to 

work each day. The commenters estimated that the facility is responsible for the purchase of 

$395 million worth of goods and services every year in the local area, and that figure represents a 

significant amount of economic activity for any locale, much less in our portion of Western 

Pennsylvania. The commenters stated that every dollar spent in the community is recycled many 

times, supporting everything from direct vendors to the power plants and their suppliers to 

byproduct processing companies to the local restaurants, and that the taxes generated from this 

economic activity create tax revenue that is critical to municipal governments and school 

districts. The commenters noted that the ongoing installation of a scrubber system underscores 
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the importance of the Homer City Generating Station, with a cost of nearly $750 million, and the 

project demonstrates a long-term commitment to the environment, the needs of the power grid, 

and the local community. 

Commenters stated that the state rules that will proceed from these guidelines will be especially 

difficult for smaller utilities that have fewer options on where and how to seek power supplies, 

and costs for compliance will be substantially higher on a per kilowatt hour basis because many 

of the costs are fixed regardless of how many hours are sold. The commenters stated that the rule 

fails to take into account the financial impacts of the rule on the general fund levels of municipal 

governments. The commenters stated that forced reductions in energy consumption to meet 

energy efficiency requirements of the guidelines can reduce income by $10,000 or more per year, 

which is extremely important in smaller towns. The commenters stated that municipal 

governments are going to have to reduce their own consumption by approximately 10% and in 

most cases this will require substantial investment in new equipment and technology. The 

commenters stated that because smaller utilities in Missouri, have a higher proportion of 

ratepayers over age 65 and a higher percentage of people living below the poverty line, the 

implementation of this rule includes several Environmental Justice components. The commenters 

stated that EPA should create provisions for longer compliance times, and exclude emissions 

when a local utility serves smaller communities with higher than average or median levels of 

protected classes. 

Commenters stated that the proposed rule will result in increased energy costs that will further 

stymy economic activity and result in additional hardship on our population, especially the 

14.7% that are already living below the poverty level. The commenters stated that its county 

unemployment hovers around 10% annually and the loss of this plant would be devastating. The 

commenters stated that a large-scale retirement of coal-fired plants across the country would 

result in massive job losses, tax base loss, increased energy costs. 

Commenters stated that the EPA's proposal will have a disproportionately greater impact on 

lower-income and middle-income families. Commenters sponsored an extensive analysis of an 

NRDC proposal which served as a blueprint for EPA's proposal and projected, among other 

impacts, double-digit electricity price increases in most states and substantial increases in natural 

gas prices nationwide. The commenters also noted that states with carbon constraints are already 

experiencing significantly higher electricity prices, including 17 and 52 percent higher electricity 

prices in California and New England, respectively than the national average. The commenters 

stated that this will have a greater impact on lower-income and middle-income families because 

it represents a large portion of their budget.

Commenters stated that members of the local community cannot afford higher energy prices, that 

the members pay a disproportionately high percentage of their income for energy, and that 

energy bills the can represent up to 71 percent of family incomes prior to energy assistance 

programs. The commenters stated that increased costs will slow economic growth, reduce job 

opportunities, and force families to make tough budget decisions. 

Commenters stated that the domestic coal-based electric power industry will have invested $145 

billion through 2016 to achieve these emission reductions; and the U.S. electric sector emits four 

percent of global greenhouse gas emissions and, as a consequence, unilateral actions by the U.S. 
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will not have a meaningful effect on climate change; and policies to reduce CO2 emissions are 

likely to increase energy costs; and increases in energy costs have a disproportionately greater 

impact on minority families, fixed and low-income consumers and minority owned businesses. 

The commenters then urged EPA and the Administration to ensure that its guidelines and other 

policies to reduce greenhouse gas emissions minimize costs, do not cause employment losses, 

support advancements in fossil fuel technologies such as carbon capture and storage, and do not 

cause increases in energy prices that will harm low-income electric consumers, minority families 

and minority businesses. 

Commenters stated that the proposed rule will increase energy costs and reduce the diversity of 

our nation's electricity supply and impede the nation's economic recovery and stifle future 

growth. The commenters stated that EPA estimates annual compliance costs between $5.4 and 

$7.4 billion in 2020, hitting $8.8 billion in 2030; but these numbers include only future power 

sector compliance costs, failing to capture the residual impacts of higher electricity rates on 

overall economic activity. Citing a recent Wall Street Journal editorial and an HIS study, the 

commenters stated that raising the price of carbon energy will also raise costs across the 

economy, which will ultimately flow to consumers and businesses resulting in slower economic 

growth, job losses, and less disposable income. The commenters stated that the IHS estimates 

that the rule will result in an additional $289 billion in cumulative electricity payments by 

consumers from 2014 through 2030; a loss of 224,000 jobs on average through 2030; more than 

$50 billion in average annual GDP loss through 2030, with a peak GDP loss of nearly $104 

billion in 2025; and from 2014 through 2030, a cumulative reduction of $586 billion in 

disposable income. The commenters stated that families will have less disposable income as they 

spend more to light and heat their homes, with middle-income and lower-income Americans 

being hit the hardest. According to the commenters, in 2001, lower-income households spent 16 

percent of their after-tax income on energy and in 2014, these households will spend 26 percent 

of their budgets on energy (before taking into account any energy assistance programs). The 

commenters stated that lower-income families are especially vulnerable because energy costs 

represent a larger portion of their budgets and reduce the amount of income they can spend on 

food, housing, health care, and other necessities.

Commenters stated that vulnerable low-income citizens will bear the brunt of increased 

electricity costs. The commenters stated that expenditures are required to benefit from energy 

efficiency. The commenters stated that energy-intensive industries are sensitive to even 

moderate electricity price increases. The commenters stated that Kentucky's eastern coal region 

is suffering already, and they will experience even greater loss of employment and production as 

other states take action to comply with the proposed rule. 

Commenters stated that the Proposal will result in increases in electricity prices that are likely to 

be substantial in a number of states, on top of steadily increasing prices to consumers that are 

projected by the federal government to continue upward even without the implementation of this 

Proposal. The commenters stated that these increases will be exacerbated in some regions due to 

the structure and operations of the RTO-administered wholesale markets, and they will have a 

disproportionate adverse impact on low- and fixed-income consumers. 

Commenters cited consumer advocacy groups that electricity prices and increases in prices have 

a disproportionate impact on low and fixed income consumers. The commenters stated that low-
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income households in the Northeast that heat with electricity pay 12.9 to 17.2 percent of their 

income for energy. 

Commenters stated that the level of renewable energy assumed by the EPA's Building Block 3 

goal cannot be achieved. The commenters stated that significant levels of increased renewable 

energy will have a serious effect on electric rates and that low income customers will be 

particularly hard hit. The commenters stated that industrial rates could also be disproportionately 

impacted because of the higher load factors that most industrial customers have. 

Commenters stated that the Proposed Rule will result in significantly higher electricity prices. 

The commenters stated that electricity prices will have immediate impacts on businesses that rely 

on affordable energy to sustain hiring and production levels and high electricity prices will also 

hit low-income Americans particularly hard, given the high percentage of their monthly budgets 

that they devote to basic needs such as heating and cooling. The commenters stated that the 

proposed rule would force low-cost coal to be abandoned in favor of other, more expensive and 

less reliable energy sources. The commenters stated that this burden will fall especially hard on 

low-income Americans who already devote substantial portions of their income on the electricity 

necessary for the basics like heating and cooling, and cited a study by the Affordable Power 

Alliance that found that the type of CO2 restrictions implied in the EPA regulation would have 

serious economic, employment, and energy market impacts at the national level and for all states, 

but that the impacts on low-income groups, the elderly, African Americans, and Hispanics would 

be especially severe. The commenters stated that because rural electric cooperatives are heavily 

coal-dependent, the Proposed Rule will have an especially severe impact on rural poverty. The 

commenters stated that EPA's current approach ignores any analysis of energy affordability and 

reliability, and is insensitive to the needs of those most affected by the exorbitant costs. 

Commenters stated that as much as 30 to 40 percent of the population in some counties of its 

service territory live in manufactured housing - which is the most energy inefficient housing a 

person can own. The commenters stated that the burden of rate increases of 20% or more will fall 

on those that can least afford it. 

Commenters stated that this rule could result in significant economic impacts to residential and 

commercial customers, particularly minorities, elderly and economically disadvantaged 

customers. The commenters stated that the Big Bend Station coal plant is a critical part of the 

Tampa Bay economy with good jobs and is a critical part of Tampa Bay ecology with warm 

water discharge serving as a winter refuge for manatees. 

Commenters stated that by proposing to rely heavily on natural gas for carbon emission 

reductions, the EPA also fails to account for the disparate impacts of rising natural gas prices on 

low-income households. The commenters stated that EPA should avoid strategies for avoiding 

climate disruption that would perpetuate disproportionate adverse environmental justice impacts. 

Commenters stated that the proposed rule will cause those in low income socioeconomic 

brackets to lose heat and power because they will not be able to pay for the rising utility costs. 

The commenters also stated concern that U.S. businesses will be unable to compete in a global 

economy due to the higher electricity rates, and that worldwide greenhouse gas emissions may 
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actually increase due to the relocation of manufacturing operations from the U.S. to other 

countries with less restrictive regulations.

Commenters cited NERA that electricity prices would increase by 12 percent per year and the 

total costs of the rule could be between $366 billion to $4 79 billion over a 15 year 

timeframe. The commenters stated that higher energy prices disproportionately harm lowincome and middle-income families.

Commenters stated that the center of California's energy policy has been to virtually eliminate 

coal, which required a move to natural gas as the State's primary source of power. The 

commenters stated that California's industrial electric prices were 65 percent higher than the 

national average. The commenters stated that in 2013, California residents and business paid 35 

percent and 32 percent higher rates respectively, with industrial rates 67 percent above and 

overall rates 45 percent above average. The commenters stated that in 2013, a company based in 

Missouri would have spent 82 percent more on electricity if it was based in California. The 

commenters stated that sharply increasing electricity rates will severely threaten Missouri's lowand fixed-income residents. The commenters stated that approximately 16 percent of 

Missourians fall below the poverty line, and in rural Missouri, the poverty rate is 18 percent. 

Commenters cited an American Coalition for Clean Coal Energy sponsored projection of double 

digit electricity price increases in most states and substantial increases in natural gas prices 

nationwide. The commenters stated that the proposed rule would force changes from costeffective coal to natural gas and intermittent renewables, which would increase the cost of 

electricity. The commenters stated that higher energy prices disproportionately harm low-income 

and middle-income families as well as rural economies that are more energy-intensive such as 

Western South Dakota. 

Commenters stated that South Carolina electric cooperative members are heavily impacted by 

poverty that nearly 20 percent of the families it serves make less than $25,000 annually, and in 

some months many spend as much as 80 percent of their income on energy costs. The 

commenters stated that the cost increases resulting from South Carolina's attempts to comply 

with the Clean Power Plan stand to significantly impact the financial well-being of the 

communities it serves and that such increases would not only disproportionately affect South 

Carolina cooperative members, but since electric cooperatives are owned by the people they 

serve, those same people must directly bear the costs of any resulting increases in the cost of 

electricity. 

Commenters stated that by significantly restricting the use of the remaining life of existing power 

generating units, the proposed rule will increase electricity prices for American households and 

since low-income families spend a larger proportion of their income on energy, a tax that 

increases energy prices would disproportionately affect the budgets of the poorest American 

families.

Commenters stated that New Orleans' vulnerability to the impacts of climate change, and issues 

such as storm severity and sea level rise are of great concern as is the impact of increasing 

electricity costs on New Orleans citizens. The commenters stated that approximately 27% of 

persons in New Orleans are below the federal poverty level and even relatively small increases in 
315

rates for electricity can cause significant difficulty for vulnerable populations. The commenters 

stated that the Energy Smart energy efficiency and conservation program was established in 

2011, and in its first three years, has estimated to have served 8,714 customers, saved 16,007,993 

kWh of electricity and reduced CO2 emissions by 89,644,761 pounds. The commenters stated 

that it is considering utility-scale renewable resources as part of the utilities' integrated resource 

plan process and as with energy efficiency, it has pursued these programs to ensure a cleaner 

energy future for its ratepayers in a cost-effective manner. 

Commenters stated that South Carolina has 12 persistent poverty counties (26 percent of the 

state's total), defined as counties with a poverty rate of 20 percent or higher in each census from 

1970-2010, and that electric cooperatives serve in all 12 persistent poverty counties in the state, 

where, in some cases, the median household incomes are 43 percent less than the national 

average. The commenters stated that 17 percent of electric cooperative members, more than 

200,000 people, live below the established Federal Poverty Level ($23,850 for a family of four). 

The commenters stated that this is 2 percent higher than the national average. The commenters 

stated that 23 percent of South Carolina's electric co-op members, more than 254,000 people, 

live beneath 125 percent of the established Federal Poverty Level ($29,813 for a family of four) 

which is three percent higher than the national average. The commenters stated that South 

Carolina residents above age 65 are especially vulnerable to rising costs for nondiscretionary 

goods and services, and that more than 40,000 households (36 percent) headed by a co-op 

member over the age of 65 have an annual household income less than dollar 25,000. The 

commenters stated that 24 percent of electric cooperative homes in South Carolina are 

manufactured housing, and that mobile homes represent 17 percent of the state's housing stock, 

which is almost 3 times the national average. The commenters stated that more than two-thirds of 

South Carolina's co-op members (68 percent) use electricity as a primary heating source, and that 

in the state's persistent poverty counties, this number rises to 73 percent. The commenters stated 

many of its members cannot afford the additional economic challenges that may result if all 

provisions of rule III (d) are enacted. 

Commenters stated that its grassroots members have clearly enunciated a strong opposition to 

regulation of greenhouse gas emissions. The commenters stated that imposing added energy 

costs on our own economy while other economies are not held to the same standard not only puts 

Kansas and consumers at a disadvantage, it serves little environmental purpose. The commenters 

cited the National Association of Manufacturers that the Proposed Standard could cost Kansas 

$13 billion gross state product loss from 2017 to 2040, 14,474 lost jobs or job equivalents per 

year, $1,000 drop in household consumption per year, up to a 15 percent increase in household 

electricity prices (national average) and up to a 32 percent increase in household natural gas 

prices (national average). The commenters stated that the 550,000 low-income and middleincome families in Kansas - 50 percent of the state's households - spend 19 percent of their aftertax income on energy. The commenters stated that 29 percent of Kansas households receive 

Social Security. The commenters stated that lower income families and Social Security recipients 

are especially vulnerable to further increases in energy costs.

Commenters stated that the proposed rule will create a burden on our low income and fixed 

income customers due to the increased cost of power and will possibly reduce the City's ability 

to attract industrial and commercial type growth, due to higher energy rates, there by inhibiting 

the ability of low and moderate income customers to find better paying jobs to pay their higher 
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utility bills. The commenters stated that fixed income and low or moderate income customers 

may not be able to take advantage of utility offered incentives to purchase more efficient 

appliances or make energy improvements to their homes, and will be forced to pay higher energy 

costs while still operating less efficient appliances and living in less energy efficient housing. 

Commenters stated that the impact of re-dispatch of coal fired generation to combined cycle 

natural gas (building block 2) has the potential to cost ratepayers hundreds of millions per year 

due to the higher cost of natural gas as compared to coal. The commenters stated that the 

investment in heat rate betterment programs at coal fired generation units will cost hundreds of 

millions, the construction of, and transmission of renewable energy sources to displace emission 

from coal fired generators has the potential to be in the billions by 2030 depending upon the final 

regulations, and efficiency improvements at commercial, industrial and residential facilities will 

run in the hundreds of millions. The commenters stated that in Owensboro, Kentucky 25.4% of 

the residents of the city, and ratepayers of OMU, live at or below the poverty line. The 

commenters stated that EPA must recognize that electric rates must be affordable in our 

communities, including to those who least can afford them. The commenters stated that EPA has 

failed to adequately determine the true cost of implementation of the proposed regulations and 

that failure is at the expense of the most vulnerable ratepayers. The commenters stated that 

EPA's social cost analysis in the RIA fails to address the real potential of increased mortality and 

adverse health impacts associated with moving ratepayers into or further into poverty.

Commenters stated that the expectation that it can somehow force its customers to use electricity 

efficiently per block 4 is not realistic. The commenters stated that these regulations will make 

electricity so expensive that our low-income ratepayers will be forced to cut electrical 

consumption to maintain the most basic necessities.

Commenters stated that there needs to be a greater focus on the options besides electric rates to 

pay for the transition to other types of energy production, as well as ways to recover the billions 

of dollars in stranded capital costs such a transition would require. The commenters stated that if 

we are going to pay for the transition away from coal generation in the electric sector primarily 

through electric rates, the impact would be extremely regressive, with the burden falling most 

heavily on low and moderate income Minnesotans and those on fixed incomes. The commenters 

stated that if the transition depends on greater use of individually-owned distributed generation, 

we need to make sure that other energy policies don't leave the people who can't afford their own 

solar array or investments in conservation carrying more and more of the cost of the grid. 

Commenters stated that in Tennessee, 24.1% of homeowners and 42.6% of renters live in 

unaffordable housing and 20% of working families are severely housing cost burdened, meaning 

that they spend 50% of their income on housing. The commenters stated that for a homeowner, 

housing costs includes mortgage, utilities, and property taxes; housing costs for a renter are rent 

and utilities. The commenters stated that increases and decreases in electricity rates and costs 

affect disposable income. The commenters stated that TN will have difficulties ensuring 

environment justice within its compliance plan without a mandate to do so. 

Commenters also stated that EPA did not assess the number of premature deaths the rule will 

cause through loss of disposable income to Americans, and stated that Texans particularly are at 

risk. The commenters said a 15% increase in energy cost due to the proposed rule will place the 
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population in Texas in dire straits. The commenters said that 700,000 families spend nearly 

three-quarters of their income on energy, and that 49% of Texas's families have gross annual 

incomes of $50,000 or less, with an average after-tax income of $23,756, or less than $2,000 per 

month. The commenters also stated that about 700,000 families in Texas live well below the 

federal poverty line, earning less than $10,000 per year, and are being squeezed hardest by 

energy cost increases. 

Commenters stated that the implications of cost increases in low income people will translate to 

going without food, medical care and prescription drugs. The commenters cited a report by 

Lutter and Morrall which stated that "regulations to promote health and safety that are 

exceptionally costly relative to the expected health benefits may actually worsen health and 

safety, since compliance reduces other spending, including private spending on health and safety. 

Past studies relating income and mortality give estimates of the income loss that induces one 

death - a value that we call willingness-to-spend (WTS) - to be around $9 to $12 million ($US 

1990)." The commenters also cited EPA's statement: "people's wealth and health status, as 

measured by mortality, morbidity, and other metrics, are positively correlated. Hence, those who 

bear a regulation's compliance costs may also suffer a decline in their health status, and if the 

costs are large enough, these increased risks might be greater than the direct risk-reduction 

benefits of the regulation." The commenters stated that NEADA 2008 National Energy 

Assistance Survey found similar results in where increased energy costs resulted in more 

sickness. 

Commenters stated that the impacts and costs of climate change to our states are very real. The 

commenters cited a 2009 study that showed that climate change would cost Oregon a minimum 

of $3.3 billion annually by 2020, $5.1 billion by 2040 and $9.8 billion by 2080. The commenters 

noted that these are costs incurred due to increased flood and storm damage, reduced food 

production, increased wildfires, and health impacts (e.g., more respiratory disease such as 

asthma). Similarly, the commenters stated that the impacts of climate change would cost 

Washington's economy $3.8 billion by 2020, $6.5 billion by 2040 and $12.9 billion by 2080. The 

commenters also cited the Oregon Health Authority that recently released the Oregon Climate 

and Health Profile Report, and this report impressively details the wide variety of ways climate 

change will impact the health and safety of Oregonians, from deteriorating air quality, increased 

wildfires and heat waves, and increased allergens and diseases. 

Commenters cited a 60 Plus report estimating that current and pending EPA regulations could 

increase electricity rates above the general inflation rate by as much as 20% and that future 

energy prices, due to market trends and current and pending EPA regulations, will likely outpace 

household income among the 63% of America's 65+ households with gross annual incomes 

under $50,000. 

Commenters stated that the per-kilowatt cost of energy would increase 11%-17% annually and 

that consumers' total increased energy cost would be $366 billion to $479 billion, or $34 billion 

(8%) to $48 billion (11%) annually. The commenters stated that these increases would 

particularly burden more vulnerable populations, such as low-income seniors who are on fixed 

budgets. 
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Commenters stated that future energy price increases, driven in large measure by petroleum 

supply and demand trends and by current and pending U.S. EPA regulations, are likely to 

outstrip real household incomes among the 63% of America's 65+ households with gross annual 

incomes less than $50,000. The commenters cited NERA analyses that the proposed Clean 

Power Plan will cause potential delivered electric price increases averaging 12% to 17% over the 

period 2017 to 2031, depending upon the degree of implementation flexibility, and that total 

consumer energy costs could rise by $366 to $479 billion in net present value. The commenters 

cited projections by the Center for Strategic and International Studies (CSIS) and the Rhodium 

Group that national electric prices could increase by 5.4% to 9.9% due to the Clean Power rule. 

Commenters stated that any increase in the price of electricity or natural gas is harmful to the 

seniors. The commenters stated that seniors on fixed or diminishing incomes pay a 

disproportionate share of their modest income for utilities. The commenters stated that our nation 

must preserve and grow the contribution of coal-based electricity which is the surest and most 

reliable way to deflate electricity prices.

Commenters stated that under the proposed regulation estimates show that electricity rates will 

increase at least 26%. The commenters stated that this would be a serious hardship to our senior 

citizens who may have to choose between meals, medication or electricity. 

Commenters stated that many fixed income seniors are limited to cost-of-living increases that do 

not keep pace with energy prices. The commenters stated that Virginia's senior and lower-income

citizens cannot afford this rule and it produces no benefits worth the cost and is not authorized 

under the Clean Air Act.

Commenters discussed the potential for job losses as a result of the rule. Commenters stated that 

EPA failed to meaningfully consider employment impacts of Clean Air Act regulations by not 

using whole economy modeling that would have captured a much more accurate picture of the 

likely job losses from this proposal. The commenters further stated that EPA failed to undertake 

an employment analysis under Section 321A of the Clean Air Act, which requires the continuous 

review of potential job losses and shifts in employment due to the implementation of the act. 

Commenters stated that the onslaught of overregulation and lack of certainty in the coal industry 

has contributed to the loss of 7,000 coal jobs since President Obama took office as opposed to 

the increase in 3,500 coal jobs that occurred in the previous administration according to EIA and 

Kentucky Energy and Environment Cabinet. Commenters stated that the proposed rule will lead 

to the closure of coal-burning power plants and the loss of more than 52,000 jobs in the coal, 

utility and railroad industries by 2020, and an additional 65,000 job losses by 2030. Commenters 

further stated that the proposed rule will lead to direct and indirect employment losses of over 

208,000 jobs by 2030. Commenters urged the EPA to withdraw its proposal for new emissions 

regulations on the basis of the direct job losses in the coal industry, the indirect economic 

impacts to communities as a result of coal industry overregulation, and the lack of overall 

environmental benefit. The commenters cited EPA's emission reductions assessments and stated 

that the proposal will result in a meaningless 1 percent reduction in atmospheric CO2 

concentrations, an insignificant reduction in global average temperature of 0.016 degrees 

Fahrenheit. The commenters noted that a study will be conducted by DMME and CCER (no 

abbreviation definition provided) to report on the effect of increased energy prices on lower 

income populations and the negative economic impacts to coal country, including job loss, in 
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order to show how damaging these new regulations are to the economy. Commenters also stated 

that all of the public forums have been far from coal country, making it prohibitive for those 

affected to speak to their plight. 

Commenters stated that forcing Minnesota to reduce its carbon emissions by 41% by 2030 is not 

fair, as midwestern states do not have to reduce by such a high percentage. The commenters 

stated that this will force the shutdown of many coal power plants, eliminate thousands of jobs in 

Minnesota, drive the cost of power up and create a terrible burden on lower income families. The 

commenters stated that it would like to see No. 3 generating plant stay online to keep some of the 

support and jobs in Becker, MN. 

Commenters stated that requiring Minnesota to reduce carbon emissions by 41% by 2030 is cost 

prohibitive, too aggressive, and will hurt our economy. The commenters stated that this will 

force the shut down of many coal power plants and result in the loss of thousands of jobs 

(including many in his legislative district) and will drive the cost of power up, which will create 

a burden on all Minnesota families and especially low income families. 

Commenters stated that for many coal-fired plants, reaching these extreme goals in such a short 

period of time will prove either economically unfeasible or physically impossible (or both), thus 

forcing their premature retirements. The commenters stated that the proposed rule will end up 

slashing not CO2 emissions, but thousands of good-paying middle-class jobs instead. The 

commenters cited projections of retirement of about 12 percent to 19 percent of all coal-fired 

capacity projected to be in service in the base case) by 2020 under the range of scenarios 

analyzed, and its impact on well over 135,000 stable, well-paying jobs for middle-class families 

that the industry provides. The commenters stated the most obvious consequence of the 

widespread closure of coal-fired power plants will be massive job losses. The commenters stated 

that the agency's plans also would result in the loss of some 52,000 permanent direct jobs in 

utilities, mining and rail and at least another 100,000 jobs in related industries.

Commenters stated that EPA recognized localized negative impacts of the proposed rule in its 

RIA. The commenters stated that the first coal mining jobs to be lost will be those at mines that 

produce the highest priced coal - notably, mines in eastern Kentucky and that the impact of this 

proposal will almost guarantee the broadening and deepening of the poverty already dominant in 

eastern Kentucky. 

Commenters cited the United Mine Workers of America prediction that there will be 75,000 

direct coal generation jobs lost by 2020 and 152,000 by 2030. The commenters cited the 

International Brotherhood of Electrical Workers that the agency's plans also would result in the 

loss of some 52,000 permanent direct jobs in utilities, mining and rail and at least another 

100,000 jobs in related industries, and that high-skill, middle-class jobs would be lost, falling 

heavily in rural communities that have few comparable employment opportunities. The 

commenters cited the US Chamber of Commerce projections that there will be 224,000 jobs lost 

on average each year through 2030, and the rule will result in a loss of $50 billion in GDP on 

average. The commenters cited Dr. Gabriel Calzada Alvarez, who examined the impact of 

renewable energy policies in Spain, found that 2.2 jobs were lost for every one job created. 
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Commenters stated that the primary concern of the IUOE is that the regulation could cause job 

loss for its members, eliminating high-quality, family-sustaining jobs, which could affect broader 

swaths of the economy and drag down overall economic performance. 

Commenters stated that during the period 2001-2013, while its energy costs escalated, California 

lost 650,000 manufacturing jobs--approximately one-third of all California manufacturing 

jobs.The commenters stated that 34 percent of the nation's welfare recipients live in California. 

The commenters stated that California has shown the disastrous consequences of abandoning 

coal as an energy source and pushing jobs for the working class out of its borders, often to 

Mexico and other countries. The commenters stated that that Missouri is at the crossroads 

between the South and Midcontinent Independent System Operator power regions, which are 

expected to incur "over half the U.S. total costs during the 2014-30 timeframe," and "will 

shoulder more of the economic consequences of compliance." 

Commenters stated that the CPP would have the effect of significantly reducing power 

generation from coal-fired EGUs, which would immediately threaten the supply of power 

available for distribution to consumers and force the retirement of hundreds of power plants. The 

commenters stated that hundreds of thousands of coal miners and supporting employees would 

face layoffs due to the decrease in coal demand. The commenters stated that due to the 

significance and size of the coal industry, enactment of the CPP would push the national 

economy along a similar trajectory as the coal industry itself. The commenters stated that by 

2030, some 114 GW of existing capacity will be removed from the grid due to closures of coalfired EGUs. The commenters stated that the Plan is projected to result in a peak loss of 442,000 

jobs occurring in 2022, amounting to a decline of nearly $104 billion to the US GDP. The 

commenters stated that most analysts predict that the cost of electricity will increase 

significantly, amounting to an aggregate increase of nearly $300 billion by 2030. The 

commenters stated that in cases of power shortages, which are a distinct possibility due to 

increased reliance on redispatch to NGCC, price spikes in excess of 10 times the average rate are 

likely. The commenters stated that costs are particularly significant for lower-income 

households, which the CPP is expected to disproportionately impact. 

Commenters stated that in Utah, coal-fueled electricity is responsible for meeting approximately 

80% of the state's energy needs, and it is crucial that Utah maintains the economic development 

competitiveness that coal provides. The commenters stated that the coal mining industry is one 

of the most important industries in the State of Utah, due not only to the number of jobs 

supported by the coal industry, but also to the economic linkages with other sectors of the 

economy and the high wages in the mining industry relative to other sectors of the Utah 

economy. The commenters stated that these high-paying coal mining jobs are located in a rural 

part of the state in which it would be difficult, if not impossible, to replace them. 

Commenters stated that Terre Haute has several manufacturing businesses that rely on that low 

cost energy to keep costs affordable. The commenters stated that if the proposed rule is 

approved, many coal-fired plants will be forced to shut down and switch to natural-gas 

generation, costing ratepayers who ultimately pay the price for new power plants. The 

commenters stated that gas prices are volatile. The commenters stated that seniors and those 

living on fixed incomes will be hit the hardest and that wholesale electricity prices are projected 
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to increase between 27 and 55 percent over the next two years as more coal-fired plants shut 

down due to other EPA rules. 

Commenters stated that EPA's assessment that customer bills will actually decrease under the 

proposed program cannot be correct if the overall cost to America's utility industry exceeds $10 

billion per year. The commenters stated that rate impacts of this magnitude will have their 

severest impacts on the less fortunate among residential customers who are least able to absorb 

the increases or to change their consumption patterns through conservation. The commenters 

stated that if utility costs go up, then utility bills will go up as well -- an outcome that will affect 

all customers. 

Commenters stated that the cost estimates fail to reflect or capture the subsequent adverse 

spillover impacts of higher electricity rates on our nation's overall economic activity. The 

commenters cited an analysis by NERA Economic Consulting indicating that average U.S. 

electricity prices would increase by 12% per year and the total costs of the rule could be between 

$366 billion and $479 billion over a 15-year timeframe. The commenters stated that many of 

these costs will have to be absorbed by residential, commercial and industrial energy consumers. 

The commenters stated that higher energy prices disproportionately harm low-income and 

middle-income families. The commenters stated that the Proposed Rule would result in a direct 

loss of 52,000 jobs in the electric utility, mining and rail sectors due to plant closures. The 

commenters stated that an additional 100,000 indirect jobs are at risk for loss in communities 

affected by the closures, and that job losses would be concentrated in, "relatively poor, rural 

areas that are least able to afford the loss of high-wage skilled jobs." 

Commenters stated that the resulting expense to electricity rates, will have the effect of 

increasing poverty, and reducing business efficiency. 

Commenters cited the U.S Chamber of Commerce's estimates on increases in electricity costs 

($17 billion increase annually, $289 billion by 2030), losses in disposal annual income 

($3,400.00 decrease in typical household annually, $586 billion by 2030), losses in investments 

and GDP (over $50 billion annually), and increases in compliance costs for electricity providers 

($28 billion annually, $480 billion by 2030). The commenters also cited the Heritage 

Foundation's estimates that aggregate GDP losses would reach $2.23 trillion by 2023. The 

commenters further stated that EPA's estimated $5.5 billion annual compliance cost is 

unrealistic. Additionally, the commenters stated that low income families and fixed-income 

seniors would be disproportionately affected and that compliance costs would be passed on to 

consumers or shareholders in the form of reduced return on investments. 

Commenters also cited the U.S. Chamber of Commerce annual and cumulative compliance costs 

and losses in GDP, and stated that lower income families would be disproportionately affected, 

jobs would be lost and energy rates would increase. The commenters also noted the discrepancy 

between the U.S. Chamber of Commerce and EPA compliance cost estimates. 

Commenters also cited the U.S. Chamber of Commerce annual and cumulative GDP, job loss, 

total disposable income and electricity cost impacts and stated that the impacts would be the 

greatest on the poor, the elderly, small business, and domestic manufacturing. The commenters 
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then provided cost estimates of the recently repealed carbon tax in Australia -$8.5 billion annual 

economic impact and $500 increased electricity costs to families- as a comparison. 

Commenters stated that as a rural electric cooperative, the dramatic increase in rates from the 

CPP will exacerbate the difficulty that poor Americans already face with the cost of electricity. 

The commenters stated they are providing EPA with comments on the special considerations of 

the impact of the proposed CPP on the ability of rural electric cooperatives to comply with the 

REA federal mandate that EPA should factor into promulgation of a final rule, if any is issued. 

The commenters stated that they have invested billions of dollars in retrofitting their fossil units 

with state of the art emissions controls and installing new, very low emission generation in order 

to comply with other CAA regulations and members must still pay for them even though the CPP 

will restrict the operation of or force the retirement of this generation. 

Commenters stated that they are intimately familiar with the challenges that today's energy bills 

pose to the health and well-being of our communities. The commenters stated further that it is 

typical to find that their clients must spend as much as 8 percent of their annual income on 

electricity alone, while the average for households that are not low-income is less than 4 percent. 

The commenters also stated that the low-income families and individuals they serve are 

disproportionately likely to carry arrears on their utility bills and to face utility disconnection, 

and to avoid such a calamity, they typically sacrifice good nutrition and medical care to meet 

their rent and utility obligations. The commenters explained that utility bills of the same size 

differ dramatically in their impact on family well-being and health. Unaffordable energy leads to 

a cascade of health risks from poor nutrition, erratic medication purchase and the threat of 

eviction, in addition to the dangerous possibility of disconnection from electricity. Further, the 

commenters stated that utility program expenditures are biased towards those who can share the 

costs out of pocket, and at present the vast majority of utility efficiency investments in their state 

are set up to match a small share of a larger, private consumer expenditure on new equipment or 

a building upgrade. The commenters noted that while their clients pay for these programs in their 

bills, they are excluded because the requirement for personal spending to access a benefit is 

unaffordable. 

Commenters stated that practically all of the NGCC-fired generation in Florida that the CPP 

anticipates to be dispatched prospectively is owned by a single investor owned utility (IOU). The 

commenters stated that to meet the performance standard, JEA and all other entities in Florida 

will have to purchase NGCC-fired generation from that single IOU, while idling their own 

capable generation fleets (for which they are still recovering costs). The commenters stated that 

the requirement to invest in EE beyond the level that is cost effective to JEA and Florida 

ratepayers will cause rates to increase generally for all, but disparately for customers that do not 

participate in utility-sponsored EE or customers that invest in RE without a utility incentive. The 

commenters stated that the most affected by this will be the already economically disadvantaged 

segments of the customer base. 

Commenters stated that if the proposed rule is finalized, capital investments would need to be 

spread and recovered over significantly fewer megawatt-hours, resulting in an increase in the 

cost of the electricity for member systems and their customers. Commenters stated that even with 

subsidies and incentives, you cannot force homeowners to take advantage of energy efficiency 
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offers, and raising power prices so high that people would be forced into it is not equitable for 

low income rural communities, or for the commercial and industrial consumers served by our 

members. The commenters then urged EPA to look for other incentives that work for low income 

retail consumers and not unfairly punish others, and noted that in a not for profit cooperative the 

cost of every incentive is spread across all the member consumers. 

Commenters stated that the proposed rule goes well beyond what is allowed under the Clean Air 

Act and dictates the operation of the generating resources, preventing the economic dispatch of 

the system which would unnecessarily raise the cost to electric consumers. The commenters 

stated that many of these citizens are low and fixed income and can least afford an increase in 

their electricity costs. 

Commenters suggested that the proposed rule does not strike a balance between climate change 

goals and economic impacts such as job losses, trade balances, and costs of electricity, goods and 

services. Commenters stated that policies must ensure that low and fixed income consumers are 

not disproportionately impacted and further suggested that all sources of GHG and economic 

sectors should be included in initiatives to reduce emissions. Commenters urged the EPA to 

think about the economic calamity we face around the world if the lights went out, if electricity 

became too costly for families who are struggling to pay their bills every month or seniors who 

spend more time in their homes than most but cannot afford excessive heating or cooling bills. 

The commenters stated that businesses rely more than ever before on electric power to boot their 

computers, charge their technology and power equipment to be successful. 

Commenters stated that affordable and reliable electric power is essential to the continued 

recovery of Indiana's manufacturing economy, which accounts for about 500,000 high-paying 

jobs in the State, in addition to 28,000 in the coal industry. The commenters stated that Indiana 

will experience a disproportionate share of rate hikes, not just because the state is so reliant on 

coal for its electricity, but also because Indiana has average retail electricity prices below the 

national average. The commenters cited NERA estimates that the actual increase in rates for 

Indiana could be close to 12 percent. The commenters stated that with 1.3 million lower- and 

middle-income households in Indiana, spending an average of 19 percent of their after-tax 

income on energy, it State is vulnerable to rate hikes. 

Commenters stated that an unrealistic and unduly expensive EPA rule will pass through directly 

to the LPC ratepayers. The commenters stated that the citizens of the TVA region, a region with 

lower per capita income, higher poverty rates and higher percentage of elderly and Social 

Security recipients than most of the rest of the nation, would thus be obligated to fulfill the 

financial obligations that will be imposed as a result of EPA's proposed rule. 

Commenters cited ERCOT estimates that "energy costs for consumers may increase by up to 

20% in 2020" under EPA's proposal, without accounting for transmission and natural gas supply 

infrastructure and other costs. The commenters cited NERA estimates that the proposal could 

cause average 2020 to 2030 delivered electricity prices to jump by 27% relative to a base case 

without the rule, and that the weighted average price increase across all customer classes 

(Residential, Commercial, and Industrial) is projected to be 2.8 cents per kilowatt-hour under the 

proposed standards. The commenters stated that EPA's proposal could cause average 2020 to 

2030 delivered electricity prices to jump by 27% relative to a base case without the rule. The 
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weighted average price increase across all customer classes (Residential, Commercial, and 

Industrial) is projected to be 2.8 cents per kilowatt-hour under the proposed standards. The 

commenters stated that residential rates could increase by approximately 3.3 cents per kilowatthour under the proposed standards, a 25% increase, relative to a base case without the rule, 

equivalent to an increase in average household electric bills of $33 per month or nearly $400 per 

year which would impact all Texans but is particularly harmful for those with marginal income, 

such as elderly customers on fixed incomes or low-income customers. 

Commenters cited a November 2014 report, "Energy Market Impacts of Recent Federal 

Regulations on the Electric Power Sector," prepared by Energy Ventures Analysis that found that 

between 2012 and 2020, all electric and gas customers would spend 60 percent (in nominal 

terms; 37 percent in real terms) more in energy costs. The commenters stated that residential 

increases would be 35 percent (nominal; 15 percent real) while industrial customers would 

experience electric and gas increases of 92 percent (nominal; 64 percent real). For Kentucky 

residents, annual electric and natural gas spending would increase by 45 percent (nominal; 23 

percent real). The commenters cited a study prepared by IHS Energy, "The Value of US Power 

Supply Diversity" that concluded that the loss of fuel diversity in the production of electricity 

will increase retail electricity prices by 25 percent and will reduce the average American 

household's disposal income by dollar 2,100. The commenters cited a study prepared by NERA 

Economic Consulting, "Potential Energy Impacts of the EPA Proposed Clean Power Plan" (Oct. 

2014), that Kentuckian's can expect 12 percent increases in delivered electricity prices under a 

"state unconstrained scenario" and 21 percent under a "state constrained scenario". The 

commenters cited "ERCOT Analysis of the Impacts of the Clean Power Plan" findings that 

ERCOT consumers could expect retail energy price increases of 14 percent to 20 percent in 2020 

and 5 percent to 7 percent in 2029. The commenters stated that increases in utility rates resulting 

from the proposed CPP compound the affordability issue for WKU and create additional barriers 

to upward educational attainment for our younger generation. 

Commenters stated that hurdles to construction in Wyoming include limited site acquisition 

potential and complex endangered species issues. The commenters stated that assuming the 

construction of natural gas generation could be done by 2020 is an unrealistic assumption, given 

engineering, permitting, transmission and construction timelines. The commenters stated that 

even assuming the completion of an NGCC plant sometime in the near future, the cost to do so 

will also have an impact on MRES and its members, as shutting down a unit and replacing it 

with an NGCC plant would cause an additional increase in wholesale costs of 20%, over and 

above the 10% cost increase caused by the installation of the SCRs. The commenters stated that 

as a result, its member community of Pella, Iowa, which receives 100% of its power from 

MRES, will experience an increase in its wholesale costs of 30% just after we have undertaken 

major projects to reduce CO2: Pella has retired its local coal plant and MRES is constructing a 

new 36 MW hydroelectric facility near Pella. The commenters stated that rate increases of this 

magnitude endanger economic development and present a very real potential that electricity will 

become unaffordable for the poorest among us and make electricity more expensive for facilities 

in the United States and potentially cause companies to abandon plants and relocate overseas. 

Commenters stated that Ohio electricity prices that were 9% below the national 2013 average, 

but many Ohio families are struggling with high energy prices. The commenters stated that 53% 

of low to middle income households spend an average of 20% of their after-tax income on 
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energy and increased energy prices will further strain these families. The commenters stated that 

projected rate increases will have a devastating impact on manufacturing in Ohio and that EPA 

has drastically underestimated these prices as reputable sources have reported increases as high 

as 39%. 

Commenters stated that the rule as proposed will result in significant electricity rate increases 

and additional energy costs for consumers which will fall most heavily on the elderly, the poor, 

and those on fixed incomes. The commenters cited a U.S. Chamber of Commerce study 

indicating that a plan of this type would increase America's electricity bills, decrease a family's 

disposable income, and result in job losses. 

Response 9: Commenters stated that the Clean Power Plan will adversely affect low income and 

middle income individuals, seniors and environmental justice communities due to job losses 

relating to potential coal generating unit closures and associated markets (e.g., coal mining) and 

due to increases in the price of electricity and other energy products such as natural gas. 

While the EPA expects that there is likely to be additional job loss in sectors related to coal 

attributable dues to implementation of the CPP, many jobs in this field are expected to remain. 

For example, the Department of the Interior continues to work on an environmental impact 

statement to evaluate the potential environmental impacts of extending the operation of the 

Navajo Generating Station (NGS) and production of coal at the nearby Kayenta Mine for an 

extra 25 years, through 2044. See Chapter 6 of the Regulatory Impact Analysis for employment 

impacts associated with the illustrative CPP scenario and responses to comments relating to 

employment in comment 5 of this section 8.6 above.

The EPA recognizes that the coal miner or coal plant worker who loses his or her job is not 

necessarily going to find a new job in energy efficiency or renewable energy. In response to the 

transition from coal to natural gas already underway due to lower natural gas prices, many states 

are implementing replicable programs to transition their workforces – by working in publicprivate partnerships with their community colleges and businesses - to secure an economic 

advantage as they transition to a lower carbon energy mix. In addition the Department of 

Commerce, Department of Labor, Small Business Administration, and the Appalachian Regional 

Commission have together created an initiative to issue grants to partnerships of regionallydriven economic development and workforce development organizations in impacted coal 

communities.9 In addition, the Department of the Interior has publically committed in the July 

2014 Technical Working Group Agreement to facilitate the development of approximately 

26,975,000 MWh of clean energy by December 31, 2035 in the Four Corners area. The EPA 

expect this commitment to support energy-sector and other jobs in the region. The EPA 

recognizes the contribution of power plants and coal mines to the economies of the Navajo 

Nation, the Hopi Tribe and surrounding communities in Arizona and New Mexico, as well as 

many other communities nationwide. The timeframe of the CPP from plan development to plan 

implementation allows states, utilities and other stakeholders the ability to work together to tailor 

their plans in the ways that best support their communities, so that they can not only reduce their 

 

9 See https://www.whitehouse.gov/the-press-office/2015/03/27/fact-sheet-partnershipsopportunity-and-workforce-and-economic-revitaliz.
326

greenhouse gas emissions, but also ease the transition of their workforces to the low carbon 

economy. 

States will make the ultimate plans as to how the CPP will be implemented by the electricity 

sector. These final emission guidelines will be implemented by emission sources within each 

state upon the EPA’s approval of a state plan. The EPA has included a number of conditions to 

help ensure that vulnerable communities will not be disproportionately impacted by this 

rulemaking. These considerations are outlined in section IX of the final rule preamble of the 

CPP.

Additionally, the EPA in its final rulemaking is requiring that states engage with all stakeholders 

in the development of their state plans, including vulnerable communities. See sections VIII.D, 

VIII.E and IX.C of the final rule preamble of the CPP for more information.

Commenters above highlight the importance of the EPA increasing communities’ ability to 

access EE/RE and financial assistance programs. In section IX.C of the final rule preamble of the 

CPP, the EPA outlines programs that the State of Maryland, New York, and Colorado having 

been employing that assist low income communities in increasing their ability to access RE/EE 

and financial assistance programs. The EPA encourages that states in the writing on their state 

plans use these and other models. Additionally, as stated in the preamble, the EPA in the coming 

months, will continue to provide information resources for vulnerable communities and states on 

existing federal, state, local, and other financial assistance programs to encourage EE/RE that are 

already available to communities. The EPA will also provide a catalog of current or recent state 

and local programs that have successfully helped communities adopt EE/RE measures. The goal 

of these resources is to help vulnerable communities gain the benefits of this rulemaking by 

encouraging that states use these types of tools in their state plans. In section IX.D of the 

preamble for the final rule, the agency describes federal programs and resources that are 

available to communities.

Additionally, the EPA recognizes the potential impacts that this rulemaking could have on jobs 

in communities. In sections VIII.G and IX.C of the final rule preamble of the CPP for the EPA 

provides information on how states should consider the potential impacts that their plans may 

have on jobs in their communities. Additionally, the agency provides information on resources 

that it will be providing on programs that specifically target economic development assistance to 

communities affected by changes in the coal industry and electricity sector.

The EPA understands that climate change is an environmental justice issue. As stated in XI and 

XII.J of this final rulemaking this rulemaking will provide broad benefit to communities across 

the nation, and will be particularly beneficial to low income and some communities of color (in 

particular, populations defined jointly by ethnic/racial characteristics and geographic location) 

where people are the most vulnerable to the impacts of climate change. Additionally, as 

highlighted in this final rulemaking, environmental justice is an important priority for the 

agency. The EPA has worked closely with its Office of General Counsel and Office of 

Environmental Justice when developing these guidelines. More information on how the agency 

considered environmental justice impacts in the rulemaking is available in sections IX and XII.J 

of this final rule preamble of the CPP. 
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Comment 10: Comments provide support for Clean Power Plan and economic analysis.

Commenters stated that under the business as usual scenario, Georgia rates and bills will 

increase, and citizens will also continue to pay in health costs. The commenters stated that in 

every rate case since 2004, Georgia Power has asked for - and received - increases in its rates 

amounting to hundreds of millions of dollars and the average residential customer of Georgia 

Power saw an increase of approximately 35 percent between 2003 and 2013, which corresponds 

to an increase of approximately $44.05 on the average residential monthly bill. The commenters 

stated that all of these rate increases were made prior to the proposal of the Clean Power 

Plan. The commenters stated that under the current scenario, many of the costs of pollution are 

borne by citizens in sick days, hospital visits, and even deaths. The commenters stated that 

dispatch and planning scenarios under the Clean Power Plan - by requiring utilities to internalize 

some of the costs of carbon pollution - will take a step towards a more accurate reflection of the 

true economic costs of producing power.

Commenters stated that a slow or inadequate response to climate change would produce 

significant costs and negative impacts on Virginia consumers, and that costs of implementation 

must be balanced with the benefits to our health, environment, and economy in evaluating any 

proposal as it relates to Virginia consumers. The commenters stated that economic cost and 

benefits, along with health and environmental benefits, are all vitally important to consider when 

accurately and responsibly evaluating how the Proposed Rule will affect Virginia 

consumers. The commenters stated that the EPA estimates a nationwide 30% reduction in CO2 

emissions by 2030, and Virginia's proposed CO2 reduction goal is 43%. The commenters stated 

that EPA estimates a cost of between $5.5 and $7.5 billion to achieve interim goals, and a total of 

$7.3 to $8.8 billion to achieve the final goals. The commenters stated that demand-side programs 

that offset higher rates to end users with expected savings from reduced electricity use. The 

commenters stated that according to EPA, while rates may increase, overall bills may be lowered 

through reduced energy use resulting from increased energy efficiency and cost-effective 

conservation measures.

Commenters stated that modern NGCC unit features the lowest capital cost relative to other 

forms of generation and provides customers with the most cost-effective generation per thousand 

households served and thousand megawatt hours generated. The commenters stated that the 

economic attributes of NGCC units offer affordable emissions reductions and are a clear market 

choice for future generation. 

Commenters stated that the largest fossil fuel corporations already use an internal cost of carbon 

above the proposed EPA regulations, and that internalizing these costs will even the playing field 

between renewable energies and fossil fuels.

Commenters stated that conversely an electric bill that goes up one to five percent will be down 

in the financial noise of most households, yet could greatly benefit the implementation of CO2 

reductions from the one commodity most essential to our modern way of life. 
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Response 10: The EPA agrees with comments that state under baseline conditions (or without 

the CPP), the costs of carbon pollution in the electricity sector are borne by citizens experiencing 

health and welfare effects. These health and welfare effects are discussed in section II of the 

final rule preamble and in the Regulatory Impact Analysis Chapter 4. GHG emissions impose 

costs on society, such as negative health and welfare impacts, that are not reflected in the market 

price of the goods produced through the polluting process – in this case electricity. As the 

commenters stated, the Clean Power Plan - by requiring utilities to internalize some of the costs 

of carbon pollution - will take a step towards a more accurate reflection of the true economic 

costs of producing power. EPA also agrees that a slow or inadequate approach to addressing 

greenhouse gases would be costly in terms of damages sustained and would impose climate 

change health and welfare impacts on society. 

Comment 11: EPA analysis underestimates good effects and/or overestimates bad effects.

Commenters described a GDP multiplier and stated that assessing the macroeconomic impact of 

policy choice generally relies on complex models of the economy. The commenters stated that 

economically beneficial energy efficiency investments yield net savings; the reduction in energy 

costs exceeds the increase in technology costs. The commenters also stated that such investments 

have three economic effects from the point of view of the economy: (1) The inclusion of energy 

efficient technologies in energy using durables increases the output of the firms that produce the 

technology; (2) To the extent that the energy using products are consumer durables, they increase 

the disposable income that households have to do other things, such as buy other goods and 

services; (3) To the extent that the energy using products are utilized as inputs in the production 

of other goods and service, like trucks used to deliver packages or vegetables, they lower the cost 

of those goods and services. The commenters stated that in competitive markets, those costs are 

passed on to the consumer in the form of lower prices, and this also increases the disposable 

income of the household to buy other goods and services.

Commenters stated that a popular measure is to estimate jobs per dollar invested. The 

commenters stated that in the electricity space, a comparative analysis of efficiency compared to 

generation found that efficiency created twice as many jobs per dollar spent on nuclear power 

and 50% more jobs than coal and gas generation, and these large increases in economic activity 

lead to increases in employment. The commenters stated that the effect is magnified by the fact 

that the non-energy sectors of the economy are substantially more labor intensive than energy 

production, and the energy sector is less than half as labor intensive as the rest of the economy. 

The commenters puts forward that this effect is compounded where energy is imported (as in the 

U.S. transportation sector), and as consumers substitute away from energy, the goods and 

services they purchase stimulate economic and disproportionately large job growth. The 

commenters remarked that these efforts to model the economic impact of energy efficiency have 

proliferated with different models being applied to different geographic units, including states 

and nations. The commenters stated that the results differ across studies because the models are 

different, the impact varies according to the size of the geographic unit studied and because the 

assumptions about the level and cost of energy savings differ. The commenters noted that these 

differences are not an indication that the approach is wrong; on the contrary, all of the analyses 

conclude that there will be increases in economic activity and employment, and given that there 
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are different regions and different policies being evaluated, we should expect different results. 

The commenters stated that, taken together, the overestimation of costs and underestimation of 

benefits lead to a substantial and systematic underestimation of the net benefits of efficiency 

gains, and because the impact of the efficiency improvements depends on (a) the size of the 

improvement and (b) the type of consumer durable being studied, (c) the sector in which it 

occurs and (d) the region being analyzed, one cannot offer a single, simple estimate. The

commenters stated that the exact calculation of costs and benefits is likely to underestimate the 

benefit/cost ratio by a factor of at least two because of the failure to reflect the macroeconomic 

benefits and cost reducing trends, both of which are positive externalities of the adoption of 

performance standards. 

Commenters stated that the RIA overstates benefits and underestimates costs, by double counting 

benefits of energy efficiency and inappropriate netting of market-driven and state programdriven efficiency, not counting integration costs of intermittent renewable technology, 

overestimating emission reductions associated with renewable technology and practical conflicts 

with grid operation, not including reliability impacts, and not counting net employment impacts. 

The commenters stated that the RIA includes gross employment effects of energy efficiency and 

renewable energy programs, not net estimates accounting for jobs lost due to higher energy 

prices. The commenters stated that overall, U.S. carbon intensity has declined over the last 

decade and half (or longer), largely as a result of autonomous changes in fuel sources and that 

such improvements are likely to continue, yet the CPP claims credit for future reductions that 

would occur in the absence of the CPP. The commenters stated that each state has a unique 

economic structure, with various productive activities contributing to each one's economy. The 

commenters stated that energy policy and regulation should not dictate "acceptable" industrial 

sector makeup, through regulatory actions that artificially inflate energy costs. The commenters 

stated that such regulation interferes with the natural, market-driven changes in state economies. 

The commenters stated that this is an area where the CPP underestimates costs of the impacts 

imposed on other industries that are not the direct target of the proposed regulation. 

Response 11: The commenters assert that economically beneficial energy efficient technologies 

lead to net savings as the reduction in energy cost exceeds the cost of energy efficient 

technology. Further the commenters stated that energy efficiency creates more jobs per dollar 

invested than nuclear, coal or natural gas generation. The commenters stated that, taken together, 

the overestimation of costs and underestimation of benefits lead to a substantial and systematic 

underestimation of the net benefits of efficiency gains associated with energy efficiency. 

The EPA believes that the economic analysis undertaken to support the Clean Power Plan and 

reported in the Regulatory Impact Analysis (RIA) comprehensively addresses the benefits, costs 

and economic impacts of the CPP for illustrative implementation scenarios. Section V of the 

preamble discussed costs of the final emission guidelines. Demand side energy efficiency is 

discussed in the preamble for the final rule, the Demand Side Energy Efficiency TSD, and in 

Chapter 3 of the RIA. The EPA notes that final guidelines’ Best System of Emission Reductions 

(BSER) determination does not take into account demand-side energy efficiency (EE), and the 

emission performance rates for each of the two source categories do not reflect demand-side EE. 

However, many commenters also urged the EPA to allow states and sources to rely on demandside EE as an element of their compliance strategies, as energy efficiency measures are in 

widespread use across the country and provide energy savings that reduce emissions, lower 
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electric bills, and lead to positive investments and job creation. The EPA agrees, and the final 

guidelines provide ample latitude for states and utilities to rely on demand-side EE in meeting 

emission reduction requirements. 

Comment 12: Small businesses will be impacted by the Clean Power Plan.

Commenters stated that along with helping to combat climate change, stronger clean energy 

standards can help create new business opportunities for small businesses. The commenters 

stated that small businesses, the majority of which are unaffected by the standards themselves 

will benefit as they supply the services and products to help those who do have to meet them. 

The commenters stated that eighty-seven percent of small business owners said that improving 

innovation and energy efficiency are good ways to increase prosperity for small businesses. 

Commenters stated that electricity prices will go up as a result of this proposal, and that energy 

costs are one of the top three business expenses for 35% of small businesses.

Commenters stated that increases in electricity costs disproportionately impact small businesses, 

which typically lack pricing power in their respective markets. The commenters stated that 

proposed rule, if finalized, would lead to significant increases in electricity costs that would harm 

small businesses. 

Commenters stated that EPA has failed to convene a Small Business Advocacy Review panel 

and conduct a regulatory flexibility analysis to evaluate the proposed rule's impact on small 

businesses, as required by the Regulatory Flexibility Act and Small Business Regulatory 

Enforcement Fairness Act. The commenters stated that the impact on electricity prices and the 

potential regulation of entities beyond the fence line undoubtedly will impact small businesses. 

Commenters stated that EPA has failed to convene a Small Business Advocacy Review panel 

and conduct a regulatory flexibility analysis to evaluate the proposed rule's impact on small 

businesses, as required by the Regulatory Flexibility Act and Small Business Regulatory 

Enforcement Fairness Act. The commenters stated that electricity costs are a significant concern 

for many small businesses and are a top three business expense for 35% of all small businesses. 

The commenters stated that for forgers, metal and energy make up the majority of input costs. 

Commenters stated that the negative effects of the Clean Power Plan will hit small businesses the 

hardest as they tend to have far less capital set aside to absorb unforeseen expenses such as 

increases of input costs (like electricity), or problems due to an unreliable electricity grid. The 

commenters stated that many small businesses will be unable to remain viable when hit with 

higher energy costs and unreliable electricity supplies, forcing them to close their doors. 

Commenters stated that with the exception of Kansas City BPU, Kansas public power systems 

are too small to employ environmental staff to comment on proposed rules and position the 

utility to lessen the impacts of comprehensive environmental regulations. The commenters stated 

that EPA should specifically consider the issues and concerns of small systems as the proposed 

rule is developed. 
331

Commenters stated that the Clean Power Plan rule will boost bottom lines and help create jobs as 

states look to comply with the standards and achieve reductions through various measures. The 

commenters supported the compliance flexibility inherent in the rule. The commenters cited an 

American Council for an Energy Efficient Economy (ACEEE) report finding that energy 

efficiency investments alone could increase national gross domestic product by $17.2 billion in 

2030, and produce a net gain of about 611,000 jobs, with all 50 states seeing net job creation, all 

at no net cost. The commenters stated that a review of the Northeast's Regional Greenhouse Gas 

Initiative (RGGI) program by the Analysis Group found that over the first three years, the 

program created more than 16,000 additional jobs with each of the 10 states showing net job 

additions. The commenters stated that 56 percent of small business owners still support EPA's 

regulations even if it would cause utility rates to rise. The commenters stated that small 

businesses are strategically positioned to help states achieve their carbon reduction goals, 

igniting job creation opportunities and cost savings along the way. The commenters stated that 

business opportunities exist with respect to modernizing inefficient power plants and buildings as 

well as operation new, cleaner and more efficient power plants; conducting energy audits and 

retrofitting residential as well as commercial buildings to be more energy efficient; and 

developing new and innovative technologies throughout the supply chain. The commenters 

stated that ACEEE conducted an analysis and found that by 2030 the rule could induce over 

$625 billion of investment in various energy efficiency industries and behaviors, and create an 

average of over 400,000 jobs per year both directly and throughout the economy. The 

commenters cited an Analysis Group report that while the Regional Greenhouse Gas Initiative 

(RGGI) program costs initially increased electricity rates, the impact of energy efficiency 

investments (using RGGI allowance revenues) significantly reduced commercial and residential 

electricity use, placing downward pressure on rates over time, and combined with lower 

consumption, tended to generate on average much lower electricity bills.

Commenters stated that the projected CO2 emission reduction from the proposed rule is, at most, 

555 million metric tons (mmt) in 2030, which represents only 1.3 percent of projected global 

CO2 emissions in that year. The commenters stated that this reduction in 2030 would offset the 

equivalent of just 13.5 days of CO2 emissions from China. The commenters stated that the EPA's 

economic analysis grossly overstates and overestimates the benefits of the proposed rule, and 

underestimates the burdens and translated costs on businesses and those they serve. The 

commenters stated that EPA has failed to convene a Small Business Advocacy Review panel and 

failed to conduct a regulatory flexibility analysis to evaluate the proposed rule's impact on small 

businesses, as required by the Regulatory Flexibility Act and Small Business Regulatory 

Enforcement Fairness Act. The commenters stated that the term "social cost of carbon" is not 

recognized as a legitimate economic metric or methodology and has not received general 

acceptance or even legitimate scrutiny necessary for a transparent rule-making. The commenters 

stated that "co-benefits" have not been confirmed attributable to this rule and should not be 

considered as sufficient evidence to support the rule's effectiveness. 

Commenters stated that EPA has failed to convene a Small Business Advocacy Review panel 

and conduct a regulatory flexibility analysis to evaluate the proposed rule's impact on small 

businesses, as required by the Regulatory Flexibility Act and Small Business Regulatory 

Enforcement Fairness Act. The commenters stated that instead of conducting this analysis, EPA 

claims that the proposed rule will not have a significant economic impact on a substantial 

number of small entities because States, not EPA, are ultimately responsible for implementing 
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Section 111(d); this claim is completely inaccurate because the impact on electricity prices and 

the potential regulation of entities beyond the fence line undoubtedly will impact small 

businesses. The commenters stated that EPA itself recognizes that the proposed rule would result 

in increases in electricity prices in some areas by as much as twelve percent. The commenters 

stated that electricity costs are a significant concern for many small businesses and are a top

three business expense for 35 percent of all small businesses; this alone demonstrates the 

widespread impact that the proposed rule would have on small businesses. The commenters 

stated that EPA should withdraw the current proposal, convene a Small Business Advocacy 

Review panel, and prepare a regulatory flexibility analysis before proceeding with a new 

proposal under Section 111(d). 

Commenters stated EPA is not adequately addressing the differences between large utilities and 

smaller utilities such as Cooperatives and the assumptions associated with Energy Efficiency 

state goals are unrealistic and detrimental to the financial wellbeing of their members.

Response 12: Commenters addressed three different issues relating to small business. Comments 

include: 1) commenters supportive of the impact the Clean Power Plan will have on small 

businesses and suggesting helping combat climate change and stronger clean energy standards 

can help create new business opportunities for small businesses, 2) commenters stating that EPA 

failed to convene a Small Business Advocacy Panel or complete a Regulatory Flexibility 

Analysis, and 3) commenters asserting that the Clean Power Plan will have disproportionately 

negative impacts on small business. 

Regarding comments received stating that the CPP and stronger clean energy standards will 

generate business opportunities for small businesses, the EPA appreciates these comments. The 

EPA agrees that there will be business opportunities and potentially new jobs in the power sector 

associated with both improving the efficiency of fossil-fuel fired power plants and construction 

of new natural gas-fired and renewable power production. In addition, the EPA expects that there 

will be opportunities in renewable energy and in the demand-side energy efficiency sectors. 

The EPA disagrees with commenters’ assertion that the EPA did not consider small businesses 

when developing the proposed rule. The EPA is aware that there is substantial interest in the rule 

among small entities (e.g., municipal and rural electric cooperatives) and has conducted an 

unprecedented amount of stakeholder outreach. As part of that outreach, agency officials 

participated in many meetings with individual utilities as well as meetings with electric utility 

associations. Specifically, the EPA Administrator, Gina McCarthy, participated in separate 

meetings with both the National Rural Electric Cooperative Association (NRECA) and the 

American Public Power Association (APPA). The meetings brought together leaders of the rural 

cooperatives and public power utilities from across the country. The Administrator discussed and 

exchanged information on the unique challenges, in particular the financial structure, of NRECA 

and APPA member utilities. Agency officials also engaged with industry leaders and trade 

association representatives from various industries. While formulating the provisions of the 

proposed rule, the EPA considered the input provided over the course of the stakeholder 

outreach. After proposal, the EPA continued to seek input from stakeholders, including small 

businesses. Opportunities for stakeholder input included providing testimony during public 

hearings and submitting comments during the public comment period. In addition, agency 

officials participated in over 300 meetings after proposal with a full range of stakeholders, 
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including stakeholders with small business interests. The EPA considered this input in 

determining the provisions of the final rule.

The EPA disagrees with commenters that believe the EPA failed to satisfy the Regulatory 

Flexibility Act’s statutory obligations. The RFA generally requires an agency to prepare a 

regulatory flexibility analysis of any rule subject to notice and comment rulemaking 

requirements under the APA or any other statute, unless the agency certifies that the rule will not 

have a significant economic impact on a substantial number of small entities. The impact of 

concern is any significant adverse economic impact on small entities directly regulated by the 

rule. See American Trucking Assoc. v. EPA, 175 F.3d 1029, 1044-45 (D.C. Cir. 1999). The EPA 

made such a certification and, thus, a regulatory flexibility analysis is not required. In addition, 

the EPA was not statutorily obligated to convene a small business advocacy review panel. The 

EPA also disagrees with commenters that believe the CAA section 111(d) rule for existing power 

plants is fundamentally different from the NAAQS. The EPA continues to assert that the 

establishment of NAAQS is analogous to establishing section 111(d) emission guidelines and 

that the EPA’s analysis here is consistent with the analysis conducted when the EPA establishes 

NAAQS. As stated in the preamble to the proposed rule (79 FR 34946-34947, June 18, 2014) 

and reaffirmed in the preamble to the final rule, the EPA’s rule will not impose any requirements 

on small entities. Specifically, emission guidelines established by the EPA under CAA section 

111(d) do not impose any requirements (or associated costs) on non-state entities (i.e., existing 

power plants) and, thus, will not have a significant economic impact upon a substantial number 

of small entities. After emission guidelines are promulgated, states establish standards on 

existing sources, and it is those state requirements that could potentially impact small entities.

Finally with regards to increases in electricity prices, the EPA estimates and discusses potential 

changes in electricity prices in chapter 3 of the Regulatory Impact Analysis. Impacts to

secondary markets that are consumers of electricity including small businesses are discussed in 

chapter 5 of the RIA. For the final rule, as shown in the RIA by 2030, electricity prices are 

expected to not change or rise slightly on average nationwide (increase by zero to less than one 

percent) as a result of the CPP. Impacts to secondary markets including small businesses that are 

consumers of electricity will be dependent upon a variety of factors discussed in the RIA chapter 

5. It is important to note that these electricity price change projection results are based upon 

illustrative scenarios of state implementation plans and actual impacts may differ depending 

upon the actions taken by sources to comply with the CPP. The flexibility afforded to states in 

developing their state plans allows them to encourage compliance methods which include design 

elements that may mitigate or promote particular impacts based on their priorities. 

Comment 13: Benefits of the Clean Power Plan are under or overestimated.

Commenters contend the benefits of the CPP are overstated.

Commenters stated that EPA fails to include other human health impacts due to the proposed 

rules and cited a report published by Senator Barrasso that lists increased hospital visits, illnesses 

and premature deaths due to joblessness, increased healthcare costs, and damages to children's 

health and family well-being as a result of unemployment due to EPA regulation. Commenters 
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further cited a March 11, 2014 letter to the EPA Administrator emphasizing the public health 

impacts of reliable electricity, including its importance to food safety, safe drinking water and 

protection from extreme temperatures. Commenters added the letter stated that EPA must take 

into account the net impact of EPA rules on health, including those plausibly associated with 

increased costs of energy and unemployment. 

Commenters stated that proposed rule skews the cost-benefits and imposes unnecessary costs 

which have impacts on human health due to higher electricity prices and economic constraints on 

the U.S. economy that have not been addressed and weighed against the speculative benefit 

conclusions presented by EPA. The commenters discussed burdens on the manufacturing 

industry as well as cited references with the following public health effects associated with 

employment status: (1) continuously-employed individuals experienced, on average, an 

additional life expectancy of four to five years, (2) reducing unemployment has been estimated 

to prevent up to 2,500 premature deaths a year, (3) in a Congress' Joint Economic Committee 

Report by Dr. Harvey Brenner, studies found that a one percent increase in the unemployment 

rate was associated with a two percent increase in premature deaths. The commenters stated that 

using these estimates and econometric models, a 2004 study by Brenner found that reductions in 

coal-fired power would result in between 170,000 and 300,000 premature deaths. The 

commenters summarized by concluding that the proposed rule is not a wise social investment to 

address premature mortality.

Commenters also stated that EPA did not assess the number of premature deaths the rule will 

cause through loss of disposable income to Americans, and stated that Texans particularly are at 

risk. The commenters said a 15% increase in energy cost due to the proposed rule will place the 

population in Texas in dire straits. The commenters said that 700,000 families spend nearly 

three-quarters of their income on energy, and that 49% of Texas's families have gross annual 

incomes of $50,000 or less, with an average after-tax income of $23,756, or less than $2,000 per 

month. The commenters also stated that about 700,000 families in Texas live well below the 

federal poverty line, earning less than $10,000 per year, and are being squeezed hardest by 

energy cost increases. 

Commenters stated that the implications of cost increases in low income people will translate to 

going without food, medical care and prescription drugs. The commenters cited a report by 

Lutter and Morrall which stated that "regulations to promote health and safety that are 

exceptionally costly relative to the expected health benefits may actually worsen health and 

safety, since compliance reduces other spending, including private spending on health and safety. 

Past studies relating income and mortality give estimates of the income loss that induces one 

death - a value that we call willingness-to-spend (WTS) - to be around $9 to $12 million ($US 

1990)." The commenters also cited EPA's statement: "people's wealth and health status, as 

measured by mortality, morbidity, and other metrics, are positively correlated. Hence, those who 

bear a regulation's compliance costs may also suffer a decline in their health status, and if the 

costs are large enough, these increased risks might be greater than the direct risk-reduction 

benefits of the regulation." The commenters stated that NEADA 2008 National Energy 

Assistance Survey found similar results in where increased energy costs resulted in more 

sickness. 
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Commenters stated that EPA impermissibly calculated health benefits due to reductions in 

criteria pollutant concentrations to below the level of the NAAQS, and dramatically skewed the 

climate benefits by presenting global benefits rather than just U.S. benefits. The commenters 

stated that mining job losses in West Virginia were underestimated because less productive 

mines would be closed first. The commenters stated that coal-fired EGU job losses in West 

Virginia were underestimated. 

Commenters stated that EPA appears to have grossly exaggerated the benefits from the proposed 

rule, particularly because most reductions in carbon dioxide emissions have already occurred 

since 2005. The commenters stated that EPA should not be claiming benefits that have already 

been achieved, but rather should be limited to those benefits that are anticipated from the 

implementation of the proposed rule. The commenters stated the costs are underestimated 

because EPA assumes that the utilities can easily switch fuels for existing sources and build new 

power plants that rely on natural gas and renewable energy. The commenters stated that EPA 

also minimizes the cost of the proposed rule because it unrealistically assumes that the price of 

natural gas will remain at its historically low levels for the next 25 years. The commenters stated 

that forcing 50 percent of coal-fired power plants to retire would equate to the loss of 

approximately 500,000 jobs nationwide, and that the number of new "green" jobs will not offset 

the anticipated job losses. 

Commenters stated that the proposed rule overestimates benefits, and underestimates costs. 

Commenters stated that it reviewed data from 93 plants in 31 states, with an average CO2/MWh 

rate of 2,626, or roughly 20 percent less efficient than the average coal plant. The commenters 

stated that these 93 plants employ at least 8,000 employees and have a nameplate capacity of 

approximately 50 GW. The commenters stated that Pennsylvania is the most affected state, with 

13 plants in danger of retirement, followed by Michigan, with seven possible retirements, and 

Illinois with six. The commenters stated that there are 14 states that could force at least three 

plants into early retirement. The commenters stated that Jonathan Masur and Eric Posner 

examined several past RIAs from EPA and found that had the analyses monetized the job losses, 

the costs of the regulations would have exceeded the benefits. The commenters stated that using 

a central estimate of $100,000 per displaced worker, the monetized costs for this rulemaking 

would total $4.2 billion, and that this would bring topline compliance cost to $13 billion. 

Commenters stated that EPA failed to adequately or reliably analyze the potential costs and 

benefits of the proposed CPP; by simultaneously overestimating the potential benefits of the 

proposal and underestimating the costs, EPA claims (in error) that the proposed rule will produce 

economic benefits. According to the commenters, if done properly, a cost-benefit analysis of the 

CPP would reveal significant costs in both the short term and the long term. The commenters 

stated that first, EPA's reliance on the social cost of carbon is wholly inappropriate because that 

calculation has not been subject to a rigorous and transparent rulemaking process, and it fails to 

address properly international benefits and costs; second, EPA fails to use full-economy 

modeling to evaluate employment impacts, which fails to account for the negative impact on 

employment likely to be experienced by other industries that support or rely upon coal 

generation and the communities surrounding them; and finally, EPA's reliance on co-benefits 

from simultaneous reductions in pollutants other than GHGs is misplaced and must be revised to 
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more appropriately reflect the health benefits that would actually he attributable to this proposed 

rule. 

Commenters stated that this proposed rule could place New Mexico's utility ratepayers, 

employees, businesses, tax base and economy in jeopardy and could harm the wellbeing of New 

Mexico families and the "public interest" of the State of New Mexico. The commenters stated 

that the risk to these constituencies easily eclipses and outweighs the health risk that EPA claims 

New Mexico's citizens may experience associated with improving New Mexico's existing coal 

fired generation emissions. 

Commenters stated that the Agency resorted to methods of calculating costs and benefits that are 

unacceptable, and that did not follow the requirements by the 111(d) of taking of costs of 

compliance into account. The commenters said that the cost-benefits analysis have three 

structural defects: 1) its use of foreign benefits to justify domestic costs; 2) its reliance on alleged 

co-benefits, especially reductions in emissions of fine particulate matter (PM2.5); and, 3) its 

failure to account for "carbon leakage," which is the risk that energy-intensive domestic 

industries will move plants and activities abroad in response to EPA finalizing its proposed rule. 

http://www.washingtontimes.com/news/2014/jul/29/gray-a-costbenefit-analysis-from-epalacking-in-c/print/. (Please see section 8.7.2, comment 3 for EPA’s response to comments on the 

use of global SCC estimates and section 8.8 for EPA’s response to the comment concerning cobenefits from PM2.5 reductions.)

Commenters stated that if EPA's analysis is amended to focus on domestic benefits and to 

remove consideration of co-benefit pollutants that the agency already controls under different 

regulations, the adjusted benefits of the proposed rule would fall significantly short of its 

acknowledged costs. The commenters added that this excess of costs over likely benefits 

becomes even clearer once carbon leakage effects, which will inevitably pressure U.S. industry 

to relocate -and continue polluting- overseas, are taken into account. The commenters said that 

CPP fails to satisfy the President's mandate of using the "best available techniques" of costbenefit analysis. 

Commenters cited NERA estimates that the proposed rule would conservatively cost the 

economy at least $41 billion per year in compliance and over $366 billion in cumulative costs 

from 2017- 2030. The commenters stated that the agency double counted the same public health 

co-benefits under previous air quality rules. 

Commenters stated that EPA failed to estimate the number of premature deaths associated with 

the loss of disposable income. The commenters said that EPA should have updated and used the 

U.S. Office of Management and Budget (OMB) federal estimate of one premature death for 

every $12 million ($US 2010) in reduction of disposable income, and stated that this 

methodology is used by OMB, FDA, OSHA and EPA to understand the degree to which their 

regulations induce premature death amongst those who bear the costs of federal mandates. 

Commenters stated that one measure of the loss of disposable income is the increase in consumer 

costs which EPA estimates at $360 Billion, and that this loss of disposable income would cause 

30,000 premature deaths. The commenters said that this adverse impact swamps the purported 

benefits of reducing particulate matter associated with the rule. 
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Commenters stated that EPA attempts to make up for the almost absurd lack of simple economic 

justification for the rule by suggesting that reducing operations and emissions from coal-fired 

power plants will have ancillary public health benefits. The commenters said that even if such an 

unsupported position were rational, it is beyond reason to suggest that sufficient public health 

benefits could accrue to offset the significant costs of this rule. The commenters added that the 

cost/benefit equation ignores the negative public health impacts of reducing the disposable 

income of those who are affected by the rule. The commenters said that this rule, if implemented, 

will significantly impact the costs of electricity, and that cost will reduce the ability, particularly 

of low income ratepayers, to afford other essential goods and services that directly affect their 

health and welfare, including medical care, medicine, adequate food and housing and the 

expenses required to be sufficiently educated and prepared to acquire and maintain employment.

The commenters said that the strongly positive correlation between income and public welfare 

and longevity has been well established and that any cost/benefit analysis that ignores it cannot 

be considered to be valid or credible. 

Commenters stated that health costs of the CPP are 9 times greater than the "co-benefits" claimed 

by EPA: $245.2B-$329.9B vs $16B-$37B. The commenters provided text from The November 

2014 NERA Economic Consulting study "Potential Energy Impacts of the EPA Proposed Clean 

Power Plan" that looked at two scenarios, one where all 4 building blocks were used (state 

unconstrained) and one where only the first two are used (state constrained). The commenters 

provided an equation to determine the impact on premature deaths as a result of the CPP through 

2031. The commenters presented the conversion of loss of discretionary income to premature 

deaths and also the conversion to premature deaths using the EPA value of a statistical life. 

Based on the information provided, the commenters indicated that when using the constrained 

scenario the cost of premature deaths is higher than when using the unconstrained scenario. The 

commenters said based on the results the health costs are higher than the co-benefits and that the 

costs to the economy are far greater than claimed by EPA. The commenters said that EPA's costbenefit justification for the rule is without basis and the rule must be withdrawn.

Commenters stated that the proposal is unlawful, ineffective, misguided, arbitrary and capricious 

due to the extreme imbalance in costs and benefits when benefits regulated under other rules are 

excluded. 

Commenters stated that EPA must conduct a thorough analysis on the costs and direct domestic 

benefits of any final guidelines. The rule as proposed simply double counts co-benefits of 

emissions reductions from domestic power plants and cited only immeasurable global climaterelated benefit. The commenters said that the EPA should also work with the Department of 

Energy to analyze any proposed impacts on federal and private sector investment in clean coal 

technology and the resulting impacts on GHG emissions. (Please see section 8.7.2, comment 3, 

for EPA’s response to the comments on the scope of the climate benefits, including the 

justification and use analysis of global estimates of the social cost of carbon.) 

Commenters assert that the benefits of the CPP are understated.

Commenters stated that the implementation of the Clean Power Plan in Texas would further 

increase water savings in the state by about two thirds more compared to the baseline.
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Commenters stated that the CPP can also reduce water consumption, a benefit that is highly 

consequential for many western states. At both of the commenters’ facilities, the export of 

thermal energy enables us to use less water in cooling towers to condense the steam for reuse in 

the boiler.

Commenters stated that the reduction of carbon combustion from generating units will not be a 

burden to the economy but a benefit. The commenters stated that the market signals that reach 

consumers at the point of purchase are heavily skewed by 7.2 billion in subsidies to fossil fuel 

industries and only 400 million in the renewable and non-combustion industries, and that explicit 

recognition of the benefits of abating carbon combustion is helpful in giving consumers better 

signals. Commenters further stated that by unleashing efficiency improvements, emissions 

reductions at the affected and other industrial sources will continue so long as a competitive 

marketplace continues to exist. 

Commenters also stated "The evidence of the nationwide impact of the emission rate reduction 

standards in the CPP leads to the conclusion that the benefits outweigh the costs by so many 

orders of magnitude that a more ambitious national goal could be achieved with very little 

adverse effect on the national economy or employment levels." Commenters cited several 

studies, including IEA's 2014 World Energy Outlook which support these conclusions and in 

some cases indicate that shifting to non-carbon based energy sources "is likely to increase, rather 

than slow, the growth of those economies." Commenters stated, "We conclude that the annual 

benefits of a more ambitious national standard for reduced carbon emissions could exceed $1 

trillion by 2030 if the labor productivity gains from reducing the future workforce's exposure to 

neurotoxins is fully accounted for." 

Commenters stated that jobs created by renewable energy resources nationally reflect the 

significant job creation potential of renewable energy compared to coal-fired power with the 

wind industry employing 80,000 and the solar industry employing over 140,000 people, a total of 

over 200,000 people compared to about 130,000 people employed nationally at coal mines and 

coal-fired power plants. The commenters stated that this impressive considering that solar and 

wind makes up about 8 percent of the electricity generation in the U.S (75 gigawatts), compared 

with the 40 percent currently generated by coal (310 gigawatts); on average, solar and wind 

generation employ a little over twice as many people per megawatt as coal generation. The 

commenters stated that if carbon emissions from coal are reduced and renewable energy 

potential developed, the state will reap significant economic, job, public health, and climate 

benefits. 

Commenters stated that North Carolina customers benefit from the increased use of lower-cost 

resources (energy efficiency and renewables) and the corresponding decrease in generation from 

higher-cost resources. The commenters stated that increasing energy efficiency above the EPACase level in the Moderate EE scenario has the effect of displacing 1,700 GWh of fossil 

generation in 2020, rising to 3,500 GWh in 2030. The commenters stated that as a result of even 

higher energy efficiency savings, the Advanced EE scenario displaces 3,700 GWh of existing 

fossil generation in 2020, and 6,600 GWh in 2030. The commenters cited a recent analysis by 

the Natural Resources Defense Council showing that EPA used outdated renewable energy cost 

and performance numbers, including levelized costs for both wind and solar energy that are 46% 

above current averages. The commenters stated that EPA should update cost and performance 
339

data for renewable energy resources in order to reflect the dramatic cost reductions that have 

occurred in recent years. The commenters stated that EPA should use those updated projections 

to more accurately quantify the amount of renewable energy that can be deployed at reasonable 

cost in North Carolina. 

Commenters stated that climate change impacts are closely linked to infrastructure damage, 

property damage, diminished agricultural production, diminished resource availability and poor 

air quality, all of which present severe economic and public health implications. The commenters 

stated that climate and weather events in 2012 alone cost the American economy more than $100 

billion, and the National Climate Assessment has projected that by the end of the century, the 

annual cost to the national economy of responding to sea level rise and flooding events could be 

as high as $325 billion. The commenters stated that when considering the annual implementation 

costs associated with the proposed rule (an estimated $7.3 billion to $8.8 billion in 2030), it is 

important to also consider the annual economic and health benefits (an estimated $55 billion to 

$93 billion in 2030). The commenters stated that since 1970, every dollar invested in compliance 

with the Clean Air Act has yielded $4-$8 in economic benefits. 

Commenters stated that failure to act to reduce greenhouse gas emissions will be costly and that 

action to reduce carbon emissions generates economic benefits. The commenters stated that 

California's Renewable Portfolio Standard (RPS) is projected to generate $60 billion in the 

California economy and create up to 235,000 jobs. The commenters stated that by 2015, Illinois' 

RPS is projected to bring nearly $6 billion in new investment and create over 5,000 jobs, while 

its Energy Portfolio Standard is projected to save the average household close to $100 a year, to 

stimulate nearly $5 billion in economic activity, and to create over 16,000 new jobs. The 

commenters stated that Maryland's portfolio of climate and energy programs would generate 

$1.6 billion for the state's economy and support 37,000 jobs. The commenters stated that 

Oregon's public purpose charge have produced the equivalent of 2,200 full-time jobs and added 

$2.7 billion to the local economy, while also saving utility customers $1.3 billion on their energy 

bills through reduced energy demand. The commenters cited other examples from 

Massachusetts, New York, and Washington. 

Commenters stated that while retail rates will increase slightly in Virginia, the lower household 

consumption counters that effect on the overall household bill and results in as much as an 8 

percent reduction in the average household bill. The commenters stated that the only "secondorder" job impacts that EPA evaluated are jobs in the coal mining and gas extraction sectors, and 

that EPA did not calculate "second-order" jobs associated with higher levels of renewable 

resources, so the figures represented in EPA's job impact numbers are conservative estimates of 

the true job creation benefits of the proposal. The commenters stated that that the Clean Power 

Plan proposal will overwhelmingly benefit Virginia, will result in net negative costs over nearly 

all years of the compliance period and will produce significant public health and economic 

benefits. 

Commenters stated that that the Guidelines exemplify well designed federal policy that can help 

drive innovation, create jobs for US workers, benefit US consumers and bolster international 

efforts to curb climate change. 
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Commenters stated that a more complete modeling of the clean power program's economic 

impacts shows that they would be enormously positive. The commenters stated that energy 

obtained by burning carbon is "cheap" relative to renewable forms of energy only when most of 

the costs of carbon-based energy are left out of the price of that energy. The commenters stated 

that while coal-fired power plants provide the direct benefit of slightly cheaper power than clean 

alternatives (a premise that will remain valid for only the next two or three years), the indirect 

costs of such costs are staggering. The commenters stated that this is because coal-fired power 

plants are essentially enormous toxin factories-an economic reality that has yet to be reflected in 

the price the power that they produce. The commenters stated that only by ignoring its enormous 

health and environmental impacts can coal-fired power be considered a "low-cost" energy 

source, the use of which promotes economic efficiency and job creation. 

Commenters stated that on average, preschool children in the United States have had their 

intellectual capacity reduced not just by 7 I.Q. points from their exposure to lead, but by another 

7 points from their exposure to methylmercury, for a combined reduction of 2 x 7 = 14 I.Q. 

points. The commenters stated that research suggests that while an increase of 1 standard 

deviation results in a 15% increase in average wages, it results in national productivity increases 

of approximately 150%, due to a multitude of external effects of intellectual capacity on 

productivity. The commenters stated that putting fresh data into the EPA's Integrated Planning 

Model yields a revised estimate that compliance with the Clean Power Plan would reduce CO2 

and related emissions for 2030 by 30% with respect to 2012 levels, reduce the annual costs to 

electric power to consumers by between $6.4 and $9.4 billion, and yield health and 

environmental benefits of from $64 to $99 billion due to the reduction in SO2, NOx, PM2.5 

emissions. The commenters stated that if the Clean Power Plan is not adopted, and coal-fired 

power plants are allowed to continue to inject neurotoxins into the environment at the current 

pace, the productivity of those entering the nation's workforce could be held to half what it 

would otherwise be. The commenters stated that a rough estimate of the reduction in GDP from 

lost productivity due to intellectual impairment from exposure to lead and methylmercury should 

begin with an annual measure of total labor output as a reflection of the value of what labor has 

produced. The commenters stated that total annual wages earned is a very conservative proxy for 

total labor output (because it excludes benefits, which are between one-fourth and one-third of 

wages, on average). The commenters stated that in 2013, total wages earned were slightly over 

$6 trillion. The commenters stated that the intellectual capacity of America's future workforce 

could be a full standard deviation higher, and its workforce's annual production would increase 

by $9 trillion, if its future workforce were spared all exposure to just two neurotoxins - methyl 

mercury and lead. The commenters stated that EPA conservatively estimates that the health care 

costs imposed on society as a whole from burning a ton of coal (which it calls the Social Costs of 

Carbon) would be $43 in 2020. The commenters stated that Social Cost of Carbon estimates 

indicate that the price of coal in 2020 would need to increase by from 82% to 105% if it were to 

cover its social costs. The commenters stated that if the external costs of coal were accounted for, 

they would double or triple the price of coal. The commenters stated if electricity produced from 

burning coal were priced to cover its social cost, the price would go up by 9-27 cents per 

kilowatt.

Commenters stated that a strong state plan should encourage investment in energy efficiency as 

well as renewable sources of energy - like solar, wind, biomass and geothermal and create local 

jobs that can't be exported, increasing demand for skilled workers such as electricians, heating 
341

and air conditioning installers, construction laborers and managers, and roofers and insulation 

installers. The commenters stated that by the end of 2014, the Missouri solar industry will have 

created more than 3,700 jobs and added $415 million to the state's economy in the last five years. 

The commenters stated that investments in wind energy would add millions of dollars in 

economic activity for Missouri while lowering electric bills. The commenters stated that offering 

energy efficiency programs is the cheapest way for utilities to meet electricity demand, far 

cheaper than building new power plants. The commenters stated that with a state plan that 

strongly emphasizes energy efficiency programs, Missouri is projected to add more than 3,900 

new efficiency--related jobs over the next five years. The commenters cited a Brookings Institute 

report (Sizing the Clean Economy) that the estimated median wage for each clean economy job 

in Missouri is $38,401 compared to $34,265 for all Missouri jobs, and a clean economy job in 

Missouri produces $27,868 on average in exports. The commenters stated that the financial 

impacts of failing to reduce our carbon output will negatively impact Missouri businesses. 

Commenters stated that U.S. manufacturers can be the leading global suppliers of cleaner cars, 

cleaner fuels, cleaner power, and technologies that improve industrial, power plant and building 

efficiency. The commenters stated that these initiatives will also serve to make our nation more 

secure by promoting geopolitical stability and helping to avoid resource shortages leading to 

confrontations and humanitarian crises resulting from climate disruption. 

Commenters stated that the CPP would spur innovation and efficiency. The commenters stated 

that the Clean Power Plan sends a strong market signal to the private sector to increase 

investments in clean, renewable energy and energy efficiency. The commenters stated that in 

Colorado, where solar and wind resources are some of the most abundant in the nation, this 

means broad-based economic growth and more jobs.

Commenters stated that we cannot afford not to regulate power plant emissions. The commenters 

cited the European Environment Agency (EEA), that air pollution in Europe cost society up to 

189 billion euros (about US $235 billion) in 2012 alone. The commenters cited Clean Air Task 

Force estimates that air pollution from coal-fired power plants accounts for more than 13,000 

premature deaths, 20,000 heart attacks, and 1.6 million lost workdays in the U.S. each year. The 

total monetary cost of these health impacts is over $100 billion annually. The commenters stated 

that the Clean Power Plan supports growth in the energy efficiency and renewable energy sector, 

which gives an opportunity for economic growth that offsets expenses associated with 

implementation. The commenters cited the National Resource Defense Council's updated 

analysis that the benefits -- in saved lives, reduced illnesses, and climate change avoided -- far 

outweigh the costs, by $21 billion to $53 billion in 2020. 

Commenters commented that increased renewable energy development will provide stable prices 

for electricity ratepayers, while expanding economic development throughout the West. The 

commenters observed first hand that renewable energy development has provided nearly 10,000 

jobs in Colorado alone, and these jobs are often located in rural areas where the dollars generated 

are multiplied throughout the economy. The commenters remarked that renewable energy 

facilities pump hundreds of thousands of dollars into rural county government and school 

coffers, increasing the quality of life and providing diverse economic stimulus. The commenters 

stated that increasing the targets for renewable energy will provide a boost for Western states to 

better enable them to meet these critical pollution reduction goals. 
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Commenters stated that investment in renewable generation and energy efficiency can drive job 

creation. The commenters stated that the fuel savings of renewable resources and energy 

efficiency improvements will lower utility bills for families and businesses and those savings 

will be spent on other goods and services, stimulating local economies, as states with strong 

energy efficiency programs are already experiencing. 

Commenters stated that energy efficiency and conservation are the fastest, cheapest, cleanest, 

and most reliable forms of energy resources. The commenters also stated that the job creation 

benefits of energy efficiency are significant; not only does energy efficiency create jobs doing 

the work of upgrading our infrastructure, the investments open up private capital to be reinvested 

in the economy, which has a multiplier effect on jobs. 

Commenters stated that a popular measure is to estimate jobs per dollar invested. The 

commenters stated that in the electricity space, a comparative analysis of efficiency compared to 

generation found that efficiency created twice as many jobs per dollar spent on nuclear power 

and 50% more jobs than coal and gas generation, and these large increases in economic activity 

lead to increases in employment. The commenters stated that the effect is magnified by the fact 

that the non-energy sectors of the economy are substantially more labor intensive than energy 

production, and the energy sector is less than half as labor intensive as the rest of the economy. 

The commenters puts forward that this effect is compounded where energy is imported (as in the 

U.S. transportation sector), and as consumers substitute away from energy, the goods and 

services they purchase stimulate economic and disproportionately large job growth. The 

commenters remarked that these efforts to model the economic impact of energy efficiency have 

proliferated with different models being applied to different geographic units, including states 

and nations. The commenters stated that the results differ across studies because the models are 

different, the impact varies according to the size of the geographic unit studied and because the 

assumptions about the level and cost of energy savings differ. The commenters noted that these 

differences are not an indication that the approach is wrong; on the contrary, all of the analyses 

conclude that there will be increases in economic activity and employment, and given that there 

are different regions and different policies being evaluated, we should expect different results. 

The commenters stated that, taken together, the overestimation of costs and underestimation of 

benefits lead to a substantial and systematic underestimation of the net benefits of efficiency 

gains, and because the impact of the efficiency improvements depends on (a) the size of the 

improvement and (b) the type of consumer durable being studied, (c) the sector in which it 

occurs and (d) the region being analyzed, one cannot offer a single, simple estimate. The 

commenters stated that the exact calculation of costs and benefits is likely to underestimate the 

benefit/cost ratio by a factor of at least two because of the failure to reflect the macroeconomic 

benefits and cost reducing trends, both of which are positive externalities of the adoption of 

performance standards. 

Response 13: Several commenters state that the benefits of the Clean Power Plan are overstated 

due to EPA’s failure to consider the negative health impacts associated with higher energy costs 

and unemployment. A number of other commenters conclude the benefits of the CPP are 

understated by EPA for a variety of reasons including:1) high costs associated with climate 

damages, 2) economic growth and jobs created with renewable and energy efficient technologies, 

3) increased revenues from economic growth for governments and school systems including 

rural communities from renewable and energy efficient technologies, 4) water savings associated 
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with less carbon intensive power generating technologies, 5) enhanced national security from 

greater geopolitical stability by addressing climate change, and 6) greater productivity of labor 

due to increases in the intellectual capacity of the US workforce.

The benefits, costs and economic impacts of the final CPP are estimated in the Regulatory 

Impact Analysis (RIA) included in the docket. In the RIA, EPA finds that the benefits of the CPP 

far outweigh the costs of the CPP. While these estimates are illustrative of the benefits and costs 

that may result from implementation of the CPP, the EPA believes these estimates are reasonable 

estimates of the benefit and costs of the action. States will make the final determination through 

their state plans as to how the sources will need to comply with the CPP. Thus, the final benefits 

and costs of the guidelines may differ from those reported to the extent that state plans differ 

from EPA’s implementation assumptions in the RIA. The EPA discusses the climate and human 

health benefits of the CPP in Chapter 4 of the RIA, the estimated costs and potential changes in 

price of energy (e.g., electricity prices) are reported in Chapter 3, and employment impacts are 

presented in Chapter 6. As discussed in Chapter 3 of the RIA, electricity prices are anticipated to 

increase by less than one percent by 2030 on a nationwide average basis, while actual electricity 

bills may fall for consumers who invest in energy efficient technologies. Regional differences in 

projected electricity price changes are likely to occur as reflected in chapter 3 of the RIA. In 

chapter 6, EPA discusses possible job impacts of the CPP and concludes that certain jobs may be 

lost in specific sectors such as coal mining, but job gains are likely in the energy efficiency 

sector. Thus the impacts on electricity prices and employment estimated by EPA do not match 

those assumed by the commenters that underlie their comment regarding negative health 

impacts. Further states will be able to address the economic interests of their utilities and 

ratepayers by using the flexibilities in the final CPP to design their state implementation plans. 

Regarding those commenters who believe EPA underestimated the benefits of the Clean Power 

Plan, EPA notes that Chapter 4 of the RIA presents the climate benefit estimates and a full 

discussion of the limitations in the SC-CO2 analysis, e.g., the incomplete way that integrated 

assessment models capture catastrophic and non-catastrophic impacts. See also Section 8.7.2, 

Comment 1, in the Response to Comments for EPA’s response to comments regarding omitted 

impacts from the integrated assessment models. EPA also reports job growth estimates relating 

to renewable energy and energy efficiency. The EPA does not directly analyze possible changes 

in the general economic activity in the nation in the RIA. However, the EPA does discuss 

potential impacts on secondary markets such as energy-intensive manufacturing in Chapter 5 of 

the RIA. In EPA’s continuing effort to advance the evaluation of costs, benefits, and economic 

impacts associated with environmental regulation, EPA has formed a panel of experts as part of 

its Science Advisory Board SAB to advise the Agency on the technical merits and challenges of 

using economy-wide economic models to evaluate the impacts of regulations that would provide 

estimates of change in general economic activity. The SAB panel of experts will consider a 

variety of issues related to the use of economy-wide modeling. Answers from the panel of 

experts will help EPA assess economy-wide economic impacts in the future. 

The EPA recognizes that less carbon intensive electric generation is generally less water 

intensive, but water usage was not directly analyzed in the RIA and actual changes in water 

usage will be dependent upon actual implementation of the CPP. (Please see 

http://www.epa.gov/cleanenergy/energy-and-you/affect/water-resource.html for more details on 

water usage associated with different types of energy generation.) The EPA agrees that climate 
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change impacts may create unstable situations throughout the world. See section II of the 

preamble of the final guidelines for more discussion of the impacts associated with climate 

change. Finally, any changes in intellectual capacity associated with the guidelines are not 

directly analyzed in the RIA.

Comment 14: Communities and markets adversely affected need support. 

Commenters stated that inclusion of mechanisms within the rule for labor and community 

adjustment assistance programs, or through federal legislation must be included. The 

commenters stated that unions are threatened by the damaging losses to private and unionsponsored health and pension plans that would result from energy market dislocations. 

Commenters stated that West Virginia can meet the goals of the Clean Power Plan and build a 

cleaner, more robust economy. The commenters stated that it will require leadership from all 

levels of government to ensure that America's coal producing states are not saddled with 

disproportionate compliance costs and economic burdens. 

Commenters stated that there is a need for special consideration for the families and communities 

facing the negative consequences of the transition to a cleaner, low carbon energy system. The 

commenters stated that some regions of our country are facing a heavier burden than others in 

accelerating the transition to a less fossil-intensive electricity system. 

Commenters stated that EPA considered regional differences in generation, fuel mix and public 

policy when setting state goals. The commenters stated the West Virginia has a 20% reduction 

target compared to the national 30% reduction target, and that integrating more natural gas, 

renewables, and energy efficiency resources with West Virginia's abundant coal resources will 

actually expand West Virginia's energy economy, support new jobs and provide consumers more 

control over their energy bills.

Commenters stated that states should help ensure that economic diversification and resources for 

worker transition are an important part of their plans, establishing a strong standard to protect the 

planet's climate, and ensuring that workers and communities have fresh economic opportunities, 

as market forces drive a shift away from coal.

Commenters stated that the current proposal does not do enough to secure maximum economic 

development potential for rural communities. The commenters stated that a reduction goal of 

26% in Nebraska falls short of the stringency needed to address the very real effects climate 

change is currently having on our ability to maintain a healthy economy in our rural

communities. The commenters stated that if fully developed, wind power is capable of meeting 

more than 118 times the state's current electricity needs. The commenters stated that the 

flexibility granted to states does not necessarily provide sufficient motivation for Nebraska to 

fully develop one of the best wind resources in the country. 

Commenters stated that Minnesota is on a clean energy path that is generally consistent with 

EPA's plan, and clean energy efforts in Minnesota have already resulted in some 15,000 jobs 
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accounting for over $1 billion in annual wages. The commenters stated that EPA should work 

with states to help provide clean energy training opportunities where appropriate. 

Commenters stated that water and wastewater utilities consume at least 1.8% of electricity 

nationwide and will face at least $414 million in increased electricity costs by 2020 due to the 

CPP. The commenters stated that an increase in the cost of electricity to water utilities from the 

CPP means that fewer funds will be available for other high priority activities (such as 

infrastructure repair) and/or that water and wastewater rates and charges will need to increase to 

offset the increased power cost. The commenters stated that a win-win scenario of reducing the 

financial challenges and furthering the overall goals of the CPP can be achieved by encouraging 

states to offer financial assistance/incentives to the water sector. 

Commenters stated that the impact of higher natural gas pricing goes well beyond the cost of 

electricity however as many manufacturing industries use gas as a fuel or raw material and 

recommended that EPA include these secondary cost impacts to manufacturing, as well as the 

heating cost impact for commercial and residential natural gas users, in the economic impact 

assessment for the proposed rule. The commenters stated that between 2002 and 2011, natural 

gas used for electricity generation was four times as expensive as coal and the U.S. Energy 

Information Administration (EIA) projects real natural gas prices to increase 31% between 2010 

and 2030. The commenters stated that those states with lower energy cost structures will be 

most at risk for higher rate increases and most energy intensive manufacturing is also located in 

states with low energy cost structures. The commenters recommended that EPA allow states the 

flexibility to mitigate the impact on energy intense industries, including flexible incentives for 

energy efficiency or cost offsets for increased energy prices.

Commenters stated that the U.S. must be prepared to provide direct support to workers and 

communities in the form of wages, benefits, training, education and recognition, and resources 

for communities to redevelop its economy to assist in the energy transition. The commenters 

added that although implementation may result in a net job creation, support must be extended to 

utility and ancillary and support sectors, if and when a power plant shuts down to provide a 

proper transition. 

Commenters stated that federal and state regulators must identify adequate funding sources for 

programs to assist workers and communities through training, wage benefits, expansion of 

existing economic development programs, and support for the development of new energy 

projects and technologies in communities most impacted. Commenters noted that while this 

historic shift in national energy policy will create new jobs in new industries, there is no 

guarantee that workers who may lose their existing jobs in coal-related industries will be the 

beneficiaries of these new jobs. The commenters further recommended that the final rule 

encourage the states to conduct state-specific job impact assessments in their State 

Implementation Plans and to provide detailed plans for mitigating any expected adverse impacts 

stemming from implementation of the rule on dislocated workers and their communities. The 

commenters stated that any regulatory policy that transfers the full cost of compliance onto 

standard workers and communities is bad policy.

Commenters suggested that EPA explore ways to promote the creation of good jobs during the 

transformation of U.S. power industry to a cleaner electric power industry. The commenters 
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stated that many workers now employed in certain parts of the energy sector will be displaced 

due to changes effected by this rule and steps must be taken to ensure that proper training, good 

benefits, family wage-incomes and a net gain in jobs result from this rule. 

Commenters stated that the federal government and the states should ensure that funding 

mechanisms are in place to support workers, as well as the communities whose livelihoods 

depend on fossil fuel-fired power plants, through the transition process. The commenters stated 

that eight counties in southeastern Kentucky have been designated as a "Promise Zone" to 

channel federal grants and assistance from various federal agencies, including housing, 

education, economic development, agriculture, and safety. The commenters stated that a useful 

precedent to consider is the Worker and Community Transition ("WCT") program, a Department 

of Energy ("DOE")-administered program that took place between 1994 and 2004 that targeted 

communities whose livelihoods were heavily dependent on the nuclear industry, and who faced 

displacement due to nuclear retirements. The commenters cited DOE estimates that with the 

funds awarded to these communities, they created a total of 50,934 jobs at a cost of $5,719 per 

job. The commenters stated that the federal government should take a leading role to ensure 

economic opportunities at the regional level are available to these workers and their 

communities, particularly in states without a strongly diversified economic base. 

Commenters stated that a just economic transition for coal workers and communities must be a 

central part of any strategy to address climate pollution. The commenters stated that a 

meaningful approach should include a fund for displaced workers, increased support for 

entrepreneurs and businesses, and investment in promising sectors including energy efficiency, 

renewable energy, agriculture, tourism, sustainable forestry, arts and culture and health care. The 

commenters stated that utilities should be required to maximize energy efficiency before 

pursuing more costly strategies like fuel switching. The commenters stated that an aggressive 

plan to upgrade our homes, schools, public buildings, businesses and industries could save 

Kentuckians millions of dollars and generate thousands of good new jobs. The commenters 

stated that the Clean Power Plan should specifically encourage and incentivize implementation 

strategies that emphasize job creation and energy savings in our most economically distressed 

communities. 

Commenters stated that while EPA estimates that there will be jobs created as a result of the 

proposed rule in the renewables sector and through energy efficiency, it is also clear that there 

will be negative job impacts related to the proposed rule as well. The commenters stated further 

that it is, therefore, essential that well-funded and consistent policies that support the 

maintenance and creation of jobs are developed alongside this rule, and these include worker and 

community training and transition programs with the goal of ensuring that impacted workers and 

their communities have a secure place in our economy. The commenters asked for EPA's 

continued support in this area as our union and others work to develop solutions to this 

challenge. 

Commenters urged President Obama and members of the Administration to ensure that workers 

displaced by CO2 reduction policies are afforded re-employment training.

Commenters stated that the coal mining industry, including union and non-union workers, 

showed up in force at the Denver hearings on the draft plan. The commenters stated that hasn't 
347

any answers for these workers concerned that climate efforts will cost them their jobs and 

livelihoods, resulting in suffering for their families and the decline of their communities. The 

commenters stated that they (the coal miners) acknowledged that the coal industry is much to

blame for its failure to invest in clean coal technologies. The commenters stated that whatever is 

to be done, government needs to address the plight of these workers and coal-dependent 

communities as part of our climate policies. The commenters suggested that some lessons might 

be drawn from the Pacific Northwest where logging economies are undergoing transformation. 

The commenters stated that all the mines won't shut down at once. The commenters also stated 

that listening and making resources available will go a ways towards making workers and 

families feel like somebody cares and they aren't just collateral damage, and policies should 

recognize that the labor force is not responsible for the industry's failure to retool or invest in its 

future. 

Response 14: Commenters assert that transition programs are needed in areas of the country that 

experience disproportionately high impacts due to the Clean Power Plan. Commenters discuss 

the need for special consideration for the families and communities facing the negative 

consequences of the transition to a cleaner, low carbon energy system. A number of commenters 

stated that specific regions of our country will face a heavier burden than others in accelerating 

the transition to a less fossil-intensive electricity system. EPA recognizes that certain areas of 

the country may experience greater impacts than others. With regards to impacts associated with 

potentially higher electricity prices, the final rule ensures that bill-lowering measures such as 

demand-side energy efficiency (EE) continue to be a major compliance option. In addition, to 

ensure opportunities for communities, particularly citizens who could be impacted by decisions, 

to continue to participate in decision making, EPA takes steps to ensure that states are actively 

engaging with communities as part of their public participation process in the formulation of 

state plans. 

EPA plans to maintain regular contact/forums with states throughout the implementation process 

and to provide training and guidance. The EPA will continue outreach throughout the plan 

development and submittal process to provide states, local governments and affected 

communities with an understanding of the rule requirements, and to provide efficiencies where 

possible and reduce the cost and administrative burden. 

In section IX.C of the final rule preamble of the CPP, the EPA outlines programs that RGGI and 

the State of Maryland having been employing that assist low income communities in increasing 

their ability to access renewable energy, EE and financial assistance programs. The EPA 

encourages that states consider these approaches and other models in developing their plans. 

Additionally, as stated in the preamble, the EPA in the coming months, will continue to provide 

information resources for affected communities and states on existing federal, state, local, and 

other financial assistance programs to encourage EE/RE that are already available to 

communities. The EPA will also provide a catalog of current or recent state and local programs 

that have successfully helped communities adopt EE/RE measures. The goal of these resources is 

to help affected communities gain the benefits of this rulemaking by encouraging that states use 

these types of tools in their state plans. In addition to providing resources to states, the EPA 

encourages states to be aware of existing efforts undertaken by other states aimed at providing 

low-income communities access to financial and technical assistance programs for EE and RE, 

and to consider similar approaches that may make sense for their own states. There are also 
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many federal programs that can help low-income populations access the benefits of renewable 

energy, energy efficiency, and the economic benefits of a cleaner energy economy. 

The EPA recognizes the potential impacts that this rulemaking could have on jobs in 

communities. Therefore, in section VIII.G of the final rule preamble, the EPA has outlined that 

states, in designing their state plans, should consider the effects of their plans on employment 

and overall economic development to realize the opportunities for economic growth and jobs that 

the plans offer. To the extent possible, states should try to assure that communities that may be 

expected to experience job losses can also take advantage of the opportunities for job growth or 

otherwise transition to healthy, sustainable economic growth (e.g., with regard to delivering 

energy efficiency measures and installing rooftop solar panels). Additionally, as part of the 

resources that we will be providing to states and low-income communities, the EPA will provide 

information on the White House’s POWER Initiative and other programs that specifically target 

economic development assistance to communities affected by changes in the coal industry and 

the utility power sector.10 

Comment 15: Rules may have a negative or positive impact on the economy and economic 

growth. 

Commenters stated that members of the local community cannot afford higher energy prices,that 

the members pay a disproportionately high percentage of their income for energy, and that 

energy bills the can represent up to 71 percent of family incomes prior to energy assistance 

programs. The commenters stated that increased costs will slow economic growth, reduce job 

opportunities, and force families to make tough budget decisions. 

Commenters stated that the proposed rule will increase energy costs and reduce the diversity of 

our nation's electricity supply and impede the nation's economic recovery and stifle future 

growth. The commenters stated that EPA estimates annual compliance costs between $5.4 and 

$7.4 billion in 2020, hitting $8.8 billion in 2030; but these numbers include only future power 

sector compliance costs, failing to capture the residual impacts of higher electricity rates on 

overall economic activity. Citing a recent Wall Street Journal editorial and an HIS study, the 

commenters stated that raising the price of carbon energy will also raise costs across the 

economy, which will ultimately flow to consumers and businesses resulting in slower economic 

growth, job losses, and less disposable income. The commenters stated that the IHS estimates 

that the rule will result in an additional $289 billion in cumulative electricity payments by 

consumers from 2014 through 2030; a loss of 224,000 jobs on average through 2030; more than 

$50 billion in average annual GDP loss through 2030, with a peak GDP loss of nearly $104 

billion in 2025; and from 2014 through 2030, a cumulative reduction of $586 billion in 

disposable income. The commenters stated that families will have less disposable income as they 

spend more to light and heat their homes, with middle-income and lower-income Americans 

being hit the hardest. According to the commenters, in 2001, lower-income households spent 16 

percent of their after-tax income on energy and in 2014, these households will spend 26 percent 

 

10 http://www.eda.gov/power/.
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of their budgets on energy (before taking into account any energy assistance programs). The 

commenters stated that lower-income families are especially vulnerable because energy costs 

represent a larger portion of their budgets and reduce the amount of income they can spend on 

food, housing, health care, and other necessities.

Commenters stated that the 16 states in the Southern States Energy Board region currently 

produce over 50 percent of the U.S. energy supply, and $5 trillion of the nation's $16 trillion 

economic output with a commensurate number of high quality jobs in the manufacturing and 

agriculture sectors with much lower electricity rates and higher economic growth than states with 

self-imposed carbon limits. 

Commenters stated that EPA did not conduct a rigorous cost/benefit analysis, and therefore has 

likely under-estimated the costs to many states' economies. The commenters stated that the 

Regulatory Impact Assessment (RIA) did not incorporate the price risk associated with increased 

reliance on historically price-volatile natural gas. The commenters estimated that state GDP 

would be reduced by $2 billion with a ten percent increase in the cost of electricity. The 

commenters stated that the final rule should include a "safety net" provision that would allow 

states that have increased exposure to natural gas price volatility to be able to dispatch their 

remaining coal-fueled fleet, if doing so will offset rate impacts that exceed ten percent. 

Commenters stated that EPA is essentially capping the amount of national electricity 

consumption in 2030. The commenters stated that the possibility of long-term low-to-moderate 

prices of natural gas could lead to an industrial and manufacturing renaissance and significant 

increases in industrial consumption of electricity. The commenters stated that the nation must be 

careful not to impede this economic growth due to consumption targets that are essentially 

imposed by the EPA's proposal, and may have unintended consequences, including limiting 

economic opportunity for many Americans. 

Commenters stated that by setting state-by-state goals for climate pollution reductions, the EPA 

is providing the states with the flexibility needed to develop innovative plans designed to spur 

job growth in the clean energy sector, lower consumer utility costs and improve health outcomes. 

The commenters noted that New York State is uniquely positioned as a leader on this front, and 

the state already has strict power plant carbon pollution standards for yet to be built plants and 

our participation in the Regional Greenhouse Gas Initiative (RGGI) - and the successful clean 

energy and energy efficiency programs it has spawned - are being showcased as a national 

model. Commenters stated that today in the RGGI region, climate pollutant emissions from the 

power sector are more than 40-percent lower than they were when RGGI was initiated in 2005. 

The commenters noted that new rules implemented in 2014, lowered the regional carbon cap by 

45-percent, locking in emission reductions already achieved and placing the region on a path to 

cut carbon pollution by an additional 10-percent by 2018. Commenters further stated that the 

multi-state initiative operates as a carbon cap and trade program, with power plant owners 

required to purchase allowances for each ton of CO2 produced. RGGI allowance auctions have, 

thus far, generated over $1.84 billion. The commenters noted that those funds have been sent 

back to the states where they have been invested in a variety of consumer benefit initiatives, 

including energy efficiency, renewable energy, direct bill assistance, and climate pollution 

reduction programs. The commenters stated that New York has benefitted from nearly $700 

million in auction proceeds, of which over $400 million has been allocated to renewable power, 
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efficiency and clean energy technology and market innovation programs - creating jobs, 

lowering consumer costs and driving further reductions in emissions. The commenters estimates 

that to date, RGGI programs have provided energy bill savings and other benefits to more than 

130,000 households and 2,500 businesses spanning all of New York State's 62 counties. 

Commenters stated that with 63,896 employees, the combined employment impacts of the coal 

industry, associated transportation and power generation industries account for 11.3 percent of 

employment by private industry in West Virginia. The commenters stated that at $6 billion, the 

combined direct impacts amount to nearly 9 percent of GSP and including the multiplier effect of 

spending by these industries and households employed by the industry, the impact amounts to 

$8.8 billion or 12.7 percent of GSP. The commenters stated that taxes paid by the coal industry 

are estimated at $638 million in 2012, including property taxes, severance taxes, workers' 

compensation, net income, and personal income taxes paid by industry employees and others.

Commenters cited research at the University of Nebraska-Lincoln that coal as a generating 

resource for electricity, combined with its transportation, primarily by rail, generates about $4.9 

billion in output, including $1.4 billion in labor income, and more than 22,800 jobs for the state. 

Commenters stated that solar power systems are expected to generate more than 20,000 GWh in 

2014, and in the Southeast alone, there is nearly one gigawatt of solar capacity currently 

operating. The commenters stated one GWh of solar generation eliminates 690 metric tons of 

CO2 emissions; across the nation, solar generation is expected to avoid 13.8 million metric tons 

of CO2 emissions in 2014. The commenters stated that solar technologies consume no fuel, 

thereby shielding customers from the fuel price volatility risks associated with fossil fuel 

generation. The commenters stated that solar photovoltaic consumes no water, and solar energy 

provides substantial air and water quality benefits. The commenters stated that the 515 MW of 

new utility scale solar for which Georgia Power Company is currently seeking PSC approval 

were offered at an average price of less than 6.5 cents per kWh, well below utility's avoided costs 

- providing, in the utility's words, "overwhelming benefit" to customers in the form of cost 

savings. The commenters stated that solar power investments create jobs and increase economic 

investment. The commenters stated that there are nearly 143,000 Americans working in the solar 

industry, a 20 percent increase since 2012 and that there are now more Americans working in the 

solar industry than mining coal. 

Commenters stated that Federal regulations have already forced two plants in his district to close 

over the last two years. The commenters cited a National Mining Association projection that 

more than 300 plants would retire nation-wide due to EPA rules over the next six years. The 

commenters cited a Heritage Foundation study predicting that the EPA's anti-coal policies could 

terminate 600,000 American jobs by 2023 while causing economic growth to drop by more than 

$2 trillion. 

Commenters stated that under the proposed guidelines, EPA projects that its proposed Clean 

Power Plan will increase electricity prices by a nationwide average of 4 percent to 7 percent, will 

increase natural-gas prices by 9 percent to 12 percent, and will cause the retirement of 46,000 

megawatts to 49,000 megawatts of coal-fueled electric-generating capacity. The commenters 

stated that the EPA's proposal will have a major impact on energy resources, electric ratepayers, 

jobs, and the economy of the Midwest region. 
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Commenters stated the Plan callously disregards the impact of increased energy costs that have a 

domino impact on every step in the supply chain resulting increased costs of our goods and 

services, reduced competiveness and job losses.

Commenters stated that as plants close or scale back operations, the loss of jobs and tax income 

in communities across the region will be a significant blow to the economy. 

Commenters stated that EPA's analysis of the employment impacts of the Proposed Rule was 

arbitrary and capricious because EPA only evaluated employment impacts in a few select 

industries. The commenters stated that EPA's partial economy model failed to address impacts 

in the communities that support coal-fired electricity generation and on consumers of electricity. 

The commenters stated that a whole economy model must include employment across a wide 

range of sectors, sufficient detail at the regional level to identify changes in the regional 

distribution of output and employment, international trade flows to evaluate how regulations will 

affect tradable sectors and dynamic analyses to examine adjustments in labor and capital markets 

in response to regulations over time. 

Commenters stated that manufacturers rely on secure and affordable energy to compete in a 

tough global economy, and that manufacturers' recent gains are largely due to the abundance of 

affordable energy we now enjoy. The commenters stated that manufacturers across CSX's 23-

state network, have invested more than $14 billion in rail-served facilities, creating more than 

14,000 jobs over the last five years. The commenters stated that in 2013, $3 billion in customer 

investments generated more than 1,600 new job opportunities. The commenters stated that 

economic productivity and environmental progress could be undermined by the Proposed Rule 

and EPA's failure to analyze foreseeable economic impacts. 

Commenters stated that a shift away from coal will significantly increase the cost of electricity, 

and that in turn will have a very significant cascading impact on GDP. The commenters stated 

that that increased costs of electricity will translate into fewer jobs for Americans in all sectors of 

the economy. 

Commenters cited a study by the Heritage Foundation that EPA's energy regulations would cost 

hundreds of thousands of jobs and cause a significant decline in personal income while having a 

minimal impact on global warming. The commenters stated that these regulations would reduce 

aggregate gross domestic product by more than $2.5 trillion between now and 2030, and 

employment would track nearly 300,000 jobs below the no-carbon-regulation baseline in an 

average year, with some years seeing an employment deficit of more than 1 million jobs. The 

commenters cited a NERA study estimating that the costs to comply with EPA's proposed plan 

could total $366 billion, or more and finds that 43 states will have double-digit electricity price 

increases. 

Commenters stated that the primary concern of the IUOE is that the regulation could cause job 

loss for its members, eliminating high-quality, family-sustaining jobs, which could affect broader 

swaths of the economy and drag down overall economic performance. 

Commenters stated that the drastic reduction in coal generation will cost 52,000 direct and 

100,000 indirect jobs. The commenters stated that MATS and the CPP will close 40% of the coal 
352

generation that exists today, and eliminate 400,000 or more irreplaceable American jobs. The 

commenters stated that under the CPP Colorado will not receive credit for plant closures already 

made and will be forced to close at least three additional coal-fired plants. The commenters 

stated that in at least 22 other states the impact of the CPP will not be limited to the coal sector. 

Commenters estimated that roughly 6% of its members will lose their jobs if the Clean Power 

Plan is finalized in its current form. The commenters stated that local power plants provide jobs 

for hundreds, and often times, thousands of workers. The commenters stated that the CPP will 

influence the cost of electricity for residents and businesses, impacting regional growth, 

employment, taxes, and wages. The commenters predicted that more than 500 coal-fired power 

plants will be shut down, and 41GW-49GW of coal-based electric generating capacity would be 

closed by 2020. 

Commenters stated that during the period 2001-2013, while its energy costs escalated, California 

lost 650,000 manufacturing jobs--approximately one-third of all California manufacturing jobs. 

The commenters stated that 34 percent of the nation's welfare recipients live in California. The 

commenters stated that California has shown the disastrous consequences of abandoning coal as 

an energy source and pushing jobs for the working class out of its borders, often to Mexico and 

other countries. The commenters stated that that Missouri is at the crossroads between the South 

and Midcontinent Independent System Operator power regions, which are expected to incur 

"over half the U.S. total costs during the 2014-30 timeframe," and "will shoulder more of the 

economic consequences of compliance." 

Commenters stated that Americans will be hit repeatedly with higher prices as businesses pass 

higher costs onto consumers. The commenters stated that if a company had to absorb the costs, 

high energy costs would shrink profit margins and prevent businesses from investing and 

expanding. The commenters stated that cutbacks result in less output, fewer new jobs, and less 

income. The commenters stated that the impact of a revenue-neutral carbon tax starting at $37 

per ton in 2015 through 2030 would be substantial, including an average employment shortfall of 

nearly 300,000 jobs; a peak employment shortfall of more than 1 million jobs; 500,000 jobs lost 

in manufacturing; an aggregate GDP loss of more than $2.5 trillion (inflation-adjusted); and a 

total income loss of more than $7,000 per person (inflation-adjusted). The commenters stated 

that the Energy Information Administration (EIA) has analyzed the economic impact of a 

$25/ton carbon tax using essentially the same model and found more than $2 trillion in lost GDP 

from 2014 to 2030 and a peak employment differential of 1 million lost jobs. 

Commenters stated that in Utah, coal-fueled electricity is responsible for meeting approximately 

80% of the state's energy needs, and it is crucial that Utah maintains the economic development 

competitiveness that coal provides. The commenters stated that the coal mining industry is one 

of the most important industries in the State of Utah, due not only to the number of jobs 

supported by the coal industry, but also to the economic linkages with other sectors of the 

economy and the high wages in the mining industry relative to other sectors of the Utah 

economy. The commenters stated that these high-paying coal mining jobs are located in a rural 

part of the state in which it would be difficult, if not impossible, to replace them. 
353

Commenters stated that the CPP will drive manufacturing and jobs out of state and overseas. The 

commenters stated that the proposed rule will impose costs on U.S. businesses in numerous ways 

without meaningfully reducing global GHG emissions. 

Commenters stated that the proposed rule will create jobs. Commenters supported the Clean 

Power Plan and stated that it will save jobs, help protect farming, fishing, forestry and other rural 

resources undeniably impacted by carbon pollution, and reduce the job-killing impacts of carbon 

pollution. The commenters further stated that the solar energy employs roughly twice as many 

people as the coal mining industry, and added that other renewable resources also add jobs. 

Commenters also supported the Clean Power Plan because it provides an opportunity for more 

research, manufacturing and construction jobs, more efficient and less costly energy, cleaner air, 

improved health outcomes and more. 

Commenters stated that the potential positive impacts of capping carbon pollution in Colorado 

could add $622 million to the economy and create over 9,000 jobs.

Commenters stated that there are significant benefits in addition to GHG emission reductions 

that can be achieved with energy efficiency programs and that energy efficiency programs can be 

deployed at a level consistent with EPA's assumed levels for the fourth building block. The 

commenters stated that in Rhode Island, 544.73 full-time equivalent (FTE) employees had work 

in 2013 as a result of its investments in energy efficiency programs to electricity and natural gas 

customers, and since most of those jobs were tied to installations at customer homes or 

businesses, the jobs were grown locally. 

Commenters stated that compliance with the Clean Power Plan will generate additional jobs and 

spur business growth in North Carolina. The commenters cited an analysis prepared by ICF 

International, Inc. for the Natural Resources Defense Council, the Clean Power Plan can create 

approximately 6,700 jobs in North Carolina. The commenters stated that there are now more 

Americans working in the solar industry than are currently working as coal miners. 

Commenters stated that the RIA does not capture various indirect employment impacts and 

provided an economy-wide assessment of the rule's impact on employment that captured the 

employment impacts of the rule not only for directly affected industries (similar to EPA) but also 

for industries that may be indirectly affected by the rule. The commenters estimated that the 

GDP and employment effects of the rule are small but positive. The commenters stated that by 

2025, total employment would increase by more than 200,000 and increase by 263,000 by 2040. 

The commenters stated that the increases in electricity efficiency brought about by the rule 

represent increases in multi-factor productivity, which stimulates the economy by raising its 

potential supply (how much output can be produced with given resources). The commenters 

stated that the efficiency investments are a cost to some industries and consumers, but represent 

increased demand for the industries producing the goods and services necessary to accomplish 

those investments. The commenters stated that reductions in electricity demand have negative 

impacts on employment and investment in the electric power industry, as well as on output and 

jobs in the coal and gas producing industries. The commenters estimated that carbon emissions 

would fall to 5104 million tons by 2040 under the proposed rule, compared with 5710 million 

tons in the reference case, with most of the reduction is in the electric power sector. 
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Commenters stated that three years after Missouri's Renewable Energy Standard was enacted, 

there were over 68,000 clean energy related jobs in the state. The commenters stated that the 

solar industry alone in Missouri supports 3,700 jobs statewide. The commenters stated that with 

the added influence of the EPA's Clean Power Plan this number is sure to grow and have a 

positive impact on Missouri. The commenters stated that raising Missouri's goal of 21% by 2030 

and including strong standards for enforcement will only help grow Missouri's economy and 

keep our workforce employed. The commenters stated that lowering the rate of unemployment in 

Missouri will increase the tax base and reduce the number of people filing unemployment 

claims, creating an insurgence of funds for schools, parks, libraries, roads, and other necessary 

areas of public spending in the state. The commenters stated that Missouri will benefit greatly 

from reducing its reliance on out-of-state coal. The commenters stated that Missouri spends $1.6 

billion importing coal from surrounding states and does not mine any of its own fuels. The 

commenters stated that the Farmers City Wind Power Project in Atchison County is a 146 

megawatt wind farm that created 150 jobs during construction, generated up to $1 million in 

local tax revenue, and pays $365,000 annually to the landowners who leased their property to the 

wind developer. The commenters stated that in Holt County, Missouri, another $400 million 

project is expected to come online in 2015, creating another 300 jobs in rural Missouri and 

lessening our reliance on imported coal. 

Commenters stated that the cost of doing nothing is far greater than that of the CPP, exceeding 

the capacity of local communities and our economy. The commenters stated that the expansion 

of energy efficiency and renewable energy generation will spur economic growth and create jobs 

in installation and maintenance which cannot be outsourced abroad. 

Commenters stated that the Clean Power Plan rule will boost bottom lines and help create jobs as 

states look to comply with the standards and achieve reductions through various measures. The 

commenters supported the compliance flexibility inherent in the rule. The commenters cited an 

American Council for an Energy Efficient Economy (ACEEE) report finding that energy 

efficiency investments alone could increase national gross domestic product by $17.2 billion in 

2030, and produce a net gain of about 611,000 jobs, with all 50 states seeing net job creation, all 

at no net cost. The commenters stated that a review of the Northeast's Regional Greenhouse Gas 

Initiative (RGGI) program by the Analysis Group found that over the first three years, the 

program created more than 16,000 additional jobs with each of the 10 states showing net job 

additions. The commenters stated that 56 percent of small business owners still support EPA's 

regulations even if it would cause utility rates to rise. The commenters stated that small 

businesses are strategically positioned to help states achieve their carbon reduction goals, 

igniting job creation opportunities and cost savings along the way. The commenters stated that 

business opportunities exist with respect to modernizing inefficient power plants and buildings as 

well as operation new, cleaner and more efficient power plants; conducting energy audits and 

retrofitting residential as well as commercial buildings to be more energy efficient; and 

developing new and innovative technologies throughout the supply chain. The commenters 

stated that ACEEE conducted an analysis and found that by 2030 the rule could induce over 

$625 billion of investment in various energy efficiency industries and behaviors, and create an 

average of over 400,000 jobs per year both directly and throughout the economy. The 

commenters cited an Analysis Group report that while the Regional Greenhouse Gas Initiative 

(RGGI) program costs initially increased electricity rates, the impact of energy efficiency 

investments (using RGGI allowance revenues) significantly reduced commercial and residential 
355

electricity use, placing downward pressure on rates over time, and combined with lower 

consumption, tended to generate on average much lower electricity bills. 

Commenters stated that the exponential growth of renewable energy is both a cause and a 

product of rapidly falling costs. The commenters stated that as the renewable energy market has 

increased in scale, costs have come down. The commenters stated that wind and solar costs have 

come down at a much faster rate than conventional sources and as the renewable energy market 

continues to increase in scale, even more cost reduction is a confident expectation. The 

commenters stated that the wind-power industry employs over 80,000 workers in the U.S., a 

number that can double with the right policies. The commenters stated that the U.S. solar 

industry employed 142,698 Americans as of November 2013, a 19.9% growth in employment 

since September 2012.The commenters stated that the geothermal industry supports over 20,147 

jobs. The commenters stated that America's biomass and waste-to-energy industries provide 

25,000 jobs nationwide. The commenters stated that energy storage systems (ESS) technologies 

are key to addressing the variability of renewable resources not managed by intelligent systems 

by allowing power to be stored and then deployed as needed, thereby foregoing the need for 

fossil-fuel powered back-up generation facilities, and ESS could also provide critical backup 

power to the grid in times of peak usage or outages without the need for fossil-fired backups. The 

commenters stated that the Department of Energy has set a conservative estimate of 5 GW of 

new storage by 2022 and expects the ESS industry to grow by several billion dollars. The 

commenters stated that others have found that the potential for 47 GW (including 25 GW of 

battery storage) of ESS by 2030.

Commenters stated that the U.S. has an estimated 3.4 million clean jobs as of 2013 - a number 

which is steadily growing. The commenters stated that in the last two years it has tracked nearly 

600 clean energy and clean transportation project announcements that could create more than 

210,000 jobs when completed. The commenters stated that over the last four years, wind 

generation has doubled and solar capacity has grown by a factor of five, and both have reduced 

costs by close to 40 percent. The commenters stated that the Clean Power Plan will accelerate 

this growth if designed to maximize private and public investment. The commenters stated that 

since 2008, the states participating in RGGI gained more than $1.6 billion in economic value, 

consumers saved $1.1 billion on electric bills, and over 16,000 jobs were created. 

Commenters stated that jobs created by renewable energy resources nationally reflect the 

significant job creation potential of renewable energy compared to coal-fired power with the 

wind industry employing 80,000 and the solar industry employing over 140,000 people, a total of 

over 200,000 people compared to about 130,000 people employed nationally at coal mines and 

coal-fired power plants. The commenters stated that this impressive considering that solar and 

wind makes up about 8 percent of the electricity generation in the U.S (75 gigawatts), compared 

with the 40 percent currently generated by coal (310 gigawatts); on average, solar and wind 

generation employ a little over twice as many people per megawatt as coal generation. The 

commenters stated that if carbon emissions from coal are reduced and renewable energy 

potential developed, the state will reap significant economic, job, public health, and climate 

benefits. 

Commenters stated that EPA should consider the costs to manufacturers, consumers, and the 

economy against the limited benefits to the environment when proposing rules and regulations. 
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The commenters stated that business and consumers are not opposed to the programs that benefit 

the environment, but oppose efforts that produce an undue burden on the economy. 

Commenters stated that the proposed rule does not sufficiently allow for population growth, or 

economic growth. The commenters stated that the proposed rule will result in higher natural gas 

prices and therefore electric rates to customers, which in turn may stifle growth. 

Commenters stated that natural gas fired electric generation throughout the United States will far 

exceed that which EPA anticipates in its CPP and that prices will spike as a result of the CPP 

The commenters stated that natural gas-fired generation in Oklahoma will more than double by 

2020, which will place significant upward pressure on natural gas commodity and transportation 

prices. The commenters stated that the EPA has failed to fully assess the direct and substantial 

indirect impacts the CPP will have on the economy as well as the day-to-day functioning of 

society thereby disregarding these price impacts. 

Commenters cited the U.S Chamber of Commerce's estimates on increases in electricity costs 

($17 billion increase annually, $289 billion by 2030), losses in disposal annual income 

($3,400.00 decrease in typical household annually, $586 billion by 2030), losses in investments 

and GDP (over $50 billion annually), and increases in compliance costs for electricity providers 

($28 billion annually, $480 billion by 2030). The commenters also cited the Heritage 

Foundation's estimates that aggregate GDP losses would reach $2.23 trillion by 2023. The 

commenters further stated that EPA's estimated $5.5 billion annual compliance cost is 

unrealistic. Additionally, the commenters stated that low income families and fixed-income 

seniors would be disproportionately affected and that compliance costs would be passed on to 

consumers or shareholders in the form of reduced return on investments. 

Commenters stated that the proposed rule would result in a myriad of economic impacts. 

Commenters cited the following economic impacts associated with the proposed plan: increased 

cost of electricity, increased price volatility, decreased grid reliability, increased costs and 

uncertainty associated with securing natural gas transmission rights, and the potential for 

financial harm to electricity association members if coal power is curtailed. 

Commenters proposed that implementation of the rule would cause serious economic harm, 

reduce energy diversity, increase electricity prices, jeopardize grid reliability, result in major job 

losses, hinder coal technology advances and fail to achieve the administration and EPA's goal of 

global leadership on CO2. 

Commenters expressed concern that the rule would substantially increase electricity and natural 

gas costs, create liability problems, put the manufacture sector at risk, and reduce good paying 

jobs with relatively small global climate impact. The commenters cited EPA"s estimates that the 

proposed rule would reduce 730 million metric tons of carbon by 2030 but then stated that China 

increased its emissions nearly that same amount in one year. 

Commenters stated that the Clean Power Plan goals, building blocks, and modeling demonstrate 

that some regions of the country will be more dramatically impacted by the GHG emissions 

requirements, and the SSEB region is one such example. The commenters stated EPA needs to 
357

consider the economic health of the region and its impact on the vibrancy and security of the 

national economy. 

Commenters stated that nuclear plant construction can be viewed as SCE&G's plan for reducing 

carbon emissions by reducing the need for new coal plants and enabling older coal plants to be 

retired. The commenters stated that the cost to consumers for this private utility effort to "reduce 

carbon emissions" has been an increase in rates of 11.82 percent since 2009, and additional rate 

increases are expected. The commenters stated that South Carolina consumers, residential and 

commercial, have seen a 37 percent hike in electricity rates in the last 5 years. The commenters 

stated that South Carolina has the fastest growing economy on the East Coast and the lowest 

unemployment rate in six years. The commenters stated that heavy investments in alternative 

energy can be done without hurting the economy, even when electricity rates increase 

dramatically, and that high-paying construction jobs created by investing in nuclear energy have 

helped South Carolina's economy. The commenters stated that these investments in alternative 

energy will protect us from the future negative effects of climate change that are guaranteed to 

hurt our economy and cost jobs. 

Commenters stated that the cost estimates fail to reflect or capture the subsequent adverse 

spillover impacts of higher electricity rates on our nation's overall economic activity. The 

commenters cited an analysis by NERA Economic Consulting indicating that average U.S. 

electricity prices would increase by 12% per year and the total costs of the rule could be between 

$366 billion and $479 billion over a 15-year timeframe. The commenters stated that many of 

these costs will have to be absorbed by residential, commercial and industrial energy consumers. 

The commenters stated that higher energy prices disproportionately harm low-income and 

middle-income families. The commenters stated that the Proposed Rule would result in a direct 

loss of 52,000 jobs in the electric utility, mining and rail sectors due to plant closures. The 

commenters stated that an additional 100,000 indirect jobs are at risk for loss in communities 

affected by the closures, and that job losses would be concentrated in, "relatively poor, rural 

areas that are least able to afford the loss of high-wage skilled jobs." 

Response 15: Commenters said that economic growth in the US would be negatively impacted 

for a variety of reasons. These reasons included impact on household’s energy costs, higher 

energy costs, plant retirements, and higher prices. Other commenters think the rule will enhance 

the economy and lead to economic growth. Reasons given for higher growth include higher 

energy efficiency, higher employment potential of renewable energy as compared to coal 

production, and renewable energy leading to falling costs.

The EPA did not quantitatively estimate impacts of the Clean Power Plan on national economic 

growth. Economic growth will be enhanced in some sectors and diminished in others. Without 

quantitative estimation of growth it is not possible to address the net effect on growth. One 

potential approach to address the rules impact on economic growth is to use a computable 

general equilibrium (CGE) model or economy-wide model. CGE models are able to provide 

aggregated representations of the whole economy in equilibrium in the baseline and potentially 

with regulation in place. 
358

When considering the economic impacts of a regulation both the effects of the costs, the benefits 

of improved air quality, and their interaction may be relevant. Therefore, in the Second 

Prospective Analysis under Section 812 of the Clean Air Act Amendments the EPA incorporated 

a set of health benefits arising from air quality improvement into the EMPAX CGE model when 

studying the economy-wide impacts of the Clean Air Act. While the external Council on Clean 

Air Compliance Analysis (Council) review of this study stated that inclusion of benefits in an 

economy-wide model “represent[ed] a significant step forward in benefit-cost analysis”, the EPA 

recognizes that serious technical challenges remain when attempting to evaluate the benefits and 

costs of potential regulatory actions using economy-wide models. 

In light of these challenges, the EPA has established a Science Advisory Board (SAB) panel on 

economy-wide modeling to consider the technical merits and challenges of using this analytical 

tool to evaluate costs, benefits, and economic impacts in regulatory development. The panel will 

also be asked to identify potential paths forward for improvements that could address the 

challenges posed when economy-wide models are used to evaluate the effects of regulations. The 

final panel membership was announced in March 2015 and the first of multiple face-to-face 

meetings of the SAB panel has been scheduled for October 2015. The EPA will use the 

recommendations and advice of this panel as an input into its process for improving benefit-cost 

and economic impact analyses used to inform decision-making at the agency.

Comment 16. Commenters stated that biomass is sustainable and provides economic benefits.

Commenters stated that the historical standing biomass stocks in the U.S. are evidence that 

biomass is a sustainable and carbon neutral feedstock that adapts to new markets. The 

commenters stated that biomass, when properly managed, maintains supply volumes. The 

commenters stated that Biomass removals in the South more than doubled between 1952 and 

2006 and biomass supply (i.e. growing-stock volume) also increased during this time period. 

Commenters stated that the inclusion of forest-derived biomass feedstocks in the Clean Power 

Plan creates economic development opportunities across many sectors and throughout the supply 

chain. The commenters stated that an increase in biomass feedstocks coming from sustainably 

managed forests would provide economic stimulus and job growth beginning with the individual 

forest owner and carrying through the logging, transportation and electricity generation 

industries. 

Commenters stated that biomass co-firing in the U.S. Southeast is estimated to create 6 times the 

jobs lost from reduced coal demand, due to the increased labor needed for biomass supply 

chains. The commenters stated that a 500MW coal plant supports 2,540 direct jobs, while a 

500MW biomass plant supports 3,480 jobs. 

Commenters stated that bioenergy is a costly way to "reduce" CO2 emissions as biomass power 

plants are expensive to build and require substantial and ongoing infrastructure investments. The 

commenters stated that bioenergy is substantially more expensive than onshore wind, per 

kilowatt-year, including both the initial infrastructure investment and ongoing fixed and variable 
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costs. The commenters stated that replacing some coal with low levels of biomass co-firing may 

result in stack CO2 increases. 

Commenters stated that using technology such as biomass, waste, landfill, landfill gas for energy 

projects create more emissions than coal fire power plants. The commenters said that these 

emissions could include dioxins, PCBs, cadmium and arsenic, and that these co-pollutants are 

just as or more harmful than CO2. The commenters said that a plan to address other toxic 

pollutants should also be developed. 

Response 16: Commenters stated that biomass is sustainable and may provide economic 

benefits. Other commenters stated that bioenergy is a costly way to reduce CO2 emissions. 

Biomass is not considered part of the best system of emission reduction in this rule and therefore 

it is not included in goal-setting or compliance evaluations. However, similar to other 

technologies outside of BSER, biomass may be considered as a part of a state’s plan to meet the 

emission guidelines.

For more information regarding Building Block 3, refer to section V.E of the final rule preamble. 

A discussion regarding the use of some biomass feedstocks for compliance purposes can be 

found in Section VIII.I.2.c and Section VIII.K.1 of the preamble.

Commenters also asserted that using technologies such as biomass, waste and landfill gas for 

energy projects create more toxic emissions than coal-fired power plants and that a plan to 

address other toxic pollutants should be developed. Toxic air emissions are addressed under 

current programs developed by EPA pursuant to Title I of the Clean Air Act. 

Comment 17: Commenters discusses the impact methane leakage will have on greenhouse gas 

emission reductions estimated by the CPP.

Commenters stated that the benefit/cost ratio is overwhelmingly positive under the proposed 

state standards, implying that the proposed state standards should be raised. The commenters 

stated that prior to the announcement of the Clean Power Plan, PacificCorp (which is the 

corporate owner of Utah's electric utility Rocky Mountain Power) already planned to reduce the 

share of its power produced from coal from the current 62% to 46% by 2024, which is a 29% 

reduction. The commenters stated that the implication is that Rocky Mountain Power will 

surpass the carbon emission's reduction target assigned by the Clean Power Plan well before 

2030 for reasons that are unrelated to the proposed Clean Power Plan, which suggests that the 

emissions-rate reduction target that the EPA has assigned to Utah under the Clean Power Plan is 

so lenient that it gives PacificCorp no additional incentive to reduce its already-planned 

emissions. The commenters stated that recent studies of the rate of fugitive methane emissions 

from fracked natural gas in the Uinta Basin found that it was 9% of all gas produced. The 

commenters stated that over a 20-year time frame, a pound of methane is 72 times more 

powerful at increasing the retention of heat in the atmosphere than a pound of CO2. The 

commenters stated that it is estimated that fugitive methane accounts for up to 8% of all gas 

produced from shale, and if true, electricity produced from burning shale gas would warm the 

globe as much as producing electricity from coal. The commenters stated that the Clean Power 
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Plan must take into account the risk that shifting from coal to natural gas may not, in fact, reduce 

greenhouse gas emissions overall. 

Response 17: The EPA assessed whether the net change in upstream methane emissions from 

natural gas and coal production is likely to be positive or negative and also assessed the potential 

magnitude of changes relative to CO2 emissions reductions anticipated at power plants. This 

analysis found that the net upstream methane emissions from natural gas systems and coal mines 

and CO2 emissions from flaring of methane will likely decrease under the proposed guidelines. 

Furthermore, the changes in upstream methane emissions are small relative to the changes in 

direct emissions from power plants. The technical details supporting this analysis can be found in 

the Appendix to chapter 3 of the proposal and final RIA and response to comment 18 in section 

8.2.

Comment 18: The Clean Power Plan emission guidelines will not achieve the targeted CO2 

reduction goals.

Commenters proposed that implementation of the rule would cause serious economic harm, 

reduce energy diversity, increase electricity prices, jeopardize grid reliability, result in major job 

losses, hinder coal technology advances and fail to achieve the administration and EPA's goal of 

global leadership on CO2. 

Commenters expressed concern that the rule would substantially increase electricity and natural 

gas costs, create liability problems, put the manufacture sector at risk, and reduce good paying 

jobs with relatively small global climate impact. The commenters cited EPA"s estimates that the 

proposed rule would reduce 730 million metric tons of carbon by 2030 but then stated that China 

increased its emissions nearly that same amount in one year. 

Similarly, commenters stated that the proposed regulations are likely to increase worldwide 

greenhouse gas emissions by decreasing the international competitiveness of U.S. businesses due 

to increased energy costs and moving businesses to areas with less efficient and more carbon 

intensive energy supplies. The commenters further stated that under this proposal the total cost of 

the products produced in the U.S. will need to increase, eroding our international 

competitiveness and resulting in the loss of U.S. manufacturing jobs, despite businesses 

investing in cost effective energy savings activities for decades. 

Commenters stated that under the CPP leakage is likely to occur on a national level and also on a 

state level, and that New York and New York facilities will be at a significant disadvantage. The 

commenters stated that energy-intensive trade-exposed (EITE) industries require a level playing 

field to prevent GHG leakage. The commenters stated that total industrial sector electricity costs 

would rise from about $65.1 billion in 2013 to 165.6 billion in 2030, a 154 percent increase. 

Commenters stated that EPA has not attempted to understand and quantify the economic or 

environmental impact of the GHG leakage that would result from the proposal. The commenters 

stated that steel is traded globally, so if American manufacturers experience costs that our 

overseas competitors do not, American steel producers will sell less product and overseas 
361

competitors will sell more. The commenters stated that there are significantly more GHG 

emissions involved in shipping scrap from America across the oceans to Turkey or China and 

producing steel there with high GHG emitting electricity generation. The commenters stated that 

manufacturers in states with higher CO2 emission targets than Virginia will have lower 

compliance costs, creating an incentive for companies to move or expand operations in states 

with less expensive, higher CO2 emission targets, and that this will create perverse economic 

incentives between states. 

Commenters stated that the domestic coal-based electric power industry will have invested $145 

billion through 2016 to achieve these emission reductions; and the U.S. electric sector emits four 

percent of global greenhouse gas emissions and, as a consequence, unilateral actions by the U.S. 

will not have a meaningful effect on climate change; and policies to reduce CO2 emissions are 

likely to increase energy costs; and increases in energy costs have a disproportionately greater 

impact on minority families, fixed and low-income consumers and minority owned businesses. 

The commenters then urged EPA and the Administration to ensure that its guidelines and other 

policies to reduce greenhouse gas emissions minimize costs, do not cause employment losses, 

support advancements in fossil fuel technologies such as carbon capture and storage, and do not 

cause increases in energy prices that will harm low-income electric consumers, minority families 

and minority businesses. 

Commenters discussed the potential for job losses as a result of the rule. Commenters stated that 

EPA failed to meaningfully consider employment impacts of Clean Air Act regulations by not 

using whole economy modeling that would have captured a much more accurate picture of the 

likely job losses from this proposal. The commenters further stated that EPA failed to undertake 

an employment analysis under Section 321A of the Clean Air Act, which requires the continuous 

review of potential job losses and shifts in employment due to the implementation of the act. 

Commenters stated that the onslaught of overregulation and lack of certainty in the coal industry 

has contributed to the loss of 7,000 coal jobs since President Obama took office as opposed to 

the increase in 3,500 coal jobs that occurred in the previous administration according to EIA and 

Kentucky Energy and Environment Cabinet. Commenters stated that the proposed rule will lead 

to the closure of coal-burning power plants and the loss of more than 52,000 jobs in the coal, 

utility and railroad industries by 2020, and an additional 65,000 job losses by 2030. Commenters 

further stated that the proposed rule will lead to direct and indirect employment losses of over 

208,000 jobs by 2030. Commenters urged the EPA to withdraw its proposal for new emissions 

regulations on the basis of the direct job losses in the coal industry, the indirect economic 

impacts to communities as a result of coal industry overregulation, and the lack of overall 

environmental benefit. The commenters cited EPA's emission reductions assessments and stated 

that the proposal will result in a meaningless 1 percent reduction in atmospheric CO2 

concentrations, an insignificant reduction in global average temperature of 0.016 degrees 

Fahrenheit. The commenters noted that a study will be conducted by DMME and CCER (no 

abbreviation definition provided) to report on the effect of increased energy prices on lower 

income populations and the negative economic impacts to coal country, including job loss, in 

order to show how damaging these new regulations are to the economy. Commenters also stated 

that all of the public forums have been far from coal country, making it prohibitive for those 

affected to speak to their plight. 
362

Commenters cited a study by the Heritage Foundation that EPA's energy regulations would cost 

hundreds of thousands of jobs and cause a significant decline in personal income while having a 

minimal impact on global warming. The commenters stated that these regulations would reduce 

aggregate gross domestic product by more than $2.5 trillion between now and 2030, and 

employment would track nearly 300,000 jobs below the no-carbon-regulation baseline in an 

average year, with some years seeing an employment deficit of more than 1 million jobs. The 

commenters cited a NERA study estimating that the costs to comply with EPA's proposed plan 

could total $366 billion, or more and finds that 43 states will have double-digit electricity price 

increases. 

Commenters stated that the proposal will result in higher electricity prices and cited the U.S. 

Chamber of Commerce that "Upon full implementation in 2030, the carbon reduced from this 

massive and costly regime would offset the equivalent of just 13.5 days of emissions from 

China."

Commenters stated that if electricity and natural gas costs rise because of a state's 

implementation plan, industrial GHG leakage will shift GHG emissions to either other states or 

to a foreign country. The commenters stated that a cost safety valve would allow states the 

flexibility to complete a cost impact analysis on an annual basis and determine what revisions are 

necessary to limit cost increases to less than 2 percent in future years. 

Commenters stated that in 2010, the GHG emission intensity of the U.S. economy, was 31% 

below the worldwide average and 67% below that of nations that are not part of the Organization 

for Economic Cooperation and Development. The commenters stated that policies that 

substantially increase the cost of energy will cause in investments and emissions to be sent to 

other, less efficient countries with higher CO2 emissions intensities and could actually result in a 

net increase in global emissions. The commenters stated that for every ton of CO2 reduced in 

2030 as a result of the proposed rule, the rest of the world will have increased emissions by more 

than 16 tons. 

Commenters stated that the projected CO2 emission reduction from EPA's proposed rule is, at 

most, 555 million metric tons (mmt) in 2030, which represents only 1.3 percent of projected 

global CO2 emissions in that year. In 2030, the reductions proposed by this rule would offset the 

equivalent of just 13.5 days of CO2 emissions from China. The commenters stated that the 

existing cost/benefit calculation for the proposed rule does not adequately reflect this structural 

imbalance of penalizing US economic growth while the economic growth of developing 

countries continues unfettered. 

Commenters cited the Brookings Institution that "standard benefit-cost practice sums the benefits 

across the political jurisdiction consisting of the citizens who are bearing the costs of the 

policy". The commenters stated that foreign entities that do not bear a share of the burdens of a 

given policy "should not have [economic] standing within a benefit-cost analysis of a U.S. 

regulation," and foreign benefits should therefore be excluded. 

Commenters stated that the projected CO2 emission reduction from EPA's proposed rule is, at 

most, 555 million metric tons in 2030, which represents only 1.3 percent of projected global CO2 
363

emissions in that year. The commenters stated that this reduction in 2030 would offset the 

equivalent of just 13.5 days of CO2 emissions from China.

Commenters stated that the projected CO2 emission reduction from the proposed rule is, at most, 

555 million metric tons (mmt) in 2030, which represents only 1.3 percent of projected global 

CO2 emissions in that year. The commenters stated that this reduction in 2030 would offset the 

equivalent of just 13.5 days of CO2 emissions from China. The commenters stated that the EPA's 

economic analysis grossly overstates and overestimates the benefits of the proposed rule, and 

underestimates the burdens and translated costs on businesses and those they serve. The 

commenters stated that EPA has failed to convene a Small Business Advocacy Review panel and 

failed to conduct a regulatory flexibility analysis to evaluate the proposed rule's impact on small 

businesses, as required by the Regulatory Flexibility Act and Small Business Regulatory 

Enforcement Fairness Act. The commenters stated that the term "social cost of carbon" is not 

recognized as a legitimate economic metric or methodology and has not received general 

acceptance or even legitimate scrutiny necessary for a transparent rule-making. The commenters 

stated that "co-benefits" have not been confirmed attributable to this rule and should not be 

considered as sufficient evidence to support the rule's effectiveness. 

Commenters stated that the Agency resorted to methods of calculating costs and benefits that are 

unacceptable, and that did not follow the requirements by the 111(d) of taking of costs of 

compliance into account. The commenters said that the cost-benefits analysis have three 

structural defects: 1) its use of foreign benefits to justify domestic costs; 2) its reliance on alleged 

co-benefits, especially reductions in emissions of fine particulate matter (PM2.5); and, 3) its 

failure to account for "carbon leakage," which is the risk that energy-intensive domestic 

industries will move plants and activities abroad in response to EPA finalizing its proposed rule. 

http://www.washingtontimes.com/news/2014/jul/29/gray-a-costbenefit-analysis-from-epalacking-in-c/print/. (Please see section 8.7.2, comment 3 for EPA’s response to comments on the 

use of global SCC estimates and section 8.8 for response to co-benefits from PM2.5 reductions.)

Commenters added that EPA's cost-benefit analysis fails to account for inevitable "carbon 

leakage" that will occur in response to higher electricity prices and off-shoring of electric 

demand and consumption to countries with lower costs and higher emission rates than within the 

U.S. The commenters added that EPA must estimate these likely significant new emissions and 

subtract them from their estimated benefits.

Commenters stated that EPA's regulations will impose billions of dollars in costs on the U.S. 

economy but fail to meaningfully reduce CO2 emissions on a global scale. The commenters 

stated that the projected CO2 emission reduction from the proposed rule is, at most, 555 million 

metric tons (mmt) in 2030, which represents only 1.3 percent of projected global CO2 emissions 

in that year. The commenters stated that this reduction in 2030 would offset the equivalent of just 

13.5 days of CO2 emissions from China. 

Commenters stated that EPA's estimates project that this rule will cause nationwide electricity 

price increases averaging between six and seven percent in 2020, and up to 12 percent in some 

locations, and also estimates annual compliance costs between $5.4 and $7.4 billion in 2020, 

rising up to $8.8 billion in 2030. The commenters concluded that these substantial power sector 

compliance costs do not capture the subsequent adverse spillover impacts of higher electricity on 
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overall economic activity, and the comprehensive financial impact for business, manufacturers 

and residential customers should be better understood and analyzed before this rule is finalized. 

Commenters stated that SCC is widely acknowledged that these cost estimates are inaccurate, 

uncertain, and highly speculative. The commenters added that the current methodology for 

assigning a cost to carbon is based on a global value and therefore is both inconsistent with OMB 

guidance and EPA assessments of costs, which are only on a U.S. basis. The commenters urged 

EPA to recalculate climate benefits solely on the domestic carbon value. The commenters also 

provided an example of how the evaluation skews the results by discussing IPM modeling and 

stating that increased electricity and natural gas prices as a result of the rule could shift 

manufacturing overseas, which could result in increased global CO2 emissions that have not 

been quantified by the proposed rule . Commenters stated they have concerns with the current 

methodology on SCC that have been previously submitted.(Please see 8.7.2 for EPA’s response 

to comments relating to the SCC.)

Commenters stated that in 2020, the average annual West Virginia household electricity and gas 

bills will increase by $750-a 38% increase-and the total annual cost of power and gas in West 

Virginia will grow from $2.7 billion to over $4 billion. The commenters stated that in 2020, the 

average annual U.S. household electricity and gas bills will increase by $680 in 2020-a 35% 

increase-and the total annual cost of power and gas in the U.S. will grow from $475 billion to 

over $750 billion. The commenters stated that U.S. compliance costs could total upwards of 

$366 billion, with 43 states facing double-digit electricity price increases, and CO2 

concentrations would be reduced by less than one-half of a percent, which would result in 

reducing the average global temperature by less than 2/100th of a degree and reducing the sea 

level by 1/100th of an inch. The commenters stated that EPA has failed to consider adequately 

the potential economic impact of its Proposed Rule due to the rise in electricity prices. The 

commenters cited NERA's conclusions that the rule would cost at least $41 billion per year, and 

under one scenario, $73 billion per year, with a total projected cost of $366 billion to $479 

billion over a 15-year period. The commenters stated that the Proposed Rule would cause 43 

states to see a double-digit electricity rate increase, and that nationwide, the proposal would 

cause a 12% to 17% average increase in electricity prices. The commenters stated that fourteen 

states face peak year electricity price increases that could exceed 20%. 

Commenters stated that it is concerned about the increased electricity costs that a re-dispatch of 

the power market could precipitate. The commenters stated that electricity cost increase 

estimates that range from 7% to 17% and that regional costs can significantly as in the New 

England area over the past winter, where lack of transport coupled with regionally higher 

demand and little supply caused spot market pricing fifteen times over normal regional pricing 

and twenty times over pricing nationally. The commenters stated that local road blocks to 

innovation such as those raised against coastal wind farms clearly demonstrate that switching to 

alternate energy sources will not be easily or quickly implemented. The commenters stated that 

as a manufacturer in a global marketplace, competitive pressures are high and increasing 

production costs in one region of the world can shift production to other regions with lower 

costs, which will not decrease global carbon emissions. 
365

Commenters stated they believe that it's the EPA's responsibility to determine environmental 

policy and our nation's role in addressing climate change, however, he does not believe that it is 

the EPA's role to set energy or economic policy as this rule clearly does. 

Commenters stated that the only way to have a meaningful impact in climate change would be 

to require the full cooperation of nations like China and India. 

Commenters stated that without their participation and commitment, this rule will accomplish 

no measurable results in the global perspective and will only serve to harm our nation's economic 

and electric reliability.

Commenters stated opposition to this proposal as it punishes electricity consumers, has no 

material benefit under climate theory. 

Commenters stated, EPA's central rationale for promulgating the proposed New Source Rule -

that the proposal will protect public health and address climate change - is entirely eliminated by 

EPA's own concession that the proposal "will result in negligible CO2 emission changes, 

quantified benefits, and costs by 2022." 79 Fed. Reg. 1,430, 1,433. See States' Comment Letter at 

10-11. 

Response 18: Commenters stated that the Clean Power Plan emission guidelines will not achieve 

the targeted CO2 reduction goals due to leakage on national and state level. The EPA discusses 

state level leakage extensively in the preamble for the final rule. See section VIII.J of the 

preamble for this discussion, as well as, remedies to avoid this phenomenon in state planning. 

See Chapter 5 of the RIA for a discussion of secondary market impacts for industry including 

energy intensive industries.

Several commenters contend that unilateral actions by the US will not achieve the CO2 reduction 

goals desired. These comments compare reductions in the CPP to emissions of other countries. 

The EPA believes final CPP is an important step towards achieving the GHG emission 

reductions needed to address the serious threat of climate change. The CPP constitutes a major 

commitment by one of the world’s largest GHG emitters. Fossil fuel-fired EGUs are by far the 

largest emitters of GHGs among stationary sources in the U.S. These emissions are primarily in 

the form of CO2, and, among fossil fuel-fired EGUs, coal-fired units are by far the largest 

emitters. Climate change is a global problem, and the United States is not alone in taking action 

to address it. The United Nations Framework Convention on Climate Change (UNFCCC)11 is the 

international treaty under which countries cooperatively consider what can be done to limit 

anthropogenic climate change and adapt to climate change impacts. Currently, there are 195 

Parties to the UNFCCC, including the United States. The Conference of the Parties (COP) meets 

annually and is currently considering commitments countries can make to limit emissions after 

2020. The 2015 COP will be in Paris, and countries will announce their post-2020 commitments 

there or beforehand. In April 2015, the United States announced its commitment to reduce GHG 

 

11 http://unfccc.int/2860.php
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emissions 26-28% below 2005 levels by 2025.12 See section II.F. of the preamble for the final 

rule for further discussion of agreements made by countries such as China to reduce greenhouse 

gases.

Comment 19: EPA needs to pursue a balanced approach that considers climate change and 

related benefits and economic impacts.

Commenters stated that more than one billion people do not have access to electricity and if we 

can provide cheap, reliable, and accessible energy for these people, their living standards will 

increase and economic development will increase-creating more jobs, improving education and 

helping provide a better way of life. Commenters stated we have to balance our environmental 

concerns, which are critically important, with improving living standards and making the world a 

better place to live. The commenters stated that fossil fuels are an important part of that 

sustainable solution. 

Commenters stated the Proposed Rule is designed to reduce utilization of sources with highcarbon intensity, which includes coal-fired generation. The commenters stated that the continued 

operation of coal-fired generating units in North Dakota is contingent on whether there is 

sufficient demand for electricity and available renewable generation to allow North Dakota to 

meet its emission rate goal.

Commenters stated that assuring affordable, reliable and secure energy is as important as 

addressing the climate change issue for the simple reason that a healthy, growing economy is 

essential to having the wherewithal to address climate change. The commenters stated that 

actions to address climate change must be balanced against their potential economic impacts. 

Commenters requested that EPA seriously consider issues associated with the overall 

socioeconomic cost of the proposed rule.

Commenters stated that sensible policies and regulations for controlling greenhouse gases must 

also consider the real economic impacts on the individual states that are tasked with 

implementing the regulations. The commenters stated that these regulations and policies should 

also consider the opportunities presented by developing technologies in renewables and energy 

efficiency that create additional jobs and technological investment, and that EPA must carefully 

balance these concerns in its final rulemaking product. 

Commenters stated that we cannot afford inaction. The commenters further stated that the costs 

from intensified hurricanes and tornados, drought, wildfires, and agricultural impacts are 

immense and continue to mount. The commenters stated humans need to be able to survive and 

 

12 United States Cover Note to Intended Nationally Determined Contribution (INDC). Available 

online at: 

http://www4.unfccc.int/submissions/INDC/Published%20Documents/United%20States%20of%2

0America/1/U.S.%20Cover%20Note%20INDC%20and%20Accompanying%20Information.pdf
367

not continue losing other species to extinction. The commenters noted that the financial cost of 

inaction is staggering as well. The commenters provided a local example of an historic flash 

flood in Oct. 2013 in Austin, Texas that resulted in $30 million in losses, according to FEMA. 

548 homes and businesses were lost; there were dozens of rescues and 4 people were killed; 

Onion Creek rose 11 feet in 15 minutes and crested at a record 41 feet; Travis County's 

uninsured claims cost $28 million; the volume of water was 120,000 cubic feet per second, 

double the force of water from Niagara Falls. The commenters explained that the emergency 

officials were thrown off because they had endured a drought for so long, and it overwhelmed 

their resources. The commenters remarked that they cannot afford the cost of ongoing extreme 

weather events, the devastation drought, or the loss of lives. 

Commenters stated that States will play a key role in preparing state plans to meet the federal 

requirements. The commenters stated that the rule will have far-reaching impacts on electric 

utility resource planning, reliability and costs - all of which ultimately impact residential, 

commercial and industrial customers. 

Commenters also stated that the proposed plan will fundamentally alter the way that electricity is 

generated and how Americans use electricity.

Commenters stated that significant greenhouse gas reductions have been achieved. The 

commenters stated that determination of the path forward in which additional reductions are 

achieved requires a careful consideration to the limits of available technology, the costs 

associated with various reductions strategies, the impact to the business community's ability to 

comply and bear such costs, and current and future global economic and environmental trends.

Commenters stated that the market should determine what solutions are viable. The commenters 

stated that the economic assumptions made by the EPA in developing these rules are 

unsubstantiated and that the EPA did not consider Florida-specific policies and circumstances 

when establishing Florida's emission goals. 

Commenters stated that if electricity and natural gas costs rise because of a state's 

implementation plan, industrial GHG leakage will shift GHG emissions to either other states or 

to a foreign country. The commenters stated that a cost safety valve would allow states the 

flexibility to complete a cost impact analysis on an annual basis and determine what revisions are 

necessary to limit cost increases to less than 2 percent in future years. 

Commenters suggested that the proposed rule does not strike a balance between climate change 

goals and economic impacts such as job losses, trade balances, and costs of electricity, goods and 

services. Commenters stated that policies must ensure that low and fixed income consumers are 

not disproportionately impacted and further suggested that all sources of GHG and economic 

sectors should be included in initiatives to reduce emissions. Commenters urged the EPA to 

think about the economic calamity we face around the world if the lights went out, if electricity 

became too costly for families who are struggling to pay their bills every month or seniors who 

spend more time in their homes than most but cannot afford excessive heating or cooling bills. 

The commenters stated that businesses rely more than ever before on electric power to boot their 

computers, charge their technology and power equipment to be successful. 
368

Response 19: Commenters stated EPA needs to pursue a balanced approach that considers 

climate change, as well as other socioeconomic factors. Commenters contend ‘assuring 

affordable, reliable and secure energy is as important as addressing the climate change issue for 

the simple reason that a healthy, growing economy is essential to having the wherewithal to 

address climate change.’ The EPA believes that it has taken a balanced approach to develop the 

final CPP. EPA has considered the impacts climate change is currently having and potentially 

will have in the future on the environment and human health. As discussed in the final rule 

preamble, the May 2014 report of the National Climate Assessment13 concluded that climate 

change impacts are already manifesting themselves and imposing losses and costs. The report 

documents increases in extreme weather and climate events in recent decades, with resulting 

damage and disruption to human well-being, infrastructure, ecosystems, and agriculture, and 

projects continued increases in impacts across a wide range of communities, sectors, and 

ecosystems. The commenters stated that actions to address climate change must be balanced 

against their potential economic impacts. The EPA addresses the costs of the final guidelines in 

section I of the preamble. The EPA assessed the costs, benefits and economic impacts of 

illustrative compliance scenarios for the CPP in the Regulatory Impact Analysis (RIA). The final 

rule RIA shows that the benefits to society of the CPP far outweigh the costs. See the final rule 

RIA in the docket for more information on the cost and benefits of the CPP for illustrative 

implementation scenarios.

Comment 20: Commenters stated that electric bills will go down as a result of the CPP.

Commenters stated that although the cost per MWh of power could increase by about 9 percent, 

the drop in electricity consumption due to energy efficiency would push total system costs down 

by 3 percent, or about a billion dollars a year in 2029. 

Commenters cited a Synapse Energy Economics report that North Carolina customers will save 

$201 to $348 million dollars each year in 2030 and beyond by complying with the Clean Power 

Plan. The commenters stated that these savings result from the use of energy efficiency and 

renewables to displace the higher operating and fuel costs of existing fossil plants. The 

commenters stated that these benefits do not include additional benefits such as job creation, 

economic growth, and improvements to public health and welfare resulting from lower carbon 

dioxide emissions. 

Commenters cited a facility-level study of Midwest pulp and paper mills that found that facilities 

could save $240 million per year in total energy costs by improving their performance to 

existing, ENERGY STAR levels, and that these efficiency-derived savings could help preserve 

the 370,000 jobs associated with Midwest pulp and paper mills. 

Commenters stated that long-term contracts for wind power generation are cost competitive with 

all other potential energy generation sources and in many states can lower electrical bills for 

 

13 U.S. Global Change Research Program, Climate Change Impacts in the United States: The Third National Climate 

Assessment, May 2014. Available at http://nca2014.globalchange.gov/.
369

utility customers. The commenters cited studies done for the Midwest Independent Systems 

Operator (MISO) that increasing wind power generation would reduce power costs by $3B to 

$9.4B, or between $63 and $200 per customer per year. The commenters cited a New England 

Independent Systems Operator wind integration study modeling a 14% increase in its footprint 

that found electricity prices dropped around 10%, and further that a 24% increase in wind 

generation would send prices down by about 15%. The commenters cited a study done by 

Syracuse University and the University of California finding that wind energy comes within .35 

cents per kWh when levelized over the 20-year life of a typical wind contract. The commenters 

stated that historically natural gas prices are very volatile and despite recent low natural gas 

prices the long-term hedge dimensions of wind power purchase agreements show the value of 

states having diverse energy generation portfolios. The commenters cited the American Wind 

Energy Association review of 15 independently done studies on wind power generation impacts 

on the energy market finding a strong correlation between the amount of wind deployment and 

electricity cost reductions to users. The commenters stated that this analysis found that the 11 

states that get more than 7% of their electricity from wind energy have seen electric prices 

decrease by 0.37% over the past five years, in contrast all other states have seen electricity prices 

increase by 7.79% during that time.

Commenters stated that although the EPA projects that the Clean Power Plan would lower 

consumer electricity bills by 8.4 percent by 2030 due to efficiency measures, the Plan could be 

far more consumer-friendly. The commenters stated that the Plan overstates the costs and 

understates the potential for energy efficiency, which is the least-cost, most effective, and most 

consumer-friendly strategy for curbing carbon emissions. The commenters stated that it also 

overstates the costs and understates the potential for renewables. The commenters stated that the 

Plan promotes increased electric generation from natural gas, even though the climate benefits of 

switching from coal to natural gas are uncertain due to methane emissions and, setting aside the 

methane issue, soon we must incur the expense of phasing out natural gas due to its carbon 

emissions. The commenters stated that natural gas prices are projected to increase 23 percent by 

2030 even without the EPA spurring additional demand for natural gas. The commenters stated 

that the Plan also includes nuclear power, which carries exorbitant costs that consumers typically 

must subsidize through their utility bills. 

Commenters stated that reducing the carbon emission rate of Montana's electric generation mix 

will result in additional renewable energy and energy efficiency which are less expensive for 

Montana consumers. The commenters stated that power from Colstrip Unit 4 at 6.8 cents is 

consistently more expensive on a per kilowatt-hour basis than wind power from the Judith Gap 

wind farm at 3.4 cents or the Spion Kop wind farm at 3.3 cents. The commenters stated that 

energy efficiency is always the least expensive source of energy and actually saves consumers' 

money. The commenters stated that according to a third party analysis of NWE's energy 

efficiency investments, energy efficiency has saved their customers over $75 million between 

2007 and 2011 which is over $125 per customer. The commenters stated that the average 

levelized cost of the saved energy was 1.6 cents per kilowatt-hour, compared to coal-fired power 

from Colstrip Unit 4 at over 6 cents per kilowatt-hour. The commenters stated that Montana 

Dakota Utilities' 20 megawatt Cedar Hills wind project was about $55 per megawatt-hour 

(MWh), and that there were opportunities for it to purchase wind energy for a 25 year period for 

about $30 per megawatt-hour. The commenters stated that wind power purchase agreements in 

the interior of the U.S. (which includes Montana) averaged about $25/MWh. 
370

Commenters stated that in Utah as elsewhere, they are currently experiencing growing impacts of 

climate change, not only on the availability of their natural resources but also on their health and 

quality of life. The commenters stated that the proposed system of emission reduction under the 

Plan includes flexibility along different fronts to help states achieve their compliance obligations. 

The commenters stated that the plan has the potential to drive innovation both in the 

development of advanced/cleaner technologies as well as smart policies. The commenters stated 

that renewable energy and energy efficiency (building blocks 3 and 4, respectively) present the 

country with enormous yet largely untapped potential for carbon emission reductions. The 

commenters stated that the Clean Power Plan can tap into this potential by making greater use of 

these abundant, non-polluting and efficient power resources, while also affecting the deployment 

of new technologies and improving financing opportunities. 

Commenters stated that if the externalities associated with electricity produced by burning coal 

are considered, the cost of alternative energy including wind and solar are already less costly 

than continuing to burn coal. The commenters said the cost of electricity from large wind farms 

is already at or below the cost of electricity from coal without considering external costs 

associated with coal and that these things would be reason enough on their own for the Clean 

Power Plan or even something that reduces use of coal more and faster. 

Commenters cited Epstein et al., 2011 conclusions that the social cost of coal-fired power could 

be as high as 60 percent of residential electricity prices and a presentation by Peterson (2012) 

statements that when adjusted to account for social, health and environmental costs and benefits, 

solar energy becomes even more cost-competitive.

Response 20: Commenters indicate that energy efficiency and renewable energy are cost 

competitive and offer benefits to communities. Some commenters contend that the costs are 

overstated and benefits understated for the CPP. These commenters further assert that electricity 

bills for consumers may be less than those estimated by EPA. As shown in the Regulatory 

Impact Analysis for the final rule, EPA estimates that electricity prices on average nationwide 

with increase somewhat by 2030 (less than one percent) with the CPP. EPA agrees that 

investment in energy efficient technologies and practices has the potential to decrease energy 

consumption and consumers’ bills may be reduced as well. It is important to note that the 

electricity price change projection results are based upon illustrative scenarios of state 

implementation plans and actual impacts may differ depending upon the actions taken by sources 

to comply with the CPP. The flexibility afforded to states in developing their state plans allows 

them to encourage compliance methods which include design elements that may mitigate or 

promote particular impacts based on their priorities. Thus states may choose to promote energy 

efficiency and renewable energy in their state implementation plans. The EPA also agrees that 

renewable energy and energy efficiency are advantageous clean energy choices. In addition, the 

EPA expects that there will be opportunities as enumerated by commenters in the renewable 

energy and demand-side energy efficiency sectors. 

Comment 21: Commenters stated that energy efficiency programs increase electric rates and 

impacts may be underestimated.
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Commenters stated that energy efficiency programs tend to increase delivered prices because the 

upfront utility costs of energy efficiency programs are recovered through delivered prices on 

remaining generation in the year they are incurred, and fixed transmission and distribution costs 

are spread over fewer electricity sales (because energy efficiency reduces end-use electricity 

sales). 

Commenters stated that EPA did not endogenously determine how much of the assumed energy 

efficiency supply would be adopted as part of a least-cost response to the regulation. The 

commenters stated that this approach does not allow the analysis to indicate whether some or all 

of the potential energy efficiency programs would be cost-effective even in the absence of the 

CPP. The commenters cited NewERA model findings that all of that energy efficiency would be 

cost-effective to adopt in the baseline scenario, even if the consumer would be given no subsidy 

by the utility. The commenters stated that the combination of EPA's decision to exclude energy 

efficiency from the analytic baseline and assumptions that might understate the cost of energy 

efficiency introduces potential distortions in the modeling. The commenters stated that by netting 

analytically questionable energy efficiency savings against the other costs, the potential impact 

to the economy is likely understated. 

Commenters stated that the CPP's EE targets for Ohio are based on electricity consumption 

levels that include customers who may become non-participants under Ohio's EE programs and 

that this would both increase costs and shift those higher costs associated with EE to the 

remaining ratepayers, and is contra to Ohio law. 

Commenters stated that EPA has drastically underestimated these costs and has attempted to 

disguise the true costs under the umbrella of elements like EE, but EPA has not been able to 

determine the actual cost of this proposal.

Commenters stated that the argument that energy efficiency measures that states implement as 

part of their compliance strategies would result in small or negative changes to electricity bills is 

based on a host of unrealistic assumptions, but if this analysis were true economy-wide, it is 

unlikely to be the case for major industrial energy users such as Caterpillar, because energy costs 

are such a significant component of its cost structure. The commenters stated that the Proposed 

Rule is unlikely to significantly impact the rate or level of energy efficiency that Caterpillar is 

able to implement and EPA should not assume that, for industrial energy users such as 

Caterpillar, higher electricity prices would be offset by greater energy savings achieved through 

new energy efficiency programs. The commenters stated that increased expenditures of utilityrun energy efficiency programs are generally passed on as higher electricity rates, especially to 

industrial customers. The commenters stated that such price increases would translate into higher 

costs for companies such as Caterpillar that have not been accounted for in EPA's economic 

analysis. 

Commenters cited EPA estimates that employment could increase between 57,000 and 78,800 

jobs, rely on a jobs multiplier with no basis in reality. The commenters stated that EPA concedes, 

"Employment impacts of demand-side energy efficiency programs have not been extensively 

studied in the peer-reviewed, published economic literature." The commenters cited EPA's use of 

a multiplier of 2.56 energy efficiency jobs per million dollars of spending, or $390,625 per job. 

The commenters stated that the earnings for the median worker are $30,454. The commenters 
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stated that EPA's multiplier of $1 million in investment to create 2.56 jobs strains credibility, and 

compares it to the work of Richard Morgenstern, who found that $1 million in environmental 

spending translates into roughly 1.5 new jobs. The commenters stated that EPA also relies on 

models of green investment spending in states, which multiplied by EPA's 2.56 jobs per $1 

million in investment, yields roughly 78,800 jobs, meaning that the nation will spend more than 

$30.7 billion on energy efficiency investments by 2020. The commenters stated that this figure is 

not contained in EPA's RIA, but instead EPA claims from $8 billion to $12.3 billion "demandside" energy efficiency costs by 2020. The commenters stated that EPA underestimates demandside costs by threefold, and that a similar extrapolation for 2030 costs would approach $150 

billion. The commenters stated that EPA's multiplier is significantly higher than past estimates 

and $30 billion in energy efficiency spending by 2020 is three times what EPA reports. 

Commenters stated that the proposed rule will force consumers to pay for both the initial 

investment in energy efficiency resources, as well as the backup generation required when 

energy efficiency fails to perform. The commenters stated that despite EPA's claim that energy 

efficiency savings will offset the tens of billions in energy efficiency costs, energy efficiency is 

widely recognized as an unreliable resource and the expected displaced generation from more 

carbon-intensive resource simply will not materialize. The commenters cited a PJM 

Interconnection staff proposal that limits eligibility for the enhanced Capacity Performance 

product within its existing capacity market structure to energy efficiency resources that can 

achieve full reduction 365 days per year and penalizes energy efficiency resources that do not 

achieve the required level of load reduction. 

Commenters stated that providing an aggressive level of demand side management (DSM) would 

increase the cost per KWh would by an average of 15 percent moving from 1.5 percent gross to 

net savings. The commenters cited an EnerNOC report which concluded that under a 

recommended scenario it was not possible to meet the Indiana state goals (per the 2009 Phase II 

Order) in any year. 

Commenters stated that they are intimately familiar with the challenges that today's energy bills 

pose to the health and well-being of our communities. The commenters stated further that it is 

typical to find that their clients must spend as much as 8 percent of their annual income on 

electricity alone, while the average for households that are not low-income is less than 4 percent. 

The commenters also stated that the low-income families and individuals they serve are 

disproportionately likely to carry arrears on their utility bills and to face utility disconnection, 

and to avoid such a calamity, they typically sacrifice good nutrition and medical care to meet 

their rent and utility obligations. The commenters explaind that utility bills of the same size 

differ dramatically in their impact on family well-being and health. The commenters stated 

unaffordable energy leads to a cascade of health risks from poor nutrition, erratic medication 

purchase and the threat of eviction, in addition to the dangerous possibility of disconnection from 

electricity. Further, the commenters stated that utility program expenditures are biased towards 

those who can share the costs out of pocket, and at present the vast majority of utility efficiency 

investments in their state are set up to match a small share of a larger, private consumer 

expenditure on new equipment or a building upgrade. The commenters noted that while their 

clients pay for these programs in their bills, they are excluded because the requirement for 

personal spending to access a benefit is unaffordable. 
373

Commenters stated that EPA uses "compliance costs as a proxy for social costs." and that this 

cannot be a valid measure of the losses to the coal industry and dependent localities. The 

commenters stated that it cannot be assumed that increased electricity costs will not be 

experienced as economic friction with lasting, and cumulative, negative consequences. The 

commenters stated that projected decrease in consumption is not historically demonstrated. The 

commenters stated that claims that the demand aspect of EPA's BSER findings is demonstrated 

for Option 1 is based on state programs that are hedged to insure that cost and reliability are not 

held hostage to state targets, and EPA does not identify any jurisdiction where such ambitious 

ultimate targets have been sustainably achieved. 

Commenters stated that investor owned utilities (IOUs) in North Carolina have actively 

developed EE programs under the incentives provided in North Carolina, and yet their history 

indicates that the EPA goals of a 1.5% annual incremental rate and a 10.3% annual cumulative 

rate by 2029 far exceed the past achievements of EE savings. The commenters stated that the EE 

savings achieved to date place North Carolina in the "middle of the pack" when compared to 

other states. 

Commenters stated that within regulated utilities, any fuel-cost savings which might be created 

through efficiency improvements would have to be returned to the power consumer, otherwise 

known as the rate base, and this makes any efficiency improvement project have an automatic 

negative return on investment, and such projects never see the light of day. The commenters 

suggested that EPA encourage the states to allow some or all of the financial benefits from 

efficiency improvements and CO2 reductions to remain with the utility, so that a positive ROI is 

possible, and can then be used as justification for the necessary capital projects which will have 

to be undertaken. 

Commenters stated that the assumed levelized cost of saved energy (LCSE) is too high. The 

commenters stated that both ACEEE and Lawrence Berkeley National Laboratory (LBNL) have 

studied the cost of saved energy and LBNL reported an average LCSE of $21 per MWh saved, 

considering program administrator costs only (i.e., not including participant costs). The 

commenters stated that ACEEE reported an average levelized cost of $28 per MWh and a 

median cost of $26 per MWh, again only considering program costs. The commenters stated 

that ACEEE found a weak correlation (r value of 0.27) between cost of saved energy and level of 

energy savings achievement. 

Response 21: Commenters assert that demand-side energy efficiency (EE) will increase 

electricity prices and impacts are understated. Commenters further took issue with the approach 

EPA used to model demand-side energy efficiency and EPA’s inclusion of demand-side energy 

in the Best System of Emission Reductions (BSER). Commenters urged the EPA to confine its 

BSER determination to actions that involve traditional generation. While some stakeholders 

recognized demand-side EE as being an integral part of the electricity system, with many of the 

characteristics of more traditional generating resources, other stakeholders did not. The EPA has 

not included demand-side EE as part of the final BSER determination. Thus, neither the final 

guidelines’ BSER determination nor the emission performance rates for the two subcategories of 

affected EGUs take into account demand-side EE. 
374

However, many commenters also urged the EPA to allow states and sources to rely on demandside EE as an element of their compliance strategies, as energy efficiency measures are in 

widespread use across the country and provide energy savings that reduce emissions, lower 

electric bills, and lead to positive investments and job creation. EPA agrees, and the final 

guidelines provide ample latitude for states and utilities to rely on demand-side EE in meeting 

emission reduction requirements. Since commenters pointed out that the utility power sector 

operates over regional interconnections that are not constrained by state borders, the BSER 

determination and the resulting source category-specific emission performance rates take into 

account that reality. The final guidelines’ BSER determination takes into account recent 

reductions in the cost of clean energy technology, as well as projections of continuing cost 

reductions. EPA also updated the underlying analysis with the most recent Energy Information 

Administration (EIA) projections that show lower growth in electricity demand between 2020 

and 2030 than previously projected. Due to these revised findings, EPA expects the final 

guidelines will be more conducive to compliance, consistent with an energy strategy that allows 

for the cleanest generation and greater reductions in 2030 than the proposal. With a revised start 

date for emission reductions of 2022, instead of 2020, as proposed, the guidelines reflect that the 

additional time aligns with the adoption of lower-cost clean technology and thus its incorporation 

in the BSER at higher levels. At the same time, the 2022-2029 interim period will more easily 

allow for companies to take advantage of improved clean energy technologies as potential least 

cost options. See Section V of the final rule preamble for more information.

As discussed, states may incorporate demand-side energy efficiency in their state implementation 

plans and sources may use EE for compliance purposes. However, the final guidelines’ BSER 

nor the performance rates take into account demand-side EE. The EPA does however consider 

demand side EE in its illustrative scenario that represents EPA best estimate of the approach 

states may take to design their implementation plans. This analysis and discussion is presented 

in chapter 3 of the Regulatory Impact Analysis (RIA) and in the GHG Mitigation Measures 

Technical Support Document. The EPA recognizes that states may design plans that differ from 

the illustrative scenario presented in the RIA and that reflects plans best suited to the needs of 

individuals in their particular state.

Comment 22: Commenters state that renewable and alternative energy are expensive.

Commenters stated that while OUC has been and will continue to be aggressive in the 

development of renewables and alternative sources of energy, the costs are currently very high 

and add a significant cost burden to our rate payers. The commenters stated that it had invested 

in demand side management (DSM) and energy efficiency (EE), which is not adequately 

accounted for in the current proposal which recognizes a 2012 baseline. 

Commenters stated that EPA is heavily relying on EE/RE expectations to make this appear to be 

a cost-effective proposal. The commenters stated that EPA's compliance modeling assumes 

"overall electric demand will decrease significantly, as states ramp up programs that result in 

lower overall demand", and that energy efficiency alone creates a predicted 11% reduction by 

2030. The commenters stated that implementing EE/RE will be to the degree U.S. EPA expects 

will be challenging. 
375

Commenters stated that practically all of the NGCC-fired generation in Florida that the CPP 

anticipates to be dispatched prospectively is owned by a single investor owned utility (IOU). The 

commenters stated that to meet the performance standard, JEA and all other entities in Florida 

will have to purchase NGCC-fired generation from that single IOU, while idling their own 

capable generation fleets (for which they are still recovering costs). The commenters stated that 

the requirement to invest in EE beyond the level that is cost effective to JEA and Florida 

ratepayers will cause rates to increase generally for all, but disparately for customers that do not 

participate in utility-sponsored EE or customers that invest in RE without a utility incentive. The 

commenters stated that the most affected by this will be the already economically disadvantaged 

segments of the customer base. 

Commenters stated that EPA's inflated renewables target would require Pennsylvania ratepayers 

to make additional transfer payments to out-of-state generators which provide no offsetting 

benefits to Pennsylvania's economy. The commenters stated that during Pennsylvania's most 

recent reporting period (June I, 2012 to May 31, 2013) electricity suppliers in the state spent 

more than $50 million to acquire unbundled credits needed to fulfill their Tier I 

RPS requirements. The commenters stated that a significant portion flows to renewable 

generators in other states such as wind farms in Illinois and Indiana, and that payments to these 

out-of-state generators constitute a sheer transfer of wealth from Pennsylvania ratepayers to 

Illinois wind farm operators who were already being fully compensated for the electricity they 

produced by purchasers in their own or neighboring states. The commenters stated that it is 

wholly implausible to suppose that Pennsylvania could reduce this reliance - and thereby reduce 

the transfer payments its ratepayers make to out-of-state wind farms - if it is required to meet the 

much higher renewables target envisioned for it by EPA. 

Commenters stated that under Building Block 3, a rapid expansion of wind generation will 

require a sizeable capital expenditure in a relatively short period of time. The commenters stated 

that this capital investment includes construction of wind farms and transmission infrastructure 

to accommodate that new wind generation. The commenters stated that the subsequent 

replacement of these new units in approximately 20 years (the presumed useful life for wind 

resources) will require a similar investment. The commenters stated that these abrupt and 

relatively large expenditures will shock Oklahoma's system, causing demand-related increases in 

the cost of financing and delays due to shortages of equipment. The commenters stated that 

imposition of the Proposed Rule's Building Blocks will create significant compliance cost and 

reliability issues as determined by the SPP, Oklahoma's RTO. 

Commenters stated that to meet carbon emission reduction targets, energy sources should be 

evaluated upon their proven capability to meet carbon emission performance goals consistently, 

reliably and cost-effectively. The commenters noted that while renewable energy sources should 

be part of the mix of low-carbon sources, intermittent energy resources must always be backed 

up, typically by natural gas-fired electric generating capacity. The commenters concluded that 

carbon reduction strategies that explicitly privilege one energy resource - in effect, choosing 

energy sources based on factors other than meeting carbon reduction goals without requiring 

higher-carbon backup - increase consumer costs and impede progress toward meeting intended 

goals. 
376

Response 22: Commenters assert that renewable energy is expensive and may increase 

electricity rates. The EPA believes that the final CPP reflects the Best System of Emission 

Reductions (BSER) and carbon emission performance goals that are consistent, reliable and costeffective and renewable energy represents a consistent, reliable cost-effective compliance choice 

for the power sector. The final guidelines are structured so that states are not required to use each 

and every one of the measures that the EPA determines constitute the BSER or to apply any one 

of those measures to the same extent that the EPA determines is achievable at reasonable cost on 

a national basis. Instead, in developing its plan, each state will have the flexibility to select the 

measure or combination of measures it prefers in order to achieve the CO2 emission performance 

rates for its affected EGUs or meet the equivalent statewide rate- or mass-based CO2 goal. Thus, 

a state could choose to achieve more reductions from one measure encompassed by the BSER 

and less from another, or it could choose to include measures such as demand-side EE programs 

that are not part of the EPA’s BSER determination, as detailed in Section VIII of the preamble 

for the final rule. Expressing the states’ obligation in terms of a state-level goal that can be met 

in aggregate, including through the adoption of CO2 emission reduction measures that are not 

identical to the components of the BSER or are not included in the BSER, rather than exclusively 

through source-specific emission performance rates, is entirely permissible precisely because the 

approach mirrors the foundation of the BSER approach itself, namely the interconnected nature 

of the electricity system in which affected EGUs operate.

States will be able to address the economic interests of their utilities and ratepayers by using the 

flexibilities in the final CPP to: 1) reduce costs to consumers, minimize stranded assets, and spur 

private investments in renewable energy and energy efficiency technologies and businesses; and 

2) if they choose, work with other states on multi-state approaches that reflect the regional 

structure of electricity operating systems that exists in most parts of the country and is critical to 

ensuring a reliable supply of affordable energy. The final rule gives states the flexibility to

implement a broad range of approaches that recognize that the power sector is made up of a 

diverse range of companies of various sizes that own and operate fossil fuel-fired EGUs, 

including vertically integrated companies in regulated markets, independent power producers, 

rural cooperatives and municipally-owned utilities, some of which are likely to have more direct 

access than others to certain types of GHG emission reduction opportunities, but all of which 

have a wide range of opportunities to achieve reductions or acquire clean generation.

Comment 23. Rural and municipal electric cooperatives will need to recover costs of stranded 

coal-fired capacity through higher rates.

Commenters stated that this regulation will eliminate the ability for rural electric cooperatives to 

use coal to generate their electricity, which will be a huge economic burden to the co-op and will 

increase electricity costs for millions of customers that depend on rural electric companies.

Commenters stated that cooperatives have heavy coal-fired generation portfolios, which allow 

them to serve their communities at a low cost. The commenters stated that one cooperative 

noted that "eliminating our coal-fired generation could increase our wholesale power costs by as 

much as 40 percent" with a corresponding "30 -- 35 percent increase in retail electric rates." The 

commenters stated that the proposed rule's impact on electric cooperatives would also adversely 
377

impact small businesses and rural, low-income communities that are served by these non-profit, 

member-owned cooperatives and eliminate many coal plants owned by electric cooperatives---

plants that provide jobs and economic health in Texas's rural communities. 

Commenters stated that electric consumers in rural areas of Florida have median household 

incomes of less than $40,000 and are primarily served by rural electric cooperatives. The 

commenters stated that Florida customers are still paying for mandated environmental 

investments and will continue to pay for them for another decade. The commenters stated that 

rural cooperatives and municipal utilities will have to retire recently upgraded coal power 

generators before the end of their useful life and build new generators all at the expense of their 

customers. The commenters stated that if they must continue to pay off the prior costs of 

installing environmental control technologies, which are no longer being used, and pay for new 

power plants, rates will increase and the higher rate burden will fall on a segment of our 

population that can least afford any additional expenses. 

Commenters stated that EPA should withdraw the Existing Source Proposal because it would 

disproportionately impact rural electric cooperatives that seek to provide affordable, cost-based 

electric power to rural Americans in the face of ever-increasing environmental mandates. The 

commenters stated that if co-ops are required to run their coal-fired units less, they may not be 

able to compensate by increasing generation at other, lower-emitting sources. The commenters 

stated that due to the geographically-determined disparity in distribution costs, rural electric 

cooperative members generally pay higher electricity rates than non-rural electric consumers. 

The commenters stated that if EPA implements the Existing Source Proposal, co-op members' 

electricity rates will most certainly increase and this would place additional burdens on a 

segment of the population already shouldering a disproportionate load.

Commenters stated that in many, if not most, instances the standards EPA has set are so stringent 

that they cannot be met except by closing or drastically curtailing operations from existing coalfired EGUs. The commenters estimates that 21% of cooperative coal generation capacity would 

be scrapped under this proposal. 

Commenters cited EPA estimates of an increase in the national average retail price of electricity 

of between 5.9 and 6.5 percent in 2020 and between 2.7 and 3.1 percent by 2030 under Option 1 

(full deployment of all four Building Blocks by 2030). The commenters cited EPA estimated 

increases, under Option 2 (lower deployment by 2025), of between 23.6 and 4.0 percent in 2020 

and between 2.4 and 2.7 percent in 2025. The commenters stated that Tri-State's status as an 

electric cooperative requires that it pass any costs on to its Member Systems, which are passed 

on to their member-owners, and Tri-State's members will be forced to shoulder the burden of 

higher cost energy and the resulting economic harm these additional costs engender. 

Commenters stated that there will be a disparate cost impact or burden on consumer-owned 

utilities COUs to comply with the CPP. The commenters stated that cost recovery mechanisms 

that are afforded to investor-owned utilities (IOUs) allow the significant costs of complying with 

CPP to be recovered from ratepayers in a manner that will not erode the earnings of 

stockholders, and in some cases, investment in new generation will increase IOU "rate base", 

thereby increasing earnings. The commenters stated that COUs will recover compliance costs by 

similar means, but COU "owners" will see less value return because they will only see rate 
378

increases. The commenters stated that in Florida, COUs have relatively newer solid fuel 

generation assets that will be more prematurely stranded than will be for IOUs. 

Commenters stated that EPA's cost/benefit calculations take credit for phantom benefits and 

overstate cost savings from EE to reach the conclusion that electricity bills will be reduced eight 

percent by the CPP. The commenters cited Energy Ventures Analysis estimates that in 2020, 

annual household electricity bills in Kentucky will increase 35% over the 2012 rate, an increase 

of almost $450. The commenters stated that the costs to comply with the CPP will be 

significantly higher than anticipated by EPA. The commenters stated that the sustained cold 

weather in the eastern half of the United States in early 2014 resulted in peak market prices (in 

PJM) in excess of $2,000/MWH and sustained prices of $70/MWH, well above the "round the 

clock" average price of $32/MWH experienced in 2013. The commenters stated that cost spikes 

and sustained high costs will be borne by the Owner-Member ratepayers. The commenters cited 

NERA estimates that for the period 2017-2031, assuming that all four "Building Blocks" are 

used, to achieve an average of 22 percent reduction in CO2 emissions, 45 GW of coal units will 

be retired, resulting in a 29 percent decline in coal-fired generation. The commenters cited 

NERA estimates that natural gas generation will about five percent on average and the price of 

natural gas would increase by about two percent on average. The commenters cited NERA 

estimates that if the energy sector only employs building blocks 1 and 2, 169 GW of coal units 

would be retired, natural gas prices would increase by 29 percent, on average, and the cost of 

delivered electricity would increase by 17 percent. 

Commenters stated that the Proposed Rule will drive up the cost to produce electricity and this 

cost increase must be passed along to its members. The commenters cited an Energy Venture 

Analysis (EVA) estimate that under the Proposed Rule in nominal dollars, in 2020, the electricity 

production cost in Mississippi will increase 225% over the 2012 cost. The commenters stated 

that SMEPA rates will be impacted well above the national average considering the number of 

coal unit retirements expected and how disproportionately low Mississippi's CO2 goal is in the 

Proposed Rule compared to the vast majority of states. The commenters stated that annual 

Mississippi residential power and gas bills are expected to increase 63% by 2020, increasing by 

$1,300. The commenters performed an analysis to estimate the impact of the Clean Power Plan if 

the proposed CO2 limitations had been in place for the years 2008 and 2012, and found that 

when the 732lb/MWh CO2 limit was applied to 2008 & 2012 along with the $80/ton carbon tax, 

SMEPA would have incurred an additional annual cost of approximately $208.3 million in 2008 

and $161 million in 2012. 

Commenters stated that should a State choose to reduce the burden on cooperatives, under EPA's 

approach, the State would need to increase the burden on other utility providers to meet that 

State's EPA goal. The commenters stated that the final rule should not provide one unit or utility 

relief at the expense of other units or utilities. The commenters stated that States need maximum 

flexibility to draw upon a wide range of tools to determine how to meet emissions reduction 

goals. 

Commenters stated that EPA either fails to recognize or minimizes the full negative economic 

impacts of the proposed rule. The commenters stated that NREA members were created to serve 

sparse rural areas where costs are shared by a smaller number of consumers, and any increase in 

rates will have a tremendous negative impact.
379

Commenters estimated the total cost for the East Texas Cooperatives to comply with the Clean 

Power Plan to be $2.9 billion over a ten year period from 2020 until 2030. The commenters 

estimated the ETCs will face $385 million in stranded costs associated with the four coal plants 

being shut down in EPA's model (ISES 2, Plum Point, Nelson 6 and Pirkey) and the closure of 

the new Woodville biomass plant, $30 million in total decommissioning costs associated with the 

retirements of the four coal plants above, and $585 million in replacement costs. The 

commenters stated that member-owners are especially vulnerable to electricity price increases. 

The commenters stated that with a total cost of $2.9 billion, estimated monthly rate impacts are 

$35-40 a month, or $420-480 per year-an increase of approximately 30--35% over current 

electricity bill. The commenters stated that the ETCs serve some of the poorest counties in the 

state of Texas.

Commenters stated that a large number of electric cooperative members face financial obstacles 

that will be greatly exacerbated by the EPA's proposed regulations.

Commenters stated that G&Ts have invested billions of dollars to install state of the art 

emissions controls to comply with numerous other regulations issued by EPA and that EPA is 

proposing to restrict or eliminate the ability of these well-controlled units from operating which 

will leave these investments as stranded assets and result in dramatic, unprecedented and 

dangerous increases in electricity rates. The commenters stated that the Clean Power Plan would 

force the retirement of an additional approximately 40-48 GWs of coal capacity, which is in 

addition to the forced retirement of approximately 47-75 GWs of coal units as a result of the

MATS & CSAPR rules. The commenters stated that the combination of this reduction in rate 

revenue and the cost of filling the generation gap with market power will have an immediate 

dramatic financial impact on G&Ts. The commenters stated that this impact would be 

compounded by the additional cost of out of market of operation of coal and gas operation under 

Building Block 2; the higher cost of renewable energy; and the cost of the energy efficiency 

measures that G&T distribution member cooperatives would incur trying to meet savings targets 

in rural service territories where successful implementation of EE programs is very difficult. The 

commenters stated that G&Ts have limited capital available to them, are heavily leveraged and 

units running even less than 10 percent below their operational norm on a continuing basis will 

be unable to generate enough revenue to service the outstanding debt on the unit. The 

commenters stated that the Clean Power Plan would drive up electricity rates and 

disproportionately impact those living in rural America. The commenters stated that EPA's 

cost/benefit calculations take credit for phantom benefits and overstated cost savings from 

energy efficiency to reach the conclusion that electricity bills will be reduced 8% by the Clean 

Power Plan. The commenters stated that in rural service territories, increases in rates result in 

service disconnection, voluntary under-service, and use of alternative heating and other energy 

options like woodstoves. The commenters stated that some Cooperatives serve one member per 

mile of transmission line or less making EE projects even more challenging, as well as reducing 

any EE gains by the line losses. The commenters stated that Energy Efficiency should not be an 

enforceable compliance measure.

Commenters stated that implementing a plan to attain the Alaska CO2 Performance Goals will 

increase the cost of electricity to some Alaskans. The commenters stated that EPA must evaluate 

the real economic impacts and the federal government must help negatively impacted locations 

recover. The commenters stated that coal is currently the only cost effective fuel source available 
380

for Golden Valley Electric Association (a rural electric cooperative) to use to generate and 

provide electricity to Interior Alaska customers. The commenters stated that should GVEA need 

to replace coal generation with available oil generation, the result would be an approximate 

$60.7 million per year increase in variable cost for the sparsely populated region, and more than 

$187 million dollars (excluding capitalized interest) in stranded assets. 

Commenters stated that the proposed emissions reductions will be impossible for Arizona's rural 

Electric Cooperative members to attain. The commenters stated that the impact to the citizens of 

this state and the economy cannot be overstated.

Commenters stated that the costs will have to be borne by cooperatives' members and consumers. 

The commenters stated that because of the lack of density on electric cooperatives lines -- in 

Minnesota, the average cooperative has 6.4 members per mile of line, versus 38-per-mile at 

Investor-Owned Utilities (IOUs) or 48 at Municipal Utilities -- those costs will fall 

proportionally higher on electric co-op members than other utility customers. 

Commenters stated that TECA co-ops receive wholesale electric energy and energy-related 

services from TVA through an all-requirements power contract, which serves as the primary 

vehicle for the wholesale rate, terms, and conditions of energy sales to the co-ops, as well as the 

regulatory powers granted to TVA, which include the oversight of the retail rate(s) and their 

service practice standards. The commenters stated that energy generated at a hydroelectric dam 

in Tennessee may ultimately be consumed in North Carolina, energy generated at a nuclear plant 

in Alabama may be consumed in Mississippi, emission reduction expenditures may occur at a 

coal-fired facility in Kentucky and be realized by customers in Georgia, etc. The commenters 

stated that any cost increases attributable to regulatory requirements are passed through 

completely to the end-use customer who is also the owner of the utility, by virtue of the 

cooperative business model. The commenters stated that Federal law generally regulates the coops and limits the ability of a state body to compel action from the co-ops. The commenters 

stated that the co-ops are unique among their peers in that their power supplier and regulator are 

the same entity. 

Commenters stated that it had already surpassed Wisconsin state mandates for renewables by 

almost 25 percent and has more distributed generation in the Badger State than all other utilities, 

despite serving only 11 percent of the people. The commenters stated that the costs of complying 

with the new regulations will fall hardest on those who can least afford it. The commenters stated 

that rural electric cooperatives own 43 percent of the nation's power lines but serve only about 11 

percent of the population with seven members per mile of line and per mile of line revenues of 

$10,565. The commenters stated that investor owned utilities (IOUs) have 35 customers per mile 

of line and per mile of line revenues of $62,655, and municipal utilities have 47 customers per 

mile of line and per mile of line revenues of $86,302. The commenters stated that rural electric 

cooperatives have significantly higher costs, far fewer consumers to absorb those costs, and 

much less revenue to cover the expense of such a system. The commenters stated that due to 

Dairyland's thinly capitalized business structure, operating reserves tend to be low and 

significant changes will place substantial burdens on Dairyland, its member cooperatives and 

ultimately the end-use consumers. 
381

Commenters stated that the members of NREA are not-for-profit distribution only utilities 

which, in turn purchase all of their wholesale energy needs from not-for-profit generation 

utilities. The commenters stated that our consumer-owners bear all costs of generation and 

compliance with EPA regulations through their rates and it is clear that the EPA did not account 

for the not-for-profit nature of rural electric cooperatives and rural public power districts. The 

commenters stated that NREA members are very concerned that the plan does not have an 

economic safety valve or cost containment guidelines that would mitigate impacts to small 

utilities and their customers in the event that the costs to comply are much greater than 

anticipated or have a significant negative impact on electric generation markets. The commenters 

stated that EPA acknowledges that the proposal will increase the price of electricity, but either 

fails to recognize or minimizes the full negative economic impacts it will impart. The 

commenters stated that NREA members were created to serve sparse rural areas where costs are 

shared by a smaller number of consumers; any increase in rates - even one improperly 

characterized by EPA's as modest - will have a tremendous negative impact. 

Commenters stated that the requirement for a 34 percent reduction in carbon emissions from coal 

plants statewide by 2030 is overly aggressive and will result in disproportionate increase in costs 

for its membership. The commenters stated that it is already challenged in providing affordable 

electricity due to the low line density of its systems, and increased costs will dramatically impact 

low- income consumers in its service territory. The commenters stated that EPA should consider 

a maximum rate impact or economic off-ramp for electric cooperatives.

Commenters stated that the proposal would significantly increase the costs associated with 

generating and transmitting electricity across this country, costs which would ultimately be borne 

by the end-user. The commenters stated that rural families and businesses pay higher monthly 

electricity bills than those living in non-rural areas, due to the increased costs associated with 

providing electricity to rural areas, as well as greater usage by rural residents. The commenters 

stated that the proposal would drive those costs even higher, potentially having a devastating 

impact on the economic recovery of rural communities. 

Commenters stated that the proposed rule will result in higher electricity prices. Commenters 

stated that EPA's proposal does not provide a workable solution to address cooperatives' unique 

circumstances, such as being heavily reliant on coal and limited in financial flexibility because of 

their not for profit status. The commenters further stated that the proposal will trigger high prices 

for many consumers and local businesses and jeopardize the wellbeing of millions of American 

families, including low income families that are most at risk. 

Commenters also proposed that EPA's proposal directly threatens safe, affordable and reliable 

electricity in rural America and the related economic opportunities. The commenters stated that 

the proposed additional level of investments in energy efficiency required by cooperatives to 

implement the fourth building block goes far beyond what can be afforded by cooperatives and 

their consumer owners. The commenters also stated that many of the consumer owners of 

cooperatives are composed of persistent poverty counties. 

Commenters stated that although the local energy cooperative tries to keep energy costs as 

inexpensive as possible, EPA's proposal will increase energy costs, which are a significant 
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portion of operating expenses for the commenters’ small business and will have to be passed on 

to customers. 

Commenters discussed the impacts of the proposal on power plants owned by electric 

cooperatives and the resulting financial burdens on the cooperatives and consumers. The 

commenters stated that these power plants have a useful life that extends beyond 2030 and coops 

have invested billions of dollars on environmental controls to meet previous regulations. The 

commenters further stated that the proposal will result in stranded assets and premature 

shutdowns, which is unreasonable, unjustifiable and arbitrary. 

Commenters stated that if the proposed rule is finalized, capital investments would need to be 

spread and recovered over significantly fewer megawatt-hours, resulting in an increase in the 

cost of the electricity for member systems and their customers. Commenters stated that even with 

subsidies and incentives, you cannot force homeowners to take advantage of energy efficiency 

offers, and raising power prices so high that people would be forced into it is not equitable for 

low income rural communities, or for the commercial and industrial consumers served by our 

members. The commenters then urged EPA to look for other incentives that work for low income 

retail consumers and not unfairly punish others, and noted that in a not for profit cooperative the 

cost of every incentive is spread across all the member consumers.

The commenters stated that because rural electric cooperatives are heavily coal-dependent, the 

Proposed Rule will have an especially severe impact on rural poverty.

Commenters has indicated that the Clean Power Plan can potentially raise our electrical rates by 

as much as 30%. Commenters stated a 30% increase in electrical power cost would have a 

significant impact on the rates we charge our customers, both residential and industrial. 

Commenters stated that South Carolina electric cooperative members are heavily impacted by 

poverty that nearly 20 percent of the families it serves make less than $25,000 annually, and in 

some months many spend as much as 80 percent of their income on energy costs. The 

commenters stated that the cost increases resulting from South Carolina's attempts to comply 

with the Clean Power Plan stand to significantly impact the financial well-being of the 

communities it serves and that such increases would not only disproportionately affect South 

Carolina cooperative members, but since electric cooperatives are owned by the people they 

serve, those same people must directly bear the costs of any resulting increases in the cost of 

electricity. 

Commenters stated that South Carolina has 12 persistent poverty counties (26 percent of the 

state's total), defined as counties with a poverty rate of 20 percent or higher in each census from 

1970-2010, and that electric cooperatives serve in all 12 persistent poverty counties in the state, 

where, in some cases, the median household incomes are 43 percent less than the national

average. The commenters stated that 17 percent of electric cooperative members, more than 

200,000 people, live below the established Federal Poverty Level ($23,850 for a family of four). 

The commenters stated that this is 2 percent higher than the national average. The commenters 

stated that 23 percent of South Carolina's electric co-op members, more than 254,000 people, 

live beneath 125 percent of the established Federal Poverty Level ($29,813 for a family of four) 

which is three percent higher than the national average. The commenters stated that South 
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Carolina residents above age 65 are especially vulnerable to rising costs for nondiscretionary 

goods and services, and that more than 40,000 households (36 percent) headed by a co-op 

member over the age of 65 have an annual household income less than dollar 25,000. The 

commenters stated that 24 percent of electric cooperative homes in South Carolina are 

manufactured housing, and that mobile homes represent 17 percent of the state's housing stock, 

which is almost 3 times the national average. The commenters stated that more than two-thirds of 

South Carolina's co-op members (68 percent) use electricity as a primary heating source, and that 

in the state's persistent poverty counties, this number rises to 73 percent. The commenters stated 

many of its members cannot afford the additional economic challenges that may result if all 

provisions of rule III (d) are enacted. 

Commenters stated that ratepayers in Alaska will bear a substantially greater burden under this 

rule than ratepayers in the interconnected states. The commenters stated that Alaska does not 

have economies of scale itself, and does not have the opportunity to participate in a regional 

compliance approach. The commenters stated that the affected EGUs in Alaska all belong to 

either cooperative or municipal utilities, and that the financial impact of this rule will be 

unavoidably felt by utility members and resident ratepayers, not investors. 

Commenters stated that the Supreme Court recently reminded EPA, nothing in the CAA 

authorizes the Agency to regulate GHGs "in any way that would be 'extreme,' 'counterintuitive,' 

or contrary to 'common sense.' The commenters stated that shutting down Springerville Unit 3 

would strand a significant investment made by Tri-State less than 10 years ago. The commenters 

stated that the decommissioning and write-off costs for Unit 3, in conjunction with any measures 

needed to replace that power supply, would harm Tri-State, its 44 member cooperatives, and the 

retail consumers of those cooperatives through higher rates to compensate for the loss of this 

valuable asset in Tri-State's generation portfolio. 

Commenters stated that the proposed emissions reductions will be impossible for Arizona's rural 

Electric Cooperative members to attain. The commenters stated that the impact to the citizens of 

this state and the economy cannot be overstated. 

Commenters stated that agriculture is often energy-intensive and depends on the availability of 

reliable, affordable energy, and a diverse energy supply keeps energy costs reasonable and 

reliable. The commenters stated that natural gas is used to power irrigation pumps and in the 

fertilizer used to produce crops; diesel is used in our farm equipment, propane is used to heat 

poultry and hog houses and to dry corn and soybeans once they have been harvested, and coal is 

used predominately by electric cooperatives, powering farms, ranches and communities all 

across rural America. The commenters stated that policies addressing carbon emissions would 

have vast, wide-ranging impacts both on America's farmer cooperatives, particularly food 

processors and on individual farmers, ranchers and growers. The commenters stated that farmer 

cooperatives and their member-owners are very concerned that regulatory programs to reduced 

greenhouse gas emissions will result in higher business costs, especially those related to energy, 

fuel, and fertilizer and if increased costs are passed along to the consumer, American agriculture 

will lose its competitive edge in the global marketplace. The commenters stated that they do not 

support adopting policies that would impose new costs on U.S. agriculture producers while 

letting our foreign competitors avoid such costs and believe that farmer cooperatives or their 

producer-owners will not continue to receive an affordable and reliable supply of energy. 
384

Commenters stated that with the cost of replacing existing coal-fired generation with natural gas 

and a mix of renewables out of reach for many municipal utilities, the natural course is to look 

for replacement power from sources that are often far removed from the local economy. The 

commenters stated that will vest the private sector power companies with all the country's 

generation assets. 

Commenters stated that because the proposal would likely result in the premature closure of 

existing power plants, the proposal's requirements amount to a regulatory taking requiring 

compensation because of the premature closures and uneconomic curtailment it will require. The 

commenters stated that this is especially true considering that many electric cooperatives, 

including those in Mississippi, constructed coal fired generating facility in accordance with the 

Fuel Use Act, in which the federal government required that no new base load electric generating 

plants be constructed without the capability to use coal. 

Commenters stated that as a rural electric cooperative, the dramatic increase in rates from the 

CPP will exacerbate the difficulty that poor Americans already face with the cost of electricity. 

The commenters stated they are providing EPA with comments on the special considerations of 

the impact of the proposed CPP on the ability of rural electric cooperatives to comply with the 

REA federal mandate that EPA should factor into promulgation of a final rule, if any is issued. 

The commenters stated that they have invested billions of dollars in retrofitting their fossil units 

with state of the art emissions controls and installing new, very low emission generation in order 

to comply with other CAA regulations and members must still pay for them even though the CPP 

will restrict the operation of or force the retirement of this generation. 

Commenters stated that EPA's estimates project that this rule will cause nationwide electricity 

price increases averaging between six and seven percent in 2020, and up to 12 percent in some 

locations, and also estimates annual compliance costs between $5.4 and $7.4 billion in 2020, 

rising up to $8.8 billion in 2030. The commenters concluded that these substantial power sector 

compliance costs do not capture the subsequent adverse spillover impacts of higher electricity on 

overall economic activity, and the comprehensive financial impact for business, manufacturers 

and residential customers should be better understood and analyzed before this rule is finalized. 

Commenters stated that they were concerned that Nebraska's public power districts may be 

unduly affected by EPA's proposed Clean Power Plan. Commenters said that Nebraska is the 

only state who, by statute, meets all of its power needs through a public power system. 

Commenters said all power in Nebraska is delivered by entities governed by independently 

elected boards. Commenters said this system continues to be extremely effective in meeting the 

needs of Nebraska citizens by delivering reliable, low-cost electricity. Commenters said that as it 

stands, the Nebraska public power districts may need to reduce capacity and reliance on existing 

units in order to comply with this proposal. 

Commenters stated that in the last 10 years, Nebraska's population has grown only by 0.7 

percent. Commenters said that since 2000, 69 of our 93 counties have experienced a decline in 

population, while our urban areas have experienced the added challenge of serving an increasing 

population. Commenters said both create unique population dynamics that the power districts 

must be ready to serve and sustain. Commenters said the proposed Clean Power Plan, in concert 

with other already enacted regulatory issues facing Nebraska utilities such as the Mercury and 
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Air Toxics Rule, the Cross State Air Pollution Rule; and the Sulfur Dioxide standard/consent 

decree, has the potential to disproportionately impact Nebraska's public power system. 

Commenters said the Nebraska public power sector is being required to implement many costly 

compliance measures over such a short period of time. 

Commenters stated as indicated in comments filed on September 29, 2014, which are hereby 

incorporated by reference, this proposal would affect approximately 100 small public and 

cooperative entities if the 4 million MWh of sales definition is used. Commenters' analysis 

determined that it is likely that the small public and cooperative utility subcategory would result 

in less than a 1% leakage rate from the carbon reduction that EPA is seeking. Commenters said 

changes to the proposal from his organization's September 29, 2014, comments include the 

following:

Clarification that small public or cooperative utility requests applicability of the subcategory (in 

paragraph (b) introductory language). Provided some clarification on how to handle units that are 

partially owned, or owned by not operated, which is a situation that applies to many 

cooperatives. Revised language addressing this issue is found in paragraphs (b)(2), (b)(3)(i)(B), 

and (b)(3)(i)(E)(III). Slightly loosened the language of paragraph (b)(3)(iii) to allow 

consideration of book life as suggested in EPA's Notice of Data Availability ("NODA"), while 

maintaining the requirement that the State Plan identify a date certain for shutdown. Added a 

new paragraph (b)(3)(iv) allowing a unit to avoid the mandatory shutdown requirement if the 

small public or cooperative utility system would come into compliance with the Final Goal by 

December 31, 2039. 

Commenters stated at a meeting in September, 2014, and again in November, 2014, the EPA 

inquired whether adequate flexibility exists under other provisions of the Proposed Rule to 

eliminate the need for the proposed small public and cooperative utility subcategory. 

Commenters said respectfully, AEPCO does not believe adequate flexibility exists. Commenters 

stated first, as detailed in the comments of the Arizona Department of Environmental Quality 

("ADEQ") submitted on November 21, 2014, in Arizona there is no flexibility to alter the 

application of the Building Blocks and still achieve both the Interim and Final Goals. 

Commenters stated thus, ADEQ does not have any practical ability to provide the relief needed 

to small public and cooperative utilities, at least under the current Proposed Rule. Commenters 

stated second, even if the Interim Goal is relaxed, under the Proposed Rule's approach of 

defining a final, numeric target, any relief that is granted to a small public or cooperative utility 

will result in another entity having to reduce proportionally more. Commenters said it is unclear 

whether, in such a zero sum situation, that a state agency such as ADEQ would find it politically 

possible to extend relief to deserving entities with limited financial capabilities. Commenters 

stated third, it is not clear, given the Section 111's requirement that cost be considered in setting 

the standards of performance for each individual source, that it is appropriate to apply 

unreasonably costly controls to small public and cooperative entities or to reapportion costs 

beyond what a reasonable control costs on other entities. Commenters said these problems are 

solved by creating a subcategory which meets its own criteria without reapportioning between 

the subcategory and the other sources no longer represented in the subcategory.

Commenters expressed concern about municipal utilities and rural cooperatives. Commenters 

stated there are numerous examples of municipal utilities and rural electric cooperatives (electric 
386

coops) with outstanding energy efficiency programs that are achieving high levels of energy 

savings, and doing so cost effectively. Commenters stated that while they do not suggest that any 

adjustments in the proposed standards are warranted, they acknowledge that the range of 

opportunity for emissions reductions may be more limited for rural electric cooperative utilities. 

Commenters said this may, in turn, impact compliance costs, which are of particular concern for 

rural electric cooperatives that tend to serve lower income residential customers. For this reason, 

commenters stated it is critical that electric cooperatives are able to realize the opportunity of 

energy efficiency as a least-cost compliance pathway. Commenters stated that the EPA should 

seek opportunities to provide technical assistance to electric cooperatives to facilitate 

implementation of energy efficiency programs, or connect electric cooperatives with financing 

resources available from the U.S. Department of Agriculture (USDA) - through initiatives such 

as their Rural Utilities Service (RUS) Energy Efficiency and Conservation Loan Program 

(EECLP), and other agencies that can serve as the foundation for effective, accessible programshelping rural electric cooperatives to meet their savings goals while promoting more affordable, 

more comfortable homes for their membership. Commenters added that the Electric 

Cooperatives of South Carolina have leveraged on-bill financing to create one of the most 

successful cooperative energy efficiency programs in the Southeast, the Help My House 

Program. Commenters stated the average participating home cut electricity use by 34 percent -

nearly 11,000 kWh per year during this program with an average simple payback of just over 

six-and-one-half years. Commenters stated after these loans are paid off, program administrators 

predict that annual savings for an average home will increase to more than $1,100 per year, 

producing a net cumulative savings after 15 years of more than $8,500. Commenters 

recommended that municipal and electric cooperative energy efficiency programs included in 

state implementation plans include third-party verification of savings as approved by the state 

and in line with standards suggested/required by EPA. 

Response 23: Commenters assert that municipal and electric cooperatives will be negatively 

impacted by the Clean Power Plan and will need to recover costs of stranded coal-fired capacity 

through higher rates. The EPA recognizes that the power sector is made up of a diverse range of 

companies of various sizes that own and operate fossil fuel-fired EGUs, including vertically 

integrated companies in regulated markets, independent power producers, rural cooperatives and 

municipally-owned utilities, some of which are likely to have more direct access than others to 

certain types of GHG emission reduction opportunities, but all of which have a wide range of 

opportunities to achieve reductions or acquire clean generation. The final rule gives states the 

flexibility to implement a broad range of approaches that recognize the diversity in the power 

sector in development of implementation plans.

The EPA’s analysis for the CPP, based in part on observed decades-long behavior of EGUs, 

shows that all types and sizes of affected EGUs in all locations are able to undertake the actions 

described as the Best System of Emission Reduction (BSER), including investor-owned utilities, 

merchant generators, rural cooperatives, municipally-owned utilities, and federal utilities. Some 

may need to focus more on certain measures; for example, an owner of a small generation 

portfolio consisting of a single coal-fired steam EGU may need to rely on more multi-unit 

compliance approaches, possibly including the purchase of emission credits or allowances, 

because of a lack of sufficient scale to diversify its own portfolio to include NGCC capacity and 

renewable capacity in addition to coal-fired capacity. As noted in the preamble of the final rule, 

as a legal matter, it is not necessary that each affected source be able to implement the BSER, but 
387

in any event, in this rule, all affected EGUs can do so. Because states can reasonably be expected 

to establish standards of performance incorporating emissions trading, affected EGUs may rely 

on emissions trading or other multi-unit compliance approaches authorized under their states’ 

section 111(d) plans to, in effect, invest in building block measures that are physically 

implemented at other locations. See the GHG Mitigation Measures Technical Support Document 

for more information on this topic. 

Comment 24: Clean Power Plan will impact Tribes.

24.a. Commenters state that certain tribes are coal-based economies that the CPP may impact 

negatively affecting these tribal economies and tribal jobs. 

Commenters stated that the Navajo Nation is a coal-based economy and believes that any climate 

change rule promulgated by EPA should consider the unique situation of the Navajo Nation, 

including its underdeveloped economy, lack of access to electricity, and staggering 

unemployment rate.

Commenters stated that The Navajo Nation is a uniquely disadvantaged people and their unique 

situation justifies some accommodation. The commenters stated that there are three large coalfired power plants on or near the reservation that are vital contributors to the economy of the 

Navajo Nation and employ a significant number of Navajo workers. The commenters stated that 

the plants located on the reservation make lease payments and pay related fees that contribute 

significant funds to the Navajo Nation government, which allows it to provide services to the 

Navajo people. The commenters stated that it wishes to preserve the operation of these power 

plants while also finding means to improve the Navajo Nation's overall economy and access to 

electricity by Navajo Nation residents. The commenters stated that does not support any 

proposed measures by EPA that could be potentially devastating to the Navajo Nation economy. 

The commenters stated that the Navajo Nation also depends on oil and gas revenues which 

fluctuate greatly, thus severely affecting the Navajo Nation's revenue stream, but that revenues, 

taxes, and lease payments related to coal are a steady and reliable source of revenue. 

Commenters stated that EPA did not account for the local economic effects of co-firing and gas 

conversion on the Navajo Nation. The commenters stated that decreased use of regionally 

available coal to accommodate increased use of off-reservation natural gas would cause 

significant adverse local economic impacts on the Navajo Nation as a result of lost revenue from 

and decreased employment at the Kayenta Complex and Navajo Mine, which supply coal to 

NGS, and FCPP, and should be avoided. The commenters stated that the Navajo Nation is 

particularly sensitive to this situation, as its economy and the Navajo Nation's General Fund, 

which funds services to the Navajo people, are heavily dependent upon the fate of the two coalfired power plants located in the Navajo Nation and the sale of coal to those plants. 

Commenters stated that the Crow Nation receives revenues equaling 66 percent of its annual 

operating budget from severance taxes paid for the mining of coal owned by the Crow Nation 

and ninety percent of the coal mined is sold to, and burned at, electrical generating units (EGU) 

in Minnesota. The commenters stated that the Proposed Rule strongly encourages the State of 
388

Minnesota to demand retirement of the older units of the power plant to meet with carbon 

reduction goals set by the EPA. 

Commenters stated that the majority of Deseret's member-consumer load serves economically 

challenged rural areas and tribal communities that will be placed at heightened risk for material 

adverse impact by costs of compliance with the Supplemental Proposal. The commenters stated 

that given the small relative size of Deseret and the relative impact of having only one 

jurisdictional EGU that it operates, EPA should formulate the Supplemental Proposal as pertains 

to the Uintah-Ouray Reservation to minimize the impacts of the Supplemental Proposal. The 

commenters stated that a portion of electric output from the Bonanza Unit is sold to off-system 

wholesale contract customers under terms of long-standing power sales agreements. The 

commenters stated that those long-term contracts pre-date the Supplemental Proposal by many 

years and under those arrangements, Deseret has very limited ability to pass through to such 

long-term contract purchasers the increased costs of compliance with the Supplemental Proposal. 

The commenters stated that the tribal members living in and around the Uintah-Ouray 

Reservation, together with the rural consumers in surrounding communities will likely bear a 

disproportionate share of such increased costs. 

Commenters stated that coal mining provides production taxes and royalties to the Crow Nation 

exceeding $20 million in 2010 when the Mine was operating at full capacity and that the revenue 

generated represents as much as two-thirds of the Crow Nation's annual non-federal budget. The 

commenters stated that WRI employs a 70% tribal workforce, with an average annual salary of 

over $66,000, and a total employment expense of approximately $18.6 million dollars. The 

commenters stated that the mine is the largest private employer within the Crow Reservation and 

is a critical source of jobs, financial support and domestically produced energy.

Commenters stated that many western power plants and associated mines reside on or near tribal 

lands and provide significant economic benefit to the tribal economy including employment of 

Native Americans. 

Commenters stated that should the EPA's Existing-Source Proposal be finalized, Seminole's 

coal-fired power plant will be forced to close - leaving 300 skilled employees and as many as 

600 contractors without a job. The commenters stated that Seminole is also the largest taxpayer 

in Putnam County, and paid more than $5 million in property taxes in both 2013 and 2014. The 

commenters stated that Putnam County cannot afford to lose Seminole's coal-fired power plant 

or any of the jobs associated with the facility. 

Commenters stated that the proposal will retire or significantly reduce the operation of 

Seminole's facilities (both SGS and MGS), resulting in severe economic impacts on Seminole. 

The commenters stated that a forced retirement prior to the end of their useful life will result in 

substantial stranded debt, as well as additional costs associated with generation to replace these 

units. The commenters stated that IPM also projects that the proposal would have dramatic 

impacts on the NGCC and peaking units at MGS. The commenters stated that the IPM Policy 

Case projects that these units will operate in 2025 at a capacity factor of just 16.1 percent, 

representing a two-thirds reduction in generation from 2012 to 2025. The commenters stated that 

EPA has not considered, and must account for, the severe economic impacts Seminole would 

face if the NGCC and peaking units at MGS are forced to reduce generation. 
389

Response 24.a.: As described in sections III.A and XI.F of the preamble to the proposed carbon 

pollution emission guidelines for existing EGUs (79 FR 34845-34847; June 18, 2014) and 

sections II.D and VI.F of the preamble to the proposed carbon pollution emission guidelines for 

existing EGUs in Indian Country and U.S. Territories (79 FR 65489; November 4, 2014), the 

final CPP was developed after extensive and vigorous outreach to tribal governments. After 

issuing the supplemental proposal, the EPA held additional consultation with tribes as described 

in the preamble for the final rule Section VII.F.

The EPA conducted an analysis of the cost, benefit and economic impacts of the CPP for tribes 

in the Regulatory Impact Analysis for the Carbon Pollution Emission Guidelines Supplemental 

Proposal and for the final emission guidelines in the Regulatory Impact Analysis for the Clean 

Power Plan Final Rule (RIA) for illustrative implementation scenarios. This rule does not 

directly impose specific requirements on EGUs located in states, U.S. territories or areas of 

Indian country. The rule also does not impose specific requirements on tribal governments that 

have affected EGUs located in their area of Indian country. For areas of Indian country, the rule 

establishes CO2 emission performance goals that could be addressed through either tribal or 

federal plans. See the RIA and final rule preamble section XII. F. for more information.

24.b. Commenters state that renewable energy will be beneficial to tribes by providing steady 

revenue, creating jobs, allowing tribes to manage their own electricity projects and improving 

the standard of living for tribes. 

Commenters stated that tribes can use renewable generation to obtain steady revenues for the 

tribal government (for example, through export of electricity), create jobs in the reservation, 

manage their own electricity projects as opposed to depending on private entities for service 

delivery, and ensure a better standard of living for tribal members who currently lack access to 

services. The commenters stated that a distributed generation-based rural electrification program 

may not be able to provide tribal governments with a large source of income, and a utility-scale 

project would not provide energy to members located far off the grid, so a balanced mix of 

distributive and utility scale generation may be needed to meet both sets of needs. The 

commenters stated that EPA should also inform tribes of available funding mechanisms to 

incentivize these projects, for example, through DOE's Tribal Energy Program. DOE's Wind 

Anemometer Loan Program. The commenters stated that a land lease to a third party, who in 

turn develops a solar or wind farm, offers the tribe the possibility of accessing tax incentives, 

which do not apply to Native Americans because they are not taxable entities, however, a 

tribally-owned project would generate a larger source of revenues than land leases, but it would 

also require experience in developing and managing projects. The commenters stated that tribes 

would benefit by moving away from coal, which is no longer economical and results in major 

environmental and health harms, as their own communities have attested. 

Commenters stated that the Clean Power Plan can result in ancillary benefits, such as the 

expansion of renewable energy, energy efficiency, a modernized grid and can create good jobs 

for people who desperately need them. The commenters stated that some jobs will be lost and 

some tribal members will be affected as tribes make the transition away from fossil fuels, and the 

government has a key role in working with tribes to help ensure a fair and just transition to a 

clean energy economy. 
390

Commenters stated that the Moapa Band of Paiute Indians became the first tribe in the nation to 

develop commercial scale clean energy project -- solar. The commenters stated that they have a 

power purchase agreement with LAWP for the first 200 megawatts of solar project called First 

Solar, and tribal members are all working and all have good paying jobs. The commenters stated 

that they have a call out to our neighbors for hundreds of more workers, who should be able to 

transition into the other solar projects with good jobs, safe jobs, and green jobs. 

Commenters stated that while some tribal members are employed at these power plants, research 

indicates that considerably more jobs could be created with renewable resources that could be 

used in lieu of coal-fired generation. The commenters stated that distributed renewable 

generation, such as rooftop solar installations, would be far more effective at closing the 

electrification gap among Navajo residents. The commenters stated that renewable development 

under the Clean Power Plan and the supplemental proposal has the potential to increase the 

standard of living of tribal communities and provide a steady source of revenue for tribal 

governments. The commenters stated that solar panels and wind turbines produce not only a 

valuable commodity, but they can also result in a large number of high quality jobs, providing an 

opportunity to increase the overall employment rate, provide electricity to tribal members that 

are located far from the electric grid, and increase revenues for the development of infrastructure 

in the reservations. 

Response 24.b.: The EPA agrees with commenters that renewable energy (RE) may be 

beneficial for tribes. Tribes may find opportunities to use renewable generation to obtain steady 

revenues for the tribal government (for example, through export of electricity), to create jobs on 

the reservation, to manage their own electricity projects as opposed to depending on private 

entities for service delivery, and to ensure a better standard of living for tribal members who 

currently lack access to electricity services. See section IX.B of the final rule preamble for 

further discussion of how EPA is promoting community involvement in the state plan 

development process. Additionally, in sections IX.C and D the agency provides information on 

resources that it will be making available to help low-income communities access EE/RE and 

financial assistance programs. Additionally, in section IX.C the EPA encourages states to 

consider similar approaches to approaches that other states are already using to help provide lowincome communities with access to financial and technical assistance programs for EE and RE.

24.c. Commenters state that emissions from the Navajo Generating Station and five other 

coal-fired power plants are harming tribal health.

Commenters stated that EPA should be able to protect public health and safety and that 

emissions from Navajo Generating Station and five other coal-fired power plants in the region is 

harming tribal health. Commenters stated that a host of respiratory illness plagued those living 

on Black Mesa with bronchitis and black lung disease and asthma.

Commenters stated that for this rule to be effective EPA should look at all stages and impacts of 

coal and fossil fuel and gas, natural nuclear power plant. Commenters stated that they are 

downwind from Navajo Generating Station and Four Corners Power Plant and the only feedback 

from the Department of Interior as the trust responsible party is that they hold trust responsibility 

for 10 tribes in Southern Arizona, which is supplied with Central Arizona Project water. 

Commenters stated that Center Arizona Project water is from the Navajo Sandstone Aquifer 
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only, supplying for mining activities on Black Mesa, which has depleted aquifers and springs. 

Commenters stated that of the energy that is produced at Navajo Generating Station, EPA 

identified, only 320 megawatts is needed to push the water from Lake Havasu to Tucson. 

Commenters stated that however there's 2,250 megawatts being produced, so the rest of it is all 

for profit and that this is just a profit issue, not a health issue. Commenters stated EPA has 

violated the way of worship, freedom of religion.

Response 24.c.: Tribal health and safety associated with air quality in and around the Navajo 

Generating Station and Four Corners Power Plants are important to the EPA and are a part of its 

mission as mandated by the Clean Air Act. Programs such as the National Ambient Air Quality 

Standards and National Emission Standards for Hazardous Air Pollutants are established to 

protect health and welfare from criteria air pollutants and hazardous air pollutants, respectively. 

Recent actions taken or planned for regional haze at the Four Corners Generating Station and for 

the Navajo Generating Station will be beneficial for air quality in the region as well as resulting 

in regional haze improvements. In Navajo territory, units are expected to shut down in order to 

comply with requirements for Best Available Retrofit Technology (BART) prior to the target 

date for the goals proposed in this action.14 These units represented approximately 30 percent of 

total EGU CO2 emissions in Navajo territory in 2012. 

Comment 25: Commenters stated that the rule is inefficient.

Commenters stated that the proposed rule is not economy-wide in its emission control regime, 

since the proposed existing source emission standard applies only to electric generating units. 

The commenters stated that the proposal lacks the market-efficiency mechanisms that a 

comprehensive legislative approach could include and that the burden of emissions reduction is 

placed on the electric generating sector rather than on the economy as a whole. 

Commenters stated that the agency can strengthen the rule and make it more consumer-friendly 

by using the least-cost means to displace the most carbon intensive generation. The commenters 

stated that a rule organized in this manner would prioritize energy efficiency and renewables, 

include far less natural gas, if any, and likely omit nuclear generation entirely. The commenters 

stated that renewable energy is already cost competitive with existing generation in some regions 

and is rapidly becoming cost competitive elsewhere. The commenters stated that in a straight 

comparison of new investments, onshore wind and utility-scale solar generation projects are 

already cheaper than building coal, natural gas, or nuclear plants. The commenters stated that if 

the agency does not revise the proposed best system of emission reduction according to this 

principle of incremental lowest-cost carbon emission reduction, it should nonetheless outline 

potential compliance strategies that follow the principle to give states strong guidance on how 

they can comply with the rule at the least cost. 

Commenters stated that CO2 levels will likely continue to decline, at least from

the US due to 1) substitution of less-carbon-intensive natural gas for coal and petroleum, and 2) 

 

14 http://www.epa.gov/region9/air/navajo/
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growth in non-carbon generation, especially renewables such as wind and solar. The commenters 

stated that these two factors, when applied to the lower electricity demand growth, produced 

actual CO2 emissions of 2,053 MMmt in 2013 in the power sector. The commenters stated that 

over a billion metric tons of CO2 emissions have been averted in the 8 years since 2005 by the 

two factors that contributed to the decline in the carbon intensity of the electric power sector. 

The commenters stated that these measured developments will not benefit from layering on a 

new, sprawling federal mandate. The commenters stated that market forces will further 

complement and support new technological and research developments underway within the 

private sector, within the states, and within countless federal agencies. The commenters stated 

concern that the CPP will become a new command and control regulatory scheme impeding new 

developments in an energy sector already driven to reduce carbon emissions. 

Commenters conducted a review of climate change literature and discussed market responses and 

barriers, social costs, positive externalities and policy implementation issues. The commenters 

summarized the literature by concluding that significant market barriers exist, social and 

transitional costs are substantial, dynamic conditions exist that can allow goals to be achieved at 

a lower cost than analyses estimate. The commenters stated that achieving climate benefits will 

require policies that address market barriers in both supply and demand.

Commenters stated that the Clean Power Plan goals, building blocks, and modeling demonstrate 

that some regions of the country will be more dramatically impacted by the GHG emissions 

requirements, and the SSEB region is one such example. The commenters stated EPA needs to 

consider the economic health of the region and its impact on the vibrancy and security of the 

national economy. 

Commenters stated that with the current Wyoming 2030 emissions reduction goal, the four EPA 

Building Blocks are unattainable and do not consider the low population in Wyoming, the nature 

of its power plants, the lack of gas fired power plants within Wyoming and the structure of its 

renewable energy industry. The commenters stated that if Wyoming could successfully negotiate 

with the EPA to reduce its 2030 emissions goal to a more attainable level, Wyoming may be able 

to achieve plan compliance though the implementation of the EPA Building Blocks, however, 

without a substantial reduction in the EPA emissions goal, Wyoming may be forced to close 

many of its coal fired power plants which would be devastating to national, state and local 

economies. 

Commenters stated that independent power producers are facing significant compliance 

requirements under the Proposed Rule with no clear mechanism to comply with such 

requirements and no way to fully recoup the costs of compliance. The commenters stated that 

implementing the Clean Power Plan as proposed will result in added carbon costs that are 

potentially so severe that many privately-owned coal-fired plants may be forced to early 

retirement, eliminating the ability of the facilities to competitively serve the electricity needs of 

residential and industrial customers. 

Commenters stated that the actions to meet the proposed reductions all have frontloaded 

substantial costs, resulting in consumers in Minnesota having to bear much higher financial 

burden than consumers in most neighboring states. The commenters further suggested that it 
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should be possible to modify the design of the program so as to place states on more equal 

footing.

Commenters stated that ratepayers in Alaska will bear a substantially greater burden under this 

rule than ratepayers in the interconnected states. The commenters stated that Alaska does not 

have economies of scale itself, and does not have the opportunity to participate in a regional 

compliance approach. The commenters stated that the affected EGUs in Alaska all belong to 

either cooperative or municipal utilities, and that the financial impact of this rule will be 

unavoidably felt by utility members and resident ratepayers, not investors. 

Commenters stated that the proposed interim goal for Arizona would require Arizona to achieve 

greater emission reductions by 2020 than any other state affected by the Proposed Rule, and that 

meeting this interim goal would require a dramatic and abrupt shift in generation from coal-fired 

plants to natural gas combined cycle ("NGCC") facilities. The commenters stated that EPA's 

Integrated Planning Model assumes that all of Arizona's coal-fired power plants would cease 

operating by 2020. The commenters stated that these plants are important sources of high-wage 

employment, and most are located in rural areas where there are few or no alternative 

employment options. The commenters stated that this raised questions about EPA's authority to 

dictate to the Arizona Corporation Commission the non-economic dispatch of generation and the 

effect of such requirements on rates and reliability. 

Commenters stated that the proposed rule fails to allow TVA to receive credit for a variety of 

renewable energy programs, energy conservation, energy efficiency and demand response 

programs that have contributed to carbon emission reductions in the TVA region, but instead 

uses them to, in effect, raise the bar higher for TVA area ratepayers to achieve carbon reduction 

emissions than for other parts of the country. The commenters stated that EPA proposes to 

promulgate new or revised regulations that impose a disproportionate cost of the nation's clean 

air achievements upon a subset of the nation's population that has already contributed a fair 

share, if not a greater share, of that cost. The commenters stated that the real ultimate costs of 

any EPA-promulgated rule that results in new compliance costs are passed through directly by 

the LPCs to the end-use ratepayers of the TVA region. The commenters stated that the proposed 

rule imposes a disparate economic burden on a section of the nation least able to afford it, and a

population which has already paid for major achievements in carbon emission reductions by its 

prior voluntary efforts upon its own initiative that were above and beyond the environmental 

requirements of existing law and regulation.

Commenters stated that the Bucksport natural gas turbine was not included in EPA's calculation 

of Maine's baseline emissions, which illustrates the lack of clarity about the status of CHP units 

in the proposed rule. The commenters stated that the baseline and future goals need to support 

natural gas fired units, as a clean fuel alternative for the State of Maine. The commenters stated 

that the proposed standards for Maine are more stringent than what is actually achievable for the 

natural gas turbines at the Androscoggin and Bucksport facilities, which achieve 488 and 526 lb. 

CO2/MW-h respectively with 100 percent credit for thermal output. The commenters stated that 

Maine's standards should not be set so low that Maine cannot rely upon natural gas in a future 

energy mix scenario. The commenters stated that Maine's proposed standards are so low that 

other states may consider it a disadvantage to partner with Maine. 
394

Commenters explained that all of Virginia's neighboring states have electric generating systems 

that are more carbon-intensive than Virginia's, but all have emission rate goals substantially 

higher than Virginia's final goal of 810 lb/MWh. The commenters stated that in fact, the 

Proposed Emission Guidelines would require greater reductions in megawatt hours or carbon 

intensity from affected units in Virginia than from similar units in either Kentucky or West 

Virginia, even though those states generated approximately twice the amount of electricity on a 

megawatt hour basis from fossil fuel than did Virginia in 2012. Moreover, the commenters said 

that in 2012 both Kentucky and West Virginia had electric system carbon intensities in excess of 

2000 lb/MWh, compared with Virginia's rate of only 911 lb/MWh. The commenters stated that 

such differences extend beyond Virginia's immediate neighbors, and in 2012 Wyoming not only 

generated more electricity by fossil fuel than did Virginia but it had a far higher electric system 

carbon intensity of over 2100 lb/MWh. However, the commenters noted that under the goal 

assigned to Wyoming under the Proposed Emission Guidelines, Wyoming would be required to 

reduce the megawatt hours or carbon intensity of its generation far less than does Virginia. 

Commenters further stated that the disparity in state goals leaves Virginia at a competitive 

disadvantage to its neighbors and numerous other states because they will be able to comply with 

the Proposed Emission Guidelines more cost-effectively. Commenters stated as an example that 

under a multi-state compliance agreement, money to purchase CO2 allowances would flow out 

of Virginia to states like West Virginia, Kentucky, or Wyoming. Commenters concluded that in 

the absence of a multi-state agreement, such states could use their competitive advantage over 

Virginia to keep their state electric rates or taxes relatively lower in order to lure away existing 

Virginia businesses and render Virginia less competitive in the quest for new businesses. 

Commenters remarked that such a disparity in state goals is simply not envisioned under section 

111(d). 

Commenters had concerns about the impacts of compliance in areas with electric grids that cross 

multiple states, such as the SPP and MISO regional markets. The commenters stated that the 

Proposed Rule does not address or acknowledge the difficulties of having various states in an 

interconnected regional market attempt to achieve different state-specific emission targets, likely 

through market-distorting taxes, mandates, or subsidies that may work at cross purposes and will 

undoubtedly create unintended consequences for neighboring states and the market as a whole. 

The commenters provided an example of a generating unit in state that has implemented a carbon 

tax is setting the market clearing price in regional wholesale markets, this will effectively force 

participants in other states to pay a carbon tax even though they may live in a state that has 

chosen a different compliance approach, with a separate set of costs. Similarly, the commenters 

stated that the economic distortions attendant to implementing the different state requirements 

under the Proposed Rule will create arbitrary winners and losers among the states that are part of 

a regional market based both on the different requirements under the Proposed Rule and the 

specific policies each state adopts. The commenters noted that the EPA has neither 

acknowledged these concerns nor explained how they can be addressed from a practical 

standpoint - particularly considering the aggressive implementation dates set forth in the 

Proposed Rule. 

Commenters stated that implementation of the proposed rule would result in a disproportionately 

high cost to fast-growing regions to achieve a questionable benefit. 
395

Commenters stated that the proposed Clean Power Plan is incompatible with our nation's need 

for strong and competitive energy marketplace, and the costly new regulations on electric 

generation facilities will result in massive price spikes coupled with a destabilization of the 

marketplace. The commenters feared it will cripple Illinois' manufacturing sector that is a vital 

cog in Illinois' economy, and that Illinois may lose its competitive advantage as an exporter of 

energy. 

Commenters stated that manufacturing states with higher percentages of coal generation in their 

portfolio could be placed at risk for huge economic disruptions for ratepayers. The commenters 

stated that it is not an acceptable result to produce disproportionate adverse economic impacts on 

one region over another. The commenters stated that while the market is driving some generation 

toward natural gas and the cost of renewable energy is decreasing, both of these would require 

capital investments in transmission lines and pipelines that must be borne by the ratepayers. The 

commenters stated that if a drastic reduction in GHGs is required in a short time frame or carbon 

sequestration becomes requisite for existing generators, Michigan's economy would be adversely 

affected in comparison to other states of equal or larger population with different electric 

generating portfolios. 

Commenters stated that the level of renewable energy assumed by the EPA's Building Block 3 

goal cannot be achieved. The commenters stated that significant levels of increased renewable 

energy will have a serious effect on electric rates and that low income customers will be 

particularly hard hit. The commenters stated that industrial rates could also be disproportionately 

impacted because of the higher load factors that most industrial customers have. 

Commenters stated that the economically disruptive effects of the proposed regulations outweigh 

any predictable health and welfare benefit; and that EPA should adopt policies that do not 

conflict with affordable and reliable supplies of electricity.

Commenters suggested that the EPA encourage the states to adopt governance policies which 

allow for spreading the cost of such improvements into the rate base at nominal levels. The 

commenters stated that consumers routinely see upward variations to their non-essential utilities 

such as cable TV, internet, cell phones, etc. without any greater social benefit other than 

entertainment, and the improved profitability of the service providers; conversely, an electric bill 

that goes up 1-5% will be down in the financial noise of most households, yet could greatly 

benefit the implementation of CO2 reductions from the one commodity most essential to our 

modern way of life. 

Commenters stated that nuclear reactors are the most expensive electric generators available. The 

commenters stated that the cost of retaining nuclear generation has not been analyzed. The 

commenters stated that new nuclear generation is also exceedingly expensive requiring both 

federal and state subsidies for construction, putting a burden on consumers many times the costs 

of renewables. The commenters stated that since there was no analysis associated with non air 

quality health and environmental issues, there should be no inclusion of nuclear as part of the 

renewable block and no credits for nuclear generation should be permitted in the carbon rule. 

Commenters stated that EPA's treatment of Georgia's "under construction" nuclear, Plant Vogtle 

Units 3&4, is inequitable and misguided and would almost certainly result in higher electricity 
396

rates for its members. The commenters stated that Georgia ratepayers should be allowed to take 

full credit for zero-emitting carbon emissions from nuclear generation in complying with any 

state or utility-specific performance standards promulgated pursuant to this rule. 

Commenters recommended that EPA include a cost cap mechanism within the Final Rule to 

protect ratepayers. The commenters stated that the true cost of attaining compliance is impossible 

to accurately estimate at this time and may be unknown until we are a number of years down the 

road. The commenters stated that North Carolina does not want its ratepayers to be placed in the 

position of choosing between electricity and food or medication due to compliance costs that 

were significantly underestimated at the beginning of the process. The commenters stated that 

implementation of a cost cap would not deter compliance activities or encourage wasteful 

spending and that the NCUC and Public Staff have ensured that electric power suppliers pursue 

cost-effective means of compliance and a similar framework can be incorporated in the Final 

Rule. Commenters stated that similar plans have been rolled-out and tested in other states and 

countries and have failed miserably. The commenters stated that every country that has 

aggressively sought to discourage coal usage has experienced large electricity price increase with 

no similar corresponding benefit. The commenters stated that between 2009 and 2013, the 

average energy bill for EU consumers increased by some 17 percent, while energy costs for 

individual users jumped by 21 percent, and that between 2005 and late 2013, the average price of 

residential electricity in the EU rose by 55 percent, and industrial electric rates jumped by 26 

percent. The commenters stated that the average U.S household historically pays 12 cents per 

kilowatt-hour - about a third of what the same amount of electricity costs in Germany. The 

commenters stated that the Proposed Rule will impose clear and substantial hardship on those 

least able to afford it. 

Commenters stated that dispatch is the short-run means by which the BES meets three 

constraints essential to its reliable operation: Matching generation from power plants with energy 

consumption by end users in real time across the entire country; avoiding combinations of power 

plant operation and energy consumption that exceed the design capability of the transmission 

system; and avoiding configurations of generation and consumption that lead or could allow 

unstable operating conditions for the power plants and other key elements of the grid. The 

commenters stated that dispatch must also support: the synchronized and stable operation of all 

generating equipment; voltage and reactive power maintained at appropriate levels throughout 

the entire system; and ensuring the entire system is configured so it can quickly return to these 

equilibrium conditions after a disturbance, such as a short circuit, loss of generation, or loss of a 

transmission element. The commenters stated that under security constrained economic dispatch, 

the variable operating costs of power plants - including the cost of any emission allowances or 

permits they must buy - influence their operation. The commenters stated that most existing cap 

and trade systems have various kinds of safety valves, cost containment reserves, or other pricebuffering policy features, and that imposing a strict absolute limit on emissions, and requiring the 

dispatch to respect that limit as an absolute constraint, can lead to extremely high allowance and 

power prices. 

Commenters stated that adoption of the proposed rule will result in a resource portfolio that is 

unreasonably leveraged toward natural gas-fired generation, and that such a shift would be 

imprudent from economic, security, and reliability standpoints. The commenters stated that the 

diversification of Arizona utilities' resource portfolios not only affects reliability but directly 
397

impacts rate base The commenters stated that the rates that ratepayers ultimately pay include the 

utilities' costs to provide service. 

Commenters stated that the Proposed Rule is setting requirements on a state-by-state basis, but 

an organized market like MISO does not similarly recognize state boundaries. The commenters 

stated that this mismatch between the Proposed Rule's framework and the operation of the 

organized market creates the potential for capacity shortages in certain locations in MISO by 

disregarding the locational needs of capacity to serve load in setting reduction targets. The 

commenters stated that these shortages will drive up prices and transmission costs in addition to 

the increased costs the Proposed Rule already mandates by requiring the increased use of 

renewable generation and the Proposed Rule is certain to substantially increase the cost of 

serving the needs of SMMPA's members.

Commenters stated that this rule is going to result in increased electricity prices to consumers 

and manufacturers, and should be crafted in such a way as to ensure the costs are transparent and 

justifiable. The commenters stated that while improving its competitive position, the U.S has also

continued to reduce GHG emissions, partially as a result of increased usage of natural gas for 

power generation, and that regulations that jeopardize these advantages will not only stunt U.S. 

economic growth and job creation, but may also make it more difficult for the private sector to 

finance and develop the technologies needed to effectively reduce GHG emissions over the longterm. 

Commenters stated that the CPP includes flawed assumptions and requirements resulting in 

overly aggressive emissions rate reductions that will raise electricity rates for customers, lead to 

a curtailment of operations for a significant number of units that are able to efficiently generate 

reliable, baseload power and allow EPA to assume (without Congressional authorization) 

regulatory roles that have traditionally been held by the states. 

Commenters stated that the proposed rule goes well beyond what is allowed under the Clean Air 

Act and dictates the operation of the generating resources, preventing the economic dispatch of 

the system which would unnecessarily raise the cost to electric consumers. The commenters 

stated that many of these citizens are low and fixed income and can least afford an increase in 

their electricity costs.

Commenters stated that fossil fuel energy is vital to our nation's economy and security and cited 

an EIA estimate that around 80 percent of our electricity will still come from fossil fuels more 

than 20 years from now. 

Commenters stated that the price for a kilowatt hour of a coal fired power plant does not take 

into account the related adverse health effects, nor the cost of droughts, flood, and fires related to 

climate change. The commenters said that if we took these factors truly into account, we would 

be having a very different discussion about the direct comparison within the cost of fossil and 

renewable energy. 

Commenters stated that a system of state-by-state rules will inevitably be less efficient than a 

unified approach and there is no incentive for merchant firms that sell electricity and related 
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services using a for-profit business model to adopt a portfolio approach to meeting CO2 emission 

goals. 

Response 25: Commenters state that the CPP is inefficient for a variety of reasons including: 1) 

the guidelines only impact the power industry when a broader market-based approach could be 

more economically efficient; 2) the concern that the CPP will become a new command and 

control regulatory scheme impeding economic incentives in an energy sector already driven to 

reduce carbon emissions; 3) certain states will be impacted disproportionately relative to others 

with state-specific goals; 4) the overly aggressive requirements of CPP will lead plant closures of 

units that operate efficiently and lead to higher prices and economic impacts, and 5) state-bystate rules are less efficient than a unified approach and merchant firms lack efficiency 

incentives. 

Regarding commenters assertion that 1) a broader market-based approach to carbon emission 

reductions would be a more economically efficient and 2) the comments that the CPP will 

become a new command and control regulatory scheme, the EPA is taking action in the CPP to 

correct a market failure and to internalize the cost to society (i.e., health and welfare impacts 

from climate change) not reflected in the market price of the goods produced through the 

polluting process – in this case electricity. As discussed in the Regulatory Impact Analysis 

(RIA), these social costs associated with the health and welfare impacts are referred to as 

negative externalities. This regulation addresses this market failure by beginning to internalize 

the negative externality by reducing CO2 emissions from existing EGUs which increases social 

welfare. The EPA recognizes that a broad market-based approach may offer greater economic 

efficiencies. However, legislative action is required for such a broad-based market approach. 

The EPA is acting within the mandates of the Clean Air Act by finalizing the CPP to address this 

market failure. It is important to note that the CPP allows states to take regional approaches to 

compliance and states may achieve greater economic efficiencies through regional market-based 

programs. EPA received many comments suggesting that states should be encouraged to join or 

form regional market-based programs. Many commenters touted the economic efficiency 

benefits of such approaches, and noted that such programs have features that support electric 

reliability. 

The EPA agrees with these comments, and notes that EPA encourages such approaches. While 

the EPA is not requiring states to join and/or form regional market-based programs, EPA notes 

that such programs can be helpful for many reasons, including features that support reliability. 

Market-based programs allow greater flexibility for affected EGUs both in the short-term and 

long-term. Under a market-based program, affected EGUs have the ability to obtain sufficient 

allowances or credits to cover their emissions in order to comply with their emission limits. 

Additionally, EPA continues to encourage states to cooperate regionally. Regional cooperation in 

planning and reliability assessments is an important tool to meeting system needs in the most 

cost-effective, efficient, and reliable way.

With respect to comments contending that 3) certain states will be impacted disproportionately 

relative to others with state-specific goals 4) that the CPP has overly aggressive requirements 

leading to closure of EGUs that operate efficiently, and 5) state-by state compliance approaches 

are less efficient than unified approaches and merchant providers lack efficiency incentives, see 

sections V, VII and VIII of the final guidelines preamble. These preamble sections discuss the 
399

ability of affected sources (including merchant generators) to achieve performance and mass 

base standards. These preamble sections also describe state goals and state implementation plans 

as well as the flexibilities afforded states in developing their plans. The potential savings and 

efficiencies available with multi-state compliance approaches are advanced in these sections of 

the preamble. See the RIA for more information on the projected changes in electricity prices 

and other economic impacts associated with illustrative scenarios of actions that may be taken to 

comply with the CPP. 

Comment 26: Commenters described overall cost estimates generally higher than those of the 

RIA.

Commenters stated that TVA has added natural gas-fired generation, increased their purchase of 

renewable energy, removed or idled inefficient coal-fired plants from their fleet, made 

substantial investments in emissions controls in the existing plants and use nuclear power for 

about 30% of their generation today. The commenters stated that all of these actions preceded the 

roll-out of EPA's proposed Carbon rule. The commenters stated that given the billions already 

invested by these nine million ratepayers, additional costs could create significant economic 

hardship to the area.

Commenters stated that the Proposed Regulation's claim that overall customer bills will go down 

is contrary to experience implementing energy efficiency programs in Virginia. The commenters 

stated that this claim could only be accurate if the costs of reducing CO2 emissions through 

energy efficiency programs are less than the variable operating costs (primarily dispatch costs) 

that would be avoided by the compliance action since compliance requires the displacement of 

existing generation, and that this expectation is not reasonable in Virginia or perhaps anywhere 

else. The commenters stated that costs (and lost revenues) associated with investments that 

continue to exist but not operate will be paid by customers or shifted to other entities, most likely 

electric energy providers and taxpayers. 

Commenters cited a US Chamber of Commerce estimate that through 2030, new carbon 

regulations would, on average, lower U.S. Gross Domestic Product by $51 billion annually, with 

a peak decline of over $100 billion in 2025; result in the loss of more than 220,000 jobs annually, 

peaking at 422,000 in 2022; and lower U.S. household total disposable income by more than 

$580 billion. 

Commenters stated that Rule 111(d) costs America's economy greatly through the increased 

regulation and the energy efficiency programs. 

Commenters stated that EPA's Regulatory Impact Analysis Is flawed. The commenters stated 

that EPA has been far too optimistic and aggressive in its assumptions of implementation of 

energy efficiency measures in each state and of natural gas supply. The commenters stated that 

the Agency has not adequately considered, or has misjudged the differences in wholesale 

electricity market structures and the cost of producing, storing, and delivering natural gas, the 

potential for stranded costs arising from the forced retirement of generation units with remaining 
400

economical useful life, the associated potential negative impacts on credit ratings and borrowing 

costs, and price volatility in electricity and natural gas markets. 

Commenters estimated costs under the State Unconstrained (BB1-4) scenario at about $560 

billion (in present value) over the period from 2017 through 2031. The commenters estimated 

that energy system costs would be greater by about $366 billion in present value terms over the 

period from 2017 through 2031 under the State Unconstrained (BB1-4) scenario. The 

commenters estimated that the net cost of the State Constrained (BB1-2) scenario - which 

excludes end-use energy efficiency, renewables and additional nuclear energy from compliance -

is substantially greater than the State Unconstrained (BB1-4) scenario with an increase in energy 

system costs by about $479 billion in present value terms over the period from 2017 through 

2031. 

Commenters stated that compliance costs are grossly underestimated because EPA fails to 

include the total, cumulative costs that it estimates will be incurred as a result of the proposed 

rule, it also failed to detail state-level compliance costs, failed to consider the significant costs 

that the states will incur in ensuring, the continued reliable operation of the electric grid, and 

does not consider any of the costs the states will incur prior to January 1, 2020 or after 2030. The 

commenters stated that EPA's estimate does not appear to include the significant additional costs 

that will be incurred by the asset owners, the states and their ratepayers who will need to absorb 

the costs of stranded capital investments associated with the retirements and abandonments 

resulting from the proposed rule. 

Commenters cited NERA estimates of an average nationwide electricity rate hike of 12 

percent. The commenters stated that EPA left several important cost inputs out of its modeling 

efforts, including the cost of new electricity and gas transmission projects that will be required to 

satisfy the requirements of the CPP. The commenters cited independent experts statements that 

EPA may have overestimated the degree of heat rate efficiency improvements achievable at 

power plants by as much as a factor of three, that EPA made optimistic projections about the 

feasibility of increased natural gas use, that EPA failed to include the need for excess natural gas 

capacity to fill-in for intermittent renewable energy resources, and that EPA made across-theboard assumptions about the future of energy efficiency based entirely on past achievements and 

not at all on the feasibility of future realizations. The commenters stated that higher energy prices 

will produce a ripple effect throughout the U.S. economy that will shutter businesses, deter 

hiring, cause layoffs, increase the price of essential goods and services, and increase the cost-ofliving for all Americans, particularly people living on fixed incomes. The commenters cited 

studies showing that unemployment, and economic malaise more generally, take an appreciable 

toll on the health and well-being of Americans by increasing the likelihood of hospital visits and 

illnesses, raising healthcare costs, and putting stress on families. 

Commenters stated that EPA has failed to consider the costs of additional transmission facilities, 

additional natural gas pipeline capacity, additional transmission support capacity, additional 

financing costs of intermittently used generating capacity, and additional maintenance, repair and 

replacement due to increased ramping up and down of dispatchable generation. The commenters 

stated that the proposal is deficient and arbitrary in its omission of: 1) any analysis of the direct 

cost impacts to owners of existing coal-fired EGUs that would be expected or forced to shut 
401

down or reduce utilization; and 2) any analysis of the full costs of ensuring a reliable bulk power 

supply system in a rapid transition to lower carbon and intermittent electricity generation.

Commenters stated that EPA has not included any assessment of the need for firm gas delivery to 

support higher utilization of NGCC units. The commenters stated that in peak months, natural 

gas may not be available without a firm delivery contract, which results in a higher delivered gas 

price, as the gas must be paid for whether used or not.

Commenters cited a NERA study estimating that the unconstrained scenario would result in $366 

billion of compliance costs and 45,000 more MW of coal shutdowns, and that this scenario relies 

heavily on reductions in electricity use via energy efficiency which come at an enormous cost of 

$560 billion to consumers that is only partially offset with electricity savings. The commenters 

cited impact estimates for the constrained scenario of $479 billion in compliance costs and 

169,000 MW of coal plant shutdowns, accompanied by non-electricity natural gas costs increase 

dramatically to $144 billion.

Commenters stated that the rulemaking notice severely underestimates direct compliance costs. 

The commenters stated that the agency has made no effort to assess the Proposed Rule's full 

effect on economic productivity and employment. The commenters stated that more 

comprehensive analyses predict compliance costs of $480 billion by 2030, an average annual 

negative impact on GDP of $50 billion, and an average annual net decrease in employment of 

over 200,000 jobs. 

Commenters cited a NERA study which found that over the period from 2012 to 2020, about 

183,000 jobs per year are predicted to be lost on net due to the effects of four EPA regulations. 

The commenters stated that the cumulative effects or these four rules over the period from 2012 

to 2020, would cause about 1.65 million job-years of employment would be lost. The 

commenters cited the NERA study estimate that U.S. disposable personal income would be 

reduced by $34 billion each year on average over this period (in 2010 dollars), and the average 

annual loss in disposable personal income per household would be $270, with a cumulative loss 

of $1,750 (in 2010 dollars). The commenters cited a Penn State study estimate that the average 

impacts of displacing 33 percent of coal-based generation in 2015 at: $166 billion (2005 $) 

reduction in gross economic output; $64 billion reduction of annual household incomes; and 1.2 

million job losses. The commenters cited another study that found that the four rules would cause 

lower GDP - on average $51 billion every year through at least 2030, with a peak decline of 

nearly $104 billion in 2025, accompanied by losses in employment. The commenters stated that 

from 2014 to 2030, the U.S. economy would have 224,000 fewer jobs, with a peak decline in 

employment of 442,000 jobs in 2022, and that slower economic growth, job losses, and higher 

energy costs mean that annual real disposable household income would decline an average of 

more than $200, with a peak loss of $367 in 2025. 

Commenters cited predictions that, should EPA move forward with its plan as originally 

announced, consumers across the country will cumulatively pay $17 billion more per year for 

electricity, GDP will decline tens of billions of dollars over the next few decades, and hundreds 

of thousands of workers could lose their jobs. The commenters stated that EPA should include 

safeguards to protect Missourians from burdensome rate increases.
402

Commenters stated that "economic dispatch" means meeting electric demand by deploying the 

most affordable power sources in reliable fashion, and that dispatch is so intimately associated 

with the provision of retail electricity that federal energy regulators have never even thought to 

challenge the State's authority over this process. The commenters stated that EPA based 

Montana's Clean Power Plan targets on an assumption that all natural gas combined cycle power 

plants in the country would operate at a 70 percent capacity factor, despite the fact that the 

national average in 2012 was 46 percent. The commenters stated that currently, natural gas 

accounts for 5 percent of the electricity generated within the MISO footprint, while coal accounts 

for 69 percent, and by 2030, as a result of the Clean Power Plan, MISO projects that gas would 

increase its share to 24 percent, while coal would decrease its share to 33 percent. The 

commenters stated that the Clean Power Plan negates Montana's long-held, if implicit, 

prerogative to choose to rely on economic dispatch, and, in its stead, imposes a system of 

environmental dispatch.

Commenters estimated that CPP compliance will cost Louisiana ratepayers somewhere between 

$3.9 billion and $5.7 billion, in NPV terms. The commenters stated that stranded utility costs, a 

cost estimate excluded in the EPA's analysis, are estimated at $1.8 billion (NPV). The 

commenters stated that lost utility base revenues associated with increased renewable energy and 

energy efficiency programs, represent are estimated to range from $360 million to $439 million 

(NPV). The commenters stated that the actual estimated cost to Louisiana ratepayers is $200 to 

$289 per ton, which is far higher than the EPA estimated (national average) compliance costs of 

$60 per ton.

Commenters stated that the real costs of this plan are not reflected in the economic studies 

provided by EPA, and there appears to be no full connection or link of the described economic 

studies to the promulgation of rules within the EPA. 

Commenters cited a NERA projection, in the primary scenario, that the total compliance costs of 

the CPP will be $366 billion between 2017 and 2031, with an annual average cost of $41 billion 

between 2020 and 2030. 

Commenters cited NERA projections that in the case in which states could use all four Building 

Blocks, the proposed rule has a present value cost of $366 billion over the period of 2017 - 2031, 

and the annual average cost over the period of 2020 - 2030 is $41 billion. The commenters stated 

that these costs are driven primarily by $560 billion in cumulative EE costs, half of which will be 

directly borne by individual residential, commercial and industrial electricity consumers. 

Commenters stated, in the second scenario, in which states cannot consider additional RE or EE, 

the costs are even higher. Commenters stated NERA estimates the present value costs could be 

Dollar 479 billion from 2017 - 2031, or Dollar 73 billion per year over the 2020-2030 period. 

The costs in the second scenario are driven by increases in electricity prices and natural gas 

prices. The commenters cited NERA projections that in the State Unconstrained scenario, the 

CPP will cause electricity prices to be 12 percent higher each year compared to the reference 

case. The commenters stated that 43 states will face average double digit percentage electricity 

price increases between 2020 and 2030, and 14 states will experience peak year increases in 

electricity prices exceeding 20 percent over the same period. The CPP will also lead to 

significant increases in coal retirements. The commenters cited NERA projections of 45,000 
403

MW of incremental coal retirements under the State Unconstrained scenario, and 169,000 MW 

of incremental coal retirements under the State Constrained scenario. 

Commenters stated that the proposed rule would result in extreme cost increases for electric 

consumers and threaten the ability of TIEC's members to compete in the global marketplace. The 

commenters cited ERCOT's estimates that attempting to comply with the Proposed Rule will 

increase wholesale electricity prices in ERCOT (relative to a baseline that is already increasing) 

between 34% and 49% by 2020, and 14% to 17% by 2029.The commenters cited ERCOT's 

estimates that the costs of reducing carbon emissions (excluding costs of building or upgrading 

transmission infrastructure, natural gas infrastructure upgrades, stand-by power necessary to 

meet reserve margins, ancillary services procurement, energy efficiency investments, and 

potential reliability-must-run contracts) will be between $3.8 to $4.4 billion by 2029.The 

commenters stated that its own analysis estimated cost totaling up to $12 to $15 billion annually 

in Texas by 2030. 

Commenters stated that State or federal implementation plans could require Santee Cooper to 

develop or purchase expensive renewable energy generation or implement additional energy 

efficiency measures, potentially at great cost. The commenters stated that because Santee Cooper 

must occasionally purchase electricity on the wholesale market to serve its customers, price 

increases will have a negative financial impact. 

Commenters stated that EPA has inappropriately analyzed costs at the national level, and the 

regional level for renewable energy, and not for what is affordable and achievable at the source. 

The commenters stated that national cost analysis ignores local impacts creating the opportunity 

for significant arbitrary localized outcomes that cannot be sustained as a matter of 

Administrative law. The commenters cited NERA that EPA's estimates of $7B in annual savings 

to the consumer are significantly overstated, and annual costs to comply with the program are 

likely to reach $41 billion. The commenters cited a recent MIT study that the costs and the 

benefits of EE investments substantially overstate the net impact on energy consumption 

reduction and the associated impact on electric bills and on climate change.

Commenters cited NERA estimates that the rule would cost between $41 and $73 billion per 

year. The commenters stated that residential rates are projected to increase by up to 50 percent in 

Colorado as a result of both the proposal and existing State policies. The commenters cited 

Energy Ventures Analysis estimates that EPA regulations, including the Clean Power Plan, 

cumulatively would increase the cost of electricity and natural gas by nearly $300 billion in 2020 

compared with 2012, and that gas bills would increase in Colorado by 61 percent and industrial 

electricity rates would increase 52 percent. Commenters stated that capital costs necessary to 

realize a 7.7% heat rate improvement in Ohio's coal-fired fleet would be significantly greater 

than the $751 million estimate. The commenters stated that these costs estimates should be 

derived from real-world HRI projects at coal-fired power plants, with consideration given to the 

feasibility of such projects in both vertically integrated and deregulated, competitive power 

markets. The commenters stated that a "shadow price" of $11.30 per ton was applied to CO2 to 

drive NGCC generation and the increased use of renewable resources in the IPM. The 

commenters stated that projected costs of CO2 would lead to increased electricity costs for the 

consumer. 
404

Commenters stated that EPA's estimated costs do not consider the implications of more 

expensive electricity across all industries and sectors of the national economy and underestimates 

the financial impact of the CPP on electricity customers and the economic impact on states. The 

commenters stated that food would become more expensive to consumers since about 40 percent 

of the energy required to grow crops and raise livestock comes in the form of electricity. The 

commenters stated that EPA should evaluate the cumulative impacts of all the recent regulations 

on the electric power sector. 

Commenters stated that compliance with Building Block 2 would cost Ohioans approximately 

$2.5 billion (in nominal dollars) more for electricity in 2025. The commenters cited IHS Energy 

that IHS Energy that reduced diversity increases average wholesale power prices by about 75% 

and retail power prices by 25%, could reduce US GDP by nearly $200 billion, lead to roughly 

one million fewer jobs, and reduce the typical household's annual disposable income by around 

$2,100. The commenters stated that any relationship, assumed, modeled, or otherwise, between 

wholesale electricity prices and consumer electricity bills is false, and that such assumptions 

cannot be used as justification for the proposed rule. The commenters stated that there appears to 

be little correlation between demand and consumer electricity bills which calls into question U.S. 

EPA's assertion that reducing demand via demand-side EE measures will reduce the price of 

electricity in the latter portion of the proposed state plan. 

Commenters stated that the assumptions severely underestimate cost and do not reflect the 

capital investments that would otherwise be required by utilities to meet growing electricity 

demand. The commenters stated that cost for additionally needed generating capacity will be 

passed along to electric ratepayers, increasing their bills for electricity. 

Commenters stated that EPA's regulations will impose billions of dollars in costs on the U.S. 

economy but fail to meaningfully reduce CO2 emissions on a global scale. The commenters 

stated that the projected CO2 emission reduction from the proposed rule is, at most, 555 million 

metric tons (mmt) in 2030, which represents only 1.3 percent of projected global CO2 emissions 

in that year. The commenters stated that this reduction in 2030 would offset the equivalent of just 

13.5 days of CO2 emissions from China. 

Commenters stated that EPA's data show the wrong fuel (bituminous coal rather than subbituminous coal) at two of MEAG's coal units that were converted to sub-bituminous coal in 

2004 to reduce emissions. The commenters stated that MEAG's forecast shows a fuel cost 

increase attributable to the increased demand for natural gas resulting from redispatch in the 

compliance case, and that EPA's data show large decreases in fuel $/MWH costs for its 

bituminous coal units, far in excess of what heat rate improvement could achieve, and far in 

excess the decrease in MEAG's bituminous coal price forecast. The commenters estimated that 

its additional cost in calendar year 2025 would range from about $187 million to $231 million, or 

an increase of about 1.2 to 1.5 cents per overall kWh generated in 2025, representing about a 

13% to 16% increase in current retail rates. The commenters cited NERA that the proposal 

would result in an average annual increase of 12%-13% in Georgia over the 2017-2031 period. 

The commenters stated that a multi-year analysis of the cost of the proposed rule based on the 

EPA approach which included the retirement of Plant Scherer Units 1 and 2 in 2020 and the 

addition of energy efficiency programs at the retail level beginning in 2020 and incrementally 
405

increasing through 2029 estimated average increased retail rates over the compliance period of 8 

to 12% with cumulative cost increases of $300 million to $1.2 billion dollars. 

Commenters stated that EPA understates the Proposal's likely disruption to the national 

economy, the negative impact on energy system reliability and adverse impacts to U.S. energy 

security, none of which are easy to quantify. The commenters cited NERA that that 

implementing EPA's State Unconstrained Option 1 - the State compliance approach with all four 

Building Blocks - would cause 45 gigawatts ("GW") of coal-fired EGU retirement, a 29% 

decline in coal-fired generation, a 5% increase in natural gas-fired generation and a 12% increase 

in electricity prices from 2017 to 2031. The commenters stated that State energy efficiency 

programs would cost about $560 billion (present value from 2017 through 2031) and total 

electricity-related costs would increase by an average of $34 billion per year from 2017 through 

2031.The commenters cited NERA analyses of EPA’s State Constrained Option 1 - utilizing only 

Building Blocks 1 and 2 -- which estimated 169 GW of coal retirements, a 29% increase in 

natural gas prices and a 17% increase in average delivered electricity prices.The commenters 

stated that the additional costs of providing electricity would be about $335 billion, and total 

consumer energy costs would be about $479 billion (present value from 2017 through 2031). The 

commenters stated that potential infrastructure costs related to natural gas pipelines, electricity 

transmission and voltage support or ancillary services, and low capacity utilization of non-retired 

coal units which would lead to increased heat rates, wear and tear costs from increased coal unit 

cycling and additional retirements were not included in the analysis. The commenters stated that 

the impact on delivered electricity prices to Georgia consumers would range between 12 - 13%. 

The commenters stated that median compliance costs for a representative scenario were 

approximately $10 billion over a 15 year period (from 2020 - 2034) and that compliance costs to 

OPC could reach $20 billion under certain scenarios, particularly if the Proposal mandates RE 

and EE measures. 

Commenters cited NERA estimates that assuming a state were able to utilize all four building 

blocks), prices for delivered electricity would increase by about 12% between 2017 and 2031. 

The commenters stated that such a state also would see a net compliance cost that is greater than 

$366 billion in present value terms over that 14 year period. The commenters stated that if a state 

were not able to utilize all four building blocks, then there would be a 17% increase in average 

delivered electricity prices, and that such states would see net costs of about $479 billion, as 

opposed to $366 billion, in present value terms during that same period. The commenters stated 

that CPP will raise serious economic and societal costs that will affect consumers, employers, 

and the economy in general. 

Commenters stated that some utilities would likely have to build Natural Gas-Fired Combined 

Cycle ("NGCC") and Renewable Energy ("RE") generation just to meet the interim goals 

proposed by the EPA, and Combustion Turbine ("CT") generation facilities may need to be built 

in conjunction with RE generating units to provide backup generation for the RE generating units 

in order to assure reliable electric service for consumers. The commenters stated that large 

capital expenditures for generation facilities will grow the rate base of the electric utilities in a 

very short time frame, which will induce rate shock for electric consumers. The commenters 

stated that in BSER Building Block Two, the EPA has proposed dispatching NGCCs out of 

economic order in order to increase their capacity factor which would this result in increased cost 

because the NGCC is being operated in lieu of the most economical generating unit, and could 
406

be impossible to do so reliably because of constraints on the electrical transmission and natural 

gas transportation infrastructure. The commenters stated that additional infrastructure may need 

to be put in place to address the increased use in order to ensure reliable service to electrical and 

natural gas consumers. The commenters stated that such a significant increase in the cost for 

electricity could undermine the global competitiveness of the U.S. and as a result seriously 

damage the U.S. economy. The commenters stated that by neglecting to take cost-effectiveness 

into account when setting EE targets, the EPA is exposing ratepayers to additional cost that may 

not be justified by the savings that would be expected to result from the EE investment. The 

commenters stated that the state is not required to comply with the CAA's aggressive EE goal, 

but if it does not, it will instead be required to look elsewhere to replace the EE energy savings 

projected by the EPA, and more likely than not, the alternative options would also be costly (e.g., 

construction of additional generation facilities). 

Commenters cited NERA projections that 43 states will have double digit electricity price 

increases, and that 14 of those states will have peak year price increases of more than 20%.The 

commenters stated that NERA also projects that EPA's Clean Power Plan could cost consumers 

and businesses $41 billion or more per year. 

Commenters cited NERA estimates that the proposed rule would cost between $41and $73 

billion per year, and cause electricity rates in Texas to increase by up to 64 percent. The 

commenters cited Energy Ventures Analysis, Inc., estimates that the rule would increase the cost 

of electricity and natural gas by nearly $300 billion in 2020 compared with 2012, that gas bills 

would increase in Texas by 75 percent and industrial electricity rates would increase 112 percent. 

Commenters cited NERA estimates that the proposed rule would cost between $41 and $73 

billion per year and cause electricity rates to increase 15 to 19 percent in Oklahoma. The 

commenters cited Industrial Energy Consumers of America that industrial rates are expected to 

increase 24 percent. The commenters cited Energy Ventures Analysis, Inc., estimates that the 

rule would increase the cost of electricity and natural gas by nearly $300 billion in 2020 

compared with 2012, and that gas bills would increase in Oklahoma by 81 percent. 

Commenters stated that by drastically increasing the cost of energy, the proposed rule will inhibit 

economic development and hamper growth at a time when many communities continue to feel 

the negative effects of a prolonged economic downturn. The commenters cited a recent IHS 

study for the U.S. Chamber of Commerce predicting that proposed EPA CO2 rules will cause the 

loss of 224,000 jobs annually, increase electricity costs by $289 billion, and lower household 

incomes by over $500 billion. The commenters stated that the Mississippi Energy Institute 

projects that the minimum incremental capital cost for Mississippi to comply with the proposed 

rule will be $14.2 billion, which will primarily consist of constructing generating facilities not 

likely to be built unless compelled by federal mandate. The commenters stated that the rule will 

almost certainly cause the premature closure of existing coal plants in Mississippi, which will 

reduce energy diversity, security, and reliability, and will place upward pressure on electricity 

prices. 

Commenters cited Kansas Corporation Commission (KCC) estimates as a base case that the EPA 

Clean Power Plan as proposed would cost the state of Kansas $8.75 billion. The commenters 

stated that the possible range of costs varies between $5 billion and $15 billion, and the 
407

corresponding increase in rates is between 10% and 30% over 13 years. The commenters stated 

that customers of Kansas City BPU would face a much greater cost of compliance due to the 

expensive upgrades needed for KCBPU's existing generation fleet. The commenters stated that 

KCBPU provides electricity to a service territory defined by a low-income population.

Commenters stated that the compliance costs to the electric industry have been estimated to be as 

much as $73 billion per year, and the costs to consumers through higher power costs have been 

estimated to be up to $48 billion annually through 2030. The commenters stated that 43 states, 

including Texas, will see cost increases in the double digits. The commenters stated that 

consumers will also bear an estimated expense of some $560 billion in the costs of new energy 

efficiency measures that will be required to meet EPA's goals for energy conservation. 

Commenters stated that EPA's estimates project that this rule will cause nationwide electricity 

price increases averaging between six and seven percent in 2020, and up to 12 percent in some 

locations, and also estimates annual compliance costs between $5.4 and $7.4 billion in 2020, 

rising up to $8.8 billion in 2030. The commenters concluded that these substantial power sector 

compliance costs do not capture the subsequent adverse spillover impacts of higher electricity on 

overall economic activity, and the comprehensive financial impact for business, manufacturers 

and residential customers should be better understood and analyzed before this rule is finalized. 

Commenters stated that EPA is proposing a system in which the future generation, and therefore 

future revenues, from electric utility generating units will be greatly curtailed. The commenters 

stated that utilities cannot be expected to make massive capital investments in equipment to 

improve generating efficiency and then not be given the full opportunity to recover those 

investments. The commenters stated that the CAA is not an appropriate vehicle to upend the 

current market-based electrical delivery system in the U.S. 

Commenters cited NERA that the proposed rule would increase costs for the electricity sector by 

at least $41 billion per year and would cost utilities and electric cooperatives anywhere from 

$366 billion to $479 billion over a 15-year time period. The commenters stated that this could 

translate into double digit electricity price increases for 43 states, and 14 states could see peak 

rates increase by 20 percent or more. The commenters stated that the proposal, according to the 

study conducted by NERA, would take an additional 45 gigawatts of coal-fired units off-line -

eliminating more power capacity than is currently needed to supply the electricity needs of New 

England - with a significant proportion of the units being taken offline prior to their scheduled 

shut-downs. 

Commenters stated that EPA rules that result in the premature retirement of existing coal plants 

can lead to higher utility rates via direct replacement power costs and through higher borrowing 

costs if the retirements have negative impacts on utility credit ratings. The commenters stated 

that credit ratings can be affected because the need for replacement power will likely lead to 

higher levels of debt, and/or other fixed obligations, rate increases that public power utilities 

must implement to recover higher replacement costs can compound the effects of other factors 

(e.g., macroeconomics, energy efficiency, net metering and other distributed generation 

initiatives) that lead to reduced sales and higher rates, and a reduction in fuel diversity (by 

eliminating coal as a portfolio option) exposes utilities to greater fuel price risks.The commenters 

cited a Fitch Outlook report that homogenizing the power generation fleet will leave utilities less 
408

able to manage fuel price risks, and in so far as rating agencies believe an affected utility will be 

unwilling or unable to pass on the costs of potential price spikes to customers, that utility's credit 

rating will be downgraded. The commenters stated that new environmental regulation that leads 

to premature retirement of existing coal-fired resources, or significant increases in the costs to 

operate these facilities, will translate into higher costs to utility customers through direct 

expenditures for replacement resources and potentially through higher borrowing costs. 

Commenters cited NERA estimates that the proposed rule would conservatively cost the 

economy at least $41 billion per year in compliance and over $366 billion in cumulative costs 

from 2017- 2030. The commenters stated that the agency double counted the same public health 

co-benefits under previous air quality rules. 

Commenters stated that the proposed rule overestimates benefits, and underestimates costs. 

Commenters stated that the rule is estimated to cost between $366 billion and $479 billion to 

implement nationwide and could push electricity prices up by as much as 17%, all while 

lowering global temperatures by only 0.018 degrees C over the next 86 years. The commenters 

stated that in many states, new laws will have to be enacted before a plan, as envisioned by EPA, 

can be submitted. 

Commenters stated that EPA understates the Proposal's likely disruption to the national 

economy, the negative impact on energy system reliability and adverse impacts to U.S. energy 

security, none of which are easy to quantify.The commenters cited NERA that implementing 

EPA's State Unconstrained Option 1 - the State compliance approach with all four Building 

Blocks - would cause 45 gigawatts ("GW") of coal-fired EGU retirement, a 29% decline in coalfired generation, a 5% increase in natural gas-fired generation and a 12% increase in electricity 

prices from 2017 to 2031. The commenters stated that State energy efficiency programs would 

cost about $560 billion (present value from 2017 through 2031) and total electricity-related costs 

would increase by an average of $34 billion per year from 2017 through 2031. The commenters 

stated that that NERA found much more significant negative impacts, including 169 GW of coal 

retirements, a 29% increase in natural gas prices and a 17% increase in average delivered 

electricity prices. The commenters stated that the additional costs of providing electricity would 

be about $335 billion, and total consumer energy costs would be about $479 billion (present 

value from 2017 through 2031). The commenters stated that potential infrastructure costs related 

to natural gas pipelines, electricity transmission and voltage support, ancillary services, low 

capacity utilization of non-retired coal units (that would lead to increased heat rates), wear and 

tear costs from increased coal unit cycling and potentially additional retirements were also not 

included in the analysis. The commenters stated that while the median compliance costs for a 

representative scenario were approximately $10 billion over a 15 year period (from 2020 - 2034), 

compliance costs to Oglethorpe Power could reach $20 billion under certain scenarios, 

particularly if the proposal mandates RE and EE measures. The commenters stated that EPA 

does not claim that the rule will have any impact on climate change. The commenters stated that 

assuming full compliance with the rule as proposed, the reduction would be about 1.3% of total 

global CO2 emissions in the year 2030, producing a negligible and probably undetectable impact 

on atmospheric CO2 concentrations. 
409

Commenters stated that EPA's cost-benefit analysis also fails the arbitrary and capricious 

standard and has failed to consider important aspects of the problem by over-estimating 

reliability of the grid under the Proposed Rule, by not evaluating the potential costs of takings 

claims by owners of EGUs in unregulated markets, by not considering the continuing costs to 

consumers of decommissioned or underutilized coal units upon which regulated public utilities 

are guaranteed a constitutionally mandated adequate rate of return on prudent investment, by not 

considering write-downs for asset impairment required by utility accounting standards, and 

overall in failing to consider cost as specifically related to the coal-fired EGU coal sector. The 

commenters stated that EPA's benefits findings are arbitrary and capricious for failure to offset 

the costs derived by application of the SCC by the value of remaining useful life of plants lost by 

the rulemaking, by failing to address aspects of the IPCC Fifth Assessment that deal with 

extreme weather events in a way that undercuts EPA's findings, and by not demonstrating in the 

docket that EPA's heat rate conclusions have a valid basis in demonstrated technical or industry 

experience. 

Commenters stated that the proposed rule currently seems to omit, among other things, (1) 

electric power and natural gas transmission upgrades; (2) market price impacts on the need for 

large amounts of short-time, high-ramp thermal power production capacity driven by increasing 

production from variable frequency energy (wind and solar); and (3) localized transition costs 

(including possible emission control device implementation) necessary to keep existing coalfired EGUs slated for retirement operational to maintain load voltages while replacement units 

and/or transmission upgrades can be developed. 

Commenters cited NERA estimates that the proposed rule would result in an average electricity 

price increase of 19 percent in Montana from 2020-2029, industry compliance costs from $366 

to $479 billion over the period 2017 to 2031, annual compliance costs from $41 to $73 billion, 

and a possible 29 percent increase in natural gas prices. The commenters stated that consumers 

will spend an estimated $560 billion to reduce electricity consumption. The commenters stated 

that coal plant retirements will increase by 45,000 MW-costing the nation more than one-third of 

its coal-fired electricity generation fleet by 2020.The commenters stated that benefits are 

calculated using a modeled Social Cost of Carbon (SCC) value that is highly prone to a large 

number of subjective input values, resistant to informed review and oversight due to its extreme 

complexity, and-as a result of these factors-highly controversial. The commenters stated that 

health co-benefits comprise 33 to 56 percent of total benefits and should play a relatively small 

part in justifying the expected (and arguably underestimated) costs of the proposed rule. The 

commenters stated that no new legal requirement exists to promote these health benefits and they 

could be justified and realized using a completely different approach and arguably at much lower 

cost based on existing authority for controlling regulated air pollutants in the CAA. 

Commenters stated that EPA brushes aside the impacts on consumers and the economy by 

minimizing long-term costs and overstating projected benefits. The commenters stated that the 

conclusion that prices will decline is based on an inaccurate cost assumptions for implementation 

each of the building blocks, including an assumption that implementation of energy efficiency 

measures in every state will cause demand to go down while relying on a corresponding hope 

that there will be an unlimited supply of cheap natural gas long into the future. The commenters 

stated that EPA monetizes the benefits of the proposal based on the co-benefits of reducing 
410

PM2.5, SO2, NOx and Ozone, each of which has its own National Ambient Air Quality Standard 

(NAAQS) that must be achieved for purposes of public health. 

Commenters cited NERA that the CPP would raise electricity prices by as much as 17 percent 

between 2017 and 2031, depending on which building blocks are available for compliance. The 

commenters stated that the proposal could also force the retirement of as much as 169 gigawatts 

(GW) of coal-fired capacity, on top of the 60 GW projected to close because of, principally,

EPA's Mercury and Air Toxics Standards (MATS) regulation. The commenters stated that the 

CPP would impose about $366 billion in costs on the U.S. energy system between 2017 and 

2031. The CPP and MATS would decimate the nation's coal fleet, shutting down roughly twothirds of its existing capacity. Overall, NERA found, the CPP would impose about dollar 366 

billion in costs on the U.S. energy system between 2017 and 2031. The commenters stated that 

higher energy costs impose disproportionate economic impacts on small business owners, as 

electricity costs often constitute a small firm's biggest expenses. The commenters cited the 

United Mine Workers of America, that the CPP would destroy 187,000 direct and indirect jobs. 

The commenters stated that "the Clean Power Plan would avert less than two-hundredths of a 

degree Celsius of warming by 2100 - an effect too small to be measured or verified". 

Commenters stated that by simultaneously overestimating the potential benefits of the proposal 

and underestimating the costs, EPA claims (in error) that the proposed rule will produce 

economic benefits. The commenters stated that EPA's reliance on the "social cost of carbon" is 

wholly inappropriate because that calculation has not been subject to a rigorous and transparent

rulemaking process. The commenters stated that the analysis fails to properly address 

international benefits and costs. The commenters stated that EPA fails to use full-economy 

modeling to evaluate employment impacts. The commenters stated that EPA's reliance on cobenefits from simultaneous reductions in pollutants other than GHGs is misplaced and must be 

revised to reflect the health benefits that would actually be attributable to this proposed rule. 

(Please see section 8.7.2, comment 1, for EPA’s response to the comments on the rigor of the 

SCC; 8.7.2, comment 5 or EPA’s response to comments on the rigor and transparency of the 

process used to estimate the SCC; and 8.7.2, comment 3 for EPA’s response to comments on the 

use of global SCC estimates.)

Commenters stated that the cost analysis EPA used to evaluate the proposed Clean Power Plan 

was inadequate as highlighted in an ERCOT 2014 report, which stated that accelerated resource 

mix changes will require major improvement to ERCOT's transmission system, posing 

significant costs not considered in EPA's Regulatory Impact Analysis. The commenters stated 

that the proposed rule incorporates generic and unsupported expectations of levels of integrated 

renewable generation and energy efficiency that are ambitious, unachievable, and uneconomic 

under traditional standards. According to the commenters, the rule will remove the current 

diversity in our electricity supplies, diversity which saves consumers more than $93 billion in 

lower electricity costs, according to a study by HIS Energy, and which also reduces the 

variability of monthly utility bills by half. The commenters stated that several studies (Energy 

Ventures Analysis and NERA Economic Consulting), show that the EPA plan will cost $366 to 

$479 billion over a 10- to 15-year period, raising electricity costs in more than 40 states, some 

with increases exceeding 20 percent; a study by the National Mining Association shows that if 

we experience another cold winter like the winter of 2013-2014, we can expect wholesale power 

prices to jump 27-55 percent across different regions, in all states, and businesses and households 
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to pay $35 billion more for natural gas. The commenters stated that a combination of another 

cold winter followed by a warmer than usual summer would cost consumers $100 bill ion in 

higher electricity and natural gas prices. The commenters stated that the WPSC also uncovered 

significant errors in the cost of complying that had been calculated by EPA and that WSPC 

comments state that the CPP irrationally discriminates against western mine mouth EGUs as 

mine mouth EGUs located near Gillette, Wyoming, depended on low cost fuel to offset the 

expense of air cooling; measures which undermine an original cost advantage undermine the 

economics of the entire plant. The commenters stated that the EPA analysis did not take into 

account the decline in public health and welfare that its proposed rule will cause by the increased 

amount of money consumers will have to pay for electricity and natural gas.

Commenters stated that EPA Seriously Underestimates the Cost of Complying with the Rule and 

the Impact of the Rule on Consumer Electricity and Natural Gas Prices. The commenters cited 

Energy Ventures Analysis (EVA) analysis of the impact of the rule that estimated wholesale 

electricity costs will increase by $274 billion, non-power natural gas costs will increase by $80 

billion, and additional capital costs for replacement power will be $53 billion. The commenters 

stated that these costs excluded investments in natural gas pipeline and electric transmission the 

rule will require. The commenters stated that forty-four states will see double-digit increases in 

their wholesale power prices, with 24 states facing increases close to or in excess of 20 

percent. The commenters cited a NERA projection that the total cost of the proposal would be to 

be $366 billion to $479 billion over a 15-year period. The NERA study cited by the commenters 

found that the proposal will cause double-digit electricity rate increases in 43 states, and a 12% 

to 17% average increase in electricity prices Nationwide, with fourteen states facing peak year 

electricity price increases that could exceed 20%. 

Commenters stated that EPA grossly under-estimates the overall cost of the proposed rule, and 

cited a recent study estimating the compliance cost of the CPP at least $366 billion. The 

commenters stated that if the CPP, with its interim rate-based targets, were enacted as proposed, 

Ameren Missouri would need to construct NGCC capacity prematurely, and that the new NGCC 

capacity would be dispatched solely for the purpose of the CPP and outside of normal plant 

economic dispatch, resulting in increased cost to customers. The commenters stated that the 

resource changes resulting from the interim goals of the CPP would have an estimated cost to 

Ameren Missouri customers of $4 billion due to the new generation and acceleration of other 

new capacity additions and costs associated with uneconomic dispatch. The commenters stated 

that the Agency can mitigate the harmful economic impact of its regulatory program by 

foregoing mandatory interim goals and instead should only set final goals. The commenters 

stated that the overall implementation cost of the CPP in terms of energy prices and reduced 

economic growth is enormous and will be borne by customers and the states for decades to 

come. The commenters stated that if EPA persists with a rule that requires early and significant 

progress toward the final goal, all deadlines should be deferred and made contingent upon SIP 

approval. 

Commenters cited NERA estimates that the proposed Clean Power Plan would cost between $41 

and $73 billion per year, and cause electricity rates to increase between 13 percent and 14 

percent in New Mexico. The commenters cited an analysis conducted by Industrial Energy 

Consumers of America estimating that the Clean Power Plan would increase wholesale power 

prices in the State by up to 23 percent. 
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Commenters stated that the four Building Blocks EPA has based the rule on suffer from 

technical and economic problems that will result in this regulation costing far more than EPA 

projects. The commenters cited NERA projections that electricity prices will experience rate 

increases from a low of 12% to 17% over the period 2017 through 2031, and natural gas prices 

will increase from 2% to 29% depending on the scenarios that are executed. The commenters 

cited Energy Ventures Analysis estimates that electricity and natural gas costs for residential, 

commercial, and industrial customers will increase by 60% by 2020 because of the GHG ESPS, 

the MATS rule and other EPA regulations aimed at the electric power sector. The commenters 

stated that this will cost $284 billion dollars by 2020, with the total cost increasing with each 

additional year of implementation and residential energy costs will increase by $680 per year by 

2020. The commenters stated that total energy costs for industry will increase by 64%, a $200 

billion increase that will be passed on to their customers or result in factory closures and

operations moving overseas. 

The commenters stated, as EPA has recognized, compliance flexibility is both necessary and 

appropriate in the context of section 111(d) rules for power plants. The commenters stated 

although the electric system is constructed and operated to accommodate fluctuations in power 

demand and supply, the changes EPA proposes to require in the power sector will lead to 

significant reliability, transmission, and natural gas supply issues -particularly if states are not 

given broad flexibility to design workable plans for their EGUs that will protect ratepayers from 

significant rate increases, prevent potentially significant stranded costs for affected EGU owners, 

and ensure the continued reliability of the electric system. In addition, the commenters stated 

broad compliance flexibility will help to ameliorate the otherwise significant potential that 

compliance costs stemming from the Proposed Rule will lead to economic upheaval in electricity 

and fuel markets. 

Response 26: Commenters described overall cost estimates generally higher than those reported 

by EPA in the economic analysis completed for the CPP and reported in the Regulatory Impact 

Analysis (RIA) for a variety of reasons. Some commenters referenced alternative studies of the 

cost and economic impacts of the CPP such as those conducted by National Economic Research 

Associates (NERA). Commenters generally state that the costs associated with the CPP will lead 

to significant economic impacts such as increased energy costs and job losses. 

Section V of the preamble presents an assessment of the costs of the final guidelines. The RIA 

completed by EPA estimates the costs of the CPP for illustrative compliance scenarios and 

shows that the final rule is beneficial to society with the benefits far outweighing the costs for the 

illustrative scenarios analyzed. The EPA recognizes that states will make the ultimate decisions 

in their implementation planning process of actions that will be taken by EGUs to comply with 

the CPP. States and sources impacted are free to choose alternative implementation approaches 

that make tend to lower costs and or increase the benefits of the CPP to society so long as the 

state goals are met.

EPA used the Integrated Planning Model (IPM) to estimate the emission reductions, costs, 

changes in generation and economic impacts associated with the guidelines by EPA. This model 

has been peer reviewed and used extensively by EPA and other organizations to analyze costs 

and impacts of regulatory actions for the power sector. Detailed documentation for IPM v.5.15 is

available at: http://www.epa.gov/airmarkets/powersectormodeling.html. It provides forecasts of 
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least cost capacity expansion, electricity dispatch, and emission control strategies while meeting 

energy demand and environmental, transmission, dispatch, and reliability constraints. EPA has 

used IPM for over two decades to better understand power sector behavior under future businessas-usual (i.e. baseline) conditions and evaluate the economic and emission impacts of 

prospective environmental policies. The model is designed to reflect electricity markets as 

accurately as possible. EPA uses the best available information from utilities, industry experts, 

gas and coal market experts, financial institutions, and government statistics as the basis for the 

detailed power sector modeling in IPM. The EPA believes that the assumptions used in modeling 

the final rule and reported in the RIA best reflect actions that may be taken by states in 

implementation planning of the final CPP. However as previously noted, states will make the 

ultimate decisions as to implementation planning. See the RIA completed for the final CPP, the 

GHG Mitigation Measures technical support document, and section 8.4 of this response to 

comment document for more discussion of the underlying assumptions used in the IPM 

modeling for the final rule.

Regarding references to alternative analyses, NERA issued its report after proposal of the CPP. 

NERA reports costs that far exceed the Clean Power Plan’s projected costs due to widely 

differing assumptions about the actions that will be taken by EGUs to comply with the CPP. For 

example, NERA erroneously assumes a maximum heat rate improvement of 1.5 percent 

compared to EPA’s 6 percent. NERA reports sharp electricity prices increases inconsistent with 

EPA’s projections of the final rule and erroneously assumes zero benefits of the CPP in it 

modeling. See response to comment 5 in section 8.6 for more discussion of alternative analyses.

Comment 27: Commenters contended that EPA did not conduct a cumulative impact analysis of 

proposed rule plus other EPA rules.

Several commenters stated that EPA has not considered the combined impact of the proposed 

rule along with other EPA and environmental regulations.

Commenters stated that the cost of this rule is additive to the costs from several other EPA rules, 

such as the Mercury MACT rule, the Refinery Sector Rule proposal and the Cross State Air 

Pollution Rule. Further still, the EPA will implement lower ozone standards by 2015. The 

commenters stated that even before the regulation's requirements are taken into account, seven of 

the EPA's final or pending regulations are projected to cost the economy more than $60 billion 

per year in lost GDP and will cause the annual loss of nearly 900,000 jobs. 

Commenters stated that EPA has failed to consider the cumulative impact of its proposal along 

with the other numerous and costly rules that directly impact the utility industry. The 

commenters provided the following list of the more prominent rules at issue:

• 2010 National Ambient Air Quality Standard for NO2; 

• 2010 National Ambient Air Quality Standard for SO2;

• 2014 National Ambient Air Quality Standard for ozone;
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• 2011 National Ambient Air Quality Standard for PM2.5;

• 2011 Cross State Air Pollution Rule;

• 2012 and 2013 Revisions to the Cross State Air Pollution Rule;

• 2011 Industrial Boiler MACT;

• Regional Haze Rule;

• Greenhouse Gas PSD and Title V permitting;

• Greenhouse Gas NSPS;

• 2010 revisions to 40 CFR 63, Subpart ZZZZ;

• 316(b) Cooling Water Intake structures;

• Steam Electric Effluent Guidelines;

• Numeric Nutrient Criteria;

• Total Maximum Daily Load rules; and

• Coal Combustion Residuals.

The commenters stated that the failure to consider the cumulative impacts of these rules is in 

direct contradiction to Executive Order 13563 that each agency must propose or adopt a 

regulation only upon a reasoned determination that its benefits justify its costs, tailor its 

regulations to impose the least burden on society taking into account the costs of cumulative 

regulations. The commenters stated that EPA must conduct this cumulative impact analysis, and 

provide the public with an opportunity for review and comment.

Commenters stated that EPA's projected average retail electric price increases for the proposed 

CPP rule in 2020 is highly uncertain because it assumes that states will follow EPA's prescribed 

building blocks approach to emission reductions and are in addition to a 3.1% average national 

price increase in 2015 for compliance with EPA's 2011 Mercury and Air Toxics Standards rule 

(EPA MATS RIA, Table 3-12). 

Commenters stated that a March 2014 analysis by National Economic Research Associates of a 

CO2 reduction proposal similar to the EPA Clean Power rule estimated national average 

residential electricity price increases of 3.0 to 11.4 percent over 2018-2033, depending upon the 

degree of flexibility in implementation (NERA/ACCCE, March 2014). The commenters stated 

that these price increases are in addition to those expected in 2015-2017 due to the 

implementation of the EPA mercury rule. 

Response 27: The EPA conducted a Regulatory Impact Analysis (RIA) assessing the costs and 

benefits of the Clean Power Plan proposal and final guidelines consistent with the requirements 
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of E.O. 12866 and E.O.13563 for illustrative compliance scenarios. The RIA shows that the 

Clean Power Plan is beneficial to society and that the benefits far outweigh the costs for the 

illustrative scenarios analyzed. The EPA recognizes that states will make the ultimate decisions 

in their implementation planning process of actions that will be taken by EGUs to comply with 

the CPP. States are free to choose alternative implementation approaches that may lower costs 

and or increase the benefits of the CPP to society beyond those estimated by EPA as long as the 

state goals are met.

The Integrated Planning Model (IPM) was used to estimate the emission reductions and costs 

associated with the guidelines. All promulgated EPA regulations affecting the power sector are 

incorporated into the baseline of IPM for development of the emission reductions, costs, and 

benefits for the guidelines. (See docket EPA-HQ-OAR-2013-0602 for the RIA conducted for the 

proposed and final emission guidelines and more details on the analysis conducted.) The final 

Clean Power Plan establishes emission guidelines for states to use in developing plans to address 

greenhouse gas emissions from existing fossil fuel-fired EGUs. Specifically, the EPA establishes 

state-specific goals for carbon dioxide emissions from the power sector, as well as emission 

guidelines for states to use in developing plans to attain the state-specific goals. Because states 

will ultimately make the decisions as to implementation of the guidelines, the RIA reflects 

illustrative benefits and costs. The guidelines set in motion actions to lower the carbon dioxide 

emissions associated with existing power generation sources in the United States. 

The EPA recognizes that each state has different policy considerations, including varying 

emission reduction opportunities and existing state programs and measures, and characteristics of 

the electricity system (e.g., utility regulatory structure, generation mix, electricity demand). The 

final emission guidelines provide states with options for establishing standards of performance in 

a manner that accommodates a diverse range of state approaches. The proposed guidelines would 

also allow states to collaborate and to demonstrate emission performance on a multi-state basis, 

in recognition of the fact that electricity is transmitted across state lines, and local measures often 

impact regional EGU CO2 emissions.