# EPA’s Clean Power Plan Power Experts 2014 - Atlanta November 5, 2014 Dr. Kenneth Mitchell U.S. Environmental Protection Agency

Atlanta, GA

# • EPA Actions on Climate 

# Change
• EPA’s Clean Power Plan 

# Outline

www.epa.gov/climatechange and www.epa.gov/cleanpowerplan

# U.S. GHG Pollution

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# EPA Actions to Reduce Carbon Pollution

• Building a 21 st 

## century transportation sector • Cutting energy waste in homes, businesses, and factories • Reducing methane and HFCs • Preparing the U.S. for the impacts of climate change • Helping lead international efforts to 

## address global climate change • Reducing carbon pollution from power plants
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### President’s June 2013 Directive to EPA: 

### Develop carbon pollution standards, regulations or guidelines, as appropriate, for: 1. New power plants • Proposed January 8, 2014 2. Modified and reconstructed power plants • Proposed June 2014 • Final June 2015 3. Existing power plants • Proposed Guidelines June 2014 • Final Guidelines June 2015 • State Plans due June 2016 

## GHG NSPS Requirements for Fossil Fuel - Fired Power Plants

http://www.epa.gov/cleanpowerplan 15

## • EPA conducted a robust pre - proposal stakeholder engagement process o Participated in meetings with over 300 utility, consumer, labor and environmental groups since June 2013 o Held 11 public listening sessions around the country  3,300 people attended  More than 1,600 people offered oral statements 

## • Reached out to all 50 states o Some states noted their programs to address carbon evolved because of:  The need to address carbon pollution  Electric system that is dynamic, and in the midst of market changes  Modernizing the power sector is good for the economy 

## • Common themes included reliability, flexibility, affordability, time for plans and implementation 6 

# Early Outreach Informed This Proposal

### This Clean Power Plan (CPP) proposal will:
• Reduce carbon pollution from existing power plants, for which there are currently no national limits • Maintain an affordable, reliable energy system and will help m ove us toward a cleaner, more stable environment for future generations • By 2030, reduce nationwide carbon dioxide emissions, from the power sector by approximately 30% from 2005 levels, with significant reductions to begin by 2020 • Cut hundreds of thousands of tons of harmful particle pollution, sulfur dioxide and nitrogen oxides as a co- benefit • Proposal will avoid an estimated 2,700 to 6,600 premature deaths and 140,000 to 150,000 asthma attacks in 2030 • Provide important health protections to the most vulnerable, such as children and older Americans • Lead to health and climate benefits worth an estimated $55 billion to $93 billion in 2030 • From soot and smog reductions alone, for every dollar invested through the Clean Power Plan - - American families will see up to $7 in health benefits 7 

# Summary - 111(d) Existing Power Plant Proposal

### • Build on actions states, cities and businesses across the country are already 

### taking to address the risks of climate change
• Spur investment in cleaner and more efficient technologies, creating jobs and driving innovation


### • Require a reasonable emission reduction glidepath starting in 2020
• Provide a flexible timeline — up to 15 years from guideline issuance — for all emission reduction measures to be fully implemented in 2030 o Recognizing that investments in infrastructure can take time to put in place and o Avoiding stranded assets 

### • Provide an array of tools states can use to formulate approvable plans 

## . 

## Summary - 111(d) Existing Power Plant Proposal

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http://www.epa.gov/cleanpowerplan

# Other Benefits

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# Electricity bills down 

# 8 % in 2030

$0 $20 $40 $60 $80 $100 $120

1990 1995 2000 2005 2010 2015 2020 2025 2030

Monthly Residential Electricity Bills (2011$)

Historical - Converted to 2011$ Base Case Clean Power Plan

## After Proposal, Coal & Natural Gas Remain Leading Sources



## of Electricity Generation

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### Each more than 30% of projected generation in 2030 

## Coal 31% Natural Gas 32% Other Fuel 37%

# Background: Clean Air Act Section 111(d) Best System of Emission Reduction

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### • Previous EPA rules under this section of the Clean Air Act have considered “add -on” control technologies – like scrubbers -- that are technically feasible to deploy at virtually any facility
• In contrast, there are a wide variety of ways to reduce carbon pollution that are commercially 

### available, technically feasible, and cost effective
• The opportunities vary from state to state, depending on how electricity is generated , energy infrastructure, and other factors


### • I n this proposal, EPA took an approach that viewed the Clean Air Act factors in determining Best System of Emission Reduction (BSER) in light of the interconnected nature of power generation 

### BSER factors
• Costs • Size of reductions • Technology • Feasibility

http://www.epa.gov/cleanpowerplan

# EPA Establishes a Goal for Every State

• EPA analyzed the practical and affordable strategies that states and utilities are already using to lower carbon pollution from the power sector
• Proposed goals are based on a consistent national formula , calculated with state and regional specific information
• Each state goal is expressed as a rate (pounds of CO 2 

### per MWh ) – a statewide number 

### for the future carbon intensity of covered existing fossil -fuel -fired power plants in a state
• The state rate goal is calculated to account for the mix of power sources in each state and the 

### application of four “building blocks” that make up the best system of emission reduction
• States will need to meet an interim goal and a final goal 12Building Block Strategy EPA Used to Calculate the State Goal Maximum Flexibility: Examples of State Compliance Measures 1. Make fossil fuel -fired power plants more efficient Efficiency Improvements • Efficiency improvements • Co-firing or switching to natural gas • Coal retirements • Retrofit carbon capture and sequestration (CCS) 2. Use lower-emitting power sources more Dispatch changes to existing natural gas combined cycle (CC) • Dispatch changes to existing natural gas CC 3. Build more zero/lowemitting energy sources Renewable Energy Certain Nuclear • New NGCC • Renewables • Nuclear (new and up rate) • New coal with CCS 4. Use electricity more efficiently Demand -side energy efficiency programs • Demand -side energy efficiency programs • Transmission efficiency improvements • Energy storage 13

# Flexibilities Available To States

• Timing o Up to 15 -year window in which to plan for and achieve reductions in carbon pollution o U p to two or three years to submit final plans 

### • Form of goal o States can use either a rate- based or mass- based goal 

### • Single or multi-state plans o States can collaborate and develop plans on a multi -state basis 

### • Selection of measures o States will choose how to meet the goal through whatever collection of measures reflects its particular circumstances and policy objectives o State measures may impact and, in fact may be explicitly designed to reduce, CO 2 emissions from utilities on a regional basis o EPA would support building off existing reduction programs

14 http://www.epa.gov/cleanpowerplan

# States Have Flexibility

15 Carbon emissions from affected power

plants in an example state 

### As an example, states could do less in the early years, and more in the later



### years, as long as on average it meets the goal

Timing of Power Plant Emission Reductions

# When States Plan, They Can...

• Look broadly across the power sector for strategies that get reductions • Choose to rely to varying degrees on measures that EPA used to calculate the goal, or on other measures that were not part of the state goal -setting analysis • Invest in existing energy efficiency programs or create new ones • Consider market trends toward improved energy efficiency and a greater reliance on lower carbon energy • Tap into investments already being made to upgrade aging infrastructure • Expand renewable energy capacity • Integrate their plans into existing power sector planning processes • Design plans that use innovative, cost -effective regulatory strategies • Develop a state -only plan or collaborate with each other to develop plans on a multi state basis • Decide how to treat plants nearing the end of their useful life and how to help plants avoid “stranded investments” 1617 By June 30, 2016 State submits initial multistate plan and request for 2- year extension EPA reviews initial plan and determines if extension is warranted by June 30, 2017 State submits progress report of plan by June 30, 2018 States submits multistate plan State submits Negative Declaration State submits complete implementation Plan by June 30, 2016 State submits initial Plan by June 30, 2016 and request 1 -year extension
State submits initial m ulti -state P lan by June 30, 2016 and request 2 -year extension Emission Guideline Promulgation June 1, 2015 by June 30, 2016

State submits n egative declaration EPA publishes FR notice by June 30, 2016 State submits plan by June 30, 2016 State submits initial plan and request for 1-year extension EPA reviews initial plan and determines if extension is warranted by June 30, 2017 State submits complete plan 2015 2019 

# Proposed Implementation Timeline

Compliance period begins 2020 2020

EPA reviews plan and publishes final decision within 12 months on approval/disapproval EPA reviews plan and publishes final decision within 12 months on approval/disapproval EPA reviews plan and publishes final decision within 12 months on approval/disapproval 2016 2017 2018

# Supplemental Proposal

• October 28, 2014 - EPA issued a supplemental proposal to its proposed CPP that sets area -specific goals for Indian country and territories • South Point Energy Center , in Fort Mojave Indian country geographically located within Arizona; • Navajo Generating Station , in Navajo Indian country geographically located within AZ • Four Corners Power Plant, in Navajo Indian country geographically located within NM • Bonanza Power Plant, in Ute Indian country geographically located within UT • Puerto Rico • Guam 

### • Two main elements: • E mission rate- based goals specific to each area of Indian country and U.S. territory that has affected EGUs • G uidelines for the development, submission, and implementation of plans to achieve the goals


### • Provides options for meeting those goals in a flexible manner that accommodates a diverse range of approaches 18

Comment Period Closes December 19, 2014

# Notice of Data Availability (NODA)
• October 28, 2014 - EPA issued a NODA related to the proposed CPP
• In this NODA, EPA discusses several issues that have been raised 

## by stakeholders, including : • The trajectory – or glide path – of emission reductions from 2020 to 2029 

### • Aspects of the way building blocks are established 

### • The way the state goals are calculated


## • The NODA is not intended to be a complete summary of the wide variety of ideas that have been raised • The agency has heard many other concepts that are not highlighted in this document because they are covered in the June proposal 19

Comment Period Closes December 1, 2014

# NODA – Glide Path

• The NODA discusses potential technical challenges described by some stakeholders associated with achieving all of the reductions that states would be required to make as early as 2020, when the compliance period begins
• Stakeholders have suggested two potential approaches for addressing these 

### issues • Allow credit for early reductions, which could provide flexibility to defer other emission reductions until later in the 2020 to 2029 period • Phasing in building block 2 over time, just as building blocks 3 and 4 are phased in over time in the June proposal


### • The NODA discusses these approaches that stakeholders have offered and explains how EPA’s June 2014 proposal requests comment on the option of early reductions
• EPA discusses and is requesting comment both on the concept of phasing in the 

### reductions required under building blocks 1 and 2 over time and possible approaches to effectuating such a phase- in 20 http://www.epa.gov/cleanpowerplan

# NODA - Establishing Building Blocks

• The NODA focuses on two issues raised by multiple stakeholders, including states, about certain aspects of the building block methodology: • The treatment of natural gas in building block 2 • The treatment of renewable energy in building block 3 

### • Stakeholders have suggested that the EPA’s Best System of Emission Reduction (BSER) determination should recognize that there are additional opportunities in the current market to use natural gas beyond those EPA included in the June proposal
• Stakeholders have suggested a regional approach to establishing renewable energy targets
• In this NODA, the EPA discusses these approaches that stakeholders have suggested and requests comment on ways that building block 2 could include new natural gas combined cycle (NGCC) units and natural gas co -firing in existing 

### coal -fired boilers and ways that state - level, renewable energy targets could be set based on regional availability of renewable energy 21 http://www.epa.gov/cleanpowerplan

# NODA - Calculating State-specific CO 2 

# Goals
• The NODA addresses two issues raised by some stakeholders, including states, regarding the calculation of state -specific CO 2 

### goals • Some stakeholders have offered that the formula for calculating each state's goal is not consistent • Stakeholders have also raised questions about the use of power plant emissions 

### data for the single year, 2012 

### • In the NODA, EPA discusses these issues and requests comment on alternative approaches suggested by stakeholders for the goal -setting equation
• In addition, EPA is making available data for the years 2010 and 2011 using the eGRID methodology and requesting comment on alternative uses of data sets in calculating the goals • The 2010 and 2011 datasets will be posted to the docket and are available on 

### EPA’s Clean Power Plan website at: http ://www2.epa.gov/carbon - pollution standards/clean - power- plan - proposed - rule-technical -documents 22

# Next Steps • The proposed rule, as well as information about how to comment and supporting technical information, are available 

## online at: http://www.epa.gov/cleanpowerplan
• EPA held 4 public hearings the week of July 28th 

## in Denver , Atlanta , Pittsburgh and Washington, D.C. – over 2,700 people attended
• Comments on the CPP proposed rule and NODA are due December 1, 2014
• Comments on the proposal should be identified by Docket ID Number: EPA- HQ-OAR-2013-0602 23

# Questions?

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