1 TABLE OF CONTENTS

4.10 Tribe and Territory Goals from SNPR

................................ ................................ ............... 2 4.10.1 Treatment of U.S. territories and non

- contiguous states in goal

- setting

...................... 2 4.10.2 Treatment of tribes in goal

- setting

................................ ................................ ................. 13 4.11 State

- specific goal computation comments

................................ ................................ ....... 34 4.12 Other

................................ ................................ ................................ ................................ .. 3682 4.10 TRIBE AND TERRI TORY GOALS FROM SNPR

Section 4.10 covers public comments related to tribe and territory goals from the Supplemental Proposed rulemaking for existing stationary sources in Indian Country and U.S. Territories; Multi

- Jurisdictional Partnerships

.
4.10.1 Treatment of U.S. territories and non

- contiguous states in goa l

- setting

Section 4.10.1 covers public comments related to the treatment of U.S territories and non

contiguous states in goal

- setting

.
Commenters have raised a number of issues related to this subsection which are organized by topics (comments) below. Resp onses are provided for these topics.

Comment 1 : T&T Supplemental

- Rework target setting formula

- RE BB3

Response 1 : The EPA is not including emission performance goals for territories in this final rule. See section VII .F. of the preamble for discussi on of this issue. However, the EPA has revised the target setting formula regarding Building Block 3, please section V.E. of the final rule preamble of the CPP for more information about Building Block 3.

The following are summaries of the specific public comments under this comment:

Commenters stated, in regards to the supplemental proposal, EPA should rework its target

setting formula so as to reduce dispatch of fossil

- fired EGUs in each jurisdiction to the same extent that generation is increased from R E (or demand is reduced from energy efficiency measures). The commenters said the agency must also ensure that no double

- counting of renewable credit occurs, and should adopt an avoided MWh approach to determine goal compliance, rather than a reduced CO2 a pproach. The commenters said a key benefit of the avoided MWh approach is that it does not require the use of system dispatch and capacity expansion models, which can be expensive due to the need to acquire licenses for the proprietary software and the exp ertise needed to properly run the models. The commenters said the burden of using these models as part of plan development and compliance assessment would be particularly high in the case of tribal and territorial governments, which are likely to have fewe r specialized staff and financial resources.

Comment 2: T&T Supplemental

- The EPA's request for comments on the treatment of low

- and

non

- emitting electric generation from Canada, and how imported resources can contribute to meeting state goals

- the U.S . and Canadian segments of the larger North American grid are integrated and interdependent

. Response 2: See section VIII. K . of the final rule preamble of the CPP for the EPA’s response to this comment more information about RE measures that occur outside the U.S

.3 The following are summaries of the specific public comments under this comment:

Commenters stated, in regards to the supplemental proposal, existing physical linkages between the U.S. and Canadian electric power systems are numerous, and are set to continue expanding. The commenters said electricity plays an integral role in the vibrant bilateral energy relationship, which itself is a pillar of the broader flow of two

- way trade that is without compare anywhere in the world. The commenters said the re are currently more than 35 electric transmission interconnections between the Canadian and U.S. power systems, which stretch across the international border and together form a highly integrated North American grid. The commenters said each Canadian pro vince along the U.S. border is electrically interconnected with a neighboring U.S. state or states, with many provinces boasting multiple (or in the case of Ontario, more than a dozen) international interties. The commenters said U.S.

- Canada integration is by no means a new phenomenon, with Ontario and New York having established their first connection more than 110 years ago.

Commenters stated, in regards to the supplemental proposal, physical linkages between the U.S. and Canadian grids have enabled stea dy growth in a robust continent

- wide electricity marketplace. The commenters said bilateral trade occurs routinely

- and has occurred for decades

- at a range of points across and beyond the border, with supply fulfilling demand in the most efficient, cost

- effective manner possible The commenters said such trade enables market participants to take advantage of supply diversity across the wider grid, reflected in the very different generation mixes in place in either country The commenters said system and ma rket integration also underpin economic development on both sides of the border.

Commenters said historically, electricity exports to the U.S. have represented 5

- 10% of total electric generation in Canada. The commenters said the majority of these exports involve the sale of surplus output from provinces with major hydropower resources, such as British Columbia, Manitoba and Quebec. The commenters said export volumes from Ontario have also risen more recently, making the province the second largest exporte r for several years. In 2013, nuclear and hydropower comprised over 80% of Ontario's supply. The commenters said New England has recently seen an uptick in imports of nuclear energy from New Brunswick following the return to service of the Point Lepreau Ge nerating Station in late 2012.

Commenters stated, in regards to the supplemental proposal, the elements involved in maintaining the reliable operation of the interconnected North American grid and managing the exchange of electricity across the U.S.

- Canad a border are extremely complex, requiring the support and participation of numerous entities in both countries. The commenters said in recent years the bulk of electricity exchanges across the U.S.

- Canada border have been executed through wholesale markets , with long

- term contracts representing less than one

- quarter of total trading activity. The commenters said these wholesale markets include the real

- time and day

ahead markets of U.S. ISO/RTO organizations such as the California ISO, Midcontinent Independ ent System Operator ("MISO"), PJM Interconnection, New York ISO ("NYISO") and ISO New England ("ISO

- NE").

Commenters said in the wholesale market context, these deliveries typically occur under one of two market structures; first, in power pools administe red by ISOs/RTOs, participants transact by submitting bids and offers into the pool. The commenters said software is utilized to calculate4 market clearing prices, including transmission congestion and losses; the other principal market model consists of bi lateral trading, in which participants negotiate directly with counterparties or anonymously via brokers or over trading platforms (e.g. Intercontinental Exchange).

Commenters said under these market structures, electricity is delivered under the followin g windows/intervals: (i) hourly, meaning delivery occurs at a constant rate over any given hour (usually the hour before delivery up until to the day before); (ii) daily, meaning delivery occurs at a constant rate over specific periods of a day (usually th e day before delivery); and (iii) term, meaning delivery occurs over a multi

- day period (often monthly, quarterly or yearly, with purchases having been made anywhere from the day before to years before).

Commenters said accordingly, at any given moment in the day, week, month or year, U.S. market participants in numerous states and ISO/RTO markets are importing energy from Canadian sources, and vice versa. The commenters said interconnections across the North American grid help to stabilize minute

- to

- minut e fluctuations by providing a large pool of generation and load, which in turn assists in absorbing normal fluctuations and keeping the system running smoothly. The commenters said this is all made possible by consistent compliance across North America wit h NERC standards and rules governing participation in ISO/RTO and bilateral markets.

Commenters stated on October 28, EPA issued a supplemental proposed rulemaking which highlighted the bi

- national implications of the proposed rule and solicited input on, "whether RE resources from Canada can be used to contribute to meeting a jurisdiction's goal." The
commenters firmly believed that imports of non

- emitting electricity from Canada can be a tool for many states to reduce their dependency on high

- GHG emittin g electricity generation. The
commenters said there is significant existing and proposed infrastructure that can bring additional clean Canadian power to the United States. The commenters said there are currently
seven trans

- boundary transmission lines pro posed that would provide additional clean energy for U.S. states to use in their implementation plans. The commenters said various widely respected renewable energy credit tracking systems exist that ensure sound accounting of Canadian electricity imports. The commenter s ask ed that nothing in the final rule discourage cross

- border collaboration that leads to cost

- effective emissions reductions for the power sector, and that it fosters reliability and sustainability in our integrated grid.

Comment 3: T&T Supplemental

- The EPA's request for comments on the treatment of low

- and

non

- emitting electric generation from Canada, and how imported resources can contribute to meeting state goals

- in its final rule, the EPA should appropriately consider, reflect a nd leverage the benefits to U.S. consumers associated with existing and expanded integrat ion of the North American Grid.

Response 3: See section VIII.K. of the final rule preamble of the CPP for the EPA’s response to this comment more information about RE measures that occur outside the U.S.

The following are summaries of the specific public comments under this comment:5 Commenters stated, in regards to the supplemental proposal, in its final rule, EPA should appropriately consider, reflect, and leverage the benefit to U.S. consumers associated with existing and expanded integration of the North American grid. The commenters said such an approach has the potential to continue facilitating substantial reductions in U.S. GHG emissions

- to which numerous U.S. s tates and utilities can attest, having already reaped the benefits of a lower

- emitting power supply through years of purchasing Canadian imports, or having already undertaken action to do so. The commenters said as the EPA proceeds with finalizing its
prop osal, the Agency should therefore recognize the emission reductions which have historically been realized in the U.S. as a result of the importation of low

- and non

- emitting generation from Canada; likewise, the EPA should not discount or disregard the emi ssion

- reduction value of this generation by limiting the ability of U.S. states and affected entities to utilize such generation for purposes of fulfilling their specific rate

- based goals under the 111(d) framework.

Commenters stated, in regards to the su pplemental proposal, failure to appropriately consider, reflect and leverage the benefits of existing and expanded U.S.

- Canada electric integration in the final rule would result in unintended consequences for U.S. entities and would deprive these entities of a valuable, proven option for meeting their carbon

- reduction goals.

Commenters said it is imperative that the EPA's final rule neither deliberately nor inadvertently deprive U.S. states and affected entities of the carbon

- reduction advantages presente d by integration and trade with Canada. The commenters said this applies both in the context of the existing relationship, as well as in the context of transactions and contracts which will be executed, and generation and transmission projects which will b e developed, subsequent to finalization and implementation of the Agency's proposal. The commenters said any undue, unnecessary and/or arbitrary foreclosure of the option for affected entities to incorporate low

and non

- emitting generation from Canada int o their 111(d) strategies will have the opposite effect of the types of benefits catalogued above. The commenters said any constraints would diminish emission

- reduction potential, impair reliability, reduce affordability, and limit development prospects fo r new non

- emitting resources in impacted U.S. states; such outcomes would be contrary to the stated objectives of the EPA and the President. The commenter s request ed that the EPA avoid any such scenario by ensuring that the benefits associated with existin g and expanded U.S.

- Canada electric integration are appropriately considered, reflected and leveraged in the final rule.

Comment 4 : T&T Supplemental

- In its final rule, the EPA should specifically state that U.S. states will have the flexibility to all ow affected entities to utilize the importation of low

- and non

emitting electric generation from Canada as a CO2 emission reduction measure

. Response 4: See section VIII.K. of the final rule preamble of the CPP for the EPA’s response to this comment more i nformation about RE measures that occur outside the U.S.

The following are summaries of the specific public comments under this comment:

Commenters stated, in regards to the supplemental proposal, there is precedent under existing CAA programs for recognit ion of the emission

- reduction benefits of low

- and non

- emitting6 electricity from Canada. The commenters recognize d that all components of state 111(d) plans

- including their CO2 emission reduction measures

- must be consistent with requirements set forth in the CAA and implementing regulations. In turn, the commenter s acknowledge d that EPA requires assurances that the utilization of low

- and non

- emitting electric generation from Canada as a CO2 emission reduction measure must not conflict with relevant aut horities and procedures under the statute.

Commenters said while some of the potential approaches under the proposed rule that might facilitate the importation of low

- and non

- emitting Canadian electricity for emission reductions are new, there is one suc h approach that has been used for decades to lower emissions in the U.S. The commenters said the Acid Rain Program under Title IV of the CAA, along with NOx budget programs under Title I, impose a mass

- based emissions compliance obligation on EGUs that is measured with continuous emissions monitors. The commenters said under both of these programs, when imported Canadian generation reduces the utilization of higher

- emitting generation from coal

- fired EGUs in the United States, it is an automatic compliance measure, with no restrictions or additional tracking or verification requirements.

Commenters said without endorsing the legality or desirability of alternative approaches, the
commenter s asserted that the approaches in the Acid Rain (Title IV) and NOx pr ograms provide a strong precedent if states decide to use an EGU, mass

- emissions

- based approach with a compliance obligation for EGUs; in such cases, the treatment of imported electric generation from Canada under a state plan should be guided by the prece dent of these CAA programs.

Commenters stated, in regards to the supplemental proposal, states and affected entities should have the opportunity to take advantage of U.S.

- Canada integration and trade, in view of the EPA's assurances that states will be gr anted maximum flexibility to meet their rate

- based goals in a manner that reflects their specific circumstances and energy and environmental policy objectives.

Commenters said it is wholly reasonable and appropriate to expect these states to reflect their integration with Canada and to incorporate recognition of Canadian resources under their own programs in the 111(d) plans submitted to the EPA. The commenter s strongly asserted that those states which wish to pursue this course of action should not be pre cluded from doing so. The
commenters said under a host of different public policy and market structure scenarios, the importation of non

- emitting generation from Canada can serve as a solution that is tailored to fulfill the unique environmental and econom ic needs of a state. The commenters said any restrictions on a state's ability in this regard would run counter to the EPA's professed intention to allow "each state to maximize the advantages it considers optimal." The commenters said what's more, such re strictions would also undermine the "state flexibility principle that is central to the EPA's development of this program."

Commenter s applaud ed the EPA for its commitment to maximizing flexibility for states under its planned approach. The commenters sai d consistent with this signal from the EPA, the Agency should facilitate the submittal of state plans which may allow affected entities to benefit from the importation of low

- and non

- emitting electric generation from Canada as one of several strategies wi thin a portfolio of GHG

- reduction measures. The commenter s request ed that the EPA incorporate language in the preamble to the final rule, to this effect.7 Comment 5 : T&T Supplemental

- In the supplemental proposal, the EPA also "requests comment on whether areas without affected EGUs may participate in multi

- jurisdictional plans." The EPA should provide all States and affected EGUs opportunity to identify and incorporate
out

- of

- state or international GHG reduction projects for implementation and compliance
purposes
Response 5 : See section VIII.K. of the final rule preamble of the CPP for the EPA’s response to this comment more information about RE measures that occur outside the U.S.

The following are summaries of the specific public comments under this co mment:

Commenters stated in the supplemental proposal, EPA "requests comment on whether areas without affected EGUs may participate in multi

- jurisdictional plans." The commenters said EPA also solicits comment "on all aspects of the treatment of RE, deman d

- side energy efficiency, and other new low

- or non

- emitting electricity generation across international boundaries in a CAA section 111(d) plan, considering the components for approvable plans described in the June 18, 2014, proposal, including any mechan isms that could be used to ensure that the low or non

emitting generation was in fact offsetting fossil

- fuel

- fired generation in the jurisdiction that would use it to meet its goal." The commenters said while a beyond the fence line approach to BSER is unl awful, States and affected EGUs should be given flexibility to allow third parties to participate voluntarily at the implementation and compliance stages to the extent that they can reduce GHG emissions in a more cost

- effective manner than fossil fuel

- fire d EGUs. The
commenter s agree d that CO2 reduction projects in areas without affected EGUs or in foreign countries have the potential to provide cost

- effective opportunities to reduce GHG emissions and should be available to States, territories, Indian tribe s, and affected EGUs

- on a voluntary basis only

- to comply with emission reduction goals established under Section 111(d). The commenters said however, there is no basis for limiting their applicability to States that participate in multi

State plans. The co mmenters said EPA should provide all States and affected EGUs with equal opportunities to identify and incorporate out

- of

- State or international GHG reduction projects for implementation and compliance purposes in the same manner as projects located in the same State.

Comment 6 : T&T Supplemental

- Treatment of renewable energy across international boundaries

Response 6 : See section VIII.K. of the final rule preamble of the CPP for the EPA’s response to this comment more information about RE measures that occur outside the U.S.

The following are summaries of the specific public comments under this comment:

Commenters stated, in regards to the supplemental proposal, imported renewable energy across international boundaries has the potential to reduce in

- st ate emissions from CPP affected sources and should be able to receive credit towards a state's compliance under either a mass

- based or
rate

- based system. The commenters said imported renewable energy from Quebec is especially likely to reduce emissions fro m affected sources in New York in the same manner as in

- state8 renewable generation; therefore, the final CPP rule should treat imported renewable generation that has these characteristics the same as in

- state generation.

Comment 7 : T&T Supplemental

- Pue rto Rico

Response 7: The EPA is not including emission performance goals for territories in this final rule. See section VII .F. of the final rule preamble of the CPP for discussion of this issue.

The following are summaries of the specific public comments under this comment:

Commenters expressed dismay at the omission of Puerto Rico from the goals list.

Commenters stated, in regards to the supplemental proposal, EPA should reconsider its proposal to reduce CO2 emissions by shifting production from AESPR to the island's NGCC plant, in view of the unique situation presented by AESPR's long

- term contract to supply power to PREPA under the Power Purchase Agreement (PPA).

Commenter s urge d EPA to revise its supplemental proposal because it is the wrong public policy for Puerto Rico. The commenters said Section 111(d) was intended to be a flexible program that can be tailored to the specific circumstances of each state or territory through consideration of unique factors specific to individual sources or groups of sources. See 42 U.S.C. section 7411(d ) ( 1). The commenters said Puerto Rico is in a unique situation that differs from every state to be covered by the ESPS

- it has only one coal

- fired power plant and that plant operates under the PPA. The commenters s aid EPA's proposal, however, would seek to disrupt the settled, long

term contractual expectations of the PPA

- and effectively strand a significant portion of Puerto Rico's investment in AESPR. The commenters said EPA would do so by requiring PREPA by 202 0 to reduce the electricity it would otherwise buy from AESPR by approximately 17.5%, and to shift the dispatch of 17.5% or more of the electricity historically generated by AESPR to EcoElectrica, the island's natural gas combined cycle ("NGCC"). The comme nters said EPA assumes this can be accomplished as part of an overall increase in dispatch of the NGCC (increasing the capacity factor from 37% to 70%). The commenters said regardless of whether or not shifting dispatch to gas

- fired generating units could work in the traditional state regulatory context, this approach is not sensible and could not work in Puerto Rico, as it would impose significant new wasteful costs on PREPA and the people of Puerto Rico.

Commenters stated the PPA requires PREPA to pay AE SPR each month a capacity payment for dependable capacity made available and an energy payment for the energy actually delivered. The commenters said thus, so long as AESPR continues to maintain its units to ensure it has the capacity to provide electricit y to PREPA, PREPA is contractually obligated to make the monthly capacity payment for the life of the PPA. The commenters said this type of obligation is an essential element of any power purchase agreement and the PPA in Puerto Rico is no exception; howev er, starting in 2020, EPA's proposal would require PREPA not to take approximately 17.5% of the dependable capacity that AESPR otherwise would use to produce electricity for PREPA. The commenters said thus, by contract, from 2020 through 2027, Puerto Rico would be obligated to pay many millions of dollars each month in capacity payments to9 AESPR for energy that EPA's proposal would require PREPA not to purchase. The commenters said that would be the nonsensical result of arbitrary and capricious agency acti on.

Commenters stated moreover, reducing the dispatch of the plant has additional cost implications under the PPA. The commenters said as a baseload plant, AESPR operates most efficiently at higher capacity factors; hence, if the plant is dispatched at lo wer rates and is forced to cycle on and off, there will be higher maintenance costs, and the PPA requires PREPA to pay those costs in the form of a higher variable cost component of the monthly energy payment. The
commenters said those additional costs wou ld also have to be paid by PREPA, if EPA's proposal to shift the dispatching to the NGCC from AESPR were adopted.

Commenters added these costs would be compounded by shifting a significant share of the electricity from AESPR, the lowest cost provider, to the NGCC. The commenters said EcoElectrica will cost PREPA approximately $30/MWh more than AESPR to provide the same electricity. The commenters said assuming, as EPA proposes, that PREPA would replace approximately 600,000 megawatt hours of electricity fr om AESPR with electricity from Eco

Electrica's NGCC, Puerto Rico will face an additional $18 million in annual energy costs. The
commenters said these costs do not include the additional costs (e.g., brownouts, etc.) that could occur if PREPA were foreclos ed from relying fully on AESPR's reliable, coal

- fired power. The
commenters said as the only coal

- fired power generator, AESPR provides a reliable, stable source of base load power. The commenters said a basket of energy resources provides the best,
most r eliable source of energy, and concerns have been raised by energy regulators about putting too much faith in gas

- fired power to the exclusion of coal fired generation. The commenters said moreover, these are costs that Puerto Rico can ill

- afford to assume; while the United States has seen a modest economic recovery, the island remains deeply mired in recession with an unemployment rate of 14%, more than double the rate on the mainland United States.

Commenter s urged EPA to take into account the existing 25

- year PPA in framing any emissions reduction program in Puerto Rico. The commenter s urged EPA to extend the deadline for Puerto Rico to submit an implementation plan until at least four years after EPA issues a final rule and to eliminate entirely the 2020 interim compliance period. The commenters said by eliminating the interim deadline and focusing solely on the final 2030 compliance date, EPA would not conflict with the contractual requirements established by the existing PPA between AESPR and PREPA. The commenters said the initial compliance deadline of 2020 would provide far too little time for Puerto Rico to develop a regulatory program to administer the program and for PREPA, AESPR and others to take the kinds of steps contemplated. The commenters sai d alternatively, at a minimum, the commenters urge d EPA to conform any final rule to the parameters established by the existing PPA by providing a full CO2 emissions allowance allocation to AESPR for the term of the PPA.

Regarding the tribal and territor ies supplementary rule, commenters stated that the Supplemental Proposal does not consider the EGUs current operation reduction as an alternative to building blocks 1 and 2, which will result in substantially higher emission reductions when compared to the Puerto Rico's opportunities with EPA's proposed requirements for building blocks 1 and 2. The commenters stated that in Puerto Rico, some of their EGUs affected by the Proposal will be10 limited in their operation, beginning in April 16 2015. The commenters stated that this results from their strategy determination to comply with the Mercury and Air Taxies Standard (National Emission Standards for Hazardous Air Pollutants from Coal

- and Oil

- Fired Electric Utility Steam Generating Units and Standards of Perfo rmance for Fossil

- Fuel

- Fired Electric Utility, Industrial

Commercial

- Institutional, and Small Industrial

- Commercial

- Institutional Steam Generating Units, Final Rule. The commenters stated that they believe that EPA's emissions guidelines should provide ful l compliance credit for the avoided emissions that result from the retirement or operation limitation of existing EGUs prior to the interim goal compliance deadline.

Commenters, operators of electric utility company on Puerto Rico, stated that building blo ck 1 requirements for oil

- fired EGUs on Puerto Rico should not be included in BSER determinations for Puerto Rico because the utility has already completed these heat

- rate improvement projects on most of their units.

Commenters stated that to achieve the contemplated heat rate improvements, the Supplemental Proposal is effectively directing Puerto Rico to require them to redevelop a new plant

-- or certainly to make wholesale equipment replacements and upgrades that would be prohibitively expensive. See 42 U.S.C. Para 7411(a ) ( 1) (requiring EPA to "tak[e] into account the cost of achieving such reduction" when establishing BSER). Commenters stated that for example, they would anticipate that to actually materially improve heat rate at their facility, the pl ant would have to completely retrofit the turbines (with a "dense pack" model), install additional cells for the cooling tower, or make other wholesale replacements, which would require replacing equipment that is only 12 years old. Commenters stated that would entail investments of literally hundreds of millions of dollars

- funds that are not available to the facility, costs that likely could not be absorbed by an already financially strapped PREPA involved in a multi

- billion restructuring, and costs that an already overburdened Puerto Rico consumer cannot afford to bear. Commenters stated that moreover, on top of those costs, their organization, PREPA, and/or the consumer would have to bear the burden of more expensive replacement power while the their fa cility is taken offline and redeveloped. Commenters stated that further, EPA has made this proposal, without giving any consideration as to whether these measures would be allowed under the PPA

- or who would bear the costs. Commenters stated that however, the PPA, which is the contract at the center of the development of the project, must be considered when establishing standards of performance for Puerto Rico. Commenters stated that an $800 million independent power project

- a critical boost to the econo my of Puerto Rico

- could not have been built without independent financing. Commenters stated that independent financing, in turn, could only be secured by a long term power purchase agreement that would guarantee a stream of agreed upon future payments b y PREPA, in exchange for their facility providing a reliable source of energy to PREPA over the 25

- year term of the PPA. Commenters stated that agreed upon in 1994 and amended in 1999, the PPA does not expire until 2027 but that however, the PPA did not

c ontemplate that they would be redeveloping their facility during the life of the PPA. Commenters stated that the PPA requires PREPA to pay them each month a capacity payment for dependable capacity made available by the facility (as measured by the equival ent availability of the unit "EAF")) and an energy payment for the electricity actually delivered. Commenters stated that these payments are absolutely essential to sustain their facility as they are their only source of funds. Without PREPA's payments, th e plant could not operate. Commenters stated that however, to receive the capacity payments, they must maintain the units at a high level of availability. Commenters stated that to ensure they maintain a high EAF, there11 are penalties imposed on them (in th e form of reduced payments) if they do not maintain a 12

- month rolling average EAF of at least 90%, with the penalties increasing as the EAF decreases. At an EAF of less than 70%, the plant would effectively be in default. Commenters stated that the PPA di d allow some time for major maintenance that would not impact the payments

- but those hours are very limited and are staggered (no more frequent than every 3 years) throughout the life of the project to provide for the maintenance (e.g., planned normal tu rbine maintenance) that was anticipated. Commenters stated that thus, unless the costs were paid by PREPA under the PPA, they cannot simply take a unit down for 3 or 6 or 12 months or more in order to build a new cooling tower or replace their turbines or undertake other major capital work to redevelop their facility, as to do so would reduce the EAF of the plant below 70%. Commenters stated that even just a 60

- day unplanned outage, unless covered under the PPA, could cost them some $13.5 million in losses.

Comment 8 : T&T Supplemental

- Guam

Response 8: The EPA is not including emission performance goals for territories in this final rule. See section VII .F. of the final rule preamble of the CPP for discussion of this issue.

The following are summaries of the specific public comments under this comment:

Commenter s said EPA's supplemental proposal applies Block 2 dispatch reductions to Puerto Rico but not to Guam, since the former has excess NGCC capacity but the latter does not. The
commenters said as EPA has noted in its supporting materials, it is technically feasible to operate the EcoElectrica NGCC plant in Penuelas at a 70 percent utilization rate (in comparison to its existing utilization rate of 37 percent), and that the territory's steam EGUs can b e expected to curtail dispatch in equal measure. The commenter s said they lack information to determine whether Guam has any options to reduce the dispatch of steam EGUs on the basis of excess NGCC capacity, and urge EPA to evaluate this possibility.

Comme nters stated, in regards to the supplemental proposal, due to its location in the middle of the Pacific Ocean, the Guam Power Authority's (GPA) system is not connected with the grids on the other Islands and there are no connections with continental U.S. s ources of power. The
commenters said there are no other power producers on the island of Guam with the exception of emergency generators and GPA administers the grid. The commenters said due to its isolated nature, GPA's system differs from electric genera ting systems in the contiguous 48 states in a number of significant respects; these include:

1. l imited fuel choices

- there is no coal, natural gas or liquefied natural gas available on Guam;

2. Increased need for on

- island generation resources must be met by GPA to maintain system reliability;

3. Limited economies of scale

- to maintain reliability, the system requires multiple smaller generation units as opposed to a few larger units;12 4. Limited flexibility for scheduling overhauls and other extended planned mai ntenance outages;

5. Different operational regimes for the GPA units as compared to those in interconnected grids; and

6. Among the highest electric rates in the country.

Commenters said for these reasons, the compliance requirements set forth in the Proposed Rule limit the flexibility of GPA (and other island utilities) in ways far more pronounced than counterparts located in the continental U.S; however, in 2012, GPA commenced resource implementation plans designed to address, among others, compliance with c urrent and upcoming environmental regulations. The commenters said these plans once implemented may allow GPA to comply with the proposed rule. The commenters said GPA has already begun its resource implementation plan to address resource needs that meet e nvironmental regulatory requirements. The commenters said once these plans push through, GPA will be able to comply with the rule; however, assistance and collaboration with USEPA is requested, for the development and timing of State Implementation Plan.

Comment 9 : T&T Supplemental

- U.S. Virgin Islands

Response 9 : The EPA is not including emission performance goals for territories in this final rule. See section VII .F. of the final rule preamble of the CPP for discussion of this issue.

The following are summaries of the specific public comments under this comment:

Commenters stated, in regards to the supplemental proposal, EPA notes that the two units in the U.S. Virgin Islands that would otherwise be subject to the rule

- the oil

- fired steam EGU in Krum Bay and the coal

- fired St. Croix Renaissance

- have ceased operation and are presumably retired. The commenters said accordingly, EPA declined to regulate these units and did not cover the U.S. Virgin Islands under the supplemental proposal. While the com menter s agree d that retired plants should not be included in the goal

- setting process, EPA did not clarify whether these two units retain operating permits. The commenters said EPA must require these units to surrender any operating permits if they wish to remain free from regulation under the supplemental proposal. The commenters said if they are undergoing repowering projects, they must be covered under the agency's 111(b) standards. The commenters said there is one oil

- fired combustion turbine at Krum Ba y that is not currently classified as a regulated EGU under the CPP; EPA must ensure that all fossil fuel

- fired EGUs that supply electricity to the grid, including the Krum Bay oil CT, are covered under both the 111(b) and 111(d) rules, as well as the
supp lemental proposal.

Comment 10 : Electric transmission infrastructure permitting, review, and consultation by the Federal government on both Federal and non

- Federal lands.13 Response 10 : See section s V.D and V.E of the final rule preamble of the CPP for dis cussion of this issue.

The following are summaries of the specific public comments under this comment:

Commenters stated in 2009, nine federal agencies, led by the U.S. Department of Energy, executed a joint Memorandum of Understanding (MOU) in an effort to improve coordination in working through the federal approvals required for energy infrastructure projects.[Memorandum of Understanding Regarding Coordination in Federal Agency Review of Electric Transmission Facilities on Federal Land (Oct. 23, 2009)] The commenters said the White House Council on Environmental Quality (CEQ) has moved a step further by establishing the Rapid Response Team for Transmission (RRTT); as stated by CEQ, the "RRTT aims to improve the overall quality and timeliness of electric transmission infrastructure permitting, review, and consultation by the Federal government on both Federal and non

- Federal lands..." The commenters said the initial focus of the RRTT has been on seven pilot projects; five of those projects are located in
t he Western U.S., including one project that crosses portions of Arizona and New Mexico, the SunZia Southwest Transmission Project. The commenters said the lead federal agency overseeing the necessary approvals for this project is the U.S. Department of Int erior's Bureau of Land Management (BLM); cooperating agencies participating in project permitting include: Arizona Department of Transportation, Arizona State Land Department, Arizona Game and Fish Department, National Park Service, New Mexico Spaceport Au thority, New Mexico State Land Office, U.S. Army Corps of Engineers, Holloman Air Force Base, Ft. Bliss (U.S. Army), White Sands Missile Range (U.S. Army), Ft. Huachuca (U.S. Army), U.S. Fish and Wildlife Service, the Department of Defense Siting Clearingh ouse, and the Bureau of Indian Affairs. The
commenters said the purpose of the SunZia Project is to transport electricity generated by new power generation resources to western power markets and load centers. The commenters said the project consists of two 500 kilovolt transmission lines originating at a new substation in Lincoln County in the vicinity of Corona, New Mexico, and terminating at the existing Pinal Central Substation in Pinal County near Coolidge, Arizona, which is operated by SRP.

Commenters stated work related to obtaining project approvals began in September 2008 when project proponents filed an application for a right

- of

- way across BLM lands, but approval has not yet been provided. The commenters said at this time, it is projected that fed eral permitting will be complete in 2015, more than 6 years after it was initiated. The commenters said project construction is expected to take an additional 3 years. The commenters said none of the five western projects under review of the RRTT has secur ed the approvals necessary to complete project construction. The commenters said although EPA might express optimism that approvals for the new gas pipeline and electric transmission projects necessitated by the Proposed Rule will take less time than the S unZia Project, the Agency cannot guarantee this fact, particularly given the high probability any project undertaken in Arizona will require multiple federal and state approvals before it can proceed.

4.10.2 Treatment of tribes in goal

- setting14 Section 4 .10.2 covers public comments related to the treatment of tribes in goal

- setting.

Commenters have raised a number of issues related to this subsection which are organized by topics (comments) below. Responses are provided for these topics.

Comment 1: Triba l should be subject to CPP

Response 1: The EPA has established goals for the three areas of Indian Country with affected EGUs. For the EPA’s response to this comment, see section s VI and VII of the final rule preamble of the CPP and the CO 2 Emission Perfor mance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenters stated if the federal government allows the delay of clean power and waive policy f

or Navajo, you will put the U.S. at the same level as China where the is no policy and regulation to control pollution level within and surrounding the Navajo there are several national state, and tribal parks that draws millions of tourists from all over the world, Grand Canyon, Mylet Valley, Canyon at the Shay, Navajo National Park, Rainbow Bridge and many others are located near and on the Navajo Reservation. The commenters said local government and businesses depend on these parks while EPA's recent dec ision for NGS and bark control is not protecting the Navajo. The commenters said while the pollution hays is being addressed for national park, it is delayed on Navajo; this is simply another environmental injustice that our people and our air is not safeg uarded. The commenters said the Navajo nation should be pursuing alternative energy with full support under federal government instead of allowing the Navajo to go in the opposite direction.

Commenters stated right now the Navajo nation is surrounded by at least five coal

- fired power plants, two of which are located on the Navajo nation, one in Arizona and one in New Mexico. The commenters were concerned when an article was released stating that the power plants located in Indian country were being delayed from the proposed rule and that tribes will have the opportunity to come up with their own cleanup plans. The commenters understand there are multi

- jurisdictional issues with tribes and states especially for the Navajo nation, but thinks this is unacceptab le. The commenter s urge d the Environmental Protection Agency to enforce the clean power plan for all power plants in the U.S. including the power plants located in Indian country.

Commenters expressed support for the President's Climate Action Plan for the country and expressed concern for the EPA's plan to accept an alternative to the Navajo Nation, which is a deviation from the rest of the country's for clean air.

Commenters also stated his understanding that President Shelly's plan will change only by five to six percent from what it has been the past 40 years and that this percentage is extremely small compared to EPA's recommendation at 24, Arizona at 52 percent, and New Mexico and Colorado at 34 percent. The c ommenters stated that this plan certainl y does not address the climate change in the Southwest United States.15 Commenters stated that under the current percentage operation will continue at the same rate for the life of the power plants and the coal mine and this translates to continued use of wa ter at the same rate, either from the River or the in aquifers, and furthermore, Peabody is pumping pristine water from Black Mesa, however this water is not used by Navajo residents, businesses, schools, or hospital.

Commenters asked why there is no heari ng or hearings in the regions where these power plants actually exist and the communities who are actually impacted by those power plants.

Commenters stated that proposed reductions for the tribe and these power plants is simply not enough to address the impacts of climate change and also not enough to reduce the other pollution that comes from these power plants outside of carbon dioxide, like methane and sulfur dioxides and nitrous oxides, which impact people's health and also impacts the water that are used to keep these operations going, and also impacts our Navajo Nation economy.

Commenters stated it's just too lax, it's too unambitious.

Commenters stated that the carbon final goal for Navajo Nation is pretty much based after TWIG, which is interrup t, just shut down one unit and assume that will take care of all the problems, mainly dropping the carbon emissions by 30, or at least a third.

Commenters stated that the TWIG decision is now under petition for review. Commenters stated that TAR and coope ration with the EPA and the Navajo Nation, TAR is only for eligible tribes and as part of the lease agreement with NGS and SRP, the Navajo Nation waived a lot of regulations on the operation of NGS so that formation of TWIG is actually a form of regulation derived from TAR, Tribal Authority Rule.

Commenters stated that there is amendment of Navajo Nation council for the Navajo Nation to cooperate with SRP and environmental and emission controls, but that amendment says this amendment does not take effect until it's signed off by the Secretary of Interior a little later, so that amendment is really no good and TWIG is actually illegal.

Commenters requested that EPA go back to the drawing boards and find a way to get around the 323 grant and lease agreement with SRP and the tribe so that the Navajo Nation can be TAR eligible.

Commenters expressed concern that EPA was considering leaving the Four Corners Power Plant out of the Clean Power Plan and about the supplemental ruling for the Dine land based power plants. Commenters stated that four to six percent suggested level for the Four Corners Power Plant is not enough to ensure healing, nor will it create an impact on any level.

Commenters appreciated EPA's effort to gather public input on this really impor tant rule.

Commenters supported the general approach that EPA used to develop carbon dioxide emission standards for existing fossil fuel fire power plants located on tribal land and agreed with EPA's decision to maintain the same analytical framework tha t was first used in the June 2014 proposal, and apply the four building blocks in a manner that's consistent with the proposed state emission goals.16 Commenter s w ere pleased that the participants in NGS and Four Corners will not be required to take any add itional measures to meet the prescribed emission goals and appreciated EPA's recognition that substantial carbon dioxide emission reductions have been or will be achieved at Four Corners and NGS through actions taken to comply with the regional Haze Rules. Commenter s appreciated that EPA has structured the proposal to provide credit for those carbon dioxide reductions.

Commenters stated that for 15 years of her life she has lived within 70 miles of two of the worst power plants in the country, the Navajo G enerating Station and the Four Corners Power Plant and that both of these power plants are located on the Navajo Nation.

The c ommenters acknowledged that these power plants have provided jobs and revenue for the Navajo Nation, but also knows these power plants are old and they do not directly provide electricity for the people residing on the Navajo Nation because the power is owned by non

Navajo utility companies and is delivered to Southern Arizona and Southern New Mexico, and from there the Navajo trib al utility authority purchases the power back from these companies, and in order to provide electricity to its Navajo customers residing on the Navajo Nation.

Commenters stated that in addition the Navajo Nation has zero percent ownership of these plants

a nd billions of gallons of water has been pumped from Lake Powell and the San Juan River to cool the units down, and the emissions from these power plants have affected the environment and the people, both on and off the reservation. Commenters stated that emissions from these power plants do not stay on the Navajo Nation. They travel to nearby towns, national parks, and waterways.

Commenters stated that it doesn't make sense that the power plants on Indian Country were exempt from this strong Clean Powe r Plan proposed by the rest of the country, and now a weak supplemental proposal has been issued by EPA. Commenters thanked EPA for proposing the Clean Power Plan and its supplemental proposal to help curb the number one source of carbon pollution on a na tional level and within Indian Country, however, the supplemental proposal only reduces emissions by at least four percent for both power plants by 2030, which does not provide equal protections as proposed for the rest of Arizona and New Mexico. Commente rs questioned how communities and future generations benefit from just a four percent reduction, why communities continue to suffer from the climate disruption for many years already and that they deserve the same treatment as the rest of the country.

Comm enters stated that NGS and the Four Corners Power Plant have shut down at least one of their units to reduce their emissions, but that should not excuse them from reducing even more emissions for the next 15 years and they should transition at least 30 per cent of their plants to cleaner energy by 2030.

Comment 2: T&T Supplemental

– The EPA should work closely and collaborate with Tribes to develop emission goals and compliance plan and provide needed flexibility

Response 2: See section II.I. of the final rule preamble of the CPP for the EPA’s response to this
comment.17 The following are summaries of the specific public comments under this comment:

Commenters stated, in regards to the supplemental proposal, EPA should consult with the Navajo Nation to estab lish appropriate and mutually acceptable CO2 emission goals for promulgation in the final rule. The commenters said given the timing challenges associated with the proposed compliance dates, and the complexities raised by the covenants not to regulate
cont ained in the NGS and FCPP leases, the commenter s asserted that the most productive and efficient path forward is for the EPA to take the lead role in the development of emission goals and a compliance plan that meets the unique needs and objectives of the Navajo Nation. The
commenter s encourage d EPA to work closely and collaboratively with the Navajo Nation to ensure that the emission goals and compliance plan are acceptable to the Navajo Nation and provide the flexibility needed by the Nation to pursue eco nomic development opportunities within the Nation.

Commenters stated that it's about health, wellbeing, jobs, and trying to transition off fossil fuels and the four building blocks that you have, they're in a good direction.

Commenters stated that to ho ld the tribe accountable to make a decision on, transitioning to, whether its natural gas or renewable energy, the tribe wants to have input on that because its going to occur on their lands and that transition needs to be from the ground up.

Comment 3: General comments before supplemental came out

Response 3: See sections II.I, VI and VII of the final rule preamble of the CPP and the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:

Commenters stated affected Western states want to work with EPA and the tribes to understand how the 111(d) compliance plans for tribal sources will work with state compliance plans. The
commenters asked will EPA, on behalf of the tribes, develop 111(d) plans for tribal sources in time for them to be coordinated with state plans. The commenters look ed forward to reviewing EPA's supplemental proposal addressing tribal sources, and expects EPA to finalize the tribal section of 111(d) simultaneously with the rest of the rule.

Comment 4: Tribal lands should be treated as additional state

Response 4: The EPA has established goals for the three areas of Indian Coun try with affected EGUs. For the EPA’s response to this comment, see sections VI and VII of the final rule preamble of the CPP and the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summ aries of the specific public comments under this comment:18 Commenters stated tribal lands should be treated as an additional state, as EPA wishes to receive comment on this. The commenters said it will be wrong to have all the tribes be generalized into the state they are living in and have them accept the state's rules. The commenters said EPA must consider the importance of letting the tribes have their own flexibility and freedom as a state would under this proposal. The commenters said there are four pot entially affected power plants within the tribal lands and by not offering them their own liberty, it may cause an outrage from the members, assuming they would want to set their own regulations. The commenters said EPA should not interfere with the cultur e and set borders for the Indian country.

Commenters stated in the same manner as a state, carbon dioxide emission goals should be formed by the EPA. The commenters said the Indian country would simply be an additional category within the proposal's docume nts. The commenters added EPA should strongly focus their efforts to convince them to create more renewable energy within the tribal lands. The
commenters said it will take the whole country to produce the necessary carbon dioxide emission levels and this undeniably includes the tribe nation as well. The commenters said having the Indian tribe members create their rules to reach the established carbon generation goals, it will provide many benefits for both sides.

Comment 5: T ribal generation sources are few in number but significant in size

– future operations important to planning

Response 5: See section VIII of the final rule preamble of the CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:

Commenters stated the Southwestern U.S. is served by a number of large tribal generation sources that are not subject to state jurisdiction. The commenters said these tribal sources in the West are few in number, but significant in size. The commenters said in 2013, three tribal, coal

fired power plants were responsible for 11% of CO2 emissions from the electricity sector in the 11 states that comprise the Western grid. The commenters said some of these tribal sources are scheduled for full or partial shutdown over the next 15 years. The commenters said understanding how these tribal sources will operate in the future is important to electricity planning in the Southwest.

Comment 6: Emission reductions credits

Response 6: See section VIII o f the final rule preamble of the CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:

Commenters stated, in response to the supplemental proposal, that they support EPA's recognition that significant reductions in CO2 emissions have been made at FCPP, and will be19 made at NGS as a result of compliance with other regulatory requirements. The commenter s support ed EPA's decision to structure the proposal such that the emission reductions a chieved at FCPP and NGS can generate credits potentially for use in other jurisdictional compliance plans or for the economic benefit of the Navajo Nation. The commenters said the allocation and use of any excess credits should be worked out between the ow ners of NGS and FCPP and the Navajo Nation.

Commenters stated, in response to the supplemental proposal, in a letter dated September 18, 2014, the Navajo Nation requested that EPA grant the Navajo Nation ownership of any available carbon credits associated with NGS. The commenters said EPA should ensure that carbon credits, to the extent they will be available, are allocated in a manner that avoids any increase in the cost of NGS power.

Comment 7: T&T Supplemental

- Building blocks application on plants within Indian territory

Response 7: For the EPA’s response to this comment, see sections V.A., VI, and VII of the final rule preamble of the CPP and the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule.

The following are summaries of the specific public comments under this comment:

Four Corners

Commenters stated EPA's notice regarding Indian Country proposes to require a six percent heat rate improvement at the Four Corners Power Plan without evaluating whether that plant is capabl e of meeting that standard, which EPA developed based solely on nationwide averages. The commenters added EPA's notice proposes to require demand side efficiency improvements in one of the poorest regions of the country that only consumes a minimal amount of electricity; however, the retirement of Units 1 through 3 appear sufficient to meet these requirements.

Commenters stated if EPA seeks to impose a source

- specific efficiency improvement requirement on an individual plant, EPA must determine whether tha t standard is achievable at that plant. The commenters added EPA should re

- evaluate whether asking one of the poorest regions of the country to invest significant capital in energy efficiency projects represents good public policy. The commenters said EPA should confirm that the retirement of Units 1 through 3 will satisfy the Clean Power Plan requirements for the Four Corners Power Plan.

Commenters stated on November 4, 2014, EPA published a proposal for regulating power plants located in Indian Country u nder the Section 111(d) program. The commenters said that proposal covers only a few facilities, one of which

- the Four Corners Power Plant, of which Public Service Company of New Mexico (PNM) owns a 13 percent share

- is geographically located within the b orders of New Mexico, but on lands that are under the jurisdiction of the Navajo Nation. The commenters said for the Four Corners Power Plant, EPA proposes to apply only two of its four building blocks

- building block 1, to require a six percent heat rate i mprovement, and building block 4, to require a small improvement in demand

- side energy efficiency. The
commenters said both of these requirements appear unreasonable:20 1. The commenters said as EPA has implicitly admitted in its related proposal for Section 11 1 requirements for modified and reconstructed units, an individual power plant may not be able to achieve a six percent heat rate improvement because the analysis underlying EPA's six percent assumption is based on a fleet

- wide average that may not be
appr opriate for a single plant; yet EPA has proposed a six percent improvement for the Four Corners Power Plant without making any attempt to determine whether that level of improvement is achievable at the specific units that comprise the Four Corners Power P lant.

2. The commenter s were concerned that EPA would attempt to force electricity consumers within the Navajo Nation to spend additional capital on projects designed to reduce electricity consumption. The commenters said the Navajo Nation is one of the poor est areas in the country, and therefore one of the least likely to have the means available for improving energy efficiency. In fact, the commenter s understand that many citizens of the Navajo Nation do not even have the means to purchase enough electricit y to perform basic functions that individuals living in more affluent portions of the country take for granted.

Commenters said despite the unreasonable application of building blocks 1 and 4 to the Four Corners Power Plan, EPA appears to have addressed t he retirements of Units 1 through 3 at the facility in a manner consistent with the retirements expected a San Juan (one of PNM facilities). The commenters said EPA included those retired units in establishing the emission reduction goals, thus allowing th e retirement of those units to count towards compliance in future compliance demonstrations. The commenters said given the significant reduction associated with the retirement of three coal

- fired units, it appears that those units will provide sufficient

c ompliance credit to allow the facility to comply with the Clean Power Plan proposed for Indian Country. As such, the commenter s support ed the goal that EPA has established for the facility, and encourages EPA to include an express statement confirming this understanding in its response to this comment.

Fort Mojave

Commenters stated the rate

- based emission performance goals proposed by EPA for Fort Mojave are inflexible and do not cohere with the overall framework of the Clean Power Plan; nor do they refle ct the "unique conditions" for an area of Indian country that has only one facility in its jurisdiction and, accordingly, little to no opportunity to achieve reductions through any of the Building Blocks.

Commenters stated EPA's final rate

- based goal for Fort Mojave is 855 lb/MWh; this goal is much lower than South Point's 2013 emissions rate of 927 lb/MWh; in addition, the proposed
rate

- based goals are based upon operations during a single, anomalous calendar year (2012), when South Point was operated at a significantly lower capacity factor than it has historically operated or is capable of due to unique operational and mechanical challenges. The commenters said in 2012, South Point's steam turbine tripped offline unexpectedly when an alarm went off at

a transformer; subsequent investigation revealed a breakdown of insulation inside the transformer, which required replacement and caused the plant to remain offline for an entire month. The commenters said altogether, the planned and unplanned outages for So uth Point in21 2012 amounted to more than six weeks when the entire plant was unavailable and additional time when either of the two combustion turbine generators was offline; as a consequence, 2012 is an unrepresentative year and should not provide the basi s for EPA's proposed goals for Fort Mojave.

Commenters stated EPA premises Fort Mojave's proposed rate

- based goals on the absence of any opportunities for re

- dispatch due to the fact that South Point is the only source located within Fort Mojave's jurisdi ction; however, this fails to recognize the opportunities for South Point to serve load in other states, which may be expected to rely upon increased dispatch of a highly efficient NGCC plant like South Point to achieve reductions in emissions from their o wn affected EGUs (in particular, coal

- fired facilities). The commenters said because the building block methodology is applied to Fort Mojave as though it were an island, the resulting rate

- based goals also fail to reflect any increased dispatch of South P oint attributable to increased cycling to support the integration of intermittent renewable generation sources (i.e., wind and solar) anticipated as part of states' compliance strategies. The commenters said as operations and cycling of South Point increas e, so, too, does South Point's emissions rate; for these reasons, EPA's proposed emission performance goals are inappropriate and fail to reflect the role South Point is anticipated to play in achieving the Clean Power Plan's overall goals of increasing di spatch of lower

- emitting fossil

- fueled resources and supporting increased renewable generation.

Commenters stated, in regards to the supplemental proposal, the Building Block methodology is ill

- suited for Fort Mojave on a stand

- alone basis. The commenters said when taken in isolation from the rest of the electricity grid, none of the Building Blocks can reasonably be expected to result in significant emission reductions for Fort Mojave. The commenters said Block 1 and Block 2

- heat rate improvements at st eam affected EGUs and re

- dispatch to NGCC affected EGUs, respectively

- are assumed to result in no reductions because Fort Mojave's tribal lands contain no existing steam EGUs whose emissions can be reduced by making them more efficient

or re

- dispatching to the lowest emitting facilities.

Commenters stated Block 3 and Block 4 measures could hypothetically be implemented to some extent; but, to expect that these measures would achieve significant emission reductions would be unrealistic, and to impose such measures would be unfair. The commenters said while EPA then suggests potential alternate methodologies to apply Block 3 to tribes, the
commenter s agreed with EPA that it would be inappropriate to impose any RE goal on Fort Mojave pursuant to Building Bloc k 3.

Commenters stated the application of Block 3 to Fort Mojave would be unreasonable because Fort Mojave's electricity use is minuscule compared to the generation of South Point; it would be unreasonable to impose an emission reduction obligation on For t Mojave that required it to develop utility

- scale RE projects when it simply does not have the demand for electricity that would result in such RE being utilized by the tribe. The commenters said because any of the alternative methodologies for applicatio n of Building Block 3 would result in RE targets that dwarfed Fort Mojave's overall electricity demand, application of those methodologies to Fort Mojave and other areas of Indian country would clearly be arbitrary and wholly unrealistic.22 Commenters state d the Supplemental Proposed Rule would apply the same method and data sources in the Proposed Clean Power Plan to compute tribal goals for Block 4. The commenters said given the marginal benefits that could be achieved vis

- a

- vis the emissions attributable to South Point, it makes little sense and would be a costly administrative exercise to require implementation of robust evaluation, measurement, verification and reporting methods for a jurisdiction as small as Fort Mojave.

Commenters said the fact that t he Building Block methodology results in no projected increase in South Point's dispatch relative to the 2012 baseline year and reduced dispatch relative to 2013 levels illustrates why setting goals that effectively only apply to one affected source

- on t ribal lands where little electricity load is consumed

- is per se unreasonable. The commenters said the fact that the proposed goals would essentially limit South Point to operations at only a fraction of what Building Block 2 assumes can be achieved on av erage for existing NGCC facilities should lead EPA to rethink its overall approach for establishing emission performance goals for areas of Indian country and for Fort Mojave in particular.

Commenters stated because the Supplemental Proposed Rule's emissi on performance goals for Fort Mojave are inconsistent with the Clean Power Plan's broader emission reduction purpose, EPA should establish an alternative basis for such goals. The commenters proposed that the rate

based goals for Fort Mojave should be base d on the highest emission rate observed in the previous five calendar years; this additional flexibility is warranted by the fact that Fort Mojave only contains one affected source

- South Point. The commenters said unlike the emissions rates for states or other tribal areas, which contain multiple affected EGUs and, therefore, already reflect an average for any given calendar year (when one source's emissions may have been lower than historic levels, while another source's emissions were higher), it would be patently unfair to base the required emissions performance goal on emissions for one calendar year for a jurisdiction such as Fort Mojave, which has only one affected facility and therefore no opportunity for averaging among a broader fleet to achieve t he goal.

Commenters said EPA stated the following in the Proposed Rule for the States: "We view the proposed goals as providing rigor where required by the statute with respect to the amount of emission reductions, while providing states with flexibility where permitted by the statute, particularly with respect to the range of measures that a state could include in its plan. This approach recognizes that state plans for emission reductions can, and must, be consistent with a vibrant and growing economy..." The commenters said similar flexibility was not given to the Navajo Nation; a Navajo Nation plan adopted under the Proposed Supplemental Rule will not contribute to a "vibrant and growing economy."

Uintah

- Ouray

Commenters stated EPA correctly noted that since the Uintah

- Ouray reservation has no natural gas generation, building block two cannot be applied. The commenters said EPA also concluded that building block three should not apply to the Reservation, but asked for comment on whether it should be appl ied; it should not. The commenters said there is no record basis at all to assume that any renewable resources could be cost

- effectively constructed on the reservation. The
commenters said EPA correctly notes that the regional approach embodied in the main proposal and the Notice of Data Availability has no applicability to the reservation, because what some23 states have achieved or intend to achieve with renewable portfolio standards does not mean that the Uintah

- Ouray Tribe could do the same. The commenter s said EPA posits that it might fashion a renewable goal for the reservation based on technical potential, but there is a large difference between technical potential and actually developing renewable resources on the reservation; any assumption that renew able resources could be developed on the Reservation would need to be backed up by data showing who the developer might be, what the Tribe's role would be, and how needed tribal and other permits, financing, and transmission would be arranged. None of this information is in the record.

Commenter s were aware of extreme electric transmission constraints that exist for transmission of any significant generation located within the Reservation for use in major load centers or recognized market hubs. The comment ers said Deseret Power Electric Cooperative was forced to default on construction indebtedness used to construct Bonanza and associated facilities; in very large part due to the lack of adequate transmission to transport and market output from the Unit
to large load center outside the Uintah basin in which the plant itself is located; the existing Bonanza unit generates much more electricity than is needed or used within the Reservation or even the entire Uintah Basin area of relatively remote northeast Uta h and western Colorado.

Commenters stated the record lacks any information on how EPA would go about mandating or enforcing a renewable resource portfolio standard on the Reservation; EPA does not discuss any authority the Tribe might have to mandate rene wable development, nor does EPA examine how EPA itself could possibly have authority under the Clean Air Act to order anyone to develop renewable resources on the Reservation. The commenters said the total size of electric load of all consumers located on lands owned by or held in trust for the Tribe is at most a few MegaWatts (peak demand); loads and activities of non

- tribal concerns, operating on BLM or other non

- tribal lands within the exterior boundaries of the historic Reservation fall outside the gene ral civil or regulatory jurisdiction of the Tribe or of EPA. The commenters said EPA does not analyze nor discuss any authority under which these loads could be forced to utilize any given percentage of renewable resources.

Comment 8: T&T Supplemental

- BB1; HRI

Response 8: See section V.C. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 1 and the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule.

The following are summaries of the specific public comments under this comment:

Commenters stated, in regards to the supplemental proposal, EPA stated that "[t]he methodology used to compute the proposed interim and final CO2 emission performance goals for U .S. territ ories and areas of Indian country with affected EGUs mirrors to the fullest extent possible the approach used to calculate goals for states discussed in section VII of the preamble to the [Proposed Rule for the States]." The commenters said the supporting information (spreadsheet and tables) for the calculation of the limit for the Navajo Nation includes a heat rate reduction of24 6% for the proposed goal that requires compliance by 2030 (4% for the alternative goal that requires compliance by 2025).

Comment ers strongly disagree d with EPA's assertion that NGS and FCPP can achieve 6% reduction in their heat rates. The commenters said the 6% heat rate improvement requirement was derived by EPA based on a national study. The commenters said it is inappropriate t o apply the Building Block #1 requirement that was derived by EPA based on national data to the two power plants located on the Navajo Nation. The commenters said EPA should establish a lower heat rate improvement requirement that takes into account unit

- s pecific considerations at NGS and FCPP, such as cost

- effective energy efficiency improvement projects that are achievable at these plants, future emission control requirements (which will limit the availability of the plants to achieve heat rate improvemen ts), and other regulatory constraints such as New Source Review requirements.

Commenters stated both power plants have already invested significantly in emission controls because of other rules and, even with additional significant capital investments, wo uld not be able to achieve a 6% heat rate improvement. The commenters said requiring a 6% heat rate improvement of these two power plants also ignores the fact that the Navajo Nation has also invested in the continued operation of the plants and has alread y suffered detrimental economic effects because of emissions reductions required under other rules.

Comment 9: T&T Supplemental

- BB2

Response 9: The EPA has established goals for areas of Indian Country with affected EGUs based on the application of t he subcategory

- specific emission performance rates to affected EGUs within those areas. See section VI of the final rule preamble for discussion of the subcategory

- specific emission performance rates. See section V.D. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 2 and the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenters stated, in response to the supplemental proposal, EPA was correct to state that applying Building Block #2 (Switching from coal

- fired to natural gas combined cycle generation) to the Navajo Nation would not result in an adjustment to the goals of the Navajo Nation; there are no natural gas combined cycle ("NGCC") units for re

- dispatch within the Navajo Nation.

Commenters oppose d EPA's suggestion in the NODA regarding the adoption of the "minimum level of generation shift" on the Na vajo Nation, which potentially would require existing coal fired boilers to co

- fire natural gas. The commenters said although the units at Four Corners Power Plant (FCPP) have the ability to combust a small quantity of natural gas for startup operations a nd early flame stabilization, the amount of heat input from natural gas combustion is limited to a small fraction of the total heat input to the units. The commenters said in order to co

fire natural gas in these units, an enormous capital investment to mo dify the boilers and increase25 the natural gas supply infrastructure would be required. The commenters said the technical obstacles and costs associated with these modifications cannot be supported as cost

- effective. The commenters said with respect to Nava jo Generating Station (NGS), there are no nearby natural gas pipelines that could supply sufficient gas flow to the plant, and it would be unreasonably costly and difficult to site, permit, and construct a pipeline to the plant. Moreover, NGS was not desig ned to operate with natural gas even for purposes of startup. The commenters said co

- firing would not be appropriate at either FCPP or NGS.

Comment 10: T&T Supplemental

- RE Development

– The EPA should clarify that states and tribes can take credit/or ou t

- of

- state emission reductions from RE projects without first entering into multi jurisdictional plans

Response 10: See section VIII of the final rule preamble of the CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:

Commenters stated, in regards to the supplemental proposal, developers must be allowed to freely negotiate the sale and delivery of electricity and RECs across jurisdictions (including state and tribal boundaries) throug h various contractual mechanisms, such as power purchase agreements, without fear that the value of those projects will be severely limited by an inability to transfer the RECs for use to address CO2 emission reductions under any state plan.

Commenters st ated on a related note, EPA seeks comment in its NODA on whether each state's (and tribe's) RE target should be based on the RE potential available across a multi

- state region in which the state or tribe is located. The commenter s oppose d this approach, in particular for tribes. The commenters said currently, there are no RE generating resources located on the Navajo Nation, and development of such resources has proven challenging, despite the abundance of natural resources well suited for renewable energy projects. The commenters added the Navajo Nation faces a very different situation from its neighboring states, thus, it would be improper and unfair to assume growth of such resources on the Navajo Nation based on growth rates of nearby states.

Commenters stated the Proposed Rule states that EPA "views the existing RPS requirements as a reasonable foundation" to quantify the CO2 emission reductions achievable based on increases in renewable generation; however, state RPS requirements do not specify that the energy from RE projects must come from in

- state facilities. The commenters said for example, in California, much of the renewable generation that counts toward the RPS comes from outside of the state; there is absolutely no reason why EPA should impose a more rigorous requirement than the states themselves impose. The commenters added the Proposed Rule recognizes that different parts of the country have different amounts of RE resources; with respect to Building Block 3, the Proposed Rule identified six di fferent regions and developed annual RE growth factors and maximum RE generation targets separately for each region; accordingly, some geographic regions are capable of developing more RE than needed to meet their own 111(d) plans. The
commenters said in t hese situations, incentives should exist for the development of additional RE26 generating resources through the sale or export of CO2 emissions to other states. The
commenters said EPA has stated it intends to provide such flexibility to states, including

a llowing states to enter into cap

- and

- trade programs; generation on tribal lands should be treated similarly.

Comment 11: T&T Supplemental

- BB3; RE

Response 11: See section V.E. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 3 and the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

A discussion regarding the use of some biomass feedstocks for compliance purposes can be found in Sectio n VIII.I.2.c and Section VIII.K.1 of the preamble.
The following are summaries of the specific public comments under this comment:

Commenters stated technical potential is based on including in a state's territory both tribal and federal lands, each of whi ch adds constraints and additional technical challenges. The
commenters said in fact, tribal lands should not be included in assessing a state's RE potential at all, considering that tribes are not subject to the Proposed Rule. The commenters said these dr awbacks must be addressed before considering any option related to technical potential.

Commenters commend ed EPA for proposing a plan to address emissions and pollution from fossil

- fueled power plants and for invoking a transition from coal

- fired power pla nts to cleaner sources of energy. While the commenters are supportive of EPA's proposed Clean Power Plan, the commenter s ask ed that EPA consider the following:

1. A stronger role for renewable energy and more stringent state renewable energy targets;

2. Full c onsideration of all impacts of biomass energy and its 'carbon neutrality' prior to allowing it as a strategy for states to meet their emission reduction goals; and

3. Allow tribal consultation and input as states begin developing clean power plans for EGUs l ocated in Ceded Territory.

Commenters stated EPA should clarify in the final rule that renewable resources built on Indian Lands are eligible for demonstrating compliance within a state or regional implementation plan. The commenters said EPA has stated du ring stakeholder discussions that new renewable projects built on Indian Lands do qualify as eligible resources under the 111(d) proposal. The
commenter s request ed that upon issuance of the final rule, EPA clarify in writing that as long as a renewable gen erating resource built on Indian Lands is quantifiable and not double counted, then that resource is eligible for inclusion in a state's compliance plan.

Commenters stated, in regards to the supplemental proposal, Building Block #3 is that it is not
approp riate for the Navajo Nation. The commenters said that Building Block #3 is not practically applicable to the Navajo Nation; not only is the Navajo Nation's electricity use within the bounds27 of the reservation small compared to the electricity generated by NGS and FCPP, the majority of which leaves the reservation, the Navajo people already obtain the majority of their electricity from low carbon resources, including zero carbon hydro

- electric sources.

Commenters stated that they strongly urge EPA to strengt hen the rule, primarily by accounting for achievable reductions through renewable energy and energy efficiency. Commenters said this should apply to territories and tribes as well. Commenters said as with states, EPA should sets strong standards for tribes and territories based on what can be achieved in reductions for renewable energy based on technological and market factors.

Comment 12: T&T Supplemental

- BB4; EE

Response 12: The EPA is not including building block four (demand

- side energy efficiency) i n the final BSER determination. See section V.A. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 4 and the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supp orting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenters stated, in regards to the supplemental proposal, demand

- side reductions can be a beneficial tool. The commenters said while the Navajo Nation offers energy efficiency programs, a significant portion of the Navajo people have very poor access to electricity; as a result, the 9.15% demand reduction goal is very challenging and not especially beneficial. The commenters said EPA's demand

- side goals were developed based upon an analysis of state data, where electricity use and incomes are far greater and the opportunities for demand

- side reductions also much greater. The commenters said the use of state information to develop goals for the Navajo Nati on results in a goal that does not make any sense for the Navajo Nation; for example, the state of Wyoming, with a per capita electricity demand that is 778% that of the Navajo Nation, and per capita income that is 476% that of the Navajo Nation, has an en ergy efficiency goal that is only 106% of that of the Navajo Nation.

Commenters stated electricity consumption on the Navajo Nation is very different than in the states; at least 32% of the Navajo Nation population does not even have electricity. The

com menters said per capita electricity consumption on the Navajo Nation is already roughly one third that of its neighbors and about half that of the most efficient state. The commenters said moreover, the majority of electricity used on the Navajo Nation is from hydroelectric sources. The commenters said further demand

- side reduction measures therefore will not result in any significant CO2 emission reductions. The commenters said unlike the states

- per capita energy consumption on the Navajo Nation actuall y needs to increase in the future to promote economic development; widespread poverty on the Navajo Nation makes it difficult to increase access to affordable electricity while also paying for the demand

- side efficiency incentive programs that form the bas is of EPA's Building Block #4 program for the states. The commenters believe d that EPA should reconsider how Building Block #4 is applied to the Navajo Nation.28 Commenters recommended that the EPA remain attentive to the existing challenges of energy

acce ss in areas where electrification rates are low, and incorporate these concerns into goal calculations such that the Clean Power Plan simultaneously supports the expansion of energy access while advancing the development of clean energy resources. The comm enters stated that EPA should encourage the adoption of renewable energy and efficiency technologies for electrification of low

- served areas; as these areas gain increased access to electricity, they have the potential to leapfrog old, energy

- intensive tec hnologies in favor of new, highly efficient resources that have the potential to provide long

- term dividends to such regions. The
commenters noted that an estimated one

- third of the Navajo do not have access to electricity and in light of high "last

- mile" costs associated with the electrification of dispersed populations within parts of Indian country, distributed renewable energy generation provides a potentially valuable solution.

Comment 13: Tribal set

- aside should be established as part of an intersta te emissions credit trading program

Response 13: See section VIII of the final rule preamble of the CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:

Commenters stated as part of an annex to the Regional Haze Rule (Annex) that was adopted in the late 1990s, an annual SO2 tribal set

- aside of 20,000 tons was made available to Indian Tribes within a nine

- state region regardless if such Tribes had major industrial sources emitting SO2. T he commenters said this set

- aside grew out of multiple discussions among the Western Regional Air Partnership's (WRAP) partners and participants where issues of equity and economic development kept coming up during conversations with respect to Tribes that had hardly contributed to visibility impairment in the West but whose environment and health had been adversely affected by neighboring jurisdictions with sources emitting significant SO2 amounts. The commenters said the Annex provided that the Tribal set

- aside was "intended to help ensure equitable treatment for tribal economies and prevent barriers to economic development." The commenters said the same rationale for a Tribal set

- aside exists today and should be incorporated into any national trading prog ram that grows out of the Proposed Rule.

Comment 14: State implementation plan development should include Tribes

Response 14: See section VIII of the final rule preamble of the CPP for the EPA’s response to this comment.

The following are summaries of th e specific public comments under this comment:29 Commenters stated the State Implementation Planning process must include tribal leaders at the table. The commenters said tribes can be treated as states under Section 301(d) of the Clean Air Act; as such, th ere is no reason why EPA should not have involved them in meetings with states concerning multistate planning efforts. The commenters suggested that this outreach be a significant part of the SIP process.

Commenters stated EPA did not consult with the Cro w Nation, did not consider the economic impacts on the Crow Nation, and did not provide a less intrusive alternative to the severe effect on the Crow Nation of this Proposed Rule. The commenters said in combination, EPA violated its trust responsibility to the Crow Nation and must provide a substantive alternative and/or mitigation of the Proposed Rule.

Comment 15: T&T Supplemental

- 2012 Baseline; coal retirements

Response 15: See section VI.D. of the final rule preamble of the CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:

Commenters stated, t he supplemental proposal does not factor out recent and near

- term coal plant retirements from its goal

- setting formula. The commenters sai d because the supplemental proposal uses 2012 as its baseline year for setting emission targets, it includes data from units that were operational in 2012 but that have since retired, as well as from plants that are now operational but will retire between now and the beginning of the compliance period. The
commenters said in the CPP context, this oversight distorts the actual generation pool in affected jurisdictions and will, in most cases, give "free" emission reduction credits rather than driving additiv e emission reductions.

Commenters said recent and near

- term retirements are relevant for the supplemental proposal because three of the five Four Corners units have already retired but are included in the emissions target for the Navajo Nation. The commen ters said EPA must recalibrate the targets for the Navajo Nation to reflect this fact. The commenter s urge d EPA to use as its baseline the most recent full year's data at the time a state submits its implementation plan for the agency's approval (i.e., if the state submits its plan in 2016, 2015 data would be used for the baseline). The commenters said if the Navajo Nation seeks and receives authority from EPA to develop and administer an implementation plan, it should use data from the most recent full yea r available at the time it submits the plan for EPA's approval; if the Nation declines to develop a plan, EPA must use also use the most recent full year's data for the baseline in a federally

- administered plan.

Commenters added that EPA should also omit from the goal

- setting exercise plants that are operating at the time states submit their implementation plans but which have announced and enforceable retirement obligations before the compliance period begins in 2020. The commenters said EPA comments in t he preamble to the supplemental proposal that one of the units at the Navajo Generating Station may retire or curtail dispatch by 2019 to comply with Best Available Retrofit Technology requirements. The commenters said if this unit is officially announced for30 retirement by the time the Navajo Nation's implementation plan is submitted to EPA (or developed by the agency) and subject to an enforceable requirement that it retire before 2020, it should also be omitted from the goal

- setting exercise under the sup plemental proposal.

Commenters stated that the proposed best system of emissions reduction, or BSER, is not flexible enough. A nd when you combine it with a reexamination of the building block analysis,
commenters stated they h ope is that EPA would be op en to considering the use of other baseline years, other than 2012 in its analysis and eventual revising of the BSER for the Navajo Nation.

Commenters stated that Arizona Public Service Company, APS, operates a generation fleet consisting of coal fired, gas fired, and nuclear units to serve the needs of over 1 million APS customers, also has an increasing portfolio of renewable energy and manages a robust behind the meter energy efficiency program, and owns and operates the Four Corners Power Plant and ow ns a portion of the Navajo Generating Station, both of which are located on the Navajo Nation and subject to the proposed supplemental rule.

Commenters stated that based on meeting with EPA representatives from Navajo Nation and the Salt River Project, ope rator of the Navajo Generating Station, the only other power plant located on the Navajo Nation, and based on all these discussions and analysis, commenter s support ed EPA's recognition that closure of three units at the Four Corners Power Plant and SRP's expected shutdown and curtailment of generation at the Navajo Generating Station by 2019 represent approximately a 30 percent reduction of total 2012 carbon emissions on the Navajo Nation.

Commenters stated that in setting the carbon emission rate goals for the Navajo Nation EPA used the same four building block methodology it used to set the state

- specific goals. Commenters stated that this methodology used 2012 as the emissions baseline year and in which to apply specific criteria. Commenter s , however d id not support using 2012 as the baseline year for studying the future emission rate goals for the Navajo Nation because 2012 was not representative of future unit operations at the Four Corners facility. Commenters stated that in general, 2012 is a poo r choice to use as a baseline year for coal fired power plants, including Four Corners because the depressed price of natural gas during 2012 caused lower than normal dispatch of many coal fired units.

Commenters stated that conversely, as natural gas pr ices have subsequently risen utilities have increased the dispatch of coal

- fired units and additionally, forced outages, which were 30 percent higher at Four Corners in 2012 than the average value at Four Corners since 2005, are out of control of unit oper ators and should be considered when establishing a representative baseline
year.

Commenters recommended that EPA not use 2012 as the baseline year and allow a much longer look back period to at least 2005 in order to establish a more representative baselin e year.

Commenters stated that Bonanza unit is a single

- unit resource and the year 2012, on which the standard is based and was developed, in that year Bonanza experienced prolonged and unusual outages due to plant maintenance outages that are usually on ly scheduled once every few years

- therefore 2012 is not a representative year on which to base Bonanza's carbon standard.31 Commenters encouraged EPA to consider a baseline year other than 2012 since 2012 was not a representative year for the operation o f NGS or Four Corners and the operators are currently reviewing plant emissions data and will provide recommendations to EPA in written comments.

Comment 16: T&T Supplemental

- Should be given flexibility to join larger regional solutions

Response 16: For the EPA’s response to this comment, see section VIII of the final rule preamble of the CPP and the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comme nts under this comment:

Commenters stated, in regards to the supplemental proposal, more reductions can also be gained through energy efficiency for states, territories and tribes, as is already being shown in several states, and these gains should be ref lected in EPA's standards. The commenters said tribes and territories should also be given flexibility to join larger regional solutions, especially given that many tribes are small and would benefit from being part of larger, regional compliance solutions

. The commenters said tribes in particular have a keen stake in a strong rule. The commenters said tribes have long continual experience with climate, wildlife, land and natural resources in North America and know intimately how climate change is already i mpacting our shared landscape. The commenter s ha ve teamed up with tribes to advance policies that seek to solve climate change.

Comment 17: T&T Supplemental

- Mass based goals

Response 17: For the EPA’s response to this comment, see section VII of the fi nal rule preamble of the CPP the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenters stated, in regards to the suppl emental proposal, the flaws associated with EPA's proposed rate

- based goals intensify with respect to EPA's proposed illustrative mass

- based equivalent values for Fort Mojave. The commenters said the Mass Conversion TSD proposes two methodologies for illus trating potential ways to convert from a rate

- based goal to a mass

based goal. The commenters said while EPA clarified upon publication of the Mass Conversion TSD that the mass

- based equivalents are merely illustrative, the commenter s nevertheless took iss ue with the extreme stringency of the model interim and final mass

- based equivalent values for Fort Mojave, which are both set at 528,000 MTCO2 (or 532,000 MTCO2 if emissions from both South Point and assumed incremental new generation capacity are covered by the goal). The commenters said these mass

- based equivalent values are significantly lower than South Point's 2013 mass emissions of 813,618 MTCO2, which emissions themselves only reflect South Point operating at approximately a 42% capacity factor; thu s, not only would EPA's proposed

mass

- based equivalents limit South Point to only a fraction of its capacity

- less than 27.5%; they32 would also contradict the assumed operational role that South Point will play in achieving the reductions available through Building Block 2.

Commenters said while it is true that there are no opportunities for re

- dispatch of NGCC facilities under Block 2 within Fort Mojave's tribal lands, South Point is connected to the Western Electricity Coordinating Council ("WECC")

- wide grid, which covers all or part of 13 U.S. states. The commenters said it can reasonably be assumed that South Point may be expected to operate at a higher capacity factor in the future in order to help satisfy the emission performance goals of neighboring jurisdictions; therefore, EPA's proposed illustrative mass

based equivalents would not only proscribe South Point from operating as it most recently has, but would unduly limit it from being dispatched at higher rates. The commenters said this would, in tu rn, be contrary to the overall goal of the Clean Power Plan of limiting power sector GHG emissions through dispatch of the lowest

- emitting fossil fuel

- fired generating sources.

Commenters said by calculating the Supplemental Proposed Rule's proposed rate

- based goals and the Mass Conversion TSD's illustrative mass

- based equivalents as though South Point were operated in isolation from the rest of the electricity grid, EPA has proposed goals that are inappropriate for Fort Mojave and South Point and contrave ne both the basis and purpose of the Clean Power Plan, which is premised upon the uniquely interconnected nature of the electricity grid and redispatch to the most efficient generating sources. The commenters said although EPA's proposed goals are supposed to reflect Fort Mojave's "unique conditions", they do not. Instead, they would arbitrarily constrain South Point to only a fraction of its historic capacity and prevent it from playing the role it is likely to play in other states' achievement of their re spective goals.

Commenters stated, in regards to the supplemental proposal, to propose both an interim and final
rate

- based goal for Fort Mojave equivalent to South Point's 2013 emissions rate of 927 lb/MWh. The commenter s asserted EPA should take an expa nsive approach to allowing jurisdictions to translate their rate

- based goals on a mass basis, as EPA has indicated it will do. The commenter s asserted that a reasonable translation of EPA's rate

- based goals for Fort Mojave would assume an 80% capacity fact or for South Point. The commenters said while Block 2 assumes re

- dispatch to NGCC facilities at a 70% capacity factor on average, EPA recognizes that the 70% figure represents an average and at least some NGCC facilities dispatch at an 80% or higher rate. The
commenters said given that South Point may need to be operated at a higher than 70% capacity factor due to WECC

- wide demand for efficient generation to replace higher emitting coal

- fired sources, assuming an 80% capacity factor in translating to mass

- b ased goals would provide an adequate buffer for South Point, and is wholly reasonable. The commenters said based on the proposed rate

- based goals, this capacity factor would result in interim and final mass

- based equivalent values of approximately 1,561,00 0 MTCO2.

Commenters further supported the ability to convert the Navajo Nation rate based goal to a mass based goal in the ability of the Navajo Nation to establish a multi

- jurisdictional agreement with states to allow trading of emission credits.33 Comment er s asserted that these elements are vital to successful compliance with the final rule, and will allow Navajo Nation the flexibility it is seeking.

Comment 18: T&T Supplemental

- Commenter s agree d with EPA determination that compliance with NGS BART prov isions and Regional Haze Rule will result in compliance with CPP

Response 18: See section X.C. of the final rule preamble of the CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:

Co mmenter s concurred with the Environmental Protection Agency's (EPA) determination that Indian Country, specifically Navajo Generating Station (NGS), will meet the proposed carbon standards of the Clean Power Plan through compliance with the NGS Best Availa ble Retrofit Technology (BART) provisions of the Clean Air Act and the Regional Haze Rule.

Commenters stated Section V of the Supplemental Proposal to the Clean Power Plan addresses the impacts of the EPA's Proposed Action, specifically the proposed rule' s air impacts. The EPA states in its proposal that it does not expect any additional emission reductions from areas of Indian Country with affected Electrical Generating Units (EGU) due to the area's expected compliance with BART requirements. The commente rs said pursuant to the NGS BART rule, one EGU will shut down or equivalent generation will be curtailed to comply with requirements for BART at NGS by 2019; this shutdown or equivalent curtailment will result in substantial CO2 reductions and the Navajo N ation meeting the proposed goal without additional actions.

Commenters stated the EPA's Supplemental Proposal for carbon emissions recognizes the balance struck between NGS constituents and the EPA to develop mutually acceptable solutions for the operatio n of NGS. The commenters said the EPA's conclusion that the shutting down of one EGU consistent with BART requirements is sufficient to meet the carbon emissions reduction proposal, is further evidence of the agency's commitment to achieve quality air
stan dards and ensure the continued vitality of NGS and the CAP, both of which are critical to Arizona's economy and its people.

Comment 19: T&T Supplemental

- EPA Correctly Recognized the Emission Reductions that Have Taken Place at NGS and FCPP Because of O ther Rules

Response 19: See section X.C. of the final rule preamble of the CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:

Commenters stated EPA correctly recognized in the supple mental proposal that the participants in NGS and FCPP have made significant investments to achieve emission reductions under other34 EPA rules. The commenters said the Navajo Nation has also made investments to assure future operation of the plants, includin g by purchasing the Navajo Mine to ensure a continued supply of coal to FCPP. The commenters said additionally, these other EPA rules have negatively affected the Navajo Nation in terms of job losses and decreased revenue to the Navajo Nation government. T he commenters said annual losses to the Navajo Nation due to the three

- unit shutdown at FCPP will be $86 million; NGS and its associated mine (Kayenta Mine) were estimated to contribute $13 billion to the Navajo Nation economy between 2020 and 2044; howeve r, that contribution will be significantly diminished as a result of EPA's Regional Haze Rule for NGS.

4.11 STATE

- SPECIFIC GOAL COMPUT ATION COMMENTS

Section 4.11 covers public comments related to the state

- specific computation procedure of the final and interim goals

.
Commenters have raised a number of issues related to this subsection which are organized by topics (comments) below. Responses are provided for these topics.

Comment 1: AL

- Plants due to retire

Response 1: As explained in section VI of th e final rule preamble of the CPP

, the EPA relies on a historical 2012 data to inform the representative baseline year. It does not project a future baseline of units based on expected retirements. For the EPA’s response to this comment, see the CO 2 Emiss ion Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenter s stated that the EPA's target

- setting for Alabama does not account for th e following planned coal unit retirements:

Colbert Fossil Plant . The Tennessee Valley Authority has announced plans to retire all five of its coal

- burning units, totaling 1,350 MW, at this facility in northwest Alabama. Although no specific retirement date has yet been set, under the terms of a Federal Consent Decree, it cannot occur later than 2019. TVA has already idled Unit 5, and this unit produced no generation in either 2013 or (so far) in 2014. In 2012, the Colbert units accounted for 3,364,920 MWh o f generation that produced 3,718,102 tons of CO2 emissions.

Widows Creek Unit 8 . TVA has announced that it will retire Unit 8 (550 MW) by November 2014. In 2012, Unit 8 accounted for 1,949,090 MWh of generation that produced 2,148,198 tons of CO2.35 Gorgas U nits 6 and 7 . Alabama Power Company recently announced that it would retire these two units, totaling 250 MW, by 2016. In 2012, these units accounted for 147,124 MWh of generation that produced 195,390 tons of CO2.

Commenter s said the electric generation a nd carbon emission levels from these units were included in Alabama's baseline emissions rate, but the EPA did not include the planned retirements of these units when calculating Alabama's emission rate target. Commenter s said collectively, these units acc ounted for more than 5.4 million MWh of coal generation in 2012. Commenter s indicated applying these retirements to EPA's emissions rate calculation lowers Alabama's emission rate by 43 lbs/MWh or 9.3 percent of the 2030 target reduction.

Comment 2: AL

- Planned coal to natural gas conversions

Response 2: The EPA relies on a historical data set rather than a projected data set for its baseline. See more discussion on this issue in s ection VI of the final rule preamble of the CPP and the CO 2 Emission Perfor mance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP. While these planned conversions are not part of the baseline and BSER quantification, states/sources could potentially recognize the corresponding reductions in their complia nce plans as discussed in section VIII of the final rule preamble of the CPP

. The following are summaries of the specific public comments under this comment:

Commenter s said that several coal

- burning generating facilities in Alabama are going to be
convert ed to run natural gas and the conversions will reduce CO2 emissions achieving 14% of the target reduction.

Commenter s indicated Alabama Power has decided to convert coal

- burning units at its Gaston, Barry, Gadsden, and Greene County facilities to run on na tural gas. Commenter s said the efficiency of such units typically is lower than that of to new or existing NGCC units, and said that gas conversion is not particularly cost

- effective. Commenter s said nevertheless, Alabama is free to rely upon gas conversio ns for compliance purposes, and compared to the coal generation they replace, they will result in lower carbon emissions.

Gaston Units 1

- 4 . Commenter s said for example, at Plant Gaston, to comply with the EPA's Mercury and Air Toxics (MATS) Rule, Alabama P ower is converting all four of its coal

- fired units to run on natural gas. Commenter s said the conversion will be in effect by April 2016, and indicated the converted units will not be as efficient as NGCC units. Commenter s said that Alabama Power's permit application for the conversion project reveals that the converted units have the potential to emit more than 1.2 million pounds of greenhouse gases per hour at full load. Commenter s added that this translates to approximately 1,196 lbs/MWh, which is above the average emission rate for Alabama's NGCC units (877 lbs/MWh), but added that the converted units will be substantially more efficient than Alabama's coal units, whose average emission rate is 2,264 lbs/MWh.

Commenter s stated that the converted units w ill be run infrequently, in a peaking capacity. Commenter s said that although precise figures are not publicly available, it is reasonable to36 assume that as peaking units, the converted units' capacity factors will rarely, if ever, exceed 15 percent. Comme nter s said this would mean 1,423,008 MWh of new gas generation with an emissions rate of 1196 lbs/MWh instead of the figures assumed in EPA's 2012 emission rate calculation: i.e. 3,190,258 MWh of coal generation at an emission rate of 2,264 lbs/MWh.

Barry Units 1

- 3. Commenter s said similarly, at its Plant Barry, near Mobile, Alabama Power plans by 2016 to cease burning coal at three units totaling 578 MW. Commenter s said that Units 1 and 2 already have gas capability; such capability will be added to Unit 3 . Commenter s said in 2012, these three units had an average capacity factor of 15 percent, and said it is reasonable to assume a similar capacity factor going forward, as Alabama Power has stated that two of the units will be used only on a limited basis.

Commenter s said that in 2012, Barry Units 1

- 3 accounted for 772,069 MWh of generation. Commenter s said assuming similar levels of generation in the future, and emission rates similar to the converted Gaston units (i.e. 1,196 lbs/MWh), the Barry units wil l produce 412,285 fewer tons of CO2 emissions than in 2012.

Greene County Units 1 and 2. Commenter s said that Alabama Power will convert these two units, totaling 568 MW, to run on natural gas by April 2016. Commenter s said it is unclear whether the conver ted units will be used solely in a peaking capacity or run more frequently. Commenter s said that in 2012, the units were responsible for 2,015,762 MWh of generation, which equates to a capacity factor of 41 percent. Commenter s said assuming similar levels of generation in the future, and emission rates similar to the converted Gaston units (i.e. 1,196 lbs/MWh), the converted units will produce 1,205,425 fewer tons of CO2 emissions than in 2012.

Gadsden Units 1 and 2 . Commenter s said these Alabama Power unit s, totaling 138 MW, are already equipped to run on natural gas. Commenter s indicated that Alabama Power has stated they will burn natural gas almost exclusively going forward. Commenter s said that in 2012, these units produced 222,100 MWh of generation tha t EPA's analysis counts as coal generation

, which equates to a capacity factor of 18 percent. Commenter s said assuming similar levels of generation in the future, and emission rates similar to the converted Gaston units (i.e. 1,196 lbs/MWh), the Gadsden un its will produce 118,601 fewer tons of CO2 emissions than in 2012.

Commenter s said in summary, the gas conversions at Gaston, Barry, Greene County, and Gadsden will collectively result in the removal of over 6 million MWh of coal generation and its substit ution with lower generation levels (approximately 4.4 million MWh) of lower

- emitting natural gas. Commenter s said they conservatively estimate that the conversions will reduce Alabama's 2012 emission rate by another 66 lbs/MWh or 14 percent of the target r eduction

.

Comment 3: AL

- Recent and planned RE projects

Response 3: See section V.A of the final rule preamble for a discussion of building block three quantification in the final CPP

. The following are summaries of the specific public comments under t his comment:37 Commenter s provided information on recent and planned renewable energy projects. Commenter s said that Alabama Power has entered two agreements to import a total of 404 MW of cost

- effective wind generation, along with associated renewable energ y credits (RECs), from Oklahoma and Kansas. Commenter s said the utility received approval for the first project, known

as Chisholm View , in September 2011. Commenter s said that under the terms of the agreement, Alabama Power receives 202 MW of generation from a wind farm in north

- central Oklahoma, as well as the associated RECs, over a twenty

- year term. Commenter s said the project came online in December 2012.

Commenter s said Alabama Power received approval for the second project, known as Buffalo Dunes , f rom the PSC in September 2012. Commenter s said the project is functionally similar to Chisholm View: Alabama Power will receive 202 MW of generation from a wind farm in southwestern Kansas, as well as the associated RECs, over a twenty

- year term. Commenter s said the project came online in December 2013.

Commenter s said that although the precise capacity factors associated with these projects are not publicly available, reasonable approximations can be inferred from the utility's statements. Commenter s said that Alabama Power has stated that the projects amount to 3 percent of the electricity consumed by its customers, and that in 2012, Alabama Power had retail sales totaling 53,946,766 MWh. Commenter s said three percent of that figure is 1,618,403 MWh, and dividing that figure by 8,784 hours and by 404 MW produces a capacity factor of 45.6 percent.

Commenter s said that similarly, Alabama Power has stated that the two projects are sufficient to power the equivalent of 115,000 homes. The average Alabama home c onsumes 14,241 kWh per year. The amount of electricity consumed by 115,000 such homes equates to 1,637,715 MWh. Commenters said d ividing that figure by 8,874 hours and by 404 MW yields a capacity factor of 46.1 percent.

Commenter s said assuming a 46 percen t capacity factor, these deals will result in 1,632,419 MWh of carbon

- free generation that goes into the denominator of EPA's emission rate equation. Commenter s said this in turn lowers Alabama's 2012 emission rate by 22 lbs/MWh or more than 4 percent of t he target reduction.

Commenter s said another recently announced renewable project is the planned Redstone Arsenal solar array . Commenter s indicated that Redstone Arsenal is a U.S. Army post and garrison located near Huntsville, Alabama within TVA territory , and said it will soon be home to the largest solar power array in Alabama

. Commenter s said that as part of its goal to have 25 percent of its energy produced from renewable sources by 2025, the Army has solicited proposals for an array that will provide up to 18,000 MWh of solar

- generated electricity for the arsenal. Commenter s said the project is estimated to be 10 to 14 megawatts in size, with as many as 50,000 solar panels. Commenter s said the Army has cited the energy security benefit the array will p rovide and noted that sharp declines in the installed price of solar power have made the project financially attractive.

Comment 4: AL

- Summary of planned carbon

- reducing measures3 8 Response 4: See section VIII of the final rule preamble of the CPP for a d iscussion state plans components.
The following are summaries of the specific public comments under this comment:

Commenter s summarized the carbon

- reducing measures planned for Alabama.

Commenter s said that in total, accounting for the retirements, conv ersions, and renewable energy procurements, all of which will occur even in the absence of the proposal, Alabama will lower its carbon intensity by 132 lbs/MWh, equating to 30 percent of Alabama's target reduction. Commenter s said that in addition, the EPA includes in the target

- setting

- and Alabama may credit toward compliance

- the state's existing renewables (2,776,554 MWh), existing energy efficiency (56,045 MWh) and existing "at

- risk" nuclear (2,329,528 MWh). Commenter s indicated that with these credi ts, Alabama is almost 45 percent of the way toward its target more or less as a matter of business as usual.

Comment 5: AL

- Summary of Alabama's Emission rate target

Response 5: For the EPA’s response to this comment, see the CO 2 Emission Performance Ra te and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenter s summarized the EPA

- calculated emission rate target for Alabama, and stated that Alabama is making good progress and the goal is achievable and should be at least as stringent as the proposed target.

Commenter s said that the EPA has proposed a carbon emission rate target for Alabama of 1,059 pounds per megawatt

- hour (lbs/MWh) to be achieved by 2 030, and an interim average target of 1,147 lbs/MWh between 2020 and 2029. Commenter s said that Alabama's proposed target represents a 27 percent emission rate reduction from an initial 2012 emission rate of 1,518 lbs/MWh

. Commenter s expressed support of t he EPA's finalization of a 2030 target for Alabama that is at least as stringent as the proposed target.

Commenter s said that Alabama's target is both modest and achievable. Commenter s said that the EPA's building blocks determine the target for Alabama, t here is nothing requiring Alabama to follow the same path for compliance. Commenter s said that as the EPA emphasizes in the proposal, states may elect to pursue some building blocks more extensively and others less extensively than assumed by the EPA, and may even choose other measures, so long as they meet the overall target reduction. Commenter s said that states retain the flexibility to determine the compliance path that makes the most sense under their unique facts and circumstances.

Commenter s said tha t the EPA's target

- setting does not take into account carbon

- reducing measures that Alabama had begun approving and putting into place prior to the proposal. Commenter s said when those measures

- which include decisions to retire or convert aging coal unit s and to begin investing in clean energy resources

- are taken into account, we can see that39 Alabama is already almost halfway toward its target. Commenter s said Alabama can get the rest of the way there through a combination of modest natural gas re

- dispa tch and stepped up investments in renewable generation and energy efficiency.

Commenter s summarized the emissions reductions associated with the EPA's analysis as follows:

Building Block 1: Lowers Alabama's 2012 emission rate by 63 lb/MWh or 14% of the ta rget reduction

Building Block 2: Lowers Alabama's 2012 emission rate by 126 lb/MWh or 27% of the target reduction

Building Block 3a (nuclear): Lowers Alabama's 2012 emission rate by 30 lb/MWh or 7% of the target reduction

Building Block 3b (renewables): L owers Alabama's 2012 emission rate by 160 MWh or 35% of target reduction. (Note: under the EPA's assumptions, Alabama does not reach the regional 10% target before 2030)

Building Block 4: Lowers Alabama's 2012 emission rate by 80 lb/MWh or 17% of the targe t reduction.

Comment 6: AK

- The EPA lacks authority under the CAA to issue these regulations

Response 6: The EPA is not including emission performance goals for Alaska in this final rule. See section VII .F of the preamble for discussion of this issue

.

T he following are summaries of the specific public comments under this comment:

Commenter s argued that EPA lacks authority under the Clean Air Act to issue these regulations. The commenter s also argued that EPA has not presented facts or reasoning to suppor t the application of the rule in Alaska.

Commenter s stated the Proposed Rule exceeds EPA's authority under the Clean Air Act (CAA). Commenter s stated first, application of section 111 (d) is limited to source categories that are not already regulated under section 112; EPA has already elected to regulate coal

- fired power plants under section 112. Commenter s stated second, regulations governing emissions from new sources under section 111 (b) are a necessary predicate for any section 111(d) regulation of exi sting sources; here, EPA has only issued proposed section 111(b) regulations. Commenter s stated third, the Proposed Rule impermissibly expands EPA's authority beyond air pollution control into the management of state energy generation and usage. Commenter s stated fourth, the Proposed Rule mandates firm, numerical emission targets rather than the guidelines and procedures contemplated by section 111(d). Commenter s stated this Proposed Rule would effectively negate state authority to evaluate EPA's guidelines in the context of costs, technical and physical feasibility, energy needs, other environmental impacts, and the "remaining useful life of the existing source." Commenter s stated fifth, the BSER measures proposed by EPA40 improperly include measures beyond t he physical or legal control of the regulated sources. Commenter s stated standards of performance established under section 111 (d) must be achievable through source

- level, inside

- the

- fence line measures. Commenter s stated sixth, the Proposed Rule conflict s with the balance of federal and state authority with respect to energy policy established in the Federal Power Act.

Commenter s added most frustrating for AK , EPA simply has not presented facts or reasoning to support the application of this rule in Alask a. Commenter s stated EPA's foundational assumptions regarding the generation and transmission of electricity, particularly the premise of a robust interconnected grid, have little relevance to Alaska. Commenter s added the technical analyses

- including the crucial Integrated Planning Model (IPM) and Regulatory Impact Analysis (RIA)

- fail to evaluate the application of this rule in our state. Commenter s concluded EPA has no basis to conclude that the costs of implementing the proposed BSER measures in Alask a would be reasonable, that the rule will not impair the reliability of electric service in the state, or that the measures are even technically feasible.

Comment 7: AK

- Alaska should not be included in the rulemaking. Explanation provided regarding ho w Alaska is different than other states

Response 7: The EPA is not including emission performance goals for Alaska in this final rule. See section VII .F. of the preamble for discussion of this issue

. The following are summaries of the specific public comme nts under this comment:

Commenter s stated that Alaska should not be included in the proposed 40 CFR 60 Subpart UUUU rulemaking. Commenter s stated that in the proposed rulemaking, EPA recognizes that states differ in important ways, including in their mix o f existing EGUs and in their policy priorities." Commenter s stated that GVEA contends that the differences in Alaska make the Clean Power Plan unreasonable, arbitrary, and capricious when applied to Alaska, and particularly to GVEA, for at least the reason s discussed below.

Commenter s stated that first, Alaska has very little coal generation. Commenter s stated that the only two coal

- fired EGUs included in the rulemaking are Healy Unit 1 and Healy Unit 2. Commenter s added that all other Alaska Subpart UUUU

- a ffected EGUs are natural gas

- fired stationary combustion turbines, primarily energy efficient combined

- cycle turbines.

Commenter s stated that the total heat input of Healy Unit 1 and Healy Unit 2 is 985 MMBtu/hr compared to the total heat input of approxim ately 9,225 MMBtu/hr for all proposed Subpart UUUU

- affected natural gas

- fired EGUs in Alaska. Commenter s added that these two coal

- fired EGUs represent 9.6 percent of the total heat input capacity for all Subpart UUUU

- affected EGUs in Alaska. Commenter s ad ded that the overwhelming majority of proposed Subpart UUUU

affected EGUs in Alaska are energy efficient natural gas

- fired combined cycle turbines, making an Alaska Plan unnecessary.

Commenter s added that second, many assumptions in the proposed rule are s imply inapplicable to Alaska. Commenter s stated that one of these inappropriate assumptions is: "The utility power41 sector is unique in that, unlike other sectors where the sources operate independently and on a local scale, power sources operate in a compl ex, interconnected grid system that typically is regional in scale."

Commenter s stated that unlike the lower 48 states, Alaska is unique because the utility power sector is stranded from other states and does not have a complex, interconnected grid system in any scale. Commenter s added that it is highly unlikely if not impossible for Alaska to participate in integrated multi

- state compliance strategies to increase the flexibility and cost

- saving opportunities that would be available to the covered EGUs.

Com menter s stated that EPA also offers the following: "A state may demonstrate during the comment period that application of one of the building blocks to that state would not be expected to produce the level of emission reduction quantified by the EPA becaus e implementation of the building block at the levels envisioned by the EPA was technically infeasible or because the costs of doing so were significantly higher than projected by the EPA."

Commenter s stated that an Alaska Plan would likely have the uninten ded consequence of imposing additional costs on GVEA customers who are already paying higher than average rates for electricity. Commenter s added that moreover, the EPA proposed heat rate improvement of 6 percent is technically infeasible for Unit 1 and He aly Unit 2; there are significant transmission constraints related to NGCC energy; natural gas resources are not readily available; incorporation of additional RE may be difficult and economically infeasible; implementation of the rule will result in signi ficant stranded asset; and GVEA members have likely maximized their energy efficiency opportunities.

Comment 8: AK

- Alaska is unique and should be exempted from the rule or the EPA must determine achievable and reasonable emission rate for existing EGUs in Alaska ; Alaska's electric utility sector lacks interconnectivity

Response 8: The EPA is not including emission performance goals for Alaska in this final rule. See section VII .F. of the preamble for discussion of this issue

. The following are summaries of the specific public comments under this comment:

Commenter s argued Alaska has a lack of interconnectivity of their electric grid and that Alaska should be exempted from the rule, or EPA must determine an achievable and reasonable emission rate for exis ting EGUs.

Commenter s stated for Alaska, implementing the rule is particularly problematic because EPA designed the rule for generating units that are interconnected through a robust transmission grid. Commenter s stated a lack of interconnectivity is the v ery characteristic that most distinguishes Alaska's electric utility sector from the rest of the country. Commenter s added because of this difference and others, Alaska should be exempted from any final rule limiting CO2 emissions from existing EGUs. Comme nter s stated alternatively, EPA must conduct the necessary analysis to determine an achievable and reasonable CO2 emission rate for existing EGUs in Alaska based on an accurate factual record.42 Commenters stated, Alaska's utilities face unique challenges i n providing electric service

- in fact, electric utility service is not universally available. Commenters said, 128 electric utilities serve our major population centers and rural communities. Commenters said, the service areas for these utilities include over 150 remote, stand

- alone electric distribution systems serving villages, most of which are inaccessible by road. Commenters said, in these rural locations, service is provided by small

- generation units that either operate in isolation or are only weakl y linked to other small electric generation units.

Commenters stated, in addition to lacking interconnection amongst our electric utility systems, they also lack an interconnected road or natural gas pipelines linking our cities, towns and villages. Comme nters said, in this context, one utility, Alaska Village Electric Corporation, serves 54 villages, including Old Harbor and Savonga

- communities 734 miles apart. Commenters said, another utility, Alaska Power Company, serves 26 communities, including Klaw ock and Tok communities separated by 645 miles. Commenters said, the absence of transmission lines to share power among communities and a road or pipeline system to transport fuel to remote areas, presents a huge challenge for providing affordable and reli able power to rural consumers.

Commenters stated, with some notable exceptions, the power and heating needs for these remote areas are met by diesel barged up from lower

- 48 suppliers or transported from petroleum refineries in Nikiski or Valdez, Alaska. Co mmenters said, after seasonal freeze

- up, many remote communities must rely on fuel that is stored in local tank farms, or pay a premium for fuel flown in by air tankers. Commenters said, when fuel reserves run short in these remote communities, truly extra ordinary (and expensive) measures may be necessary to ensure the availability of fuel. Commenters said, to help communities meet their energy needs the state supports programs to maintain fuel tanks, improve power generation and end use efficiency, and exp loit local renewable energy sources such as wind, biomass, solar, geothermal, and hydroelectric.

Commenters stated, the provision of electric utility service in Alaska cannot be compared to the more densely populated areas of the country. Commenters said, elsewhere in the U.S., most electric consumers are connected to an extensive electric grid. Commenters said, these interconnected states also have well

- established interconnected energy markets that provide for the sale and transmission of power from wher e it can be most economically produced to where demand exists. Commenters said, here, other than Anchorage and Matanuska load centers, no Alaskan load centers are interconnected by redundant transmission infrastructure. Commenters said, Alaskan loads are t oo small and too distant to support the type of electric transmission grid available in the continental U.S.

Comment 9: AK

- Alaska is unique, s hould be exempted from the rule ; Alaska's major population and electric load centers have limited interconnecti vity.

Response 9: The EPA is not including emission performance goals for Alaska in this final rule. See section VII .F. of the preamble for discussion of this issue

.43 The following are summaries of the specific public comments under this comment:

Commenter s argued Alaska's utility sector is fundamentally different from the electric utility industry in the continental U.S., and concluded Alaska should be exempted from the rule.

Commenter s stated Alaska's electric utility sector differs in many ways from the industry in the rest of the United States. Commenter s added the utility power sector in the continental U.S., as described by EPA, is characterized by the interconnection of a variety generation resources by robust transmission grids extending over large r egions. Commenter s stated the interconnected nature of the continental grid enables flexible dispatch of generation resources and renders electricity a generally fungible product. Commenter s stated the fungible nature of electricity and the flexibility in dispatch practices permitted by an interconnected transmission grid are "central, to EPA's evaluation of the '"best system of emission reductions." Commenter s stated however, EPA's description of the utility power sector in the continental U.S., does not d escribe the electric utility sector in Alaska.

Commenter s stated Alaska does not have a robust infrastructure of looped transmission facilities interconnected with generation facilities extending over large regions. Commenter s stated rather, as a state, Al aska is "islanded"

- it has no interconnection with other states or regions. Commenter s stated the relatively small population (0.3% of U.S. population) is dispersed over a substantial geographic area (16% of U.S. landmass or 570,641 square miles). Commente r s added transmission lines do link a few major population centers, but these systems have limits. Commenter s stated because the Proposed Rule relies on a factual premise that does not apply to Alaska, the state should be exempted from the rule.

Commenters stated, there are a few larger electric utility load centers in Southeast, Southcentral, and Interior Alaska. Commenters said, four of these load centers have limited transmission interconnections: the Kenai Peninsula, Anchorage, Matanuska, and Fairbanks load centers. Commenters said, because the transmission lines generally follow the 470

- mile long Alaska Railroad corridor between Seward and Fairbanks, these loosely interconnected electric load centers are jointly referred to as the "Railbelt."

Commenter s stated, the Municipality of Anchorage is Alaska's largest population center with 291,826 people (in 2010) and a land area of 1,705 square miles. Commenters said, our largest city is spread over seventy percent more land area than the State of Rhode Isla nd which had a population more than three times that of Anchorage in 2010. Commenters said, with a land area of 24,608 square miles and a population in 2010 of 88,995, the Matanuska

- Susitna Borough is larger than ten states, each of which has a population many times larger than the Matanuska

Susitna Borough. Commenters said, even in our "urban" areas, Alaskan utilities have a lot of ground to cover to deliver power from generating units to load.

a. Railbelt Utilities

Commenters stated, the Railbelt load cen ters are served by six vertically integrated, cooperative or municipally owned utilities. Commenters said, the Kenai Peninsula is served by Homer Electric Association (Homer), the City of Seward, and Chugach Electric Association (Chugach). Commenters said, the Anchorage load center is served by Chugach, Anchorage Municipal Light44 and Power (ML&P), and Matanuska Electric Association (MEA). Commenters said, MEA also serves in the Matanuska load center. Commenters said, Golden Valley Electric Association (GVEA) serves the Fairbanks load center Commenters said, each of these independent utilities is governed by a locally elected board.

Commenters stated, the Railbelt utilities serve a region of approximately 100,000 square miles, approximately half the size of th e area served by the Electric Reliability Council of Texas (ERCOT). Commenters said, ERCOT provides independent system operator (ISO) service through a unified system controlling 43,000 miles of transmission infrastructure and 550 generation units. Comment ers said, by contrast, our Railbelt utilities independently provide service in their territories utilizing a total of 1,500 miles of transmission infrastructure and 39 utility or state owned generation units, plus purchases from a few small independent pow er producers. Commenters said, even if an ISO were created in Railbelt Alaska, it would take a substantial investment in infrastructure to have the same system operational flexibility enjoyed by ERCOT.

Commenters stated, the Railbelt utilities generate app roximately 80% of the state's electricity and serve a peak load of around 870 MW. Commenters said, all five of the "likely affected EGUs" identified by EPA

- Nikiski Cogeneration, George M. Sullivan Plant 2, Beluga Power Plant, South

- central Power Plant, a nd Healy Unit 1

- provide electricity within the Railbelt. Commenters said, with the exception of transmission between the Anchorage and Matanuska load centers, the Railbelt load centers, and thus the affected EGUs, are connected by only single contingency outage transmission tie lines. Commenters said, because loss of these single contingency lines means no energy can be transported amongst load centers, each utility must carry sufficient reserve locally to meet their loads.

b. Railbelt Transmission Conne ctions

Commenters stated, the Kenai Peninsula load center is connected to the Anchorage load center by a 90

- mile, single contingency 115kV transmission tie line owned by Chugach. Commenters said, the ability to move power on the Kenai to Anchorage transmis sion line is constrained by a stability limit of approximately 70 to 75MW, the need for approximately 10MW of reserve capacity, and increased line losses associated with increased energy transfer.

Commenters stated, the Matanuska and Anchorage load centers are connected by multiple transmission systems. Commenters said, the first is a 230 kV transmission system owned by Chugach. Commenters said, this system connects Chugach's and ML&P's generation plants to the Teeland Substation in the western portion of t he Matanuska load center. Commenters said, the second system is a 115 kV transmission line jointly owned by ML&P, Chugach and MEA. Commenters said, this 115kV line connects the Eklutna Hydroelectric Project to the Anchorage load center and to the eastern p ortion of the Matanuska load center. Commenters said, finally, MEA owns a 115 kV transmission system that connects the eastern and western portions of the Matanuska load center, creating a looped system with the Anchorage load center.

Commenters stated, th e Matanuska and Anchorage load centers are connected to the Fairbanks load center by a 200

- mile, single contingency transmission system currently operated at 138kV running from Teeland Substation to Healy. Commenters said, this includes (1) a 6 mile 138kV45 line connecting the Teeland and Hollywood substations, which is currently owned by the State and due to transfer to MEA in 2018; (2) a 21 mile 115 kV line connecting Hollywood and Douglas that is owned by MEA; and (3) the 173

- mile Alaska Intertie built to a 345 kV design connecting the Douglas and Healy substations and owned by the State. Commenters said, from Healy, two 138kV transmission lines carry power to Fairbanks

- a 103 mile line running to the Goldhill substation and the 97 mile long Northern Inter tie running into Wilson Substation. Commenters said, while conditions can vary, the Alaska Intertie is typically operated at or near its usual stability limit of approximately 70

- 80 MW throughout the year to deliver electricity generated at hydroelectric a nd natural gas facilities to Fairbanks. Commenters said, energy purchases are generally scheduled to the maximum capacity of the line, depending on the availability of hydroelectric and gas generation capacity, and the availability of natural gas fuel.

Com menters stated, these transmission lines follow routes that are often remote from all road access, and are subject to outages during winter peak loads caused by avalanches and ice loading. Commenters said, in particular, the Alaska lntertie has two cables bundled together about 8 inches apart for each phase. Commenters said, the snow/ice loading on the lntertie can be particularly dramatic when the accumulated snow and ice bridges the gap between the two cables. Commenters said, once such a bridge is formed , snow and ice accumulate across the entire platform, causing accumulations of more than one

- foot diameter. Commenters said, there is a particular risk of ground fault when uneven snow loading causes the lines to sag to the ground.

Comment 10: AK

- Alaska should be exempted from the rule

Response 10: The EPA is not including emission performance goals for Alaska in this final rule. See section VII .F. of the preamble for discussion of this issue

. The following are summaries of the specific public comments u nder this comment:

Commenter s argued Alaska should be exempted from the rule in particular due to Alaska's lack of an interconnected grid. The commenter s argued attempts to comply with the rule would result in extraordinary costs, and may raise reliability concerns.

Commenter s stated Alaska should be exempted from any section 111 (d) rule governing carbon emissions from EGUs because Alaska's electric utility sector differs in critical respects from the industry in the continental U.S. Commenters added perha ps most significantly, Alaska does not have a robust interconnected grid. Commenter s stated because of the lack of transmission interconnections and other unique circumstances, Alaska cannot reasonably implement the BSER measures. Commenter s stated however , Alaska is already achieving carbon emission savings pursuant to our own policies without federal intervention.

Commenter s stated it bears noting that even the primary policy motivation for this rule

- the finding that fossil fuel

- fired EGUs are the large st emitters of GHGs among stationary sources in the U.S

. - does not apply to Alaska. Commenter s stated nationally, power plants account for roughly one

- third of all domestic GHG emissions. Commenter s stated EPA reports that, in 2005, sources in the U.S. em itted 7,195.3 million metric tons (MMT) of CO2e. Commenter s added of46 that, emissions from the electric power industry accounted for 2A45. 7 MMT

- slightly more than

one

- third of U.S. CO2e emissions. Commenter s stated by comparison, in 2005, electric generat ion in Alaska produced 3.2 MMT CO2e

- only 6 percent of the state's total 52.1 MMT CO2e emissions. Commenter s stated by our count, the five "likely affected fossil sources" in Alaska accounted for only 4.4% of statewide GHG emissions. Commenter s added these emissions are de minimus in the context of the issue EPA seeks to address in this rulemaking. Commenter s stated the policy rational behind the Clean Power Plan's focus on the electric utility sector does not apply to Alaska.

Commenter s stated while the op portunity to reduce CO2 emissions from Alaska's electric utility sector is negligible, attempts to comply with the Proposed Rule would result in extraordinary costs. Commenter s stated implementing the Proposed Rule may also raise issues regarding the relia bility of electric service, and may result in irrational consequences

- including greater impairment to air quality in Fairbanks. Commenter s concluded this rule should not be applied in Alaska.

Comment 11: AK

- Alaska has special considerations affecting generation and delivery of electric power

Response 11: The EPA is not including emission performance goals for Alaska in this final rule. See section VII .F. of the preamble for discussion of this issue

. The following are summaries of the specific public c omments under this comment:

Commenter s stated that m any special considerations affect generation and delivery of electric power in Alaska, particularly for GVEA. Commenter s that the GVEA service area is located in Interior Alaska. Commenters said i n a clim ate which drops to 50 degrees below zero, having reliable generation is imperative, truly a matter of life and death. Commenter s expounded that available fuel is restricted in the Interior largely to naphtha, diesel, and coal. Commenter s added that reasona bly priced or low cost liquid fuel has rarely been available, a cost issue that has been exacerbated with the closure of the Flint Hills Resources (FHR) refinery at North Pole, Alaska in 2014. Commenter s stated that this closure has also increased the vuln erability of the liquid fuel supply chain to interruption. Commenter s stated that given this increased vulnerability and the high cost, additional oil

- fired EGUs are not an appropriate option for compliance with Subpart UUUU. Commenter s added that local na tural gas resources do not exist in the region and no natural gas pipeline to Interior Alaska exists. Commenter s stated that natural gas would need to be liquefied and trucked into the Interior from significantly distant locations. Commenter s stated that a s a result, installing cost effective natural gas

- fired generation is not an option at this time.

Commenter s stated that unlike the lower 48 states, Alaska is stranded from inter

- state transmission grids. Commenter s added that Alaska is electrically isolat ed from the lower

- 48 states and the nearest neighbor, Canada. Commenter s stated that one constrained transmission system, the Railbelt Grid, exists. Commenter s stated that The Railbelt Grid provides limited interconnection within the most populated region of the state. Commenter s stated that currently, GVEA typically maximizes the capabilities of the existing transmission system. Commenter s47 added that additional transmission of power from Southcentral Alaska to the Interior is not an option without signific ant costly upgrades. Commenter s stated that transmission is limited to a single 80 megawatt (MW) transmission line between Anchorage and Healy where the line bifurcates into two lines, both serving the GVEA service area. Commenter s added that in addition, in the past, the purchase of energy from Southcentral utilities has been limited during the winter months due to limited gas supplies in extreme cold weather. Commenter s concluded that regardless of the availability of power from Southcentral utilities, th e transmission infrastructure between Southcentral Alaska and the Interior cannot support the transmission of additional energy.

Comment 12: AK

- Alaska's regulatory framework is different; utilities may choose to be exempt from economic regulations, and no wholesale power market exists

Response 12: The EPA is not including emission performance goals for Alaska in this final rule. See section VII .F. of the preamble for discussion of this issue

. The following are summaries of the specific public comments un der this comment:

Commenter s argued Alaska's regulatory framework is different from that presumed by EPA. The
commenter s argued Alaska utilities may choose to be exempt from economic regulation, and no organized wholesale power market exists.

Regulatory fr amework . Commenter s stated Alaska's regulatory environment differs from the framework presumed by EPA. Commenter s stated in the continental U.S., FERC regulates interstate electric energy transmission and the wholesale energy market. Commenter s added howev er, because Alaska has no interstate electric energy transmission, Alaskan utilities are largely unaffected by FERC transmission and wholesale market rules. Commenter s stated instead, wholesale transactions between utilities are regulated by the public uti lity commission, the Regulatory Commission of Alaska (RCA).

Commenter s stated the RCA regulates electric utilities according to traditional economic ratemaking principles

- requiring that reliable service is provided at just, reasonable, nondiscriminatory rates. Commenter s stated utilities, under RCA oversight, must apportion charges to their respective customer classes according to the "cost causer

- cost payer" principle. Commenter s stated the RCA and the Alaska Energy Authority (AEA), through the Intertie Management Committee, may implement reliability standards.

RCA's statutory authority . Commenter s stated there are limits to the RCA's statutory authority. Commenter s added unlike public utility commissions in many other states, the RCA does not have genera l facility siting authority. Commenter s expounded also, while other states have enforceable resource plans, in Alaska, utilities submit 10

- year capital improvement plans for informational purposes only. Commenter s concluded significantly, municipal and coo perative utilities, including all of the utilities affected by this rule, may choose to be altogether exempt from economic regulation by the RCA.48 No RTOs or ISOs . Commenter s stated nor is the limited Alaska transmission system managed by a Regional Transmi ssion Organization or ISO as is typical elsewhere in the country. Commenter s stated here, individual electric utilities or state agencies own discrete portions of the transmission infrastructure. Commenter s stated each utility operates the transmission inf rastructure it owns and, in some cases, operates transmission infrastructure owned by the State under contract. Commenter s added interconnection agreements exist, if at all, only when each of the participating utilities find the terms of the agreement to b e in their individual members or customers best interests.

No wholesale power market . Commenter s stated no organized wholesale power market exists in Alaska. Commenter s added instead, wholesale power transactions between utilities are based upon bilateral agreements, and typically involve hour

- ahead non

- firm economy energy transactions. Commenter s stated existing transmission system limitations prevent most Alaska utilities from entering into firm wholesale power transactions. Commenter s stated by contrast, within the interconnected continental grid, power can be bought on a firm or non

- firm basis, and for varying blocks of time.

Commenter s stated although outlined in AS 44.99.115, Alaska's energy policy is not integrated in a single statute. Commenter s adde d the policies are integrated through multiple statutes that establish and allocate duties and authority amongst numerous state departments and agencies, including AEA, DEC and the RCA.

Comment 13: AK

- Installing natural gas

- fired EGUs in not an option at this time

Response 13: The EPA is not including emission performance goals for Alaska in this final rule. See section VII .F. of the preamble for discussion of this issue.

The following are summaries of the specific public comments under this comment:

Co mmenter s stated that the GVEA service area is located in Interior Alaska, centered in Fairbanks. Commenter s stated that local natural gas resources do not exist in the region and a gas pipeline from the Alaska North Slope or Cook Inlet fields has not been installed. Commenter s concluded that as a result, installing natural gas

- fired generation is not an option at this time.

Commenter s expounded that the construction of a natural gas pipeline from the Alaska North Slope to a deepwater terminal in Southcentra l Alaska is currently being evaluated by the State of Alaska and a consortium of companies consisting of Exxon Mobil, ConocoPhillips, BP, and TransCanada. Commenter s added that this potential project is in the very early stages of evaluation. Commenter s st ated that the primary purpose of this project would be the export of liquefied natural gas (LNG) to markets outside of Alaska. Commenter s added that a secondary benefit of the project would be that natural gas would become available to Interior Alaska.

Com menter s stated that whether a natural gas pipeline will be constructed and the date that natural gas might become available in Interior Alaska cannot be determined at this time. Commenter s added that past attempts to construct a pipeline have failed. Comme nter s concluded49 that as a result, the state of Alaska cannot rely on natural gas

- fired electrical generation in Interior Alaska to replace any of the coal fired

- generation of the Healy Power Plant.

Comment 14: AK

- Existing infrastructure cannot support transmission of electricity and reliance on transmission would increase the reliability risk

. Response 14: The EPA is not including emission performance goals for Alaska in this final rule. See section VII .F. of the preamble for discussion of this issue.

T he following are summaries of the specific public comments under this comment:

Commenter s stated that transmission of additional power from Southcentral Alaska is not a viable option. Commenter s added that adequate natural gas supplies may become available from the Cook Inlet gas fields to enable additional natural

- gas power generation in Southcentral for potential transmission to Interior. Commenter s added that however, the existing transmission infrastructure between Southcentral Alaska and Interior Alask a cannot support the transmission of electricity from any additional Southcentral generation that might be intended to displace Interior coal

- fired generation. Commenter s stated that the estimated cost to upgrade the transmission infrastructure from Anchor age to Fairbanks is approximately $500,000,000. Commenter s added that the total estimated cost to fully upgrade the entire Railbelt Grid to enable additional NGCC transmission from Southcentral and for unencumbered utilization of existing and possible new RE generation is approximately $1,000,000,000. Commenter s stated that because of the isolated nature of Interior Alaska, GVEA customers are already paying for electricity at rates that are much higher than Southcentral Alaska and most of the lower 48 state s. Commenter s concluded that the limited GVEA customer base simply cannot afford the added cost of the required transmission infrastructure.

Commenter s added that independent of cost, reliance on transmission of electrical power from outside of Interior Al aska introduces increased reliability risk to GVEA customers due the extreme climatic and geographical conditions previously described. Commenter s concluded that because of the need to protect the health and safety of GVEA customers, primarily relying on

e lectrical transmission from Southcentral Alaska is not an acceptable alternative to having electrical generation in Interior Alaska.

Comment 15: AK

- Reliance on transmission from outside the interior increases reliability risk

Response 15: The EPA is no t including emission performance goals for Alaska in this final rule. See section VII .F. of the preamble for discussion of this issue.

The following are summaries of the specific public comments under this comment:

Commenter s stated that reliance on transm ission of electrical power from outside of the Interior introduces increased reliability risk to GVEA members. Commenter s added that GVEA must have the ability to supply electricity to the Interior 365 days a year, particularly during the winter50 to protect against the loss of life and destruction of property under extreme climate conditions and deliver the power despite system upsets and malfunctions. Commenter s added that any electrical transmission line from Southcentral Alaska to the Interior must naviga te the mountains of the Alaska Range and hundreds of miles of rugged, remote areas. Commenter s added that repair and maintenance of this remote line is challenging at best. Commenter s stated that given the climate and rugged territory, particularly in the winter months, it is not prudent or acceptable for GVEA members to rely primarily or exclusively on electrical transmission from Southcentral Alaska.

Commenter s added that the Interior lacks economically viable renewable resources. Commenter s stated that G VEA has already developed one of the more practicable RE resources, installing approximately 25 MW of wind generation near Eva Creek. Commenter s stated that GVEA is currently evaluating the Eva Creek windpower units to determine whether the equipment will withstand sub

- arctic climate conditions and produce power at predicted rates. Commenter s stated that even if the wind

- power units are successful, these units and other renewable resources cannot displace Units 1 and 2 at the Healy Power Plant as essential baseload units.

Comment 16: AK

- HRI of 6% cannot be achieved at the Healy Power Plant; Healy Unit 2 was ignored in the baseline and goal calculations; equipment upgrades were based on magnitude of larger units

. Response 16: The EPA is not including emis sion performance goals for Alaska in this final rule. See section VII .F. of the preamble for discussion of this issue.

The following are summaries of the specific public comments under this comment:

Commenter s argued that heat rate improvements of six pe rcent cannot be achieved at the Healy Power Plant. The commenter s also argued that Healy Unit 2 was ignored in the baseline and goal calculations, and that EPA's analysis of equipment upgrades relied on units that were a magnitude larger than the Healy uni ts. The commenter s also argued application of the rule would result in extraordinary costs, impair reliability, and aggravate air quality concerns in the Fairbanks area.

Commenter s stated the first BSER measure proposed by EPA is a six percent heat rate im provement (HRI) at coal

- fired steam generating units. Commenter s stated EPA evaluated two general approaches to improving heat rates: (1 ) implementing "best practices" in operations and maintenance and (2) equipment upgrades. Commenter s stated applying thi s building block to Alaska, EPA assumed a six percent reduction in the CO2 emission rate at Healy Unit 1

- from 2,852 to 2,681lb/MWh. Commenter s stated this element of the goal calculation is not reasonable as applied to Alaska.

Commenter s stated first, as EPA recognizes, heat rate improvements may be accomplished through the use of "best practices" or equipment upgrades only to the extent those measures have not already been implemented at a facility. Commenter s added however, although EPA applies this ele ment to Healy Unit 1 in the goal calculation, the agency does not provide information to51 support a determination that "best practices" or equipment upgrades are available to that EGU. Commenter s added worse, the baseline and goal calculations ignore Healy Unit 2 altogether.

Commenter s stated second, EPA's analysis of equipment upgrades relies on Sargent & Lundy (2009), a study that evaluated HRI at coal units between 200 MW and 900MW. Commenter s stated the units evaluated in that report are an order of magn itude larger than the 27 and 52.5MW Healy units. Commenter s added without closer study, EPA cannot reasonably conclude that the same equipment upgrades evaluated for those large units are technically feasible for the Healy units. Commenter s stated even if some of the equipment upgrades are technically feasible, EPA failed to support a conclusion that those upgrades otherwise qualify as BSER for small coal EGUs.

Commenter s stated the only information currently available reveals that a six percent HRI cannot be achieved by the Healy units. Commenter s stated GVEA reports that a number of the HRI measures recommended by EPA have already been implemented at the coal plant and some are not available to the Healy units. Commenter s stated GVEA's initial evaluation s uggested that heat rate improvements of 2.11% and 2.15% might be achievable at Healy Unit 1 and Unit 2, respectively. Commenter s stated although, given variability in operating conditions, application of these measures would not necessarily result in the f orecasted improvement as compared to the 2012 baseline.

Commenter s stated installation of pollution control technologies, as required by a consent decree with EPA will reverse these gains. Commenter s expounded the consent decree requires GVEA to install (1 ) selective catalytic reduction (SCR) equipment at Unit 2; selective non

- catalytic reduction (SNCR) controls at Unit 1; and (3) SCR controls at Unit 1. Commenter s stated GVEA anticipates that the SNCR equipment will degrade the heat rate of Healy Unit I by about 0.1% and that the installation of SCR equipment will result in a 2.87% degradation of the heat rate at each unit. Commenter s concluded thus, there are no net heat rate improvements possible in Alaska and application of this measure to determine Alas ka's goal is unreasonable.

Comment 17 : AK

- Healy Unit 2 should be an affected EGU and included in baseline data for Alaska; GVEA provides emission rate values

Response 17: The EPA is not including emission performance goals for Alaska in this final rul e. See section VII .F. of the preamble for discussion of this issue.

The following are summaries of the specific public comments under this comment:

Commenter s stated that Healy Unit 2 formerly known as the Healy Clean Coal Project was either inadvertently omitted or impermissibly excluded from the Alaska CO2 Performance Goals calculation. Commenter s expounded that Healy Unit 2, constructed in 1997 as a Department of Energy Demonstration Project, is a coal

- fired steam generating unit, and meets all of the c riteria in proposed 40 CFR 60.5795(b)(1) for classification as an affected EGU. Commenter s added that Healy Unit 2 was permitted and has maintained its operating permits since 1993, and is currently52 permitted under a Title V federal operating permit. Comme nter s stated that emissions from Healy Unit 2 have been included in the State of Alaska emissions inventory since the unit began operations in 1998

- 993 and throughout the warm lay

- up period beginning in 2000. Commenter s stated that Healy Unit 2 was maintai ned in warm lay

- up status at expenditures that exceeded $20 million while contract disputes between the owner and operator, as well as, regulatory issues were being resolved. Commenter s added that in November 2012, GVEA, in good faith, entered into a Conse nt Decree with EPA and agreed to meet select emission limits and install state

- of

the

- art additional emission control equipment on Healy Unit 1 and Healy Unit 2 to bring Healy Unit 2 from warm layup into full service. Commenter s stated that in the Consent Decree, EPA contemplated and authorized the future operation of Healy Unit 2 pursuant to the terms of the Consent Decree, resolving EPA objections to the GVEA and the Alaska Industrial Development and Export Agency's ( AIDEA) intent to restart Unit 2 and op erate the Unit for its full service life. Commenter s stated that the Consent Decree does not contemplate the retirement of Healy Unit 2. Commenter s added that the Consent Decrees does contemplate EPA's ability to rely on the enforceable conditions in the C onsent Decree in the future concerning operations of Healy Unit 2, including the Alaska Regional Haze SIP. Commenter s concluded that EPA contemplated the operation of Healy Unit 2 well into the future.

Commenter s stated that GVEA is currently investing app roximately $187,000,000, excluding capitalized interest, in Healy Unit 1 and Healy Unit 2 based on successfully executing the Consent Decree with EPA that resolved uncertainties about the future operation of these two small steam generating units. Commente r s stated that a significant portion of this investment is for installation of mandated air pollutant emission controls as agreed to with EPA under the executed Consent Decree. Commenter s stated that this investment will enable Healy Unit 2 to operate at a ir pollutant emission rates lower than originally designed and in compliance with the more stringent rates set forth in the Consent Decree. Commenter s added that Healy Unit 2 will be operational in a matter of months.

Commenter s stated that consistent with the intent to return Healy Unit 2 to full service as agreed in good faith with EPA in the Consent Decree, and the fact that Healy Unit 2 has consistently been included in the Alaska SIP, GVEA asserts that Healy Unit 2 should be included in the Alaska CO2 Performance Goals calculations consistent with other EPA decisions in calculating CO2 Performance Goals. Commenter s stated that EPA has added estimates for other EGUs not yet in operation in 2012 that are affected EGUs for purposes of the emission guidelin e, "including nuclear facilities under construction." Commenter s stated that the proposed rule, therefore, inadvertently or impermissibly omits Healy Unit 2 when compiling baseline data and generating the Alaska CO2 Performance Goals.

Commenter s stated tha t if Healy Unit 2 is not included in the Alaska Performance Goals, the goals will simply be unachievable and Healy Unit 2 will not be able to operate in the manner contemplated by the parties and relied upon by GVEA in the executed Consent Decree. Commente r s added that Healy Unit 2 CO2 emissions do not have to be based on 2012 actual electrical generation and actual CO2 emissions. Commenter s stated that instead, the Healy Unit 2 electrical generation and CO2 emissions for the purpose of calculating Performa nce Goals should be calculated assuming that Healy Unit 2 was operating as intended. Commenter s added that given that Healy Unit 2 was and is intended to be a base load unit with an estimated capacity53 factor of 85 percent, a reasonable basis for the calcul ations is that Healy Unit 2 would have operated 7,446 hours in 2012.

Commenter s summarized that Healy Unit 2 is expected to have a CO2 emission rate of approximately 139,800 pounds per hour (lb/hr) at maximum capacity and is expected to have a net output o f 52.5 MW after the installation of selective catalytic reduction for NOx emission control. Commenter s stated that the total net MWh would have been approximately 390,915 MWh. Commenter s stated that based on these specifications, the 2012 Healy Unit 2 CO2 emission rate would be approximately 2,666 pounds per net megawatt

- hour (lb/net MWh) and the total Healy Unit 2 CO2 emissions would be approximately 521 ,032 short tons in 2012. Commenter s concluded that EPA should use these values for correcting the Alask a CO2 Performance Goals.

Comment 18: AK

- Affected EGU inventory is inaccurate; provided corrections

Response 18: The EPA is not including emission performance goals for Alaska in this final rule. See section VII .F. of the preamble for discussion of this issue.

The following are summaries of the specific public comments under this comment:

Commenter s stated that t he affected EGU inventory that was used to calculate the Alaska rate

based carbon dioxide (CO2) emission performance goals is inaccurate and p rovided corrections.

Commenter s stated that corrections should be made prior to calculating the final Alaska performance goals C ommenter s stated that this goal recalculation is incomplete and must be updated by EPA to incorporate additional information.

C ommenter s stated that Unit 8 at the Chugach Electric Association (Chugach Electric) Beluga Plant should not be listed as a separate affected EGU. Commenter s expounded: Unit 8 is a non

fired heat recovery steam generator (HRSG) associated with the natural g as

- fired stationary combustion turbines that the U.S. Environmental Protection Agency (EPA) has designated Beluga Units 6 and 7. Commenter s explained that in other words, Beluga Units 6 and 7 are combined

- cycle turbines that share the Unit 8 HRSG. Commente r s state d that the power generated by Unit 8 should be included with the power generated by Beluga Units 6 and 7 to accurately represent the combined

- cycle turbine electrical generation of these EGUs.

Commenter s stated that Emission Unit 2 at the Golden V alley Electric Association (GVEA) Healy Plant was existing in 2012, but was not included in EPA affected EGU inventory; Healy Unit 2 and its calculated 2012 emissions should be added to the affected EGU inventory and Alaska CO2 Performance Goal.

Commenter s stated that Unit 6 at the Anchorage Municipal Light & Power (ML&P) George M. Sullivan Plant 2 is a non

- fired HRSG associated with stationary combustion turbines that EPA has designated Units 5 and 7. Commenter s added that in other words, Plant 2 Units 5 and 7 are combined

- cycle turbines that in 2012 shared the Unit 6 HRSG; the power generated by Unit 6 should be included with the power generated by Plant 2 Units 5 and 7 to accurately represent the54 combined

- cycle turbine electrical generation of these EGUs . Commenter s noted that Unit 5 was converted to a simple

- cycle turbine in 2013, but was operated as a combined

- cycle turbine in 2012.

Commenter s stated that two additional natural gas

- fired combined

- cycle combustion turbines were under construction at ML&P Plant 2 in 2013, but were not included in the EPA "Under Construction" Calculation; these two units should be added to the affected EGU inventory.

Commenter s stated that the Chugach Electric South

- central Power Project Unit 4 (EPA EU ID 4) has not yet co mmenced construction and so should be eliminated from the affected EGU inventory.

Commenters stated that for some EGUs, the reported CO2 emissions that EPA used in the Alaska CO2 Performance Goals calculations were based on 40 CFR 98 Subpart C calculation methods. Commenters added that in other cases, EPA used the U.S. Energy Information Administration (EIA) 923 and 861 reports to calculate CO2 emissions for each unit. Commenters explained that the CO2 emissions that were calculated based on data contained in the EIA reports are frequently different than the CO2 emissions reported under 40 CFR 98 because of different calculation methodologies and because the emissions are calculated for different purposes.

Commenters summarized that EPA should only use the established CO2 emission factors from 40 CFR 98 to ensure goal calculation and enforcement consistency. Commenters stated that for example, CO2 emissions determined using continuous emission monitoring systems (CEMS) can be different than CO2 emissions det ermined using 40 CFR 98; the difference could lead to inadvertent reporting inconsistencies and false indications that compliance with the plan requirements is not being attained. Commenters concluded that consistently using CO2 emission factors from 40 CF R 98 for all purposes would eliminate this risk.

Commenters stated that GVEA Healy Unit 2 was constructed in 1997 as a Department of Energy Demonstration Project, is a coal

- fired steam generating unit, and meets all of the criteria in proposed 40 CFR 60.5 795(b)(1) for classification as an affected EGU. Commenters stated that Healy Unit 2 was operated in 1998 and 1999, but has not generated electricity since then due to disagreement amongst the parties, including regulatory agencies. Commenters added that i n November 2012, GVEA entered into a Consent Decree with EPA in good faith and agreed to meet select emission limits and install additional emission control equipment on Healy Unit 1 and Healy Unit 2 to enable returning Healy Unit 2 to service. Commenters stated that GVEA is currently investing approximately $187,000,000, excluding capitalized interest, in Healy Unit 1 and Healy Unit 2 based on successfully executing this Consent Decree with EPA that resolved uncertainties about the future operation of thes e two steam generating units; this investment will enable Healy 2 to operate at air pollutant emission rates equal to or lower than the emission rates that had originally been expected. Commenters concluded that consistent with the intent to return Healy U nit 2 to service as agreed in good faith with EPA in the Consent Decree, APA believes that Healy Unit 2 should be included in the Alaska Performance Goals calculations. Commenters added that if Unit 2 is not included in the Alaska Performance Goals, the go al will be too low and the Unit will not be able to operate as expected which is counter to that agreed upon in the EPA

- endorsed Consent Decree. Commenters stated that including Healy Unit 2 in the performance goals calculations cannot reasonably be based on 2012 actual electrical generation55 and actual CO2 emissions because the unit was not operating in 2012. Commenters stated that instead, the Healy Unit 2 electrical generation and CO2 emissions for the purpose of calculating performance goals should be ca lculated assuming that Healy Unit 2 was operating as intended.

Comment 19: AK

- Alaska's goals are based on unrealistic assumptions, are unclear, and are based on an inaccurate EGU inventory

Response 19: The EPA is not including emission performance goal s for Alaska in this final rule. See section VII .F. of the preamble for discussion of this issue.

The following are summaries of the specific public comments under this comment:

Commenter s stated that i ncomplete, corrected calculations have been prepared b y the EPA. Commenter s stated that these updated calculations are incomplete because EPA did not provide adequate information to determine the basis for several calculation steps. Commenter s added that even so, these incomplete, corrected calculations demon strate that the recalculated interim CO2 performance goal for Alaska should be no less than 1,261 pounds of CO2 per net megawatt

- hour (lb CO2/net MWh) compared to the proposed EPA interim goal of 1,097 lb CO2/ net MWh. Commenter s stated that the same incom plete, corrected calculations demonstrate that the final CO2 performance goal for Alaska should be no less than 1,191 lb CO2/net MWh compared to the proposed EPA final goal of 1,003 lb CO2/net MWh. Commenter s concluded that the completely corrected calcula tions will likely result in higher goals.

Commenter s stated that the corrections that were made and the reasons that EPA must update the calculations before identifying interim and final Alaska CO2 Performance Goals are summarized below.

• Step 2

- Building B lock 1: Commenter s stated that the APA calculations use a more realistic heat rate improvement of one percent for the two Healy coal

- fired EGUs, as opposed to the six percent that EPA assumes.

• Step 3a

- Building Block 2: Commenter s stated that both the APA and EPA calculations assume that electricity generated by natural gas

- fired combined

- cycle combustion turbines will be redispatched to offset generation from existing coal

fired EGUs. Commenter s added that the reality today is that the existing transmissio n capacity between Southcentral Alaska and Interior Alaska is restricted, so limited opportunity exists to offset the generation from coal

- fired EGUs. Commenter s stated that the APA calculations conservatively retain the redispatched generation, but EPA sh ould carefully examine whether redispatch is a viable option in Alaska before recalculating the goals and promulgating a final rule.

• Step 4b

- Building Block 3: Commenter s stated that EPA applies a renewable electricity growth factor of 11.426 percent to ea ch year between 2020 and 2029. Commenter s added that this growth rate is based upon data EPA complied for56 2002 through 2012, but EPA did not provide the data or the calculations that were used to determine the 11.426 percent factor. Commenter s stated that this growth factor is too high, but cannot further identify the reason the factor is high without reviewing the EPA calculations. Commenter s stated that the updated but incomplete APA goal calculations use the EPA growth factor despite the lack of technica l justification for the factor. Commenter s added that EPA should reexamine this growth factor to determine if the factor is realistic and should share the results of this reexamination with the public before recalculating the goals and promulgating a final rule.

• Step 5

- Building Block 4: Commenter s stated that EPA provided no support for the demand side energy efficiency potential for the years 2020 through 2029. Commenter s stated, Commenters do not believe that significant reductions in demand are availabl e in Alaska through energy efficiency. Commenter s added that the updated but incomplete APA goal calculations do not include a demand side energy efficiency factor for this reason. Commenter s stated that EPA should reexamine the energy efficiency factors t hat the agency used to determine if the factors are realistic and should share the results of this reexamination with the public before recalculating the goals and promulgating a final rule.

Commenter s added that GVEA is a member of the APA and endorses th e APA comments addressing the proposed Subpart UUUU rule.

Commenter s said that, significant changes in Alaska's generation mix would be required to achieve the assigned emission rate. Commenter s said that Alaska's compliance options would be very limited i ncluding the premature retirement of at least one coal plant. Commenter s said this shutdown could cause an unreasonable expense to ratepayers. Commenter s said EPA's goal also assumes Alaska can mandate consumer energy efficiency practices with the impact of avoiding 744 GWh of generation (almost a quarter of the total generation from "affected EGUs" in 2012 and perhaps a third of "affected EGU" generation in 2030). Commenter s said the small population and limited electric utility infrastructure render the EPA's hypothetical compliance strategies impossible to implement at a cost that provides affordable and reliable essential electric utility service to Alaska ratepayers.

Comment 20: AK

- BB3 RE

Response 20: The EPA is not including emission performance g oals for Alaska in this final rule. See section VII .F. of the preamble for discussion of this issue.

The following are summaries of the specific public comments under this comment:

Commenter s stated that additional production of significant electricity fro m renewable energy sources is not a likely or realistic option. Commenter s stated that approximately 140,000 MWh of non

- firm renewable energy has already been incorporated into the GVEA generation portfolio. Commenter s stated that incorporating additional generation from renewable energy sources is57 theoretically possible depending on type, size, and location, but integration and interconnect costs may be completely uneconomical. Commenter s added that the transmission grid location is limited, so the need fo r additional infrastructure is generally considered a precursor to further renewable energy development. Commenter s stated that given this situation and the limited population in the GVEA service area, the Alaska Annual RE Growth Factor should be assumed
t o be zero. Commenter s stated that reliability is required and paramount due to the extreme Alaska climatic conditions. Commenter s concluded that reliability cannot be sacrificed in an attempt to meet the State's renewable energy goal.

Commenter s stated the Alaska Annual RE Growth Factor was calculated differently from the factor that was calculated for the Lower 48; for the Lower 48, EPA determined the amount of RE generation that is necessary for each region to reach the assigned target. C ommenter s said us ing that value, EPA determined a constant RE generation growth rate necessary to achieve that goal if applied from 2017 through 2029. C ommenter s said for Alaska, EPA determined the difference in the RE generation between 2002 and 2012; the E PA then assumed that this RE generation growth rate could be sustained from 2017 through 2029. C ommenter s said this assumption is likely incorrect because EPA has no technical basis for assuming that RE generation growth will continue; EPA should assume no growth in RE g eneration unless EPA can identify RE generation projects that will be constructed or specific requirements that will lead to the construction of RE generation.

Commenter s stated all of Alaska's affected EGUs are in a specific interconnected region, the Ra ilbelt, yet EPA used statewide RE generation as a factor in calculating the Alaska CO2 Performance Goals. C ommenter s said Alaska has numerous RE generation projects in remote communities that are not connected to the affected EGU electrical grid; this appr oach results in the Alaska CO2 Performance Goals being artificially low. C ommenter s said the calculation should be revised to only include Railbelt region RE projects; in addition, in a small interconnected system, like the Railbelt, wind regulation is a c hallenge and EPA cannot assume more projects can be added.

Comment 21 : AZ

- goals: provide AZ with no flexibility and are unworkable; will be devastating; unequal and disproportionate burden on AZ

Response 21: In this final CPP, the EPA has switched to a regional treatment o f building blocks which result in a different state goal for Arizona. The regionalization approach to building block two in particular means that the reduction potential from the Arizona NGCC fleet is assessed regionally instead of being focused in state which seemed to be the root of Arizona’s concern. EPA has also revisited the deployment path of its building blocks and the differential between Arizona’s interim and final goal provides more flexibility for a glidepath than the int erim and final rates for the state at proposal. EPA analysis does not suggest that the coal fleet operates in a peaking fashion when complying with the final CPP BSER. See section s VI and VII of the final rule preamble of the CPP for the EPA’s response t o this comment and the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP. Also, see the EPA ’s Regulatory Impact Analysis for the Clean Power Plan Final Rule,58 EPA

- 452/R

- 15

- 003 ( RIA ) analysis and power sector modeling for an indication of expected system

- wide and regional impacts.

The following are summaries of the specific public comments under this comment:

Commenter s said that the EPA's interim and final goals provide Arizona with no flexibility and

are unw orkable. Commenter s said that Arizona is left without an effective way to use flexibility between the building blocks to achieve the proposed Arizona goals, in particular that witching from coal to natural gas by 2020 is the only building block available t o Arizona to meet EPA's proposed goal

.
Commenter s stated that the Arizona DEQ analyzed increasing RE and EE standards in the state to allow for the continued operation of a portion of the coal

- fired fleet in Arizona and, in fact, these actions have the opp osite effect. Commenter s stated that in the ADEQ comments to EPA, the State postulated various scenarios of increasing the incremental contribution from RE and EE so as to reduce the amount of re

- dispatch from coal to NGCC in order to preserve some coal

fi red generation in the state. Commenter s stated that when ADEQ performed this analysis they discovered the more Arizona relies on BB3 and BB4 to achieve compliance with the final goal of 702 lbs CO2/MWh, the farther it gets from compliance with the interim goal (scenarios 2

- 4). Commenter s stated that conversely, if Arizona designs its program to comply with the interim goal, it ends up with a final rate that is far lower than necessary to comply with the final standard and ends up preserving a much smaller p ortion of its existing coal

- fired generation resources. Commenter s stated that b ecause of all the technical issues associated with the re

- dispatch of coal

- fired generation to NGCC units by 2020, Arizona is faced with insurmountable challenges in meeting th e proposed interim goals.

Commenter s stated that EPA also suggested that Arizona's coal

- fired units could be operated as peaking plants to cover the peak energy demand during the summer months. Commenter s determined that while such an option may be availab le at facilities that have a variety of EGUs that are co

- located and can combust different fuels, the majority of the generating stations with coal

- fired EGUs in Arizona only have coal

- fired units. Commenter s stated that therefore, operating the Arizona co al

- fired EGUs only during the summer months is unrealistic from an economic perspective; it is not economically justified to keep a full operating complement on site for only several months of plant operation during the year.

Commenter s said that while the EPA's Proposed Carbon Rule gives some states considerable flexibility to meet their goals, this is not true for Arizona. Commenter s said this lack of flexibility would result in closure of all coal plants in Arizona by 2020, a goal that is simply impossib le to meet while maintaining the reliability of the electric system.

Commenter s said that Arizona has no flexibility to shift from one building block to another to meet its rate

- based goal under the program as proposed. Commenter s said that if even small

a mounts of coal generation are preserved post 2020 to serve summer peak loads, the interim goal cannot be met, and this is true even if Arizona substantially increases reliance on Building Blocks 3 and/or 4 above the levels already assumed by the EPA in set ting Arizona's goal. Commenter s stated that if no coal generation remains in 2020, using Building Block 1 will obviously have no effect on Arizona's rate (and it would not in any event). Commenter s said59 further, Arizona cannot increase reliance on Building Block 2 because the interim goal effectively requires the maximum redispatch possible.

Commenter s indicated that the interim and final goals proposed for Arizona will be devastating

.
Commenter s said that the EPA's calculation of interim and final goals is based on the premise that all existing coal

- fired EGUs, including Apache Station's ST2 and ST3, are redispatched to NGCC, and that Apache Station's existing natural

- gas fired steam unit, ST1, is redispatched to NGCC. Commenter s indicated that AEPCO has no NGCC generating capacity and redispatch of ST2, ST3 and ST1 reduces Apache Generating Station's capacity from net installed 555 MW to 135 MW. Commenter s indicated this decrease in generating capacity would be devastating.

Commenter s stated that any belief that Arizona would be able to meet the proposed carbon emission goals without a large re

- dispatch of coal

- fired generation to NGCCs is simply credulous. Commenter s stated that the re

- dispatch of all of Arizona's coal

- fired generation to NGCC units is frau ght with insurmountable technical difficulties, especially within the interim period. Commenter s stated that even if such an outcome could eventually be achieved, the result leaves the state's electric energy supply system vulnerable due to a diminished fu el mix and will substantially increase energy costs to Arizona customers due to having to construct the necessary supporting infrastructure. Commenter s stated that technical issues include the inability to meet load demands during summer peak months, overl oading of the electrical transmission system, and the supply of natural gas necessary to reliably operate the NGCCs (impacts the electrical grid reliability and energy cost). Commenter s stated that the most likely outcome is that the state's utilities will be left with the difficult decision of whether to jeopardize electric reliability in Arizona or risk noncompliance with the proposed carbon emission rate reduction goals.

Commenter s argued the proposed rule is inequitable in its distribution of emission r eduction targets, and the goal is not achievable for Arizona. Commenter s stated there are serious flaws in the calculations and assumptions made for the State of Arizona. Commenter s added the proposal is particularly egregious in its inequitable distributi on of emission reduction targets. Commenter s stated the target for Arizona is 52 percent by 2030, which is the second most stringent target in the nation. Commenter s stated further, the interim goal will require 90 percent of that reduction target to be me t by 2020. Commenter s stated these goals are simply not achievable, particularly given the limited resources available to the rural cooperatives in my district. Commenter s encourage d EPA to carefully review the comment letters written by the state utilitie s. Commenter s concluded they will highlight the infrastructure limitations, and the imprudence of relying almost exclusively on one energy source.

Commenter s stated Arizona's compliance goals illustrate the logical shortcomings in EPA's formulation of com pliance targets for states. C ommenter s said Arizona has one of the youngest coal fleets in the United States, currently, the sixth youngest out of all the states; the blanket assumption that Arizona could attain the same degree of heat rate improvement as the older, less efficient plants in other states is clearly untenable. C ommenter s said Arizona has the largest and one of the newest and most efficient nuclear generating facilities in the United States; EPA's failure to consider the particulars of Arizona 's nuclear fleet improperly overlooks the significance of this measure as an attainable means for compliance. C ommenter s said EPA made no evaluation about how the natural gas facilities in Arizona are used to meet existing loads or the60 seasonal nature of A rizona's loads; EPA failed to consider whether there is access to sufficient gas transportation to operate all facilities to the degree EPA modeled for purposes of establishing the compliance targets, or whether Arizona utilities even have the legal right to use the power generated by all of the facilities considered. Commenters said Arizona already has one of the lowest per capita rates of carbon emission ; Arizona also has a quickly growing population. Commenters said b y contrast, many states with less str ingent goals have older coal generation, declining populations and consequently higher per capita generation of carbon emissions. Commenters said p lainly, Arizona is contributing significantly less GHG emissions than many other states ; u nder such circumsta nces, placing more burdensome compliance targets on Arizona is illogical, unreasonable, arbitrary and capricious.

Commenter s asked why did the EPA impose such an aggressive interim goal on Arizona; has the agency considered alternative approaches that woul d be less burdensome on the economy and the electric system in Arizona and other states.

Commenter s asked will the EPA adjust the rule to avoid the localized impacts on Arizona's communities, particularly in rural Arizona.

Commenter s stated an 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 implica tions for Arizona customers. C ommenter s said the CPP is projected to increase fuel and purchased power costs by 40% and generation capital expenditures by 30% when compared to more reasonable alternatives; major conclusions are:

• The interim targets result ing from EPA's building blocks are unreasonable, are inequitable for Arizona, and cannot be achieved without major reliability

concerns.

• The infrastructure needs and costs associated with implementing the Clean Power Plan as it currently stands are very s ignificant over a relatively brief period of time.

• Alternative interim and final goals that fully consider the remaining useful life of existing plants would achieve significant carbon reductions without jeopardizing grid reliability and result in a lower cost to ratepayers.
Commenters stated, it is not clear that even switching to NGCC will help AEPCO and similarly situated cooperatives and small utilities to meet the goal. Commenters said, EPA's goal of 702 pounds per megawatt hour for Arizona is well b elow the carbon intensity that AEPCO can achieve at its units due to their elevation and design even with efficiency improvements. Commenters said, it is also not clear that AEPCO can purchase any existing units that could achieve this rate. Commenters sai d, AEPCO is thus forced to rely on energy efficiency and renewable energy. Commenters said, unfortunately, under Arizona utility structure AEPCO does not participate directly in those programs, its members do. Commenters said, under EPA's proposal it is no t clear whether AEPCO can get credit for that work. Commenters concluded, EPA should reevaluate the building block assumptions using the target reductions for Arizona.61 Comment 22 : AZ

- Unequal and dis proportionate burden on Arizona

Response 22: In this fi nal CPP, the EPA has switched to a regional treatment of building blocks which results in a different state goal for Arizona

. See section VII of the final rule preamble of the CPP for the EPA’s response to this comment and the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenters stated that EPA's Approach Places an unequal and disproportionate burden on Arizona.

Commente r s made the point that Arizona must achieve disproportionately larger emission reduction goals than a vast majority of other states across the country and a much larger reductions than all the states neighboring Arizona mostly because the Proposed Rule ass umes Arizona has a relatively large amount of underutilized existing NGCC capacity. Commenter s stated that based on that assumption, EPA suggests that Arizona should simply displace all coal

fired generation irrespective of technical limitations and econom ic dispatch concerns. Commenter s stated that in contrast, if a state had not already made efforts to diversify its generation portfolio to take advantage of zero or lower carbon

- emitting generation sources such as renewable and NGCC, then that state's redu ction requirement to lower the nation's carbon footprint would be inexplicably small. Commenter s concluded that EPA's approach to setting the states' carbon emission rate goals penalizes Arizona for a progressive, diverse generation mix.

Commenter s stated that the proposed emissions reduction of 52% by 2030 is the second most stringent in the country and considerably higher than the other states in the southwestern region. Commenter s added that this preposterous target will require the state to meet approxi mately 90% of the goal by 2020. Commenter s concluded that with these standards, the EPA effectively ignores Arizona's careful planning and resource stewardship over the past several decades and imposes greater restrictions and higher costs on our residents than in other states with far higher carbon emissions.

Commenter s stated that while Arizona only accounts for approximately 1.88 percent of the total CO2 emissions from generation units affected by the proposed rule, it is required to provide approximatel y 5.16 percent of the reduction by 2029.

Commenter s stated that Arizona falls in the middle of the states with respect to its carbon emissions. Commenter s stated that Arizona's ratio of percent of reduction to percent of contribution is 2.74, the highest of any state. Commenter s concluded that in Arizona's case, the proposed rule would require a 52 percent reduction in the emission rate from 2012 to 2029; this is the second largest reduction of all the states.

Commenter s argued Arizona's treatment under t he proposed rule is inequitable when compared to the rest of the nation.62 Commenter s stated EPA's proposed final goal for Arizona would require a 52% reduction in CO2 emissions intensity from the proposed program baseline year of 2012; only one state, Washi ngton, is being asked to do more. Commenter s added interestingly, Arizona and Washington are similar in that both states currently have a large percentage of carbon

- free generation. Commenter s stated yet it appears that both states, as well as others that have already made significant investment in carbon

- free resources, are penalized under EPA's proposal by being asked to do more than neighboring states with minimal carbon

- free generation.

Commenter s added Arizona's emissions reduction requirement is signi ficantly more stringent than the requirements for neighboring states; when compared to Utah, for example, Arizona's goal is nearly two times as stringent.

Commenter s stated the Proposed Rule raises several important issues for Arizona; first, the Proposed Rule would impose on Arizona greater reductions than required of most other states and does so more quickly. C ommenter s said the Proposed Rule would require a greater than 50 percent reduction below 2012 levels (1453 lbs/MWH to 702 lbs/MWH). C ommenter s sa id the technical support documents indicate that this would result in incremental costs in Arizona that are greater than all but six states, even though Arizona already has very high levels of renewable

non

- emitting nuclear and hydro generation, resulting in a very low carbon intensity for our electric system.

Commenter s stated as currently drafted, the Proposed Rule places an inequitable burden on Arizona to reduce its CO2 emissions by imposing overly stringent interim and final emission rate goals that im pact system reliability and impose an unreasonable financial burden on Arizona
customers.

Commenter s stated implications for Arizona to comply with the proposed rule are disproportionately higher than nearly any other state. C ommenter s said Arizona has one of the most severe reduction targets of all states covered under the Clean Power Plan, with a reduction below its 2012 baseline of 52%, while most states' requirements are well below 50% with some less than 20%. C ommenter s said other states like Washingto n and South Carolina also have a large percentage reduction, although the drivers are different. Commenters said Washington State has only a small amount of coal, so relatively minor generation switching measures can achieve compliance. C ommenter s said Sou th Carolina is impacted not by building block 2, as it has limited existing NGCC capacity, but rather by building block 3, due to the proposed new nuclear generation capacity in the state. C ommenter s said Arizona stands out as the state most impacted by bu ilding block 2, due to its high coal generation and significant existing NGCC capacity.

Comment 23: AZ

- The Proposed Carbon Rule Does Not Recognize The Significant Efforts Already Made And Being Made In Arizona To Reduce CO2 Emissions

Response 23: In thi s final CPP, the EPA has switched to a regional treatment of building blocks which results in a different state goal for Arizona

. See sections VI.D., VIII.B, and VIII.C. of the final rule preamble of the CPP for the EPA’s response to this comment. The ac tions listed in the63 comment that occur after 2012 will help the state move towards compliance with its BSER reduction requirements.

The following are summaries of the specific public comments under this comment:

Commenter s stated Arizona utilities are alre ady achieving significant reductions to their coal portfolios and the state's carbon emission rate as evidenced through the ACC's IRP process; an EPA enforcement overlay in areas not traditionally subject to EPA's regulatory oversight is not
necessary or a ppropriate including: solar energy, requirements for regulated utilities to produce at least 15 percent of their retail sales from renewable resources by 2025; electric energy efficiency and demand

- side management ("DSM") programs and measures; plans to re tire, convert to natural gas, or reduce ownership in coal

- fired power plants:

• Arizona Public Service Company ("APS"): Retiring Cholla Units 1, 2 and 3 (647 megawatts)

• Tucson Electric Power Company ("TEP" ): Reducing ownership in Springerville 1 by 197 meg awatts; Reducing ownership in San Juan by 170 megawatts; Converting Sundt Unit 4 from coal to natural gas (125 megawatts)

• Arizona Electric Power Cooperative, Inc. ("AEPCO"); Converting Apache ST2 from coal to natural gas (175 megawatts)

Commenter s stated while appreciative that the EPA's desire for uniformity in its proposal to reduce CO2 emissions from affected EGUs under Clean Air Act Section111 ( d), this one

- size

fits

- all approach employs a flawed methodology, seeded with false assumptions, that has re sulted in a fundamental misrepresentation of Arizona's electricity supply and delivery system. C ommenter s said Arizona utilities have developed an alternative approach that achieves a meaningful CO2 emission rate reduction for Arizona in an affordable mann er. C ommenter s said this same approach could be applied consistently across the nation without significantly affecting the EPA's stated CO2 emission reductions while simultaneously rectifying the unique inequities that would occur in Arizona under the Prop osal. C ommenter s strongly encourage d the EPA to incorporate this balanced approach in its final rule.

Comment 24: AZ

- goal revisions

Response 24: For the EPA’s response to this comment, see sections V, VI, and VII of the final preamble and the CO 2 Emiss ion Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenter s stated that if EPA retains its building block methodology, EPA must rev ise Arizona's final goal so that it is based upon realistic and accurate assumptions. Commenter s offered changes in how Arizona's final goal should be recalculated.64 Commenter s recommended the following changes: Use the maximum 2012 monthly capacity factor of 49.4 percent for Arizona as the base when re

- dispatching NGCC generation up to 70 percent capacity factor; u se the average seasonal rating of 9,626 MW for Arizona NGCC units when re

- dispatching to displace coal; u se the 1031 lbs. CO2/Net MWh for NGCC u nits as allowed in section 111(b) for new NGCC units; a llow coal units to operate through their remaining useful lives and book lives assuming a book life of 40 years, and allow for an additional 20 year life for older plants where major costs have been in curred for EPA required upgrades or retrofits. (Apache ST3, Coronado 1 & 2, Springerville 3 & 4 in service burning coal to beyond 2030); r emove the at

- risk nuclear component of Building Block 3; r educe the Building Block 1 efficiency improvement to 1 perce nt; i nclude states without RE requirements and Arizona at 7 percent in determining the regional 2020 average RE goal of 16.00 percent for the Western Region; and Reduce the EE goal to 0.6 percent per year for states that had EE goals in place in 2012.

Comm enter s stated that all of the modifications proposed by the ACC to EPA's goal calculation methodology could easily be applied to all similarly situated states. Commenter s stated that for Arizona, these changes will result in the cumulative effects on the A Z 2030 lbs CO2/MWh goal and cumulative percent reduction as follows:

• EPA Goal Calculation: 702, 52%

• Use Maximum Monthly Capacity Factor: 794, 45%

• All Prior Changes plus use of Seasonal Ratings: 846, 42%

• All Prior Changes plus use 1,031 lbs. CO2/Net MWh e missions for NGCC units: 932, 36%

• All Prior Changes plus allow coal units to operate through their remaining useful life and book life: 982, 32%

• All Prior Changes plus remove at risk Nuclear component from Building Block 3: 1,009, 31%

• All Prior Changes plus reduce efficiency improvements in Building Block 1 to 1%: 1,028, 29%

• All Prior Changes plus include states with no RE goal in the calculation of the regional average RE goal and adjust Arizona RE goal to 7%: 1,042, 28%

• All Prior Changes plus reduce EE goal to 0.6% per year for states with EE programs in place in 2012: 1,136, 22%

Commenter s provided updated combined spreadsheets from the three EPA workbooks used to calculate the state 111(d) goals in order to allow the Arizona Department of Environmen tal Quality (ADEQ) to model the effects of various assumptions on the interim (2020

- 2029) and final (2029) lbs CO2/MWh rates for affected EGUs in Arizona.65 Commenters include d the following scenarios:

Commenter s 1 scenario: EPA's goal calculation. Commenter s stated that EPA's version has been modified to add columns showing the baseline rate, alternative baseline rate and total 2029 EE savings in MWh and to link to the RE and EE calculations in the other spreadsheets, rather than just incorporating the RE an d EE values.

Commenter s 2 scenario: Commenter s stated that a rate calculation that assumes (a) 15 % RE by 2029, (b) incremental EE savings of 1.61 % per year (the 2012 savings for Arizona according to EPA) after June 2014 and (c) adjusting redispatch to co mply with the final goal of 702 lbs CO2/MWh. Commenter s stated that consistent with the proposal, existing RE is counted in the calculation, but EE savings count only if they result from actions taken after the date of proposal. Commenter s stated that this rate calculation also modifies the formula for determining NGCC redispatch by setting the post

- redispatch generation equal to 2012 capacity (column J) x post

redispatch CF (column U) x 8784. Commenter s stated that this modification allows the use of Goal Seek to set redispatch generation to the levels that will achieve a particular final or interim
rate

- based goal (columns BD and BE).

Commenter s 3 scenario: Same as 2, except 21 % RE by 2029 is assumed.

Commenter s 4 scenario: Same as 3, except 33% RE by 20 29 and incremental EE savings of 2 % per year are assumed.

Commenter s 5 scenario: Same as 4, except redispatch is adjusted to achieve the interim goal of 735 lbs CO2/MWh, rather than the final goal of 702.

Commenter s stated that for each scenario

, they s how the level of coal generation in 2020 that would be consistent with the other assumptions.

Commenter s stated that the RE spreadsheet (blue tab) includes EPA's original calculation for Arizona plus the alternative calculations used in the scenarios. Com menter s stated that each EE alternative has its own spreadsheet (green tabs). Commenter s stated that the RefTables spreadsheet provides some of the values needed by the EE calculations.

Commenter s also stated that these scenarios have been modeled solely for illustrative purposes only and do not reflect that any of the scenarios represents a cost

- effective or feasible approach to compliance.

Comment 25 : AZ

- The E PA outreach to AZ Stakeholders

Response 25 : See section II.I. of the final rule preamble of the CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:66 Commenter s stated the rule is complex and will have profound impacts on Arizona; and request ed outreach to Arizona stakeholde rs

.
Commenter s stated that almost one year in the making, the administration's proposal is extremely complex and will have profound impacts on every sector of Arizona's economy, from our utilities to our families and businesses. Commenter s concluded that o utreach to Arizona stakeholders on a rule of this magnitude is imperative.

Commenter s argued that CPP would be disastrous, and reques ted that AEPCO executives meet directly with EPA before rule is finalized

.
Commenter s stated that as written, the current p roposal will have a significant impact on the state of Arizona's rural electric cooperatives, including Arizona Electric Power Cooperative, Inc. (AEPCO). Commenter s urge d EPA to work with AEPCO to mitigate these impacts before the rule is finalized.

Commen ter s stated that under the EPA's proposed plan, Arizona was given a carbon reduction goal of almost 52 percent, one of the highest carbon reduction goals of all 50 states. Commenter s noted that it is imperative that the EPA does not take a one

- size

- fits al l approach and that rules with such far

- reaching implications take into account the unique needs of rural communities. Commenter s noted that as currently drafted, the EPA's proposed plan would be disastrous to AEPCO, its Member cooperatives, and the hundre ds of thousands of members they serve.

Commenter s stated that AEPCO has worked in good faith with the federal government in the past and already has committed to spending millions of dollars to meet environmental standards, most notably the EPA's recent re gional haze requirements. Commenter s added that given its history of compliance and its service to southern Arizona, AEPCO executives should have the opportunity to meet directly with EPA to discuss a potential solution that benefits our environment, saves jobs and allows for critical utility services to continue in rural Arizona.

Comment 26 : The EPA should exempt AZ from the CPP until compliance status for the Navajo Generating Station is known/incorporated

Response 26 : See sections IV.D , VII, . and VIII . of the final rule preamble of the CPP for the EPA’s response to this comment. EPA is finalizing source category rates and state goals for all affected EGUs in the contintenal U.S. including those on tribal lands.

The following are summaries of the spe cific public comments under this comment:

Commenter s requested, due to unresolved ownership of the Navajo Generating Station (NGS) power plant (and subsequent uncertainty of compliance scenario requirements), that EPA withdraw or delay issuing a final rule . Commenter s also requested a third party study of the issues surrounding ownership changes at the NGS, and/or exempt Arizona from complying with the final rule until the compliance scenario for NGS is known and can be incorporated into AZ's approach for c ompliance with the final rule

.67 Commenter s stated that the EPA issued a final ride effective October 7, 2014 requiring the Navajo Generating Station (NGS) power plant to reduce its nitrogen oxide emissions between 2009 and 2044. Commenter s stated that the f inal, rule outlines four possible emissions reduction compliance scenarios based on the ownership of the NOS on December 31, 2019. Commenter s stated that currently the three 750 megawatt coal

- fired generating units that comprise the NOS

are co

- owned by six separate entities; the U.S. Bureau of Reclamation (24,3 percent), Salt River Project (21.7 percent), Los Angeles Department of Water and Power (21.2 percent), Arizona Public Service (14 percent), NV Energy (11.3 percent) and 'Noon Electric Power (73 perce nt).

Commenter s stated that under the final rule, the applicable emissions reduction scenario that is enforced will depend on the outcome of ownership changes to the NGS, as well as whether NGS can increase its generation capacity (by no more than 189 mega watts). Commenter s explained that if the Navajo Nation does not purchase an ownership share in the NGS by December 31, 2019 then the most stringent emissions reduction requirements are triggered, including permanently closing unit 1 by 12/31/19. Commenter s stated that if the Navajo Nation is able to purchase an ownership share prior to the trigger date then less stringent emission reductions targets are required and coal

- fired generation may continue, however, generation capacity would have to be reduced an d nitrogen oxide limits would take effect by 2010.

Commenter s stated that it is the opinion of the Authority that the unresolved ownership situation surrounding the NGS, and therefore uncertainly as to which compliance scenario will be required, will have a material impact o n the State of Arizona's ability to comply with requirements under the proposed rule.

Comment 27 : AZ

- forced coal retirements

Response 27 : See section 5.11 of the RTC of a discussion on stranded assets as well as the Stranded Assets A nalayis MEMO from July 2015 in the Docket for this rulemaking.

The following are summaries of the specific public comments under this comment:

Commenter s asked did EPA analyze the impact of stranded costs from early retirement of coal

fired power plants on Arizona's electric rates, if so, please explain the process and results.

Commenter s stated under the literal application of the Clean Power Plan building blocks, Arizona would be required to retire all of its existing coal

- fired generation in 2020 to com ply with EPA's goals (except for tribal coal). C ommenter s said the total elimination of coal

- fired generation in Arizona required to meet the CPP interim targets would require an estimated 10 GW of new resource capacity from 2020 to 2030 to meet future res erve margins for Arizona's peak summer season, with about 2.3GW directly attributed to CPP impacts and not load growth. C ommenter s said the only coal

- fired generation included beyond 2020 is sourced from the Navajo Generation Station that is on tribal land and not subject to Arizona interim and final goals.68 Comment 28 : AZ

- BB2 Re

- dispatch issues

Response 28 : See section V.D. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 2.

The follow ing are summaries of the specific public comments under this comment:

Commenter s suggested that in applying Building Block 2, the EPA should take into account that a significant amount of the merchant owned generation located in Arizona is delivered out of
state. Commenter s indicated that this represents approximately 50 percent of the NGCC capacity in 2012 that the EPA assumed would be available for use by Arizona utilities to serve load within the state. Commenter s said the EPA should take into account t hat a significant amount of electricity generated in Arizona is exported.

Commenters stated agreement that strict application of Building Block 2 to Arizona by 2020 would not constitute BSER for four reasons: Commenters said, first, requiring the retiremen t of Arizona's entire coal fleet by 2020, which would be the effect of imposing BB2 as a stand

- alone requirement, would impose unreasonable costs in the form of stranded investments. Commenters stated, second, the EPA modeling of the cost impacts of redisp atch pursuant to BB2 appears to be flawed. Commenters said, third, the assumption of a 2020 implementation date for BB2 fails to adequately account for the need to develop the infrastructure required for redispatch. Commenters stated, finally, full imposit ion of BB2 by 2020 or even 2030 could jeopardize the reliability of Arizona's grid and would be inconsistent with the EPA's obligation to consider "energy requirements."

Commenter s stated due to the large amount of NGCC capacity in Arizona, this building block has a significant impact on its state goal computation and would require significant and sudden shifts in the state's generation mix to meet the resulting emission rate reductions. C ommenter s in fact, as applied in the EPA's building block approach, the increased use of NGCC units in the state would displace all coal fired generation in the state, in effect forcing the retirement of all of the approximately 3,316 MW of coal capacity operating as of the 2012 baseline net already planned retirements and units slated for conversion to natural gas.

Commenter s stated that the re

- dispatch to 100% NGCC is untenable and unacceptable.

Commenter s stated that according to calculations, meeting this target would require a 100% retirement of coal generation in Ariz ona and a 100% increase in reliance on natural gas generation, all by 2020. Commenter s noted that Arizona's Co

- ops' generation portfolios currently include 80% coal, 5% natural gas and less than 1% in renewables. Commenter s noted that indeed, the EPA's Pro posed Rule would require that a titanic shift in these portfolios take place in a very short period of time without taking into account the transmission and generation constraints, voltage regulation limitations, and various other factors that comprise a v ery complex system. Commenter s added that rural communities will suffer significant economic consequences from the imposition of this Proposed Rule that include job losses at coal plants, increased energy costs, reduced economic development opportunities, and higher costs for basic consumer goods.69 Commenter s added that further, the coal

- fired Apache Generating Station, which is owned by Co

- ops in Arizona, was built under the Fuel Use Act of 1978 as the only viable alternative energy source at the time. Com menter s stated that now, the same federal government that mandated its construction is now ridiculously requiring its closure. Commenter s added that this is particularly disconcerting as evidence mounts that the original notions of "global warming" and the n "climate change" impact scenarios are no longer supported by numerous climatological models.

Commenter s stated Arizona operates outside of an RTO or ISO; thus, does not have the same flexibility to easily redispatch as other states. C ommenter s said this scale of this redispatch mixed with the interim goal creates a perfect storm that could expose rate pairs to serious reliability and safety issues. C ommenter s said in a dessert Southwest summer reliable electricity is not a luxury, it is a life sustaining necessity. C ommenter s urge d the EPA to provide a substantially longer runway for states to make this coal to natural gas transition and include a phase

- in approach to redispatch.

Commenter s stated contrary to the EPA's stated objective of "maintaining an affordable, reliable, and diverse energy mix" [79 FR 34832], the Proposal would result in Arizona losing the diversification of resources it has developed over the past several decades. C ommenter s said in terms of resource diversification and an "all of th e above" energy strategy, Arizona is a model
state. C ommenter s said the EPA's Proposal would erode that benefit by concentrating Arizona's resource portfolio on natural gas. C ommenter s said given the historical swings in natural gas prices and availability , coupled with the absence of natural gas storage in Arizona, that is risky proposition; it should not be the mandate under the Proposal. C ommenter s said over the last 70 years, Arizona has developed a balanced and diversified system to deliver safe, relia ble, and affordable energy. C ommenter s said the state's utilities already are transitioning to a less carbon

intensive system of providing energy; however, the EPA is requiring the state to fundamentally reshape its system in five years. C ommenter s said su ch a drastic shift will have serious reliability and cost implications for Arizona residents.

Commenter s stated the Proposed Rule's assumed implementation of the entirety of Building Block 2 (BB2) in 2020 deprives Arizona, of any meaningful flexibility in implementing the CPP; any change in the proposed balance between BBs 1, 2, 3 or 4 results in Arizona being unable to achieve the Interim Goal, or else results in Arizona greatly overshooting the Final Goal. C ommenter s said as a result, Arizona is basicall y locked into EPA's goal setting exercise, which requires the complete redispatch of Arizona's coal

- fired EGUs to NGCC EGUs in 2020.

Comment 29: AZ

- BB3 RE

Response 29: See section V.E. of the final rule preamble of the CPP for the EPA’s response to th is comment and more information about Building Block 3.

The following are summaries of the specific public comments under this comment:70 Commenter s said that the EPA should adjust Arizona's 10% RE goal down to 7% to account for distributed generation, and i ndicated that similar adjustments may be needed for other states as well.

Commenter s said that Building Block 3 requires substitution of higher CO2 emitting fossil fuel generation with zero emitting RE generation, and the EPA developed a "best practices" scenario for RE generation. Commenter s said the best practices scenario for each state consists of an annual RE growth factor applied to the state's historical RE generation, subject to a maximum RE generation target, and the growth factors and targets we re developed separately for each of the six regions.

Commenter s said the EPA used 2012 as the base year for each of the states in the region and summed up the amounts for all states in the region to determine a regional starting level. Commenter s said the EPA's approach was to calculate a goal amount of RE for 2029 based upon the average of the 2020 RE standards for each state, excluding from the average states with no state mandated RPS goal, and then calculating the annual growth rate required to reach th e 2029 goal from the region's actual 2012 utility scale RE energy. Commenter s said the EPA then applied the annual growth rate on a state by state basis to each state's 2012 actual RE energy beginning in 2017 to determine that state's yearly total RE MWh f rom 2017 through 2029, and each state's RE MWh was limited to its 2020 RPS goal. Commenter s said that in Arizona, the total RE energy could not exceed 10 percent.

Commenter s said that with respect to the goal of 10 percent in 2020, which was used for Arizo na in calculating the average goal for the Western region, the EPA's assumptions contained an

error. Commenter s said that in the ACC's rules, of the 10 percent goal for 2020, 30 percent must come from distributed generation, which the EPA has not included in its goal calculations. Commenter s said that the EPA should adjust the goal used for Arizona down to 7 percent to account for these exclusions, and indicated that similar adjustments for other states may need to be made.

Commenter s said that one of the assumptions the EPA used in calculating Arizona's total RE energy limit was incorrect.

Commenter s said that Building Block 3 requires substitution of higher CO2 emitting fossil fuel generation with zero emitting RE generation, and the EPA developed a "best practices" scenario for RE generation. Commenter s said the best practices scenario for each state consists of an annual RE growth factor applied to the states historical RE generation, subject to a maximum RE generation target, and the growth factors and targets were developed separately for each of the six regions.

Commenter s said the EPA used 2012 as the base year for each of the states in the region and summed up the amounts for all states in the region to determine a regional starting level. Commenter s said the EPA's approach was to calculate a goal amount of RE for 2029 based upon the average of the 2020 RE standards for each state, excluding from the average states with no state mandated RPS goal, and then calculating the annual growth rate required to reach the 2029 goal from the region's actual 2012 utility scale RE energy. Commenter s said the EPA then applied the annual growth rate on a state by state basis to each state's 2012 actual RE energy71 beginning in 2017 to determine that state's yearly tot al RE MWh from 2017 through 2029, and each state's RE MWh was limited to its 2020 RPS goal. Commenter s said that in Arizona, the total RE energy could not exceed 10 percent.

Commenter s said that with respect to the goal of 10 percent in 2020, which was use d for Arizona in calculating the average goal for the Western region, the EPA's assumptions contained an error. Commenter s said that this goal, taken from the Arizona Corporation Commission's (ACC's) Renewable Energy Standard Tariff ("REST") rules, does no t apply to all load in Arizona. Commenter s said that the REST rules are only applicable to utilities under the jurisdiction of the ACC, and this only accounts for about 60 percent of the load in Arizona.

Commenter s stated EPA's proposed emissions reduction target for Arizona underestimates the emissions reductions the State can and indeed, under state law, must achieve under Building Block 3 related to renewable energy. C ommenter s said under Arizona's Renewable Energy Standard and Tariff (REST), five percen t of the electricity generated from the State's regulated utilities must come from qualifying renewables in 2015, ten percent in 2020 and fifteen percent by 2025. C ommenter s said this mandated increase in renewables generation will displace substantial amo unts of fossil fuel generation; this State

- mandated increase of renewable generation exceeds that assumed by EPA when EPA established the State's target emissions reduction amount. C ommenter s said under EPA assumptions, by 2029, 4 percent of Arizona's

annu al electricity generation should come from renewables, an increase of just 2 percent from 2012 amounts. C ommenter s said thus whereas, under EPA assumptions, increases in renewables generation accounts for just 10 percent of the emissions reductions needed for Arizona to meet its 2029 target, under Arizona's mandatory REST renewables generation can in fact account for 19 percent of the emissions reductions that will be required. C ommenter s added given the current relatively low cost of utility

- scale solar ph otovoltaic (PV) capacity and continued likely PV cost reductions, the share of generation from renewables in Arizona by 2025 could well exceed the RPS target, with a correspondingly greater contribution to emissions reductions.

Commenter s stated with respe ct to the state authority that EPA would rely upon for purposes of establishing compliance targets, EPA did not account for the fact that in Arizona's case, the REST as well as the EE Rules both have finite durations and actually terminate coincident with the interim compliance target set in the proposed rule; it would be exceedingly premature for EPA to presume that Arizona will perpetuate, much less surpass the standards set for 2020 by Arizona's rules for purposes of setting either an interim compliance target or a final target.

Commenter s stated with regard to RE, Arizona has experienced numerous challenges that may impact the ongoing development of renewable generation in the state. C ommenter s said EPA's assumption in Arizona's case that the future of renewable generation is invariably aimed toward unfettered expansion is, therefore, entirely unsupportable and is contradicted by the emerging regulatory challenges that have already been experienced; the Proposed Carbon Rule sets compliance targets on fau lty bases and should be revised to account for these issues.

Commenters stated, the state of Arizona provides a good example of the disconnect between state policy and achievable renewable energy generation. Commenters said, with high solar and geothermal potential and an active renewable energy industry, Arizona has among the most attractive markets for renewable energy generation. Commenters said, however, the state has a72 relatively modest RPS while the West region has the least ambitious renewable energ y growth factor under the Proposed Rule. Commenters said, as a result, the EPA target estimates that Arizona would generate 3,663 GWh of renewable energy by 2030, constituting just 4 percent of its 2012 generation. Commenters concluded, this puts Arizona's target for renewable energy generation in the bottom quarter of Building Block 3 targets.

Comment 30: AZ

- BB4 EE

Response 30: The EPA is not including demand

- side energy efficiency (building block four) in the final BSER determination. See section V.A. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 4.

The following are summaries of the specific public comments under this comment:

Commenter s stated under Arizona's energy efficiency s tandard, the State's investor

- owned utilities, electric cooperatives and the Salt River Project, must ramp up the efficiency of their electricity production by percentages that exceed the assumptions underlying EPA's target for the State; specifically, und er state law, Arizona utilities and cooperatives must conserve between 15.75 (Salt River Project) and 22 (investor

- owned utilities) percent of electricity sales by 2020. C ommenter s said under EPA's more lenient assumptions for demand

- side energy efficiency (Block 4), the State's utilities need only increase efficiency by 1.5 percent per year after 2017 and need only reach a maximum of 5.2 percent in 2020 and 11.4 percent in 2029; thus there is an over 10 percent point difference between the State's and EPA' s assumptions regarding energy efficiency in just 2020. C ommenter s said Arizona's ability and, indeed, obligation to "overcomply" with the proposed federal targets for energy efficiency will ease the costs and feasibility of the State's efforts to comply w ith its overall Clean Power Plan carbon emissions reduction target. C ommenter s said EPA's flexibility in allowing states to achieve reductions through "beyond the fenceline" measures by utilizing policies that are currently in place such as renewable energ y standards and energy efficiency standards is crucial to Arizona's ability to comply with federal targets in a cost

- effective manner.

Comment 31: AZ

- In setting goals, the EPA should assume that any units with remaining life extending beyond 2030 conti nue to operate
Response 31: For the EPA’s response to this comment, see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this commen t:

Commenter s said that in setting state goals, the EPA should assume any coal units whose remaining useful life and book life extends beyond 2030 continue to operate.

Commenter s said that in setting state goals, the EPA's should include any coal units who se remaining useful life and book life extends beyond 2030 as continuing to73 operating. Commenter s added that this should also include coal units that have made recent major investments for prior EPA

- mandated emissions reductions.

Comment 32: AZ

- State

- s pecific emission factors for BB2 are inconsistent with analysis conducted for new units

Response 32: See section V.D. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 2. EPA relies on t he baseline emission rate from affected sources in its quantification of BSER. Assuming a higher emission rate than currently observed would be inconsistent with the best system of emission reductions.

The following are summaries of the specific public comments under this comment:

Commenter s said that the state

- specific emission factors used to calculate the NGCC component of the baseline and target goal rates is inconsistent with EPA's analysis conducted for new units under section 111(b).

Commenter s sa id that the state

- specific emission factors used to calculate the NGCC component of the baseline and goal rates is inconsistent with "EPA's analysis regarding emission rate capabilities for new, highly efficient units under section 111(b)." Commenter s said that in all but three states, the EPA's method assumes that existing NGCCs will emit CO2
at a lower rate than the lowest standard (1,000 lbs CO2/MWh) for new NGCCs.

Commenter s calculated the impact of combining the stranded investment exclusion with an

a ssumed NGCC rate no lower than 1,000 lbs CO2/MWh.

Comment 33: AZ

- Impact of BB2 and interim goal on Arizona

Response 33: For the EPA’s response to this comment, see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP. Although EPA disagrees with the assertion that its goal setting process at proposal would have required closure of all coal facilities in Arizona, it has taken a regional approach to quantifying BSER in this final rule that it believes furt her addresses Arizona central concern about the concentrated impact of incremental NGCC generation if focused purely on replacing in

- state fossil steam generation.

The following are summaries of the specific public comments under this comment:

Commenter s s aid that because application of BB2 to Arizona results in assumed retirement of entire coal fleet by 2020, the effects on Arizona are acute, and the more that Arizona relies on BB3 and BB4 to achieve compliance with the final goal, the further it gets away from reaching the interim goal.74 Commenter s said that since application of BB2 to Arizona results in the assumed retirement of the state's entire coal fleet by 2020 and accounts for 81 percent of the reduction in the state's adjusted baseline rate, the ef fect on this state is particularly acute.

Commenter s stated the more Arizona relies on BB3 and BB4 to achieve compliance with the final goal of 702 lbs CO2/MWh, the farther it gets from compliance with the interim goal. Commenter s said conversely, if Ari zona designs its program to comply with the interim goal, it ends up with a final rate that is far lower than necessary to comply with the final standard and ends up preserving a much smaller portion of its existing coal

- fired generation

resources. Commen ter s said that based on a review of the EPA's data, many other states face this same issue, including Texas, Florida, Arkansas, North Carolina and Oklahoma.

Comment 34: AZ

- Impact of CPP on ozone non

- attainment area

Response 34: See section I.A. of the f inal rule preamble of the CPP for the EPA’s response to this comment. EPA BSER assumptions are not premised on any new NGCC build. Furthermore, EPA compliance modeling anticipates that there will be less new gas build relative to a base case scenario. S ee the Regulatory Impact Analysis.

The following are summaries of the specific public comments under this comment:

Commenter s said increased NGCC generation will add to existing ozone non

- attainment problems in Arizona.

Commenter s said that most existing NGCC generation in Arizona is located in Maricopa County, in or near the 8

- hour ozone nonattainment area. Commenter s said that increased operation of NGCC units, and the corresponding increase in NOx emissions, will make attainment of the ozone NAAQS signi ficantly more difficult, especially if, as anticipated, EPA reduces the standard to 70 ppb or lower next month.

Commenter s said it is likely that to meet the state's goal, or even a substantially higher goal, Arizona utilities would need to construct new s imple cycle natural gas or NGCC generation, which will be difficult, if not impossible, in or near ozone nonattainment areas. Commenter s said that in particular, Tucson Electric Power (TEP) is substantially dependent on coal generation at the Springerville station to serve its customers and would probably have to construct simple cycle natural gas or NGCC near its Tucson customers to compensate for retirements at Springerville. Commenter s said that Tucson has experienced 8

- hour ozone concentrations in

exces s of 70 ppb and is therefore likely to be a nonattainment area after the ozone NAAQS is revised.

Comment 35: AZ

- Targets are too strict and don't give credit for Palo Verde nuclear

Response 35: See section V.A. of the final rule preamble of the CPP for t he EPA’s response to this comment. EPA has modified it approach to determining state goals. Final rule BSER is75 premised of a regionalized building block two. For stats with large NGCC inventories like Arizona, this reduces the amount of in

- state impact of that incremental NGCC potential.

The following are summaries of the specific public comments under this comment:

Commenter s said that the target set for Arizona fails to recognize peaking requirements, fails to give credit for Palo Verde nuclear statio n, and requires states to inequitably share the burden of emissions reductions.

Commenter s said the most concerning aspect of the proposal for Arizona is the target reduction. Commenter s said that Arizona is asked to reduce carbon emissions by 52 percent, which is the second highest reduction in the nation. Commenter s said this goal fails to recognize several realities, such as the need to maintain the current capacity of the system due to Arizona's unique energy demands during certain times of the year. Co mmenter s indicated this percentage reduction also fails to give Arizona credit for the Palo Verde Generating Station, which is the largest nuclear generating facility in the United States and a zero carbon emission source. Commenter s said the EPA's method of determining each state's reduction requirement should take all sources into consideration, and also provide a fair distribution of the impact of reductions between states rather than requiring citizens of one state to inequitably shoulder the burden.

Comment 36: AZ cannot shutter coal resources and replace with natural gas. Forced early retirements would devastate rural economies

Response 36: See response 35

The following are summaries of the specific public comments under this comment:

Commenter s ar gued Arizona's coal resources cannot be shuttered and replaced by excess natural gas generation capacity. C ommenter s also argued the closures would devastate rural economies

.
Commenter s stated closure of the coal generating stations in Arizona would devast ate the economies of rural communities, where the plants support high

- wage employment and provide a critical tax base for schools and local governments. Commenter s stated rate increases resulting from the Proposed Rule would disproportionally affect rural consumers and exacerbate the growing problem of poverty in these areas. Commenter s encourage d EPA to consider the impacts this Proposed Rule would have on Arizona's rural families and businesses.

Comment 37: AZ

- The EPA wrongly assumes Arizona can transi tion the state's energy portfolio

Response 37: See section V.D. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 2. In the final rule, EPA has taken a76 regionalized approach to block two , adjusted the start of the interim period to 2022, and assumed a more gradual deployment of building block two. These changes address the concerns expressed in the comment below.

The following are summaries of the specific public comments under this comm ent:

Commenter s stated that t he EPA wrongly assumes that Arizona's reliable and affordable coal resources can be easily shuttered and replaced by "excess" natural gas generation capacity. Commenter s stated that this assumption, which is the foundation of t he Proposed Rule's goals for Arizona, demonstrates the EPA's misunderstanding of the ownership of these resources, how Arizona uses these resources and coal resources to meet summer peak load demands, the current limitations of Arizona's natural gas infras tructure and storage, and the availability of transmission resources. Commenter s added that Arizona's aggressive interim and final goals presume the state has an unfettered ability to perform a complex transition of the state's energy supply by 2020, inclu ding retiring most of the state's coal

- fired generation units and making a significant investment in new infrastructure to replace that generation. Commenter s stated that EPA's own modeling shows that this transition cannot happen, demonstrating that such a transition is not economically viable, not technically viable, or both. Commenter s encourage d EPA to reconsider this flawed assumption and correct the Proposed Rule to reflect the realities in Arizona.

Comment 38: AZ

- list of questions for the EPA; con siderations for Arizona

Response 38: See sections V.A., V.C., V.D., V.E., and VII of the final rule preamble of the CPP and the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP for the EPA’s response to thi s comment. EPA has revised its timing and approach to interim goals. At the proposal, Arizona’s interim goal was much closer to its final goal (reflecting less of a glidepath), than it is in this final CPP rule.

The following are summaries of the specifi c public comments under this comment:

Commenter s questioned the following:

Why did the EPA impose such an aggressive interim goal on Arizona? Has the agency considered alternative approaches that would be less burdensome on the economy and the electric sy stem in Arizona and other states?

Will the EPA adjust the rule to avoid the localized impacts on Arizona's communities, particularly in rural Arizona?

Did the EPA analyze the impacts of stranded costs to utilities? Did the EPA account for the remaining useful life of the current generation assets, including those with multiple decades of remaining useful life?77 Will the EPA provide its analysis of how it can direct the Arizona Corporation Commission to order merchant natural gas generators in Arizona to use these plants to serve instate load to offset the closure of coal facilities?

Will the EPA explain why it did not provide credit for the state's zero

- emission sources such as nuclear and hydroelectric generation, thus failing to recognize Arizona's lar ge proportion of existing carbon

- free resources in the goal

- setting process?

Comment 39: AZ

- NCGG generation capacity isn't available to meet peak demands

Response 39: See section V.D. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 2. In this final CPP, EPA has taken a different approach to block two . Moreover, the source category rates (and corresponding state goals) are premised off region

- wide fossil steam replacement potential in the least stringent region (the eastern U.S.). The source category rates, even though not prescriptive, still embody a significant amount of fossil steam (coal steam generation) in their rate derivation. EPA does not believe that the final source cate gory rates or state goals would require Arizona to operate its coal fleet in the manner described below.

The following are summaries of the specific public comments under this comment:

Commenter s stated that NGCC generation capacity isn't available to me et peak demands.

Commenter s described the process by which EPA concluded that NGCC can reliably achieve a 70 percent capacity factor, and described flaws in the assumptions that EPA made in its re

dispatch analysis.

Commenter s stated that when determining the potential generation capacity of the NGCCs located within Arizona, EPA used the nameplate rating of the units; although, the nameplate rating of NGCC is not the same as the net available output from the units. Commenter s explained that net available c apacity output is influenced by a number of factors, such as site elevation, humidity, ambient temperatures, turbine rating, and plant loads. Commenter s stated that in Arizona, peak electrical demand is typically proportional to peak ambient temperatures. Commenter s stated that when electrical demand is at its highest is the same time when the units' net capacities are most limited due to ambient conditions. Commenter s stated that because EPA did not take this into consideration, NGCC generation capacity as sumed by EPA is approximately 2,000 MW higher than what is actually available during peak demand periods.

Commenter s stated there are difference s between the generation capacities of NGCC units located within Arizona assumed by EPA compared to the actual a vailable capacities of these units.

Commenter s stated that EPA's second flawed assumption is the use of an annual capacity factor to determine the margin of additional energy output that can be generated by NGCC in Arizona. Commenter s explained that in do ing this, EPA must have assumed the annual capacity factor for NGCC in Arizona is a rather flat line, when in reality there is huge difference between the78 electrical demands in the summer months versus the remainder of the year. Commenter s stated that for most years, the average summer demand is more than twice the average demand for the remainder of the year.

Commenter s stated that in Arizona, the most critical period for utilization of generation capacity is the period from June through September. Comment er s used data from EPA's Clean Air Markets Division to plot the historical output from all of NGCC units located in Arizona during August 2012 to show the actual NGCC capacity that is available during summer months versus how much the EPA assumes is availa ble for re

- dispatch. Commenters stated that during hour 16 on August 7, 2012, Arizona NGCCs were generating 8,455 MW (net), and the coal and gas steam units were generating 4,098 MW (net).

Commenter s stated that in order to re

- dispatch all coal and gas st eam with NGCC generation as assumed by EPA, the NGCCs would have to be operating at 12,533 MW (8,455 MW + 4,098 MW). Commenters said maximum capacity assuming all units were fully available, however, was only 9,305 MW, a difference of 3,248 MW. Commenter s stated that only 850 MW of the 4,098 MW of required capacity would have been available for re

- dispatch in this hour, leaving 3,248 MW of demand that would still need to be met. Commenter s stated that this suggests that 2,354 MW of coal would have been need ed for reliability purposes. Commenter s stated that in fact, there was not enough combined cycle capacity available for re

- dispatch in the state of Arizona for thirty of the thirty

- one days in August, 2012.

Commenter s stated that almost 50 percent of the t ime during August 2012 the energy demand that would normally be provided by coal

- fired generation exceeds the available capacity of all of the NGCC units in Arizona. Commenter s concluded that therefore, it is not possible to re

dispatch all coal

- fired gene ration to the existing NGCC fleet and meet Arizona's load demands with NGCC during peak demand periods.

Commenter s stated that the same analysis was performed for all hours of 2012. Commenter s stated that for nearly 800 hours throughout the year, the NGCC units in Arizona could not meet the energy demand.

Commenters stated that during this period, the average capacity factor for all the NGCC units in Arizona would have to increase from 64 percent to 98 percent, which far exceeds the 70 percent cap proposed by EPA. Commenter s explained that because of the substantial increase in electrical demand in Arizona during peak demands, the annual average capacity factor of 70 percent for the NGCC units cannot be used as a basis for determining the additional capacit y the NGCC units can supply during peak demand periods.

Commenter s added that NGCC units are complex mechanical systems that malfunction even under the best of readiness and preventive maintenance programs. Commenter s stated that it is naive and unrealisti c to assume there will not be forced outages due to mechanical issues with these units from time to time. Commenter s stated that such outages will also reduce the availability of NGCC capacity, which is part of the reason why reserve margins are required.

Commenter s stated that EPA suggested that the state's utilities could just operate coal

- fired generation during peak demand periods, but this is not a viable option. Commenter s stated that79 the coal

- fired EGUs in Arizona are large, complex units. Commenters added that typically, such units are not designed and engineered to sit idle for extended periods of time; such practices would challenge reliable operation of the units. Commenter s concluded that moreover, the staffing and maintenance necessary to suppor t such a scenario would not be economically justified.

Comment 40: AZ

- Re

- dispatch will require construction of new NGCC units with an unreasonable timeframe

Response 40: See section V.D. of the final rule preamble of the CPP for the EPA’s response to t his comment and more information about Building Block 2. EPA BSER quantification for proposal and final rule does not assume any new NGCC construction.

The following are summaries of the specific public comments under this comment:

Commenter s stated that r e

- dispatch will require construction of new NGCC units with an unrealistic timeframe.

Commenter s stated that in addition to the shortage of electrical capacity to meet Arizona needs during peak demand periods, there will also be a general shortage of ele ctrical capacity if all of the state's coal

- fired generation shuts down. Commenters commissioned PACE Global to conduct a study of the impact of the Proposed Rule in Arizona

. Commenter s stated that PACE Global used an AuroraXMP platform to model an hourly chronological dispatch model to simulate the economic dispatch of power within a competitive framework. Commenter s stated that based on this modeling, PACE Global concluded that an additional 3.5 GW of new natural
gas

- fired capacity will be needed by 2020 to meet the load and reserve margins. Commenter s added that of this additional generation, 2.3 GW is directly attributable to the Proposed Rule.

Commenter s stated that because utilities cannot be expected to prematurely make such an investment, the time fr ame for designing, engineering, permitting, and constructing this new NGCC capacity is only two to three years. Commenter s added that it is unrealistic to believe that such a feat is possible. Commenter s stated that in addition to mammoth amount of work th at would be involved for the utilities, there is a huge concern regarding the ability of original equipment manufacturers to supply the necessary equipment and the availability of the labor necessary to construct the equipment in such a short time period.

Comment 41: AZ

- radically compressed timeline, AZ has virtually no time for proper economic, safety, and reliability based preparation; pipelines; natural gas interruption and supply

Response 41: See section I.A. of the final rule preamble of the CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:80 Radically compressed timeline . Commenter s stated that according to the proposed rule EPA assumes Arizona would be able to complete this fou ndational transition from coal to natural gas by around 2020

- About five years after states get clarity on targets, and even less time from when state plan s actually gain approval.

Commenter s added that since Arizona has no natural gas storage and only tw o major national gas pipelines, this radically compressed timeline leaves Arizona virtually no time for proper economic, safety, and reliability based preparation.

Commenter s stated NERC

- CAISO has determined that Arizona's "existing pipeline capacity is

no t adequate to handle incremental gas needs of the state under the CPP." (NERC

- CAISO Joint Report, "Maintaining Bulk Power System Reliability while Integrating Variable Energy Resources"). C ommenter s said EPA has not given adequate consideration of this iss ue and it requires a change in the timing of BB2 and revision to the Interim Goal, at the very least.

Pipelines. Commenter s stated Arizona benefits primarily, though not exclusively, from two long

haul pipelines, Transwestern and El Paso Natural Gas pipeli nes; both of these pipelines are expected to remain highly utilized, as they currently are, to serve demand in New Mexico, Arizona and California and also to serve rising exports to Mexico. C ommenter s said given the current high capacity factor of pipeline usage in this region, the addition of Clean Power Plan induced natural gas demand for power needs in the southwest leads to concerns that the current pipeline system is inadequate to serve all demand during periods of peak usage. C ommenter s said Pace Glob al's pipeline flow model analysis indicates that under the Clean Power Plan, expansions would be needed to meet consumption needs and maintain reliability on both the northern and southern legs of the El Paso pipeline and on the Transwestern pipeline. C omm enter s said the Pace Global's pipeline flow model analysis indicates that under the Clean Power Plan, the following expansions would be needed to meet consumption needs and maintain reliability:

El Paso Southern leg would require expansion by the early 20 20s if not sooner, as it is expected to exceed design flow by 2022 based on average flows.

El Paso Northern leg would require expansion by 2025.

Transwestern pipeline, which is already over 95% utilized, would benefit from expansion, although most of the incremental flows will impact the El Paso pipeline system.

Commenter s stated generators will need to secure existing pipeline capacity in order to ensure readily available supply; even so, generators who are in the money and could generate, but who rely o n interruptible pipeline capacity, may find themselves unable to dispatch during periods of high demand due to pipeline constraints. C ommenter s said this significant increase in natural gas demand coupled with inadequate natural gas storage and transportat ion infrastructure will ultimately lead to higher natural gas and power price volatility in the Desert Southwest.

Concerns about natural gas interruption and supply issues . Commenter s stated that EPA also believes that since no particular NGCC unit is req uired to achieve a specific utilization rate, that other NGCC units located in the state could make up for the loss due to a natural gas supply issue. Commenter s stated that this does not apply well in Arizona because the state utilities are81 limited to one primary gas supplier and, to a lesser extent, a secondary gas supplier. Commenter s added that furthermore, most all of the NGCC units within the state are located within a small geographic region. Commenter s stated that accordingly, any natural gas supply interruption to any one particular NGCC is likely to also be an interruption to most other NGCCs within the
state.

Commenter s stated that EPA relies on the ability of transmission planners to overcome any impediment and be able to assure the natural gas s upply is available to meet EPA's proposed re

dispatch plan. Commenter s warned that while transmission planners typically are quite skillful, the nation's natural gas supply system is in a tremendous state of flux and surely will have to overcome challenges never before witnessed.

Commenter s added that the PACE Global study identified that the incremental increase of natural gas demand resulting from the increased utilization of NGCC units and the need for new NGCC capacity to fill the void left from the ret irement of coal

- fired units will exceed the current natural gas supply capacity. Commenter s stated that Arizona's natural gas needs for power generation alone would increase by an estimated 500 MMcf/d, representing more than a 55 percent increase relative to Arizona's current power sector natural gas consumption. Commenters added that natural gas consumption in Arizona would increase from 900 MMcf/d in 2015 to over 1,500 MMcf/d in 2020 and more than 2,500 MMcf/d by 2030. Commenter s stated that the significa nt need for new pipeline infrastructure and capacity in a very short period of time will further strain already stressed natural gas infrastructure in the state.

Commenter s stated that the already highly utilized and limited natural gas pipeline network

se rving Arizona, mainly El Paso and Transwestern pipelines, would require expansion by the early 2020s to account for the increased demand for natural gas by the power sector on top of expected demand growth in other sectors. Commenter s added that based on m odeling by PACE Global, the southern leg of the El Paso line is expected to exceed its current capacity by 2022 and would require expansion by the early 2020s or sooner. Commenter s stated that the northern El Paso line would require expansion by 2025. Comm enter s added that the Transwestern pipeline, which is already over 95 percent utilized, would also require expansion to serve any additional future demands.

Commenter s stated that the development timeline to increase capacity is a minimum of 3 years with 4 or more years being a more reasonable estimate. Commenter s concluded that this means that the expansion would need to begin as soon as Arizona's implementation plan is finalized in 2017 to ensure reliable natural gas supply to the state.

Expansion of pipe lines will be necessary . Commenter s stated incremental natural gas demand resulting from the increased utilization of natural gas fired generation and the required new natural gas capacity needed to backfill the retired coal units to meet load would exceed the capacity of Arizona's existing, but already heavily utilized natural gas pipeline network. C ommenter s said Pace Global's analysis indicates that compliance with Arizona's interim goals would result in increased use of the El Paso system, as the altern ate pipeline, Transwestern, is already 98% to 100% utilized; both the El Paso and Transwestern systems would require expansion by the mid

- 2020s to maintain adequate supply capacity. C ommenter s said pipelines82 require a minimum of four years lead time from n eed determination to in service date; the timing of the CPP goals would require these expansion projects to begin soon to meet demand.

Other infrastructure needs . Commenter s stated Building block 2 accounts for over 70% of Arizona's reduction required fro m baseline to its 2030 goal; the assumption that this generation switching could occur by 2020 is not feasible for Arizona due to in large part to the magnitude of investments in generation, transmission and pipeline infrastructure simultaneously, which re quire substantial commitments, permitting and construction lead times. C ommenter s said significant new infrastructure in the form of new electric transmission infrastructure, natural gas pipeline expansions, and generation infrastructure to maintain reliab ility would be needed. Commenters said f urther it would leave stranded investments in the state's existing coal fleet that would impact electric rates.

Comment 42: AZ

- Transmission sy stem cannot support re

- dispatch

Response 42: See section V.D. of the f inal rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 2. EPA believes its proposal and final CPP rate and goal requirements are fully compatable with resource adequacy, reliability, and the constrai nts of the current power grid as described in the Resource Adequance and Reliability Final TSD an d section VIII.G.2 of the preamble.

The following are summaries of the specific public comments under this comment:

Commenter s stated that the Arizona transmis sion system cannot support re

- dispatch.

Commenter s stated that the electrical high voltage transmission system in Arizona has evolved over time and, in part, is designed to deliver power from remotely located power plants to the load. Commenter s added that the Phoenix area is by far the largest load center in Arizona, representing about 62 percent of Arizona load. Commenter s stated that it is served by a complex network of generation and transmission primarily owned and operated by APS and the Salt River Pr oject Agricultural Improvement and Power District (SRP).

Commenter s stated Arizona's coal

- fired units are predominantly located to the northeast of the Phoenix load pocket while most of the NGCC units are located to the west and southwest of Phoenix. Comme nter s asserted that the re

- dispatch of all of Arizona's coal

- fired generation would change the way power flows and impact a significant portion of Arizona's transmission system. Commenter s stated that this raises reliability concerns about the operation of the electrical transmission system.

Commenter s stated that one of the key measures of reliability of serving the Phoenix load pocket is Maximum Load Serving Capability (MLSC). Commenter s clarified that this is the maximum amount of load that can be serve d assuming that all generation located inside the load pocket is operating at full capacity, and the transmission system is importing as much power as possible, without overloading any circuits. Commenter s added that transmission and local generation

resou rces are planned based on projected load and MLSC plus a reserve margin to account for contingencies. Commenter s stated that based on APS's assessment, there currently is enough83 existing and planned local generation and transmission to reliably serve the A PS Phoenix load pocket into the 2020s. Commenter s asserted that re

- dispatch of the coal

- fired EGUs, however, will reduce MLSC and jeopardize APS's ability to reliably serve the Phoenix load.

Commenter s questioned the impacts to the regional transmission sy stem if the generation from all coal

- fired EGUs in Arizona were re

- dispatched to the NGCC units by 2020 as envisioned in EPA's Proposal. Commenter s stated that both the impacts on MLSC and impacts under light load conditions were evaluated. Commenter s stat ed that using industry standard power flow tools and methods, the limiting elements and transmission system upgrades that would be needed to restore the MLSC to its present state and to mitigate high voltage levels occurring under light load conditions wer e identified.

Commenter s stated that the analysis was conducted using the planned transmission configuration in 2020 and assuming the generation from the following coal

- fired EGUs is re

- dispatched to the NGCCs located in the state.

Commenter s stated that three cases were developed for the MLSC studies: BASE CASE

- MLSC of the Phoenix load pocket with coal

- fired generation on line, NO COAL

- MLSC of the Phoenix load pocket after coal

- fired generation re

- dispatch, and NO COAL WITH UPGRADES

- MLSC of the Phoe nix load pocket with coal

- fired generation re

- dispatched, and overloads mitigated.

Commenter s stated that the results of the MLSC study show that under the No Coal Scenario, the MLSC of the Phoenix Valley load pocket is reduced by 1,338 MW (from 16,321 MW to 14,983 MW); the peak load plus margin value is 15,255 MW. Commenter s concluded that this scenario results in a shortage of 272 MW.

Commenter s asserted that assuming the actual peak load does not exceed the projected peak load, and if all generators and transmission lines are in service at the time of the peak, the load requirement is met and the shortage occurs in the margin value. Commenter s warned that however, depending on what contingencies are occurring at the time of the peak, it is possible that t he load may not be met.

Commenter s stated that this analysis is a first cut at identifying the transmission impacts associated with the re

- dispatch of Arizona's coal

- fired EGUs. Commenter s added that due to the magnitude of the transmission changes that wo uld be necessary to resolve this situation, a more detailed engineering analysis would have to be performed. Commenter s stated that therefore, the cost and time required to implement the required upgrades has not been confirmed. Commenter s concluded that h owever, preliminary cost estimates are in the hundreds of millions of dollars and the time to implement the transmission system upgrade will take years.

Commenter s stated the existing transmission network is designed for coal

- fired EGUs located in the eas tern and southern periphery of the State, while the NGCC EGUs are located in and around Phoenix and in the western periphery of the State. C ommenter s said significant modifications and additions to the transmission network would be required to account for shutdown of the coalfired EGUs and still provide reliable electricity. C ommenter s said it does not appear that these issues were included in the proposed timing of BB2 implementation in 2020.84 Commenter s stated since the CPP requirements will not be finaliz ed until mid

- 2015 and state implementation plans will not be approved by EPA until mid

- 2017 or later, timing of the final state plan approval and the typical five

- year timeframe to site and construct new power plants would result in real reserve margin dec lines, noting the sharp decrease in coal generation required under Pace Global's analysis of the CPP Building Block scenario. C ommenter s said given these real world constraints, Arizona will need to seek relief from the CPP's interim goals in order to main tain grid reliability and security. C ommenter s said the EPA should include a reliability safety valve mechanism in the final rule; even if the interim goals are delayed or state goals reduced, there is still a risk to reliability. C ommenter s said consisten t with impacts, the EPA should include in its final rule circumstances under which compliance can be delayed to manage real time issues that will compromise electric reliability.

Comment 43: AZ

- framework used by the EPA assumes electricity is bound by state lines

- not accurate
Response 43: See section s VI, VII, and VIII.C. of the final rule preamble of the CPP for the EPA’s response to this comment. EPA has taken a regionalized approach to building block two in this final rule.

The following are summa ries of the specific public comments under this comment:

Commenter s stated electricity is not bound by state lines

- unlike the framework contemplated by the Proposal. C ommenter s said the Springerville facility is located in Arizona less than 10 miles from the New Mexico border, however the majority of power produced by Unit 3, which is owned by Tri

- State, is used to serve Member System loads in rural Colorado and New Mexico. C ommenter s said the fact that there is excess natural gas

- fired capacity within th e borders of Arizona (which is why the coal

- fired EGUs in Arizona must be shut down under the Proposal) does not mean that those natural gas plants can provide electric power to the residents of Colorado and New Mexico that Springerville Unit 3 currently s erves.

Commenter s stated those excess natural gas

- fired plants are located on the other side of Arizona largely to help provide electric power to residents in California and Nevada, and there is no reason to believe that the output of these units could be transmitted to Tri

- State's Colorado and New Mexico customers, nor does Tri

- State have any contractual rights to compel the owners of those plants to increase their output for the benefit of Tri

- State.

Comment 44: AR

- Rule falls hardest on one of the p oorest states
Response 44: See section s V.D VI and VII of the final rule preamble of the CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:

Commenter s stated that the proposed rule fa lls hardest on one of the poorest states (Arkansas)

.85 Commenter s asserted that the rule as proposed will require Arkansas to meet an almost 45% reduction in carbon emissions from electric generating units ("EGUs") by 2030. Commenter s stated that this is the 6th highest rate of reduction in the nation, imposed upon a state that currently ranks 46th in per capita income. Commenter s added that there can be no question that the proposed rule will have a huge impact on our state's utility rates, and these rate in creases will disproportionally impact low income Arkansans. Commenter s stated that this drastic reduction creates an economic inequity for Arkansas when compared with other states.

Comment 45: AR

- The EPA's targets for Arkansas are achievable

Response 4 5: The EPA appreciates the comments of support for the proposed goals, please see Section V, VI, and Section VIII of the preamble for discussion of changes to the BSER between proposal and final based on comment s and our further consideration, the quantifi cation of the BSER in this final rule, and a description of the state goals

. The following are summaries of the specific public comments under this comment:

Commenter s asserted that EPA's targets for AR are achievable

.
Commenter s stated that in this sectio n, they combine d reasonable levels of re

- dispatch, energy

efficiency savings and renewable development to demonstrate the achievability of the EPA's emissions

- reduction target for Arkansas. Commenter s stated that they assume d the energy

efficiency savings of the modest case. Commenter s added that the generation requirement equals the state sales forecast used by the EPA, plus 10% losses and net exports, which are set at the
out

- of

- state ownership shares of the coal plants (and which therefore decline as coa l

- plant output declines) .

Commenter s stated that they assume d that in 2020, White Bluff retires, Turk capacity factor falls to 68%, and the capacity factors of the other three coal plants fall to the 30

- 35% range. Commenter s stated that after 2020, they r amp ed down the capacity factors for the remaining coal plants, with Flint Creek retiring in 2027, Turk reaching 60% capacity factor in 2030, and the other plants reaching capacity factors near 20%. Commenter s added that for the NGCC plants in 2012, they as sume d that Oswald and Fitzhugh operate as they did in 2012 (at 7% capacity factor and high emission rates), Pine Bluff operates as it did in 2012, and that the other four plants operate at an average capacity factor around 55%, based on nameplate rating. C ommenter s stated that thereafter, they ramp ed down the combined

- cycle generation to keep total generation near the output requirement. Commenter s added that they also ramp ed down the oil and gas steam generation, to reflect pending retirements and the effe cts of higher renewable generation. Commenter s stated that for the "other generation" category (mostly combustion turbines), they kep t generation fixed at the average of 2012 and 2013 levels.

Commenter s stated that the "Non

- covered Generation" category in cludes the new renewables. Commenter s added that the 2020 renewable capacity in each category is a small fraction of the potential estimated; other than wind imports, the same is true for the 2030 capacity. Commenter s stated that the timing of the renewabl es reflects the lead times, which are minimal for wind86 imports from the Plains and for solar, with in

- state wind and addition of capacity at existing dams taking longer for licensing, design, and construction. Commenter s added that each of these categories of renewables can be developed faster to back down the NGCCs and/or support further reductions in coal use.

Commenter s stated that applying emission rates by generation category yields an estimate of total emissions in the example compliance plan. Comment er s added that on a mass basis, this plan would reduce emissions 41% by 2020, an average of 47% over 2020

- 2029 (compared to a target of 41%), and 54% in 2030 (compared to a target of 44%). Commenter s stated that the average emission rate under the EPA form ula would be about 878 lb/MWh for 2020

- 29 (compared to the target of 968 lb/MWh) and 734 lb/MWh for 2030 (compared to a target of 910 lb/MWh).

Commenter s stated that this compliance trajectory should be readily achievable. Commenter s added that the Arkans as DEQ can establish a SIP that exceeds the EPA goals, adopt a mass

based target, assign emission allowances to each covered unit, and accept allowances from other states. Commenter s stated that inclusion of allowance prices in planning and dispatch would result in reduced usage and/or retirement of coal capacity, while meeting local reliability constraints. Commenter s added that if any one component of the compliance trajectory (four types of renewables, energy

- efficiency programs, and increased output at four NGCC plants) were to be problematic, the generation owners would purchase more allowances, dispatch would shift more towards low

- and no

- CO2 resources, utilities can accelerate their energy

- efficiency programs, and addition of renewables will be more attractive to utilities and more profitable for developers.

Commenter s concluded that the EPA's targets for Arkansas are feasible. Commenter s added that the more

- modest reductions required of most other states should be equally achievable.

Comment 46: AR

- goal recommendations

Response 46: For the EPA’s response to this comment, see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP. EPA takes a regionalized approach to quantifying BSER in this final rul e. It quantification of the building blocks shows a significant amount of fossil steam remaining online, and its compliance modeling does as well. There is no requirement that any specific unit (e.g., Plum Point) would be required to curtail generation.

The following are summaries of the specific public comments under this comment:

Commenter s request ed that EPA incorporate the following positions and recommendations:

The carbon reduction goals that EPA proposes for Arkansas are based on modeling that ign ores practical limitations and real

- world economic impacts.

EPA should revamp its BSER modeling so that the carbon emissions goals established for each state reasonably reflect what is realistically achievable in the timeframe of the CPP.87 To the extent t he Arkansas emissions targets would necessitate curtailed operations or the premature retirement of Plum Point, that outcome would impose profound economic harm on Mississippi

- already among the most economically disadvantaged states in the nation

- as wel l on as the several other states in which Plum Point's co

- owners do business.

EPA should extend the compliance deadlines in the CPP in order to mitigate the economic impacts of mandating adherence to aggressive reduction targets in a compressed period of time.

EPA should require that state plans include a process to evaluate electric system reliability issues resulting from implementation of the state plan and require mitigation when needed.

Comment 47: AR

- goals

Response 47: For the EPA’s response to this comment, see sections VI and VII of the final preamble and CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP. EPA has treated the Turk Plant as an under construction source in its baseline, and theref ore adjusted its generation and emissions in the baseline upwards so the state totals better reflect its incremental impact.

The following are summaries of the specific public comments under this comment:

Commenters stated Arkansas would be particularly ha rd hit by the proposed Clean Power Plan; in order to meet the 2030 target, Arkansas would need to reduce its carbon intensity by 44 percent compared to 2012 reported carbon dioxide emissions.

Commenter s stated the reduction from actual carbon dioxide emis sions will likely be even greater once Arkansas includes a full year of operation for the Turk power plant (Fulton, AR) that went into operation in December 2012. C ommenter s said the Turk plant is one of the cleanest, most

- efficient coal plants in the coun try, and Arkansas is punished for that investment.

Commenter s stated in order to meet the 2020 interim target, which is only six years away, Arkansas may have to close 4 of its 7 coal

- fired power plant units. C ommenter s said these power plants, once equip ped with pollution control technologies to comply with MATS, CSPAR, and regional haze regulations, could operate for an additional twenty years; however, it is not likely that these coal

- fired power plants would be modified for GHG emission reduction. C omm enter s said therefore, the utilities that own these power plants may choose to close them prematurely, which could lead to reliability issues throughout the state.

Comment 48: AR

- Timing and Stringency of Goals.

The 2030 Arkansas goal is technical flaw ed and unattainable in allotted time, goals may cause electric service disruptions in AR and affect electric service and cost in other states, interim goal will require too much reduction too quickly, insufficient natural gas pipelines and transmission

res ources currently exist and not feasible to construct new infrastructure by dates required

.88 Response 48: See section I.A. of the final rule preamble of the CPP for the EPA’s response to this comment. See the Resource Adequacy and Reliability TSD.

The fol lowing are summaries of the specific public comments under this comment:

Several commenters said that the 2030 Arkansas goal, which is the sixth most stringent in the United States, is unattainable under the contemplated time frame. Commenter s said further , the goal is technically flawed, and the actual emissions reductions needed to meet the goal will exceed the apparent 44% level, and without correction, these goals may threaten to cause electric service disruptions in Arkansas and may also affect electri city service and cost in other states.

Commenter s said that of equal importance is the fact that the Arkansas interim goal is almost the same as the final goal. Commenter s indicated they understand that the EPA intends for the interim goal to allow the st ate

- through the averaging of emissions across a series of individual
years

- to implement a flexible glide path to compliance in 2030. Commenter s stated that, however, the Arkansas interim goal is so close to the 2030 goal that, based on a straight

- line decline starting in 2020, the state would have to plan, seek approval for, and implement a suite of actions producing a CO2 emissions reduction of roughly 37% between 2016 and 2020. Commenter s said that in practical terms, such a large undertaking in so sh ort a time is unworkable, and added that any delays in meeting this near

- term goal would essentially move the 2030 goal forward in time.

Commenter s said that emissions reductions of this magnitude within less than four years imply a major, permanent change in the electricity operations within the state. Commenter s said that the magnitude of the change in the case of Arkansas cannot properly be characterized as "re

dispatch", as the EPA has provided within the portion of the goal

- setting formula that dominat es the Arkansas goal. Commenter s said that "dispatch" refers to a selection by a utility company or grid operator between existing generation resources to meet fluctuations in load. Commenter s said the Arkansas goal, by contrast, requires state regulators and EGU owners to take actions on a different time scale and with a fundamentally different effect. Commenter s indicated the goal requires long

- range, multi

- utility resource planning that will likely permanently retire and replace major resources and will include major new policy initiatives.

Commenter s said there are insufficient natural gas pipelines and transmission resources to replace coal

- powered generators with natural gas generators in Arkansas, and it is not feasible to construct new infrastructur e by the dates required in the Clean Power Plan. Commenter s also said it is currently unknown what cost may be involved in comprehensively redesigning the electric transmission system.

Commenter s stated w ith respect to infrastructure, the proposed rule con templates power supply changes that could require substantial investments in additional infrastructure over the multi

- year compliance period to ensure reliability, particularly with respect to increased utilization of gas fired generation. Commenters asser ted that it is important that the Commission continue its work to support the timely development of needed energy infrastructure."89 Commenter s stated the timelines for "Transmission Planning Process" and "GI Transmission and Service Process", both of which require approximately eight and a half years; are showing an estimate of up to $2.3 million per mile for 345 kV transmission construction.

Commenter s stated the carbon emission reductions proposed for Arkansas cannot be achieved in the timeframe of the CPP without causing significant economic disruption.

Commenter s said the carbon emissions goals that the CPP would establish for Arkansas are especially aggressive; in 2012, the amount of CO2 actually emitted by electric generating units in Arkansas was 1,63 4 lbs per MWH. C ommenter s said the CPP would require Arkansas to reduce the statewide rate of carbon emissions to 968 lbs for each MWh generated, averaged over the period 2020

- 2029, and to 910 lbs per MWh by 2030

- a 44% reduction from the 2012 emissions r ate and the sixth highest reduction proposed for any state; fully 68.5% of that modeled reduction is assumed by EPA to come through the reduced utilization of existing coal

fired generation.

Commenter s stated the flaws in EPA's application of its BSER met hodology to Arkansas are too numerous to list, but the more obvious examples of the problems in EPA's application of this method to Arkansas generally and Plum Point specifically include the following:

a. EPA's consideration of regulatory impacts is incom plete.

b. EPA's analysis fails to account for the massive infrastructure build

- out the CPP would require.

c. EPA's assumptions about efficiency improvements are not sound.

Comment 49: AR

- Load Growth Issues

Response 49: In regards to load growth consid erations for determining sub category

- specific rates or state goals, EPA believes 2012 is a reasonable baseline expectation and does not expect aggregate generation levels from these sources to increase during the compliance period. Moreover, it assumes th at the under construction units have either 55% or 60% of the utilization dedicated to non

- replacement purposes

– therefore, this generation is added to the 2012 generation levels for existing sources.

The following are summaries of the specific public co mments under this comment:

Commenter s said that because of Arkansas' lower socioeconomic ranking, Arkansas Municipal Power Association members that are experiencing load growth due to economic development should not be penalized as inefficient.

Comment 50 : AR

- The EPA's treatment of emissions from new coal fired EGUs th at started in 201290 Response 50: Based on comment s and further consideration

, the EPA is treating units that commenced operation in 2012 as under construction and estimating a representativ e full year generation for the unit as a substitute for the partial year data reported in 2012. For the EPA’s
response to this comment, see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP. For the Tu rk Plant, EPA effectively assumes an incremental impact of 60% utilization. It further recognizes that this new coal plant may operate at even higher utilization levels. However, as noted by the commenter s

– some of this generation would have a replaceme nt (rather than incremental affect). Therefore, EPA felt the 60% utilization rate was reasonable for adjusting the states emissions and generation upwards.

Additionally, EPA has taken a regional approach to quantifying building block po tential in this fin al rule. Quantifying the reduction potential of BB2 and BB3 technologies regionally (instead of just in the state where located

– as proposed), has the effect noted by commenter s of bringing outlier states closer to the mean.

The following are summaries o f the specific public comments under this comment:

Commenter s stated AR has two brand new coal

- fired EGUs and one undergoing a major upgrade, each has remaining useful life that extends far beyond 2030 compliance date. Commenter s said new plant emissions at Turk (limited operation in 2012) were almost completely excluded from goal

- setting baseline; methodology to address this issue for Turk and other 5 coal

- fired EGUs in nation that commenced operation in 2012 is presented.

Commenter s listed the five coal

- fired power plants (totaling seven EGUs) that are located within Arkansas: (1

- Unit Flint Creek 558MW plant; 2

- Unit White Bluff 1800MW plant; 2

- Unit Independence 1800MW plant; 1

- Unit Plum Point 720MW Energy Station; and 1

- Unit John W. Turk 609MW power plant .) Commenter s indicated that taken together, Turk, Plum Point, and Flint Creek represent 34% of the coal

- fired EGU capacity in Arkansas. Commenter s said that because two of them are brand new (Turk and Plum Point) and the third is undergoing a major upgrad e (Flint Creek), each has a remaining useful life that extends well beyond the proposed 2030 compliance date.

Commenter s said the CO2 emissions from the normal operation of Turk are almost entirely omitted from the calculation of the initial Arkansas emiss ions baseline. Commenter s explained that the Turk plant emitted less than 0.2 million tons of CO2 during 2012; during its first full year of operation (2013), however, it emitted 3.7 million tons of CO2.

Commenter s said that the effect of including a full y operational Turk plant in 2013 would make Arkansas' initial adjusted fossil rate 1,698 lbs CO2/MWh (1,793 lbs CO2/MWh unadjusted) as compared to 1,634 lbs CO2/MWh adjusted (1,722 lbs CO2/MWh unadjusted). Commenter s said thus, if the 2012 goal

- setting bas eline is retained in its current form, Arkansas will have a higher actual initial emissions rate than contemplated in the compliance baseline, and will therefore be required to make significantly larger reductions than the EPA proposed within the formula. Commenter s said this base year selection also would exacerbate the difficulty with meeting the interim goal and the implementation problems resulting from wide disparity among states.91 Commenter s said that while it might seem reasonable to adopt instead a 2013 baseline, or a baseline that averages emissions from a series of years, they believe that those approaches would not reach the underlying problems highlighted by the addition of the Turk plant and its interaction with goal compliance for at least thre e reasons:
First, the addition of highly efficient, low

- fuel

- cost coal generation in part displaces other generation, including existing combined

- cycle generation. Thus, in part because of the addition of the Turk plant, a 2013 baseline (and other future y ears) will reflect decreased NGCC utilization in Arkansas (indeed, avoiding reliance upon natural gas generation was the chief economic argument made to regulators to justify building the plant).

Second, because of differences between 2012 and 2013 in wea ther, electricity load, and fuel prices, it may be impossible to exactly quantify this effect within any single year, but even a small impact would significantly affect the Arkansas goal. This is because the EPA formula's Block 2 "re

- dispatch" from coal to natural gas is by far the largest component of the Arkansas goal. The reduction in 2013 NGCC generation under the proposed formula caused by the combination of Turk generation, increased natural gas prices, reduced load, weather, and other effects would

- if the proposed formula were applied to 2013 data

- require even greater Arkansas emissions reductions, even though the real

- world effect of the displacement of NGCC by new coal would make the reductions more difficult to achieve. A similar result would f ollow from using a 3

- yeare average for baseline goal setting emissions.

A third, and more fundamental baseline issue, is that the interstate nature of the electricity generation and transmission system does not harmonize with the state

- specific jurisdictio n of state air environmental (and generally) utility regulators. The new Turk emissions were added to Arkansas, in significant part, to provide electricity over an interstate transmission system: for instance, the plant's owners include electricity supplie rs in four states and its inclusion in retail electricity rates has recently been litigated in Texas and Louisiana

.
Commenter s said that a more reasonable approach would be to make adjustments to the formula that take into account unique situations and th at tend to bring the outlier states towards the mean. Commenter s said therefore, with respect to partial

- year emissions from Turk, and perhaps the other five coal

- fired EGUs nationally that commenced service during 2012, EPA should:

Exclude the post

- 2012 share of annual emissions from the goal

- setting formula on the basis that the remaining useful life of the plant clearly places it outside the proposed compliance period (much as EPA has already provided that a state may exclude the emissions from new comb ined cycle natural gas EGUs from Section 111(d) and account for them only under Section 111(b)).

Alternatively, EPA could gradually phase

- in the incorporation of Turk emissions for compliance purposes, recognizing these emissions through a higher allowed fossil emissions rate (perhaps based upon a straight

- line annual percentage ranging from 0% to 100% over its full remaining useful life).

Comment 51: AR

- financial implications of prematurely retiring Plum Point would be crippling92 Response 51: For the E PA’s response to this comment, see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP. EPA BSER quantification of source category rates and its final RIA modeling suggest that coal generation is
a very significant portion of the generation portfolio mix in a BSER scenario. The Final, nor proposed, CPP would not require units like Plum Point to curtail operation.

The following are summaries of the specific public comments under this comment:

Commenter s stated that financial implications of prematurely retiring Plum Point would be crippling.

Commenter s stated that in developing their reduction goals, EPA forecasted the retirement of Plum Point by 2020 and this makes absolutely no sense. Commenter s assert ed that there are hundreds of coal

- powered electric generators in the United States and on average, they are over 40 years old. Commenter s stated that Plum Point is a new and efficient coal plant that was first energized in 2010. Commenter s added that it i s equipped with the extensive environmental controls that were mandated for new plants when it was constructed. Commenter s stated that Plum Point represents one of the largest investments that our community has ever made. Commenter s concluded that the fina ncial implications of prematurely retiring Plum Point, or reducing its output for environmental compliance, would be crippling to North Little Rock and other Arkansas cities.

Comment 52: 6% HRI is not reasonable for Arkansas; states should be allowed to calculate their own BB1 goal by evaluating specific facilities or the EPA should set an average net heat rate (BTU/kWh) for all affected EGUs for BB1 goal setting; the BB1 goal setting formulas should be modified for new and newly modified units, and shoul d recognize that environmental control projects reduce HRI opportunity

Response 52: See section V.C. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 1. Section 3.1.4 of this RTC docume nt discusses the interation between expected control and BB1 assumptions.

The following are summaries of the specific public comments under this comment:

Commenter s said that in setting a state's emissions rate reduction target, the EPA has proposed reduci ng emissions rates at existing coal

- fired units based on a uniform average of 6% HRI that is derived from a national study. Commenter s said that the EPA, further, inappropriately applied an analysis of gross heat rate data to a net heat rate goal. Commente r s said it is impractical and unreasonable for the EPA to assign an average HRI to states irrespective of the ability of a particular state's EGUs to make that HRI, and the resulting HRI goal does not reasonably apply in Arkansas. Commenter s also indicated that Arkansas has limited ability to increase the overall efficiency of coal

- powered generators because two of the six coal plants in Arkansas are the newest and most efficient in the nation, and the remaining have little if any ability to improve the eff iciency of their coal

- fired generators.93 Commenter s said the newest facility, the Turk plant, is the only ultra

- supercritical coal

- fired EGU and is the most fuel

- efficient coal

- fired EGU in the U.S. Commenter s said the second

newest plant, Plum Point, began commercial operations in the latter part of 2010. Commenter s said that based upon information provided by Southwestern Electric Power Company and Plum Point, these newer EGUs will not be able to achieve any appreciable HRI. Commenter s said given the lack of opportunity for HRI at those two facilities, the remaining five Arkansas coal

fired EGUs would need to implement HRI exceeding 8% in order to meet the 6% HRI goal. Commenter s said information provided by Entergy to the commenter s indicate d that if all o f the items identified by Sargent and Lundy's report that could be implemented at the Independence and White Bluff facilities were fully implemented, the average HRI would be 2% to 4%. Commenter s said thus, Arkansas' newer plants will likely not see any si gnificant improvements or only trivial improvements in heat rate, and our older plants probably cannot achieve greater improvement beyond the design heat rate.

Commenter s said further, the Flint Creek unit is being retrofitted with additional emission

con trol equipment to comply with the Mercury and Air Toxics Standards (hereinafter "MATS") and Regional Haze rules. Commenter s said the new equipment will increase the Flint Creek unit's heat rate above the 2012 base year heat rate, thus decreasing its effici ency. Commenter s said this environmental control project will thus likely reduce the available HRI assumed for Arkansas in Block 1.

Commenter s said that for the purpose of goal

- setting the EPA should recognize that:

Currently un

- scrubbed units which contin ue to operate at base

- load levels will likely be required to implement controls that will create parasitic loads that will partially negate the theoretical benefits of investments in HRIs (commenter s noted such units comprise 76% of coal

- fired EGU capacity in AR)

. The reduced coal EGU operations envisioned in Block 2 of the Proposed Rule will likely erode the operating efficiency of these EGUs.

Commenter s indicated the heat rate ranking of Arkansas coal

- fired EGUs among coal

- fired EGUs nationally according to the 2012 EIA form 923 annual dataset and the 2013 EIA form 923 monthly dataset. Commenter s said it confirms that Turk is the most efficient coal

- fired EGU in the U.S. and suggests that it is unlikely that the Arkansas plants have the potential for the s ame level of cost

- effective HRI improvements, on average, as plants in other states, since over half of the coal

- fired capacity in Arkansas is most recently among the top 100 plants nationally for heat
rate.
To address these BB1 HRI calculation and goal s etting concerns:

Commenter s said EPA should allow Arkansas ( and other states ) to calculate its Block 1 goal by evaluating their specific facilities' actual opportunities for efficiency measures at their respective EGUs

Commenter s said alternatively, instea d of focusing on the percentage HRI, it may be more practical to set an average net heat rate in BTU/kWh for all affected EGUs (a method similar to traditional New Source Performance Standards) for Block 1 goal

- setting.94 Commenter s said the EPA should exc lude Turk's and Plum Point's capacity from any assumption in the Final Rule that all plants within Arkansas can be made more efficient.

Commenter s said similarly, the goal

- setting formula should be amended to take into account at least the bright

- line case s where remaining useful life precludes near

- term retirement, such as plants that came into operation during and after 2010, and those currently undergoing major environmental control projects.

C ommenters said the 2012 baseline assumptions should be adju sted to recognize the fact that environmental control projects occurring post

- 2012 will worsen heat rates, reducing the available opportunity for HRIs.

Comment 53: AR

- BB2 input data discrepancies and suggested changes to treatment of CHP facilities

Resp onse 53: See section V.D. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 2 and see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CP P. Consistent with commenters suggestion, and as discussed in section VI of the preamble, EPA no longer includes useful thermal output when quantifiying BSER. Therefore, the NGCC 2012 NGCC rate for existing sources (those commencing operationg before 20 12) in the state is 896 lb/MWh in EPA’s final calculations.

The following are summaries of the specific public comments under this comment:

Commenter s said discrepancies in actual emissions rates for AR facilities, in combination with other methodological issues regarding BB2 and treatment of CHP facilities, establishes unreasonable interim and final goals for Arkansas.

Importance of BB2 for AR goal

- setting

. Commenter s indicated that Arkansas is among a handful of states for which the assumptions underlyin g Block 2 are the most important goal

setting issue: 67% of the required 2030 reductions from Arkansas' adjusted 2012 baseline emissions rate, and 73% of the 2020

- 2029 rate reductions from the adjusted 2012 baseline, stem from Block 2. Commenter s said alth ough a state is allowed to over

- comply with one building block (BB) to offset under

- compliance with another BB, in the case of Arkansas so much of the goal is dependent on Block 2 that a significant shortfall in Block 2 compliance likely cannot be made up through the relatively small potential that the EPA foresees in Arkansas from the other Blocks, particularly in the case of short

- term compliance with the interim, goal.

Data Discrepancy . Commenter s said the goal

- setting formula establishes an imputed aver age emission rate for NGCC plants within Arkansas of 827 lbs CO2/MWh. Commenter s said this average is based upon the amount of generation and the amount of emissions during 2012 for seven NGCC power plants.

Commenter s said every NGCC plant in Arkansas has an actual emissions rate that is higher than the adjusted NGCC emissions rate imputed to Arkansas for existing NGCC. Commenter s said an95 adjustment to the actual emissions rate for a single plant (PBEC) significantly lowers the 2012 fleetwide average NGCC emissions rate. Commenter s said the formula then carries forward this imputed average to project total NGCC fleet emissions after "re

- dispatch". Commenter s said carrying this imputed emissions rate through Block 2, which is the single largest factor in the goal

- setting formula for Arkansas, misrepresents the effect of "re

- dispatch" on CO2 emissions.

Methodology used for Combined Heat and Power (CHP)

. Commenter s said the EPA's treatment of CHP, and particularly the emissions from PBEC, unrealistically lowe rs the Arkansas NGCC fleetwide CO2 emissions rate during the 2012 baseline year, thereby skewing the baseline and

re

- dispatch assumptions.

Commenter s said the PBEC is the only CHP facility in Arkansas that is included within the 2012 NGCC baseline emission s rate (and thus in the Block 2 assumptions about re

- dispatch for individual state goal

- setting). Commenter s said that PBEC is a 236 MW facility, comprising less than 5% of the total NGCC capacity in Arkansas.

Commenter s said that according to EPA data, PB EC's actual CO2 emissions rate during 2012 was 1,132 lbs CO2/MWh

- 37% higher than the EPA

- imputed fleet wide average emission rate for NGCCs. Commenter s said however, because PBEC is a CHP plant, the EPA accounts for its useful thermal output ("UTO"), att ributing an emissions reduction to this useful heat. Commenter s said through that attribution, PBEC is accorded an adjusted emissions rate of 602 lbs CO2/MWh

- 28% better than any other NGCC in Arkansas.

Commenter s said that removing UTO from the goal comp utation would increase the fleet

- wide NGCC emission rate by 8% and reduce the stringency of the overall Arkansas 2030 goal by 6%. Commenter s said that the EPA's treatment of this one existing industrial cogenerator within the goal

- setting formula thus coul d significantly steer statewide public utility planning through 2030, having an impact similar in magnitude to the EPA's assumptions regarding RE, EE, or statewide HRIs for coal EGUs.

Commenter s said that because PBEC is an industrial cogeneration facility , it generally runs to provide electricity and heat to its host paper mill, regardless of whether fuel prices and load conditions within the broader power market lead to a low or high level of annual dispatch for other NGCCs. Commenter s said that during 20 12, when every other NGCC in Arkansas ran less than half the time, PBEC operated on average at 72% of its nameplate capacity.

Commenter s said the goal

- setting formula creates a weighted average including PBEC running during 2012 at 72% capacity and the oth er (generally larger) NGCC generators running at capacity factors of 7% to 47%

. Significant percentage of total NGCC capacity in AR had low capacity factors in 2012

. Commenter s said that four NGCC plants ran very little during 2012, at utilization factor s ranging from 7

- 12%. Commenter s said these plants have almost 2180 MW of capacity, forming almost 40% of the total capacity among affected NGCC units in Arkansas. Commenter s added that these units had 2012 CO2 emissions rates between 11% and 37% higher th an the EPA

- imputed average of 827 lbs CO2/MWh, in part because of their low utilization rate.96 Commenter s said that in addition, two large plants comprising almost 3,200 MW

- 57% of total affected NGCC nameplate capacity

- ran a little less than half the ti me during 2012. Commenter s said these NGCC plants had 2012 emissions rates above the 827 lbs CO2/MWh EPA

- imputed average, with the bulk of the capacity being 5% less efficient than EPA's average.

Capacity of PBEC was more than 70% in 2012

. Commenter s said finally, PBEC comprised the remaining capacity and ran over 70% of the time during 2012, and said it is the only plant with an adjusted emissions rate

- based on useful thermal output

- below the fleet average. Commenter s said PBEC's adjusted emissions ra te is 27% below the EPA

- imputed average.

Goal

- setting Assumptions and Implications

. Commenter s said that under the EPA's goal

- setting assumption, all of these plants would run, on average, 70% of the time. Commenter s said that under that scenario, it is c lear that substantially all of the increase in NGCC generation would come from the roughly 40% of NGCC capacity with much higher 2012 emissions than the EPA average and the roughly 60% of NGCC capacity with slightly higher 2012 emissions than the EPA avera ge. Commenter s indicated the single plant with lower emissions (PBEC) is already above 70% capacity utilization and would contribute little or nothing to 70% average operations, even if it were to run 100% of the time.

Commenter s said that absent an adjust ment to remove UTO from the imputed average Arkansas emissions rate, it is thus unrealistic for the EPA to assume that average emissions in Arkansas at the 70% NGCC utilization rate will match the adjusted NGCC emissions rate assigned to Arkansas in the go al

- setting formula. Commenter s said rather, if the EPA does not omit imputed UTO from the Arkansas average emissions rate, then the actual fleetwide NCGG emissions rate at 70% NGCC capacity utilization will likely significantly exceed the EPA

- imputed rate, impairing Arkansas' compliance with the goal.

Suggested Modifications to Treatment of CHP . Commenter s said they do not oppose accounting for useful heat input for CHP plants in section 111(d) compliance plans . Commenter s said that increased use of highly

- efficient CHP in appropriate applications can be a significant, useful and realistic strategy to reduce CO2 emissions. Commenter s also said that disproportionately weighting existing CHP within the 2012 baseline , however, does not serve this purpose and

se verely distorts the real effect of increasing utilization of existing NGCC capacity.

Commenter s said that excluding the UTO from PBEC in the goal

- setting formula would yield an Arkansas fleet

- wide NGCC emission rate of approximately 896 lbs CO2/MWh, rather than the EPA

- imputed 827 lbs CO2/MWh. Commenter s suggested that to the degree that the non

- PBEC generation is actually available at the level assumed by the EPA, this would be a more realistic representation of the effect of the re

- dispatch envisioned in Block 2.

Commenter s said another way to address useful UTO from PBEC would be to use the sum of plant

- specific emissions from NGCC units after re

- dispatch in the goal computation formula. Commenter s said the "NGCC rate x Re

- dispatched NGCC generation" te rm in the numerator of the goal computation formula would be replaced by the sum of unit

- level emissions from NGCC units after re

- dispatch. Commenter s said unit

- level NGCC emissions after re

- dispatch can be calculated by multiplying plant

- specific emission rates by unit

- level generation expected at 70% capacity utilization for each unit.97 Commenter s said that properly accounting in this way for plant

- specific emissions and UTO from the NGCC units in Arkansas yields a significantly different overall emissions rate goal

.

Comment 54: AR

- Effect of NGCC utilization patterns on rate

Response 54: See section V.D. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 2. See response 53.

The following are summaries of the specific public comments under this comment:

Commenter s said that the EPA should develop a method for calculating BSER under BB2 which is not skewed by outlying emission rates from NGCCs due to useful thermal output or low utilization with frequent startups and shutdowns.

Commenter s stated that a further complication of using a historical 2012 NGCC rate in the goal computation is that emission rates from individual units are likely to change if units that were largely inactive during 2 012 are ramped up to 70%. Commenter s said NGCC units that are currently used to follow load are cycled on and off more frequently than they would if these units were used for base load. Commenter s said that NGCC units at facilities which were operated at l ess than 12% of their capacity over the 2012 baseline period, such as Dell, Fitzhugh, Oswald, and Hot Spring, may achieve lower emission rates if ramped up to 70% capacity utilization. Commenter s stated that the EPA should develop a method for calculating BSER under Block 2 which is not skewed by outlying emission rates from NGCCs due to useful thermal output or low utilization with frequent startups and shutdowns.

Comment 55: AR

- Nameplate versus summer

- rated capacity

Response 55: The final rule uses ne t summertime NGCC capacity rather than nameplate capacity. See section V.A. of the final rule preamble of the CPP for the EPA’s response to this
comment.
The following are summaries of the specific public comments under this comment:

Several commenters sai d that the EPA has overestimated the total capacity of Arkansas' NGCC units by assuming they operate at nameplate boiler capacity during the summer months.

Commenter s said that the EPA should take into account the summer

- rated capacity (perhaps by incorpor ating average humidity and summer temperatures for a Region) when assuming potential NGCC capacity. Several commenters said NGCC units in Arkansas are not able to operate at the stated nameplate boiler capacity during summer months, in part due to atmosphe ric conditions, and therefore, the EPA has overestimated the total capacity of Arkansas' NGCC units.

Commenter s said the most efficient NGCC plant in Arkansas, Magnet Cove, for instance, has a nameplate capacity of 746 MW, but a summer

- rated capacity of 64 2 MW

- almost 13% lower98 than the nameplate capacity. Commenter s said the largest NGCC in Arkansas is Union Power. Commenters said t he U.S. Energy Information Administration (hereinafter "EIA") records Union Power's nameplate capacity as 2,428 MW, but its s ummer

- rated capacity (2,020 MW) is almost 17% lower than its nameplate capacity

. Commenter s said that these two plants are perhaps the most likely to see increased operations under a scenario like EPA's Block 2.

Commenter s said according to EIA, Arkansas' NGCC affected fleet nameplate capacity was 5,588 MW

. The EIA NGCC affected fleet summer

- rated capacity was 4,661 MW

- a difference of roughly 16%, or over 900 MW.

Commenter s said they understand that the EPA bases Block 2 goal

- setting on nameplate capaci ty in part because summer

- rated capacity may be more difficult to define in a manner that is uniform nationwide. Commenter s indicated they also understand that the Block 2 "re

- dispatch" is essentially an energy

- based, rather than capacity

- based assumption. Commenter s said these considerations do not, however, obviate the reality that significantly less existing NGCC capacity is reliably available in Arkansas. Commenter s reiterated, the Block 2 "re

- dispatch" dominates the EPA goal

- setting for Arkansas, and t he EPA should adjust the Arkansas goal to take into account the actual reduction in annual energy generation that results from lower available summer NGCC capacity.

Comment 56: AR

- If air permit limitations prevent NGCC from reaching 70% utilization, th en the reduced capacity limitation should be used in BSER determination

Response 56: See section V.D. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 2. EPA does not assume unit

- level requirements or adjustments when quantifying the building blocks, rather it assumes the building block levels reflect a regional reduction potential that can be achieved on average across the regional NGCC fleet (in the case of BB

- 2) . No unit is required to operate at a particular utilization level.

The following are summaries of the specific public comments under this comment:

Commenter s said that if a facility has permit limitations limiting a NGCC from reaching 70% capacity utilization, the reduced ca pacity utilization should be used in the EPA's BSER determination.

Commenter s said that the EPA includes the full nameplate capacity of the 600 MW Oswald plant within Block 2 of the goal

- setting formula. Commenter s said that because Oswald operated at less than 7% capacity utilization during 2012, its remaining capacity contributes substantially to the Arkansas goal.

Commenter s said that according to the owners of the Oswald plant (Arkansas Electric Cooperatives Corporation, hereinafter "AECC"), its current Title V air permit includes NOx emissions limitations that effectively limit the operation of the plant to a 60% capacity factor. Commenter s said operating Oswald in excess of these limitations may require a new permit that99 might necessitate physical impr ovements to the plant to conform to Prevention of Significant Deterioration air quality regulations.

Commenter s said that AECC's Fitzhugh plant is another Arkansas NGCC plant with air permit limitations. Commenter s said specific conditions within the plant 's air permit limit natural gas usage to 9.6 billion cubic feet based on an annual rolling average, which according to AECC, translates to a maximum annual capacity factor of about 63%.

Commenter s said that if the EPA chooses to include facilities with pe rmit limits that prevent a facility from reaching 70% capacity utilization in the BSER determination, it should utilize a capacity factor that does not exceed currently permitted levels.

Comment 57: AR

- Unit

- level data discrepancies and methodology devia tions

Response 57: See section V.D. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 2. The EPA used the methodology described in Appendix 9 of the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP to assign unit

- level net generation and emissions. EPA followed this methodology because the information was not available to determine exact matches between units and generators. Because BSER q uantification works at the regional and state level, and the total emissions and total generation from the facility are the same (regardless of unit

- level apportionment), this data limitation typically has no influence on the the aggregate totals used. Fo r instance, at Union Power plant referenced below, all of the NGCC are categorized as likely affected so the collective reported generation and emissions from the facility that goes into BSER quantification is the same (e.g., 4.3 million short tons) , regar dless of how it is apportioned to the unit

- level. The same holds true at the generation level (e.g., 9.91 TWh for this plant). The EPA examined the commenter s ’ attachments, but it was not clear how or why they believe this results in a difference to the Ar kansas goal in these instances. The only instance where this limitation may be come of relevance is where some units at the plant are considered affect e d, and some are not. However, this does not appear to be of central concern with the plants listed belo w. Based on a review of the commenter s attachments, it appears the implication may be that it somehow impacted the “other emissions” associated with UTO. However, in this final CPP rule, EPA no longer includes useful thermal output in its goal computation s.
The following are summaries of the specific public comments under this comment:

Commenter s said that in the EPA's "Data File: 2012 Unit

- Level Data using the eGRID Methodology" dataset, the EPA used aggregate data rather than generator

- specific data for NGCC units, which may deviate from the methodology described in the "Description of 2012 Unit

- Level Data using eGRID Methodology" Technical Support Document (hereinafter "TSD").

Commenter s said that in analyzing the EPA's "Data File: 2012 Unit

- Level Data using the eGRID Methodology" dataset, they note that certain data elements appear to be derived without following the methodology (including the methodology for data priority) described in EPA's "Description of 2012 Unit

- Level Data Using eGRID Methodology " TSD. Commenter s said100 specifically, the EPA aggregated Combined Cycle Steam Part (hereinafter "CA") and Combined Cycle Combustion Turbine Part (hereinafter "CT") data before performing calculations, instead of using available generator

- specific data or pe rforming prime

- mover

- specific calculations. Commenter s said that this resulted in loss of generator

- specific accuracy and misapplication of data priority as described in the TSD at the following facilities:

• Dell Power Station generator units CTG1, CTG2, and STG

• Harry L. Oswald generator units 1

- 9

• Hot Spring Generating Facility CT1, CT2, and Steam Turbine (hereinafter "ST")1

• Magnet Cove Gas Combustion Turbine (hereinafter "GCT")1, GT2, and ST1

• Pine Bluff Energy Center generator units CT01 and CT02

• Thomas Fitzhugh generator units 1 and 2

• Union Power Partners LP generator units CTG1

- CTG7 and STG1

- STG4

Commenter s stated that while this treatment of NGCC data may seem negligible at a facility level, the cumulative effect would have a 26 lb/MWh difference in Arkansas' final goal. Commenter s said that additional discrepancies between the EPA's "2012 Unit

- Level Data using eGRID Methodology" dataset and the values that ADEQ compiled when replicating the methodology described in the "Description of 2012 Unit

- Le vel Data using eGRID Methodology" TSD can be found in the attached spreadsheet.

Commenter s said they seek clarification on the rationale behind the EPA's departures in the methodology used to derive generation and emissions data for these units from the m ethodology as described in the "Data File: 2012 Unit

- Level Data using the eGRID Methodology" TSD. Commenter s said that in addition, any necessary corrections to the dataset should be made before this data is used in the final goal computation for Arkansas.

Comment 58: AR

- The EPA should establish a ramp rate for re

- dispatch to NGCC

Response 58: See section V.D. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 2.

The following are summ aries of the specific public comments under this comment:

Commenter s supported a more gradual phase

- in of Block 2 to take into consideration current infrastructure feasibility and the overall magnitude of re

- dispatch and the degree to which it affects the book life of new and recently modified coal

- fired EGUs.

Commenter s said that in the October 28, 2014 NODA, the EPA sought comment on a more gradual phase

- in of Block 2 which considers the amount of utilization shift to NGCC feasible by101 2020 then grows NGCC utilization to the full target based on the timing needed to build out new infrastructure to support the target utilization. Commenter s said the magnitude of redispatch from NGCC to coal that is indicated in the goal

- setting formula for Arkansas is more c onsistent with long

- term resource planning decisions than with what are commonly considered dispatch decisions. Commenter s said this is because the amount of generation shifted within the formula (equal to approximately 64% of the generation from the five coal

- fired power plants that operated in Arkansas during some or all of 2012) reasonably would be expected to cause retirement of a significant portion of these units. Commenter s added that such compliance also would likely impair the remaining useful lif e of one or more coal

- fired EGUs such as Turk, Plum Point, and (potentially, upon retrofit) Flint Creek, and might require natural gas or transmission infrastructure upgrades.

Commenter s supported the consideration of current infrastructure feasibility a nd the use of a growth rate grounded in realistic timeframes for additional infrastructure deployment for Block 2. In addition, Commenter s suggested that the EPA should establish a threshold above which re

dispatch cannot reasonably be assumed to occur dur ing the time between state plan approval and 2020. Commenter s said the threshold should take into account at least (a) the overall magnitude of redispatch and (b) the degree to which it affects the "book life" of those coal

- fired EGUs that became operation al since 2010. Commenter s said the threshold also could take into account the effect on EGU remaining useful life of environmental controls retrofits underway at the time of the publication of the Proposed Rule. Commenter s said above this threshold, Block 2 should then be phased in, in a manner similar to Blocks 3 and 4.

Comment 59: AR

- Most RE options are impractical in AR because of inadequate wind and solar capacity, attainment of the RE goal for Arkansas will depend largely on access to RE from other states, the EPA should provide a clear RE credit compliance pathway and additional guidance regarding interstate trading

. Response 59: See section V.E. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 3. See section VIII of the final preamble for discussion of ERCs and compliance pathways.

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 prea mble.
The following are summaries of the specific public comments under this comment:

Arkansas and Associated Regional RE Goal

Commenter s said the goal

- setting formula assigns a 20% RE goal for an EPA

- designated "South Central" region (Arkansas, Kansas, Lo uisiana, Nebraska, Oklahoma, and Texas). Commenter s said renewable generation for each state in the region is assumed to grow towards this goal, from its current share of non

- hydro renewable generation, at an EPA

- assigned 8% annual growth rate. Commenter s stated that the application of this growth rate to current levels of renewable generation (rather than the 20% regional goal itself) yields the operative Arkansas goal of 7% renewable generation by 2030 and 5% for the interim goal period. Commenter s said t hat102 reasonable attainment of this goal using currently demonstrated technology, however, depends largely on access to renewable generation from other states that Arkansas cannot, under the proposed rule, guarantee through its own action.

Commenter s stated that most renewable energy options are impractical in Arkansas because of inadequate wind and solar capacity based primarily on topographic constraints. Commenter s said that solar energy projects in Arkansas have not performed as well as renewable energy p rojects in other states, and generally wind energy projects in Arkansas are not feasible.

Distribution of On

- Shore Wind Resources in EPAs South Central Region

Commenter s noted that regarding the proposed 20% regional goal, the EPA's "South Central" region contains two distinct categories of states for the purpose of RE. Commenter s said the first includes Kansas, Nebraska, Oklahoma, and Texas

- these states have among the best wind energy resources in the United States. Commenter s said that generally, wind e nergy makes up by far the largest share of demonstrated, non

- hydro, renewable generation, and consequently, the availability of wind resources is a significant determinant of the demonstrated non

- hydro renewable resources available to any state.

Commenter s said the second category of states within the EPA

- designated South Central region includes Arkansas and Louisiana, and these two states simply do not have the same level of on

shore wind resource. Commenter s said this bright

- line distinction means that i n Arkansas it currently is significantly less costly for a utility to negotiate a Purchased Power Agreement (PPA) to generate and deliver wind energy from one of the windier states than to construct utility

- scale wind generation in Arkansas. Commenter s sa id the strongest evidence of the contrast between the wind resource in Arkansas and the neighboring windy states that EPA grouped it with is that while every electric investor

- owned utility (hereinafter "IOU") or generation

- owning cooperative within Arkans as either includes, or is considering wind PPAs within their generation portfolios, there is not a single utility

- scale wind farm in Arkansas. Commenter s stated that Arkansas utilities currently buy wind energy primarily from Oklahoma and Kansas on the bas is of cost, and without the requirement of a state Renewable Energy Standard. Commenter s stated in a comparison of RE technical potential for each of the states in the South Central region the differences are due primarily to estimated wind resources.

Reco mmendations for Determining RE Goals in AR

Commenter s said that because imported wind energy is important to the cost

- effective attainment of the RE goals proposed within BSER, they make the following recommendations:

A. EPA should provide a clear RE cred it compliance pathway.

More specifically, EPA should clearly credit renewable generation based upon out

- of

state PPAs in a manner that does not depend on Arkansas negotiating agreements with neighboring states; and

EPA also should credit increased, custom er

- sited distributed renewable generation within a state, which is implemented after the date of the publication of the Proposed Rule, similarly to its proposed treatment of end

- use EE.103 B. Particularly, in the case of net

- metering for zero

- carbon RE, the EPA should provide an acceptable standard method of converting installed capacity to generation, and/or method(s) for measuring generation for net

- metering customers.

Other Needs and Recommendations

Checklist for compliance through interstate trading . Comm enter s also recommended that the EPA provide the states with a template (or checklist) containing all the required components for plans that rely on interstate trading to comply with the rates, in order to reduce the burden on states that either develop a state

- only plan or pursue an interstate trading plan for compliance, while providing a platform to streamline the EPA's review of Section 111(d) plans.

RE goals based on economic potential and demonstrated RE . Commenter s said that if the Final Rule contin ues merely to allow for interstate cooperation in the counting of RECs and out

- of

state PPAs, but does not make these tools available to states as a unilateral right, then they recommend that RE goals for each state be based upon the technical and economic potential for demonstrated RE generation within each state, rather than upon a regional average that assumes interstate cooperation.

Need for EPA to develop state

- specific technical and economic pathway

. Commenter s said that on page 7 of the "Alternate RE Approach TSD", the EPA suggests such a potential alternative method for goal

- setting that would calculate technical and economic potential. Commenter s said if the Final Rule does not make available clear, unilateral pathways for individual states to acc ess out

- of

- state renewable generation for compliance, then they recommend that the EPA further develop the state

- specific technical and economic potential pathway and make it available for comment before it is finalized so that stakeholders can better comp are this method to the other two RE approaches (regional and benchmarking) described by the EPA.

Compliance risk for states with no 'at

- risk' nuclear generation . Commenter s said that the EPA proposed as part of Block 3 that states with nuclear generation be eligible to receive credit for the carbon savings associated with keeping 6% of "each state's historical nuclear capacity" in operation. Commenter s said the EPA's 6% assumption is based upon a percentage of total U.S. nuclear power generation that the E PA deems to be at risk of retirement. Commenter s said that Arkansas does not anticipate any nuclear plant retirement during the time period contemplated for compliance, thus its nuclear generation is not "at risk." Commenter s said that the EPA should

reeva luate the BSER calculations regarding states with nuclear generation that is not "at risk," as the national percentage is not a uniform national trend and the EPA's standing assumption creates a compliance risk for those states.

Biomass fuels should be tr eated same as other RE technologies in goal setting . Commenter s said that for states such as Arkansas with rich renewable forest resources, biomass energy would provide a significant portion of projected renewable energy. Commenter s added that Arkansas'
st arting level of performance value in the EPA's proposed goal

- setting formula is based solely on biomass and wood

- derived fuels generation reported to the Energy Information Administration (hereinafter "EIA"). Commenter s said that combusting biomass for ene rgy does not produce a

one

- for

- one increase in net CO2 emissions because biomass is part of the natural carbon cycle. Commenter s said that for this reason, and because the EPA applies the renewable energy annual104 growth in the goal

- setting formula to existi ng biomass generation, biomass fuels should be treated in the same way as other renewable products, such as wind and solar, for compliance
purposes.

Comment 60: AR

- Proposed rule needs to account for annual CO2 emissions for Turk Plant

Response 60: The EPA has flagged the Turk Plant as under construction in 2012, and adjust ed the state’s coal generation and emissions upwards reflecting a representative full year of operation for the plant. For the EPA’s response to this comment, see the CO 2 Emission Per formance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenter s said that the John W. Turk, Jr. power plant commenced operation in December 20 12, and a full year of CO2 emissions for the facility should be accounted represented in the EPA database.

Commenter s said the John W. Turk, Jr. Power Plant ("Turk") began commercial operation on December 20, 2012, and therefore, the only CO2 emissions in the EPA's database for 2012 were startup emissions and ten operational days for Turk. Commenter s said by contrast, in 2013, Turk operated in a manner that the commenters considers a typical year for a baseload, coal

- fired power plant, i.e. all year long.

C ommenter s said the emissions from Turk must be factored into the baseline emissions levels in order for the proposed Rule to accurately capture the status quo. Commenter s said that because the 2012 baseline is not a representative sample as it pertains to Turk (or other factors, for that matter), the commenters proposes a substitution of calendar year 2013 values, in lieu of 2012 values, for Turk in the eight

- year average (2005

- 2012) proposed in a prior comment

Comment 61: AR

- Arkansas is an exporter of coal

- fired generation; the costs to reduce emissions should fall on the out

- of

- state utilities

Response 61: See section V.III.C. of the final rule preamble of the CPP for the EPA’s response to this comment.

The following are summaries of the specific publi c comments under this comment:

Commenter s stated that Arkansas is an exporter of coal energy, and the costs of reducing emissions from Arkansas's coal fleet should fall heavily on the out

- of

- state utilities with entitlements in Arkansas coal plants.

Commen ter s stated that Arkansas is an exporter of coal

- fired energy, and hence has more coal capacity covered by the CPP than other states with the same consumption of coal

- fired energy. Commenter s stated that in 2012, Arkansas energy generation was 26% more tha n the sum of105 Arkansas retail sales and 10% retail losses; in 2013, Arkansas generated at least 18% more energy than it used. Commenter s stated that these large exports are partially due to the fact that 30% of Arkansas coal capacity is owned by or sold und er long

- term contracts to out

- of

- state utilities. Commenter s summarized that these non

- Arkansas entitlements comprise the following: Independence 1 is 25% owned by Entergy Mississippi (According to its 2012 IRP, Entergy Arkansas sells another 4% of Indepen dence 1 in long

- term wholesale sales, most out of the state); Independence 2 is owned 25% by Entergy Mississippi, 7.1% by East Texas Coop, and 14.4% by Entergy Power for sales into the wholesale market (According to its 2012 IRP, Entergy Arkansas sells abo ut 8% of each White Bluff unit in long

- term wholesale sales, most out of the state); Plum Point is 36% owned by out

- of

- state utilities; 57% is owned by LS Power, which sells another 38% to out

- of

- state utilities and 11% into the wholesale market. The remai ning 15% or so (about 100 MW) is owned by or sold to Empire District Electric, which has a peak load of about 1,150 MW and about 3.3% of its sales (or a peak of about 40 MW) in Arkansas (So even this capacity is mostly serving out

- of

- state load); Turk is o wned 8% by Oklahoma Municipal Power Authority and 7% by East Texas Electric Coop, Inc; Meanwhile, SWEPCo has two coal units (Turk and Flint Creek) in Arkansas, for about a third of its coal capacity, even though Arkansas represents only about a fifth of SW EPCo's sales.

Commenter s stated that the costs of reducing emissions from Arkansas's coal fleet will, and should, fall heavily on the out

- of

- state utilities with entitlements in Arkansas coal plants. Commenter s stated that if the Arkansas DEQ allocates tho se plants' CO2 allowances equal to their share of total Arkansas coal

- plant emissions, the out

- of

- state owners will need to pay other generation owners for emission credits or accept lower production levels. Commenter s added that if the Arkansas DEQ allows unused allowances from other states to count towards Arkansas compliance, the owners may reduce output at out

- of

- state plants, or retire them entirely, to free up allowances to meet their Arkansas obligations.

Commenter s stated that partly as a result of coal generation for exports, a much greater percentage of Arkansas energy production is from coal than the national average. Commenter s added that in 2013, 53% of Arkansas electric energy production came from coal, more than a third greater than the 39% o f national energy generation from coal (EIA Form 923, 2013).

Commenter s concluded that retirement of the exporting coal plants would reduce Arkansas's generation requirements. Commenter s added that retiring the four Independence and White Bluff units woul d require replacing only about three of them with renewables, energy efficiency, and increased operation of gas combined

- cycle units. Commenter s stated that under a mass

- based approach, as advocated by SWEPCo and the Bipartisan Policy Center presentations (October Presentations 1 and 2), these reduced exports would move Arkansas toward compliance with the Plan.

Comment 62: AR

- generation companies targeted AR for recent installation of coal

- fired plants; subsequently complian ce in AR is made more difficu lt

Response 62: See sections V.C. and VIII of the final rule preamble of the CPP for the EPA’s response to this comment.106 The following are summaries of the specific public comments under this comment:

Commenter s asserted that generation companies targete d AR for recent installation of coal

- fired plants; subsequently compliance in AR is made more difficult.

Commenter s stated that while other states were announcing the retirement of coal capacity, generation companies were building coal plants in Arkansas; the 665 MW Plum Point was completed in 2010, and SWEPCo completed the 600

- MW Turk plant in 2012. Commenter s added that since 2008, 96% of Arkansas capacity additions have been coal, compared to 15% in the rest of the U.S. Commenter s stated that the two pla nts added in Arkansas, a plant with only about 1.5% of U.S energy output, amounted to over 8% of national coal

- plant additions.

Commenter s stated that while SWEPCo was adding Turk to Arkansas's compliance burden, SWEPCo announced the retirement of its Wel ch 2 unit in Texas, and its affiliate Public Service of Oklahoma has announced retirement of both of its Northeastern coal units, which will make compliance in Texas and Oklahoma easier. Commenter s stated that no coal capacity has been retired in Arkansas, and no retirements have been announced. Commenter s asserted that nationally, about 230 coal

- fired units totaling 22,000 MW were retired in 2005

- 2013, or about 7% of total coal capacity. Commenter s added that another 35,000 MW, roughly 11% of the fleet,

ar e scheduled for retirement in 2014

- 2026, even before any effect of the Plan.

Comment 63: AR

- Arkansas is behind in EE and RE, but should be able to meet goals

Response 63: See sections V.A., V.E., and VII of the final rule preamble of the CPP for the EP A’s response to this comment.

The following are summaries of the specific public comments under this comment:

Commenter s asserted that AR is behind in regards to energy

- efficiency and renewables, but AR should be able to meet its goals.

Commenter s stated t hat the Arkansas utilities have come late to energy

- efficiency. Commenter s stated that until the Arkansas PSC ordered the investor

- owned utilities to ramp up their efforts, starting in 2009 (Order, APSC Docket Nos. 06

- 004

- R, 08

- 144

- U), none of the Arkansas utilities had made any significant effort to improve customer efficiency. Commenter s added that the Arkansas utilities have also been passive with respect to renewable resources, neither acquiring significant amounts of utility

- scale renewables nor encour aging customers to add roof

- top solar and other behind

- the

- meter renewables.

Commenter s stated that the decisions of the utilities led to their current situation, and some additional effort may be required to catch up to the Northeast on energy

- efficiency, neighboring states on renewables, or most states in replacing their coal fleets with cleaner generation. Commenter s added Arkansas has some offsetting advantages, including the ramp

- up of energy

efficiency programs much earlier and faster than the EPA ant icipated, the development of large amounts of wind capacity (and transmission to bring it to market) in adjacent states, a large107 amount of underutilized natural

- gas combined

- cycle (NGCC) capacity, and falling costs for solar and wind resources.

Commenter s concluded that while the state goals are derived from EPA's very conservative estimate of achievable reductions from each block, Arkansas should be able to exceed any of the three targets and meet its goals with multiple combinations of dispatch, renewable s and efficiency. Commenter s added that while SWEPCo was correct in observing that "EPA's building blocks are based on flawed assumptions," those flaws mostly understate the magnitude of resources for compliance.

Comment 64: AR

- 82% is an achievable cap acity factor for NGCCs; Arkansas can close co

fired plants and re

- dispatch if raise NGCC capacity factor

Response 64: See section V.D. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 2.

The following are summaries of the specific public comments under this comment:

Commenter s stated that AR can close coal plants and re

- dispatch that energy if they raise the NGCC capacity factor to 78%; and added, 82% overall is an achievable capacity fac tor

.
Commenter s stated that the coal plants that are most likely to be retired prior to 2030, White Bluff and Independence, with or without the CPP, produced about 20,950 GWh of energy in 2013. Commenter s stated that bringing the NGCC plants with the capa city factors of less than 70% in 2013 up to 70% would produce about 17,800 GWh of additional energy; raising the NGCC capacity factors to about 78% would replace all the energy from Independence and White Bluff, without any renewables or load reductions.

Commenter s added that the EPA uses nameplate capacity for the NGCCs in computing the feasible capacity factors. Commenter s stated that a unit's nameplate capacity is often greater than its summer or winter rated output, so a 70% capacity factor on nameplat e capacity will require more than 70% capacity factor for the other ratings. Commenter s stated that based on the summer ratings above (and a corrected 580 MW rating for Dell), the capacity factors equivalent to 70% of nameplate would be 77% to 84% and 82% overall for the various non

- cogenerating units. Commenter s added that these are readily achievable capacity factors for most NGCCs. Commenter s stated that while the AECC asserts that "the actual tested ratings of NGCCs, and not the nameplate ratings, shoul d be used to determine a state's NGCC capacity under the proposed Rule" (Clean Power Plan Comments, September 30, 2014, at 4), the requirements for Arkansas would be the same at an 82% capacity factor based on summer rating.

Comment 65: AR

- Can exceed t he EPA targets for renewables

Response 65: See section V.E. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 3.108 The following are summaries of the specific public comments under this com ment:

Commenter s stated AR can exceed EPA targets for renewable

.
Commenter s stated that the potential adds up to nearly thirteen times the EPA's renewable

energy target for 2030. Commenter s concluded that while not all of this potential will be developed, Arkansas certainly can exceed the EPA targets with imports, indigenous renewables, or a combination of the two.

Comment 66: CA

- Appears current mix of energy and environmental programs in California will achieve CPP goals

Response 66: Please see Section V, VI, and Section VIII of the preamble for discussion of changes to the BSER between proposal and final based on comment s and our further consideration , the quantification of the BSER in this final rule, and a description of the state goals.

The followin g are summaries of the specific public comments under this comment:

Commenter s stated that the U.S. EPA set California's interim rate

- based goal (the average of years 2020

- 2029) at 556 lbs CO2/MWh and the final goal at 537 lbs CO2/MWh by 2030. Commenter s i ndicated that the California Energy Commission (CEC), in consultation with ARB and California Public Utilities Commission, performed a preliminary analysis to estimate the expected CO2 rates in 2020, 2024 and 2030. Commenter s indicated that based on this a nalysis, they believe that using the current mix of energy and environmental programs being implemented within California will bring California into compliance with the U.S. EPA proposed targets for California. Commenter s said in addition, U.S. EPA's rule, as proposed, will further support existing state policies on energy and air quality.

Comment 67: CA

- CPP is less stringent tha n what California could achieve

Response 67: Please see Section V, VI, and Section VIII of the preamble for discussion of chan ges to the BSER between proposal and final based on comment s and our further consideration , the quantification of the BSER in this final rule, and a description of the state goals.

The following are summaries of the specific public comments under this comm ent:

Commenter s asserted that the Clean Power Plan is less stringent than what CA could achieve

.
Commenter s asserted that California will very likely exceed its 33% RPS by 2020. Commenter s added that many expect that Gov. Brown will propose new targets for 2030 that will be equivalent to between 50% and 60% renewable energy standard.109 Commenter s warned that while it is clear that the EPA intends to build upon California's progress, the EPA must take care to avoid watering down the efforts of California and its neighboring states.

Comment 68: CA

- California's existing state

- mandated 33 RPS is undervalued in the 2030 target
Response 68: See section V.E. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Bu ilding Block 3.

The following are summaries of the specific public comments under this comment:

Commenter s stated that additional renewable energy resources identified in building block 3 of the proposal are based on a regional analysis of existing renewab le portfolio standards (RPS). Commenter s said that for the west, this means that California's existing state

- mandated 33 percent RPS is undervalued in U.S. EPA's 2030 target for California, as many other western states do not have comparably aggressive RPS goals. Commenter s indicated that using the EPA's current methodology, California is credited with a 20 percent RPS goal by 2030 to meet the proposed target of 537 lbs CO2/MW

- hr.

Comment 69: CO

- Climate change impacts are obvious and costly. The EPA sh ould finalize and enforce the CPP as quickly as possible

Response 69: See section I.A. of the final rule preamble of the CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:

Commenter s argued climate change impacts are obvious and costly, without the CPP, the power mix will remain dominated by coal. C ommenter s urged EPA to finalize and enforce the CPP as quickly as possible

.
Commenter s stated at the direction of City Council, who serve a s the Board of Directors for the utilities, an independent consultant conducted a study of various options for decommissioning the Martin Drake facility. Commenter s stated the consultant issued their final report at the end of 2013. Commenter s stated the s tudy estimated the net present value of the direct financial costs for all the utility's power generation over a 30

- year time horizon for a dozen decommissioning scenarios. Commenter s stated the costs were compared to a base case of continuing operation of Martin Drake for 20 years. Commenter s stated the study also estimated the net present value of the indirect social and environmental costs of the various decommissioning options over the same 30

- year period. Commenter s added there are many components to t he indirect costs but greenhouse gas and critical air contaminants were the two largest.110 Commenter s stated the study concluded, that given the age of Martin Drake, it is not feasible to continue to operate it for 20 more years. Commenter s added it also det ermined that the indirect costs were nearly as large as the direct financial costs. Commenter s stated two scenarios allowed for decommissioning in six and nine years adding natural gas or a mix of wind and natural gas generation. Commenter s added these two scenarios increased direct costs by 4.8 to 5.4 percent while decreasing indirect costs by 14 to 19 percent, three to four times the direct cost increase. Commenter s stated while these direct cost increases are not trivial, it must be realized that Colorad o Springs Utilities prides itself on having electric rates 20 percent lower than the comparable utilities along the front range. Commenter s stated hence, this aging coal plant could be decommissioned while still easily allowing the utility to maintain belo w average rates.

Commenter s stated you would think that Colorado Springs' City Council, having just witnessed firsthand the trauma and destruction from two back to back wild land fires and seeing the results of this study would quickly move to create a dec ommissioning plan. Commenter s added however, it's obvious from public comments that direct financial costs far outweigh the indirect social and environmental costs for a majority of accounts. Commenter s stated executives in the utilities state they can kee p Martin Drake operating for another 30 years.

Commenter s stated Colorado Springs is just one of hundreds of communities across the country with similar scenarios playing out. Commenter s stated climate change impacts are becoming obvious and very costly. C ommenter s added the cost to change the electric power generation mix is manageable, yet without these proposed greenhouse gas regulations, our power generation mix will remain dominated by coal because there's insufficient reasons to change. Commenter s

con cluded please proceed to finalize and enforce these regulations as quickly as possible.

Comment 70: CO

- The EPA should require states to achieve the deepest reduction possible and use wildlife

- friend renewables and energy efficiency. The EPA should stre ngthen Colorado's current goal

Response 70: The EPA has not included demand

- side energy efficiency (building block 4) in the final BSER determination. See section V.E. of the final rule preamble of the CPP for the EPA’s response to this comment and more in formation about Building Block 3 and see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenter s requested that EP A work to ensure that it achieves the deepest reductions possible by requiring states to use wildlife friendly renewable energy and energy efficiency and not just by simply burning more natural gas. Commenter s added that in its rulemaking EPA estimated tha t Colorado can generate nearly 15 percent of our power from renewable sources in 2020, which is substantially less ambitious than our own standards of our own energy goal of 30 percent power from renewables in 2020. Commenter s concluded that the EPA should strengthen the proposed standard to reflect Colorado's current goal.111 Comment 71: CO

- The EPA should strengthen the proposed RE goal for Colorado

Response 71: See section V.E. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 3 and see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenter s stated in its rulemaking EPA estimated Colorado can generate nearly 15% of our power from renewable sources in 2020 which is substantially less ambitious than our own statewide renewable energy goal of 30% power from renewables by 2020. Commenter s concluded the EPA should strengthen the proposed standard to reflect Colorado's current goal.

Comment 72: CO

- RE targets are achievable; emission reduction targets must not be weakened

Response 72: See section V.E. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 3 and see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this c omment:

Commenters argued e xisting state policies indicate that the CPP's renewable energy targets are achievable. The commenter s further argue d that (for CO and other states) the emission reduction targets must not be weakened.

Commenter s stated the City of Aspen is a strong proponent of renewable energy, and as such supports EPA's assessment of the potential for renewable energy deployment in individual states and regions. Commenters added several independent analyses indicate that EPA's suggestions

are achievable. Commenters stated for example, the renewable energy generation levels projected by the US Energy Information Administration (EIA) describe more renewable energy in 2020 under a business as usual approach than what the CPP's interim requirements (in 2020) suggest. Commenters added further, 29 states and the District of Columbia currently have renewable electricity standards (RESs). Commenters stated interestingly, the actual renewable energy generation of 7 states in 2013 exceeded the CPP's 2030 renewable energy target. Commenters stated additionally, 17 of those 29 states have smaller renewable energy targets under the CPP that what their RES's require under state law; several standouts include:

• California (State: 33% by 2020; EPA: 21% by 2030)

• C olorado (State: 30% by 2020; EPA: 21% by 2030)

• Connecticut (State: 27% by 2020; EPA: 9% by 2030)

• Hawaii (State: 40% by 2030; EPA: 10% by 2030)

• Massachusetts (State: 22% by 2020; EPA: 24% by 2030)112 • Minnesota (State: 31% by 2020; EPA: 15% by 2030)

• New York (S tate: 29% by 2015; EPA: 18% by 2030)

• Oregon (State: 25% by 2025; EPA: 21% by 2030)

Commenters concluded given the City of Aspen's positive experience with renewable energy diversification, the enormous benefits that RGGI states have experienced under their carbon abatement program, and the fact that many states already have mechanisms in place to meet or exceed the CPP's 2030 renewable energy suggestions, c ommenters stated that the CPP's emission reduction targets must not be weekend in the final rulemakin g.

Commenters stated Tri

- State claims they are already doing all they can, and that particularly expanded transmission would be required to install more renewable energy. C ommenter s said rights of way difficulties, timeframe for licensing, and risk in havi ng to abandon too difficult transmission projects altogether are indeed daunting; yet Tri

- State fails to consider multiple renewable energy opportunities on existing or soon to be built transmission lines.

Comment 73: CO

- Colorado is ahead of the curve , but should continue to advance renewables

Response 73: See section V.E. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 3 and see the CO 2 Emission Performance Rate and Goal Computatio n TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenters stated that CO is ahead of the curve but should continue to advance renewables, be a national leader

.
Commenter s stated that now many of us know and applaud the fact that Colorado's already ahead of the curve and moving away from coal as a primary energy source and posturing the increase of renewable energy statewide from sources like wind and solar. Commenters add ed that just meeting minimum level of this newly proposed standard through past action should not be the final goal. Commenters stated that to continue being a national leader for renewable energy and really tackling climate change before it's too late, Coloradans should be embracing the standard as a way to increase our state's efforts to reduce carbon pollution, to increase our new energy goals, and to help the neighboring states move forward quickly to make this national proposal a success across the A merican west where there is ample opportunity and resources to set an example for the nation.

Comment 74: CO

- The EPA's approach for calculating state target levels of renewable energy performance is flawed

.113 Response 74: See section V.E. of the final ru le preamble of the CPP for the EPA’s response to this comment and more information about Building Block 3 and see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenters stated EPA examined mandatory state RPS requirements from the Database for State Incentives for Renewables and Efficiency ("DSIRE"). The commenters said EPA essentially ignored the factors that distin guish RPS requirements by state, and further overlooked states' investment in EE, hydro, or qualified fossil fuels (waste coal, carbon capture sequestration). The commenters said EPA only considered the RPS requirements for investor owned utilities (IOUs) in calculating state effective levels in 2020; under this approach, Colorado's effective RPS level in 2020 is 30% (as compared to Colorado's existing RES requirement of 30% by 2020 for IOUs, and 10

- 20% by 2020 for municipalities and rural electric cooperat ives).

Commenters stated the Proposed Rule relies on resource projections that overestimate reasonably achievable expansion levels and exceed industry plans. The commenters said EPA assumes qualifying non

- hydro renewable generation in the contiguous U.S. to grow from 213 TWh in 2012 to 281 TWh by 2020, reaching 523 TWh by 2030. The commenters said these projections far exceed the Energy Information Administration ("EIA") non

- hydro renewable generation forecast in their Annual Energy Outlook 2013 ("AEO 2013 ") that grows from 202 TWh in 2012 to 275 TWh by 2020, reaching 317 TWh by 2030 for all sectors. The commenters said EPA assumed rapid growth in non

- hydro renewable generation also exceeds its own long

- term forecast in the Proposed Rule's regulatory impact assessment (356 TWh in 2030).

Commenters stated in Colorado specifically, EPA assumes qualifying non

- hydro renewable generation to grow from 6,193 GWh in 2012 to 7,426 GWh by 2020, reaching 10,840 GWh by 2030; these projections far exceed EPA's own model ed results during its regulatory impact analysis which predict renewable expansion to reach 6,676 GWh by 2020 and 9,612 GWh by 2030. The commenters said notably, Colorado's RES allows the contribution of small hydroelectric facilities (<30MW) towards compl iance. The commenters said these facilities account for 1.73% of Colorado's total electric generation; excluding the contribution of these resources as EPA has done in its analysis would lower Colorado's 2020 effective RES level to 28.27%. The commenters s aid EPA's implicit incorporation of hydroelectricity into the targets and subsequent exclusion of it as a renewable energy resource under the Proposed Rule sets too high of regional renewable targets than was previously established under the states' respec tive programs. The commenters said EPA also attempted to quantify regional inequalities, and in so doing, blurred the realities of any one state; this has the effect of distorting Colorado's investments in renewable energy, dating back at least to the pass age of the RES, made effective by Colorado vote, in 2004.

Commenters stated Colorado applies a multiplier to select, in

- state resources; specifically, Colorado's RES allows every kWh generated from solar electric generation located in the territory of an IOU, cooperative or municipal utility, and generated by a facility that begins operation before July 1, 2015 to count as 1.5 kWh, and 3.0 kWh, respectively for RES114 compliance purposes. The commenters said EPA's inclusion of the multiplier in the calculatio n of an effective target makes EPA's target higher than what is realistically attainable for Colorado.

Comment 75: CO, NM, NV

- Western states are prepared to meet the EPA's standards

Response 75: Please see Section V, VI, and Section VIII of the preambl e for discussion of changes to the BSER between proposal and final based on comment s and our further consideration , the quantification of the BSER in this final rule, and a description of the state goals.

The following are summaries of the specific public comments under this comment:

Commenters asserted that western states have been proactive and are well prepared to meet EPA's standard within the timeframe EPA proposed

.
Commenters stated that Western Resource Advocates has analyzed Colorado, New Mexico and Nevada's current energy policies and finds that these three states will be very close to achieving EPA's proposed 2030 targets. Commenters added that in fact, in Colorado and New Mexico, policies already in place will accomplish over 80 percent of what EP A standard requires. Commenters added that in Nevada with existing policies and plans, the state and main utility will have little if anything else to do to meet EPA's proposed requirements, and that's summarized from the graph in front of me.

Commenters s tated that in the west many states and utilities have already been taking the initiative to advance clean energy and prove energy efficiency and transition the most carbon intensive power plants to cleaner sources of energy; key stakeholders including our utilities, state agencies, health and environmental advocates have worked together to pursue creative, workable solutions. Commenters added that those solutions protect our community's air quality and health and have protected electricity customers from un tenable rate increases.

Commenters stated that for example, Colorado's Clean Air Clean Jobs Act, Nevada's Senate Bill 123, and New Mexico's recent plans to advance the retirement of a portion of San Juan generating station put these three states in an exce llent position to meet the standards and are moving those states toward a lower carbon footprint. Commenters added that all five southwestern states in the four corners region have energy efficiency programs in place to further reduce the environmental imp acts of our energy needs.

Commenters stated that an analysis finds that if Colorado and New Mexico simply follow through on what they're planning to do anyway under current policies, both states will accomplish over 80 percent of EPA's standard. Commenters added that in Nevada, by implementing current policies as already planned, the state will need to take few additional actions, if any, to meet EPA's standard.

Commenters concluded that while there's more to do over time and Colorado and New Mexico as well as several other states in the region ; western stakeholders can and will come together to115 find workable low

- cost practical solutions that protect communities, economies, jobs, and the environment.

Comment 76: CO

- CPP is achievable and beneficial

Respo nse 76: Please see Section V, VI, and Section VIII of the preamble for discussion of changes to the BSER between proposal and final based on comment s and our further consideration , the quantification of the BSER in this final rule, and a description of the state goals.

The following are summaries of the specific public comments under this comment:

Commenters argued the CPP is achievable and beneficial

.
Commenters stated based on the success of current carbon abatement and renewable energy programs, Aspen is confident that the CPP's nationally aggregated 30 percent CO2 reduction targets for 2030 are achievable and in fact quite modest. Commenters added further, analysis shows that because of early action and existing policy, Colorado is well positioned to mee t the CPP's proposed target of 35 percent below 2005 levels by 2030.

Commenters stated a significant part of the City of Aspen's support for the proposed Rule comes from ongoing experience diversifying and de

- carbonizing electricity sources. Commenters sta ted currently, Aspen Electric's generation portfolio contains approximately 80 percent renewables, yet it has the fifth lowest residential electricity rates (amongst municipal utilities) in the state. Commenters added rates are also lower than those of mos t Colorado coops and investor owned utilities. Commenters stated the Aspen region is also an energy efficiency success story. Commenters stated between 2011 and 2013, Energy Smart Colorado worked in Gunnison, Eagle and Pitkin Counties to improve energy eff iciency in participating homes by an average of 10 percent, while generating $2.25 in benefits for every $1 invested. Commenters stated clearly, investments in renewables and efficiency by former and current community leaders have not only benefitted the e nvironment, they have also insulated ratepayers against the inherent volatilities of fossil

- fuel markets and prices (prices that should only increase as their true costs to society begin to be monetized). Commenters added given that the Aspen area's renewa ble energy and energy efficiency penetration have surpassed the CPP's 2030 BSER calculation for Colorado (6.5 percent increase in renewable energy and a 6.7 percent decrease in electricity demand), the City of Aspen is confident that the Plan is achievable

.
Commenters stated likewise, early and ongoing action at the state level makes Colorado well

positioned to meet EPA's proposed standards. Commenters added under current policies including the state Renewable Energy Standard (RES), Colorado is projected to reduce emissions 28 percent by 2030

. Commenters stated this means that if the CPP is not strengthened, Colorado will meet 81 percent of the proposed rate reductions (needing only an additional 7 percent) to comply with the 2030 target under current state plans. Commenters stated Colorado's RES is projected to reduce CO2 emissions by 30 million tons, create more than 33,000 jobs and generate 4.3 billion in economic output. Commenters added further, many Western residents and Coloradans are supportive of the CPP. Commenters expounded at the Denver hearings on the116 CPP during the summer of 2014, supportive testimony outnumbered those opposed by 5 to 1. Commenters stated lastly, Larry Wolk, Executive Director and Chief Medical Officer at the Colorado Department of Public Health and Environment, submitted a letter to Administrator McCarthy with 15 state agency leaders in 2013 urging EPA to develop a "stringent but flexible" framework to reduce carbon pollution from the electricity sector. Commenters concluded the proposed CPP closely aligns with what these state officials requested in a national rule requiring carbon pollution standards for the electricity sector.

Commenters stated states that have already taken a regional approach to reducing carbon emissions have done so successfully and their experience indicates that the CPP is achievable. Commenters added the nine Northeast and Mid

- Atlantic States that participate in the Regional Greenhouse Gas Initiative (RGGI) have reduced power plant GHG emissions by almost 40 percent since 2005 while creating 23,000 job years, generating $2.4 billion in economic benefits, reducing electric rates by 8 percent, saving consumers in more than $2 billion in energy costs and generating $10.4 billion in health benefits. Commenters stated not only does RGGI's ongoing success demonstrate that reducing emissions can be an economic opportunity, it also emphasizes that a regional approach to emissions reduction, (which is allowed and encouraged in the proposed CPP) can bolster efficiency and achievability. Commenters added during the written comment period on this rulemaking, the RGGI states submitted a joint letter to EPA requesting that the CPP be strengthened.

Comment 77: CO

- EE

- EnergySmart Program details and accomplishments

Resp onse 77: The EPA has not included demand

- side energy efficiency (building block four) in the final BSER determination. See section V.A. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 4

. The following are summaries of the specific public comments under this comment:

Commenters detailed the EnergySmart program and how EE improvements have been accomplished through the program

.
Commenters stated in the last four years Boulder County has im plemented and piloted innovative energy efficiency services that are now being adopted by both the Independent Power Provider and Municipal Utilities serving our county. Commenters stated the EnergySmart service uses assessments, advising and incentives to make energy efficiency upgrades easy and financially rewarding for homeowners, businesses and property owners. Commenters added in just four years, 13,000 homes and 3,200 (nearly one

- half) of Boulder County businesses have participated in the service. Com menters stated residential participants have taken advantage of nearly $1.5 million in rebates and $2 million in loan financing. Commenters added on the commercial side, Boulder County businesses have already invested nearly $12 million in energy efficienc y projects.

Commenters stated EnergySmart introduced the personalized assistance of an energy advisor to our community, which has proven successful. Commenters stated through EnergySmart rebates,117 customers implement efficiency upgrades that utility DSM off erings alone have been unable to motivate.

Commenters stated a Department of Energy BetterBuildings grant, funded through the American Reinvestment and Recovery Act, launched EnergySmart, and funded additional EnergySmart rebates that when combined with ex isting utility rebates brought the payback period within the customer's horizon. Commenters added on average, EnergySmart rebates made up 25 percent of the total rebate required to move the project. Commenters stated of the 1,177 commercial projects comple ted since EnergySmart began, more than half are now accruing savings for the customer beyond what it cost to implement the project.

Commenters stated each year since EnergySmart's inception, the demand for both advising and rebates has exceeded capacity. C ommenters stated other entities have adopted offerings modeled on EnergySmart innovations, including the City of Longmont's Business Efficiency Grant and Platte River Power Authority and Xcel Energy's Refrigeration and HVAC Efficiency programs. Commenters stated hundreds of contractors have begun specializing in efficient equipment, and energy service companies such as McKinstry have begun working with local property owners at scale.

Commenters stated with EnergySmart's initial projects now yielding savings , customers have appetite for further upgrades, and property owners are coming to view upgrades as a standard investment, whether motivated by competition, cost savings, code requirements, or tenant relations. Commenters stated building owners who relied h eavily on EnergySmart advisor assistance early on are incorporating efficiency upgrades and maintenance into their business models and undertaking projects on their own. Commenters added this frees EnergySmart to pursue new customers, deeper energy retrofi ts, and clean energy supply.

Comment 78: CO

- BB1 HRI

Response 78: See section V.C. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 1.

The following are summaries of the specific pub lic comments under this comment:

Commenters stated that some stakeholders are stating that the EPA's 6% assumption of improvement is over

- stated, and merely 1.5% is achievable. The commenters stated it is interesting to note that, in 2006, Tri

- State's most recently constructed coal fired power plant

- (a portion of) Springerville in Arizona

- was built as a sub

- critical plant than others built in that period, all being super

- critical. The commenters said significant improvements are possible.

Comment 79: C O

- Building blocks irretrievably flawed; cannot ramp up to 70% capacity

Response 79: See section V.D. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 2.118 The following are summaries of the specific public comments under this comment:

Commenters argued EPA failed to support the claim that the states' targets under each Building Block are achievable.

Commenters stated with the exception of Building Block 1, each of the measures that EPA ha s proposed to adopt as part of the BSER for existing affected EGUs reaches beyond the individual regulated sources themselves, and therefore is not a "system of emission reduction" under section 111 of the Act. Commenters added nonetheless, even if the Age ncy's proposed BSER were lawful, EPA's Proposal is faulty because the Agency has failed to support its claim that the states' targets under each Building Block are achievable.

Commenters stated it is fundamental that a standard of performance under section Ill must "reflect[] the degree of emission limitation achievable through the application of the best system of emission reduction which (taking into account the cost of achieving such reduction and any

non

- air quality health and environmental impact and e nergy requirements) the Administrator determines has been adequately demonstrated." Commenters added EPA may not base its determination that a standard is achievable on "mere speculation or conjecture." Commenters stated rather, the Agency bears the burden of showing that a standard is achievable "for the industry as a whole" and "under the range of relevant conditions which may affect the emissions to be regulated," including "under most adverse conditions which can reasonably be expected to recur." Commen ters stated in order to show that the Proposal is achievable, EPA must "(1) identify variable conditions that might contribute to the amount of expected emissions, and (2) establish that the test data relied on by the agency are representative of potential industry

- wide performance, given the range of variables that affect the achievability of the standard."

Commenters concluded EPA has not done so in this rulemaking. Commenters added rather, the Agency has set targets under each Building Block that far exc eed what is feasible or cost

effective. Commenters stated in particular, the targets under Building Blocks 1 and 2 (i.e., the Building Blocks that involve measures taken by affected EGUs, either individually or collectively across a state) are not supporte d by the rulemaking docket and are simply not achievable. Commenters added Building Block 3 is based on unrealistic assumptions, and Building Block 4 gives rise to enforcement difficulties. Commenters concluded as a result, compliance with the state goals will be extremely costly and difficult (if not impossible) for any state as a whole and will certainly be impossible for many individual affected EGUs to achieve.

70% Capacity not achievable

. Commenters stated EPA proposes to find that it is achievable fo r each state, in the aggregate, to shift generation from coal

- fired units to NGCC units until the existing NGCC units reach a statewide maximum capacity factor of 70 percent based on nameplate capacity (or 65 percent, under the alternative goals on which E PA solicits comment). Commenters stated in developing this target and concluding that it is achievable, EPA adopts an overly simplistic view of how electricity is generated, dispatched, and distributed by utilities in the real world. Commenters added the A gency incorrectly assumes that all NGCC units have roughly the same ability to ramp up generation; that all NGCC units have access to adequate natural gas; that load formerly served by coal generation can instead be served by in

- state NGCC generation; and that new pipeline and transmission infrastructure can be built quickly and inexpensively. Commenters stated yet electricity is not the easily

- produced, uniform, fluid119 commodity that EPA assumes it is. Commenters concluded many significant barriers will
pro hibit a state's NGCC units from ramping up generation to an overall 70 percent capacity factor, making this Building Block unachievable.

70% Capacity not achievable; NGCC's not subject

. Commenters stated for the two NGCC facilities that Tri

- State owns, ramping up utilization to a 70 percent annual capacity factor would be impossible. Commenters stated Tri

- State owns the J.M. Shafer Generating Station (J.M. Shafer) and the Rifle Generating Station (Rifle), both located in Colorado. Commenters stated as

an initial matter, Tri

- State notes that neither of these NGCC plants should be subject to the Proposal, as neither plant meets the applicability criteria for the source category that EPA defined in its January 2014 proposed NSPS for new EGUs. Commenters stat ed as proposed, the source category would include a stationary combustion turbine only if it actually supplies "one

third or more of its potential electric output and more than 219,000 MWh net

- electrical output to a utility distribution system on a 3

- year rolling average basis." Commenters stated according to the 2012 generating data on which EPA relies in this Proposal, J.M. Shafer operated at only a 21 percent capacity factor, while Rifle operated at a mere 3 percent capacity factor and generated less tha n 19,000 MWh. Commenters added the 3

- year rolling average net

- electrical output for each of these generators is well below 219,000 MWh. Commenters concluded thus, because these units do not fall within the source category defined in the January 2014 NSPS p roposed rule for new EGUs, section 111(d) would not authorize Colorado to impose any federally enforceable obligation on Tri

- State's NGCC units.

Shafer and Rifle baseload facilities

. Commenters stated it is extremely uncertain whether J.M. Shafer and Rifle could even operate at a higher capacity factor. Commenters added both of those plants were built for reliability purposes (i.e., they operate only at times of high electricity demand) and not as baseload facilities. Commenters concluded if the plants had to run at a higher capacity factor, it is likely those plants would quickly have technical issues and fail.

Permits prohibit from reaching 70% CF

. Commenters stated in any event, even if Tri

- State's NGCC units were subject to the Proposal (which they are not), the limits contained in their Title V permits would prohibit them from increasing utilization to a 70 percent annual capacity factor. Commenters stated these permits contain numerous requirements, including annual fuel usage limitations. Commenters a dded J.M. Shafer's annual natural gas consumption is limited to 10,375 million standard cubic feet per year (for the turbines), while Rifle's consumption is limited to just 1,650 million standard cubic feet per year.

Commenters stated there are numerous sc enarios in which the facilities could operate during a year and reach these annual fuel limits. Commenters stated the actual duration of operations that would be required to reach the limit

- and consequently, the maximum permitted annual capacity factor f or each unit

- will vary depending on a number of different variables, including ambient temperature, operating load, the number of startups during a year, the duration of operation following a startup, and the duration of downtime between a shutdown and t he next startup.

Incorrect nameplate capacities

. Commenters added in addition, if Tri

- State's NGCC units were subject to the Proposal, EPA utilized incorrect nameplate capacities for some of the units at120 Rifle. Commenters stated the incorrect nameplate ca pacities were reported on 2012 EIA Form 860. Commenters stated Tri

- State is currently working with the Department of Energy to make these necessary corrections to the correct nameplate capacities

.
Commenters stated Tri

- State has about a half dozen gas gene rators that are or can be converted to combined

- cycle for greater efficiency. The commenters said today these generators have only single digit capacity factors, being operated a tiny percentage of the time. The commenters said industry argues that the 70% capacity factor is unattainable. The commenters said this could be a valid concern; and suggest EPA bring on board not only NREL, but also university engineering departments and even some industry consulting firms to assess the engineering feasibility of combining greater levels of renewables with natural gas, since improving wind and solar capacity factors will reduce the percentage of time that natural gas power plants must firm up these resources.

Comment 80: CO

- Rule doesn't account for different bu siness models thus increasing costs and causing confusion

Response 80: For the EPA’s response to this comment, see the Regulatory Impact Analysis for the Clean Power Plan Final Rule

. The following are summaries of the specific public comments under this co mment:

Commenters stated the rule does not account for different business models, thus increasing costs and causing regulatory confusion.

Commenters stated that Colorado's electric utility sector is not uniform in its ability to raise capital to build new infrastructure or recover costs of implementing regulation. Commenters noted that in addition, no single regulatory authority has jurisdiction over all utilities; Electric utilities in Colorado follow several models:

Commenters stated i nvestor

- owned utili ties that are owned and capitalized by shareholders and are guaranteed a rate of return on investment subject to rate regulation by the Public Utilities Commission Rural electric cooperatives that are owned by their members who carry the cost of providing the power distributed to the membership and are regulated by the members Generation and transmission cooperatives that generate and sell power and transmission services to its member cooperatives, and are governed by a board of its members and Municipal u tilities that generate and buy power and transmit the power to citizens within their jurisdiction and are governed by boards of elected officials. Commenters stated that the differing methods of providing capital and absorbing costs of changes in utility s ervices is not recognized or reflected in the proposed rule, or in the "building blocks" which are offered by EPA as means of achieving compliance with the rule.

Comment 81: CO

- concerned about wide variances in required emissions reduction by state121 Res ponse 81: For the EPA’s response to this comment, see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenters argu ed t he wide variance in states emission reductions is problematic.

Commenters stated Holy Cross is concerned by the wide variances in the required emission reductions by state, which might be mitigated in a few key ways. Commenters added for example, creat e for calculation purposes a Block 5 that retires power plants that have been in commercial operation for a certain number of years (e.g., 55

- 60 years) and that have carbon intensity per MWH above a certain threshold. Commenters stated EPA has stated that the states do not have to use all of the blocks; however, this additional block may close some of the wide variances between states. Commenters added also, it may be appropriate to place an upper and lower collar on required state emissions reductions, suc h as a maximum reduction of 35% and a minimum reduction of 25%.

Comment 82: CO

- The EPA should use 2013 data for Pueblo Airport Genera ting Station (PAGS)

Response 82: See Appendix 1 to the CO 2 Emission Performance Rate and Goal Computation TSD for CPP F inal Rule for the unit

- level 2012 data use d in the final CPP rule. The Pueblo Airport Generating Station in Colorado was identified as commencing operation in 2012 and b ased on comments, the EPA is treating units that commenced operation part way through 2012 as under construction and estimating generation and emissions of a capacity factor assumption of 55% for NGCC units.

The following are summaries of the specific public comments under this comment:

Commenters asserted that EPA should use 2013 data fo r the Pueblo Airport Generating Station (Colorado)

.
Commenters stated that for Pueblo Airport Generating Station (PAGS): The 2012 data year used by EPA results in inaccuracies due to 2012 being a partial 40CFR75 Acid Rain Program reporting year for CO2. Co mmenters stated that the PAGS facility was initially commissioned in late 2011. Commenters stated that the 40CFR75 reporting for CO2 emissions begins 180 days after "commercial operation." Commenters stated that thus, for the six PAGS combustion turbines t he CO2 reporting began around the April 2012 timeframe. Commenters concluded that this partial year of CO2 data, along with the complete year of generation data, severely distorts the PAGS emission rate calculations. Commenters suggested using the 2013 dat a as a replacement for the 2012 data. Commenters concluded that utilizing any calendar year other than 2013 would necessitate reliance on estimates.

Comment 83: DE

- Delaware has met goals already and should be exempt from the CPP

.122 Response 83: The EPA does not agree that Delaware should be exempt from the CPP. Please see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP for final goals.

The following are summaries of the specific public comments u nder this comment:

Commenters stated that the EPA plan has numerous flaws. The commenters stated that the overall goal is to reduce CO2 emissions 30% by 2030 from 2005 levels. The commenters argued that Delaware should be exempted from the plan (as VT and DC have already been exempted) because Delaware reduced emissions 29% by 2012, and 40% by 2013. With the correct data, the
commenters stated that Delaware will better the EPA emission rates by 4% without changing capacity factors between various generatio n sources. Because Delaware exceeded the EPA emission goals without adopting the Clean Power Plan, the commenters asserted that Delaware should be exempted from the plan

.

Comment 84: DE

– Affected Units

Response 84: The EPA agrees and has added Garrison Energy Center to the baseline inventory of likely affected units as shown in A ppendix 1 to the EPA’s CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule

The following are summaries of the specific public comments under this comment:

Commenters recommend ed EPA add Calpine's Garrison Energy 300 MW NGCC as an existing affected unit.

Commenters stated that EPA utilized the NEEDS v5.13 data base (p. 6 Goal Computation TSD) for units under construction. Commenters stated that this data base did not include Calpine's Garrison Energy 300 MW NGCC that is being constructed in Delaware. Commenters added that this unit commenced construction before January 8, 2014 and has an anticipated start

- up date in mid

- 2015.

Comment 85: FL

- Cape Canaveral N GCC should be categorized as "under construction NGCC "

Response 85: The EPA agrees and has categorized Cape Canaveral NGCC as under construction as discussed in section VI of the final rule preamble of the CPP and shown in the Appendix 1: unit

- level data f ile to the CO 2 Emission Performance Rate and Goal Computation TSD

The following are summaries of the specific public comments under this comment:

Commenters indicated the Cape Canaveral NGCC plant was mis

- categorized in the EPA analysis.123 Commenters indica ted that the EPA's eGRID dataset classifies FPL's Cape Canaveral NGCC plant in the existing NGCC category. According to c ommenter s , the EPA's Goal Computation TSD state d , however, that "NGCC capacity that was not operating in 2012 " should be classified

as ' under construction NGCC.' Commenter s note d that the EPA's eGRID data for the Cape Canaveral NGCC shows that this unit did not send any power to the grid in 2012; therefore, this unit should be categorized as an "under construction NGCC " unit for goal sett ing purposes. Commenter s stated that when a NGCC unit is listed as an "under construction NGCC" unit, the EPA's goal setting methodology states that the NEEDS database is used to determine that unit's capacity. Therefore, c ommenter s state d , Florida's exist ing NGCC capacity should be reduced by 1,295 MW (nameplate capacity of Cape Canaveral) and Florida's under construction NGCC capacity should be increased by the capacity of Cape Canaveral according to the NEEDS database.

Comment 86: FL

- Clarification for Florida's under construction NGCC

- Port Everglades

Response 86: The EPA did review its list of under construction units considered likely affected sources. It relied on comment data, publically reported EIA data (including 2013), and NEEDS. It noticed t he 2013 reported status of “T” for the Port Everglades NGCC facility which is described as “regulatory approval received. Not under construction... ” The EPA has not included it in its final rule inventory of likely affected units, but notes that this does not constitute an applicability determination of the unit.

The following are summaries of the specific public comments under this comment:

Commenter s noted that the NEEDS database does not identify specific "Under Construction NGCC" units in Florida. Comme nter s asserted that the listed 1,157 MW of "Under Construction NGCC" capacity represents the summer capacity of FPL's Riviera NGCC facility. Commenter s said that if this is the case, it appears the EPA has not included the under construction capacity from FPL's Port Everglades NGCC. Commenter s asserted this unit commenced construction prior to January 8, 2014 and therefore should be classified as an "Under Construction NGCC." Commenter s concluded that if this is accurate, Florida's "Under Construction NGCC" capacity should be increased by the capacity of Port Everglades according to the NEEDS database.

Comment 87: FL

- Tallahassee's Arvah B. Hopkins Unit 2 capacity must be corrected

Response 87: The EPA has switched it s assessment of NGCC generation to rely ing on the summer capacity metric as described in section V.A of the final rule preamble of the CPP . The summer capacity rating for this unit is listed as 140 MW, consistent with the commenters ’
statement.
The following are summaries of the specific publi c comments under this comment:

Commenters indicated that the capacity of one of the units in eGRID is incorrect.

Commenters said that the City of Tallahassee's Arvah B. Hopkins Unit 2 is characterized in the 2012 eGRID database as having a nameplate capaci ty of 259.2 MW. Commenters stated that this124 unit's true capacity is, however, significantly lower. According to Commenters

, Unit 2 was originally a 230 MW (summer net rating) gas/oil steam EGU. Commenters stated that the steam unit was repowered for use as a heat recovery boiler and as a result of the reduced heat input, now has a summer net rating of 140 MW. Commenters indicated that the facility is physically unable to generate 259.2 MW; therefore, its potential generation capacity should be identified as 140 MW.

Comment 88: FL

- Comments on the IPM modeling results; the EPA should use net

- summer capabilities

Response 88: The EPA is using net summertime capacity rather than nameplate capacity for the final rule. See section V.A. of the final rule preambl e of the CPP for the EPA’s response to this
comment.
The following are summaries of the specific public comments under this comment:

Commenters argued that EPA should use net

- summer capabilities for baseline calculations

.
Commenters stated (regarding the IPM modeling results) it appears EPA has used nameplate capacity for all generating units to calculate the state emission target. Commenters added EPA should have used unit net

- summer capabilities as reported by all generators to NERC, FRCC, and EIA. Comm enters concluded this approach would capture the summer peak generation capability and is the more appropriate baseline.

Comment 89: FL

- FPL plans to continue to operate four 800 MW oil

- fired units at Manatee and Martin generating facilities

Response 89 : See section VIII.D. of the final rule preamble of the CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:

Commenters argued that FPL plans to continue to operate four 800 MW oil

- f ired units at Manatee and Martin generating facilities.

Commenters stated EPA's modeled projection is that FPL's Manatee and Martin oil

- fired generating facilities will retire. Commenters added these four 800 MW units provide reliable fuel diversity to th e cast and west coasts of our service territory in the event FPL loses natural gas supply. Commenters concluded it is important that FPL maintain the fuel diversity option provided by continued operation of these oil

- fired units and FPL plans to continue t o operate these units.125 Comment 90: FL

- Fuel diversity is important to Florida

Response 90: See section VIII.D. of the final rule preamble of the CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments und er this comment:

Commenters argued the importance of fuel diversity in Florida

.
Commenters stated fuel diversity in Florida and nationally cannot be stressed enough, and its importance is great enough to warrant prior regulation at the federal level (see d iscussion above regarding the Fuel Use Act). Commenters added fuel diversity has served the United States well through frequent periods of fuel supply limitations, many of them related to natural gas disruptions (e.g., hurricanes Katrina and Rita) resultin g in little impact to electric grid reliability. Commenters stated the extreme cold of January and February 2014, particularly in the Mid

Atlantic and Northeast states provided a peek into the potential consequences of reducing fuel diversity and over

- conc entrating EGU demand into natural gas. Commenters stated with many EGUs eliminating their ability to utilize fuel oil in order to comply with environmental regulations, these units instead relied solely on natural gas whose spot prices reached record level s exceeding $100/mmBtu. Commenters stated as EPA's proposal results in additional migration from coal to gas as a fuel choice, cost will become a secondary problem when EGUs are faced with gas supply shortages and reliability is jeopardized.

Commenters sta ted this fuel diversity need is especially critical for Florida given its geographic location, lack of native energy production capacity and limited electric transmission import capability. Commenters stated with the exception of a limited amount of electr icity that can be transported into the state, Florida is essentially an island that relies on generating units within the state and the necessary fuel supply for those units. Commenters stated Florida's current electric reliability is dependent on EGUs' ab ility to import fuel supply for either immediate consumption, or to store it for consumption later. Commenters stated coal is a storable fuel source in Florida while natural gas is not. Commenters added Florida does not have the geological formations to

ec onomically store a material amount of natural gas underground. Commenters stated EPA's proposal must allow for a substantial amount of coal

- fired electric generation to remain in Florida to ensure some level of fuel diversity and the resulting reliability benefits. Commenters concluded to remove more than 90 percent of coal capacity from Florida as proposed by EPA would obligate Florida to rely solely on 'just in time' inventory for nearly all of its fuel supply, with reliability consequences for any disrup tions in the supply chain.

Comment 91: FL

- RE

Response 91: The EPA has revised its block three quantification based on comment. See section s V.A. and V.E. of the final rule preamble of the CPP for more information about Building Block 3 and see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.126 The following are summaries of the specific public comments under this comment:

Commenters stated Seminole works to maintain a balanced and diversified generati on portfolio that includes SGS and MGS, as well as capacity and energy provided through short

- , medium

- , and long

- term purchased power agreements ("PPAs") with other utilities, independent power producers, and government entities. The commenters said these resources reflect a mix of technologies and fuel types, including one of the state's largest renewable energy portfolios, although Seminole sells a portion of the renewable energy credits ("RECs") associated with its renewable generation to third parties, which can use the RECs to meet mandatory or voluntary renewable requirements. The commenters said the specific amount of generation Seminole purchases from PPAs varies year to year, but on average, PPAs account for around 40 percent of the total demand. T he commenters said the balance and diversity in Seminole's generation and PPA mix reduces exposure to changing market conditions, helping keep rates competitive; fuel diversity is also of paramount importance for Seminole and Florida due to its unique geog raphic location and already

- heavy reliance on out

- of

- state natural gas supplies. The commenters said Seminole has had a specific policy in place for years to acquire additional renewable resources, either through ownership or PPAs; specifically, Seminole's Board Policy No. 308 expresses its commitment to develop and utilize renewable energy resources, particularly where cost

effective; this has resulted in Seminole entering into numerous PPAs for renewable generation; accordingly, the reasonably available a nd cost

- effective renewable options in Florida are already being utilized, and EPA's assumption that Florida can do substantially more is erroneous.

Commenters stated that it appeared "that EPA has not taken into account requirements under PURPA and Flor ida law regarding the purchase of renewable energy by Florida utilities." Commenters asserted "that federal and Florida law, along with the technical feasibility of renewables in Florida (not in North Carolina or the region), should determine the extent of renewable generation that could be developed and used to offset emissions from fossil sources." Furthermore, commenters urged "EPA to remove the six percent at risk nuclear from the calculation of Florida's performance requirements" because it is based on a generic, non

- Florida assumption and because it creates a more stringent performance requirement and decreases compliance flexibility.

Comment 92: FL

- Transmission capability in Florida is not unrestrained

Response 92: See section V.D. of the final ru le preamble of the CPP for the EPA’s response to this comment and more information about Building Block 2.

The following are summaries of the specific public comments under this comment:

Commenters said that the EPA's IPM modeling accounts for transmission limitations between NERC regions. Commenters said that this modeling assumes, however, that transmission127 capability within each NERC region is unrestrained (i.e., there are no technological or logistical barriers preventing the movement of electricity wit hin the region). Commenters posed the question that given Florida's unique peninsular geography, has the EPA considered whether this assumption unrealistically assumes that Florida's transmission capabilities are adequate to meet the modeled assumptions of 70% dispatch.

Comment 93: FL

- The EPA must properly consider Florida's transmission and natural gas supply issues

Response 93: See section V.D. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Buil ding Block 2.

The following are summaries of the specific public comments under this comment:

Commenters argued EPA must properly consider Florida's transmission and natural gas supply issues.

Commenters stated EPA's existing

- source proposal creates greate r fuel supply challenges by eliminating over 90 percent of the existing coal facilities in Florida. Commenters stated although EPA's proposal assumes adequate natural gas supply is available to all utilities in order to support the contemplated increase in gas fired electric generation, this assumption, specifically, does not account for fuel supply risks associated with the production, processing, storage and transportation of natural gas supply to power plants in peninsular Florida.

Commenters stated unli ke solid fuel (coal) and liquid fuel (oil), natural gas is not easily stored due to its physical characteristics that require significantly more volume per unit of energy stored. Commenters added natural gas storage facilities must also possess specific ch aracteristics to safely and economically store a material amount of fuel for use during periods of supply disruption.

Commenters stated all of the natural gas consumed by EGUs in Florida is produced outside the state and imported via one of the interstate gas pipelines. Commenters added historically, the vast majority of the gas supply transported into Florida was produced along the gulf coast (Alabama, Mississippi, Louisiana, Texas) from shallow and deep

- water offshore platforms. Commenters stated offshore natural gas production has declined in recent years and onshore, unconventional gas production is making up an increasingly large percentage of the supply transported into Florida. Commenters stated this supply originates from production regions even furt her away from the state (Oklahoma, Arkansas, north Louisiana, and south Texas) and is dependent on multiple interstate pipelines in order to reach Florida. Commenters stated Florida's increased reliance on the "upstream" pipeline network creates a new form of risk for the state that is not addressed by EPA's proposal and one that would be exacerbated with the removal of coal and oil

- fired generation and the associated storable nature of their respective fuels within the
state.

Commenters stated currently, S eminole holds enough firm gas transportation capacity to dispatch its existing owned and tolled (purchased power) NGCC facilities at a 70 percent capacity factor128 but this will reduce Seminole's available gas transportation capacity for use in simple cycle gas facilities during periods of peak demand. Commenters added however, should Seminole be responsible for constructing NGCC generation capacity to replace its coal

- fired facilities and operate those at a 70 percent capacity factor, Seminole will need a mi nimum of 150,000 decatherms per day ("Dths/day") of incremental firm gas transportation capacity to meet this need.

Commenters stated to put that into perspective, the Gulfstream Natural Gas System pipeline is fully subscribed and the Florida Gas Transmiss ion ("FGT") pipeline has varying volumes of unsubscribed capacity posted on its website as of July 22, 2014. Commenters stated these range from 88,500 Dths/day in summer 2014 to 184,000 Dths/day during the 2017

- 2021 period. Commenters stated beginning Nove mber 1, 2021, and beyond, FGT has 214,000 Dths/day of unsubscribed capacity. Commenters stated if other utilities are forced to take similar actions, there will be insufficient gas transportation capacity available into the state of Florida to support the required NGCC generation. Commenters added if a third pipeline is constructed, which Seminole understands is required to meet Florida's gas needs regardless of EPA's existing

- source proposal, that third pipeline will need to be expanded beyond its currentl y contemplated size to support this incremental gas demand from NGCC facilities. Commenters stated NERC has also expressed concern with EPA's proposal and its lack of consideration of pipeline capacity restraints.

Commenters stated EPA must provide ample t ime for EGUs to negotiate contracts for the requisite gas supply and transportation capacity and for the permitting and construction of the necessary pipeline infrastructure. Commenters emphasized contracting decisions made with the urgency to comply with EPA's proposed timelines may not be the optimal decisions for consumers in the long

- term. Commenters concluded gas transportation commitments will likely have a 20

- year minimum time horizon meaning that the next generation will continue to pay for the cost of hasty decisions.

Comment 94: FL

- The EPA should correct errors related to Florida's goals, recalculate goals, and provide an opportunity for public review/comments on revised goals

Response 94: For the EPA’s response to this comment, see the CO 2 Em ission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenters argued EPA should correct errors related to Florida's goals, recalcu late, and provide opportunity for public review/comments

.
Commenters stated EPA made numerous factual and technical errors in its calculation of Florida's goals. Commenters added when just correcting for the first two errors (changing the nameplate MW to n et, and the average emission rate to the actual rate), Florida's proposed goal in 2030 is well over 900 lb/MWh. Commenters stated EPA's other mistakes are equally erroneous, and must be addressed as well. Commenters concluded accordingly, EPA must129 correct all of the errors related to Florida's goals, recalculate the goals, and provide an opportunity for public review and comment.

Comment 95: FL

- Revised calculation for Florida goal

Response 95: For the EPA’s response to this comment, see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenters provided a revised calculation for the Florida goal

.
Commenters stated th at taking the suggestions and recommended corrections described in the above sections, the City has presented a revised calculation of the state goal, consistent with the more appropriate, yet still challenging, updates to building blocks 2, 3, and 4. Comm enters added that these calculations are designed to provide a sense of how the issues identified in the City's comments impact the potential goals.

Commenters concluded that based on the revised calculations using the corrected noted in these comments, th e Florida final goal would be no lower than 1,068 lb/MWh. Commenters added that it should be noted that this calculation is conservative in that it does not revise all steps just those with specific insights. Commenters stated that for example, the calcula tion does not adjust building block 1 and many other inputs.

Comment 96: FL

- CHP units should not be included in Florida's goal calculation

Response 96: In the final CPP, all emissions from likely affected CHP plan ts are included in the baseline, plea se see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenters argued that combined heat and power (CHP) units can not re

- dispatch to higher capacity factors in the same way that non

- CHP units can. The commenters argued that EPA's assumption to re

- dispatch to 70 percent is unreasonable, and CHP units should not be included in Florida's goal calculation

.
Commenters stat ed EPA improperly included combined heat and power ("CHP") units in its Building Block 2 goal calculation, mistakenly assuming that CHP units can redispatch to higher capacity factors in the same manner that non

- CHP NGCC units can. Commenters stated this i s in error, as CHP dispatch largely depends on the needs of adjacent facilities, not the needs of the grid. Commenters concluded EPA's assumption that CHP units can redispatch to 70 percent is unreasonable, and CHP units should not be included in Florida's goal calculation. Commenters added EPA must recalculate Florida's goal excluding all CHP units from the calculation.130 Commenters stated if, however, EPA chooses to include CHP units in Florida's goal calculation, it must do so according to the same applica bility criteria that EPA establishes under the new source rule. Commenters added as is discussed below, EPA's new

- and existing

- source proposals provide different applicability criteria for CHP units.

Comment 97: FL

- The EPA should calculate Florida's g oal using 2005 data

Response 97: See section VI.D. of the final rule preamble of the CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:

Commenters recommend ed EPA revise the FL goal u sing 2005 data

Commenters stated that while the City is not recommending a specific goal, they are recommending that EPA revise the Florida state goal using 2005 data which aligns with the President's baseline, and allows for credit for efficiency improvem ents, re

- dispatching, increases in renewable energy, and demand side management already implemented.

Comment 98: FL

- Florida shouldn't be penalized for early carbon reductions; 2020 goal is not achievable

Response 98: In the final rule, the EPA has move d the start date of the interim period from 2020 to 2022. See sections I.A., VI.D., VIII.B, and VIII.C. of the final rule preamble of the CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this com ment:

Commenter s argued Florida shouldn't be penalized for early carbon reductions and the 2020 goal is unachievable

.
Commenter s stated the EPA rule aims at reducing Florida's carbon emissions 38 percent from 2012 to 2030, with an interim emission reductio n goal of 27 percent starting in 2020. Commenter s stated unfortunately, the proposed rule gives no credit for Florida's 20 percent carbon reduction since 2005, while simultaneously increasing generation by 12 percent. Commenter s stated the City strongly be lieves that this important achievement should be counted, and not effectively penalize the state for early reductions. Commenter s added in addition, to allow sufficient time for states to develop their programs and then for utilities to develop plans for c ompliance, additional time beyond the year 2020 is needed. Commenter s concluded the 2030 goal is optimistic, but 2020 goal is not achievable and certainly EPA has not demonstrated that the utilities in Florida could make changes sufficient to reach the goa l.131 Comment 99: FL

- The goal for Florida is not fair. Florida should be given credit for customer

owned renewables

. Response 99: For the EPA’s response to this comment, see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP. EPA has regionalized building block two meaning that the reduction potential from incremental NGCC in Florida are observed regionally instead of concentrated in Florida steam sources. This may address some of the concern addres sed in the coment below regarding equity, state goal level, and % reduction.

The following are summaries of the specific public comments under this comment:

Commenter s stated that t he EPA's goals for Florida are not equitable. Commenter s expounded that the 2030 goal for Florida is 740 lb/MWh, which is more than a 56 percent carbon dioxide ("CO2") reduction from 2005 levels. Commenter s added that however, the CPP's 2030 goal for the nation is "30 percent from 2005 levels.'' Commenter s stated that the EPA has not provided justification for Florida's goal to be significantly higher than the national average. Commenter s added that it also is telling that the EPA's goals for Florida's existing fossil fuel generation are more stringent than the CO2 goals recently established as Best Available Control Technology in the EPA's "Standards of Performance for Greenhouse Gas Emissions from New Stationary Sources: Electric Utility Generating Units" (79 FR 1429). Commenter s concluded that should not be possible under the Cl ean Air Act.

Commenter s stated that Florida also should be given credit for customer

- owned renewable generation that is subsidized through net metering rates, tax exemptions, or rebates from the State or the local utility. Commenter s added that Florida an d its ratepayers are directly and indirectly subsidizing these customer

- owned low emission generators, and the EPA's goal should give Florida credit for its achievements.

Comment 100: FL

- Florida's goal is unachievable

Response 100: For the EPA’s respon se to this comment, see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenter s argued EPA's method for determinin g the RE goal for Florida is flawed and the goal is unachievable

.
Commenter s stated the renewable energy generation goal that EPA has calculated for Florida is unachievable. Commenter s stated EPA's methodology for determining the goal is fatally flawed be cause it arbitrarily ties a state's goal to the RPS goals of other nearby states. Commenter s stated the goals of these states reflect each state's highly unique renewable energy potential which often may not actually require as much renewable energy genera tion as the state goals purport. Commenter s stated as a result, the state renewable energy generation targets, including that for Florida, are unreasonably aggressive and do not take into account factors affecting the actual renewable energy growth potenti al in each state. Commenter s added EPA's own IPM132 modeling results indicate that predicted renewable energy generation by the end of the compliance period is not economical to meet the renewable energy targets EPA used in its goal calculation. Commenter s ur ge d EPA to withdraw the proposed state goals and reduce its renewable energy generation targets based on a state evaluation of renewable energy potential.

Commenters were greatly concerned with the methodology EPA used to set the BSER and the resulting Flo rida performance requirements for existing electric generating units (EGUs). Commenters said, as previously noted, EPA's assumptions and analysis supporting its Proposed Rule, and the Florida CO2 pounds per megawatt

- hour (lbs./MWh) emission performance
req uirements presume an implementation strategy that either bypasses or preempts the FPSC's exclusive jurisdiction under Chapters 366 and 403, Florida Statutes. Commenters said, the EPA's Proposed Rule establishes CO2 lbs./MWh emission performance requirement s using national or regional averages rather than assessing what is reasonable and technically achievable in Florida. Commenters said, moreover, EPA did not consider Florida

- specific policies in developing the Proposed Rule.

Comment 101: FL

- goals too a ggressive

Response 101: The EPA has not included demand

- side energy efficiency (building block four) in the final BSER determination. The EPA has changed the start date for the interim period from 2020 to 2022. For the EPA’s response to this comment, see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenter s stated that EPA's compliance BB 4 assumes that demand side management can reduce electric demand by 10% by 2030. The commenter s stated that Florida continues to experience significant population growth that is not taken into account for the state or localities. The commenter s stated that this rule subjects states with high economic or population growth to negative disparate treatment. In addition, the commenter s stated that Florida utilities have had robust energy efficiency programs for many years. The commenter s noted, according to EIA, in 2012 Florida had one o f the lowest annual per capita energy consumption rates in the country at 210 million BTUs as compared to the national average of 302 million BTUs. The commenter s stated that there is no recognition of this in the rule, leading to the concern that this rul e is based on a "one size fits all" approach, which is at odds with the flexibility intended to be provided to the states by the CAA statute in Section 111(d).

The commenter s stated that, overall, the four BB targets are far too aggressive for the allotte d compliance period; the "glide path" is in actuality a cliff under the 2020

- 2022 requirements for many states; it leads to premature retirement of plants, stranded investment, and reliability issues; the costs to consumers of forced retirements are far to o high; and the reductions are inappropriately front

- loaded. The commenter s stated that a much longer, smoother glide path is required and the interim targets should be eliminated entirely.

The commenter s stated that the ESPS is based on specific statewide emission rate goals (mandatory) that EPA has determined are feasible for each state, where the greater a state's133 ability to reduce CO2 emissions, the more stringent are its state emission reduction goals. The
commenter s noted that only BB 1 is an "inside the fence" control option.

The commenter s stated that BB 1 and 2 reductions are "front loaded" and are effective in 2020. The commenters stated that to comply with the proposed mandatory emission goals, Florida must reduce CO2 emission by 31% from 2012 lev els by 2020 and 40% by 2030, so that 75% of the compliance goal for Florida is front loaded to 2020. The commenter s stated that to achieve this reduction EPA estimates that 90.72% of Florida's coal

- fired generation would be re

- dispatched to NGCC units. How ever, the commenter s stated that coal

- fired EGUs cannot run at such low capacity factors (e.g., 10%), so it is likely 100% of Florida's coal

- fired EGUs will shut down.

The commenter s stated that front loading of BB 1 and 2 creates the majority of the cost impact of the ESPS due to stranded costs caused by premature coal unit shutdowns. The commenter s stated that if the implementation date for the rule would be delayed sufficiently to avoid premature retirement of Florida's coal

- fired EGUs, ESPS costs could be reduced by approximately 60% based on EPA cost factors in the proposed rule's RIA.

Comment 102: GA

- The EPA must clarify the process to adjust for Pla nt Washington (GA) if
necessary
Response 102: For the EPA’s response to this comment, see the CO 2 Em ission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP. EPA did not consider Plant Washington a likely affected unit under 111(d) in its quantification of BSER.

The following are summaries of the specific public comme nts under this comment:

Commenter s stated that EPA should clarify in the final rule a process for adjusting the baseline emissions levels as well as the interim and final CO2 emission goals for Georgia in the event that Plant Washington is constructed and determined to be an existing source.

Commenter s stated that Plant Washington is an 850 MW coal fired EGU proposed to be built in Washington County, Georgia. Commenter s stated that the project currently has a valid PSD permit issued by Georgia EPD; a fina l determination on the NSPS regulatory status of Plant Washington has not yet been made. Commenter s stated that If Plant Washington is constructed and in fact determined to be an existing source, emissions would have to be included in the baseline and goa l calculations for Georgia.

Comment 103: GA

- Inequity between the states; GA is penalized for early action

Response 103: See sections VI.D., VIII.B, and VIII.C. of the final rule preamble of the CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:134 Commenter s argued that states are not treated equitably under the proposed rule, and that the rule penalizes states that took early action.

Commenter s said that with the rules as currently drafted, Georgia is mandated with a 48% reduction in its carbon emission intensity rate, which is well above the 30% average required emissions reduction across all states. Commenter s indicated that they understand that the EPA attempted to tailor the rule s for individual states and not set a uniform reduction across all states. However, c ommenter s indicated that Georgia is being asked to invest more heavily than almost every other state despite the massive emission reductions that have been achieved over t he last decade and the projected emissions improvements from the addition of new nuclear power generation, increased deployment of renewables, and continued energy efficiency programs. Commenter s concluded that the proposed rule is punitive toward states t hat have, on their own, proactively pursued emission reductions.

Commenter s stated while the Proposal's stated objective is to reduce emissions of CO2, the generation projections for Plant Vogtle

- which emits no CO2

- have been used to justify more strin gent CO2 standards for Georgia. The commenter s said Oglethorpe Power's investment in Plant Vogtle will ultimately reach around $4

- 5 billion, an investment in reduced carbon emissions that the Proposal simply ignores. The commenter s said instead, the lower goal set for Georgia will require more investment than other Southeastern states that do not have new nuclear capacity; the additional costs of achieving that lower goal will have to be passed along to our members.

Comment 104: GA

- Georgia target is more stringent than most other states; too little credit is given for proactive management

Response 104: See sections VI.D., VIII.B, and VIII.C. of the final rule preamble of the CPP for the EPA’s response to this comment.

The following are summaries of the sp ecific public comments under this comment:

Commenter s stated that t he Chamber is concerned that there is too little credit given for the proactive management of and investment in the state's energy sector that has occurred in recent years and that the CO2 emissions reduction targets allocated to Georgia will impose an unfair burden on consumers, businesses and industry in this state. Commenter s added that these targets are far more stringent than the goals EPA has proposed for most other states and are even more stringent than EPA's proposed 1,000 lb/MWh CO2 performance standards for new fossil

- fuel

fired power plants.

Comment 105: GA

- All of Georgia's existing nuclear units are expected to be operational through the compliance period

Response 105: See pre amble section V.A for a response.135 The following are summaries of the specific public comments under this comment:

Commenter s stated that all of Georgia's existing nuclear units are expected to be operational throughout the compliance period of the exposed rule. Commenter s also clarified that based on EPA's calculation methodology, Georgia's at

- risk nuclear should be estimated as: (4082MW ) ( 8760hrs ) ( 90% capacity factor ) ( 6% ) = 1,930,949 MWH or 220.4 MW at

- risk nuclear capacity, less than EPA's estimate of 237 MW.

Comment 106: GA

– Under Construction Nuclear

Response 106: See section V.A of the final rule preamble of the CPP for the EPA’s response to this comment

. The following are summaries of the specific public comments under this comment:

Commenter s sta ted EPA's treatment of Georgia's "under construction" nuclear, Vogtle units 3&4, is inequitable and misguided and would almost certainly result in higher electricity rates for our Members.

Comment 107: GA

- Georgia is well positioned to use RE (solar) an d EE to meet the proposed standard

Response 107: See section V.E. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 3 and see section V.A. of the final rule preamble of the CPP for the EP A’s response to this comment and more information about Building Block 4.

The following are summaries of the specific public comments under this comment:

Commenter s argued Georgia well positioned to use RE and EE to meet the proposed standard. The commente r s discussed solar power potential and in particular how Georgia's recent solar projects were well below avoided cost

.
Commenter s stated Georgia is well positioned to use RE and EE in its plan to meet the proposed standard. Commenter s added in particular, recent developments in the solar market demonstrate both the potential and cost

- effectiveness of solar power as a compliance strategy.

Solar Energy . Commenter s stated with the addition of 91 MW, installed solar capacity more than quadrupled in 2013, making Georgia the fastest growing solar market in the nation according to the Solar Energy Industries Association. Commenter s added rapid growth will continue. Commenter s stated under its Advanced Solar Initiative (ASI), Georgia Power Company has already contra cted for an additional 58 MW of distributed generation (1 MW or less) to be online in 2014 and 566 MW of utility scale projects (greater than 1 MW) to be online in 2014

- 2016. Commenter s stated another 100 MW of distributed generation is programmed under AS I for136 2015 and 2016, and Georgia Power will build 30 MW projects on each of three army bases. Commenter s stated Green Power EMC, which is owned by electric cooperatives, has a 20 MW project underway. Commenter s concluded all in all, Georgia already has on the ground or in the pipeline at least 925 MW of solar capacity to be online from 2013 to 2016.

Commenter s stated the potential for solar power is shown not only by the completed and scheduled projects, but also by the projects that were offered but not se lected in the ASI process in 2014. Commenter s stated a lottery was used to select the 58 MW of distributed generation. Commenter s stated in that process, 976 projects totaling 784 MW were not selected. Commenter s added a request for proposals (RFP) was use d to select utility

- scale projects. Commenter s stated fifty

- six third

- party bidders offered 146 unique projects totaling 5,150 MW. Commenter s stated in total, about 5.4 GW of distributed generation and utility

- scale solar was offered for development but le ft on the table in 2014.

Commenter s stated the cost

- effectiveness of solar power in Georgia is demonstrated by the bids offered under the ASI RFPs for utility

- scale solar. Commenter s stated the first RFP procured 50 MW at an average price of less than 8.5 cents/kWh. Commenter s added Georgia Power announced that this price was below the utility's avoided cost. Commenter s stated given this initial success in acquiring cost

- effective solar energy, the next RFP was for all remaining utility scale solar in the A SI program, with a not to exceed price of 8.5 cents, resulting in the procurement of 516 MW at an average cost of less than 6.5 cents/kWh, well below avoided cost. Commenter s concluded it is now clear that utilities in Georgia can acquire solar power for l ess than it costs to run their existing plants.

Commenter s stated if the extra 5.4 GW of solar power offered in 2014 were developed over the next 15 years and Plant Vogtle units three and four come online as anticipated, Georgia could exceed the renewable energy generation projected for the state in Building Block 3. Commenter s stated the calculation projects 12,230,636 MWh of renewable energy by 2030, of which 27 percent (3,278,536 MWh) was already in place in 2012. Commenter s stated the 925 MW of solar

ca pacity programmed since 2012, plus 250 MW of wind power from Oklahoma procured by Georgia Power, can be expected to provide another 17 percent. Commenter s stated assuming a capacity factor of only 15 percent, adding 5.4 GW of solar generation would more th an cover the remaining 56 percent, even without any more wind power or other renewables in the mix. Commenter s concluded these numbers demonstrate that the level of RE projected by EPA under Building Block 3 is well within reach in Georgia.

Energy Efficien cy . Commenter s stated similarly, Georgia is well positioned on Building Block 4. Commenter s stated Southface agrees that well

- established practices for utility

- based EE programs can cost

- effectively be scaled to produce annual savings equal to 1.5 percent of sales. Commenter s added Georgia is already further along that path than reflected in the calculations in Building Block 4. Commenter s stated Georgia Power, which accounts for about 60 percent of retail sales in the state, has built a portfolio of EE pro grams that is currently saving 0.4 percent. Commenter s stated the cost of energy saved at that level is only 1 cent/kWh. Commenter s stated Georgia Power's experience establishes a solid foundation from which to expand utility

- based EE as a compliance strat egy. Commenter s added furthermore, Georgia has a strong and expanding private marketplace for EE. Commenters encourage d a final rule that supports an "everything

- should

- count" approach to clean energy.137 Comment 108: GA

- Georgia has untapped potential for renewable energy production (solar)

Response 108: See section V.E. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 3.

The following are summaries of the specific public comments under this comment:

Commenter s stated GA has untapped potential for renewable energy production

.
Commenter s stated that while we have finally moved beyond the myth that solar energy doesn't work in Georgia and developed a strong solar market, we can do much, muc h more. Commenter s added that Southface maintains an online solar energy map that tracks solar installations across the state; we know of more than 920 residential and commercial projects with the collective capacity of 110 megawatts.

Commenter s stated th at our utilities have also shown leadership in this arena. Commenter s expounded that Georgia Power's Advanced Solar Initiative will bring online more than 700 additional megawatts of solar energy by the end of 2016. Commenter s added that GreenPower EMC, wh ich provides clean energy to the state's electric membership cooperatives, recently announced a 20 megawatt solar deal.

Comment 109: GA

- Solar

Response 109: See section V.E. of the final rule preamble of the CPP for the EPA’s response to this comment and m ore information about Building Block 3.

The following are summaries of the specific public comments under this comment:

Commenter s stated Georgia is ready to deploy its solar energy resources. Commenter s added that Solar is clean, carefully regulated, cost

- effective, quickly deployed, and a proven resource.

Comment 110: GA

- Solar energy is a cost

- effective and abundant source of energy supply in Georgia. The EPA should not weaken Georgia's goal

Response 110: See section V.E. of the final rule preamble o f the CPP for the EPA’s response to this comment and more information about Building Block 3.

The following are summaries of the specific public comments under this comment:

Commenter s stated that under a series of programs authorized by the Georgia Public Service Commission ("GaPSC"), Georgia Power has contracted for almost a gigawatt of electricity to be provided by solar resources. Commenter s added that in 2011, the fully

- integrated and regulated utility was ordered to procure 50 MW of solar through the large scale solar program.138 Commenter s stated that a year later, Georgia Power requested

- and the GaPSC ordered the Company

- to procure 210 MW of solar capacity to be fully installed by 2016 as part of a program known as the Advanced Solar Initiative ("AS I"). Commenter s added that building on the ASI and as part of the 2013 Integrated Resource Plan for Georgia Power, the GaPSC ordered an expansion of an additional 525 MW of solar (the expansion is known as "ASI Prime"). Commenter s added that more recently, the GaPSC approved 90 megawatts of solar on army bases on October 23, 2014.

Commenter s stated that all of these projects have added cost

- effective solar resources into Georgia Power's portfolio. Commenter s added that Georgia Power was able to contract f or 425 MW

- the entire amount allotted for utility scale under the ASI

- Prime

- at or below avoided costs. Commenter s stated that under the latest offering for the ASI and the ASI

- Prime, the pricing for chosen projects had an average cost of less than 6.5 c ents per KWh. Commenter s added that the 90 MW to be installed at army bases will also fall below projected avoided costs. Commenter s concluded that this means that none of these projects will increase rates.

Commenter s stated that additional proposed proje cts and information continue to show that solar energy is a cost

- effective and abundant source of energy supply in Georgia. Commenter s stated that the National Renewable Energy Laboratory currently estimates over 3,100 GW of technical solar potential in th e state. Commenter s added that though a small portion of that technical potential, the same offering for the ASI and ASI Prime discussed above returned a significant number of projects: over 5.1 GW of proposed projects, which included 140 different offerin gs. Commenter s added that although the exact pricing submitted is protected, one can assume most

- if not all

- of these bids were at or below avoided cost, as bidding developers were made aware of this requirement. Commenter s stated that as discussed abov e, only 10 percent of the proposed projects have been selected for purchase by Georgia Power. Commenter s added that on November 6, 2014, building on the success of the 90 megawatts of solar to be installed on army bases, Georgia Power announced a similar deal with the naval base at Kings Landing. Commenter s stated that among the benefits cited for the project, the Company found that the naval project would "provid[e] an economical supply of electric power for the Company's customers."

Commenter s conclude d that as Georgia has significant opportunity to expand cost

- effective solar resources, the EPA should not weaken Georgia's targeted goal as proposed.

Comment 111: GA

- Wind energy can save ratepayers money; the EPA should not weaken Georgia's goal

Respo nse 111: See section V.E. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 3.

The following are summaries of the specific public comments under this comment:

Commenter s stated that i n ad dition to taking a leadership position on solar, Georgia has recently taken steps embracing wind energy. Commenter s added that in 2013, Georgia Power announced that it had signed two power

- purchase agreements totaling 250 megawatts of wind power from139 Oklah oma. Commenter s stated that under these deals

- which were unanimously approved by the GaPSC ( Georgia Public Service Commission ) in 2014

- wind energy will begin flowing into Georgia in 2016.

Commenter s stated that although this project will benefit the e nvironment and will have the effect of reducing carbon emissions, it also provided a direct economic benefit to ratepayers. Commenter s added that in fact, Georgia Power and Commission Staff found that the wind deals provided an "extraordinary advantage to ratepayers" at prices below avoided cost, which puts downward pressure on rates. Commenter s concluded that this means that it was cheaper to purchase the wind resources and let some of the other units in Georgia Power's system

- likely fossil units

- sit i dle.

Commenter s stated that there is substantial opportunity to invest in additional wind resources going forward

- and likely at even lower prices . Commenter s added that Commission Staff's testimony found that there was potential for other wind procureme nts from the midwest under existing infrastructure, and that Georgia Power was paying a premium for certain aspects of the contracts they had already signed. Commenter s stated that there are at least two proposed high voltage direct current lines that, on ce constructed, will bring between 5 GW and 6.5 GW of wind energy to the southeast from the midwest and Texas. Commenter s concluded that if Georgia utilities act proactively to purchase additional wind resources, they will be able to purchase a significant amount of wind energy

- and help ratepayers save money.

Commenter s concluded that as wind energy can also be added to the portfolio in a manner that can save ratepayers money, it is a cost effective resource for compliance with the Clean Power Plan, and t he EPA should not weaken its proposed goal for Georgia.

Comment 112: GA

- Georgia has anemic appliance efficiency programs, but good building codes and thermal efficiency programs; the EPA should take a look at the Energy Star Program

Response 112: The E PA appreciates the comments regarding energy efficiency programs and E nergy S tar, however the promulgated rule does not include a building block four as part of the BSER. Please see section V.A. of the preamble for more information regarding the building b lock four and demand side energy efficiency.

The following are summaries of the specific public comments under this comment:

Commenter s stated that the State of Georgia has had problems under the IRP; it has quite anemic appliance efficiency programs. Com menter s stated that on the other hand, this state does have pretty good building codes, and thermal efficiency programs run by Georgia Power offer good value for dollar.

Commenter s stated the Federal Government can help by continuing DOE rulemaking on
ap pliances and lighting. Commenter s added EPA needs to take a look at the Energy Star program; the Energy Star program is used in Georgia as sort of the label that triggers the incentive program. Commenter s added that the Energy Star program is not always up to date and140 there need to be more resources devoted to that. Commenter s concluded that all sides of the argument should agree.

Comment 113: GA

- There is significant opportunity to expand energy efficiency in Georgia

Response 113: See section V.A. of th e final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 4. See section VIII of the preamble for a discussion of alternative compliance measures and demand

- side energy efficiency.

The following are summaries of the specific public comments under this comment:

Commenter s stated that t here is significant opportunity to expand energy efficiency resources in Georgia. Commenter s added that in 2005, the Georgia Environmental Finance Authority procured a st udy that showed that Georgia had the potential to save 29 percent of retail sales by 2024. Commenter s stated that under the aggressive scenario that it modeled, GEFA found that Georgia could have cost effectively saved approximately 8.7 percent of retail s ales

- which corresponded to a reduction of 12,546,554 MWh or 1.6GW of peak demand

- by 2010

.
Commenter s stated that although "[r]ealizing this potential would produce immediate dollar savings for customers, reductions in power plant emissions and substan tial gains for the Georgia economy in the form of increased employment and personal income," much of this cost

- effective energy efficiency potential is yet to be developed.

Commenter s stated that this is even though utility planning has shown how inexpens ive energy efficiency measures are in Georgia. Commenter s added that for example, one portfolio proposed by Georgia Power in 2013 illustrated the cost effectiveness of measures to save energy: the cost to save one kilowatt hour (KWh) for residential measur es was 4 cents, and for commercial measures was 1 cent; although no industrial programs were proposed by Georgia Power for certification, costs to save one KWh for industrial measures under a separate scenario were 2 cents per kwh. Commenter s stated that the levelized costs of the approved programs equaled 1 cent per kwh saved.

Commenter s concluded that as there is significant amount of cost

- effective energy efficiency potential still to be developed in Georgia, the EPA should not weaken the targets that it has proposed.

Comment 114: HI

- If the EPA revises goals, the EPA should address oil

- fired units in establishing BSER for revised standards and the scope of the rule , and shoul d provide a new comment period

Response 114: The EPA is not including emissi on performance goals for Hawaii in this final rule. See section VII .F. of the preamble for discussion of this issue.

The following are summaries of the specific public comments under this comment:141 Commenter s stated that we accept GHG emission rate goals as they are currently proposed for Hawaii; however, if EPA decides to significantly revise these goals, we would like oil fired units addressed in establishing BSER for the revised standards. Commenter s stated that a large amount of the national fuel oil usa ge for energy generation is in Hawaii. Commenter s added that unfortunately, for building block 1, EPA only addressed GHG abatement measures specific to coal fired units. Commenter s stated that considering that a majority of the energy generation by affecte d EGUs in this state is from burning oil, heat rate improvements identified for oil fired units would be more representative in supporting BSER for Hawaii's EGUs.

Commenter s added that if the emissions rate goals in the proposed CPP are revised significan tly, we would also like the EPA to update the proposed Plan with the new proposed standards and provide a new comment period.

Commenter s stated that for Hawaii, CO2 emissions from 111(d) affected sources comprise approximately 67% of the CO2 emissions from all power plants. According to the commenter s , the same ratio for the U.S. mainland is approximately 93%. The commenters respectfully requested that if EPA changes the scope of this rule, such that this percentage materially changes, then the commenters r equested the opportunity to comment on the technical, economic and other impacts of this change on Hawaii.

Comment 115: HI

- The combustion turbine at Kapaia Power Station is not an affected EGU

Response 115: The EPA is not including emission performance goals for Hawaii in this final rule. See section VII .F. of the preamble for discussion of this issue. It agrees that Kapaia Power Station would not be a likely affected EGU under 111(d).

The following are summaries of the specific public comments under thi s comment:

Commenter s stated they would like EPA to remove Kauai Island Utility Cooperative's Kapaia Power Station from the list of facilities subject to the performance goals in 40 CFR Part 60 Subpart UUUU. Commenter s noted that the combustion turbine tha t is listed as an affected EGU at this facility does not meet the criteria in 40 CFR Section 60.5795(b)(2) for the defined source category. Commenter s stated that according to 40 CFR Section 60.5795(b)(2), in order for a stationary combustion turbine to be an affected EGU, the unit must burn 90% natural gas on a heat input basis on a 3

- year rolling average. Commenter s stated that the combustion turbine at Kapaia Power Station is permitted to burn naphtha, fuel oil No. 2, jet

- A, heavy straight run gasoline, ethanol, and biodiesel. Commenter s added that the combustion turbine at this facility is not permitted to burn natural gas or synthetic natural gas. Commenter s concluded that therefore, the combustion turbine at Kapaia Power Station is not an affected EGU.

Comment 116: HI

- The EPA should revise Hawaii's goal based on removing Kapaia Power Station's combustion turbine from affected EGUs, and should use more representative fuel data142 Response 116: The EPA is not including emission performance goals for Hawai i in this final rule. See section VII .F. of the preamble for discussion of this issue. See response 115.

The following are summaries of the specific public comments under this comment:

Commenter s stated that w e examined the US Energy Information Administr ation data that EPA used to develop the Hawaii's emission rate goals presented in Table 1 of 40 CFR Part 60, Subpart UUUU. Commenter s stated that this review identified a number of instances where Hawaii's emissions inventory information contained data spe cific to Hawaii fuels that was different from the fuel data used by EPA. Commenter s stated that for Hawaii's review, emission rate goals were recalculated after removing Kapaia Power Station's combustion turbine from the list of affected EGUs, and substitu ting the more representative fuel data specific to Hawaii sources. Commenter s added that as an example, the "2030 and thereafter" goal calculated by EPA was 1,306 lb/MWhr versus 1,329 lb/MWh as calculated by Hawaii reviewers. Commenter s stated that while t he recalculated goal values were not significantly different from those determined by EPA, we request that EPA use the revised values if EPA decides to recalculate Hawaii's emission rate goals after the public comment period. Commenter s included a comparis on between EPA and Hawaii determined parameters and goal calculation results.

Comment 117: Commenter s included Hawaii's 2012 Plant

- Level Data for Likely Covered Fossil Sources.

Comment 118: Commenter s included Hawaii's Unit level inventory

Comment 119: Co mmenter s included awaii's re

- calculations of state goals.

Comment 120: Commenter s included Hawaii's heating value data and calculations for affected facilities.

Comment 121: Commenter s included Hawaii's DOH 2012 Emissions Inventory fuel quantity and heat content for facilities and fuels used in EPA

- HQ

- OAR

- 2013

- 0602

- 0256 data file.

Comment 122: Commenter s included Hawaii's CO2 emission calculations: DOH Calculation uses facility reported annual average heating values (per 2012 Emissions Inventory Reports to DOH) and EPA Fuel Emission Factors (kg/MMBTU) to calculate CO2 emissions

Comment 123: HI

- fuel burning

- throughputs

Commenter s provided Hawaii's Fuel Burning

- Throughput calculations for AES.

Commenter s provided Hawaii's calculations for fuel burning

- throu ghput for Honolulu facility.

Commenter s provided Hawaii's corrections to fuel burning

- throughputs for Hamakua facility.

Commenter s provided Hawaii's corrections to fuel burning

- throughputs for HC&S facility.143 Commenter s provided Hawaii's corrections to fuel burning

- throughputs for HPOWER1 facility.

Commenter s provided Hawaii's corrections to fuel burning

- throughputs for HPOWER2 facility.

Commenter s provided Hawaii's corrections to fuel burning

- throughputs for Kahe facility.

Commenter s provided Hawaii's corre ctions to fuel burning

- throughputs for Kalaeloa facility.

Commenter s provided Hawaii's corrections to fuel burning

- throughputs for Kapaia PS facility.

Commenter s provided Hawaii's corrections to fuel burning

- throughputs for Keahole facility.

Commenter s pro vided Hawaii's corrections to fuel burning

- throughputs for Maalaea facility.

Commenter s provided Hawaii's corrections to fuel burning

- throughputs for Puna facility.

Commenter s provided Hawaii's corrections to fuel burning

- throughputs for Waiau facility.

C ommenter s provided Hawaii's corrections to fuel burning

- throughputs for Allen

- Fuel facility.

Comment 1 24: HI

- Description of worksheet

Response 117

- 124: The EPA appreciates the Hawaii corrections and information files provided, please see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP for the final goals. The EPA is not including emission performance goals for Hawaii in this final rule. See section VII .F. of the preamble for discussion of this issue.

The following are summaries of the specific public comments under this comment:

Commenter s provided Hawaii's description of worksheet: Comparison of 2012 Hawaii EIA923 fuel usage and heating data with that derived from CAB Emissions Inventory Reports: fuel set includes all available EIA923 and CAB data.

Commenter s provided Hawaii's description of worksheet: 0256 Plant Level Data.

Commenter s provided Hawaii's r eview of EPA 111(d) data presented in the EPA

- HQ

- OAR

2013

- 0602

- 0256.xls" document and related docum ents identified in the EPA & EIA Documents sheet. Commenter s stated that annual fuel usage, fuel heat content, and carbon dioxide emissions were evaluated based on 2012 Hawaii Department of Health Emissions Inventory data and EPA greenhouse gas emission fa ctors. Commenter s added that based on this review, the following recommendations/comments to EPA 111(d) data are presented. Commenter s concluded that references, calculation details and discussion are presented in supporting pages.

Commenter s provided Hawa ii ’s corrections to the Net Electric Generation calculations.

Comment 125: ID

- Calculation of ID goal; hydropower; baseline; RE target setting method1 44 Response 125: See section VI of the final rule preamble of the CPP for a response to the concern about 2 012 data representativeness for states with a large hydro portfolio. The EPA has made adjustments to the baseline reflecting to reflect generation in a non

- outlier year for hydro generation

. The following are summaries of the specific public comments unde r this comment:

Commenter s stated the EPA's approach to the Proposed Rule of selecting a single year (2012) for establishing a baseline is inaccurate and fails to represent Idaho's electricity and emission mix; the single baseline year fails to capture the hydroelectric variability or accurately represent NGCC generation in Idaho. The commenter s said using baseline years of 2010, 2011, or 2012 (or a combination of the three) does not resolve the problem because those years do not represent Idaho's current g eneration mix, and they will fail to produce a state performance goal that can be achieved at a reasonable cost. The commenter s said the EPA must account for this discrepancy by allowing for hydroelectric normalization and re

- formulating Idaho's goal with 70% NGCC capacity factors for the baseline.

Commenter s stated hydropower generation is variable and must be normalized; the EPA's proposed rule unfairly places Idaho (and other states with significant hydropower resources) at significant risk of non

- compl iance and increased cost due to weather

- induced hydropower generation variability. The commenter s said this variability effects the amount of emissions in the baseline used to determine the EPA's goal. The commenter s said in order to eliminate the effect o f hydro generation variability on the ability of states like Idaho to comply with the Proposed Rule, the EPA must adjust the emission rates in the baseline and during compliance

measurement periods.

Commenter s stated hydroelectric generation in 2012 was a pproximately 110 percent of Idaho's average hydroelectric generation from 1990 to 2012; above

- average hydropower generation years yield lower emissions from thermal generation; this means that emissions in the 2012 baseline year were abnormally low. T he co mmenter s said below

- average hydropower production years have historically necessitated the dispatch of additional thermal resources to meet load demands and to maintain system reliability with the effect of increasing emissions; by mandating emission reduc tions from the 2012 baseline, the emission

- rate goals established for Idaho are artificially low.

Commenter s stated given the uncertainty of a multi

- state plan, the EPA must reformulate Idaho's goal with 70% NGCC capacity factors for its baseline; otherwi se, Idaho will not be able to meet its 2030 goal with the EPA's targeted amounts of EE and RE without forcing Idaho's utilities to run their NGCC plants at 2012 capacity factor levels.

Commenter s stated since the EPA has already determined that running NG CC plants at 70% for redispatching purposes is a key component of BSER, the EPA should reformulate Idaho's goal with 70% NGCC capacity factors for its baseline; reformulating Idaho's goal in this way would encourage cost

- effective redispatch of out

- of

- stat e coal generation consistent with the premise of Building Block 2; reformulating Idaho's goal would also give needed flexibility to Idaho's utilities, maximize CO 2 reduction, and minimize adverse reliability and cost impacts to
customers.145 Commenter s stat ed the EPA's RE target setting method results in three issues that affect Idaho and must be addressed; first, Idaho's in

- state carbon free generation percentage already greatly exceeds the EPA's proposed renewable portfolio standards ("RPS") when hydro gen eration is included. The commenter s said the EPA must treat existing hydropower as RE ensuring that the benefits of Idaho's current carbon free generation portfolio are properly accounted for in offsetting emissions from affected unit generation. The comme nter s said second, the amount of offsetting renewable energy generation in the EPA's proposed target is disproportionally larger than the amount of Idaho's affected unit generation; if the EPA does not treat existing hydropower as RE, then at a minimum, Id aho's RE target (existing plus incremental) should be capped by the amount of Idaho's affected unit generation. The commenter s said third, the EPA's Alternative Renewable Energy Methodology Targets completely ignore any cost and reliability impacts and sho uld not even be considered.

Comment 126: ID

– The EPA should distinguish between current and future RE, including existing hydrogeneration. The EPA should use state

- specific growth potentials and adopt more stringent goals due to more

- achievable EE

.

R esponse 126: See section V.E. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 3 . The EPA is not including demand

side energy efficiency (building block four) in the final BSER determina tion. S ee section V.A. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 4.

The following are summaries of the specific public comments under this comment:

Distinguish between current and future RE generation . Commenter s encourage d EPA to distinguish between current RE generation to establish the baseline emissions and the potential for future RE generation to establish the emissions target. Commenter s stated that by distinguishing between current and future RE EPA can provide a more transparent credit for those states that have developed RE and those that have not. Commenter s stated that in the proposed rule EPA excludes hydroelectric power stating: "inclusion of this generation in current and projected levels of performance would distort the proposed approach by presuming future development potential of large hydroelectric capacity in other states." Commenter s were concerned that by excluding hydrogeneration, EPA is not capturing a large i nfluence on CO2 emissions.

Calculation of existing and future RE . Commenter s included a method to calculate existing and future renewable energy when setting Idaho's emissions target. Commenter s proposed that to distinguish between current and future RE, include existing hydrogeneration, and use a more
state

- specific projection of RE potential

, EPA adopt a modified method for calculating the contribution of RE when setting a state emission target. Commenter s proposed an approach with three parts.

Commente r s stated that first, EPA should establish the baseline emissions for each state using the current mix of all generation resources. Commenter s stated that EPA should not project146 future RE development in setting this baseline emission rate. Commenter s added that this step would capture existing resources, including hydrogeneration, and use actual data to set current emissions. Commenter s recommend ed EPA use the most recent year available to calculate existing RE, and a 5

- year average of hydrogeneration to ad dress year

- to

- year variability in hydropower.

Commenter s stated that second, EPA should use a state based approach to setting RE targets proposed by the Union of Concerned Scientists in their report Strengthening the EPA's Clean Power Plan. Commenter s add ed that this approach considers the track record of past RE development over a recent time frame to set an individualized RE growth target for each state. Commenter s support ed EPA's proposal isolate the RE growth to those resources more traditionally inclu ded in state

- level Renewable Portfolio Standards. Commenter s recommend ed EPA improve this approach by using state

- specific growth potentials.

Commenter s stated that third, EPA should set a State's emission rate target by starting with the current baseline emissions rate and decrementing these emissions by applying the potential RE development. Commenter s stated that this methodology captures the effects of existing hydrogeneration but does not presume future hydroelectric development in a manner that would distort the goal setting exercise.

Commenter s stated that to employ this method EPA could simply divide the current calculation of "Existing and New RE" in the block 3 portion of the goal setting exercise. Commenter s stated that this would treat RE with the same method natural gas combined cycle plants, with distinct calculations of 2012 capacity and "under construction". Commenter s added that for RE, the EPA would simply put existing RE, including hydro, in the 2012 capacity column. Commenter s stated tha t then, EPA can create a new category of future RE generation using the state specific growth rates proposed by the UCS. Commenter s stated that using this methodology transparently captures the roll existing hydrogenation plays in Idaho's current and futur e emissions while also preventing any distorting effect of including hydrogeneration in future RE projections.

State

- specific EE potential. Commenter s stated that EPA should use state specific energy efficiency potential studies when setting emission targ ets. Commenter s recommend ed EPA use
state

- specific data on energy efficiency potential that document a higher level of EE availability than EPA assumes in the proposed rule. Commenter s added that each Idaho utility produced a potential study in 2013 that c alculates the technical, cost

- effective, and achievable levels of EE through 2032. Commenter s added that these studies define the actual levels of available efficiency measures, screen these measures for cost

- effectiveness unique to Idaho, and consider the ability of the utility to actually acquire the savings. Commenter s stated that these studies use existing EE technologies and currently adopted, or scheduled to go into force, codes and appliance standards. Commenter s stated that each Idaho utility uses t hese potential studies in formulating the Integrated Resource Plans

-- a twenty

- year plan to find the least cost, least risk resources to meet Idahoans' energy needs. Commenter s stated that for these reasons, the potential studies provide the best available source to establish the level of EE available for the best system of emissions reductions adequately demonstrated in Idaho. Commenter s stated that because these studies document a larger amount of EE available in Idaho, EPA should adopt a more stringent

em issions target.147 Commenter s stated that to set Idaho's emission target EPA proposes that the contribution of EE is 1.5% of sales annually, totaling 3.9% in 2020 and 11.1% in 2029. Commenter s stated that each of the investor owned utilities in Idaho

-- Avista , Idaho Power, and Pacificorp

-- project a higher level of available and cost

- effective EE. Commenter s stated that combined these utilities serve 85% of the electric sales in our state. Commenter s added that a host of cooperative and municipally owned utili ties serve the remaining 15% of Idaho's electricity under the umbrella of the Bonneville Power Administration. Commenter s recommended that for these utilities EPA use the EE potential contained in the Northwest Power Planning and Conservation Council 6th P ower Plan. Commenter s stated that each of these potential studies document more available and
cost

- effective EE potential than EPA assumes.

Commenter s stated that in 2013, Idaho Power commissioned an Energy Efficiency Potential Study produced by EnerNOC U tility Solutions. Commenter s stated that EnerNOC reports the results as a percentage of energy sales compared to a baseline assuming no utility sponsored efficiency programs. Commenter s added that the study documents cumulative EE potential in 2022 of 18.1 % being cost

- effective, rising to 22.8% in 2032. Commenter s stated that Avista's 2013 potential study documents similar levels of cost

- effective and achievable EE potential for the company's service territory in northern Idaho. Commenter s stated that Pacif icCorp, who serves southeastern Idaho, also commissioned a potential study in 2013 showing similar results. Commenter s added that PacifiCorp incorporated these results in the company's 2013 Integrated Resource Plan by analyzing a future resource portfolio that presumed annual energy savings levels of 2.0%. Commenter s stated that this portfolio proved to be the least cost, least risk option to meet future energy demands. Commenter s stated that the 6th Power Plan calculates by 2030 that EE can reduce regional energy demand by 26.8%.

Increase stringency of goals . Commenter s stated that these Idaho specific assessments support EPA increasing the amount of EE potential used to establish Idaho's emission target. Commenter s recommended that instead of using 3.9% b y 2020 and 11.1% by 2030, EPA use at least half of the identified cost

- effective potential in 2020 and all the cost effective potential by 2030. Commenter s concluded that this allows time for Idaho utilities to ramp up customer engagement and EE program ad ministration to capture all available cost

- effective energy efficiency.

Comment 127: ID

- The EPA should include hydropower in RE targets, or should cap RE at

ex isting affected unit generation

Response 127: See section V.E. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 3.

The following are summaries of the specific public comments under this comment:

Commenter s stated that hydropower generation is a critical, cost

- effective, and car bon

- free component of both Idaho's and the entire nation's generation mix. Commenter s added that the contribution of hydro generation to Idaho's low carbon profile is direct and substantial: hydro typically accounts for 60

- 70% of in

- state generation on an annual basis and displaces substantial148 amounts of in

- state and out

- of

- state fossil generation. Commenter s stated that given the importance of hydro generation as a leading zero

- carbon emitting energy source, EPA's failure to include or reasonably address e xisting hydro generation in the proposed rule is arbitrary and capricious.

Commenter s stated that the exclusion of existing hydro generation particularly affects Idaho in the context of EPA's calculation of Proposed RE Targets. Commenter s added that under its primary RE proposal, EPA establishes each state's RE Target by comparing existing RE generation (excluding hydro) as a percentage of total generation (including hydro) against a percentage derived by EPA from an average of Renewable Portfolio Standards ("RPS") from states within an assigned region. Commenter s stated that applying this calculation, EPA assigned Idaho an existing RE percentage of 16% and developed the Proposed RE Target based on the comparison of that percentage to a 21% regional RPS aver age. Commenter s stated that EPA's methodology and resulting Target fails to recognize and ensure proper accounting for Idaho's existing hydro generation.

Commenter s stated that first, by requiring Idaho to acquire additional incremental RE based on other s tates' RPS rules, EPA ignores Idaho's existing zero

- emission hydro generation. Commenter s stated that when Idaho's in

- state carbon

- free generation is considered with hydro included, the state RE percentage already greatly exceeds EPA's regional RPS target. Commenter s added that for example, during the 2012 baseline year, Idaho produced 15,499 GWhs of total generation; of that, only 2,044 GWhs was from carbon emitting sources (1,640 GWhs from affected units) with 13,454 GWhs from non

- carbon emitting sources. Commenter s stated that thus, Idaho has already offset more than 6.5 times the amount of its in

- state carbon emitting generation with existing non

- carbon emitting generation within its borders. Commenter s concluded that on this basis, Idaho meets an RPS of 87% zero

- carbon emitting energy.

Commenter s stated that because 81% of Idaho's non

- carbon emitting energy is produced from hydro generation, the incremental RE targets as proposed by EPA would effectively result in new renewable development that would oft en displace Idaho hydroelectric generation rather than mitigating or reducing CO2 emissions produced by affected unit fossil generation plants. Commenter s added that if existing hydro generation is reasonably accounted for in developing Proposed RE Targets , then such generation would more than offset any incremental RE requirement based on regional RPS standards. Commenter s concluded that EPA should remove the Proposed RE Target from the goal

- setting methodology for Idaho.

Commenter s stated that second, EP A's implementation of the RE target calculation for Idaho is fundamentally flawed because it is not reasonably tied to the generation and emissions of the fossil units that EPA intends to regulate. Commenter s added that Idaho and Washington are the only tw o states with Proposed RE Targets that exceed their 2012 affected unit generation. Commenter s stated that under EPA's current proposal, Idaho's targets significantly exceed every other state's targets as a percent of 2012 affected unit generation.

Commente r s stated that in fact, Idaho's Proposed RE Target exceeds Idaho's affected unit generation by almost 200%. Commenter s expounded that this aberration occurs because EPA calculates the Proposed RE Targets independent of affected unit generation and emission s. Commenter s stated that EPA is thus forcing Idaho to offset more than its fair share of emissions,149 which is inconsistent with the main premise of EPA's BSER method for establishing state goals (i.e., offsetting CO2 emissions from affected fossil units). Commenter s added that not only does this excessive target overstep EPA's authority by purporting to regulate activities unrelated to affected source emissions, but it also would lead to the arbitrary and capricious result of requiring development of new RE to displace existing zero

- carbon emitting generation. Commenter s concluded that if EPA does not take the appropriate step of eliminating Idaho's incremental RE targets based on the state's existing hydro generation, then at a minimum, Idaho's Proposed RE Target (existing plus incremental) should be capped by the amount of Idaho's 2012 affected unit generation.

Comment 128: ID

- The EPA should reconsider its determination to apply BSER to Idaho

Response 128: See sections V.A. and V.D. of the final rule p reamble of the CPP for discussion of the final BSER determination and building block two, respectively. Also see section VII of the final preamble for discussion of updated state goals based on the subcategory

- specific emission performance rates. EPA basel ine data reflects that Idaho has one of the lowest emission rates for its affected fossil inventory. The state does have EGUs that meet the applicability requirements, so BSER is applied to the state. However, EPA believes that the final CPP BSER is cons istent with Idaho’s status as a low emission rate state, and the difference between Idaho’s baseline rate and the ultimate state goal is low due to the profile characteristics noted below.

The following are summaries of the specific public comments under t his comment:

Commenter s stated that Idaho's treatment under the proposed rule illustrates the fundamental problems with EPA's approach to determining the Best System of Emission Reduction ("BSER") and establishing interim and final performance goals for th e state. Commenter s added that Idaho's existing carbon profile is very low by virtually any measure. Commenter s added that Idaho has the second lowest total 2012 CO2 emissions in the country; more than 87% of in

- state energy generated from zero

- carbon emit ting generation sources; no in

- state coal generation; and (Idaho has) established and successful Energy Efficiency programs.

Commenter s stated that yet EPA's proposed rule establishes a performance goal for Idaho that is the second most stringent among all states and requires a further reduction of 33% from EPA's baseline CO2 emission rates. Commenter s added that the Idaho performance goal is so low, in fact, that Idaho Power cannot utilize a brand new, CAA Section 111(b)

- compliant natural gas combined

- cycl e ("NGCC") unit, built in 2012, to meet its load. Commenter s stated that these fundamental structural problems are exacerbated by EPA's failure to accurately characterize Idaho's existing NGCC generation in the baseline emission rate, which translates thro ugh the goal

- setting process to further reduce the state performance goal.

Commenter s concluded that EPA should reconsider its determination to apply its building block BSER to Idaho and to establish Idaho state performance goals that require reductions b eyond Idaho's current generation mix. Commenter s added that if Idaho did nothing further to reduce its carbon emissions, it still would be one of the lowest emitting states (in both absolute amounts and in terms of emission rates) in the nation based on th e emission rate goals EPA is proposing150 for the other states. Commenter s stated that if EPA does set performance goals for Idaho, it must correct the anomalous values for NGCC generation in the baseline emission rate to appropriately reflect the critical ro le of NGCCs in re

- dispatch of out

- of state coal generation and supporting

zero

- carbon emitting generation.

Comment 129: ID

- Idaho should not be subject to a state performance goal

Response 129: The EPA disagrees that Idaho should not be subject to a sta te performance goal. Please see section VII of the final preamble and CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP for the final goals. See response to 128.

The following are summaries of the specific public comments under this comment:

Commenter s argued that Idaho should not be subject to a state performance goal. The
commenter s argued that EPA's BSER as applied to Idaho is arbitrary given Idaho's existing carbon profile and cannot be reasonably imple mented

.
Commenter s stated that EPA's proposed BSER has not been "adequately demonstrated" for Idaho as required by Clean Air Act Section 111, and the proposed rule as it affects Idaho is likely to increase carbon emissions from the state due to unreasonabl e and arbitrary restrictions on the use of existing in

- state NGCC generation.

BSER doesn't align with generation characteristics in ID . Commenter s stated that EPA's proposed BSER does not align rationally with the generation characteristics in Idaho. Comme nter s stated that though Idaho has two NGCC plants that EPA considers existing sources under the proposed rule, both of those sources (including Idaho Power's Langley Gulch plant which just started operation in June 2012) are fully compliant with EPA's pro posed Section 111(b) new source performance standards for NGCCs. Commenter s added that as EPA recognized in issuing its implementing regulations for Section 111(d), "the degrees of control represented by EPA's emission guidelines [for existing sources] wil l ordinarily be less stringent than those required by standards of performance for new sources." 40 Fed. Reg. 53340, 53341 (Nov. 17, 1975). Commenter s stated that EPA's proposed BSER turns this logical relationship on its head. Commenter s stated that by im posing a state performance goal for Idaho based on implementation of activities that are not undertaken at the NGCC plants, but rather "outside the fenceline," EPA not only locks in an emission rate assumption for these NGCCs well below the 111(b) emission rate, but also effectively limits output from those plants based on the interim and final goal compliance requirements. Commenter s concluded that thus, the Section 111(d) emission guidelines for Idaho's existing NGCCs are far more stringent than the compa rable 111(b) standard.

BSER is arbitrary . Commenter s stated that the arbitrary nature of EPA's BSER and state performance goals for Idaho is further demonstrated by reviewing Idaho's overall carbon profile. Commenter s added that Idaho's 2012 CO2 emission l evel was the 2nd lowest emission level in the country, second only to Vermont, the only state that is not subject to a state performance goal under EPA's proposed rule. Commenter s added that Idaho has no in

- state coal generation.151 Commenter s stated that in 2012, 87% of Idaho's in

- state generation came from zero carbon emitting sources, including hydroelectric, wind, solar and geothermal. Commenter s added that due to the continual addition of generation by new zero

- carbon emitting sources within the state, by 2020, an even higher percentage of Idaho's in

- state generation will be carbon free. Commenter s stated that Idaho utilities also operate successful Energy Efficiency programs that are continually evaluated by the Idaho PUC. Commenter s stated that EPA's Not ice of Data Availability ("NODA") released on October 30, 2014, demonstrates that Idaho already produces/saves more MWh through renewable energy ("RE") and energy efficiency ("EE") than it generates from affected fossil units. Commenter s added that for 201 2, EPA reports Idaho as producing 2,514,502 MWhs of RE (excluding hydropower and EE) compared with only 1,639,922 MWhs of affected unit generation. Commenter s stated that under the goal

- setting equation as adjusted in the NODA, by subtracting the fossil em issions that would be displaced by existing RE, Idaho's calculated emissions rate goal on a lbs/MWh basis would be a negative number.

Idaho emission profile . Commenter s stated that Idaho already surpasses the most stringent carbon standard that EPA envisi ons under the proposed rule for all but one state, and has more than mitigated carbon emissions from its two affected fossil units by the amount of RE and EE it has already accumulated. Commenter s added that in fact, Idaho's existing emission profile is cl oser to Vermont than any of the other states that EPA has assigned state performance goals. Commenter s concluded that it is arbitrary and capricious for EPA to impose a state performance goal proposing a further 30% reduction in Idaho's carbon intensity be cause Idaho already implements an energy mix that achieves the intent of the proposed rule.

BSER not "adequately demonstrated" in ID . Commenter s added that in addition, the compliance issues that would arise for Idaho in attempting to meet the artificially low state performance goals illustrate that EPA has failed to "adequately demonstrate" that its building block BSER can be reasonably implemented in Idaho. Commenter s stated that in its Legal Memorandum for Proposed Carbon Pollution Emission Guidelines fo r Existing Electric Utility Generating Units, EPA describes an adequately demonstrated BSER as "one that can 'be[] shown to be reasonably reliable, reasonably efficient, and " reasonably " expected to serve the interests of pollution control without becomi ng exorbitantly costly in an economic or environmental way.'" Id. at 66

- 67 (Essex Chemical Corp. v. Ruckelshaus, 486 F.2d at 427, 427 (D.C. Cir. 1973)).

Commenter s stated that EPA's BSER fails to meet any of these criteria with respect to the state perfor mance goals imposed on Idaho. Commenter s stated that first, EPA's imposition of constraints on NGCC generation in Idaho is not "reasonably reliable" because it creates serious concerns regarding the ability to meet demand, particularly in low hydro generat ion years. Commenter s added that second, the NGCC constraints are not "reasonably efficient" because they threaten to prevent the re

- dispatch of Idaho utility

- owned, out

- of

- state coal generation to in

state NGCCs, which is the most efficient and cost

- effec tive manner of replacing that generation. Commenter s added that third, the requirement of additional emissions reductions through constraints on NGCCs and development of additional renewable generation cannot reasonably be expected to achieve emission redu ctions without exorbitant economic or environmental costs. Commenter s stated that if EPA requires further emission reductions, Idaho may have to resort to alternative energy sources that would increase costs to Idaho customers and the state's overall carbo n intensity. Commenter s added that for example, Idaho Power would be forced to replace152 efficient existing NGCC generation precluded by the proposed rule through more costly and carbon

- intensive alternatives. Commenter s stated that in order to comply with t he rule as proposed, Idaho Power would have to: (1) operate its peaking plants more often, at a higher cost to consumers and with greater emissions than its NGCC units; (2) rely on market purchases which can be costly, unreliable, have unknown carbon profi les, and for which transmission capacity may not be available to move the energy to Idaho; (3) replace existing, reliable zero

carbon emitting hydro generation with new intermittent zero

- carbon emitting generation sources at a higher cost; and (4) build a new NGCC with a potentially higher emission rate under 111(b). Commenter s stated that such potential outcomes are directly contrary to the intent of the proposed rule. Commenter s concluded that given the absence of an adequate demonstration of EPA's BSER f or Idaho and the low carbon intensity Idaho has already achieved, EPA should not impose a state performance goal or require further CO2 emission reductions for the state.

Comment 130 : ID

- The EPA must correct its treatment of Langley Gulch and modify th e Idaho baseline emission rates and state performance goals

Response 130: The EPA has modified the assumed generation and emissions fro m the NGCC fleet in the state of Idaho by flagging Langley Gulch as under construction and using a capacity factor value reflective of a full year’s operation rather than the partial year data reported in 2012. See the CO 2 Emission Performance Rate and Goal Computation Technical Support Document for CPP Final Rule.

The following are summaries of the specific public comments under this comment:

Commenter s argued that EPA must correct its treatment of Langley Gulch and modify the Idaho baseline emission rates and state performance goals. The commenter s argued that there are artificial constraints on Idaho's existing NGCCs and EPA should provide flexibility for increased NGCCs in low hydro years.

Commenter s stated that the appropriate correction to the baseline emission rate for Langley Gulch goes beyond simply fixing a mathematical error. Commenter s added that the characteristi cs of Langley Gulch and its role in the generation mix for Idaho and Idaho Power demonstrate that the plant should be assigned a higher baseline emission rate in the goal setting
process.

Commenter s stated that first, Langley Gulch was planned and built fo r the purpose of replacing new potential coal

- fired generation, consistent with the re

- dispatch principles EPA relies on in Block 2 of its BSER determination in the proposed rule. Commenter s stated that the customer load now being served by Langley Gulch h ad originally been proposed in Idaho Power's Integrated Resource Plan submissions to be met through construction of a new coal

- fired generating unit at the Jim Bridger Power Plant in Wyoming, in which Idaho Power has a partial ownership interest. Commenter s stated that instead, Idaho Power elected to move forward with new NGCC generation at Langley Gulch in anticipation of carbon regulation and reduction requirements among other factors.153 Commenter s stated that second, the proposed rule is likely to lead to increased demand for NGCC generation within Idaho to address reductions in out

- of

- state coal generation that is a significant part of Idaho Power's and Idaho's generation mix. Commenter s stated that Idaho Power is a part owner of three out

- of

- state coal pl ants and relies on out

- of

- state coal generation for approximately 30

- 40% of its electric supply. Commenter s added that under Block 2 (anticipating redispatch of coal to NGCC generation) of EPA's goalsetting method, the Boardman facility in Oregon and the N orth Valmy facility in Nevada are projected to close before 2020. Commenter s stated that the most economic and efficient response to those closures for Idaho Power customers would be to shift a portion of that company

- owned generation to NGCC generation wi thin Idaho at Langley Gulch. Commenter s added that however, artificial constraints on Idaho's existing NGCC generation will prevent replacement of that power with in

state NGCC generation and leave no in

- state generation sources sufficient to absorb the lo st out

of

- state generation. Commenter s stated that despite reducing its reliance on coal

- fired generation consistent with the intent of the proposed rule, Idaho will have no ability to develop an achievable and affordable compliance plan that meets custome r demand if state performance goals are set so low that they effectively eliminate in

- state NGCC generation. Commenter s added that by way of example, EPA's own IPM modeling projects that Idaho's NGCC plants (Langley Gulch and Rathdrum) would operate at an annual average capacity factor of greater than 73% in 2018 prior to the start of the compliance period. Commenter s stated that once the compliance period begins in 2020, the IPM model projects NGCC capacity factors dropping to 12.5%.

Commenter s stated that third, NGCC generation in Idaho, and at Langley Gulch in particular, plays a critical role in leveling the effects of variability in hydropower generation within Idaho and the surrounding region. Commenter s added that in a normal or typical year, hydroele ctric generation accounts for approximately 50% of Idaho Power's total generation. Commenter s stated that as a consequence, variations in annual streamflow conditions (which can vary by more than 100% from minimum to maximum flow) can have a significant im pact on the operation of the company's non

- hydro generation resources. Commenter s stated that for example, during a favorable water year, greater hydro generation reduces the need to dispatch fossil resources to meet customer loads. Commenter s stated that the opposite is true during poor water years. Commenter s stated that this occurs because Idaho Power dispatches its generation resources from lowest cost to highest cost, and Langley Gulch has a dispatch cost that is generally higher than the dispatch cost of the company's out

- of

- state coal

- fired resources. Commenter s stated that therefore, Langley Gulch is often the "marginal" resource that is first called upon when hydro generation is low and displaced when hydro generation is high. Commenter s added that the results of the simulated operating statistics for Idaho Power's hydro generation plants and Langley Gulch indicate over the 85 different actual water conditions that have been recorded since 1928. Commenter s stated that this set of time periods was cho sen because it is consistent with the method for evaluating hydro generation in the context of rate proceedings before the Idaho PUC. Commenter s stated that the results demonstrate the impact that hydro variability has on NGCC operation and the inverse rel ationship that exists between those two resource types.

Commenter s stated that these dramatic differences in historic hydro generation demonstrate the importance of providing flexibility for increased NGCC generation that will be needed during below

- avera ge hydro generation years. Commenter s added that non

- hydro renewable energy sources, even if their share of generation were expanded as contemplated by EPA under Block 3154 of its goal

- setting method, will simply not be sufficient to replace hydro generation in low

- water years, and such resources are ill

- suited to serve in that role (without NGCC support) due to their intermittent nature. Commenter s stated that moreover, the role of NGCC generation in compensating for low hydro generation will only increase go ing forward because the proposed rule will constrain Idaho Power's ability to offset hydro generation with additional Company

owned out

- of

- state coal generation. Commenter s added that by artificially constraining NGCC generation, EPA would guarantee future compliance problems for Idaho because the overly stringent performance goal effectively eliminates in

- state options for replacement power in years with below

- average hydroelectric generation.

Commenter s stated that in light of these specific characteristi cs, EPA should correct its treatment of Langley Gulch in a manner that provides the flexibility necessary to accomplish the important functions of reducing out

- of

- state coal generation and supporting zero

- carbon emitting generation. Commenter s stated that EPA should consider Langley Gulch as a new NGCC unit under Section 111(b) that would be excluded from any requirements for existing units under Section 111(d). Commenter s added that Langley Gulch is a newly

- constructed, state of the art NGCC unit that meet s all requirements for new generation under the proposed Section 111(b) standards and operates at a CO2 emission rate below the rate proposed for new NGCC units. Commenter s stated that EPA's imposition of effective limitations on the emission rate and outp ut from this new Section 111(b) compliant NGCC plant through the Section 111(d) goal

- setting process for existing units is inconsistent with its own expectations of how Section 111 should work in practice. Commenter s stated that when EPA issued its regulat ions implementing Section 111(d) in 1975, the Agency reasonably anticipated that "the degrees of control represented by EPA's emission guidelines [for existing sources] will ordinarily be less stringent than those required by standards of performance for n ew sources." 40 Fed. Reg. 53340, 53341 (Nov. 17, 1975). Commenter s stated that treating Langley Gulch as subject to Section 111(b) would be more consistent with the statutory structure and would provide Idaho and Idaho Power much needed flexibility to oper ate Langley Gulch to further the carbon reduction goals of the proposed rule.

Commenter s stated that if EPA continues to treat Langley Gulch as an existing unit subject to Section 111(d), then the most appropriate correction to the plant's baseline operati ng characteristics is to assign an annual capacity factor of 70%. Commenter s stated that in the context of developing Building Block 2 of its proposed BSER, EPA determined that NGCCs can be considered available for use to re

- dispatch coal generation within a state up to an annual capacity factor of 70% (See 79 Fed. Reg. at 34863). Commenter s stated that as explained above, Langley Gulch has been used in the past and will be used in the future to replace generation from
out

- of

- state coal

- fired units owned by Idaho Power. Commenter s added that EPA should encourage this cost

- effective ramping down of coal generation, without regard to whether it is occurring within or across state lines, and avoid imposing any artificial constraints on NGCC operation that would impede beneficial re

- dispatch. Commenter s stated that the best way to achieve that outcome in Idaho and with Langley Gulch is to assign a baseline capacity factor of 70% to Idaho's NGCC generation consistent with EPA's Block 2 expectations and to recalcul ate Idaho's state performance goal to reflect this more appropriate representation of NGCC generation. Commenter s stated that by removing arbitrary barriers to NGCC operation, this approach would provide needed flexibility to Idaho's utilities, encourage m aximum CO2 reduction, and minimize reliability and cost impacts to customers.155 Comment 131: IL

- The EPA made false assumptions to support the GHG rule

Response 131: See section V of the final rule preamble of the CPP for discussion of the EPA’s final BSE R determination. Also see sections VI and VII for discussion of the subcategory

specific emission performance rates and state goals, respectively.

. The following are summaries of the specific public comments under this comment:

Commenter s argued EPA has made false assumptions to support the GHG Rule. The
commenter s argued that meeting Illinois' target requires a reduction in use of the Dallman Unit 4, however, Section 111(d) of the CAA does not support that EPA can disrupt or redirect existing energy disp atch markets

.
Commenter s stated CWLP is a member of the American Public Power Association (APPA). Commenter s stated CWLP's new Dallman Unit 4 was one of seventeen new plants that APPA used to demonstrate in its comments on USEPA's proposed GHG rule for new EGUs that even the newest, cleanest US units do not and cannot come close to meeting the 1,100 lb/MWh limit for new plants. Commenter s added similarly, since there is little to no technology to reduce carbon emissions from existing new plants such as Dall man Unit 4, other than possibly an untested, commercially unavailable carbon capture and storage technology, meeting Illinois' targeted reduction requires a scheme in which Dallman Unit 4 operates less. Commenter s stated Section 111(d) of the Clean Air Act does not support a GHG Rule that authorizes the USEPA to disrupt or even to redirect the existing energy dispatch market of the Independent System Operators like MISO and PJM, created to enable a reliable grid at the most affordable price. Commenter s conc luded moreover, the USEPA has made false assumptions to support the GHG Rule.

Comment 132: IL

- Illinois' goal should be adjusted for inclusion of the 1600 MW Prairie generating station

Response 132: The EPA has adjusted Illinois baseline and goal refl ecting the inclusion of Prairie State Generating Station as a likely affected EGU

. The following are summaries of the specific public comments under this comment:

Commenter s argued Illinois' goal should be adjusted for inclusion of the 1600 MW Prairie
gene rating station

.
Commenter s stated adjust Illinois' emission reduction goals to account for the absence of any representative data for use in baseline and goal determinations. Commenter s stated in particular the 1600 MW Prairie State Generating Station in W ashington County did not reach full and expected normal operating levels and emissions in, or prior to, the year 2012. Commenter s recommend ed that the Illinois emission reduction goals be adjusted to reflect projected normal, representative operation and e missions of this facility going forward.156 Comment 133: IL

- Heat rate improvements are unrealistic due to parasitic load from control equipment

Response 133: See section V.A of the final rule preamble of the CPP for the EPA’s response to this comment.

Th e following are summaries of the specific public comments under this comment:

Commenter s argued that heat rate improvements are unrealistic due to parasitic load from control equipment

.
Commenter s stated Illinois has mandated significant reductions in emis sions of sulfur dioxide, nitrogen oxides, and mercury in rules, such as the Illinois mercury rule, Clean Air Interstate Rule, and multi

- pollution reduction requirements contained in these rules. Commenter s stated the additional pollution control equipment required by such rules makes heat rate improvements of 6% more difficult due to the parasitic load.

Commenter s stated further, there are units in Illinois that have installed pollution control equipment since the baseline year of 2012, with more controls either under construction or on the way. Commenter s stated in at least one case, an affected source owner has noted the loss of nearly 10% of its net output since 2012 due to the parasitic load. Commenter s concluded it appears unrealistic to assume that th is unit, and any like it, could achieve a cumulative heat rate improvement of around 16% over the base year.

Comment 134: IL

- BB2

Response 134: See section VI.A of the final rule preamble of the CPP and the CO 2 Emission Performance Rate and Goal Computa tions TSD for CPP Final Rule

. The following are summaries of the specific public comments under this comment:

Commenter s support ed the increased utilization of NGCC's; however aside from the lack of authority for a state environmental agency to compel an i ncreased dispatch of NGCC units, USEPA's calculation to determine Building Block 2 that would increase utilization of such units to 70% for the Holland Energy Facility (ORIS code 55334) in Beecher City, Illinois is in error. The commenter s said as an examp le, USEPA assumed that the entire capacity for the steam turbine (ST) could be dispatched at 70%; the facility is limited by its CAAPP (air) permit; in fact, each duct burner on the steam turbine has a firing limit of 1,500 hours per year limit

- this addi tional MW capacity is unavailable for more than 80% of the year.

Commenter s stated the units are also limited by its NPDES (water) permit. The commenter s said even though the facility is equipped with a closed cycle cooling tower, the NPDES Permit has the rmal effluent limitations that cannot be exceeded. The commenter s said if the effluent temperature exceeds the limit and the facility is forced to stop discharging, the facility could157 continue to run for several hours; however, the facility may have to dis continue operation if temperatures (discharge and/or upstream river temperature) do not come down. The commenter s said the NPDES permit also prohibits the discharge from the permitted outfall to the Kaskaskia River if the river flow is less than 10 cfs; th is is effectively a shutdown requirement. The
commenter s said these water issues are not unique to WVPA's NGCC facility; these errors need to be corrected and the goals adjusted accordingly.

Comment 135: IN

- Indiana should have higher emission rate tar gets
Response 135: For the EPA’s response to this comment, see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commen ter s did not support utilizing EPA's methodology to set emission rate standards, however the commenter s argued Indiana should receive higher emission rate targets based on more reasonable assumptions.

Commenter s d id not support utilizing EPA's existing met hodology to set emission rate targets, the company examined the interim and final emission rate targets using more realistic assumptions. Commenter s stated the results of NIPSCO's 2012 baseline year analyses suggest that, based on EPA's methodology and mor e realistic assumptions, Indiana's 2020

- 2029 interim rate target should be set no lower than 1,786 lb CO2/MWh, and Indiana's final emission rate target should be set no lower than 1,753 lb CO2/MWh. Commenter s stated NIPSCO conducted similar analyses using the 2011 data released as part of EPA's October 28, 2014 NODA. Commenter s stated applying more reasonable assumptions to the 2011 baseline year data indicates that Indiana's 2020

- 2029 interim rate target should be set no lower than 1,853 lb CO2/MWh, and In diana's final emission rate target should be set no lower than 1,824 lb CO2/MWh. Commenter s d id not support utilizing EPA's exiting methodology to set emission rate standards. Commenter s stated these calculations are provided to show how Indiana's rates

wo uld have been set using more reasonable assumptions in EPA's existing methodology.

Comment 136: IN

- Indiana should receive greater mass allocation

Response 136: See sections V.A and VII. C of the final rule preamble of the CPP for the EPA’s response to t his comment.

The following are summaries of the specific public comments under this comment:

Commenter s argued that Indiana should receive greater mass allocation, TSD does not account for projected future increases in Indiana generation.

Commenter s stated NIPSCO has reviewed the newly released TSD, "Translation of the Clean Power Plan Emission Rate

- Based CO2 Goals to Mass

- Based Equivalents," and does not agree158 with EPA's suggested historical calculation method for states that choose mass

- based compliance. Commenter s added the method presented in the TSD does not adequately account for the projected future increase in Indiana generation. Commenter s stated the State Utility Forecasting Group reported to the Indiana Utility Regulatory Commission in December 20 13 that electricity requirements in the state would grow at a rate of 1.17% annually until the year 2031. Commenter s added EPA has embedded EE requirements in the proposed rate targets, and multiplying the targets by a mass equivalent generation level that is artificially lower because it already incorporates the effects of EE would constitute double counting. Commenter s stated for this reason, a 1.17% annual growth rate is more appropriate than the suggested EIA Electricity Market Module regional value of 0.45%. Commenter s added practically speaking, EE displaces future growth; it does not replace existing generation. Commenter s concluded NIPSCO suggests that EPA clarify its method of calculating mass allocations and allow state

- specific modeling of electri c growth.

Comment 137: IN

- The EPA incorrectly applied BSER

- The EPA is not legally allowed to regulate outside the fence. The EPA's assumptions across the Building Blocks are incorrect and unrealistic

. Response 137: See sections V.A., V.B., V.C., V.D. , V.E. of the final rule preamble of the CPP for the EPA’s response to this comment and the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP for the final goals.

The following are summaries of the specifi c public comments under this comment:

Commenter s argued EPA incorrectly applied BSER, is not legally allowed to regulate outside the fence, and their assumptions across the Building Blocks are incorrect and unrealistic

.
Commenter s stated after applying the four Building Blocks to Indiana, EPA calculates a state interim emission rate target of 1,607 lb CO2/MWh from 2020

- 2029 and a final emission rate target of 1,531 lb CO2/MWh by 2030. Commenter s stated NIPSCO believes that Indiana's state targets are overly aggressive and are based on faulty assumptions underlying the four Building Blocks.

Commenter s stated EPA cannot expect coal

- fired EGUs to achieve a 6 percent improvement in heat rates. Commenter s added industry analyses indicate that heat rate improveme nt potential is between 1 percent to 2 percent across the industry. Commenter s stated economically achieving a 70 percent capacity factor for NGCC units is unrealistic. Commenter s added the highest statewide average NGCC capacity factor in Indiana was 53 p ercent in 2012. Commenter s stated this uncharacteristically high level of NGCC generation in Indiana occurred during a year when natural gas prices were near historic lows. Commenter s stated therefore, NISPCO believes that the maximum expected statewide av erage capacity factor for Indiana's NGCC plants should be no higher than the demonstrated 53 percent. Commenter s stated EPA's assumptions regarding energy efficiency deployment in Indiana are grossly exaggerated. Commenter s stated the Agency believes that Indiana can achieve annual EE savings of 1.5 percent, eventually resulting in a cumulative savings of approximately 11 percent in 2029. Commenter s concluded the annual159 incremental rate of 0.58 percent EE savings achieved by Indiana in 2012 is the highest i ncremental rate EPA should assume and is in line with the EPRI study.

Comment 138: IN

- is uniquely disadvantaged in meeting EE targets due to an Indiana law allowing industrial customers to opt out of EE programs

Response 138: The EPA has not included d emand

- side energy efficiency (building block four) in the final BSER determination. See section V.A. of the final rule preamble of the CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this commen t:

Commenter s argued NIPSCO is uniquely disadvantaged in meeting EE targets due to an Indiana law allowing industrial customers to opt out of EE programs.

Commenter s stated on March 28, 2014, Indiana Senate Enrolled Act 340 (SEA 340) became law (codified a s IC 8

- 1

- 8.5

- 9 et seq), allowing qualified industrial customers as defined by the statute to opt out of EE programs in Indiana. Commenter s added for the period of 2012

- 13, 53 percent of the energy consumption savings achieved by the Core programs in Indian a were attributed to commercial and industrial customers. Commenter s stated in NIPSCO's service territory, industrial customers represent approximately 50 percent of energy usage. Commenter s stated due to the significant percentage of industrial customers that have opted out of Indiana's EE programs, the significant percentage of Indiana EE program savings already achieved by industrial customers, and the significant percentage of NIPSCO's customers that are industrial users, NIPSCO is uniquely disadvantage d in meeting the EE targets established in the Proposed Rule.

Comment 139 : IN

- Indiana demand

- side goals costly and unfeasible; Indiana is penalized for past improvements

Response 139: The EPA has not included demand

- side energy efficiency (building blo ck four) in the final BSER determination. See section V.A. of the final rule preamble of the CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:

Commenter s argued that Indiana's demand

- side EE goals would be incredibly costly to achieve, may not be feasible. The commenter s also argued that Indiana is penalized for past improvements in energy efficiency

. EE goals . Commenter s stated that EPA expects Indiana to achieve cumulative reduction s in residential, industrial, and commercial energy usage of 3.2 percent by 2020 and 11.1 percent by 2030. Commenter s added that these numbers are based on a set of flawed assumptions about Indiana's electricity sector and would be incredibly costly to ach ieve. Commenter s stated that160 IUG proposes EPA conduct a more realistic appraisal of the potential for realizable energy savings in Indiana based on state

- specific forecasts. Commenter s stated that IUG also proposes EPA take Indiana's existing demand

- side e fficiency programs into account when crafting their expectations for future energy savings.

Commenter s added to better understand why EPA's 1.5 percent number is inappropriate for Indiana, it helps to understand the history of demand

- side efficiency progra ms in our state. Commenter s stated in December 2009, the IURC mandated that Indiana utilities implement a set of statewide demand

- side management programs ("CORE programs") to achieve energy savings equivalent to a 2 percent reduction in sales by the year 2019, with interim goals.

Commenter s stated according to the evaluation completed to measure energy savings through the CORE programs, in 2012 (the first year such programs were offered on a statewide basis) Indiana achieved an "overall verified program r ealization rate of 71 percent for kWh and 60 percent for kW." Commenter s stated in other words, through its statewide programs, Indiana achieved less than 0.7 percent verified energy savings in 2012. Commenter s added Indiana has a very limited history in l arge

- scale energy efficiency programs, making it difficult to know the long

- term achievability of energy efficiency goals. Commenter s stated yet, in spite of these facts, EPA calculated that Indiana was one of twelve states that "have either achieved" or h ave established requirements that will lead them to achieve "annual incremental savings rates of at least 1.5 percent of the electricity demand that would otherwise have occurred." Commenter s concluded the existence of a state requirement to achieve 1.5 pe rcent savings at some point in the future is a far cry from demonstrating that requirement's feasibility or cost

- effectiveness.

Commenter s added recent events in Indiana support IUG's skepticism towards EPA's aggressive savings target. Commenter s stated th is year, the Indiana General Assembly elected to reevaluate the specifics of the state's energy efficiency programs. Commenter s stated Senate Bill 340 established a sunset for the aforementioned goals, effective December 31, 2014. Commenter s added had thos e benchmarks remained in place, a study by the Energy Center of Wisconsin estimated the cost of compliance would have spiked to $200 million in 2015 and $549 million in 2019.

Past improvements . Commenter s stated Indiana has already taken advantage of many of the easiest opportunities to improve statewide energy efficiency. Commenter s stated for instance, in addition to utility

- specific programs, through the CORE programs created by the IURC in 2009, utilities and stakeholders have been aggressively marketin g residential home energy audits; low

income weatherization; building assessments at schools; residential lighting improvements; and commercial & industrial prescriptive rebates for several years. Commenter s stated these efforts are widespread and impactfu l; in fact, the SUFG cites utility

- sponsored conservation efforts as having a major influence on the overall resource needs of Indiana in 2013. Commenter s stated to date, the vast majority of verified savings have come from residential lighting improvement s and commercial & industrial prescriptive rebates; both of these programs promise diminishing returns in the years to come.

Commenter s stated in the case of residential lighting improvements, savings are realized when the light bulb is changed. Commenter s added the opportunities for year

- over

- year improvements are limited by the nature of the technology. Commenter s stated in the case of commercial &161 industrial prescriptive rebates, major retrofits like equipment replacement or building improvements are als o often one

- time opportunities. Commenter s added as more and more major efficiency improvements are implemented by a facility, improvements tend to yield fewer savings per dollar invested. Commenter s stated other measures besides lighting and equipment imp rovements have no track record of being sustained and/or growing annually, or face consumer acceptance problems. Commenter s stated inexplicably, EPA assumes that existing opportunities for improvements in energy efficiency will be continuously available fo r a decade.

Commenter s stated federal lighting standards will make it harder for Indiana to include residential lighting improvements in its 111(d) Plan. Commenter s stated specifically, the Energy Independence and Security Act of 2007 (H.R. 6) set new ligh t bulb efficiency standards that have largely resulted in the phase

- out of traditional incandescent bulbs. Commenter s stated other federal building codes and efficiency standards will have a major impact on the marketplace for appliances and household prod ucts in the coming years. Commenter s stated these standards will result in energy savings in Indiana, but Indiana cannot claim those savings in its 111(d) Plan because those savings programs are not "realized exclusively through the adoption and implementa tion" of Indiana demand

- side efficiency programs. Commenter s concluded under the proposed rule, Indiana is effectively being penalized for the state's past investments in energy efficiency.

Comment 140: IN

- Indiana should receive credit for early EE sav ings

Response 140: The EPA has not included demand

- side energy efficiency (building block four) in the final BSER determination. See section V.A. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Buildi ng Block 4.

The following are summaries of the specific public comments under this comment:

Commenter s argued that EPA should allow credit for early action under existing state EE
programs

.
Commenter s stated EPA proposes that emission reductions achieved d uring a plan performance period that result from an existing state program may apply toward its required state emission performance target. Commenter s stated EPA should expand the scope of the existing programs provisions of its Proposed Rule to give the b roadest favorable treatment possible to EE actions taken that result in reduced CO2 emissions regardless of whether those actions were taken prior to issuance of the Proposed Rule. Commenter s stated to not allow early action would create a perverse incenti ve to delay EE programs and wait for credit.

Commenter s added EPA and states could apply the 'Weight of Evidence' concept offered in Section VI above to capture early action.

Comment 141: IN

- Indiana's EE goal is unreasonable162 Response 141: The EPA has no t included demand

- side energy efficiency (building block four) in the final BSER determination. See section V.A. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 4.

The following are sum maries of the specific public comments under this comment:

Commenter s stated that f or Indiana, EPA determines the percentage of potential avoided MWh sales from EE savings to be 3.20 percent in 2020, increasing to 11.11 percent in 2029. Commenter s added th at the 11.11 percent EE goal is among the highest levels assumed by EPA. Commenter s stated that EPA's calculations start with approximately 3,600,000 MWhs for EE in 2020 and increases to about 12,600,000 MWhs in 2029, which means that half of the CO2 emiss ions rate reductions for Indiana are coming from future EE. Commenter s concluded that these are fairly high numbers and extremely unrealistic, particularly given the unique difficulties that co

- ops have achieving energy reductions from EE in general, and H oosier Energy's specific experience.

Comment 142: IN

- A regional compliance plan would be required for Indiana's compliance due to the reduction in Merom station capacity factor

Response 142: See section V.E. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 3.

The following are summaries of the specific public comments under this comment:

Commenter s stated that Hoosier Energy's analysis determined that because of the reduction in the ca pacity factor at Merom, insufficient power will be generated to meet demand; its system will be short 3.7 million MWhs annually. Commenter s added that for each MWh that Indiana does not generate through RE or does not reduce through an EE program (in a por tfolio approach), Indiana must reduce 5 MWhs of coal. Commenter s stated that unless Indiana and Illinois participate in a regional compliance plan, Hoosier Energy's NGCC and most of its RE in Illinois cannot be utilized for CPP compliance in Indiana.

Comm ent 143: IN

- The EPA should not base Merom station capacity factor on 2012 operations

Response 143: For the EPA’s response to this comment, see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP. The E PAdoes not make any unit

- level assumptions or requirements in regards to plant operation levels. The building blocks are assessed regionally in the final rule. See preamble section VI for a discussion of unit

- level outage, why EPA believes it does not di srupt its quantification of source

catgory rates, and the unit

- level outage impact test it conducted for units nationwide to determine if any corresponding state

- level adjustments were necessary.

The following are summaries of the specific public comments under this comment:163 Commenter s stated that Hoosier Energy relies almost exclusively on the state of the art Merom station for baseload generation. Commenter s stated that as proposed, the CPP will force Merom units to operate significantly less even though they are some of the lowest emitters of traditional pollutants in the country. Commenter s stated that according to technical support documents, EPA assumes that Merom operates at a capacity factor of 59 percent based solely on 2012 operations

- a year in w hich significant pollution control upgrades were being made. Commenter s stated that this is an arbitrary, unfair and inaccurate capacity factor. Commenter s added that for example, the net capacity factor for Merom was 77% in 2011 and 75% in 2010 when major upgrades were not being performed. Commenter s stated that assuming the Indiana Department of Environmental Management (IDEM) employs the rate to mass based equivalent conversion provided for in EPA's November 2014 technical support document, Indiana will have an interim mass equivalent of 76,689,000 metric tons of CO2. Commenter s stated that if IDEM apportions this CO2 budget across Indiana's coal

- fired plants based solely on 2012 operations, Merom's capacity factor would be reduced to 42 percent. Commente r s concluded that this severe reduction in Merom's generation will significantly hamper Hoosier Energy's ability to provide reliable, affordable power to its members.

Comment 144: IN

- Data corrections for coal

- fired facilities; concern for Indiana ratep ayers
Response 144: The EPA has adjusted the generation and emissions for the state up to reflect a representative full year’s operation for the Edwardsport facility recognizing the comment that it began operation part way through 2012 and thus 2012 data w as not representative. See section VI of the final rule preamble of the CPP and the CO 2 Emission Performance Rate and Goal Calculation TSD for CPP Final Rule for further discussion.

The following are summaries of the specific public comments under this co mment:

Commenter s offered corrections to inaccurate data for coal

- fired facilities and expressed concern for Indiana ratepayers if the Edwardsport IGCC plant is prevented from fully operating

.
Commenter s stated based on a review of U.S. EPA's technical sup port documents included as a part of the proposed rule, Indiana has identified several data points that are inaccurate specific to a number of active coal

- fired facilities currently located in the state. Commenter s added this includes the classification of some of the state's facilities as "peakers". Commenter s stated there are additional concerns associated with the 2012 emissions data. Commenter s added for example, Duke Energy's Edwardsport Generating Station is a new coal gasification facility sited adja cent to the old Edwardsport power plant that had coal fired boilers. Commenter s stated the old plant ceased operation prior to 2012 and the new Edwardsport IGCC plant was in the initial start of operations in 2012. Commenter s stated the emissions data U.S. EPA used in the TSD for Edwardsport is in no way reflective of actual operating conditions and should be adjusted when evaluating Indiana's state goal. Commenter s expounded this facility ran very little during 2012, yet U.S. EPA data assumes this facility was operating at full capacity. Commenter s added the Edwardsport IGCC facility was conducting tests for operation and was not yet fully in service in 2012. Commenter s stated furthermore, the Edwardsport IGCC used natural gas instead of coal for a signific ant portion of the time it was operational in 2012. Commenter s stated the future164 emission rate for this facility will likely be greater than the 2012 levels because this facility is designed to run primarily on synthesized gas from coal. Commenter s stated Indiana is concerned that the current emission rate targets for Indiana under the Clean Power Plan could prevent the Edwardsport IGCC plant from fully operating according to its original design. Commenter s stated if this happens, Indiana ratepayers will be ar more than $2.5 billion in construction costs for this facility without receiving the full benefits expected when the initial investment in the plant was originally approved in 2007. Commenter s stated under Indiana law and past orders from the IURC, the utility may recover approved construction costs even if the facility never operates to serve ratepayers. Commenter s concluded preventing the Edwardsport IGCC plant from fully operating could represent a significant stranded cost issue for Indiana ratepayer s, which is explicitly contrary to the intent of the rule.

Comment 145: IN

- 70% capacity factor for NGCCs overestimates Indiana's capabilities

Response 145: See section V.D. of the final rule preamble of the CPP for the EPA’s response to this comment an d more information about Building Block 2.

The following are summaries of the specific public comments under this comment:

Commenter s argued a 70% capacity factor for NGCCs overestimates Indiana's capabilities

.
Commenter s stated in the year 2012, natural g as prices were at record lows. Commenter s added natural gas powered EGUs were able to sell power to RTOs at lower prices than coal

- fired EGUs and had a larger piece of the power sector. Commenter s stated it was also a very hot summer in Indiana, and energy usage was above normal levels. Commenter s stated even under these conditions, in which there was a financial advantage to maximize natural gas power, NGCC capacity usage in Indiana was only at 53% when averaged between all the NGCC units. Commenter s state d this indicates that BSER for Indiana NGCCs should be closer to 53% than 70%. Commenter s stated the Noblesville facility is a former coal

- fired unit converted to a NGCC unit by the addition of combustion turbines, and is less efficient. Commenter s stated the Noblesville unit ran at a 29% capacity factor in 2012, despite the favorable natural gas price conditions of that period. Commenter s added while new NGCCs built in Indiana would most likely be able to operate at a 70% capacity factor and help Indiana r each the BSER determination, this would require Indiana to bring all new NGCC units in under both Section 111(b) and 111(d) to be able to meet the BSER. Commenter s concluded it is unclear whether a facility can be regulated under both elements of Section 1 11 and it most certainly was not the intention of the CAA to force states to build new facilities in order to meet BSER requirements under 111(d).

Comment 146: IN

- Insufficient technical information is provided showing how a 6% heat rate improvement is achievable; utilities should receive credit for implemented improvements

Response 146: See section V.C. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 1.165 The following are summaries of the specific public comments under this comment:

Commenter s argued there is not sufficient technical information to show how a 6% heat rate improvement is achievable. The commenter s argued many utilities have already implemented suggested heat rate impr ovements and should be given credit

.
Commenter s stated U.S. EPA erroneously relied on the Sargent & Lundy report and incorrectly applied cumulative improvements in a manner inconsistent with how the study was conducted. Commenter s added the study was inten ded as a guide for EGU operators to use to evaluate potential areas for heat rate improvements. Commenter s stated in the study, it was assumed many times that the technology being evaluated was older or had not already been already replaced with more up

- to

- date technology. Commenter s concluded however, many Indiana utilities have already implemented the suggested heat rate improvements and should be given credit in the proposed rule for those improvements.

Comment 147: IN

- Indiana is not positioned to ad dress the RE goal within the proposed timeline (due to lack of infrastructure )

Response 147: See section V.E. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 3.

The following are summar ies of the specific public comments under this comment:

Commenter s argued due to lack of infrastructure, Indiana is not positioned to address the RE goal within the proposed timeline

.
Commenter s stated in order for Indiana to meet the renewable goal set b y U.S. EPA in Building Block 3, the state would essentially have to double its wind farm capacity. Commenter s added however, current infrastructure does not allow all of the energy currently being produced by Indiana's wind farms to reach the grid, so addi tional wind energy capacity still would not increase Indiana's renewable energy share. Commenter s stated until new transmission capacity is in place, it is impossible for wind energy production to increase. Commenter s stated transmission lines are being sc heduled for installation by the Midcontinent Independent System Operator (MISO) in the coming years to address the current problem, but the interim time frame for this rule does not give sufficient time for adequate infrastructure to be put in place. Comme nter s concluded based on the factors described above, Indiana is not in a position to adequately address the goal proposed by U.S. EPA for Building Block 3 within the proposed rule's timelines.

Comment 148: IN

- Additional legislative action and time wil l be required to achieve compliance with the RE goal

Response 148: See section I.A. of the final rule preamble of the CPP for the EPA’s response to this comment.166 The following are summaries of the specific public comments under this comment:

Commenter s arg ued that additional legislative action and time will be required to achieve compliance with the RE goal.

Commenter s stated the RE goal for Indiana of 7,547,087 MWh (approximately 7% of total generation of 121,794,969 MWh) will be difficult to achieve. Comm enter s stated Indiana has a Voluntary Clean Energy Portfolio Standard (VCEPS) Program. Commenter s added none of the Indiana utilities have developed renewable generation using the VCEPS Program. Commenter s concluded additional legislative action in Indiana will be required to achieve state compliance with the Clean Power Plan's RE goal, which could take a considerable amount of time to implement.

Comment 149: IA

- targets , applicability clarifications

Response 149: For the EPA’s response to this comment, see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP. Also the EPA agrees with the commenters and the MP&W Muscatine Plant #1 Generator 7 is excluded because the nameplate capacity is equal to or less t han 25 MW.

The following are summaries of the specific public comments under this comment:

Commenter s stated EPA should strengthen the overall stringency of Iowa's interim and final emissions rate target. The commenter s said since 2012

- EPA's proposed b aseline year

- Iowa utilities have 1) retired or announced for retirement some coal

- fired power plants, 2) converted or announced for conversion some coal plants to natural gas, 3) announced and begun construction on a new, natural gas plant, and 4) built or announced construction of significant new wind generation; these changes are underway and will largely be concluded by 2016 or 2017.

Commenter s stated Iowa will likely be in compliance with the proposed rule before the plan performance period even begi ns in 2020

- and will potentially be in compliance before Iowa is required to submit a state compliance plan in 2016.

Commenters stated that the proposed rule generated significant confusion regarding the inconsistencies in discussions of applicability cr iteria and requested clarification on the applicability status of MP&W's Unit 7. Commenters also supported the approach for applicability presented in the preamble and requested that MP&W Unit 7 be designated an excluded unit due to its small size.

Comme nt 150: IA

- The EPA underestimated Iowa's RE potential; BB3 would be based on technical potential and economic potential for RE development; Iowa RE target is not stringent

.167 Response 150: See section V.E. of the final rule preamble of the CPP for the EP A’s response to this comment and more information about Building Block 3.

The following are summaries of the specific public comments under this comment:

Commenter s argued EPA has underestimated Iowa's RE potential, and the state's ability to reduce carbon pollution. The commenter s argued that Building Block 3 should be based on technical potential and economic potential for RE development, and that the Iowa RE target is not stringent

.
Commenter s stated as currently proposed, EPA's regional approach for es tablishing renewable energy targets under Building Block 3 significantly underestimates Iowa's cost effective renewable energy potential and the state's ability to reduce carbon pollution. Commenter s stated the Council recommends that EPA base Building Blo ck 3 on technical potential and economic potential for renewable energy development, instead of or in addition to the policy basis that EPA has proposed to use. Commenter s added the policy basis "the averaging of state RPS policies" provides a reasonable s tarting point for Building Block 3, but the building block should be strengthened by adding technical and economic potential analysis. Commenter s stated the alternative approach proposed by EPA in the Alternative RE Approach Technical Support Document is a substantially improved approach for Building Block 3, and the Council comments on that approach in more detail below.

Alternative approach . Commenter s stated under the proposed approach, EPA developed regional, renewable energy targets based on states' a verage RPS standards. Commenter s added EPA then capped renewable energy targets for states that were performing at levels over this regional
average.

Commenter s stated overall, the proposed approach would result in 7% of total U.S. electricity sales deriv ed from renewable energy in 2020 and 12% in 2030. Commenter s stated the proposed approach would also result in higher levels of renewable energy in most, but not all states.

Commenter s added Iowa is one of four states where the application of the proposed approach for Building Block 3 results in less renewable energy during the compliance period than the state had actually installed and in operation in the 2012 baseline year

.
Commenter s stated under Step 4b of the building block as proposed, Iowa would ge nerate just under 8,566 GWh of existing and incremental renewable energy in 2020, and that is held static from 2020 to 2030.

Synapse Energy Analysis . Commenter s stated the Council conducted an analysis of Iowa's compliance potential with this current and planned renewable wind generation using Synapse Energy Economics' Clean Power Plan Planning Tool ("CP3T"). Commenter s stated the Council made the following modifications to inputs

.
Commenter s stated Iowa's 2012 actual wind generation of 14,183 GWh was mai ntained from 2013 to 2015 and then increased to 18,536 GWh annually to reflect the addition of MidAmerican's two wind projects (totaling 1,212 MW). Commenter s added a reasonable 41% capacity factor was assumed.168 Commenter s stated compared to the 8,566 GWh renewable energy target for Iowa currently proposed in Building Block 3, Iowa will actually generate "at a minimum" 18,536 GWh in 2020. Commenter s added this is almost 10,000 GWh more than the level produced by the proposed Building Block 3 methodology.

Co mmenter s stated compared to the 8,566 GWh renewable energy target for Iowa currently proposed in Building Block 3, Iowa will actually generate "at a minimum" 18,536 GWh in 2020. Commenter s stated this is almost 10,000 GWh more than the level produced by th e proposed Building Block 3 methodology.

Commenter s stated this addition of wind generation alone reduces Iowa's emissions rate from 1,551 lbs/MWh in 2015 to 1,360 lbs/MWh in 2016. Commenter s stated using default assumptions for load growth (the load grow th projected from AEO 2013), Iowa's emissions rate is 1,425 lbs/MWh in 2030, assuming no other compliance options are included (no energy efficiency, no coal plant retirements or conversions, etc.). Commenter s stated in other words, Iowa will meet half or more of its emissions target well before 2020, with wind energy already existing and planned to be installed before 2020.

Commenter s stated if the basic energy efficiency savings in Building Block 4 are also included in the CP3T model, Iowa's emissions ra te is 1,294 lbs/MWh in 2020 and 1,178 lbs/MWh in 2030. Commenter s added, these energy efficiency savings are likely to occur in Iowa because the state has a supportive policy framework where reasonably high levels of annual savings are achieved (e.g., 1% o r more annually). Commenter s concluded as a result, existing/planned renewable energy and expected energy efficiency savings would allow Iowa to exceed the interim and final goal by a comfortable margin.

Commenter s stated Iowa has the technical potential t o achieve levels of renewable energy development that are an order of magnitude greater than what EPA calculated in Building Block 3.

NREL Study . Commenter s stated the most complete recent study, the Renewable Electricity Futures Study, was released by the National Renewable Energy Laboratory in 2012. Commenter s stated EPA relied upon data from this study in its Alternative RE Approach Technical Support Document. Commenter s stated in this study, NREL identified 1,723,588 GWh of wind energy potential for Iow a and 7,029,897 GWh of solar PV potential (urban utility

- scale, rural utility

scale, and rooftop). Commenter s stated this translates to 571 GW of wind and 4,043 GW of solar. Commenter s added the NREL study also identified additional potential from hydropow er and bio

- power. Commenter s concluded wind and solar alone, however, account for 8,753,485 GWh of renewable energy technical potential in Iowa.

Commenter s stated the Renewable Electricity Futures Study is consistent with other major national studies exam ining the state's potential for renewable energy development, such as the Department of Energy's 20% Wind Energy by 2030 report. Commenter s stated in this report, DOE projected that approximately 300 GW of wind capacity would be needed to bring the U.S.
to 20% wind. Commenter s added of this, 251 GW would be land

- based and 54 GW would be offshore. Commenter s stated certain states contributed significantly more wind capacity than169 others, by hosting 10 GW or more wind capacity. Commenter s stated Iowa is one of those states and, by 2030, would host approximately 20 GW of wind capacity.

Commenter s stated DOE also provided a projected schedule of wind capacity additions by state. Commenter s stated according to this schedule, Iowa was forecast to have 2,930 MW of installed capacity by 2016; 7,960 MW by 2020; and 19,910 MW by 2030. Commenter s stated Iowa is already well ahead of this schedule: Iowa will have over 6,000 MW of wind capacity by 2016, more than twice the projected amount by DOE. Commenter s concluded the refore, Iowa's technical potential for renewable wind is not a distant or theoretical concept, but is clearly achievable and is being achieved now.

Current IA goal . Commenter s stated EPA's proposed renewable energy goal for Iowa under Building Block 3 doe s not require Iowa to develop any of the technical potential projected by DOE or NREL's analysis. Commenter s stated furthermore, the state's final target under the proposed rule would require Iowa to develop very little of this potential, even if Iowa comp lies with the proposed rule with wind energy alone . Commente rs added, if Iowa uses no other compliance option than wind

- no efficiency, no coal plant retirements, no heat rate improvements, no conversions to natural gas

- the wind energy that will be inst alled before 2020 will reduce Iowa's emissions rate to between 1,354 lbs/MWh (no load growth) to 1,425 lbs/MWh (load growth) in 2030.

Commenter s stated, Iowa is already retiring coal plants, converting others to gas, and can be expected to realize savings from existing and ongoing energy efficiency programs. Commenter s stated these current and planned actions, along with existing wind installed prior to 2020, are likely to meet Iowa's entire compliance obligation. Commenter s concluded as a result, it is

un likely that the proposed Clean Power Plan will require or encourage Iowa to install much or any new wind generation for compliance purposes.

Commenter s stated according to the Council's analysis using selected inputs in the M.J. Bradley & Associates' Clean Power Plan Evaluation Tool, increasing Iowa's annual incremental savings rate ("maximum ramp

- up level") from 1.5% to 2% and the pace of improvement ("ramp

- up step") from 0.2% to 0.25% would change Iowa's 2020 interim emissions rate target under the
propos ed rule from 1,341 lbs/MWh to 1,316 lbs/MWh and the state's final goal in 2030 from 1,301 lbs/MWh to 1,262 lbs/MWh.

Commenter s stated while the above modifications result in a modest increase to Iowa's targets, they are important changes for EPA to make, strengthening Iowa's targets will ensure that the state has a meaningful compliance obligation under the proposed rule. Commenter s concluded it will also help ensure that Iowa is maximizing cost

- effective and technically feasible energy efficiency savings.

Commenter s stated by using adjusted, regionally

- based renewable energy generation targets to establish Iowa's emissions rate goal for 2030, EPA set Iowa's final emissions goal at 1,301 lbs/MWh. Commenter s stated this amounts to a 16% reduction from its cu rrent emissions rate of 1,552 lbs/MWh. Commenter s stated if EPA had used Iowa's actual renewable energy generation in 2012 to establish its emission reduction goal for 2030, Iowa's goal would have been more170 stringent: 1,168 lbs/MWh. Commenter s concluded th is amounts to a 25% reduction in Iowa's current emissions rate.

Commenter s stated in addition to renewable energy development, the proposed regulation rewards states that retire coal plants that were in operation in the 2012 baseline year but are then
ret ired or converted to natural gas prior to 2020. Commenter s stated, Iowa utilities have or are in the process of retiring and converting to gas a number of coal units in Iowa that were included in the 2012 baseline.

Commenter s stated the combination of thes e coal plant retirements and conversions and the proposed methodology with Building Block 3 results in a 2030 emissions rate target that is not stringent and a target that Iowa will likely be in compliance with before 2020. Commenter s concluded the EPA cou ld improve the balance between credit for early action and overall stringency in the final rule in order to ensure carbon reductions occur in Iowa both prior to 2020 and between 2020 and 2030.

Comment 151: KS

- Goal Format

Response 151: The EPA is finaliz in g subcategory

- specific emission performance rates and rate

based and mass

- based statewide goals. See sections VI and VII of the preamble for discussion of the subcategory

- specific emission performance rates and statewide goals, respectively.

.
The follow ing are summaries of the specific public comments under this comment:

Commenter s stated that a rule based on a CO2 rate goal that is based on lbs/MWh is of concern, as our Unit is below the lb./MWH goal due to the fact we operate utilizing natural gas.

Co mment 152: KS

- State goals should be adjusted for an incomplete assumption

. Response 152: See section VI of the final rule preamble of the CPP for a discussion of the EPA ’s choice of a baseline year. The EPA believes this is a conservative representati on of the state and regional level emissions and generation values. It recognizes that their will inherently be changes to the system infrastructure and operating patterns in the future year (generally shifting to a lower emissions intensity scenario), bu t the EPA took comment on the use of a projected baseline versus a historical baseline and commenters generally supported a historical baseline. See RTC section 3.1.4 for a discussion of the relationship between heat rate improvement and pollution control . EPA also notes that unit

- level requirements or assumptions are not made in the quantification of BSER, rather region

- wide assumptions for the source

category affected fleet.

The following are summaries of the specific public comments under this comment:

Commenter s stated t he EPA should adjust the Kansas state goal for an incomplete assumption made regarding the commenter s ' La Cygne Generation Station. Commenters said the EPA171 calculated the 2012 baseline based on the historic generation of the station. Co mmenter s stated this will not be achieved because of the addition of emission control equipment in 2015 primarily required by EPA's Regional Haze Rule. Commenter s stated this additional emission control equipment will increase the auxiliary loading resulti ng in a decrease in the net generation at the station. Commenter s stated Kansas's state goals should be adjusted accordingly.

Comment 153: KS

- By including non

- dispatchable resources, the EPA has understated the CO2 emissions limit that can reliably be met in Kansas

. Response 153: For the EPA’s response to this comment, see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comm ent:

Commenter s stated b ased on the EPA's formula for determining an emissions limit using the four building blocks, there is a bias on the part of the EPA to lower the emissions standard as far as possible

- beyond standards that result from an adequately demonstrated system. Commenter s said in doing so, the EPA has proposed an emissions standard for Kansas that is too low to provide any real options for compliance other than spending an exorbitant amount of money on a combination of new NGCC plants, renew able energy, transmission investment, and stranded
costs.

Commenter s stated the EPA is under the mistaken impression that because the electric grid is integrated, electricity is "fungible" and displacement of generation from coal

- fired units is an easy ta sk. Commenter s said what the EPA fails to acknowledge is that the affected coal

- fired EGUs are base

- load units. Commenter s stated the U.S. Energy Information Agency defines base

load as follows:

Base load : The minimum amount of electric power delivered or required over a given period of time at a steady rate.

Base load capacity : The generating equipment normally operated to serve loads on an around

the

- clock basis.

Base load plant : A plant, usually housing high

- efficiency steam

- electric units, which is n ormally operated to take all or part of the minimum load of a system, and which consequently produces electricity at an essentially constant rate and runs continuously. These units are operated to maximize system mechanical and thermal efficiency and minim ize system operating costs.

Commenter s stated by including non

- dispatchable resources, such as renewable generation and DSM energy efficiency, the EPA has understated the CO2 emissions limit that can reliably be met in Kansas. Commenter s said while renew able generation certainly has a place in the overall generation portfolio of an electric utility, the inclusion of renewable energy must be integrated carefully with an eye towards the overall reliability of the grid. Commenter s stated, a base

- load plant p rovides electricity at an essentially constant rate and runs continuously. Commenter s said172 obviously, DSM energy efficiency is not a generation resource and cannot under any circumstances provide electricity to the grid.

Comment 154: KS

- The EPA's calc ulation of Kansas's goal for carbon reduction is seriously flawed and too low

Response 154: For the EPA’s response to this comment, see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenter s stated t he EPA's calculation of Kansas's goal for carbon reduction is seriously flawed and too low. Commenter s said if the EPA issues its final rule on the Clean Power Plan and it is in substantially the same form as currently recommended, then it should incorporate the following the commenter s ' organization's revised calculations for the EPA's building blocks in determining an appropriate CO2 emissions level.

Commenter s reviewed the EPA's calculations setting Kansas's greenhouse gas goal; commenters

are not conceding agreement with the EPA's building block methodology; and also does not claim its review is complete given the limited amount of time allowed to provide comments on
t he proposed plan. Commenter s stated however, the technical review results in a significant change in the CO2 emission goal assigned to Kansas. Commenter s said specifically, the goal should be increased from the figure calculated by EPA (1,499 lbs/MWh) to 1 ,950 lbs/MWh. Commenter s stated the changes made were to correct for serious flaws within the EPA's calculations.

Commenter s stated the purpose of the Clean Power Plan is to "Cut carbon emission from the power sector by 30 percent nationwide below 2005 le vels" by 2030. Commenter s said that the seven affected Kansas coal plants identified by the EPA have reduced their combined CO2 emissions by 19.1% between 2005 and 2012. Commenter s said thus, one would expect that Kansas has only to reduce CO2 emissions by another 10.9% by 2030. Commenter s stated but by using a rate approach (lbs./MWh) for calculating Kansas's 2030 goal, the EPA has obviated the dramatic improvement Kansas achieved in CO2 reduction from 2005 to 2012.

Commenter s stated Kansas achieved its 1 9.1% reduction in CO2 between 2005 and 2012 by reducing the generation from coal plants and re

- dispatching less carbon intensive generation. Commenter s said between 2005 and 2012, net energy output from affected coal plants declined by 17.7% while CO2 emis sions declined 19.1%. Commenter s stated this large reduction in CO2 emissions was achieved while Kansas's retail sales of electricity increased by 3.15%. Commenter s stated by using the rate of CO2 emissions rather than the absolute reduction in CO2 emissio ns, EPA shrank the reduction in CO2 emissions in Kansas from 19.1% to just 1.7%.

Commenter s said having stated such, his organization used the same 2012 data for fossil fuel sources of electric generation to arrive at a goal of 1,950 lbs/MWh.173 Commenter s stated a notable disparity in the proposed rule between how renewable energy generation is treated for (1) goal setting and (2) for compliance purposes. Commenter s said specifically for Kansas, when setting the Kansas 2030 goal in step 4b under BSER Block 3, the EPA used the 2012 actual state total RE generation of 5,252,653 MWh. Commenter s stated of that total amount, however, 2,511,888 MWh were not owned by Kansas utilities, and generally would not be available to Kansas for meeting its goals under the p roposed rule, even while counting toward CPP goals in other states. Commenter s stated to make up for the inequitable treatment of Kansas' renewable generation, his organization proposes that its 2030 goal be recalculated by taking the revised regional RE l evel of 12 percent from above times the Kansas utility

- owned wind generation

. Commenter s said note that if a heat rate improvement value of 2 percent is used in the calculation above (in lieu of the proposed 6 percent, which is unreasonably high), the resu lting step 4b emission rate becomes 1,912 lbs CO2/MWh. Commenter s stated further, if no change is made to the proposed rule's value for Kansas demand

- side EE avoided generation (4,124,018 MWh), the Kansas 2030 CPP goal becomes 1,644lbs CO2/MWh, and using a n HRI value of 2 percent becomes 1, 712 lbs CO2/MWh. Commenter s said this ultimate number, 1,712 lbs CO2/MWh, represents the correct value for the Kansas 2030 goal in consideration of the factors discussed above, and utilizing the single base year 2012. Co mmenters said i n consideration of recommended use of a three

- year period (2011

- 2013) to set goals, the Kansas 2030 CPP goal (with 6 percent HRI) becomes 1 ,662 lbs CO2/MWh, and using an HRI value of 2 percent becomes 1, 732 lbs CO2/MWh.

Comment 155: KS

- The EPA did not correctly interpret the applicability of the Kansas renewable energy standard and the administrative regulations adopted by the Kansas Corporation Commission to implement them

Response 155: The EPA made changes to Nearman Unit 1 and Coffe yville baseline data based on comment and further review of the data. See Appendix 1 of CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule . Section V of the final rule p reamble of the CPP explains changes made to BB3 and BB4 assump tions for BSER based on comment. Section VI of the final rule preamble of the CPP explain s the EPA’s choice in baseline year.

The following are summaries of the specific public comments under this comment:

Commenter s stated the EPA did not correctly inter pret the applicability of the Kansas renewable energy standard and the administrative regulations adopted by the Kansas Corporation Commission to implement them. Commenter s said the first issue relates to the fact that only investor

- owned utilities and ele ctric cooperatives are subject to the Kansas RES. Commenter s stated the first bullet below explains the result of this error in interpreting the statute. Commenter s said the EPA erred in determining the renewable rate to be used for the South Central Regio n average rate. Commenter s stated in the proposal, the rate for the entire region was determined using the Kansas RES. Commenters said however, Texas' renewable standard should be included in developing the regional rate. Commenter s stated the second bulle t describes a corrected South Central Region renewable rate. Commenter s said the final issue relates to how renewable energy generation is treated for goal setting versus compliance
purposes.174 Use of KS RES for regional RE . Commenters stated in using Kansa s's nominal 20% RES for fixing the regional RE level at 20%, however, the EPA failed to take into account two factors about the Kansas standard: (a) the standard does not apply to all electric utilities in the state, but to investor

- owned utilities (IOUs) and electric cooperatives only, i.e., not municipal utilities; and (b) according to the standard, "[e]ach megawatt of eligible capacity in Kansas installed after January 1, 2000, shall count as 1.10 megawatts for purposes of compliance."

Commenters stated noting that the Kansas RES is capacity (peak demand) based, the breakdown by energy source owner type for Kansas 2012 EGU capacity, according to correspondence from the Kansas Corporation Commission and based on the KCC document at http://www.kcc.state.ks .us/pi/2013_electric supply and_dem and report.pdf.

Commenters said thus, for calculation purposes when used to compare standards among different states, the actual (or effective) 2020 RES/RPS used for Kansas should be (20% / 110%) x (7,974/8,473) = 17.1% , or 17%.

Commenter s stated Kansas is the only state in the EPA's South Central Region (under the EPA's analysis AR, KS, LA, NE, OK, and TX) that has an RES/RPS in percent form. Commenter s said Texas' standard of 10,000 MW by 2025 was not used by the EPA, apparently because it is explicitly capacity

- based (i.e., not in percent form), and the proposed rule's "GHG Abatement Measures" TSD (http://www2.epa.gov/carbon

- pollution

- standards/clean

- power

- planLproposed

rule

- ghgabatement

- measures) states (without fu rther explanation): "EPA did not include targets that were capacity

- based"

- apparently referencing the Database of State Incentives for Renewables & Efficiency (DSIRE) website, for example the following text at http://www.dsireusa.org/rpsdata/RP5FieldDefini tionsApri12011.pdf: "This [Target Mandate] field applies only to states that express their RPS standard in terms of installed capacity (MW). At the time of this writing, this, included only TX, IA, and MI."

Commenter s stated about setting RE levels, the s ame TSD notes: "The EPA compiled the state

level effective RE levels derived above, organized them by region, and determined an average percent generation target for that region. This average did not include any values for states in which there is no bindi ng RPS requirement This average regional RE generation target offers a basis for the determination of state

- level RE targets for informing state goals..."

Texas RPS . Commenter s stated however, the Kansas RES' and other states' standards expressed in perce nt terms are capacity

- based, a fact which the EPA overlooked when utilizing the DSIRE data. Commenter s said therefore, there is no objective reason to exclude Texas' RPS for use in finding RE levels.

Commenter s stated for the South Central Region, his org anization proposes that the Texas standard of 10,000 MW be converted to a percent value, then averaged with Kansas' 17.1 percent. Commenter s said the easiest way to do this (and a conservative way considering growth) is to divide the 10,000 MW Texas standa rd by the state's latest available total generating capacity. Commenter s stated using the 2012 unit capacity supplied by the EPA at http://www2.epa.gov/carbon

- poll ution

- standards/clean

- power

- plan

- proposed

- rule description

2012

- unit

- level

- data

- using, the 2012 total generation capacity for Texas is 148,944 MW.175 Commenter s said in percent terms, the Texas renewable standard is therefore 10,000 MWh/148,944 MWh = 6.7%.

Commenter s stated averaged with the effective Kansas RES of 17.1%, the Kansas

- proposed RE level for the South Central Region should be 11.9%. Commenter s said rounded to the nearest percent, this is 12%.

Disparity between how RE treated for goal setting v ersus compliance . Commenter s stated related to the last two comments is the notable disparity in the proposed rule between how renewable energy generation is treated for (1) goal setting and (2) for compliance purposes. Commenter s said specifically for Kan sas, when setting the Kansas 2030 goal in step 4b under BSER Block 3, the EPA used the 2012 actual state total RE generation of 5,252,653 MWh. Commenter s stated of that total amount, however, 2,511,888 MWh were not owned by Kansas utilities, and generally would not be available to Kansas for meeting its goals under the proposed rule, even while counting toward CPP goals in other states. Commenter s stated to make up for the inequitable treatment of Kansas' renewable generation, his organization proposes that its 2030 goal be recalculated by taking the revised regional RE level of 12 percent from above times the Kansas utility

- owned wind generation as follows: Kansas' RE target = 12% of (2012 total electric gen.

- non

- KS wind gen.) = 0.12 * (44,424,691

- 2,511 ,888) MWh = 5,029,536 MWh

Commenter s stated thus the recalculated 2030 Kansas goal under step 4b becomes: 4b: CO2 emission rate = (coal rate * gen.) + (OG steam rate * gen.) + (NGCC rate * gen.) coal gen. + OG steam gen. + NGCC gen. + nuclear gen. + renew able gen. = (2,224 x 28,076,795) + (1,466 x 1,552,435) + 0 lbs CO2/MWh 28,076,795 + 1,552,435 + 0 + 581,272 + 5,029,536 = 1,837 lbs CO2/MWh

Other changes considered . Commenter s said note that if a heat rate improvement value of 2 percent is used in the ca lculation above (in lieu of the proposed 6 percent, which is unreasonably high), the resulting step 4b emission rate becomes 1,912 lbs CO2/MWh.

Commenter s stated further, if no change is made to the proposed rule's value for Kansas demand

side EE avoided generation (4,124,018 MWh), the Kansas 2030 CPP goal becomes 1,644 lbs CO2/MWh, and using an HRI value of 2 percent becomes 1,712 lbs CO2/MWh. Commenter s said this ultimate number, 1,712 lbs CO2/MWh, represents the correct value for the Kansas 2030 goal in consideration of the factors discussed above, and utilizing the single base year 2012. Commenter s stated in consideration of KDHE's recommended use of a three

- year period (2011

- 2013) to set goals, the Kansas 2030 CPP goal (with 6 percent HRI) becomes 1,66 2 lbs CO2/MWh, and using an HRI value of 2 percent becomes 1,732 lbs CO2/MWh.

Commenter s stated since his organization is recommending that non

- Kansas wind be subtracted out from total state electric generation to estimate its RE target, the same process should be carried out for setting the baseline CO2 emission rate.

Commenter s stated thus the corrected Kansas 2012 baseline CO2 emission rate, after data correction and accounting for wind generation owned by non

- Kansas entities, comes to 2,088 lbs/MWh.176 EPA has overstated EE potential . Commenter s said the EPA has substantially overstated the amount of EE that could be achieved by states in the future in setting the 111(d) CO2 standards. Commenter s said the EPA projected increasing levels of EE based on it s evaluation of best practices, ultimately developing specific goals that increase each state's EE measures by approximately 1.5 percent of sales of electricity each year. Commenter s stated much of the data and methods were developed by EE advocacy 'organi zations. Commenter s said the metrics adopted by the EPA largely incorporate these findings, and differ substantially from the engineering

- based analyses that have been conducted on the topic. Commenter s stated one study, conducted by Lawrence Berkeley Nati onal Laboratory, reported potential estimates for EE savings from 0.5 percent to 1.1 percent. Commenter s said several other studies of EE potential, conducted mostly by advocacy organizations, EPA consultants, and the EPA's own analysis are nearly all "top

- down, policy

- based approach" studies. Commenter s stated only one study analyzed by the EPA used a conventional bottom

- up engineering approach

- a study by the Electric Power Research Institute (EPRI) contained in a report that was released in 2009 with an update in 2014. Commenter s said notably, EPRI's estimate for average annual achievable potential was 0.5 percent to 0.6 percent per year. Commenter s said ultimately, the EPA chose to use 1.5 percent as the best practice level.

Commenter s stated the EPA us es EIA Form 861 data as the baseline level of the amount of EE achievements by utility demand

- side management programs. Commenter s said the EPA acknowledges the consistency and quality issues with this data, resulting from the self

- reported sourcing and di fferent estimation methodologies, but does not address this issue. Commenter s stated while the EPA did use state

- specific data from form EIA

- 861 for establishing starting points for EE levels, it applied national estimates of EE potential to this data and applied an EE growth rate historically only experienced in other best

- practice states. Commenter s said the applicability of both these metrics has some fundamental flaws, based on the variability of state

specific factors, including relative industrial, co mmercial, and residential consumption of electricity. Commenter s stated Kansas is a relatively rural state, with manufacturing mostly centered in more populated areas.

Goal calculation errors and suggested changes . Commenter s stated the following comments deal with errors made by the EPA in its calculations of Kansas' 2030 goal, as well as steps in the goal computation process that his organization recommends EPA take to improve its calculation of the Kansas 2030 goal.

Referring to http://www2. epa. gov/s ites/production/files/2014

- 06/20140602tsd

- plant

- level

- data

unit

- levelinventory 0.xlsx : c ommenter s stated the EPA erred in its allocation of generation and emissions data for Riverton Unit 8. Commenter s said this unit was converted from coal firing to only firing natural gas during 2012, and data for Unit 8 should be edited.

Referring to http://www2.epa.gov/sites/production/files/2014

- 06/20140602tsd

- plant

- level

- data

unit

- level

- inventory 0.xlsx : c ommenter s stated the EPA erred in the value it used for 201 2 electric generation from Coffeyville Unit 4 (i.e., 15,981 MWh). Commenter s said the correct value is 32,621 MWh.

Referring to http://www2.epa.gov/sites/production/files/2014

- 06/20140602tsd

- plant

- level

- data

unit

- level

- inventory 0.xlsx : c ommenter s state d the EPA erred in the value it used for 2012 CO2177 emissions from Kansas City Board of Public Utilities Nearman Unit 1 (i.e., 1,465,886.628 tons). Commenter s said the correct value is 1,475,131.088 tons.

Referring to http://www2.epa.gov/sites/production/fi les/2014

- 06/20140602tsd

- egrid

methodology 0.xlsx : c ommenter s stated the EPA's value for 2012 Kansas total wind capacity is 3,170 MW. Commenter s said however, the actual value is 2,912 MW, which excludes Waverly Wind Farm

- that won't come online until 2016

- and two small Westar wind units that have been decommissioned.

RE sold across state lines . Commenter s stated the EPA must be consistent in the manner in which it treats renewable energy that is sold across state lines. Commenter s said when the EPA calc ulated the goals for each state, all renewable megawatt hours (MWh) generated in the state in 2012 were placed in the denominator. Commenter s stated however, with respect to goal achievement, if this generation is credited to the power purchaser in a diffe rent state, the generating state would be required to make up the shortfall.

2012 baseline . Commenter s stated in the proposed Clean Power Plan, the EPA inappropriately uses a single

- year baseline of 2012. Commenter s said a number of events can happen duri ng any given one

- year period that results in misrepresentation of actual generation and emissions levels. Commenter s stated factors that should be taken into account include unit operation variances due to extreme weather or maintenance, fluctuating natura l gas prices, and changes in the types of units available for dispatch. Commenter s said in Kansas, several large electric generating units (EGUs) experienced lengthy outages in 2012 for maintenance and installation of pollution control equipment to ensure compliance with other Clean Air Act obligations. Commenter s stated KDHE suggests that using a three

- year averaging methodology would smooth out the various anomalies and would be more appropriate for setting state CO2 emissions reductions goals.

Commenter s stated a three

- year baseline period would be consistent with how the EPA expects states to demonstrate compliance under the proposed Clean Power Plan. Commenter s said as currently proposed, the rule would require states to meet the final emission perform ance level on a three

- calendar

- year rolling average starting January 1, 2030. Commenter s stated the EPA even states that "[t]he rolling three

- year performance periods for measuring actual plan performance against the final goal performance level are propos ed in light of year

- to

- year variability in economic and other factors, such as weather, that influence power system operation and affect EGU CO2 emissions." Commenter s stated furthermore, a three

- year baseline methodology would be consistent with how the E PA has developed and implemented other existing programs using multiple years (e.g., Acid Rain Program, Clean Air Interstate Rule, Cross State Air Pollution Rule, and permitting and modeling requirements).

Mass

- based goals . Commenter s stated the EPA reque sted comment on whether it should provide a presumptive translation of rate

- based goals to mass

- based goals for all states, for those who request it, and/or for multi

- state regions. Commenter s said the EPA should provide a mass

- based goal for each state, r egardless of whether it is requested, and for multi

- state regions upon request. Commenter s stated further, in the process of setting mass

- based goals, the calculations should account for projected increase in electrical demand, as a rate

- based approach wou ld similarly allow for increase in demand. Commenter s said finally, the EPA should rely on projected178 demand as determined by the agency closest to the electrical industry, which, for Kansas, would be the Kansas Corporation Commission. Commenter s encourage d the EPA to release the rate versus mass calculations in the form of a NODA prior to the release of the final rule so states would have the opportunity to comment on the calculation and EPA the opportunity to make adjustments in the process.

Gross load vs net load . Commenter s stated the EPA requested comment on the use of gross load versus net load data for goal compliance. Commenter s said Kansas favors the use of gross load (i.e., generation) data over net generation for two reasons, consistency and fairn ess.

Commenter s stated in the document titled "Part of E.O. 12866 and 13563 Review: EPA Response to Interagency Comments on the EGU GHG Modified/Reconstructed Source NPRM (clean) (2060

- AR88) as part of review of EGU GHG Existing Source NPRM (2060

- AR33) (5 /30/2014)" in the docket for the proposed rule, the following text is found: "To the extent that the EPA finalizes modified and reconstructed standards for stationary combustion turbines that are consistent with the standards for newly constructed stationa ry combustion turbines, the EPA intends to take the same approach with regards to the use of net or gross output in both final actions." Commenter s said in light of the fact that the EPA's proposed new source CO 2 standards under section 111(b) are already based on gross generation, for the sake of consistency gross generation should also be used for the section 111(d) standards.

Commenter s stated for any state where the proposed rule's goals are to be met on a unit

- by

- unit (or fleet

- by

- fleet) basis, the u se of net generation values penalizes utilities for electricity that is used to power pollution control systems

- mandated by other EPA regulations

- that are installed subsequent to 2012. Commenter s said additionally, in answer to a question his organizat ion's staff asked with regard to affected EGUs using existing EIA forms to report their generation under the proposed rule, EPA Region 7 answered: "Kansas will not be using EIA data for utilities to show compliance with the 111(d) Plan. The State Plan will need to have monitoring, recordkeeping, and reporting, requirements to meet 60.5805. This is also discussed at 79 FR 34910." Commenter s stated KDHE therefore suggests that by using gross generation to meet goal performance, affected EGUs, all of which are already Acid Rain sources reporting CEM data to the EPA's Air Markets Program, can be relieved of the burden of new reporting requirements by simply allowing them use of Air Markets Program (CEM) data to fulfill their requirements (for CO2 emissions as we ll as electric generation) under the proposed rule.

Credit for early reduction . Commenter s stated the EPA requested comment on the option that emission reduction effects that occur prior to the beginning of the initial plan performance period could be app lied toward meeting the required level of emission performance in a state plan, thus, enabling a state to count emission improvements achieved by state programs prior to 2020 toward its interim goal, allowing the state to begin demonstrating emission perfo rmance earlier and follow a more gradual emission improvement trajectory during the interim performance Period of 2020

- 2029. Commenter s said his organization strongly supports this concept as Kansas has seen a significant decrease in CO2 emissions for seve ral years prior to the 2012 baseline
year.179 Comment 156 : KY

- Kentucky will have to cut jobs and reliable income, and those less fortunate will be hurt by increased utility bills

Response 156: 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.

The timeframe of the CPP from plan development to plan implementation allows states, utilities and other stakeholders the abili ty 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.

The following are summa ries of the specific public comments under this comment:

Commenter s stated the plan is a numbers game masquerading under the guise of allowing
states flexibility to meet an individual prescribed carbon reduction goal. Commenter s added but the effect of rea ching this goal treats states different and plays favorites. Commenter s stated Kentucky's assigned target is to reduce carbon emissions in 2013 by 18 percent, while Washington State has been assigned a target of over 70 percent.

Commenter s stated that the targets paint an illusion by using percentages rather than real numbers; an illusion that Kentucky is somehow getting off easy. Commenter s added that Kentucky will have to cut much more emissions than Washington to meet its target. Commenter s stated that t his is because Washington does not utilize low

- cost, efficient, and reliable coal fire generation and Kentucky does. Commenter s stated that Washington will only have to close one coal

- fired power plant to meet its goal of reducing emissions by over 70 perc ent.

Commenter s concluded that Kentucky, with 20 coal

- fired power plants that provide the state with 90 percent of its electricity will have to cut significantly more jobs and reliable income for thousands of families across the state in order to meet its goal. Commenter s added that it's those in less fortunate communities and those who lost their jobs due to fuel switching that are hurt the most from higher utility bills.

Comment 157: KY

- Additional flexibility regarding schedule is appropriate, but a regional approach could significantly lower Kentucky's reduction target

. Response 157: For the EPA’s response to this comment, see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenter s stated w ithin the NODA, the EPA claims the concepts for consideration are in response to comments from meetings with stakeholders to provide a more fair assessment of Building Blocks 2, 3 and 4; changes to the formula for calculating the goal; and more flexibility with respect to the timeframe of implementation. Commenter s said their organization's review of the NODA finds the recommendations regarding the implementation schedule may be more180 favorable and provide states additional flexibility toward a glide

- path approach. Commenter s stated however, the considerations the EPA has outlined relative to the other topics, particularly a regional assessment of Building Blocks 2, 3, and 4 cou ld result in significant reductions to Kentucky's target emission rate. Commenter s stated based on calculations performed by the Kentucky Energy and Environment Cabinet, Kentucky's target could change from the original proposal of 1,763 lbs CO2/net MWh by 2030 down to as low as approximately 1,034 lbs CO2/net MWh, if adopted to the full extent of the potential described in the NODA.

Comment 158: KY

- Some options being considered would essentially remove coal

- fired generation as an important part of the n ation's generation mix

Response 158: For the EPA’s response to this comment, see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under t his comment:

Commenter s stated w hile the EPA's proposed state

- specific reduction targets for Kentucky and other states create compliance challenges for coal

- fired generation, some of the options being considered by the EPA, as indicated in the NODA, would essentially remove coal

- fired generation as an important part of the nation's generation mix. Commenter s said "levelizing" emission reduction targets through a regional approach could substantially increase the hardship on coal

- reliant states such as Kentu cky which is surrounded by states with greater potential for renewables, available nuclear capacity, or higher reliance on natural gas. Commenter s stated it would be inconsistent and irrational for the EPA to evaluate state

- specific reduction targets deeme d achievable by EPA and then proceed to mandate some states go beyond their assigned targets and allow others to meet targets significantly below their calculated potential.

Commenter s stated in short, most of the NODA alternatives to which the EPA seeks c omment would result in reduction targets that are largely unachievable by Kentucky without significant and concerning implications for the State and electricity customers of his organization.

Commenter s stated the Kentucky Energy and Environment Cabinet ha s determined that under some "levelization" scenarios presented with the alternatives in the NODA, Kentucky's reduction target could be adjusted as low as 1,034 lbs. CO2/ net MWH. Commenter s said reductions of such a magnitude would force utilities to prem aturely close most of their coal

- fired plants in Kentucky. Commenter s said for every coal

- fired generating unit remaining in service, a utility would be forced to develop an equivalent amount of renewable energy, a daunting prospect in a state like Kentuck y with few opportunities to generate energy from renewable sources. Commenter s stated the vast majority of generating capacity in Kentucky would either move from coal to natural gas

- fired generation or come from renewable resources imported from other
stat es.

Comment 159: KY

– RE & EE

.181 Response 159: The EPA has revised its block three quantification based on comment. See Section V.A. and V.E. of the final rule preamble of the CPP for more information

. See section V.A. of the final rule preamble of the C PP for the EPA’s response to this comment and more information about Building Block 4.

The following are summaries of the specific public comments under this comment:

Commenters stated EPA should consider that Kentucky has a low potential for renewables,

w hich was noted by EPA, and existing Kentucky law bans nuclear plants.

Commenter s stated Kentucky has almost met the CO2 reduction requirements required in the Clean Power Plan. Commenter s added because of the coal

- fired power plants that have already clos ed, switched to natural gas, or currently slated to be mothballed before 2020, there is little more that Kentucky will have to do to meet the carbon plan's goals.

Commenter s concluded that therefore, the Clean Power Plan does not incentivize Kentucky or
ot her similar coal

- gas

- energy

- dependent states to move towards sustainable energy development, to tap the low

- hanging fruit of economic development and savings around energy efficiency, or to support demand

- side energy efficiency.

Comment 160: KY

- The EPA 's IPM model assumptions are incorrect with known errors

. Response 160: For the EPA’s response to this comment, see NEEDSv.5.15 file. Also see the EPA base case and policy case modeling scenarios for the final rule. EPA notes that unit

- level projections are illustrative.

The following are summaries of the specific public comments under this comment:

Commenter s stated the EPA's IPM model assumptions are incorrect with known errors. Commenter s said the model inputs show retirement of the E.W. Brown Units 1 and 2. Commenter s stated however, KU has no plans or announcements for retirement of these units. Commenter s said additionally, the model does not show mercury controls for E.W. Brown Unit 3, Mill Creek Units 1 and 2, or Trimble County Units 1 and 2. Co mmenter s stated although it may have a small effect, negative energy for KU's Tyrone Station in the 2012 actual data used for the goal calculation should be excluded because Tyrone did not operate in 2012.

Commenter s stated other questionable retirements j ust within Kentucky include TVA Shawnee, Big Rivers Electric Corporation's Reid Unit 1, and the Cooper and Dale Stations owned by East Kentucky Power. Commenter s said the model also incorrectly shows continued operation of the Paradise Coal Units 1 and 2.

Commenter s stated a related limitation of IPM is that this model does not represent unit commitment and electric power plant hourly dispatch in a detailed manner. Commenter s said research that EPRI has done shows that important insights can be gained when electric sector models capture positive and negative correlations between load, renewable energy resource variability, and uncertainty across adjacent regions given that renewable resources are non

-182 uniformly distributed in space and time. Commenter s stated the EPA should consider enhancing the treatment of renewable energy in IPM and to complement the IPM analyses with more detailed, unit commitment modeling.

Comment 161: LA

- The EPA erroneously calculated Louisiana's goal

- suggested changes provided

R esponse 161: The EPA has made a number of changes to its baseline data in the final rule that incorporate the data corrections identified by commenter s . Notably, it is using net summertime capacity, treating the Ninemile point and Morgan City facilities m entioned as under construction, has re

- categorized Perryville power Station unit 2

- ct, re

- categorized the units at Louisiana 1, and removed Washington Parish Energy Center from its list of under construction units.

The following are summaries of the specif ic public comments under this comment:

Commenter s claimed EPA erroneously calculated LA's goal, and provided changes

.
Commenter s stated that EPA erroneously estimated the capacity of Louisiana's NGCC fleet, resulting in unfairly stringent emission limits f or Louisiana.

Commenter s stated that if the Agency insists on retaining the current building

- block approach, EPA should, at a minimum, make the following changes to the calculation of Louisiana's emission reduction goals:

Use net capacity not nameplate

. Commenter s stated that while EPA used name plate capacity of NGCC units in the emission limit calculation, EPA uses capacity information from the National Electric Data System (NEEDS) in the IPM modeling. Commenter s added that unit capacity values in the N EEDS v.5.13 data base reflect net summer dependable capacity, which is more often used in daily planning and operation purposes during the summer peak season, after accounting for auxiliary services. Commenter s stated that the NEEDS v5.13 net summer rating s should be used in the emission limit calculation in building block 2 instead of EIA nameplate capacity.

Several NGCC were omitted

. Commenter s stated that several NGCC units under construction in Louisiana were not included in the calculations. Commente r s expounded that Units 6a and 6b at Entergy Louisiana Nine Mile Point have nameplate capacity of 640 MW and projected net summer capacity of 559 MW. Commenter s noted that also, Louisiana Energy and Power Authority's (LEPA) Morgan City Power Plant NGCC uni t 14

- 01 is under construction and will have a nameplate capacity of 84 MW and projected net summer capacity of 64.5 MW.

Perryville NGCCs . Commenter s stated that EPA's emission limit calculations for Louisiana classify each of the three gas turbines at Ent ergy Louisiana's Perryville Power Station as NGCC units. Commenter s noted that however, one of the three, unit ID 2

- CT, is not equipped with a heat recovery steam generator and operates in simple cycle mode only. Commenter s concluded that therefore, the ca pacity for that unit should not be included in the block 2 equation.183 Entergy Gulf State No. 1 plant

. Commenter s stated that EPA's calculations include input data for five EGUs at Entergy Gulf States Louisiana's Station No. 1 Generating Plant. Three of th e units, (1A, 2a and 3A) are boilers and not turbines. Commenter s stated that no unit at Louisiana 1 will meet the definition of affected electric generating unit because none of these units supplies one

third or more of its potential electric output and m ore than 219,000 MWh net

- electric output to a utility distribution system (Information source Initial comments of Louisiana Department of Environmental Quality RE: 40 CFR 60 Subpart UUUU

- Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units(79 FR 34830), September 12th 2014,). Commenter s concluded that input data for these units should be removed from the building block 2 calculations.

Washington Parish Energy Center . Commenter s noted that EPA's calculation s include input data from Washington Parish Energy Center which is neither in operation nor under

- construction. Commenter s concluded that upon making the above adjustments to the input data for block 2 of the emission limit calculations, Louisiana's final emission limit goal should be 1,078 lb/MWh and the alternate limit should be 1,239 lb/MWh.

Comment 162: LA

- The EPA should remove R.S. Nelson Units 1A and 2A from calculations as they are not affected units

Response 162: Per the commenters ’ indication, the EPA has re

- categorized R S Nelson Generators 1A and 2A to “ EXCLUDE ” in the baseline inventory and is not treating them as likely affected units. However, the EPA notes this does not constitute a final applicability determination.

The following are sum maries of the specific public comments under this comment:

Commenter s requested EPA remove R.S. Nelson Units 1A and 2A from the state's calculation; these are not affected units

.
Commenter s stated that EPA included efficiency improvements for R. S. Nelson Units 1A and 2A (Westlake, Louisiana) in setting the state goal for Louisiana in Building Block 1. Commenter s added that these units are operated by Entergy, but are owned by Nelson Industrial Steam Company. Commenter s described that the units were constr ucted for the purpose of supplying electrical power and steam to chemical plants and refineries owned by Nelson Industrial Steam Company, and the units do not supply one

- third or more of their potential electric output to a utility distribution system on a three

- year rolling average basis. Commenter s concluded that these units, therefore, are not "affected units," as defined by the Proposed Rule, and should be removed from the state's calculation.

Comment 163: LA

- The EPA should re

- evaluate its model bec ause Brame Energy Center Unit 2 will not be retired184 Response 163: For the EPA’s response to this comment, see the EPA base case and policy case projections for the final CPP Rule. EPA unit

- level projections are illustrative and not prescriptive of a comp liance requirement

. The following are summaries of the specific public comments under this comment:

Commenter s stated EPA's IPM model erroneously predicts the retirement of Brame Energy Center Unit 2 in year 2016 and requests EPA re

- evaluate its model t o include the expected costs of the proposed BSER and ensure that its proposed targets for Louisiana take into account the continued operation of the unit.

Commenter s stated that a review of the files from the Integrated Planning Model (IPM) results reveal s that data for Cleco's Brame Energy Center Unit 2 (previously referred to as Rodemacher 2) is not included in the year 2016 or for any other year thereafter. Commenter s stated that this suggests EPA's model assumes that Cleco will retire the unit.

Commen ter s added that in response to Cleco's inquiry regarding this discovery, EPA's Power Sector Modeling staff indicated that the assumed retirement of Unit 2 was most likely attributable to the NEEDS data base, which may indicate an expected retirement of the unit in year 2016. Commenter s stated that however, Cleco's own predictive modeling of demand and optimum generation indicates that Unit 2 is expected to operate normally in year 2016 and Cleco does not expect to retire the unit in the near future.

Comm ent 164: LA

- The EPA has misapplied and/or miscalculated at least three of the Building Blocks as they apply to the state of Louisiana

Response 164: For the EPA’s response to this comment, see the CO 2 Emission Performance Rate and Goal Computation TSD fo r CPP Final Rule supporting the final CPP. In addition to updating its BSER quantification, EPA has also updated unit

- level data for EGUs in Louisianna that impact its state’s goal.

The following are summaries of the specific public comments under this c omment:

Commenter s stated a s the Agency is well aware, the EPA's greenhouse gas (GHG) goals for Louisiana are 948 lbs/MWh in 2020 (a reduction of 35.3% from the 1,466 lbs/MWh rate recorded in 2012) and 883 lbs/MWh in 2030 (a reduction of 39.8%). Commenter s said these goals were ostensibly developed using the four "Building Blocks" proposed by the EPA. Commenter s stated it is LUS' firm belief, however, that the EPA has misapplied and/or miscalculated at least three of these Building Blocks as they apply to t he state of Louisiana, and more particularly to LUS' Brame (Rademacher) Unit 2 (hereafter referred to as RPS

- 2). Commenter s said in addition, the unit retirements and dispatch adjustments proposed by the EPA are impractical in the timeframe allowed.185 Comme nt 165: LA

- There are errors and omissions in the data used to calculate Louisiana's state goal

Response 165: For the EPA’s response to this comment, see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final C PP.

The following are summaries of the specific public comments under this comment:

Commenter s oppose d the EPA's proposed rule because it unequivocally exceeds the authority provided to EPA by Section 111(d) of the Clean Air Act, and risks undermining L ouisiana’s economic development while providing questionable and unsubstantiated environmental benefit.

Commenter s said the proposed rule sets Louisiana's final goal at 883 pounds of CO2 per net megawatt hour (lb CO2/MWh) and specifies the state's "altern ate goal" as 1025 lb CO2/MWh. Commenter s stated after accounting for the discrepancies identified herein, Louisiana's final goal should be 1078 lb CO2/MWh, with an alternate goal of 1239 lb CO2/MWh. Commenter s said while the EPA's use of this incorrect dat a calls into question the rule in its entirety and warrants its abandonment, at the very least the EPA should revise Louisiana's goals ; h owever, even if these numbers are revised by EPA

- the results would still cripple Louisiana’s economy.

Comment 166: L A

- The EPA's proposed BSER for Louisiana is discriminatory

Response 166: See section I.A. of the final rule preamble of the CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:

LA targ ets . Commenter s stated the 2020 Interim Goal will require Louisiana to reduce its CO2 emissions by 38 percent from a baseline level of 1,533 lbs/MWh to 948 lbs/MWh. Commenter s stated the EPA's 2030 Final Goal of 883 lbs/MWh is a 42 percent reduction relati ve to the EPA's 2012 baseline. Commenter s said overall, the Interim Goal will require Louisiana to reduce its power sector CO2 emission by as much as 17.8 million metric tons, and 19.7 million metric tons by 2030. Commenter s stated the EPA's proposed final CO2 emissions reductions is comparable, in level terms (or mass balance terms) to the carbon emissions of three of Louisiana's four major coal facilities (Brame Energy Center, Dolet Hills, and RS Nelson).

LA reductions relative to other states . Commenter s stated Louisiana will be required to reduce its CO2 emissions at a level comparable to the national average reduction under the proposed CPP. Commenter s identified Louisiana's required emissions reductions relative to other states despite the fact that Lo uisiana uses about 27 percent more natural gas to generate electricity than the overall U.S. average.

Commenter s stated Louisiana gets effectively no credit, under the proposed CPP, for having spent decades concentrating its power generation resources into cleaner burned fuel sources

. Commenter s said Louisiana will be required to reduce its CO2 emissions by 650 lbs/MWh, an amount virtually equal to the national average of 649 lbs/MWh.186 Commenter s identified the inequity of the proposed EPA CPP in greater de tail. Commenter s stated in 2012, 16 states reported that they generate 80 percent or more of their electricity from coal. Commenter s said of those 16 states, only one (South Dakota) has a proposed CPP carbon emissions reduction that is greater than the nat ional average (67 percent reduction). Commenter s stated another four states have reductions that are comparable to the national average, while the balance are below, and in some instances, well below the national average and the required reductions the EPA is imposing on Louisiana. Commenter s stated consider that four states (Kentucky, North Dakota, Wyoming, and West Virginia) all report 100 percent of their power being generated from coal, and yet all four have emissions reductions less than 30 percent.

LA emission reductions as share of GDP . Commenter s stated even more imposing is the impact that the proposed CPP will have on Louisiana ratepayers. Commenter s said Louisiana's required emissions reductions, as a share of state Gross Domestic Product (or "GDP ") is considerable. Commenter s stated that Louisiana will be one of the hardest impacted states on an emissions reduction per GDP basis of any state in the country. Commenter s said Louisiana, for instance, ranks 8th in the required reductions per unit of s tate GDP under the proposed CPP.

Various components of BSER for LA . Commenter s said Building Block 1, which estimates the percent reductions available from improved coal plant thermal efficiencies, accounts for 8 percent of Louisiana's required CO2 reducti ons under the proposed CPP. Commenter s stated Building Block 2, which estimates the CO2 reductions that would arise if Louisiana required its natural gas combined cycle ("NGCC") units to increase their operating utilization rates to 70 percent on an annual average basis, accounts for the overwhelming share (58 percent) of the reduction under the EPA's BSER estimates for Louisiana. Building Block 3a, representing the emissions reductions associated with preserving "at

- risk" nuclear generation, accounts for t hree percent of Louisiana's BSER. Commenter s said Building Block 3b, estimated to be the potential emission reductions available from the utilization of greater levels of renewable energy, would account for 16 percent of Louisiana's BSER. Commenter s stated lastly, Building Block 4, estimated by the EPA as the potential CO2 reductions that could arise from greater levels of energy efficiency, are estimated to account for 15 percent of Louisiana's BSER.

Overall issues . Commenter s stated take serious issue wit h the development of the EPA's BSER, in general, and the methods by which each of the building blocks associated with the BSER are calculated. Commenter s said there are errors associated with each of the analyses that leads to significant overestimates of the potential emissions reductions available in each of the building blocks. Commenter s stated further, the EPA has failed to consider other critical policy issues in estimating Louisiana's BSER such as cost and power system reliability.

Comment 167: LA

- The EPA should work with each state to correct its factual errors and develop realistic CO2 emission standards, if the rule is finalized

Response 167: The EPA reviewed and incorporated many State comments into the CPP Final Rule. The corrected factual er rors identified by the Louisiana Department of Environmental Quality can be identified in the unit

- level data on Appendix 1 of the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.187 The following are summ aries of the specific public comments under this comment:

Commenter s stated that the s tates have expressed significant concerns with the final emission performance goals. Commenter s said about Louisiana

- On September 12, 2014 the Louisiana Department of E nvironmental Quality (LDEQ) submitted comments to the EPA expressing serious concerns on Louisiana's final goal of 883 pounds of CO2 per net megawatt hour. Commenter s said LDEQ points out in their letter that the EPA made factual errors in the proposal by classifying certain combustion sources as Natural Gas Combined Cycle (NGCC), but these sources are actually simple cycle units or are a boiler. Commenter s stated LDEQ also points out that the EPA again factually erred in believing that construction was com pleted on a permitted energy center. Commenter s said LDEQ's comments concludes that, after correcting the EPA's factual errors using EPA's methods, Louisiana's final goal should be 1,078 lb CO2/MWh.

Commenter s stated in summary, the EPA should work with ea ch state to correct its factual errors and develop realistic CO2 emission standards, if the rule is finalized.

Comment 168: ME

- By lumping bioenergy with all other renewables, and biomass and waste

burning as if they reduce emissions as effectively as w ind and solar, the EPA may be inadvertently promoting these technologies as mitigation measures

Response 168: 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 complianc e 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 preamble.

A discus sion 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.

The following are summaries of the specific public comments under this comment:

Commenter s stated b y lumping bioenergy with all other renewables, and biomass and waste

burning as if they reduce emissions as effectively as wind and solar, the EPA may be inadvertently promoting these technologies as mitigation measures in the GHG rule. Commenter s said further, coun ting these emissions as zero can also introduce significant errors into the estimate of present day power sector CO2 emissions and target emissions rates, which are likely to be carried forward as states attempt to meet target emissions goals. Commenter s

s tated this problem is most apparent for those states where bioenergy and waste

- burning contribute a significant share of total CO2 emissions.

Commenter s said to explore this further, the same data as the EPA was used , from the Agency's Emissions and Gener ation Resource Integrated Database (eGRID), to estimate what proportion of state

- level GHG emissions were not being included in the EPA's official totals. Commenter s said for the initial estimation of 2012 baseline power sector rates, the EPA only consider s power generation and emissions from a segment of the total power sector, excluding facility emissions188 from contributing to calculated 2012 state

- level emissions rates on various grounds. Commenter s stated standalone biomass plants and municipal waste com bustors are excluded because they are "non fossil fuel" units, burning less than 10% fossil fuels. Commenter s stated the EPA also excludes industrial/commercial power generators that are not connected to the grid, a set of facilities that includes a substa ntial number of biomass

- burning units. Commenter s said simple cycle turbine plants less than 25 MW and steam turbine plants less than 25 MW/250 MMBtu are also excluded.

Commenter s said emissions from biomass

- or waste

- burning facilities were excluded from state totals on the basis of being non

- fossil fueled (states with low amounts of biomass/waste in this category may nonetheless have biomass/waste burning units that were excluded on the basis of not being connected to the grid).

Commenter s stated Florida is the state with the most bioenergy/waste emissions excluded from its 2012 emissions total (13.2 million tons). Commenter s said in terms of how CO2 from biomass and waste burning compares to reported CO2 from fossil fuels on a percentage basis, Vermont i s the leader, but in fact biomass energy does not actually provide a high percentage of the power generated in that state, due to the presence of the 543 MW Vermont Yankee nuclear plant.

Commenter s stated that Maine is the state where biomass makes the la rgest percentage contribution to both in

- state power generation and power sector CO2 emissions. Commenter s said some of Maine's 2012 emissions as reported in eGRID were not included in the EPA's summed total.

Commenter s stated in Maine, four fossil

- fueled plants contribute the 17% of emissions initially regulated by the GHG rule. Commenter s said of the excluded emissions, Rumford Cogeneration (a biomass

- burning plant owned by NewPage Corporation), contributes 1.3 million tons of CO2, 13% of eGRID's reported emissions for the state. Commenter s said another 28% of reported emissions are contributed by facilities burning biomass and waste where emissions have not been included in the total because they occur at facilities burning less than 10% fossil fuels (the se are the "standalone" biomass and waste

- burning plants). Commenter s stated biomass/waste burners that are not connected to the grid, and are therefore not included in the EPA total, contribute a further 17% of emissions; similarly, 12% of emissions come from fossil

- fueled plants not connected to the grid. Commenter s said another 25% of emissions come from fossil

- fueled facilities excluded because they are less than 25 MW in size. Commenter s stated not reported at all to eGRID are those facilities that bur n fuels solely for thermal energy.

Comment 169: ME

- The EPA's decision to exclude new biomass power development from its forward

- looking modeling reflects some realities about costs and impacts of biomass energy

Response 169: 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.189 For more information regarding Building Block 3, refer to Section V.E of the 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.

The following are summaries of the specific public comments under this comment:

Commenter s s tated the EPA's decision to exclude new biomass power development from its forward

- looking modeling is obviously not prescriptive, but it does reflect so me realities about costs and impacts of biomass energy.

EPA's modeling counts biomass energy emissions

Commenter s said first, the EPA has counted actual stack emissions from bioenergy in its forward

- looking modeling, which probably explains in part why l ittle new bioenergy capacity is included, since growing the industry is counterproductive to reducing emissions. Commenter s said the modeling treats biomass but as a high

- carbon fuel with emissions of 195 lb CO 2 /MMBtu, a rate that translates approximately one ton of forest wood emitting one ton of CO 2 when burned (the modeling still treats biogenic waste burning as having zero emissions.) Commenter s stated under this scheme, any net reductions in lifecycle CO 2 emissions that do occur over time are a "bonus"

- but the model doesn't depend on them occurring in its determination of how states can meet their target goals. Commenter s stated this is a sound modeling decision, for while it means that the modeling does not match EPA's equation for determining state

- level goal emissions rates, it is useful because it answers the questions, "What happens if under EPA's carbon accounting framework, or due to legal reasons, all bioenergy emissions must be counted? Can states still achieve their renewable energy goals wit h minimal bioenergy?"

Commenter s stated in Maine, as elsewhere, the answer is yes, with the modeling projecting a mixture of low

- emissions renewable energy, natural gas, and high

- emissions biomass to help the state to achieve its 2030 emissions goal

.
Comm enter s said under the modeling scenario for Maine, biomass provides the majority of the state's power sector CO 2 emissions in 2030 (while the modeling treats biogenic municipal waste burning as zero emissions, the contribution of waste burning to the total mix is low). Commenter s stated the modeling does contain some flawed assumptions, and only covers a relatively small portion of the state's power sector. Commenter s stated however, the fact that bioenergy

- heavy Maine can achieve the emissions goals even w hile constraining new bioenergy development and counting full stack emissions from existing plants is a rebuttal to biomass industry arguments that new bioenergy build out is necessary for achieving renewable energy goals.

Commenter s stated at the same ti me, the large percentage of biomass burners that is excluded from regulation shows how little the existing industry has to fear from the GHG rule, at least in Maine.

Commenter s said the biomass industry has always been careful to avoid the 250 MMBtu fossil

fuel limit, to avoid regulation as fossil

- fueled plants under other EPA rules. Commenter s stated190 these include the NSPS set for particulate matter emissions at fossil

- fueled electric utility boilers, and the triggering provisions for Prevention of Signifi cant Deterioration permitting (whereby if a boiler receives more than 250 MMBtu heat input from fossil fuels, it is regulated as a fossil

fueled unit where PSD permitting is triggered by emissions of 100 tons of a criteria pollutant, rather than the 250 t ons of emissions that trigger PSD permitting at biomass

- fueled boilers). Commenter s said similarly, most biomass

- burning plants are exempted from regulation under the GHG rule because they don't receive more than 250 MMBtu heat input from fossil fuels, or because they are commercial/industrial units that are not connected to the grid. Commenter s stated giving the existing biomass industry even less cause for concern about the rule, EPA's modeling demonstrates that even biomass

- heavy Maine can achieve its e missions reduction target while counting emissions from ongoing operation of existing biomass facilities.

Comment 170: ME

- The Proposed Rule Incorrectly Identifies Wyman Station as an Affected EGU

Response 170: The EPA still views William F Wyman as a likely affected source and it is included in the baseline. However, as discussed in s ection V and VI of the final rule preamble of the CPP

, the EPA has switched from a state

- specific to a region

- specific approach to determine

s ub category rates. In its B SER application, it assesses the reduction potential across the fleet and recognizes that every source is unique and will have different constraints in which it operates. The EPA’s BSER quantification does not make any unit

- level requirements or assumptio ns, but rather assess the region’s fleet potential at the aggregate level. The comment does not provide any demonstration that this unit does not meet the 111(d) applicability criteria, so it is still included as part of the baseline of “likely affected u nits”.

The following are summaries of the specific public comments under this comment:

Commenter s stated t he proposed rule identifies Wyman Station as an affected EGU. Commenters said because Wyman Station is oil

- fired, Maine's goal is calculated based in part on the assumption that the electrical generation from Wyman Station can be replaced by increasing utilization of the three NGCC units considered by the EPA to be affected EGUs in the proposed rule, thereby reducing CO2 emissions. Commenter s stated thi s is not a plausible scenario because Wyman Station is a spinning reserve facility that only generates electricity when called upon to do so by ISO

- New England when other EGUs in the region, including the aforementioned NGCC units, cannot generate enough e lectricity to meet demand. Commenter s said the most likely scenario in which FPL would be called upon to operate Wyman Station is when the supply of natural gas in the region is not sufficient for the NGCCs in the region to generate adequate electricity to meet demand. Commenter s stated under this circumstance, it is not possible to replace Wyman Station's generation with NGCC generation, since the reason Wyman Station operates is because there is insufficient fuel to operate the NGCC plants.

Commenter s sta ted the EPA must re

- calculate Maine's baseline and target emission rates without including Wyman Station as an affected EGU.191 Comment 171: ME

- The EPA must re

- calculate Maine's baseline rate and target rate of CO2 emissions based on consideration of West brook Station as Maine's only affected EGU

Response 171: For the EPA’s response to this comment, see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP. EPA notes that its final inventory of likely affec ted units does not constitute an applicability determination. EPA. See section VII.E of the preamble for a discussion of the relationship between state goals and EGU status change.

The following are summaries of the specific public comments under this co mment:

Commenter s stated the EPA calculated Maine's baseline emissions rate in a framework that includes four affected EGUs, including three NGCC plants that qualify as existing EGUs under the language in the proposed rule. Commenter s said these plants all meet or exceed the CO2 emission standards in the EPA's proposed NSPS, and if they were to be built or modified in 2016, they would be exempt from consideration as affected EGUs under the rule as proposed. Commenters said i n order for Maine to achieve the goal proposed in the rule, these plants will be required to operate more efficiently than they would be if they were new plants. Commenter s stated this is illogical and far from cost

- effective. Commenter s said it makes no sense to require an older source t o meet more stringent standards than a new source. Commenter s stated Maine recommends that the EPA modify the proposed rule to exempt EGUs that either already meet, or are modified to meet the CO2 emission standards being proposed for new fossil fuel

- fired EGUs under the NSPS. Commenter s said in states or regions with existing NGCC capacity and significant steam capacity, this will create greater latitude for redispatch away from higher

emitting steam EGUs and may encourage retirement of these facilities. C ommenter s said the EPA has proposed that four EGUs in Maine should be considered to be affected EGUs under the rule as proposed: FPL Energy Wyman LLC in Yarmouth (Wyman Station); Westbrook Energy Center in Westbrook (Westbrook Energy); Rumford Power Compan y in Rumford (Rumford Power); and Maine Independence Station in Veazie (Maine Independence). Commenter s said Appendix D to the EPA's Technical Support Document (TSD) for Goal Computation provides the 2012 output in MWh for each of these four plants. Commen ter s stated Wyman Station has a potential output of 850 MW, or 7A46,000 MWh/year, and sold 59,067 MWh in 2012, which represents 0.8% of potential output; Westbrook Energy has a potential output of 552 MW, or 4,835,520 MWh/year, and sold 2A46,083 MWh in 201 2, which is 50.6% of potential output; Rumford Power has a potential output of 251 MW, or 2,198,760 MWh/year, and sold 363J95 MWh in 2012, which is 16.5% of potential output; and Maine Independence has a potential output of 520 MW, or 4,555,200 MWh/year, a nd sold 1,243,500 MWh in 2012, which is 27.3% of potential output. Commenter s said Wyman Station operates as "spinning reserve", and only supplies electricity to the grid when Maine's other assets cannot meet demand. Commenter s stated the EPA should exempt Wyman Station from the proposed rule, because it supplies far less than one third of its potential output to the grid, and it operates at the minimum level necessary to function as an emergency reserve. Commenter s stated Rumford Power and Maine Independen ce also supply significantly less than one third of their potential output to the grid, and should therefore not be considered affected EGUs under the proposed rule. Commenter s said the EPA should re

- calculate Maine's baseline CO2 emission rate and target CO2 emission rate based on Westbrook Energy as Maine's only affected EGU.192 Commenter s stated Maine and other states in the Northeast are exploring ways to increase the availability of natural gas in New England, and are hopeful that a plan can be put in pla ce that will resolve the natural gas shortages and associated price spikes that have plagued the region in recent years. Commenter s said if the Northeast region is able to solve the regional natural gas shortage, Maine's NGCC units may actually increase po wer generation well beyond current levels of operation. Commenter s stated it is possible that in future years one or more of these EGUs will exceed the 1/3 sales threshold and thereby potentially qualify as affected EGUs at that time. Commenter s said the p roposed rule does not address the possibility that EGUs may be subject to regulation for less than the entire compliance period. Commenter s stated it is not possible to know in advance when or if one or more potentially affected EGUs will actually become a ffected under the proposed rule. Commenter s said the final rule should define EGUs as affected based upon their status at the time the rule is adopted, using generation, sales and fuel use data from the three years immediately preceding adoption. Commenter s stated this will enable states to create compliance plans based on concrete information rather than speculation regarding future generation characteristics, and will avoid states being required to dedicate scarce resources to continually modifying their compliance plan. Commenter s said for the same reasons, EGUs that change their operational characteristics during the proposed rule's compliance period, increasing generation to such an extent that they would have been considered affected EGUs at the time t he rule was adopted, should be subject to the NSPS proposed under Section 111(b) of the CAA.

Commenter s stated the EPA must re

- calculate Maine's baseline rate and target rate of CO2 emissions based on consideration of Westbrook Station as Maine's only affe cted EGU. Commenter s said the EPA must also add provisions to the proposed rule that make non

- affected EGUs exempt from regulation under the proposed rule, and require them to meet the NSPS in the event that future operations cause them to exceed the minim um threshold criteria of affected EGUs.

Comment 172: ME

- The EPA must exempt EGUs that are not connected to the US grid from consideration under the proposed rule

Response 172: See section VIII. K . of the final rule preamble of the CPP for the EPA’s respo nse to this comment. Also see the applicability language in section IV.D.

The following are summaries of the specific public comments under this comment:

Commenter s stated the EPA must exempt EGUs that are not connected to the US grid from consideration under the proposed rule.

Commenter s stated Maine is unique in that it borders on only one other state, with most of its political boundaries adjoining Canada. Commenter s said because of this physical isolation, significant parts of Maine are connected to the Canadian grid and not under the control of US

based distribution networks. Commenter s stated it is not realistic to expect Maine to develop a compliance plan that requires a Canadian company, operating in Canada, to act in a particular way. Commenter s said the final rule needs to clearly exempt those parts of states that have no193 interconnection with the US grid. Commenter s stated the proposed rule has no provision to account for electricity distribution that is beyond a state's control. Commenter s said Maine urges the EPA to exempt EGUs in that are solely connected to the Canadian grid from the final compliance rates.

Commenter s stated the EPA must exempt EGUs that are not connected to the US grid from consideration under the proposed rule.

Comment 173: MI

- NGCC emission rates used to set state goals under BB2 are unreasonable; should use rates equal to proposed standards for new units when setting goals for existing units

Response 173: See section V.D. of the final rule preamble of the CPP for the EPA’ s response to this comment and more information about Building Block 2. EPA no longer relies on useful thermal output when quantifying BSER. Therefore, the NGCC rates assumed in the calculation no longer reflect useful thermal output and are consequently higher in the final CPP than the proposed CPP for the state of Michigan of 998 lb/MWh.

The following are summaries of the specific public comments under this comment:

Commenter s said that in its calculation of emission rate targets for Michigan, the EPA u ses a state specific average NGCC emission rate of 810 lb/MWh, which is incorrect and misrepresents actual achievable emissions. Commenter s requested that EPA use reasonable NGCC emission rates in setting the goals for building block 2. Commenter s said a r eview of the available data for existing NGCC units in Michigan indicates that the EPA used thermal heat output in addition to electric generation output from combined cycle plants in the calculation of the average CO2 emission rate for Michigan. Commenter s said the use of thermal heat output in this calculation is incorrect; the calculation should only include electric generation output. Commenter s said taking out the thermal heat output yields 998 lb/MWh as the average of NGCC net electric generation emis sion in Michigan, which is a more reasonable emission factor for calculating the state goal for building block 2.

Commenter s said in addition, emissions associated with ramping up NGCC units to higher capacity factors should be weighted towards units with more potential generation, not the average for all NGCCs. Commenter s said the more efficient NGCCs should have lower emission rates and also higher baseline utilization.

Commenter s said that for most states, the average NGCC emission rate is below the pro posed standards for natural gas

- fired stationary combustion units that EPA is requiring for new or modified and reconstructed sources under Sec. 111(b). Commenter s said these unreasonable and unrepresentative state average emission rates cause state goals to be more stringent than what would be required if EPA's proposed standards for new or modified and reconstructed sources were used in the goal setting calculation. Commenter s said to avoid the differences among unit capabilities and emissions in each sta te, and to avoid inconsistencies between thermal and electric generation output, they recommend the use of NGCC emission rates for setting emission rate goals that are equivalent to EPA's proposed standards for new, modified or reconstructed194 units [1,000 l b CO2/MWh gross for larger units (>850 mmBtu/hr), 1,100 lb CO2/MWh gross for smaller units (<850 mmBtu/hr)]

.

Comment 174: MI

- Request the final 2030 target for Michigan to be amended

Response 174: For the EPA’s response to this comment, see the CO 2 Emi ssion Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenter s requested the final 2030 target for MI be amended

.
Commenter s stated the final 2030 target for Michigan must be subsequently amended in the final rule. Commenter s stated that when entered into EPA's state goal calculation spreadsheet for Michigan, a target of 1,442 lbs CO2/MWh is derived

.
Commenter s added that additional m odifications to the target will also be needed to account for Ludington and base year changes as requested.

Comment 175: MI

- Three different goal numbers were developed for Michigan

Response 175: There was one final goal rate for Michigan at Proposal

– 1,161 lb/MWh. See page 22 at http://www2.epa.gov/sites/production/files/2014

- 06/documents/20140602tsd

- goal

computation.pdf . Please see section V II of the final rule preamble for rate

- based and mass

- based statewide goals for Michigan.

The following are summaries of the specific public comments under this comment:

Commenter s noted that in the calculation of the state goals there are three different goal numbers developed for Michigan in terms of percent reduction in the proposal and technical support documents (TSD): 31.5 percent, based on the adjusted rate in the preamble, 36 percent based on the numbers in the Goal Computation TSD, and 45 percent c alculated from the initial to the final number in the Regulatory Impact Analysis (RIA) modeling.

Comment 176: MI

- Corrections for 2012 renewable energy generation in Michigan

Response 176: For the EPA’s response to this comment, see the CO 2 Emission Pe rformance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenter s offered corrections for 2012 renewable energy generation

.195 Commenter s stated t hat in review of the building block calculations for Michigan, it was noted that EPA data assumptions, utilizing EIA state

- level renewable energy generation on existing Renewable Energy for Michigan should be corrected as follows for 2012 Renewable Energy generation:

1. Plant Operator Name: Invenergy Plant Name: Gratiot County Wind 2012 Net Generation (MWh): 226,178 Correction: The 2012 generation from this source needs to be included in the total for Michigan

2. Plant Operator Name: Sumpter Energy Associates Pla nt Name: City Sand 2012 Net Generation (MWh): 9,993 Correction: Missing from EPA 2012 Calculations

3. Plant Operator Name: Sumpter Energy Associates Plant Name: Carleton Farms Phase I 2012 Net Generation (MWh): 42,428 Correction: Missing from EPA 2012 Calcula tions

4. Plant Operator Name: Sumpter Energy Associates Plant Name: Carleton Farms Phase II 2012 Net Generation (MWh): 33,730 Correction: Missing from EPA 2012 Calculations

5. Plant Operator Name: Wayne Energy Plant Name: Wayne Energy 2012 Net Generation (MWh): 4,026 Correction: Missing from EPA 2012 Calculations

Comment 177: MI

- Concern that the proposed final state goal for Michigan is more stringent than other similarly situated Midwestern states

Response 177: See section I.A. of the final rule preamble of the CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:

Commenter s stated the proposed final state goal for Michigan is more stringent than other similarly situated Midwestern states. Commenter s said Michigan's final goal of 1,161 average pounds of CO2 per net MWh is lower than those of Illinois (1,271), Indiana (1,531), and Ohio (1,338). Commenter s stated requiring a lower rate from Michigan, a state that has already made significant progress in reducing carbon emissions, is inequitable.196 Comment 178: MN

- General comments and Building Block 1

Response 178: See section V.C. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 1.

The following are summaries of the specific public comments under this comment:

General Comments

Commenter s stated that their comments to EPA's electric utility sector greenhouse gas emission reduction proposals have been shared under various s ubmittals for over 2 years (e.g. since EPA's April of 2012 proposed new unit NSPS proposal). Commenter s said that throughout all this time, they have consistently expressed concerns that the EPA's proposals for reducing Minnesota electric generation relate d greenhouse gas emissions are targeting emissions standards or proposed targets with stringency that is technically unworkable or not cost effectively achievable relative to the cost effectiveness criteria relevant for or applicable to the electric utilit y sector in Minnesota and our region.

Commenter s said that the EPA has inadequately recognized Minnesota early action that reduces CO2 emissions from electricity generation when determining Minnesota BSER building block targets. Commenter s said that Minne sota legislators, regulators and utilities have already implemented early measures similar to the EPA's BSER strategies, and indicated these measures were deployed while applying cost effectiveness criteria pertinent to Minnesota utilities and electricity customers. Commenter s indicated that full recognition of Minnesota early action would accept ongoing Minnesota initiatives as adequate for satisfying the EPA's Clean Power Plan target assigned to Minnesota through 2030.

Building Block 1 Comments

Commenter s stated that cost effective early deployment of turbine generator efficiency improvements on Minnesota coal units have already been implemented, delivering the greenhouse gas emission reductions from Minnesota coal generating units under early action that EPA is now proposing for the CPP. Commenter s said that these improvements were made after determinations by Minnesota regulators that the projects were cost effective, as part of utilities' resource planning or rate recovery proceedings.

Commenter s explai ned that the Minnesota Public Utilities Commission (MPUC) has required Minnesota utilities to adopt heat rate improvement projects and maintenance practices that optimize the balance between preserving unit operating efficiency and dispatch capability. Com menter s said that these measures help preserve the dispatch capability of an electric generating unit, which helps assure that the value of generation resources is retained over time, as utility, customer and energy market needs continue to evolve. Comment er s said that integrated resource planning, regulated by the MPUC, is part of what guides the process for deployment of new resources and dispatch capability of existing generation resources.

Credit should be given for early action . Commenter s said that in determining the 6% Block 1 target for improving coal unit efficiency, the EPA used calendar year 2012 reported generation, which effectively "books" the already optimized Minnesota generating unit efficiency measures197 into 2012 generation statistics, witho ut giving recognition or CPP credit for cost effective generating unit efficiency improvements implemented before 2012. Commenter s said thus, the EPA's target

- setting component under its CPP Block 1 is redundant to Minnesota early action measures. Commente r s stated that the EPA's Block 1 target should recognize Minnesota's early actions as satisfying Block 1 target compliance for Minnesota.

A 6% HRI is not reasonable for smaller generating units

. Commenter s indicated that a 6% heat rate improvement target is not reasonable for smaller generating units. Commenter s said that this is both a consequence of how small units don't carry the economy of scale that helps keep cost per unit of electricity output affordable, and due to the manufacturers of heat rate im provement equipment not offering "off the shelf" components for small units. Commenter s indicated that customizing equipment to accommodate small unit

- specific requirements adds to cost, if such equipment is available at all.

Sargent and Lundy Report

. Com menter s said it is notable that the report prepared by Sargent and Lundy (S&L Coal

- Fired Power Plant Heat Rate Reductions, Final Report SL

- 009597, Project 12301

- 001, January 22, 2009, the "S&L Report") from which the EPA identified potential Block 1 genera ting unit efficiency options, referenced in the EPA's CPP Block 1 Technical Support Documentation, pre

- dates deployment of the turbine upgrades that improved heat rate performance of Minnesota Power units. Commenter s said the S&L analysis cites some of th e very measures deployed by Minnesota Power among those it suggests for efficiency improvements, just as the report also recognized that variances between units preclude the deployment of all measures identified by S&L on all electric generating units.

Mi nnesota already meeting BB1 target

. Commenter s said if the EPA recognized Minnesota early action since 2005, including measures such as generation heat rate improvement programs and deployment of measures recognized in the above

- referenced S&L Report, Min nesota would be found to already have delivered on the EPA's Block 1 target measures. Commenter s said consequently, the EPA should accept Minnesota early action for generating unit efficiency improvements as sufficient for fully satisfying the EPA's propos ed CPP Block 1 target. Commenter s said that because the CO2 emissions per net megawatt hour from coal units posted in 2012 already includes the benefit of these early deployed efficiency improvements in Minnesota, the EPA should eliminate that six percent component from the CPP target set for Minnesota. Commenter s added that these Minnesota actions, taken early and voluntarily, should receive the EPA CPP compliance "extra credit" for their improved environmental performance, years ahead of the EPA's propose d actions.

Comment 179: MN

- Building Block 2 related comments

Response 179: See section V.D. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 2.

The following are summaries of the spec ific public comments under this comment:

Commenter s stated that the EPA has incorrectly assumed that a national "one

- size

- fits

- all" opportunity for re

- dispatching existing natural gas combined cycle units (NGCC) is possible or198 viable. Commenter s stated th at the EPA's Block 2 usurps Minnesota regulatory authority over Minnesota electricity resource planning and cost recovery and should be eliminated from the Clean Power Plan (CPP).

Commenter s said that Minnesota's integrated resource planning (IRP) process already optimizes generation resources, giving balanced consideration to customer need, economics over the long term, fuel supplies costs and risks, socioeconomic impacts, and managing risks and environmental stewardship, including CO2 emission environment al externalities. Commenter s said Minnesota's resource mix, as reflected by power supply makeup of each of its utilities, includes significant and increasing amounts of intermittent renewable resources, and said the resulting energy mix of dispatchable cap acity from Minnesota's existing coal and NGCC units is necessary to preserve grid integrity and customer service reliability. Commenter s said these comprehensive IRP measures better serve the EPA's indicated intent of its CPP than the EPA's "one

- size

- fits

- all Block 2 targeted, but artificial, dispatch level for existing NGCC.

Commenter s said there is little uncommitted dispatch opportunity existing for Minnesota NGCC units to accommodate the EPA's CPP assignment of a 70% capacity factor level of operation. Commenter s said this Minnesota resource availability situation is in conflict with what the EPA assumes would be available for re

- dispatch from all existing NGCC electric utility units nationwide. Commenter s said the EPA should correct this oversight by e liminating the Block 2 coal to natural gas re

- dispatching contribution when setting the Minnesota CPP BSER target and should recognize Minnesota's robust integrated resource planning process as sufficient for satisfying BSER Block 2.

Commenter s indicated that the Minnesota Department of Commerce and Minnesota Public Utilities Commission have provided for implementation of a mature integrated resource planning and engineering review process. Commenter s explained that Minnesota utilities propose measures for meeting customer electricity needs and cost recovery for resource deployment and operation that balances the economics, reliability, environmental performance and socioeconomic impacts while managing risk, consistent with state law. Commenter s said these IRP measures include significant public stakeholder input and are subject to a transparent, robust, measured and just regulatory process. Commenter s said they are designed to deliver universally available, least cost supply of reliable electricity to Minne sotans. Commenter s said over the years the IRP process has provided for the deployment of electric generation including provisions for recent and ongoing deployment of environmental control retrofits on fossil units as reviewed and recommended by the Minne sota Pollution Control Agency (MPCA). Commenter s said this Minnesota regulator review includes analysis of whether environmental measures are cost effective through determination of economic break points above which further action is assessed as uneconomic (i.e., deployment of measures through the "heel of the cost curve"). Commenter s added that the economic analysis includes consideration of environmental emission externality costs, including those for CO2, PM, SO2 and NOx.

Commenter s said that in additio n, Minnesota IRPs and Minnesota Public Utility Commission cost recovery approvals consider the dispatch at which these generating resources would be economic. Commenter s said consequently, the balance of existing NGCC and coal

- fueled generation in Minnesot a reflects NGCC dispatch that provides for reliability under conditions of increasing use of intermittent renewable energy resources and for serving customer peak199 electricity generation needs. Commenter s said in contrast, the EPA's Block 2 analysis arbitra rily attempts to re

- dispatch existing NGCC, presuming a 70% capacity factor level that could only be achieved while serving as a base load resource. Commenter s said that since these Minnesota existing NGCC units were deployed for different purposes and to serve different dispatch needs than base load service, it is not appropriate to presume such re

- dispatch.

Commenter s said that if the EPA insists on including NGCC re

- dispatch in Minnesota's CPP target, the EPA must consider the measures and costs that wo uld be incurred to replace the intermittent renewable resource reliability, peak power generation resource service electric and natural gas transmission support that the NGCC units currently provide. Commenter s said these considerations would be in additio n to what EPA has recognized will be needed to bolster infrastructure, to support the EPA's arbitrary 70% target set for existing NGCC units, annual capacity factor. Commenter s said that historic operation of Minnesota existing NGCC units has more typicall y run in the 10% to 25% capacity factor range. Commenter s said that the EPA notes an average 24.5% capacity factor for Minnesota existing NGCC units in 2012, a year that experienced unprecedented low natural gas prices that are not currently available nor would be commercially expected into the future.

Comment 180: MN

- The EPA's treatment of generation resources within state boundaries can create taking of rights

Response 180: See section VIII. L . of the final rule preamble of the CPP for the EPA’s respo nse to this comment.

The following are summaries of the specific public comments under this comment:

Commenter s stated that the EPA's approach for determining state

- by

- state CPP targets ignores ownership rights in generating resources. Commenter s said st ate targets were established by considering generating resources within a state and electricity customer retail sales in the state, but actual sourcing of electricity to service those sales may come from both within and outside the state borders. Commenter s said electric utilities may own or operate electric generating resources in one state that may or may not serve electricity customers in that state. Commenter s said joint ownership, assignment and long term sales are commonplace in the electric industry, due to the high capital cost, long lived assets and economy of scale benefits larger assets offer. Commenter s said that by allocating the renewable attributes of a generating resource to a state, regardless of whether the owner of the generating resource resides in that state or uses the generation to serve customers in that state, EPA has effected an unlawful taking of property rights.

Commenter s said for example, renewable generation constructed in North Dakota to help meet the Minnesota state mandated RPS is counted toward North Dakota renewable energy goals in the EPA's Technical Support Documentation. Commenter s said when the EPA established the Minnesota and North Dakota CPP target portion for BSER Block 3 renewables, the EPA referenced each state's retail electricity sales and assigned a percentage for qualifying renewable energy. Commenter s said in turn, the EPA 15% renewables target was established by the EPA200 analysis based on the average RPS for states in the region with an RPS. Commenter s said ho wever, CPP state renewables BSER targets may also include state approved RPS qualifying renewable energy options (such as existing hydro) that the EPA is proposing will not be recognized for CPP proposed compliance. Commenter s said consequently, the relati ve stringency of a CPP renewables target set in a state is affected by considering both renewables deployed in other regions that qualify for satisfying a state RPS and renewables that EPA has not determined will count for CPP compliance. Commenter s said t hus, the EPA's use of state borders for determining renewable resource responsibility creates situations where resources deployed and paid for on behalf of electric utility customers in one state may have their underlying renewable energy value attributed to another state.

Commenter s indicated that Power Purchase Agreements (PPAs) commonly used to provide for renewable energy resource delivery to satisfy state renewable energy targets may also put electricity customers at risk of disaggregation from the be nefits of renewable energy resources for which electricity customers have been paying when renewal is due. Commenter s said PPAs expire and may or may not be up for renewal at timing when the capital investment serviced by satisfaction of a state renewable energy standard is still under cost recovery.

Commenter s recommended that any asset or power purchase agreement that is recognized, approved and paid for by utility customers be given credit when accounting for CPP compliance. Commenter s said that in the case of Minnesota Power, its significant North Dakota wind investments, PPAs and Canadian Hydro PPAs should be included and credited towards Minnesota compliance with the EPA's Clean Power Plan, as Minnesota Power has prudently developed these resources to capitalize on the economics, economies of scale, strong partnerships and strategic linear infrastructure (such as AC and DC transmission lines).

Comment 181: MN

- State should decide credit and treatment of existing hydro for CPP credit as RE

Response 1 81: See section VIII. K . of the final rule preamble of the CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:

Commenter s stated that existing hydroelectric generation should receive full Clean Power Plan (CPP) credit as a renewable energy resource so that hydro generation has equivalent standing to other renewable energy resources for CPP compliance.

Commenter s stated said they have Minnesota

- based hydroelectric plants that count towa rd achievement of the Minnesota Renewable Portfolio Standard that, in turn, the EPA has considered as part of Block 3 target setting under the CPP. Commenter s said the state of Minnesota also imports about ten percent of its electricity from Canadian exist ing hydroelectric generation resources that may or may not satisfy current state renewable energy requirements, but may be allowed to satisfy future renewable energy requirements. Commenter s said the EPA should give deference to the state to decide credit and treatment of existing hydroelectric power for satisfying state CPP targets. Commenter s said Minnesota Integrated Resource Planning201 already includes consideration of available existing and proposed new generation resources, conservation and energy effic iency measures. Commenter s said the EPA's insertion of constraints on states for CPP compliance that does not recognize the environmental attributes of hydro generation can create problems with takings of property rights from parties who own or are under a greement to receive the output from generation resources in approved state Integrated Resource Plans and state rate

- making filings.

Comment 182 : MN

- Renewables built by Minnesota ratepayers that are located outside of Minnesota should be credited to Mi nnesota; the rule should address this issue and establish a way to resolve state conflicts

Response 182: See section VIII. L . of the final rule preamble of the CPP for the EPA’s response to this comment. EPA has regionalized building block three, and not in cluded any existing RE in the BSER quantification or state goals.

The following are summaries of the specific public comments under this comment:

Commenter s stated that another huge concern we have is the location of the renewable generation that rate paye rs of Minnesota have already developed. Commenter s added that a large percent of the wind generation that Minnesota utilities have built resides in optimum locations but is outside the borders of Minnesota; primarily in the Dakotas, Wyoming, and Iowa.

Comm enter s stated that this renewable generation was built by Minnesota rate payers to meet the requirements of the Minnesota Renewable Energy Standard and should be credited to Minnesota's CO2 reductions under this proposal.

Commenter s concluded that Minnesot a state officials have received preliminary confirmation from the EPA that this will count for Minnesota, but the final rule will need to address this issue, along with a way to resolve state by state conflicts.

Comment 183: MN

- Target requirements shoul d be both physically and economically available for deployment on unit

Response 183: See section V.C. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 1.

The following are summaries of the specific public comments under this comment:

Commenter s indicated that the EPA's assigned stringency to existing electric generating unit CO2 emissions should not extend beyond measures that are physically and economically available for deployment on the unit.

Commenter s said that the EPA established the Block 1 generating unit efficiency improvement targets for Minnesota and neighboring states at 6%, considering statistical analysis of heat rate202 improvements achieved during maintenance outages and by referencing a Sargent and Lundy study of plant efficiency improvement options. Commenter s recommended that states be allowed to hear petitions from utilities for accepting a unit as delivering adequate heat rate performance, giving consideration to cost e ffective deployment of heat rate improvement measures. Commenter s said upon state approval of the unit's petition, the state's target would be adjusted to reflect the change in the state's Block 1 stringency such that other units are not compelled to provi de for additional efficiency measures. Commenter s said absent a means for giving relief to state target

- setting when individual units demonstrate they cannot cost effectively meet a 6% efficiency improvement, the EPA's CPP target

- setting process would be c ompelling units owned or operated by different utilities to outlay additional funds to compensate for the EPA BSER cost effectiveness or feasibility assessment errors.

Comment 184: MN

- Minnesota technical corrections submitted to the EPA

Response 184: F or the EPA’s response to this comment, see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenter s stated t he Minneso ta Pollution Control Agency (MPCA) submitted to the EPA technical corrections related to the EPA characterization of the Best System of Emission Reduction CPP target set for Minnesota. Commenter s said the EPA should apply these corrections as consideration is also given to Minnesota early action measures, making adjustments in the EPA CPP targets for Minnesota and providing for Minnesota utility source CPP compliance.

Comment 185: MN

- Hutchinson Plant #2 is not an affected unit and must be removed from

c alculations

Response 185: The EPA reviewed the Hutchinson Plant 2 data and still considers generators 2 and 3 to be likely affected units in the EPA’s baseline inventory. The EPA believes nearly all

non

- cogen eration NGCC units greater than 25 MW will be s ubject to the CPP applicability criteria. However, as explained in the preamble, the baseline inventory does not constitute a final applicability determination. See section VII.E for further discussion on applicability status and relationship with state goals adjustments.

The following are summaries of the specific public comments under this comment:

Commenter s state d that the NGCC capacity for MN in the EPA calculation must be revised to remove Hutchinson Plant #2

- ORIS 6358

- Generators 2 and 3. Commenters said Hutchinson Plant #2 does not meet the criteria of an affected unit because its average annual operation has been below 219,000 MWh. Commenter s said these units have never operated at or above this threshold, and these units should be removed from the EPA's list of affected sources.203 Comment 186: MN

- The EPA's CPP provisions should not impede the deployment of effective and ongoing state programs

Response 186: For the EPA’s response to this comment, see section VIII of the final rule.

The following a re summaries of the specific public comments under this comment:

Commenter s emphasized that the EPA should encourage proactive, environmentally friendly programs under deployment in states. Commenter s said for example, Minnesota Power is implementing the E nergyForward strategy, which was part of Minnesota's Integrated Resource Plan (IRP) process. Commenters said EnergyForward is an effective and balanced response to transition our generation fleet away from a mix of about 95% coal and 5% renewables in 2005 towards a balanced mix of one third each of renewable energy, natural gas and coal

- fueled electric generation. Commenter s stated customer conservation improvements and energy efficiency programs are also a key component of our EnergyForward strategy. Comme nter s said the EPA's CPP provisions should not impede the deployment of effective and ongoing state programs of this nature.

Comment 187: MN

- Ongoing concerns about the EPA greenhouse gas emission reduction proposals stringency, cost and the EPA's over looking significant Minnesota early action benefits

. Response 187: See sections V.C. VI.D., VIII.B, and VIII.C. of the final rule preamble of the CPP for the EPA’s response to this comment. Also see section 3.1.4 of the RTC for a discussion on heat rate i mprovement and pollution controls. EPA does not assume any specific unit make a heat rate improvements, its quantification of BSER is premised on what is achievable at the

source

- category fleet level on average.

The following are summaries of the specific public comments under this comment:

Commenter s stated comments to EPA's electric utility sector greenhouse gas emission reduction proposals have been under preparation and shared under various submittals for over 2 years (e.g. since the EPA's April of 201 2 proposed new unit NSPS proposal). Commenter s consistently expressed concerns that the EPA's proposals for reducing Minnesota electric generation related greenhouse gas emissions are targeting emissions standards or proposed targets with stringency that i s technically unworkable or not cost effectively achievable relative to the cost effectiveness criteria relevant for or applicable to the electric utility sector in Minnesota and the region. Commenter s suggest ed some key areas in which the EPA should modif y their proposal before finalization that can address these concerns: the EPA has inadequately recognized Minnesota early action that reduces CO2 emissions from electricity generation serving Minnesota electricity customers when assigning the Minnesota Bes t System of Emission Reduction (BSER) "Block" targets. Commenter s stated Minnesota legislators, regulators and utilities have already implemented early measures similar to EPA's Best System of Emission Reduction (BSER) activities for reducing Minnesota ele ctric utility greenhouse gas emissions. Commenter s stated these Minnesota measures were deployed while applying cost effectiveness criteria pertinent to204 Minnesota utilities and electricity customers. Commenter s said full recognition of Minnesota early acti on would accept ongoing Minnesota initiatives as adequate for satisfying EPA's Clean Power Plan target assigned to Minnesota through 2030 as outlined below. Commenters said Minnesota's legislators, regulators and utilities already have the policy, regulati on and action plans in place, without additional EPA regulation, that are responsive and wholly adequate in providing the affordable, environmentally sound and reliable electric service Minnesota residents and businesses require and deserve.

a. Generation energy efficiency improvements (BSER Block 1).

Commenter s stated cost effective early deployment of turbine generator efficiency improvements on Minnesota coal units have already been implemented, delivering the greenhouse gas emission reductions from Minn esota coal generating units under early action that the EPA is now proposing for the CPP. Commenter s said these improvements were made after determinations by Minnesota regulators that the projects were cost effective, as part of utilities' resource planni ng or rate recovery proceedings.

Commenter s stated the Minnesota Public Utilities Commission (MPUC) has required Minnesota utilities to adopt heat rate improvement projects and maintenance practices that optimize the balance between preserving unit operat ing efficiency and dispatch capability. Commenter s said these measures help preserve the dispatch capability of an electric generating unit. Commenter s stated preservation of dispatch capability helps assure that the value of generation resources is retain ed over time, as utility, customer and energy market needs continue to evolve. Commenter s said integrated resource planning, regulated by the MPUC, is part of what guides the process for deployment of new resources and dispatch capability of existing gener ation resources.

Commenter s stated in determining the 6% Block 1 target for improving coal unit efficiency, the EPA used calendar year 2012 reported generation. Commenter s said use of a 2012 baseline effectively "books" the already optimized Minnesota gene rating unit efficiency measures into 2012 generation statistics, without giving recognition or CPP credit for cost effective generating unit efficiency improvements implemented before 2012. Commenter s said for example, in 2009 and 2010 Minnesota Power's Bo swell Energy Center Units 3 and 4, the two largest generating units, representing more than 50% of Minnesota Power's nameplate generating capability for its system, underwent turbine replacements, achieving improvements in gross plant efficiency of 5% and 8.7% respectively. Commenter s stated other Minnesota utilities have implemented similar turbine efficiency improvements (e.g. Xcel Energy's Sherco Unit 3). Commenter s said thus, the EPA's target

- setting component under its CPP Block 1 is redundant to Minne sota early action measures. Commenter s stated the EPA's Block 1 target should recognize Minnesota's early actions as satisfying Block 1 target compliance for Minnesota.

Commenter s stated a 6% heat rate improvement target is not reasonable for smaller gener ating units. Commenter s said this is both a consequence of how small units don't carry the economy of scale that helps keep cost per unit of electricity output affordable and due to the manufacturers of heat rate improvement equipment not offering "off the shelf" components for small units. Commenter s stated customizing equipment to accommodate small unit

- specific requirements adds to cost, if such equipment is available at all.205 Commenter s stated it is notable that the report prepared by Sargent and Lundy ( S&L Coal

- Fired Power Plant Heat Rate Reductions, Final Report SL

- 009597, Project 12301

- 001, January 22, 2009, the "Sargent and Lundy Report") from which the EPA identified potential Block 1 generating unit efficiency options, referenced in the EPA's CPP Bl ock 1 Technical Support Documentation, pre

- dates deployment of the turbine upgrades that improved heat rate performance of Minnesota Power units. Commenter s said the S&L analysis cites some of the very measures deployed by MP among those it suggests for ef ficiency improvements, just as the report also recognized that variances between units preclude the deployment of all measures identified by S&L on all electric generating units.

Commenter s stated were the EPA to recognize Minnesota early action since 200 5, including measures such as generation heat rate improvement programs and deployment of measures recognized in the Sargent and Lundy Report, Minnesota would be found to already have delivered on EPA's Block 1 target measures. Commenter s said consequently , the EPA should accept Minnesota early action for generating unit efficiency improvements as sufficient for fully satisfying the EPA's proposed CPP Block 1 target. Commenter s stated because the CO2 emissions per net megawatt hour from coal units posted in 2012 already includes the benefit of these early deployed efficiency improvements in Minnesota, the EPA should eliminate that six percent component from the CPP target set for Minnesota. Commenter s stated additionally, these Minnesota actions, taken early and voluntarily, should receive the EPA CPP compliance "extra credit" for their improved environmental performance, years ahead of the EPA's proposed actions. Commenter s said they also serve as reinforcement to his organization's comment that the EPA's pr oposed regulations in Block 1 are unnecessary and redundant to early and ongoing Minnesota measures.

Comment 188: MN

- Should use actual capacity for Mankato Energy, rather than nameplate

Response 188: The EPA has switched its assessment of NGCC generatio n to rely on the summer capacity metric as described in preamble section V.A.4.b of the final rule preamble of the CPP and the EPA has updated the summer capacity value for Mankato in its 2012 unit

- level file informing the baseline.

The following are summa ries of the specific public comments under this comment:

Commenter s requested that the actual capacity of the Mankato Energy (ORIS 56104) unit be used rather than the name plate capacity. Commenter s said that Mankato Energy has a current capacity of a max imum of 375 MW at 6 degrees F. Commenters said t he name plate capacity reported to EIA of 530 MW is due to the large capacity of the unit's steam turbine, if the facility had been constructed with all components [it was not]. Commenter s said at this time, the steam turbine portion is oversized as the facility has only one combustion turbine and one heat recovery steam generator (HRSG).

Commenter s said that the actual capacity of 375 MW is made up of 295 MW of combined cycle output with 80 MW of peaking powe r developed in the HRSG by employing duct burners. Commenter s stated that the existing Mankato Energy Center consists of one Siemens 501FD206 combustion turbine generator, one Nooter/Erikson HRSG, a Toshiba TCDF 40L steam turbine generator, and other ancillar y equipment. Commenter s stated in order to be able to generate up to 530 MW of power as the name plate capacity states, additional components must be installed at the unit. Commenter s stated that because the plant was, and continues to be physically unable to generate 530 MW, the EPA should revise its presumption of the potential generation capacity for this unit to 375 MW

Comment 189: MN

- The EPA should not use presume or default assumptions when determining Minnesota CPP targets

Response 189: See secti on V.D. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 2 and see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP for goals.

Th e following are summaries of the specific public comments under this comment:

Commenter s strongly request ed the EPA to not use presumed or default assumptions when determining Minnesota CPP targets.

Commenter s stated the EPA made a series of assumptions ab out Minnesota electric utility generation and customer electricity service when assigning a Minnesota proposed Best System of Emission Reduction target emission rate.

Commenter s stated as clearly indicated in the EPA's CPP proposal, the nature and extent of Minnesota early action did not receive proper credit in the EPA target setting. Commenter s said for example, when the EPA set Minnesota's Block 2 related target contribution for switching from existing coal generation to existing natural gas combined cy cle (NGCC) generation, the EPA incorrectly presumed how existing NGCC capacity might be available to reassign for dispatch at a 70% capacity factor average for the state.

Commenter s stated Minnesota Public Utility Commission oversight and the IRP process c onsider what resources are deployed and how the resources are dispatched in order to meet: Minnesota's needs for regional voltage support, reliability for accommodating the ongoing Minnesota build out of intermittent renewable energy resources, service for energy intensive industry needing affordable, 24/7 electricity and support of the Minneapolis/St. Paul peaking electricity resource needs.

Commenter s stated Minnesota participates in the Midwest Independent System Operator (MISO) system, which ensures de livery of least

- cost dispatch and reliable electricity service to Minnesota retail electricity customers. Commenter s said moreover, Minnesota's strong history of regulation keeps Minnesota electricity service as affordable, reliable and environmentally res ponsible as possible.

Commenter s stated the EPA's presumption that Minnesota existing NGCC can replace Minnesota existing coal resources, thereby delivering higher cost natural gas services throughout207 the state, ignores Minnesota's carefully managed resour ce balance without providing consideration of the price and reliability consequences to all Minnesota customers.

Comment 190: MN

- Sherco Unit 3 was offline in 2012

Response 190: See section VI of the final rule preamble of the CPP for a response to this
comment. The EPA performed a nationwide evaluation on the significan ce of unit

- level outages with respects to state level data. It has adjusted the baseline up for the state in this case to reflect the outage.

The following are summaries of the specific public comments under this comment:

Commenter s indicate d that the baseline calculation for 2012 for Minnesota must be corrected. Commenters stated Sherburne County Generating Station (Sherco) Unit 3 was offline for all of 2012 due to an unplanned outage, making the starting point of Minnesota's goal calculation atypical. The commenter s said the calculation should be corrected as this approximately 900 MW unit will be operating for the duration of the planning period and likely beyond.

Comment 191: MN

- Sherco 3, the EPA's Heat Rate Improvement Targets in Building Block 1 Are Unattainable

Response 191: See section V.C. of the final rule preamble of the CPP for the EPA’s response to this comment and c hapter 2 of the GHG Mitigation Measures TSD supporting t he final CPP for more information about Building Block 1.

The following are summaries of the specific public comments under this comment:

Commenter s stated t he heat rate improvements contemplated in Building Block 1 are not technically feasible for his o rganization because of previous improvements made to Sherco 3. Commenter s said in the case of Sherco 3, the heat rate improvements contemplated by Building Block 1 are not technically feasible because Sherco 3 is a more recently constructed plant, and SMMP A and Xcel have already made extensive emissions and efficiency improvements to the unit.

Commenter s stated, Sherco 3 is a highly efficient generator that has been equipped with state

- of

the

- art emissions control technology. Commenter s said at the time it was built, environmental controls accounted for roughly 30% of the $1.072 billion construction budget. Commenter s stated as of August 2010, $391,009,587 in emissions controls for Sherco 3 have already been invested . Commenter s said the unit's boiler was eq uipped with low nitrogen oxide burners and an overfire air system for NOx emissions control to limit the formation of nitrous oxides. Commenter s stated the unit was also equipped with state

- of

- the

- art control systems for sulfur dioxide and particulates, an d the unit has sorbent injection system to control mercury emissions.208 Commenter s stated further considerable resources to reduce Sherco 3's carbon emissions have been expended . Commenter s said in 2011, Sherco 3 underwent a major retrofit of the intermediat e and high pressure turbine sections to improve efficiency. Commenter s stated this upgrade cost $21 million. Commenter s said indeed, Sherco 3 has already made or is planning to make most of the efficiency improvements contemplated by the EPA under Building Block 1.

Commenter s stated given these prior and planned improvements, it will not be technically feasible to achieve an additional 6% reduction for Sherco 3 through further heat

- rate improvements. Commenter s said this reality presents practical and finan cial challenges. Commenter s said considerable resources in making improvements to Sherco 3 were invested with the expectation that the unit will run in the long term. Commenter s estimate d that Sherco 3 has an additional useful life of 30 years and has deb t financing on the unit that it will be servicing until at least 2028. Commenter s said thus, to the extent the Proposed Rule limits Sherco 3's ability to operate, it would greatly increase costs because not only would servicing the debt for the prior inve stments in the unit have to be continued , purchase replacement power to offset the reduction in Sherco 3's operations would also occur . Commenter s urge d the EPA to ensure that Building Block 1 will account for the technical feasibility of the contemplated improvements for individual units.

Comment 192: MN

- Minnesota Baseline Corrections

Response 192: See section VI of the final rule preamble of the CPP for a response to this
comment. The EPA has adjusted the baseline up for the state in this case to ref lect the outage. The EPA has also adjusted the capacity for Mankato facility. It currently still considers the Hutchinson units referenced as likely affected units.

The following are summaries of the specific public comments under this comment:

Commenter s stated o n September 16, 2014, the Minnesota Pollution Control Agency ("MPCA") submitted a letter to the EPA in Docket ID No. EPA

- HQ

- OAR

- 2013

- 0602 addressing certain technical issues that affect calculation of baseline emissions used to establish emission s reduction goals for Minnesota. Commenter s said in that letter, MPCA requested certain corrections to electric generating unit status and characteristics used to calculate Minnesota's goals, specifically addressing Northern States Power Minnesota Sherburn e County Unit 3 ("Sherco 3"), Mankato Energy, and Hutchinson Plant #2. Commenter s stated with respect to Sherco 3, the 938 MW coal

- fired generating unit was out of service during the entire calendar year of 2012. Commenter s said this was an unusual conditi on and does not reflect Minnesota's current and anticipated future reliance on this unit. Commenter s stated thus, as MPCA requests, Minnesota's 2012 baseline conditions should be recalculated to include generation at Sherco 3. Commenter s stated with respec t to Mankato Energy, the presumed potential generation capacity of this unit should reflect its current capacity of 375 MW. Commenter s said finally, as MPCA describes, Hutchinson Plant #2 generators 2 and 3 should be removed from the EPA's list of affected sources because they do not meet the criteria for affected units and Minnesota's natural gas combined cycle capacity should also be adjusted to remove this plant.209 Comment 193: MN

- Credit for New Hydro Power

Response 193: See section VIII. K . of the fin al rule preamble of the CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:

Commenter s stated t he EPA has not been clear on the role of hydropower in counting toward state compliance with the goals. Commenter s said however, because such hydropower is carbon free and will further reduce the need for new coal power, it should count toward compliance with Minnesota's goal. Commenter s stated for example, Minnesota Power is planning on brin ging a significant amount of new hydropower from Canada to its generation mix in the next decade, with hydro ultimately producing 10 to 15 percent of Minnesota Power's overall generation source. Commenter s stated Minnesota ratepayers, and especially the co mmenter s ' organization's members in northern Minnesota, will be paying for that hydropower through their rates. Commenter s said therefore, Minnesota and its ratepayers should receive compliance credit for such expenditures.

Comment 194: MN

- Carbon Emis sions Leakage

Response 194: See section VIII. L . of the final rule preamble of the CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:

Commenter s stated t he EPA's proposed Clean Power P lan does not address carbon emissions "leakage," and this is a crucial issue for Minnesota's manufacturers, economy and environment. Commenter s said many commodities made in the U.S. are traded globally and if Minnesota manufacturers experience energy cost s that our competitors in other states and countries do not, then Minnesota manufacturers likely sell less product and importers sell more. Commenter s stated using steel as an example, there are significantly more carbon emissions involved in shipping scra p from Minnesota across the ocean to Turkey or China, and then having that steel produced in those countries utilizing less costly but high carbon content electricity, and then the resulting emissions associated with the return shipping. Commenter s said as proposed, the EPA's proposed Plan could dramatically increase costs of natural gas and electricity, while providing off

- shore competition, and even competitors in other states, an advantage while at the same time creating carbon emissions leakage. Comment er s stated the result for Minnesota would be emissions reductions that are insignificant when compared to the increases in emissions that would occur elsewhere in the U.S. and internationally.

Comment 195: MN

- Minnesota would be forced to reduce carbon emissions by a higher percentage than other Midwestern states

.210 Response 195: See section I.A. of the final rule preamble of the CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:

Comm enter s stated forcing Minnesota to reduce its carbon emissions by 41% by 2030 is not fair. Commenter s said other Midwestern states do not have to reduce by such a high percentage.

Commenter s stated Sherco has already been asked to research shutting down only 1 of the older generating stations to make the environmental emission reduction while keeping the other around for back

- up or spare parts; reduced maintenance costs. Commenter s said they are already putting together the action plans to make the cataly tic reduction improvement on No.1& No. 2.

Comment 196: MN

- A change would mean that Minnesota only needs to further reduce its emissions by 30% rather than the EPA

- calculated 41%

. Response 196: For the EPA’s response to this comment, see the CO 2 Emiss ion Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenter s stated Minnesota has a strong RES that drives renewable energy developmen t in Minnesota as well as in neighboring states to serve Minnesota's load. Commenter s said the EPA used an in

- state only renewable generation figure of 9,454 Gigawatt hours ("GWh") for 2012 to calculate the baseline emissions rate. Commenter s stated the EP A has proposed that out

- of

- state renewable energy generation can be used for compliance purposes. Commenter s stated if out

- of

state renewable generation contracted to serve Minnesota load is included in Minnesota's baseline emissions rate, Minnesota alread y has 12,100 GWh of renewable energy generation that would count for Clean Power Plan compliance. Commenter s said this increase in renewable energy generation attributable to Minnesota reduces the gap between Minnesota's ultimate target and the status quo.

Commenter s recalculated Minnesota's proximity to its goal using more current and accurate energy efficiency figures. Commenter s said Minnesota tracks energy efficiency achievements through its Conservation Improvement Program ("CIP"). Commenter s stated t he sum of incremental savings from 2006 to 2012, assuming the same annual savings were achieved in 2011 and 2012, is 4,902 GWh, which is a conservative figure. Commenters stated once this sum is discounted to account for the fact that only 83% of retail sa les is served by in

- state generation and multiplied by 1.0751 to account for losses between the meter and the generator, we reach a figure of 4,373 GWh of energy efficiency savings in Minnesota in 2012.

Commenter s stated if out

- of

- state renewable energy a nd Minnesota's CIP energy efficiency figures are included in Minnesota's 2012 baseline emission rate, the baseline emissions rates drops from 1,470 lbs/MWh to 1,243 lbs/MWh. Commenter s said this change would mean that Minnesota only needs to further reduce its emissions by 30% rather than the EPA

- calculated 41% to comply with the 2030 Clean Power Plan target of 873 lbs/MWh.211 Comment 197: MN

- Minnesota should not be penalized for our early action and for being a national leader in greenhouse gas reduction policy

. Response 197: See sections VI.D., VIII.B, and VIII.C. of the final rule preamble of the CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:

Commenter s stated i t is imperative t hat Minnesota receive full credit for the costs of all early action in order for the Minnesota economy to remain competitive both nationally and internationally. Commenter s said it is also imperative that the EPA considers the cost of any supplementary act ion when setting Minnesota's CPP targets. Commenter s stated the Minnesota Next Generation Energy Act of 2007 ("NGEA") established a statewide renewable energy standard. Commenter s said Minnesota's early action by adoption of legislation such as the NGEA le d to significant repowering and emission reduction requirements which continue to successfully reduce statewide CO2 emissions. Commenter s stated Minnesota regulators also require all utilities in the state to file an Integrated Resource Plan ("IRP") that i ncludes consideration of CO2 environmental externalities. Commenter s said all Minnesota filed IRPs must demonstrate that recently deployed and proposed environmental control retrofits deliver emission reductions that comply with recent environmental regula tions addressing regional haze, fine particulates, ozone and mercury as well as including a range of CO2 emission costs. Commenter s urge d the EPA to consider that these early action and nation leading policy decisions have a true cost to current and future Minnesota ratepayers. Commenter s said early renewable energy deployment actions, along with demand side management conservation and efficiency programs, should allow Minnesota to be rewarded and credited for existing programs.

Commenter s stated using the year 2005 as a baseline for the CPP assures Minnesota credit for their existing programs and avoids any punishment for the more recent Minnesota early action initiatives. Commenter s said Minnesota's NGEA referenced 2005 as a baseline year for setting and tracking progress of the state's greenhouse gas emissions extending through 2030. Commenter s stated the magnitude of CO2 emission reductions in the state from Minnesota's early action more than satisfies Minnesota's "fair share" contribution towards meetin g overall United States climate policy objectives for improving the electric generating sectors emissions profile through 2030.

Comment 198: MN

- Retirements and Conversions o f Coal

- Fired EGUs

. Response 198: For the EPA’s response to this comment, see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenter s stated t he planned retirements of existing coal units in Minn esota will provide some additional emissions reductions.212 Commenter s stated the retirements will result in a net reduction in CO2 emissions. Commenter s said the exact level of avoided emissions will depend on how the coal units' generation is replaced in M innesota's energy mix. Commenter s stated in addition to retirements, two units (Laskin Energy Center Units 1 & 2) will be converted from coal to natural gas. Commenter s said these units generated 191,860 and 174,506 MWh in 2012, respectively. Commenter s st ated using a conservative estimate that 25% of the CO2 emissions from these units slated for retirement or conversion could be avoided, Minnesota's estimated 2030 emissions rate drops even further

- to 916 lbs/MWh. Commenter s said under this business

- as

- us ual scenario, the Clean Power Plan would only drive a modest 5% additional reduction in emissions to meet the 2030 target. Commenter s stated if 75% percent of the emissions from these units are avoided, Minnesota will surpass its Clean Power Plan target em issions rate in 2030 with no additional emissions reductions driven by the Clean Power Plan itself.

Commenter s stated these scenarios demonstrate that despite what seems like an ambitious target for Minnesota, meeting this target can be achieved or nearly achieved under a business

- as

- usual plan. Commenter s said Minnesota can continue to act as a leader in showing other states how to cost effectively achieve targets while simultaneously boosting the economy. Commenter s stated these scenarios also demonstrate that the Clean Power Plan can go further in pushing states to make deeper emissions cuts necessary to combat climate change.

Comment 199: MN

- H ydropower serving Minnesota retail customers

Response 199: See section VIII. K . of the final rule preamble o f the CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:

Commenter s said a nother CPP issue the EPA must clarify is the future use of hydropower in the state's energy portfolio. Comme nter s said Minnesota will increase its reliance on carbon free hydropower in the foreseeable future and energy producers that utilize this resource should be given credit. Commenter s stated the CO 2 reductions from hydropower production benefit Minnesotans regardless of whether the generation is sourced from existing or new generation resources or whether these resources are located within Minnesota. Commenter s ask ed that the EPA count all hydropower serving Minnesota retail customers towards state CPP compl iance goals.

Comment 200: MS

- Mississippi had 15th lowest carbon intensity rate, yet Mississippi's reduction goals are among the harshest

Response 200: See section I.A. of the final rule preamble of the CPP for the EPA’s response to this comment.

The fol lowing are summaries of the specific public comments under this comment:213 Commenter s stated that in 2012, Mississippi had the 15th lowest carbon intensity rate among the states, yet under the EPA's proposed Clean Power Plan, Mississippi's carbon intensity r eduction goals are among the harshest, requiring a 62 percent reduction from the so

- called 2005 baseline
year.

Comment 201: MS

- Goal is disproportionately low and would be devastating to Mississippi electric rates and hinder economic development

.
Re sponse 201: See section I.A. of the final rule preamble of the CPP for the EPA’s response to this comment. See section V of the preamble for how EPA revised its building block assumptio n s based on comments. Also see the Stranded Asset Analysis MEMO in th e Docket.

The following are summaries of the specific public comments under this comment:

Commenter s argued the goal for MS is disproportionately low and would have a devastating impact on MS electric rates, hinder economic development in MS.

Commenter s stat ed that the CO2 emission goals set for Mississippi by EPA are unreasonable, unachievable and unfair. Commenter s added that the goals established for Mississippi are well below the proposed 111(b) NSPA of 1,100 lbs./net MWh for coal and 1,000 lbs./net MWh f or gas. Commenter s stated that Mississippi's goal is well below the national average of 991 lbs./net MWh. Commenter s added that furthermore, the EPA's stated goal was a 30 percent national reduction of CO2 emissions below 2005 emission rates. Commenter s st ated that the final Mississippi goal of 692 lbs./net MWh represents a 64 percent reduction below the Mississippi 2005 CO2 emission rate. Commenter s concluded that this clearly shows a disproportionate requirement for Mississippi.

Commenter s stated that the Mississippi Energy Institute (MEI) estimates that under the Proposed Rule, Mississippi electricity users would have to spend an additional dollar 14.2 billion for the State to be in compliance by 2030. Commenter s stated that MEI estimates ninety

- eight per cent (98 percent) of that cost will go to build electric power generating facilities to meet the new generation mix goals, and most of that cost will be associated with meeting an aggressive renewable energy production target as our existing coal plants ar e prematurely retired. Commenter s stated that MEI's 2030 Base Case, without the Proposed Rule, shows a generation mix of 63 percent natural gas, 20 percent coal, 15 percent nuclear and 2 percent wood, for a total capacity of 16,079 MW. Commenter s stated th at the generation mix in 2030 under the Proposed Rule would be 68 percent natural gas, 13 percent nuclear, 8 percent solar, 6 percent coal, 4 percent wood and 3 percent wind for a total capacity of 18,127 MW. Commenter s expounded that the additional 2,000 MW is necessary because of the installment of large amounts of intermittent renewables to meet the target set by the EPA in the Proposed Rule. Commenter s added that the MEI forecasts that 3,000 MW of solar and 800 MW of wind would also require about 69,000 acres of land. Commenter s expounded that this cost does not include normal operational and maintenance cost through 2030, nor does it take into account the hundreds of millions of dollars of stranded cost as existing coal plants across Mississippi are pre maturely retired. Commenter s stated that for EPAM members, those coal plants continue to be financed214 with loans from the Rural Utility Service. Commenter s concluded that in short, the EPA Proposed Rule would have a devastating impact on Mississippi's elect ric rates and hinder economic development within the State.

Comment 202: MS

- Devastating impact on the rural customer base by preventing the ability to provide reliable and affordable electricity

Response 202: See section I.A., V.A, V.C., V.D., V.E., an d VII of the final rule preamble of the CPP and the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments unde r this comment:

Use of 2012 data . Commenter s said there are numerous reasons for the disproportionate requirement for Mississippi including the many flaws associated with each of the building blocks. Commenter s said in addition to the flaws associated with the building blocks, the EPA's use of 2012 generation and emission data for the calculation of the state's goal is unfair. Commenter s stated the EPA picked a single year when the US experienced a record warm winter and the lowest natural gas prices in ten years, with natural gas generators displacing coal at record levels in many areas. Commenter s said just 2 short years later, Federal Energy Regulatory Commission (FERC) in the Summer 2014 Energy Market and Reliability Assessment states, "In 2012, natural gas was 57 cents cheaper than coal resulting in record natural gas fired generation. Higher natural gas prices this summer (2014) should make natural gas

- fired generation less competitive with coal, with gas burn projected to be 2.5% lower than last summer and 17% below the summer of 2012." Commenter s stated the EPA should base calculations from data collected in 2005 or at the very least take a multiyear approach.

Cannot achieve goal with existing resources . Commenter s stated based on an evaluation of hist orical generation dispatch for an In

- State Market and assuming plants slated for retirement in EPA's rule are in fact closed down or output is reduced, the Mississippi CO2 goals cannot be achieved with existing resources. Commenters said modeling of histor ic system dispatch for the years 2008 and 2012 shows that the best emission rate that could be achieved was 751 lbs/MWh for 2008 and 769 lbs/MWh for 2012, but only after additional costs of $106 Million and $42.8 Million, respectively as economic dispatch was converted to low carbon dispatch. Commenters said EPA's 2020 MS goal of 732 lbs/MWh could not have been, and still cannot be, achieved.

Additional zero carbon sources needed to barely reach attain goal . Commenter s stated in order to achieve the CO2 goa l, installation of some form of zero carbon energy would be required

. Commenter s said if assumed that solar capacity could have been installed in the historical evaluation, as solar is the only possible renewable resource possible in Mississippi, 83.2 MW o f solar capacity would have been required in 2008 and 158 MW in 2012. (Commenter s stated this is based on an 18% capacity factor for solar which is typical for Mississippi.) Commenter s said the capital cost associated with this capacity is $119 Million in 2008 and $225.7 Million in 2012 and results in achieving a CO2 emission rate of 731.8 lbs/MWh in 2008 and 731.6 lbs/MWh in 2012. Commenter s stated these are barely below the 2020 CO2 goal for Mississippi and this is215 with the assumption that there are no un planned or extended planned outages at the Grand Gulf Nuclear Station or one of the natural gas combined cycle facilities. Commenter s said unlike other utilities in Mississippi, the owned generation and load served is located in the state and would all be subject to the inequitable goal the EPA established for Mississippi. Commenter s said with load growth, there would be even more solar energy needed by 2020, with costs by then running into the hundreds of millions.

Forced early retirement will cause stran ded assets and job losses . Commenter s stated a significant portion of generation and purchase power originates from coal

- fired generation. Commenter s said in recent times, a greater portion of Member System power needs has come from natural gas resources d ue to low natural gas prices. Commenter s stated however, history has shown natural gas prices to be cyclical, thus maintaining fuel diversity is important to his organization in providing stability to the cost of energy for Members. Commenter s said additio nally, coal fired generation has been equipped with flue gas desulphurization (FGD) systems to control sulfur dioxide emissions; retrofitted with Selective Non

- Catalytic Reduction (SNCR) systems to control nitrogen oxides (NOx); and is currently conducting testing on equipment and systems to meet the EPA's Mercury Air Toxic Standards (MATS). Commenter s said under this proposed rule, coal fired generation would be forced to shut down, resulting in significant stranded investment, much of which resulted from compliance with prior EPA rule making. Commenter s stated this stranded investment will impose additional costs for members and significantly cripple the ability to stabilize the cost of energy for members going forward. Commenter s said in addition to the i ssues surrounding the stranding of these investments, the EPA forced shut down of coal fired power plant will result in leaving 105 hard

- working, skilled employees without jobs.

EE measures less efficient for residential consumers . Commenter s stated the EP A's Proposed Rule requires electric consumers to implement additional energy efficiency (EE) measures thus placing an undue burden on consumers. Commenter s said the rural members served by his organization are hit especially hard by these additional standa rds and costs. Commenter s said in the Proposed Rule, the EPA fails to consider the characteristics of electric consumers served by rural electric cooperatives and instead makes broad EE assumptions across all states. Commenter s stated this fails to account for the fact that EE measures are generally less effective for residential consumers as compared to industrial and commercial consumers.

RE target unreasonable . Commenter s stated the EPA's proposal sets a target for Renewable Energy (RE) that is unreasona ble and unsubstantiated for the State of Mississippi. Commenter s said the EPA presumption that renewable options can provide any appreciable amount of energy does not reflect the realities of state meteorology. Commenter s stated Mississippi averages 52 inc hes of rainfall annually and wind is intermittent during most of his organization's peak load season. Commenter s said to build enough RE to reach the targets as proposed by the EPA, would require construct ion of inefficient RE generation thus again resulti ng in increased cost for Mississippians.

Lowest median household income, cannot afford rate increases . Commenter s stated the EPA also does not take into consideration that Mississippi ranks dead last in median household income in the United States at $39,2 95, well below the US average of $51,058. Commenter s said216 furthermore, the 2010 Hunger in America report showed that 47% of Mississippians reported having to choose between paying for food and paying for utilities.

EPA overstepped authority, current goal is unachievable, effects will be devastating

. Commenter s stated the EPA has overstepped the bounds of its authority, the current goal for Mississippi is unachievable, and this rule, as proposed, will have devastating effects on members. Commenter s said the EPA has no legal basis for issuing the Proposed Rule and it will not withstand judicial review. Commenter s stated the Proposed Rule violates the Rural Electrification Act, the actions proposed are beyond EPA's authority, the Proposed Rule does not conform to CAA Section 111 and it will result in a regulatory taking for coal units. Commenter s stated the Proposed Rule's requirement that coal units retire early will have severe financial impacts on his organization and will strand assets in which significant investment s were made

. Commenter s said these costs will drive up electricity rates which will devastate consumers. Commenter s stated the coal unit retirements proposed in EPA's rule will leave his organization unable to provide reliable service to its memb ers. Commenter s said increased reliance on natural gas combined cycle and RE, as contemplated by the rule, is not sufficient to close the generation gap created by the retirements and makes the power grid less resilient in the face of abnormal conditions.

BB1 goal cannot be achieved . Commenter s stated each Building Block that is part of the Proposed Rule is flawed and is based on unrealistic and inaccurate assumptions. Commenter s said the EPA's proposed six percent heat rate improvement across all coal unit s is not achievable and fails to recognize that most efficiency projects have already been undertaken. Commenter s stated there are no additional heat rate improvement projects that will realize this level of efficiency. Commenter s said the Proposed Rule al so does not include New Source Review exclusion for projects undertaken pursuant to Building Block 1.

BB2 70% CF not substantiated . Commenter s stated the EPA's proposal in Building Block 2 that natural gas combined cycle operate at a 70% capacity factor is not substantiated by any existing operations. Commenter s said more than a 32% capacity factor in combined cycle plants has never been achieved , and attaining a 70% capacity factor, if at all possible, would be uneconomical.

BB3 goals unrealistic . Commente r s stated the EPA's RE goals in Building Block 3 are unrealistic because solar and wind energy have not been proven as viable in Mississippi and the goals do not account for biomass, the sole source of Mississippi's RE in 2012. Commenter s stated the RE
goa ls also penalize early action as $77.5 million has already been invested in the Grand Gulf Nuclear Station's Extended Power Uprate Project.

BB4

- don't get credit for early actions . Commenter s stated the EE targets in Building Block 4 do not account for th e investments already made. Commenter s said successful EE programs are already in place. Commenter s stated there should be credit for these programs, rather than be punished with the daunting task of pursuing additional EE projects and meeting aggressive
g uaranteed levels of EE.217 Commenter s stated the goals set forth in the Proposed Rule cannot be achieved . Commenter s said attempting to do so will have a devastating impact on rural customer base by preventing the ability to provide reliable and affordable e lectricity.

Comment 203: MS

- Goals are based on inaccurate data and flawed methods, and don't treat renewable potential and NGCC potential in comparable fashion

Response 203: See section V.D. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 2 and the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commente r s stated proposed goals based on inaccurate data/flawed methodologies, and do not treat renewable potential and NGCC potential in a comparable fashion.

Commenter s stated that the calculation of the proposed standards in the Entergy utility region is based on inaccurate data and/or flawed methodologies, which results in interim and final emission rate standards that are unrealistic and overly stringent. Commenter s stated that the proposed standards also do not treat renewable potential and natural gas combi ned

- cycle ("NGCC") potential in comparable fashion. Commenter s expounded that while renewable potential is assessed on a regional basis (although the regions used do not match power market boundaries), NGCC potential is assigned strictly on a situs basis, with disparate results for the Entergy region.

Comment 204: MS

- Recommendations as a starting point for modifying the proposed rule with respect to Mississippi

Response 204: For the EPA’s response to this comment, see section V of the final preamble and CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP. EPA corrected its calculation of the Kemper facility generation and emissions.

The following are summaries of the specific public comments under this comme nt:

Recalculate Mississippi goal . Commenter s recommend ed that the Mississippi CO2 goal be recalculated based on the following:

1. Commenter s said remove the 631,874 MWh from the denominator of the Mississippi CO2 goal calculation for "at risk" nuclear generat ion as there is no "at risk" nuclear generation in the state of Mississippi.

2. Commenter s stated change the baseline for RE from 3% to 0%. Commenter s said this would make the 2029 goal 7% rather than 10% and result in the denominator decreasing218 from 5,458,43 0 MWh to 3,820,880 MWh. Commenter s stated this difference in MWh should be replaced with coal generation.

3. Commenter s stated remove EE from the goal calculation but allow achievements to count towards achievement of the goal. Commenter s said this would remo ve 718,276 MWh from the denominator of the 2020 goal and 4,920,527 MWh from the denominator of the 2029 goal as EE and be replaced with coal generation.

4. Commenter s stated there are two suggestions for the handling of the Kemper IGCC facility:

a. Commenter s sa id first, the EPA attributed 5,836,968 MWh to the Kemper IGCC facility. Commenter s stated this is an apparent mistake as this would require the facility to have an annual capacity factor of 115%. Commenter s stated this should be corrected.

b. Commenter s state d second, the generation attributed to Kemper should be removed from the goal calculation and replaced with coal fired capacity.

5. Commenter s stated replace generation shortfall in NGCC generation due to the difference in name plate capacity verses summer ti me capacity. Commenter s said this creates a 5,226,304 MWh generation shortfall for the year or 435,525 MWh per month. Commenter s stated multiplying 435,525 MWh by the 5 summer months provides a shortfall of 2,177,625 MWh that should be replaced with coal g eneration.

Commenter s stated the above changes resulted in revised CO2 goals for the State of Mississippi of 1,175 lbs/MWh in 2020 and 1,166lbs/MWh in 2029. Commenter s said this request is reasonable as it raises the state goal slightly above that of the n ew source standard currently being considered. Commenter s stated it makes absolutely no sense to have a standard for EGUs that is more stringent than that for new sources. Commenter s stated this revised goal also puts Mississippi near the National Average Goal and is a 43% reduction from Mississippi's 2005 CO2 emission rate well in excess of the desired 30% goal stated by the EPA.

Commenters stated Mississippi Power is currently building the nation's first integrated gasification combined cycle project with CCS in Kemper County, and rather than reward their research and development efforts, EPA's proposing a target more stringent than even this state

of

- the

- art technology could achieve.

Use actual lifetime average capacity for nuclear plants . Commenter s reco mmend ed that the 80.3% actual lifetime average for the nation's nuclear generating plants be considered rather than the 90% capacity factor used by the EPA when determining whether a state can meet CO2 goals established by the EPA.

Eliminate interim targe ts and let states determine final compliance date

. Commenter s recommend ed that the EPA abandon the Proposed Rule's interim emission targets and that the states as part of their implementation plans be allowed to establish final compliance dates that are un it specific and based on the stated determined end of the useful life of a facility. Commenter s stated this will lessen the economic impact of stranding an asset that has significant219 RUS debt and results in additional cost s and difficulty in ability to fin ance other projects and infrastructure required to meet the EPA's proposed rule.

Comment 205: MS

- The EPA's proposed final goal for Mississippi of 692 lbs CO2/MWh is overly aggressive and unachievable

. Response 205: For the EPA’s response to this commen t, see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenter s stated the EPA's proposed final goal for Mississippi of 692 lbs CO2/MWh is overly aggressive and unachievable. Commenter s said the approach to use regional and national averages with regard to the building blocks, without following through with any sort of feasibility analysis at the state level, resulted in unrealistic goal projections for some states. Commenter s stated for Mississippi, the goal path is riddled with unrealistic expectations. Commenter s said the EPA continuously indicates that the goal path is not the only compliance path, and while that may be true, it is impossible to ignore the fact that the unrealistic goal path provided an unrealistic goal for Mississippi. Commenter s stated before Mississippi can begin to move forward with the concept of developing a SIP under this proposal, the State mus t be allowed the opportunity to establish a realistic goal.

Comment 206: MS

- The EPA formula hardwires in an assumed emissions rate for the Kemper IGCC plant that essentially treats it as a highly

- efficient NGCC plant, which is inappropriate

. Response 2 06: For the EPA’s response to this comment, see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP. EPA has adjusted its calculation for the Kemper facility per the comment.

The following are summaries of the specific public comments under this comment:

Commenter s stated t he EPA formula hardwires in an assumed emissions rate for the Kemper IGCC plant that essentially treats it as a highly

- efficient NGCC plant, which is inappropriate. Commenter s said the EP A's assumed emission rate for Kemper is 806 lbs CO2/MWh, whereas the EPA's assumed average emission rate for Mississippi NGCC units is 848 lbs CO2/MWh. Commenter s stated yet it is crucial to emphasize that performance of the technology at Kemper has catego rically not been demonstrated.

Comment 207: MS

- The EPA's treatment of nuclear generation penalizes states with nuclear resources by including "at risk" nuclear in the denominator of the state goal220 Response 207: See section V.A. of the final rule prea mble of the CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:

Commenter s stated t he proposed rule notes that existing and under

- construction nuclear generation is CO2

- free generati on with relatively low variable operating costs. Commenter s said the EPA proposes to include six percent of each state's historical nuclear capacity in the state's goal.

Commenter s stated concern that a recent uprate at Entergy's Grand Gulf Nuclear Statio n has resulted in an overly stringent calculation of Mississippi's goal and that states with existing nuclear that have invested in upgrades are being unnecessarily penalized.

Commenter s stated the EPA's treatment of nuclear generation penalizes states wi th nuclear resources by including "at risk" nuclear in the denominator of the state goal. Commenter s said while the y do not believe it is appropriate to penalize a state for having any zero

- carbon emission nuclear capacity, the commenters ask ed that the EP A at least remove recent investment in nuclear generation, such as the Grand Gulf uprate, if nuclear generation remains in the denominator. Commenter s stated Grand Gulf completed a power upgrade on June 16, 2012, increasing its production by over thirteen percent for a total output of 1,443 MW. Commenter s do not believe that including the full power output of Grand Gulf (following the uprate) in the calculation is appropriate.

Comment 208: MS

- The proposed rule does not provide flexibility to Mississip pi.

Response 208: See section I.A. of the final rule preamble of the CPP and the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP for the EPA’s response to this comment.

EPA has regionalized building bloc k two in the final CPP in a manner that it believes addresses the commenters concern regarding the state

- focused impact of incremental NGCC at proposal.

See section VII of the preamble for the state goals in this final CPP Rule.

The following are summaries of the specific public comments under this comment:

BB2 would effectively eliminate coal

- fired generation . Commenter s stated b ased on the data the EPA used in calculating the emissions rate goals for Mississippi, 7500 GWh of electricity were generated in the state from coal

- fired resources in 2012. Commenter s said the re

- dispatch building block zeroes out that low

- cost source of electricity, by assuming that output from NGCC plants is increased to more than 63 percent of maximum annual generation (i.e., f ull capacity output every hour of the year). Commenter s stated this increase, from a 2012 level corresponding to 46 percent of theoretical maximum output, fully displaces all coal generation in Mississippi. Commenter s stated while the EPA asserts that this is not a requirement of the plan, but rather just one of the building blocks that can be considered in developing a compliance plan,221 along with the renewable energy and energy efficiency components, the commenters do not agree with the EPA that the projec ted levels of these other building blocks will be achievable for Mississippi. Commenter s stated the result is that Building Block 2 would effectively eliminate coal from Mississippi's resource mix. Commenter s said according to the EPA's goal computation da ta, Mississippi would be one of only five states that had in excess of 15 percent coal generation in 2012, but would have coal zeroed out as a result of redispatch under Building Block 2

. Illustration of lack of flexibility . Commenter s stated to illustrate the lack of flexibility afforded to Mississippi under the Clean Power Plan as proposed, consider the impact if Mississippi attempted to fashion a compliance plan targeting NGCC operation at 60 percent of potential maximum annual output instead of the 63 p ercent assumed by the EPA. Commenter s said under the Clean Power Plan methodology, that would "allow" retention of 1700 GWh of coal generation (with the assumed 6 percent heat rate improvement)

- less than one sixth of the 2012 generation level

- but would require offsetting increases in other building blocks. Commenter s stated implementation of the other building blocks to achieve the 2029 target emission rate of 692 lbs/MWh of CO2 would be extremely difficult, and certainly not adequately demonstrated. Co mmenter s said applying the renewable energy building block, Mississippi would have to more than double the quantity of renewable generation relative to the EPA

- derived target to an equivalent of more than 3800 MW of wind capacity by 2029. Commenter s stated only Texas, Iowa, and California currently have this much wind generation capacity. Commenter s said relying on increased energy efficiency under Building Block 4 would also require doubling the already difficult EPA

- derived target to accommodate retention of the same small portion of coal generation.

Commenter s stated even the practically infeasible scenarios described above would not represent useful flexibility, however, because the small amount of accommodated coal generation would likely not allow the continued operation of even one coal

- fired power plant under expected operational constraints. Commenter s said there are currently four coal

- fired generating facilities in Mississippi.

Commenter s stated the Watson units are currently expected to be conve rted to burn natural gas, and thus are not candidates for retention as coal

- fired resources going forward. Commenter s said of the remaining plants, only Morrow operated at a level in 2012 that would be accommodated under the flexibility scenarios under whi ch 1700 GWh of retained coal generation could be "purchased" at the expense of substantial increases in targets under Building Blocks 3 and 4. Commenter s stated Plant Daniel would also be a candidate for retention, since it is nearing completion of a $660 million environmental retrofit to install flue gas desulfurization for control of sulfur dioxide emissions. Commenter s stated however, the efficient operating point for the retrofitted units would be much higher than could be accommodated under any feasibl e flexibility scenario. Commenter s said moreover, a further planned retrofit to install selective catalytic reduction ("SCR") to control for nitrous oxide emissions, would result in operating restrictions that would require operation above 90 percent of ca pacity, likely in excess of 8000 GWh annually. Commenter s stated the nature of efficient and effective operation with SCR is that a plant must be either fully on or off, and cannot be operated at low load or cycled to provide load

- following service. Commen ter s said these operating realities also mean that Mississippi would not easily be able to attain its fuel diversity objectives through regional coordination. Commenter s stated marginal exchanges with other states via joint plans or regional trading222 would be insufficient to accommodate efficient operation of even a single coal

- fired plant in Mississippi.

Commenter s stated the lack of real flexibility is not only a question of the infeasibility of retaining any coal generation, but is also an issue with res pect to gas

- fired generation. Commenter s said because the Mississippi emissions rate goals throughout the 2020

- 30 compliance period are all substantially below the already low rate the EPA has assumed for existing combined cycle facilities, it is not possi ble for Mississippi to rely on gas

- fired generation to manage the challenges of increasing the levels of renewable generation and energy efficiency. Commenter s stated that is, because the emissions rate for existing NGCC units is well above the target rate s for the state, increasing NGCC generation only increases the amount of renewable energy and energy efficiency needed to meet the goals. Commenter s said thus, even though application of Building Block 2 results in an assumed capacity factor of 63 percent for existing NGCCs in Mississippi, rather than the maximum redispatch assumption of 70 percent, this does not imply that Mississippi has any more flexibility via extra "headroom" in gas generation. Commenter s stated since coal generation is effectively pro hibited under the plan, there is no opportunity to run the gas

- fired plants more to allow flexibility in achieving the other building blocks.

Commenter s said as proposed, the Clean Power Plan offers Mississippi no practical degree of flexibility. Commente r s stated rather, each building block would impose a significant and costly burden on Mississippi electricity consumers.

Comment 209: MO

- Rate Impacts Arising From the EPA's Proposed CPP

Response 209: For the EPA’s response to this comment, see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenter s stated meeting the EPA's unrealistic interim targets would require t he installation of 1,200 MW of NGCC capacity. Commenter s stated in addition, this capacity would need to be forced to run at capacity factors substantially in excess of what is dictated by conventional security

- constrained least cost economic dispatch prot ocols.

Commenter s stated compliance with the EPA's proposal would impose an additional $4 billion of cost on its Missouri residential, commercial and industrial customers. Commenter s said further examination of that analysis shows that between $1 billion a nd $2 billion of that additional cost would be incurred in the period 2019 through 2023, with electric rates being increased by 10%

- 15%, and perhaps more, depending upon the price of natural gas. Commenter s stated these are increases that customers can ill

- afford to pay, especially when the same emission reductions can be achieved by 2034 without incurring these excess costs.223 Comment 210: MO

- Proposed rules do not provide an opportunity for a state to receive credit for pre

- 2012 renewable energy project s
Response 210: See sections VI.D., VIII.B., and VIII.C. of the final rule preamble of the CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:

Commenter s stated m any of Missouri's exis ting renewable projects were developed in response to the MoRES; yet the proposed rules do not provide an opportunity for a state to receive credit for pre

- 2012 renewable energy projects.

Comment 211: MO

- Reliance on re

- dispatch makes it impossible to achieve the reductions mandated in the state goals

Response 211: See section V.D. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 2 and the CO 2 Emission Performance Rate and Goal Comput ation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenter s stated building block 2 is simply not attainable at all because MRES does not have any existing NGCC plant s to which it could re

- dispatch its coal generation. Commenter s said this is a significant concern because the Clean Power Plan relies heavily on building block 2 to attain almost one

- third of the reductions that are used to set state goals. Commenter s s tated this reliance on redispatch makes it impossible to achieve the reductions mandated in the state goals.

Comment 212: MO

- Missouri Can Cut Greenhouse Gas Emissions from Power Generation by 30 Percent & Criteria and Hazardous Air Pollution by 60 to 70 Percent; planned coal

- fired EGU retirements will achieve most of reductions required

Response 212: For the EPA’s response to this comment, see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

Th e following are summaries of the specific public comments under this comment:

Emission reductions expected

. C ommenter s stated more efficient use of existing infrastructure CO2 emissions in 2005 from coal, natural gas, and oil

- fired electrical power genera tion in Missouri were 83.4 million tons. Commenter s said 81.7 million tons of this came from the burning of 45.8 million tons of coal. Commenter s stated if the existing natural gas (NG) generating capacity was fully utilized, displacing a portion of the co al in supplying this same energy, 16.7 million tons less of CO2, 66.8 million tons of CO2 would be emitted, a 20 percent reduction in Missouri's overall GHG emissions from power plants. Commenter s stated NOx emissions would be reduced by nearly 45 percent. SO2, mercury, and a long list of additional224 HAP emission reductions of 50 percent could be achieved, utilizing existing infrastructure. Commenter s said additional CO2 reductions of up to 13.9 percent could be achieved by more fully utilizing nuclear and h ydroelectric generating capacities.

Commenter s stated recognition of the potential of this approach has been growing as states and nations explore readily deployable options for reducing GHG emissions. Commenter s said the chairman of the Federal Energy Reg ulatory Commission, Jon Wellinghoff, recently testified at a Senate hearing that natural gas, in combination with renewable resources and energy efficiency, could be a near

- term bridge until zero

- carbon technology is widely accessible.

Already announced pl ant retirements . Commenter s stated in addition to the reductions Missouri can achieve through compliance with existing renewable and efficiency policy, Missouri will achieve over half its needed reductions simply by following through with the plant retirem ents already announced for the near future.

Commenter s said Missouri's mass

- based reduction target is approximately 15.13 million MT by 2030. Commenter s stated under this mass

- based analysis, more than half of that required reduction (57%) will be made up by plant retirements. Commenter s said Ameren Missouri plans to retire its Meramec plant by 2022, making up 28% of Missouri's total needed reduction and 67% of its own needed reduction.

Commenter s performed an analysis of the mass

- based reductions required by each electrical generating unit (EGU) in Missouri, as compared to the reductions that will be achieved by plant retirements already announced for the near future. Commenter s said both of these analyses demonstrate that Missouri's required reductions ta rget is easily achievable with few additional commitments from Missouri EGUs.

Comment 213: MO

- Affected Units

Response 213: The EPA believes all coal steam EGUs greater than 25 MW are likely affected units under the final CPP applicability criteria. Uni ts GT1, ST1, and 2 are excluded because they have a nameplate capacity of 25 MW. This inventory of likely affected units does not constitute an applicability determination. See section VII.E of the preamble for further discussion of how future applicabil ity status changes interact with state goals.

The following are summaries of the specific public comments under this comment:

Commenter s stated EPA defines an affected electric generating unit (EGU) "as any boiler, integrated gasification combined cycle or combustion turbine that (1) is capable of combusting at least 250 Million Btu per hour; (2) com busts fossil fuel for more than 10 percent of its total annual heat input; (3) sells greater than 219,000 MWh per year to a utility distribution system; and (4 ) was not in operation or under construction as of January 8, 2014 (emphasis added)" (Page 34854, Section V (C) ). The commenter s stated according to this definition, the EPA has erroneously included Blue Valley (BV) Units 1 and 2 in Independence, Missouri as regulated units in its October 2014 NODA Data Files: 2010 and 2011 Unit Level Data Using eGRID Methodology (xls). The commenter s said BV Units 1 and 2 have identical generators rated at225 29,411 KVA (= 24.999 MW or KVA x 0.85 power factor) and turbines r ated at 22 MW. The
commenter s said the turbines restrict the net available energy sold to utility distribution system to a theoretical maximum of 192,720 MWh (22 MW x 8,760 hr); and, therefore BV units 1 and 2 must be excluded as affected units. The commen ter s added the maximum net energy sales for these units in the last 20 years was 117,637 MWh, well short of the theoretical maximum MWh.

Commenter s stated although BV Unit 3 has a generator rating of 65 MW, a turbine rating of 58 MW, and a theoretical ann ual maximum energy production of 508,080 MWh, it does not operate as a base load unit having an average capacity factor of only 18% over the last 20 years. The
commenter s said it is apparent from the annual net energy sales for Blue Valley Unit 3 from 1994 to the present that the maximum net sales for BV3 was 195,188 MWh with an average of 92,309 MWh over the last 20 years. The commenter s stated that Blue Valley Unit 3 should also be excluded as an affected unit.

Commenter s stated EPA defines an affected E GU as a "steam generating unit that has a base load rating greater than 73 MW (250 MMBtu/h) heat input of fossil fuel (either alone or in combination with any other fuel) and was constructed for the purpose of supplying more than 219,000 MWh net electric o utput to a utility distribution system on an annual basis" (Page 34954, Section XII, section 60.5795 (b) (1)). The commenter s said although this definition of an affected EGU is inconsistent with that presented in Section V of the proposed rule, BV 1 and 2 must still be excluded because they also do not meet either of these conditions. The commenter s said according to this section's definition, BV 3 must also be excluded as an affected EGU since its rating is less than 73 MW; BV 3 net sales have not exceede d 219,000 MWh for the last 20
years.
Commenters, state air quality permitting authorities, requested that the EPA work with the State of Missouri after the section 111(d) applicability criteria are more clearly defined so that calculation of the goal for the State of Missouri will reflect use of an accurate list of affected sources in the final rule.

Comment 214: MT

- Revisions

Response 214: For the EPA’s response to this comment, see Chapter 4 of the GHG Mitigation Measures TSD for CPP Final Rule and the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP. See section V.A. of the final rule preamble of the CPP for more information about Building Block 4. See sections VI.D., VIII.B., and VIII.C. of the final rule preamble of the CPP for more information about early action credit.

The following are summaries of the specific public comments under this comment:

Commenter s stated on page 4

- 22 of the GHG Abatement Measures TSD, the renewable electricity numbers sho wn in Table 4.6 for Montana are incorrect for all years and do not match the numbers used elsewhere by the EPA. Commenter s said for instance, in 2030, Montana's renewable electricity target should be 2,723 GWh rather than the 2,848 GWh shown in the table.226 Commenter s stated the renewable energy percentage numbers for Montana in Table 4.7 on page 4

- 24 are also incorrect (most likely because they are using the MWh numbers from Table 4.6).

Commenter s stated Montana has adopted the 2009 IECC not the 2006 as the text using EPA's state map indicates. See: http://bsd.dli.mt.gov/bc/current_codes.asp

. http://www.energycodes.gov/adoption/states/ montana

.
Commenter s stated the EPA improperly assumes that Montana can implement additional demand

- side EE, such that consumers reduce energy use by as much as 12% by 2030 to offset coal

- fueled EGU generation. Commenter s said as with the EPA's renewable e nergy, the EPA presumes to dictate "best practices" to states for energy conservation programs provisions. Commenter s stated but, as with renewable energy, the EPA neither has the expertise nor the authority to dictate to Montana what "best practices" are for adopting programs that conserve energy. Commenter s asserted this overall method has resulted in a goal which is far too ambitious for Montana.

Commenter s stated the Proposed Rule does not meet the statutory standard of showing that its EE projections h ave been "adequately demonstrated." Commenters said i ndeed, the sheer magnitude of the EPA's EE goal is staggering. Commenter s said the EPA projects that in 2030, electricity usage will be 10% below the business

- as

- usual case. Commenter s stated according to the EPA, electric consumption in 2030 will be little more than it is today and will actually decline between 2020 and 2030. Commenter s stated according to the U.S. Census, population is expected to rise to 358,471,000 people by 2030, an increase of 37,1 08,000 from the projected 2015 level of 321,363,000, or an average of more than 2 million people per year. Commenter s stated further, the EPA has not evaluated this issue relative to Montana. Commenter s said the EPA's proposal thus arbitrarily assumes that Montana's population and economy can grow, much less thrive, without electricity growth. Commenter s said the EPA's conclusion is unsubstantiated.

Commenter s stated using the EPA's cost assumptions, commenter s project additional energy efficiency costs to be $0.6 billion on a 2013 net present value (NPV) basis. Commenter s said however, since the EPA makes the assumption that no reduction in Montana's coal

- fired generation would occur, the additional EE is assumed to result in Montana exporting additional

en ergy out of state, which would lead to additional revenues that would offset some of the added EE costs. Commenter s stated using a projected price for these exports at the EPA's wholesale energy prices, a $0.32 billion shortfall exists that would have to b e made up, presumably through additional charges to retail customers. Commenter s said the higher costs to the utilities, coupled with a lower sales base over which fixed costs are recovered, are projected, in turn, to result in higher prices for consumers.

Commenter s stated further, Montana ratepayers have already invested in EE programs and renewable energy. Commenter s said but under the Proposed Rule, these ratepayers would receive little credit for the beneficial impact that these investments may have. C ommenter s stated instead, allowing Montana to count pre

- 2020 emission reductions would recognize the benefit of these contributions and would avoid sending a distorted price signal to states to wait until 2020 to implement emission reductions. Commenter s s aid the most reasonable approach to providing early action credit would be to allow any emission

- reducing actions that take place after the baseline year to count toward compliance with state goals. Commenter s said such emission227 reductions would not alread y be included in state goal calculations, so there would be no risk of double

- counting. Commenter s stated accordingly, Commenter s urge d the EPA to provide early action credit for at least those pre

- 2020 actions that states can demonstrate took place any ti me after the date of the Proposed Rule.

Comment 215: MT

- Montana's Target Should Be Increased

Response 215: For the EPA’s response to this comment, see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CP P. At proposal, EPA relied on a within state application of the building blocks which limited the potential of BB2 to have an impact in Montana as the state had not existing NGCC units. In this final rule, EPA has modified its approach to a regional asse ssment of the building blocks. As a consequence, Montana’s state goal has been adjusted from the proposed level.

The following are summaries of the specific public comments under this comment:

Commenter s oppose d the proposed carbon reduction target for Mo ntana. Commenter s said Montana received the second weakest carbon reduction goal in the nation. Commenter s stated the 21% rate reduction goal by 2030 is based on calculations that underestimated Montana's clean energy potential. Commenter s said Montana cou ld easily meet a 21% rate reduction goal without doing much beyond business as usual. Commenter s stated Montana can cost

- effectively replace coal with renewable energy and energy efficiency while saving consumers money, benefitting the economy, and creatin g sustainable jobs. Commenter s said given the urgency of addressing climate change, the EPA should set a more reasonable goal for Montana of 30% reduction by 2030.

Comment 216: MT

- Tapping into our abundant renewable energy and energy efficiency

resourc es could transform Montana's electricity mix and make power more affordable for Montanans

. Response 216: For the EPA’s response to this comment, see the CO2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Montana's Current Electricity Mix . Commenter s stated Montana ’s current electricity mix exports most of the electricity generated in state. Commenter s said in fact, only half of t he electricity generated in Montana is consumed in state. Commenter s stated this is due to the relatively small population size compared with large, centralized electricity generation facilities

- primarily the Colstrip Generating Station in Colstrip, Mont ana. Commenter s said the Colstrip plant is one of the highest greenhouse gas polluters in the nation, pumping an average of 15 million tons of carbon dioxide into the atmosphere each year. Commenter s said the Colstrip Generating Station is a four unit, 2,0 94 megawatt facility in southeastern Montana. Commenter s stated Colstrip is the second largest coal plant west of the Mississippi River and is owned by a228 combination of regulated utilities and unregulated electricity suppliers. Commenter s said Puget Sound Energy based in Washington State owns the largest share of Colstrip and PPL, based in Allentown, Pennsylvania, has the second largest ownership share. Commenter s stated most of the owners reside in the Pacific Northwest . Commenter s said only NorthWestern E nergy (NWE), which owns 222 megawatts of Colstrip Unit 4, provides regulated electricity service to Montana.

Commenter s stated at present, electricity generated in Montana comes from two primary sources: coal and hydropower. Commenter s said about 50% of Mo ntana's electricity generation comes from coal. Commenter s stated hydropower makes up about 40% of the electricity generation mix while wind comprises about 5.0% of electricity generated in Montana. Commenter s said the remaining fraction of electricity gen eration comes from natural gas and petroleum.

Commenter s stated Montana's currently coal

- dominated electricity mix is unsustainable and outdated and does not represent the vast clean energy potential. Commenter s said tapping in to the abundant renewable e nergy and energy efficiency resources could transform Montana's electricity mix away and make power more affordable for Montanans.

Comment 217: MT

- RE

Response 217: The EPA has revised its block three quantification based on comments and our further con sideration. See Section V.A. and V.E of the final rule preamble of the CPP for more information about building block three.

The following are summaries of the specific public comments under this comment:

Commenter s stated a recent National Academy of Scie nces study ranked Montana's wind energy potential as tied with Kansas for second best wind potential in the United States. Commenter s said the study estimated that Montana's abundant and high quality wind resource could meet in

- - state energy needs 370 time s over.

Commenter s stated although Montana ranks second in wind energy potential, it only ranks 23rd in the amount of installed wind energy capacity. Commenter s said wind makes up over 90 percent of the eligible renewable energy projects developed to mee t Montana's Renewable Energy Standard (RES). Commenter s said the state RES requires regulated utilities to meet 15 percent of their electricity demand with renewable resources by 2015. Commenter s stated Montana's high quality wind resource enabled utilitie s to meet the 15 percent standard in 2012

- three years earlier than legally required. Commenter s said Montana has developed over 600 megawatts of wind energy in less than ten years.

Commenter s stated Montana could develop over 5,000 megawatts of wind ene rgy by 2030. Commenter s said that is enough wind energy to power nearly 5 million homes. Commenter s stated the EPA should base its renewable energy building block on this type of wind potential, not outdated state policies like the RES.

Commenters stated t hat, the states should adopt a renewable portfolio standard or adopt a more aggressive standard if they already have one in place. Commenters said that the amount of22 9 renewable power EPA is planning to bring online in the compliance timeframe of the rule is not based on accurate assumptions and is not reasonable or feasible.

Commenters stated that, EPA started with the wrong numbers and applied an unrealistic growth factor which resulted in the wrong conclusion. Commenters said that EPA used all the wind
pow er generated in Montana in their calculation including the wind power exported to other
states. Commenters said renewable energy exported out of Montana should not be required when setting the state's goals. Commenters said that the effect of the error wil l improperly increase the stringency of Montana's goal.

Commenters stated that, by 2030 Montana would have to add between 2.7 and 4.4 million MWh per year of new renewable energy resources to comply with the Proposed Rule. Commenters said, the generation r esources would range from initial investment from $0.56 billion to $3.25 billion (2013 NPV). Commenters said that, an additional cost of between $0.06 and $0.14 billion (2013 NPV) is needed to improve the transition infrastructure. Commenters said that the increase in transition cost were not included in the EPA estimated impact cost. Commenters said that including the generation and transmission cost will be range of $0.62 and $3.38 billion (2013 NPV) to comply with the Proposed Rule. Commenters said that pricing these exports at EPA's projected wholesale energy prices results in a projected $775.6 million shortfall.

Comment 218: NE

- general goals

Response 218: For the EPA’s response to this comment, see the CO 2 Emission Performance Rate and Goal Computat ion TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenter s stated if the CPP rule as proposed is to maintain flexibility and adherence to the intent of the CAA, [then] the commenter s request ed EPA re

- evaluate its assumptions in setting the emission standards for NE and surrounding states, and to consider the limitation of resources that individual facilities will need to address, including: reliability of wind energy rel ative to reliability and affordability; multistate service region and allocation of emissions reductions requirements.

Comment 219: NE

- incorrect data for NE NGCC plants used by the EPA in calculation of NE goal

Response 219: For the EPA’s response to th is comment, see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP. In regards to Beatrice Power Station, the EPA relies on summertime capacity reported in this final rule. This appears to address the con cern raised by commenter s as the summertime capacity is significantly lower than nameplate. Regarding the Terry Bundy Generating Station, the prime mover type of230 u nit 4 was changed to GT and the unit was consequently excluded from the baseline inventory o f likely affected units.

The following are summaries of the specific public comments under this comment:

Commenter s stated data used by EPA in the calculation of the CO2 emissions goal relating to existing NGCC capacity located in Nebraska is incorrect. The commenter s said the incorrect data used resulted in an over calculation of existing NGCC capacity located in Nebraska and has caused an error in the calculation of the CO2 emissions goal relating to existing NGCC capacity located in Nebraska. The comme nter s d id not believe that these inaccuracies substantially impact the Nebraska target, but nonetheless the corrections should be addressed.

Commenter s said there are two combined cycle facilities located in Nebraska; they are the Beatrice Power Station, ORIS Code 8000, operated by the Nebraska Public Power District, and the Terry Bundy Generating Station, ORIS code 7887, operated by the Lincoln Electric System.

Commenters said the nameplate capacity (MW) data used by EPA for the Beatrice Power Station is incorrect; the combined cycle system at the Station consists of two CTs and one Steam Turbine. C ommenter s said the data used by EPA listed each CT at 104.7 MW and the Steam Turbine at 93.9 MW; each CT is actually rated at 76.6 MW; the Steam Turbine is rat ed at 93.9 MW.

Commenters said the data used by EPA for the Terry Bundy Generating Station is also incorrect; the combined cycle system at the Station consists of two CTs and one Steam Turbine; the Station also has one simple cycle CT. C ommenter s said the data used by EPA listed all three of the CTs at the Station as combined cycle units; only two of the CTs are combined cycle; the nameplate capacities listed for all the units were correct.

Comment 220: NV

- goals

Response 220: For the EPA’s response to this comment, see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment: Final

Commenter s assert ed that available credible evi dence requires that the numeric values in each block used to calculate the final goal must be re

- evaluated and a new goal recalculated. Commenters said t he following Scenarios were evaluated by the Nevada Agencies that reflect more feasible goals:

• Scenari o 1 contemplates the retirement of Valmy in 2025 pursuant to the current PUCN schedule; the continued operation of TSPP through 2030; a 1.5% heat rate efficiency improvement at TSPP; the use of USEPA's alternate RE; and USEPA's proposed EE values.231 • Scenari o 2 contemplates Valmy's retirement in 2025; TSPP's continued operation through 2030; a 1.5% heat rate efficiency improvement at TSPP; the total Nevada RE generation minus exported RE; and USEPA's proposed EE values.

Commenter s said the above two calculat ions respect the remaining useful lives of Valmy and TSPP, as required by the plain language of Section 111(d) of the Clean Air Act; the first uses the alternative RE approach, whereas the second calculation removes the exported RE from the goal computatio n. The commenter s said the Nevada Agencies believe that both goal computations reflect more feasible goals that consider the remaining useful lives of the affected sources. The
commenter s added the Nevada Agencies seek a firm commitment from the USEPA that it will work with the Nevada Agencies on the goal calculation before the final rule is issued.

Interim

Commenter s stated despite EPA's statements that that the Proposed Rule is not intended to force a state to shutdown coal plants, the 2020 interim emis sion limit of 697 lb/MWh proposed by EPA would require Nevada to shutter the State's coal

- fired fleet, including the TS Power Plant. The commenter s said the closure of a facility under Section 111(d) is per se unreasonable; moreover, an EPA action that res ults in the forced closure of a facility with more than 30 years of useful life remaining, at stranded costs estimated at $450 million, would constitute a regulatory taking. The commenter s said EPA has neither the constitutional nor the statutory authority to finalize the Nevada emission limit in light of these realities.

Commenter s stated EPA claims that the 10

- year phase

- in period is intended to mitigate the stringency of the standard; in the case of Nevada, however, the 2020 limit would require the State to shutter its coal

- fired fleet of EGUs. The commenter s said specifically, 2020 is the mandated date by which states must achieve the reductions set forth in Building Blocks 1 and 2; by 2020, the EPA

- mandated CO2 emission rate for Nevada would drop from t he baseline level of 1,091 lb/MWh to 697 lbs/MWh (a 37% decrease). The commenter s said at this emission rate level, there is no allowance for coal

- fired generation after 2020; the increment between the 2020 and the final 2030 goals simply reflects the year

- to

- year impacts of Building Blocks 3 and 4 for the period of 2020

- 2030, which do not substantially reduce the emission rate from 2020 levels. The commenter s said the impossibility of meeting this target reflects the unrealistic increase in NGCC utilizatio n by 2020, and EPA's failure to properly account for Nevada's substantial investment in renewables prior to the 2012 baseline year.

Commenter s stated in calculating the interim performance goals, EPA assumes that all of Nevada's NGCC units would increase u tilization to approximately 50% by 2020; as an initial matter, a substantial shift to NGCC generation over a six

- year period is practicably unworkable and fails to account for substantially higher natural gas utilization in the summer months, when

excess c apacity is simply not available. The commenter s said Nevada does have over 5 GW of NGCC generating capacity, which is located in southern Nevada; this generating capacity was constructed largely to accommodate summer electrical loads in the Las Vegas area and in southern California. The commenter s said in the summer months, load demands in these areas can be double of the winter months. The commenter s said although there may appear to be excess NGCC on an annual basis, that generation is not likely to be av ailable during the summer months to make up for the lost coal generation. The commenter s said by averaging the excess232 NGCC capacity over a year, EPA comes up with an unreasonable requirement for increasing NGCC utilization in Building Block 2, which in tur n results in an unreasonable 2020 interim emission limit.

Comment 221: NV

- affected sources

Response 221: The EPA considers all coal steam units with a nameplate capacity above 25 MW to be likely affected units. This does not constitute an applicability determination, but EPA has left TS Power Plant in its inventory of likely affected EGUs. See section VII.E of the preamble regarding future changes in applicability status.

The following are summaries of the specific public comments under this comment:

Co mmenter s stated the Proposed Rule improperly designates the TS Power Plant as an "affected steam generating EGU" for purposes of calculating the baseline and the state emission "goals" for Nevada; as a result, the TS Power Plant must be included in the Nev ada plan implementing EPA's performance standards. The commenter s said the TS Power Plant, however, is unique among the facilities that EPA asserts are regulated under the Proposed Rule; specifically, Newmont constructed the TS Power Plant for the purpose of supplying more than 85% of its potential electric output to Newmont's mines; therefore, the TS Power Plant is not an "affected" EGU and should be excluded from the final rule and from development of the Nevada plan implementing the final standards.

Comm enter s stated consistent with its stated purpose, NNEI sells a limited amount of the electricity generated at the TS Power Plant to NV Energy for distribution to the grid. Commenters stated t he excess power that is not destined for Newmont's mine sites is sold to NV Energy; this sliver of the TS Power Plant's total generation is the only electricity that is sold to a utility distribution system; to facilitate the delivery of power from the TS Power Plant to the various mine sites, NNEI entered into two agre ements with NV Energy:

• Confirmation Agreement (August 22, 2007): This agreement between NNEI and NV Energy provides for the sale of power from the TS Power Plant to NV Energy; specifically, the agreement partitions the power generated at the TS Power Plan t into three blocks, designated Blocks 1,2 and 3 and specifies the contract power purchase price for each block; Block 1 is power sold to NV Energy and is, in effect, payment to NV Energy for ancillary services and to guarantee service to Newmont mine site s; Block 2 power is power sold to NV Energy and destined for re

- purchase by Newmont at the individual mine sites; Block 3 power is excess power available for sale by NNEI to NV Energy or other third parties.

• GS

- 4

- NG Electric Service Agreement between NV E nergy and Newmont U.S.A. Ltd. dba Newmont Mining Corporation (August 22, 2007): This agreement specifies the energy rates and conditions for the purchase of TS Power Plant

generated power from NV Energy at the Newmont mine sites; the rate schedule233 includes Newmont's cost of production plus transmission and distribution costs established by NV Energy.

Commenter s said the Block 1 power is payment for the use of NV Energy's transmission system and therefore is not intended for sale to a "utility distribution system." C ommenter s said the Block 2 power is generated for transmission to Newmont's mines, and does not enter a "utility distribution system." C ommenter s said the Block 3 power which is the excess power sold to NV Energy for distribution to the grid. C om menter s said consistent with the stated purpose for construction of the TS Power Plant, over the eight years that the plant has been operational (including a partial year during plant commissioning), an average of 73% of the electricity generated by the TS Power Plant was sent to Newmont's mines, TS Power Plant continues to operate in support of its narrow purpose: to provide reliable electricity to Newmont's mining operations.

Commenter s stated the TS Power Plant is not an affected EGU subject to the Prop osed Rule because it was constructed with the express purpose of serving an industrial load, and only a small percentage of the total power generated at the facility is sold to a utility distribution system. C ommenter s said the Proposed Rule does not conte mplate the unique attributes of an EGU that is not part of an interconnected grid, which further supports the exclusion of the TS Power Plant from the scope of this rulemaking. C ommenter s said only Building Block 1 could be applied to the operations of the TS Power Plant, but it is unreasonable to assume a 6% heat

- rate improvement at a six

- year old, highly efficient facility. C ommenter s said inclusion of the TS Power Plant in the final rule would result in the imposition of an unreasonable and technically i nfeasible emission limit in a manner that would require the premature closure of the facility and constitute an unconstitutional regulatory taking. C ommenter s request ed that EPA expressly provide in the final rule that the TS Power Plant is not an "affecte d" EGU and should not be included in the rule's baseline calculations or in Nevada's Section 111(d) implementing plan.

Commenters stated that the TS Power Plant does not meet the proposed applicability criteria and must be excluded from the final rule beca use this plant was constructed for the express purpose of generating power for Newmont's mine sites in northern Nevada. Commenters believed that the entire premise of the proposed rule is the interconnected nature of the electrical grid, and
commenters con cluded that the proposed rule should not apply to an EGU whose purpose is to support industrial activities. Commenters requested that the final rule exclude the TS Power Plant from the calculation of the Nevada emission limit and clarify that the TS Power Plant should not be included in the Nevada plan as an affected EGU because the TS Power Plant was not constructed for the purpose of supplying more than one

- third of its "potential electric output" to the grid.

Comment 222: NV

- BSER

Response 222: See section V.A. of the final rule preamble of the CPP for the EPA’s response to this comment

. The following are summaries of the specific public comments under this comment:234 Commenter s stated Newmont expended more than $600 million in constructing the TS Powe r Plant, in reliance on existing regulations, and to ensure a continued, reliable electricity supply for its operations. C ommenter s said TS Power Plant is a new facility and could not achieve the 6% heat rate improvement either alone, or when averaged with Nevada's remaining coal

- fired EGUs. C ommenter s said the remaining Building Blocks are inapplicable to the TS Power Plant and therefore cannot constitute BSER for the facility; moreover, when applied statewide, application of the first two Building Blocks would result in closure of all of Nevada's coal

- fired EGUs, including the TS Power Plant. C ommenter s said the cost of such a performance standard is per se unreasonable; moreover, the approximately $450 million in stranded assets resulting from forced earl y retirement of the TS Power Plant would result in an unconstitutional taking.

Comment 223: NV

- BB1

Response 223: See section V.C. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 1.

The following are summaries of the specific public comments under this comment:

Commenter s stated the TS Power Plant is one of the newest coal

- fired power plants in the country; as a new power plant, numerous efficiencies were incorporated into the design in order to achieve the lowest possible heat rate. C ommenter s said due to a number of factors, achieving the 6% improvement in heat rate as proposed by Building Block 1 for the TS Power Plant is considered unrealistic and unachievable.

Commenter s said th e 6% heat rate improvement scenario is based largely on methods described in the S&L Report and incorporated in the GHG Abatement Measures TSD; specifically, EPA designated nine methods described by S&L as best practices, representing a 4% improvement and four additional methods designated as equipment upgrades with the potential for a 2% improvement in heat rate. C ommenter s said the majority of these methods simply are not applicable to the TS Power Plant. C ommenter s said of the various methods described b y EPA as justification for the Building Block 1 heat rate improvement, the majority are not applicable to the TS Power Plant because (1) the proposed upgrade already has been incorporated into the design of the TS Power Plant; (2) as a new facility, age

- re lated degradation of various components that would negatively impact heat rate has not occurred, making equipment replacements unnecessary; and (3) equipment designated for upgrades (i.e. wet scrubber, ESP) is not installed at the TS Power Plant because th e facility uses other emission control technologies.

Commenter s said of the thirteen methods included in the EPA analysis, only one, installation of a neural network system, has the potential to be applied at the TS Power Plant. C ommenter s said the S&L re port indicates that a neural network could improve heat rate by between 0% and 1.5%. C ommenter s said installation of a neural network

- which based on industry experience involves a substantial learning curve and does not react consistently to different ty pes of coal

- at a cost of hundreds of thousands of dollars, for negligible (or even non

- existent) heat rate improvements is simply not reasonable.235 Comment 224: NV

- RE

Response 224: See section V.E. of the final rule preamble of the CPP for the EPA’s re sponse to this comment and more information about Building Block 3.

The following are summaries of the specific public comments under this comment:

Commenter s stated the Nevada Agencies found that several RE facilities were excluded from the USEPA's calcul ations for Nevada's RE and emission rate goals. C ommenter s said based on data from NV Energy's 2012 RPS compliance report, 372,621 MWh of RE generation were excluded from the USEPA's calculations. C ommenter s said including this "missing RE generation," Nev ada's total RE generation for 2012 was 3,359,251 MWh. C ommenter s said using this statewide total, the percent of exported RE is 23%, leaving 2,540,728 MWh of creditable RE.

Commenter s stated in order to determine Nevada's new RE goal assuming RECs can be used for compliance, the USEPA's methodology for calculating Nevada's RE goal was reviewed. C ommenter s said the Nevada Agencies found that the USEPA used the 2012 total RE generation reported under EIA Form

- 923 to calculate Nevada's RE goal. C ommenter s sai d the RE generation reported on this form is not accurate. C ommenter s said based on publicly available information on the power purchase agreements (PPAs) for a number of facilities in Nevada, 800,523 MWh of RE in 2012 was generated for out

- of

- state use. C ommenter s said this constitutes 27% of the 2,968,630 MWh (Nevada's total RE generation) used to calculate Nevada's final (2029) RE and emission rate goals.

Comment 225: NV

- EE

Response 225: See section V.A. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 4.

The following are summaries of the specific public comments under this comment:

Commenter s stated Nevada's housing stock is new, limiting Nevada's ability to deploy energy efficien cy measures. C ommenter s said Nevada has experienced its large growth primarily in the past 20 years and thus does not have significant housing stock that is old, inefficient, and ripe for energy efficiency measures. C ommenter s said to add some perspective, Nevada's population was only 285,278 in 1960; it grew to 1,201,833 in 1990 and more than doubled by 2010 to 2,700,551. C ommenter s said accordingly, Nevada's efforts at DSM are limited, in part, by the large amount of newer housing stock and the fact that Nevada must gain incremental efficiencies over relatively new units with new appliances. C ommenter s said the USEPA fails to account for this in its analysis.

Comment 226: NH

- recommend using New Hampshire's 2020 RGGI base budget to calculate the RGGI regi onal total projected 2030 mass

- based goal236 Response 226: See section VII. of the final rule preamble of the CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:

Commenter s stated New Ha mpshire's 2020 (the last year of the current RGGI program's annual 2.5 percent cap reduction) base budget (i.e., allowance allocation) under RGGI is 4.08 million tons; a number that DES and the PUC believe may be more appropriately reflective as a goal tha n EPA's projected New Hampshire 2030 emissions of 3.64 million tons, determined as part of its goal computation. C ommenter s said EPA's proposed goal is based on the assumption that all existing fossil fuel

- fired generation will be re

- dispatched to natural gas combined cycle (NGCC) units with a capacity factor of 63 percent , projected 2030 gas

- fired generation of 8.3 million MWh, and an emission rate of 878 lbs/MWh for those units. C ommenter s said because any potential new sources are covered under the RGGI cap, further reducing the 2020 base budget to EPA's 2030 goal represents significant additional reductions. C ommenter s recommend ed using New Hampshire's 2020 RGGI base budget to calculate the RGGI regional total projected 2030

mass

- based goal, rather than EPA's presumptive, mass

- based goal after rate

- to

- mass translation.

Comment 227: NH

- general goal comments

Response 227: For the EPA’s response to this comment, see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenter s stated upon evaluation of the EPA's goal

- setting methodology and computations, the commenter s were concerned with the ability of New Hampshire to meet the proposed CO2 emission rate of 486 pounds per net megawatt

- hour (lb/MWh), given state

- specific and EGU

specific considerations. Although the commenter s will certainly continue to support the carbon reduction effort in New Hampshire, the stringency of t he building blocks prescribed by the EPA create insurmountable challenges for the state.

Commenter s stated due to the broad assumptions made by the EPA in all aspects of the goal

setting formula, in the absence of a regional approach, the commenters assert ed that New Hampshire lacks the flexibility to derive a combination of building blocks that will meet the CPP goal while providing cost

- effective and reliable energy to consumers.

Comment 228: NH

- BB1

Response 228: See section V.C. of the final rule pre amble of the CPP for the EPA’s response to this comment and more information about Building Block 1.

The following are summaries of the specific public comments under this comment:237 Commenter s stated with respect to Building Block 1, significant heat rate improvements at the coal

- fired Merrimack Station (New Hampshire's largest coal

- fired plant) were accomplished prior to 2012; hence New Hampshire would receive no credit for such improvements under the current proposal. At this time, the commenters asserted that additional significant upgrades to this and other coal

- fired plants in New Hampshire may be difficult to accomplish. C ommenter s added, the current operating scenario of New Hampshire's coal

- fired power plants (operating more like peaking units as opp osed to base

- loaded units under the current electricity markets in the Northeast) would likely diminish any potential efficiency gains.

Comment 229: NH

- BB3

Response 229: See section V.E. of the final rule preamble of the CPP for the EPA’s response to t his comment and more information about Building Block 3.

The following are summaries of the specific public comments under this comment:

Commenter s had significant concerns with the individual state rate based 2030 goal (486 lbs/MWh) proposed by EPA for Ne w Hampshire, the fifth most stringent goal proposed in the entire country. C ommenter s said relative to the potential for additional renewable energy under Building Block #3, while Renewable Portfolio Standards (RPS) in other states may be a mechanism by wh ich to drive investment solely in new renewable energy, New Hampshire's RPS not only established Classes I and II for new renewable energy, but also established Class III Existing Biomass and Class IV Existing Small Hydro because legislators wanted to not only provide an incentive for new renewables, but also to maintain existing renewables that are "at risk" of shutting down. C ommenter s said accordingly, existing small (< 5 MW) hydro generation in New Hampshire should be credited by EPA. C ommenter s said sm all dams have high ongoing maintenance costs; without incentives, these dams struggle to remain open and economically viable. C ommenter s said similarly, biomass

- fired plants cannot compete with relatively lower

priced natural gas

- fired plants without a fin ancial incentive and are at some risk of shutting down; nearly 85 percent of (1,172,587 out of 1,381,286 MWh), of New Hampshire's 2012 non

hydro renewable generation was from biomass. C ommenter s said in 2006, the Schiller Station coal

- fired plant replaced one of its three 50 MW units with a biomass

- fired unit; thus, EPA's projected growth of renewable generation in New Hampshire is likely over

- estimated. C ommenter s said while New Hampshire does have an RPS, compliance in 2013 was met mostly by Alternative C ompliance Payments rather than increases in in

- state renewable generation. C ommenter s added, out

- of

- state sources have recently applied for and received eligibility to create New Hampshire Renewable Energy Certificates (RECs). C ommenter s said the "Alternat ive Renewable Energy Approach", as outlined in EPA Technical Support Document, based on technical and economic potential as proposed by EPA could and should be used for New Hampshire.

Comment 230: NJ increasing NGCC utilization should count towards goal compliance.238 Response 230: See section VIII of the final rule preamble of the CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:

Commenter s stated New Jersey's interim and final goal s under the rule proposal are 647 lb/MWh and 531 lb/MWh, respectively, while its average existing NGCC emission rate is 889 lb/MWh. C ommenter s said analysis provided by EPA in its application of building block 2 assumes that the affected NGCC fleet is util ized at a capacity factor of 39% and that redispatch at approximately 44% could displace all the coal and oil

- fired generation in the state. C ommenter s said while New Jersey expects the recent asymmetric trends in fossil generation to continue with approxi mately 5% of NGCC capacity equaling its coal and oil

- fired generation, due to the higher emission rates of coal and oil

- fired generation as compared to NGCC, displacing this remaining coal and oil

- fired generation will contribute to compliance with New Jer sey's goal, but only to that nominal degree because its interim and final emission rate goals are lower than its existing NGCC fleet emission rate. C ommenter s said in fact, under EPA's rule proposal, any additional utilization of New Jersey's existing affe cted NGCC fleet, beyond displacing coal and oil

- fired generation, would have to be offset by sources with emission rates lower than the proposed goals. C ommenter s said this would lead to discouraging use of additional NGCC, which is contrary to EPA's suppo rt for NGCC and the national CO2 emissions reduction goal, and limits New Jersey compliance options to non

- fossil generation. C ommenter s said this result holds true for even the most efficient new NGCC units representing the cleanest fossil

- fueled generati on today.

Commenter s said states that have interim and final goals above 908 lb/MWh can benefit from adding NGCC as a cost

- effective compliance option, whereas states like New Jersey have their options limited to EE and RE. C ommenter s said significantly, EPA's NODA of October 28, 2014, views RE and EE as displacing NGCC units and coal and oil

- fired units, and could result in a reduction of use of existing NGCC in New Jersey by 80%. C ommenter s said by adopting a uniform national performance standard of 1,03 0 lb/MWh, states would be encouraged to fully exploit the use of NGCC.

Comment 231: NJ

- BB3 RE

Response 231: See section V.E. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 3.

The following are summaries of the specific public comments under this comment:

Commenter s stated EPA's algorithm governing building block 3 results in an RE share for New Jersey that is not supported by underlying data or proper evaluation; this is not a real istic or a reasonable outcome.

Commenter s stated according to the study prepared by the National Renewable Energy Lab (NREL) evaluating individual RE technical potential, relied upon by EPA in its Alternative RE Approach TSD, New Jersey has an RE potentia l of 0.11%, relative to the nation as a whole; yet239 under EPA's proposed RE approach to BSER, New Jersey is assumed to generate 2% of the national total of renewable generation, or approximately 18 times its technical potential for in

state renewables. C omm enter s said this unbalanced proportion of RE results in an expectation of emission reductions that is unreasonable from both a technical and economic perspective. C ommenter s said New Jersey supports renewables through one of the nation's most aggressive RP S and New Jersey has developed more of its in

- state solar technical potential than any other state in the nation. C ommenter s said EPA, however, improperly relies on a state's RPS to infer both technical and economic potential; such an approach penalizes st ates such as New Jersey that have taken early action to develop RE. C ommenter s said EPA must take a more pragmatic approach to this building block and evaluate state RE resource potential relative to both costs and environmental factors. C ommenter s said EP A's alternative RE approach to building block 3, is an appropriate starting point for EPA to reconsider the RE goal setting procedure.

Commenter s support ed EPA's decision to not include Oyster Creek in the nuclear component of the goal since the unit is s cheduled for retirement in 2019; however, EPA did not indicate whether the generation lost by this retirement would be replaced by new or existing units. C ommenter s said EPA must conclude that the lost generation will be replaced by existing fossil fuel

- fi red units and New Jersey's goal should be adjusted accordingly.

Comment 232: NJ

- The EPA should modify its BSER methodology and adjust goal for New Jersey

Response 232: See section V.A. of the final rule preamble of the CPP and the CO 2 Emission Performan ce Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:

Commenter s stated notwithstanding New Jersey's recommendati on that EPA evaluate the merits of a uniform national performance goal, EPA must at least modify the four building blocks as detailed in the "New Jersey Corrective Approaches," provided below. C ommenter s said each Corrective Approach is independently justi fied and merits an adjustment to New Jersey's state

specific goal. C ommenter s said when combined, these corrections would significantly change the goal for New Jersey.

1) New Jersey Corrective Approach 1 : EPA's assumed re

- dispatch of all coal and oil gene ration to NGCC must be modified. Commenter s stated New Jersey evaluated how the State's goals would differ if EPA's assumed re

- dispatch of coal and oil

- fired generation to NGCC generation were modified. C ommenter s said in the proposal, New Jersey's goals a re based on the assumed

re

- dispatch of 100% of the 2012 coal and oil

- fired generation from the affected EGUs to NGCC. C ommenter s said this approach is fundamentally unsound because a 100% coal and oil

- fired generation re

- dispatch resulted in an increase in New Jersey's NGCC generation capacity from 39% to only 44%, well below EPA's assumed maximum NGCC utilization level of 70%. C ommenter s said EPA's assumption that all of the coal and oil

- fired generation can be re

dispatched to NGCC is not feasible because a minimum level of coal and oil

- fired generation240 must be preserved in order to maintain grid reliability in the event of insufficient supplies of natural gas, most likely to occur during extreme weather conditions, as experienced during the winter of 2013

- 2014 and the polar vortex.

C ommenter s said New Jersey re

- calculated interim (2020

- 2029) and final (2030 and after) goals if EPA's unsound assumptions are relaxed (i.e., 100% of the coal and oil

- fired generation is unlikely to be re

- dispatched as NGCC). C ommenter s said these calculations were performed for both the 2012 base year (EPA proposal) and 2011 base year scenarios. C ommenter s said EPA eGRID data for 2011 was downloaded following the instructions provided by the EPA NODA. C ommenter s said the affect ed facility data for this year was used to calculate the interim and final goals for New Jersey using EPA's methodology provided in the Section 111(d) proposal. C ommenter s said with the exception of the base year data, all other aspects of the EPA goal cal culation methodology, including the at

- risk nuclear, renewable energy, and energy efficiency, were employed. Commenter s stated for the no re

- dispatch 2012 base year scenarios, New Jersey interim and final goals increased to 731 and 600 lb/MWh, respectively

. C ommenter s said for the

no re

- dispatch 2011 base year scenarios, New Jersey interim and final goals increased to 797 and 670 lb/MWh, respectively. C ommenter s said since 100% redispatch of coal and oil

- fired generation from affected facilities is unreason able for New Jersey, the higher 2012 baseline goals of 731 lb/MWh (interim) and 600 lb/MWh (final), at a minimum, should be considered; however, since 2011 was a more typical year for annual coal and oil

- fired generation by New Jersey's affected EGU's, the higher 2011 baseline goals of 797 lb/MWh (interim) and 670 lb/MWh (final), are more appropriate.

2) New Jersey Corrective Approach 2 : Different base years should be available to states to calculate goals . Commenter s stated while EPA uses a single base yea r to set goals, providing states with flexibility in selecting the average of two years out of five or ten recent years would be consistent with the contemporaneous concept in EPA's New Source Review rules. C ommenter s said New Jersey conducted an evaluatio n of the New Jersey interim goal (2020

- 2029) and final goal (2030 and after) and how these goals would change if a base year other than 2012 were used. C ommenter s said the 2012 baseline year chosen by EPA was an atypical year for the operation of New Jerse y's affected EGUs. C ommenter s said in 2012, the total generation from New Jersey's 21 affected EGUs was 25,087,907 MWh, which is significantly lower than the annual generation from these EGUs for the years 2010 and 2011 (27,806,585 and 30,302,427 MWh, resp ectively). C ommenter s said use of multiple recent base years results is more representative of operations for New Jersey's affected EGUs and use of such typical years results in more reasonable interim and final goals. C ommenter s said EPA eGRID data for 20 10 and 2011 were downloaded following the instructions provided by the EPA NODA; the affected EGU data for these years were used to calculate the interim and final goals for New Jersey using EPA's methodology provided in the Section 111(d) rule proposal. C ommenter s said with the exception of the base year data, all other aspects of the EPA goal calculation methodology, including the at

- risk nuclear, renewable energy, and energy efficiency, were employed. Commenters said t he New Jersey interim and final goal s increased to 661 and 550 lb/MWh, respectively, for the 2010 base year. Commenters said t he New Jersey interim and final goals increased to 661 and 557 lb/MWh, respectively, for the 2011 base year. C ommenter s said if an average of the 2 years were assumed , New Jersey's goals would be raised to 661 lb/MWH (interim 2020

- 2029) and 553 lb/MWh (final 2030 and after), which would be more representative of the operation of those facilities than the use of the atypical 2012 values.241 3) New Jersey Corrective Approa ch 3 : RPS growth rates should be based on retail sales RPS weighted averages and not the simple state averages used by EPA. Commenter s said EPA has calculated individual state RE target levels through a series of steps that start by grouping individual sta te RPS 2020 percentage targets into regional averages. C ommenter s said each regional average was determined by simply averaging the respective RPS percent generation state targets for that region. C ommenter s said for example, the RE target for the East Cen tral region is calculated as the average of 2020 RPS requirements in Delaware (19%), District of Columbia (20%), Maryland (18%), New Jersey (22%), Ohio (9%), Pennsylvania (8%), Virginia (N/A), and West Virginia (N/A), which is equivalent to 16% (Virginia a nd West Virginia are excluded from this calculation). C ommenter s said these regional percent averages are used in determining a state's RE MWh or, equivalently, its percentage target in Building Block 3. C ommenter s said state RPS requirements are typically determined by multiplying the RPS percentage for a particular year with the retail sales for that same year and, therefore, EPA must amend their methodology by applying a "weighted average" based on state retail sales. C ommenter s said regional RE targets would then be computed consistent with the weighted average RPS targets; the steps of this RE methodology are as follows:

Step 1: Determine State 2012 retail sales using EIA data;

Step 2: Multiply State 2020 RPS targets by its 2012 retail sales;

Step 3: Determine regional RE MWh targets from Step 2;

Step 4: Determine regional RE percentage targets from Step 3;

Step 5: Recalculate State RE targets under Building Block 3;

Step 6: Recalculate State goals.

Commenter s said under this approach, New Jersey' s proposed interim goal (2020

- 2029) and final goal (2030 and after) have been recalculated; 663 lb/MWh and 561 lb/MWh, respectively. C ommenter s said under EPA's Alternative State Goals, New Jersey's interim goal (2020

- 2024) and final goal (2025 and after) have been recalculated; 731 lb/MWh and 690 lb/MWh, respectively. C ommenter s said this corrective approach, combined with the other corrective approaches, should be used by EPA to revise the goals for New Jersey.

4) New Jersey Corrective Approach 4 : EPA's Alternative RE Approach . Commenter s stated while RE should not be used to set goals, the commenter s support ed EPA's alternative RE approach. C ommenter s said this approach is a more pragmatic method for determining state RE targets through the use of estima ted technical and economic in

- state RE potential rather than RPS targets. C ommenter s said New Jersey has one of the nation's most aggressive RPS that supports renewable generation, not only within the state, but within the entire PJM region. C ommenter s sai d load serving entities (LSEs) are required to offset the electricity sold in New Jersey from qualifying renewables within the PJM region. C ommenter s said due to the limited technical and economic instate potential, New Jersey expects that additional futur e RE required by Section 111(d) must be provided by renewable generation outside the state. C ommenter s said between 2006 and 2010, 75% of the RECs retired for New Jersey's RPS program have come from out

- of

state renewables. C ommenter s said according to th e National Renewable Energy Lab (NREL),242 RE technical potential identified in EPA's Alternative RE Approach TSD, New Jersey only represents 0.11% of the potential renewable generation in the nation; yet under EPA's proposed RE approach to BSER using RPS tar gets to infer RE potential, New Jersey is assumed to generate 2% of the total national renewable generation within the state. C ommenter s said this significant difference in BSER can be directly attributed to EPA's reliance on state RPS targets and the assu mption that RPS compliance will come entirely from in

- state renewable generation. C ommenter s said EPA must therefore base New Jersey's goal on the Alternative RE Approach if RE is ultimately used in goal calculations. C ommenter s said New Jersey's proposed interim (2020

- 2029) and final goals (2030 and after) have been recalculated; 724 lb/MWh and 668 lb/MWh, respectively. C ommenter s said under EPA's Alternative State Goals, New Jersey's interim goal (2020

- 2024) and final goal (2025 and after) have been recal culated; 770 lb/MWh and 747 lb/MWh, respectively.

5) New Jersey Corrective Approach 5 : Use New Jersey's EE Market Potential Assessment Study Approach to establish EE targets instead of EPA's single target for all states . Commenter s stated while EE should not be used to set goals for fossil fuel EGUs, adjustment of the EE component is appropriate to accommodate states that have advanced EE programs. Commenter s stated New Jersey, like other states, develops and implements their EE and RE programs based on st atewide market assessments, impact evaluations, or evaluations of other state market assessments in the region. C ommenter s said New Jersey has performed EE and RE market assessments to assist in developing the NJCEP programs. C ommenter s said despite the si gnificant level of financial support by the New Jersey ratepayers for clean energy, including both EE and RE, New Jersey's Clean Energy Program has not achieved or approached the annual EE saving level of 1.5%. From 2004 to 2013, the annual energy savings from New Jersey's Clean Energy Program has ranged from 0.15% to 0.6%; this is, at best, 60% less than the annual EE savings goal set by EPA. C ommenter s said it is also significantly less than the estimates set in the NJCEP EE Market Assessment studies.

Com menter s stated the maturity of the EE programs also has a major influence on energy savings. C ommenter s said as an established EE program develops, most of the no cost or low cost (low hanging fruit) is exhausted; the remaining EE savings, therefore, becom es more costly to acquire. C ommenter s said these programs require more complex administration to address various levels of incentives, financing and tiered rebates; this increases the EE program administration costs and greatly increases the dollars spent relative to the energy saved. C ommenter s said New Jersey's Clean Energy Program for EE and RE is a statewide program administered by the NJBPU. C ommenter s said it is not just one or two utility areas or one managed by one or two electric or gas utilities i n various franchise areas; it is a statewide electric and natural gas EE and RE program. C ommenter s said the EE incentive and rebates offers are the same for Cape May Point (the southernmost point of New Jersey) to High Point (the northern most point of Ne w Jersey). C ommenter s said this has an impact on an EE savings that can be achieved in New Jersey versus a state with a new EE program in just one utility franchise area that has a more specific focused approach to address one electric generation plant.

C ommenter s stated the energy building codes also impact savings. C ommenter s said in New Jersey's program, as in most EE programs, the energy savings are calculated as the difference between the energy efficiency equipment and the energy building code requir ement for that equipment. C ommenter s said as the energy building codes improves the energy efficiency that is243 required to be installed in new and retrofit construction, the energy savings an EE program can claim is getting smaller and smaller. C ommenter s s aid the cost to acquire these savings is also increasing. C ommenter s said some states calculate the energy savings based on the difference between the energy efficient equipment to be installed and the efficiency of the unit it is replacing; however, that requires a more complex measurement and verification method than the deemed energy savings calculation method currently used by the NJCEP and other state EE
programs. C ommenter s said this increases the program administration costs and reduces the dollars a vailable for EE direct incentives.

Commenter s stated EPA must factor in the difference between projected and estimated EE savings and the actual reported savings in mature statewide EE programs; rather than regulate EE and RE under Section 111(d), the fede ral government should consider incentives and different regulatory authority to increase EE and RE. C ommenter s said the Best Practice Level of Performance was partly influenced by averaging recent electric EE potential studies, including a recent study con ducted on behalf of New Jersey; this Study identified 0.8% as achievable and, therefore, EPA must adjust Building Block 4 to reflect NJ's achievable electric EE for both Option 1 and Option 2 if EE is to be included in goal determination. C ommenter s said r eplicating EPA's methodology for calculating savings target scenarios under Option 1 and Option 2 using 0.8%, New Jersey's Cumulative Annual Electricity Savings (percentage of annual sales) under Option 1 and Option 2, result in 5.95% in 2029 and 3.44% in 2024, respectively. C ommenter s said New Jersey's proposed interim goal (2020

- 2029) and final goal (2030 and after) have been recalculated; 663 lb/MWh and 560 lb/MWh, respectively; under EPA's Alternative State Goals, New Jersey's interim goal (2020

- 2024) a nd final goal (2025 and after) have been recalculated; 723 lb/MWh and 680 lb/MWh, respectively. C ommenter s said this corrective approach, combined with the other corrective approaches, should be used by EPA to revise the goals for New Jersey.

6) New Jerse y Corrective Approach 6: Combination of Corrective Approaches

. Commenter s stated EPA should evaluate all possible permutations of the Corrective Approaches presented. C ommenter s provided an example of a permutation by combining New Jersey Corrective Approa ches 4 and 5; under this approach, New Jersey's proposed interim goal (2020

- 2029) and final goal (2030 and after) have been recalculated; 746 lb/MWh and 715 lb/MWh, respectively; under EPA's Alternative State Goals, New Jersey's interim goal (2020

- 2024) an d final goal (2025 and after) have been recalculated; 772 lb/MWh and 752 lb/MWh, respectively. C ommenter s said this corrective approach, combined with the other corrective approaches, should be used by EPA to revise the goals for New Jersey.

Commenter s s tated the coal

- fired EGUs did co

- fire with natural gas (most notably at Hudson Unit 2); given the amount of natural gas fired at our three coal

- fired steam units the coal emission rate for New Jersey calculated by EPA is not a true emission rate for coal

- f ired generation only. C ommenter s said in the spreadsheet titled "tsd

- plant

- level

- data

- unit

- level

inventory", EPA included all of the CO2 emissions and net generation from PSEG's coal

- fired EGUs in 2012 regardless of the fuel burned at the time. C ommenter s said the inclusion of natural
gas co

- firing in the coal emission rate puts the New Jersey coal EGUs at a disadvantage because EPA is seeking an additional six percent heat rate improvement on units that have lower244 emission rates because of this co

- firing; therefore, EPA must recalculate New Jersey's coal emission rate based on the hours when the units fired coal only and then apply the proper heat rate improvement target to this value.

Comment 233: NM

- coal retirements

Response 233: See section V.C. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 1.

The following are summaries of the specific public comments under this comment:

Commenter s stated EPA has publicly and repeatedly affir med that coal

- fired unit retirements can be part of a state's compliance plan under EPA's Section 111(d) Clean Power Plan proposal; although EPA's preamble, goal calculations, and technical support documents are consistent with that understanding, an expre ss confirmation of that approach would help avoid any potential challenges during the SIP development and approval process. C ommenter s said EPA should expressly confirm that the retirement of two coal

- fired electric generating units in New Mexico, which wi ll reduce annual CO2 emissions by 36 percent, will count towards compliance with EPA's proposed Clean Power Plan; specifically, EPA should affirm that those retirements should not be assumed in calculating the New Mexico goals, but should be reflected in t he compliance calculations.

Commenter s stated EPA should expressly and unambiguously confirm that the retirement of San Juan Units 2 and 3 by December 2017 will help New Mexico comply with the emission rate goals that EPA has proposed through both ensurin g that the goal calculation does not already assume those reductions in defining the goal and through allowing those reductions to be included in the compliance calculation.

Commenter s stated although primarily intended to facilitate compliance with the C lean Air Act regional haze program, the retirement of two of New Mexico's largest coal

- fired units by December 31, 2017 will have a dramatic impact on CO2 emissions in the State. C ommenter s said since San Juan Unit 2 emits approximately 3.1 million tons of CO2 per year and San Juan Unit 3 emits approximately 4.6 million tons per year, the retirement of those units will eliminate 7.7 million tons of CO2 emissions annually. C ommenter s said that reduction in annual emissions will reduce New Mexico's overall CO 2 emission rates by 21 percent on a lb/MWh basis, and reduce the State's CO2 mass emission rates by 36 percent in total tons of emissions (based on expected emissions in 2014).

Commenter s stated based on the manner in which EPA calculated the CO2 emission rate goals for New Mexico, EPA appears to have recognized the significant progress towards a lower

carbon future that these coal

- fired unit retirements will make; specifically, in calculating the emission reduction goals for New Mexico, EPA began with the 2012 CO2 emissions from San Juan Units 2 and 3 in the numerator of the equation and included 2012 generation from those units in the denominator of the equation, before applying the various building blocks; therefore, assuming that EPA will allow New Mexi co to use the same calculation method to demonstrate compliance that EPA used in establishing the goal, the compliance demonstration calculation245 will reflect the retirement of those units after 2017 because the numerator will no longer contain any CO2 emis sions from the retired units. C ommenter s said while the denominator will also decrease, the overall effect of the retirement of San Juan Units 2 and 3 will be to eliminate a higher

- carbon

- intensity resource; thus, based on EPA's proposed goal calculation, the retirement of San Juan Units 2 and 3 will help New Mexico reach its goals.

Comment 234: NM

- BB1 HRI

Response 234: See section V.C. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Bloc k 1.

The following are summaries of the specific public comments under this comment:

Commenter s stated EPA's decision to apply its generic, hypothetical six percent assumption is particularly inappropriate for New Mexico because New Mexico's largest coa l

- fired facility, San Juan, which accounts for nearly 90 percent of the coal

- fired generation in the State, has already made significant efficiency improvements for which it would not receive any credit under EPA's proposal

. S pecifically, commenters state d San Juan has already implemented many of the projects referenced in EPA's GHG Abatement Measures Technical Support Document or similar projects, including the following:

• Replaced pulverizer classifiers to improve coal fineness

• Installed rotating air th roats on pulverizers to improve coal fineness

• Replaced various portions or sections of boiler tubes

• Replaced air foils with flow nozzles, improving air flow accuracy and combustion efficiency

• Installed neural network to optimize combustion controls

• Ins talled new air heater seals

• Baghouse installations to replace electrostatic precipitators (ESPs)

• Burner replacement

• Replaced portions of piping and headers with advanced designs and materials

• Replaced the venturi throat on FGD systems

• Boiler cleaning to remove boiler scale

• Turbine overhaul to replace turbine rotor, inner shell, diaphragms, and packing/seals246 • Feedwater heater tube replacement

• Installed advanced cooling tower fill, replaced cooling tower fill and grid, tuned cooling tower

• Cleaned cond enser tubing

• Replaced older electric motors with new, more energy efficient motors

Commenter s stated that San Juan estimates that, from 2006 (before most of these projects were completed) to 2013 (after all of them were completed), the heat rate improved at two units, but did not improve at the other two units; over the time period during which these projects were performed, the overall plant

- wide heat rate improvement was just over one percent. C ommenter s said despite these significant efforts to improve efficiency, no significant trend in heat rate can be discerned

.
Commenter s stated even though PNM has already undertaken most of the efficiency projects that EPA recommended in its building block 1 analysis, EPA assumes that San Juan is nevertheless
capa ble of achieving just as much of an efficiency improvement as a theoretical generator that has only taken advantage of half of those projects, according to the generic assumption EPA has applied nationwide. C ommenter s said because the improvements San Juan has already made were completed prior to the EPA

- selected baseline of 2012, they will not count toward compliance with New Mexico's emission rate reduction goals; therefore, EPA's building block 1 assumes that San Juan must achieve another six percent imp rovement, above and beyond the improvements already achieved . H owever, commenters stated , due to the efforts San Juan has already made, plant engineers do not expect that efficiency can be improved by any more than 1

- 2 percent beyond current efficiency lev els, well below the additional six percent EPA assumes to be hypothetically achievable.

Commenter s stated the 2012 baseline initially chosen by EPA actually represents the best heat rate for two of the San Juan units, and one of the lowest heat rates for the other two units

. Commenters stated as a result, the heat rate EPA expects San Juan to achieve is actually six percent better than the level it achieved in one of its best

- performing years

. T herefore, in order for San Juan to achieve the heat rates EPA expects in all years, including those that will be inevitably higher due to uncontrollable variability in efficiency levels, t he commenter s said PNM may have to achieve an even greater efficiency improvement than six percent.

Commenter s stated like many un its across the country, San Juan is facing new environmental requirements for conventional pollutants that will make achieving additional efficiency improvements more difficult by increasing the parasitic load that the unit itself will need to operate thos e new controls. C ommenter s said San Juan is likely better off than many units in the country because it has already installed a suite of state

- of

- the

- art controls that many other units may still need in order to comply with other EPA requirements, includin g scrubbers, baghouses, low NOx burners; but even the well

- controlled San Juan units will still need to install additional systems in the near future to comply with new EPA rules that could impact efficiency levels, such as the Selective Non

- catalytic Redu ction (SNCR) systems imposed under the regional haze program, which could increase the parasitic load at the plant by up to 2 MW per unit.247 Commenter s stated as a result of the efficiency improvements PNM has already achieved at San Juan, and the additiona l environmental controls that will reduce efficiency and make additional improvements even more difficult, the commenter s believe that the additional six percent heat rate improvement that EPA expects under building block 1 for New Mexico is not feasible f or San Juan

. T herefore, commenters stated EPA's assumptions for building block 1 are likely unachievable for the State as a whole, given that San Juan represents the vast majority of coal

fired generation in New Mexico. Accordingly, commenter s asked EPA to revise its nationwide building block 1 assumptions for states like New Mexico, where they are inappropriate.

Comment 235: NM

- BB2

Response 235: See section V.D. of the final rule preamble of the CPP for the EPA’s response to this comment and more infor mation about Building Block 2.

The following are summaries of the specific public comments under this comment:

Commenter s stated partial re

- dispatch is possible in New Mexico; it may, therefore, become an important option to include in the New Mexico State Plan.

Comment 236: NM

- BB4 EE

Response 236: See section V.A. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 4.

The following are summaries of the specific public comments under this comment:

Commenter s stated they generally support EPA's recognition of the importance of energy efficiency (EE) in reducing CO2 emissions . Ho wever, commenters stated they have a number of concerns regarding EPA's methodology and assumptions underlying the use of EE savings in calculating the proposed state goals for New Mexico:

1. C ommenter s question ed EPA's decision to assume the same annual savings rate of 1.5 percent is achievable in all states. Commenters said that assumption is based on the historical sa vings rate that has been achieved in only three states with the most aggressive EE programs (Maine, Vermont, and Arizona) and is not an appropriate target for all states because energy use per customer varies significantly from state to state and can have a significant impact on the cost

- effectiveness of many EE programs; specifically, states with low electric energy use per capita may not be able to achieve the same savings rate as states with higher energy use per capita. Commenters said residential users in New Mexico likely have less opportunity for energy savings than customers in other states with higher per capita energy usage rates. Commenters added many typical EE programs are also less cost

- effective in New Mexico, due to the mild climate in the

ar ea. Commenters said cannot seek approval of EE measures that are not cost

- effective,248 thus have fewer options available to it in meeting EPA's EE expectations than other utilities in other states.

2. C ommenter s question ed EPA's assumption that a savings rate of 1.5% can be sustained indefinitely, year after year. C ommenter s said recent EE successes relied upon by EPA in developing its building block 4 assumptions have depended upon the benefits provided by lighting retrofits

- the replacement of incandescent bu lbs with LED bulbs or other efficient lighting technologies

- which provide an extremely cost

- effective and universal means of improving EE across all sectors of the economy

. H owever, commenters stated once LED and other lighting technologies have saturate d the market, which is likely to occur in the next ten years, additional efficiency improvements will require more aggressive, and less cost

- effective, actions that will likely result in smaller and smaller efficiency improvements. C ommenter s recommend ed t hat EPA recognize the fact that savings rates cannot be sustained indefinitely in defining its expectations for efficiency improvements under building block 4.

3. C ommenter s said EPA's 1.5 percent one

- size

- fits

- all goal for states fails to take into
account the variation in demographics in different states that could have a significant impact on the potential success of EE programs . Commenters added that in particular, New Mexico has a significant rural population, and participation in EE programs is typicall y low in rural populations

. I n addition, the commenters stated New Mexico has a very low income per capita, which suggests many New Mexico residents will not have sufficient resources to participate in EE programs unless they are fully funded upfront by th e utility, which generally makes those programs less cost

- effective. C ommenter s said EPA should take these state

- specific barriers to EE programs into account in developing its assumptions regarding the level of EE improvement that will be achievable in Ne w Mexico.

4. C ommenter s ask ed EPA to reconsider its decision to ignore savings resulting from EE programs prior to 2017 and only count post

- 2017 improvements in EE toward compliance with each state's emission rate reduction goals. C ommenter s said although
st ates without significant existing EE programs will need time to develop and implement new programs, and therefore should not be required to comply prior to 2017, states that already maintain EE programs should be able to count the savings realized from tho se programs even if the savings occur prior to 2017. C ommenter s recommended that EPA allow all net EE savings that have been achieved from utility implemented programs, or at least those that have been implemented in the ten years before 2017.

5. C ommenter s said EPA should take each state's prior experience with EE programs into account in determining what is achievable in the state . Commenters stated New Mexico began requiring utilities to implement EE programs in 2005 with the Efficient Use of Energy Act (E UEA), which established cumulative EE savings goals of 5 percent and 8 percent by 2014 and 2020, respectively (below 2005 levels). C ommenter s said with their initial efforts, New Mexico utilities should have been able to take advantage of the most
cost

- eff ective measures available (e.g., LED lighting), but even so at least one utility has already indicated that it will not be able to meet the EUEA goals, despite implementing numerous programs that were projected to achieve those goals. Commenters said given249 that meeting the EUEA goals have already proven difficult for one utility, and the fact that EPA's goals are far more aggressive than the EUEA (seeking a 10.6 percent improvement over 2012 levels by 2030), EPA should reconsider its assumptions regarding t he level of EE that will be achievable in New Mexico. C ommenter s added the EUEA requires New Mexico utilities to ensure their EE programs are cost

- effective based on a "utility cost test" which ensures that "the monetary costs that are borne by the public utility and that are incurred to develop, acquire and operate energy efficiency or load management resources on a life

- cycle basis are less than the avoided monetary costs associated with developing, acquiring and operating the associated supply

- side

resou rces." C ommenter s said like New Mexico's RPS, the EUEA also restricts New Mexico utilities from spending more than 3 percent of sales on EE programs.

C ommenter s support ed EPA's decision to recognize states' EE efforts generally, but ask ed EPA to consider allowing the State of New Mexico to establish its own EE targets based on its understanding of the state

- specific constraints that EPA's analysis fails to address

. A lternative ly

, the commenters asked EPA to reconsider its EE targets by taking those constra ints into account
on a state

- by

- state basis.

Comment 237: NM

- impacts of CPP

Response 237: For the EPA’s response to this comment, see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The followi ng are summaries of the specific public comments under this comment:

Commenter s stated developed a computer model to analyze aspects of the proposal and determine the potential impacts on New Mexico of various policy choices selected by EPA in developing the proposed Clean Power Plan. C ommenter s said the model provides a current forecast of expected annual generation and CO2 emissions from existing fossil fuel

- fired generating units for the compliance period of 2013

- 2030

- referred to as a "base case"

- and

co mpares that forecast to EPA's proposed emission reduction goals to evaluate the "compliance gap" that will exist between the EPA's proposal and New Mexico's projected emissions rate.

Commenter s stated the "base case" analysis indicates that, despite New M exico's already aggressive plans to reduce CO2 emissions

- including the retirement of two of the largest emitting sources in 2017 and the significant increases in renewable energy and energy efficiency expected in future years under existing federal and sta te laws

- a significant compliance gap of 211 lb/MWh remains between EPA's goal of 1,0481b/MWh and New Mexico's projected "base case" rate of 1,259 lb/MWh.

Commenter s stated in addition to illustrating the "compliance gap" that will remain under the "base c ase" in New Mexico, the model allows the various parameters to be altered to illustrate the potential impact that any changes in policy will likely have on the goals for New Mexico and the ability of the State to meet those goals. C ommenter s said by alteri ng some of the assumptions EPA used to develop its proposed goals, the model can illustrate the effect that alternative policies will have on New Mexico's compliance gap.250 Commenters stated that deliberations for the final rule should include re

- evaluation and clarifications of the list of affected sources within New Mexico because the State Goal Computation Technical Support Document provided in the docket does not include all affected sources and may include some sources that do not meet proposed applicab ility criteria.

Comment 238: NY credit for early action should be given; NY already making reductions

Response 238: See sections VI., VIII.B., and VIII.C. of the final rule preamble of the CPP for the EPA’s response to this comment.

The following are su mmaries of the specific public comments under this comment:

Commenter s stated New York has already reduced CO2 emissions from its power sector by 41.6% below 2005 levels and generates approximately 53% of the electricity it uses on an annual basis from no n

- emitting resources. C ommenter s said the state's generation fleet is the ninth cleanest in the country, and New York's commitment to the Regional Greenhouse Gas Initiative (RGGI) calls for even further CO2 reductions between now and 2020. C ommenter s said New Yorkers currently pay the highest electric rates in the contiguous United States, including fees that are used to fund investments in clean energy and conservation that have contributed to New York's already low

- carbon emissions profile. C ommenter s sai d the targets developed for New York under the Clean Power Plan for further CO2 emissions reductions should recognize and appropriately reflect the significant efforts that have already been made in New York and the progress that has been achieved.

Comment er s stated a legitimate program should not punish States that have made significant progress to addressing GHG

. C ommenter s said the EPA should commend States that have made significant GHG reductions on their own; there is little doubt that New York is tre ated inequitably. C ommenter s said compounding the issues with inequitable treatment is the fact that New York has some of the United States' highest energy cost and cannot sustain any increased energy costs . Commenters stated other States need to address t he economical low hanging fruit; national policy should be focused on reducing national GHG in a manner that first address the least costly options.

Commenter s stated New York City has been a leader in addressing climate change at the local level and is wo rking both to reduce our own contributions to global warming and to prepare for its inevitable effects. C ommenter s said this work is occurring as part of PlaNYC, an integrated sustainability plan for a greener, greater New York by the year 2030. C ommenter s said as part of that effort, New York City recently set an ambitious goal to reduce citywide GHG emissions by 80 percent below 2005 levels by the year 2050, representing the same goal set by the United Nations' Framework on Climate Change to prevent dange rous anthropogenic interference with the climate system. C ommenter s said in just seven years, the City has reduced emissions from municipal buildings and City operations by 19 percent; moreover, the City is on track to meet the goal of a 30 percent reducti on in City government emissions by 2017. C ommenter s said more than 65 percent of these citywide GHG emissions reductions are attributable to fuel switching and other improvements in the City's electric and steam generation facilities.251 Commenter s stated the City is acting to develop a cleaner power sector; in addition to the planned 100 megawatts of renewable generating capacity that the City intends to install, it is considering incentives geared toward private

- sector development of renewable generation
cap acity and is working with the State on measures that would support the proliferation of non

carbon based generation. C ommenter s added the City has secured a license from the Federal Energy Regulatory Commission to build a 14 megawatt hydroelectric facility at the Cannonsville Reservoir, a component of the City's drinking water supply system, and it recently entered into an agreement with a private developer for a large

- scale solar installation at its Fresh Kills landfill.

Comment 239: NY

- general goals

Re sponse 239: For the EPA’s response to this comment, see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenter s stat ed the size of reduction for New York State under the EPA's Plan is large when compared to other states, especially given the amount of emission reductions already achieved by the state and the anomalous 2012 baseline. C ommenter s said New York State remain s at a competitive disadvantage when compared to other states that have reduced their respective CO2 emissions less than the state already has. C ommenter s said the EPA's Plan, and New York's implementation of it, should not have the outcome of driving out of New York State additional manufacturing companies and other high energy users. C ommenter s said EPA's Plan needs to give credit to states with large consumer electricity costs given that New York's energy consumers already bear the cost of the achievemen t of emission reductions. C ommenter s said the EPA's Plan should have a balanced approach across states in terms of the overall national reduction in CO2 emissions. C ommenter s said New York State should not be penalized for being a leader and an early mover in terms of reducing the CO2 intensity of its electric power sector; other states must do more, as additional emission reduction opportunities exist. C ommenter s said New York State's emission reduction success to date shows that other states must be requi red to reduce their emissions more in relation to New York State.

Comment 240: NY

- BB2

Response 240: See section V.D. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 2.

The followin g are summaries of the specific public comments under this comment:

Commenter s stated the CPP poses difficult challenges for New York in achieving the target CO2 emission rate required by EPA's proposal. C ommenter s said these challenges arise, in part, be cause the State's prior efforts in reducing emissions have exhausted almost all of the emission reduction potential of one of the building blocks; thus, while the commenter s understand that252 EPA is not requiring that the State implement each building block at the level contemplated in the proposal, New York has less flexibility and fewer strategies to deploy in meeting its target than many other states.

Commenter s stated Building Block Two's anticipated level of re

- dispatch to existing NGCC plants is unatta inable given reliability requirements that necessitate the operation of oil/gas steam units in New York City and Long Island, as well as other factors. C ommenter s said generation owners are subject to market and reliability rules that are approved by the F ederal Energy Regulatory Commission (FERC). C ommenter s said the consequence of these FERC rules is that

re

- dispatch to NGCC units from other fossil fuel units, especially oil/gas steam units, is limited by an electric transmission and/or a gas supply const raint. C ommenter s said as a result, it is virtually impossible for New York to achieve the 70% capacity utilization assumed by EPA in Building Block Two.

Commenter s stated EPA's application of Building Block Two to New York requires a 99.3% reduction in co al and oil

- fired generation as a result of re

- dispatch to natural gas; but, as explained by EPA, a "state's NGCC generation is only adjusted up to [the 70%] ceiling if its historic fossil sources support such a level." C ommenter s said because of constraint s, New York's fossil sources do not support this level. C ommenter s said although New York supports switching from coal or oil to NGCC where feasible, New York's electricity system simply cannot accommodate this level of re

- dispatch; therefore, the final C PP rule should address New York's unique circumstances and constraints regarding natural gas dispatch.

Commenter s stated there are specific limitations unique to the ability of the New York Metropolitan Area (NYMA) that further limit the amount of "Other G as" generation that can be displaced or redispatched in New York. C ommenter s said units located in New York City are required to run in order to provide needed voltage support and frequency stability in this heavily

populated urban center; while unit upgra des and re

- powering with natural gas have dramatically improved the emissions profile of "incity" generation over the past decade, the system cannot maintain stability and reliability without these key resources.

Commenter s stated an additional factor con cerns the use of oil in these dual

- fuel units; in order to protect reliable delivery of power during high natural gas use periods, whether during the peak summer time load period or winter periods when natural gas deliveries are constrained and preferentia lly routed to residential customers, NYISO rules require generators in the NYMA to combust oil in dual fuel units to ensure the reliable provision of electricity in the event of an unforeseen contingency on the natural gas transmission and delivery system. The commenter s said this requirement and its consequence for generation have previously been addressed by the EPA, particularly in its Cross State Air Pollution Rule ("CSAPR").

Comment 241: NY

- BB3 RE

Response 241: See section V.E. of the final rule pr eamble of the CPP for the EPA’s response to this comment and more information about Building Block 3. Any on

- the

- way incremental RE capacity post 2012 levels would have its generation qualify for compliance purposes in the future253 compliance year in which that generation occurs. In this way, among others, early action is being recognized and compatible with CPP compliance.

The following are summaries of the specific public comments under this comment:

Commenter s stated the CPP poses difficult challenges f or New York in achieving the target CO2 emission rate required by EPA's proposal. The commenter s said because it relies on Northeastern states' relatively ambitious renewable energy policy targets, Building Block Three sets an extremely challenging goal fo r the amount of renewable energy generation assumed to be achievable in New York. The commenter s said this difficulty is exacerbated by EPA's disallowance of existing hydroelectric power to meet EPA's target even though it has included existing hydroelectr ic power in establishing the State's emission reduction target. The
commenter s said it has been New York's policy to promote the development of new renewable energy resources since at least 2004, when the PSC instituted the State's 2015 renewable portfolio standard (RPS) target to support over 14,000 GWh of renewable electricity purchases made through a variety of initiatives including the Main Tier, Customer

- Sited Tier, Voluntary Market activity, Executive Order 111, and Long Island Power Authority (LIPA) contributions.

Commenter s stated EPA has ignored key aspects of New York's RPS in its rate

- setting formula. The commenter s said part of the rationale behind setting New York's RPS at 30 percent of electric energy used in the State was that existing hydropo wer facilities would be counted toward attainment of that goal. The commenter s said EPA has stripped existing hydropower out of New York's attainment, changing its effective renewable generation rate to 4 percent from 17 percent of energy generated. The co mmenter s said EPA thereby requires the State to develop more than 8,600 MW of additional renewable generation to meet EPA's final 18 percent target, as compared to the 2,700 MW that would be required to meet the full 25 percent EPA target were existing hyd ropower to be counted. The commenter s said as a result of the inconsistency in the rate

setting formula and the inequity in the regional rates, the commenter s do believe that the proposal to allow regional compliance with the targets under this Building Bl ock as put forth in the October 28th NODA, would resolve this concern.

Commenter s stated nuclear, hydro, and other zero

- emissions resources generated more than 53 percent of the electric energy used in New York in 2013; as such, they are crucial to New Yor k's emissions reductions efforts. The commenter s said without these resources, New York would not have been able to achieve the significant emissions reductions it has seen over the past decade; ensuring these resources remain in place will be key to the S tate meeting future targets as well; indeed, the loss of any one of these resources may significantly increase fossil emissions in the State.

Commenter s stated several factors limit states' ability to govern the operation of these facilities

- particularl y under the auspices of the Clean Air Act. The commenter s said as zero

- emissions resources, these plants are not directly regulated under the Act; the EPA has no authority to compel these resources to operate. The commenter s said further, particularly in s tates with deregulated electricity markets, states are also restricted from providing out

- of

- market incentives to these resources by FERC rules.254 Commenter s stated as it pertains to nuclear assets, licensing and supervision of these plants is the sole juri sdiction of the federal Nuclear Regulatory Commission (NRC); states who have sought decision

- making authority with respect to nuclear plants within their borders have found themselves with few options to either incentivize the continued operation of, or ad vocate for the closure of, these units.

Commenter s stated in New York, particularly, the EPA has not included the generation associated with its existing large hydroelectric facilities as part of the zero

- emission resource Building Block, reportedly becau se it "distorts" the adjusted emission rate for the State; in the same manner, emission

- free nuclear generation, either in the numerator or the denominator of the adjusted emission rate, distorts the ability of the State to meet its adjusted emission rate target. The commenter s suggest ed that eliminating nuclear generation from the adjusted emission rate calculation across all states would be an equitable way for states to allow power markets to select for emission

- free generation technologies in cooperatio n with the NRC if nuclear generation is a preferred approach or in cooperation with other permitting entities if other technologies such as wind or solar are more cost

- effective.

Comment 242: NY

- flexibility issues

Response 242: See sections I.A., VI., V III.B., and VIII.C. of the final rule preamble of the CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:

Early Actions

Commenter s stated while the State understands EPA's proposal does not require states to implement each particular building block at the assumed levels, this apparent flexibility is limited in practice for a state like New York. The commenter s said EPA's proposal offers a state flexibility to deviate from a particul ar building block only to the extent emission reductions may be made up through other building blocks or other means. The commenter s said because of the ambitious level of EPA's proposed target and the fact the State has already achieved substantial emissi on reductions using the same strategies EPA incorporates in the building blocks, such "flexibility" is in reality limited. The commenter s said as EPA explains in its proposal, the application of a building block to a state may be limited if a state demonst rates that it cannot achieve the anticipated level of emission reductions from the building block and cannot make up the emissions through application of other building blocks; this is precisely the situation for New York. The commenter s said having alread y driven substantial change in the generation dispatch and the supply portfolio, the State would have to leverage additional reductions using a smaller tool box than that available to the less

- advanced states. The commenter s said EPA should make adjustment s to three of the proposed building blocks; the commenter s said refinements to Building Blocks Two, Three, and Four would more accurately reflect achievable and adequately demonstrated opportunities for emission reductions across the country.

Gas and Elect ric Systems255 Commenter s stated New York's existing gas and electric infrastructure does not enable achievement of this building block as structured by EPA. Commenters stated that w hile the y understand that EPA's intent under the CPP is to apply all buildin g blocks equally to all states, New York presents a special case, as Congress recognized in the Energy Policy Act of 2005. The commenter s said in particular, Congress recognized the unique nature of New York's reliability issues by singling out New York an d specifically allowing the State to go beyond federal reliability standards. See 16 U.S.C. section 824o. The commenter s said EPA previously recognized many of these constraints unique to the New York City and Long Island regions of the State when it revis ed the State's emission budgets under the Cross

- State Air Pollution Rule (CSAPR) to account for the State's reliability issues. The commenter s said consistent with the Clean Air Act's requirement that standards of performance consider "energy requirements, " 42 U.S.C. section 7411(a)(1), EPA should modify the CPP to similarly account for these New York

specific constraints and reliability requirements. The commenter s said in this way, this building block will require re

- dispatch of existing coal and oil/gas steam units to the maximum extent that is realistically achievable. The commenter s said EPA's proposal assumes that the output of NGCC across the country could be increased to displace the output of the more carbon

- intense coal and oil and/or gas fired ste am units. The commenter s said its basis is that the nation's average NGCC fleet utilization rate or capacity factor using nameplate ratings is between 44%

- 46%, while the NGCC's fleet's availability factor is between 87%

- 92%. The commenter s said the NGC C output increase envisioned in this building block is not realistic for New York, however, because it does not adequately consider the State's existing physical gas and electric system constraints. The commenter s said New York cannot use this building blo ck to obtain the operating output of NGCC units envisioned by EPA.

Reliability Requirements

Commenter s stated to ensure electric system reliability, certain generators located in New York City and Long Island are required to comply with rules of the New York State Reliability Council (NYSRC) as implemented by the New York Independent System Operator, Inc. (NYISO). The commenter s said these rules require, for example, that, under high load constraints, some higher

- emitting oil/gas steam generating units be dispatched on oil to guard against potential interruption in gas supply to ensure electric reliability in these metropolitan areas. The commenter s said as a result, specific units that would generally be uneconomic to dispatch are required to operate; mor eover, because of the NYSRC Minimum Oil Burn requirements, some oil/gas steam units in New York City must operate using oil at certain times of the year, in order to be able to immediately switch operation and be prepared for a natural gas supply disruptio n. The commenter s said taken together, these unique New York City and Long Island requirements constrain the NYISO's ability to dispatch NGCC units. The commenter s sa i d EPA has neglected to take any of these limitations into account when evaluating the pot ential reduction in New York achievable under Building Block Two, despite previously recognizing these constraints in its final CSAPR revisions.

Comment 243: NC

- general goal; BSER; credit for early action256 Response 243: See sections VI., VIII.B., and VI II.C. of the final rule preamble of the CPP and the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:

Commenter s stated EPA has stated that there is flexibility in the rule in that it allows states to develop their own compliance plans; these compliance plans may, but are not required to, utilize any combination of the four "building blocks " identified in the proposed Clean Power Plan. The
commenter s were concerned that any purported flexibility is unfounded, and asks how flexibility can be achieved when EPA has already demonstrated that North Carolina will need to use all four building bloc ks to achieve an overall 44 percent reduction from the 2012 baseline CO2 rate of 1772 lb/MWh to a final rate of 992 lb/MWh. The commenter s said it must be recognized that the proposed emission reduction goals for North Carolina cannot be achieved solely by inside

the

- fence

- line improvements at existing fossil fuel

- fired EGUs, which is the only legal method to achieve these CO2 emission reductions.

Commenter s asserted that EPA unlawfully imposes a standard for affected, existing EGUs that is more stringent than the standard for new EGUs. The commenter s said compared to North Carolina's mandatory interim goal of 1,077 lb/MWh and final goal of 992 lb/MWh, the proposed new source performance standard for a new coal unit is 1,000

- 1,050 lb/MWh and for a new gas

u nit is 1,100 lb/MWh. The commenter s said EPA's logic implies that a new fossil unit in North Carolina, which can only be constructed using the absolute best control technology, requires a far less stringent compliance requirement than existing units. The c ommenter s said there is no legal or rational basis to set North Carolina's mandatory goals for existing units below the standards required for new units; to remedy this flaw, the commenter s request ed that any carbon emission rate adopted for North Carolina must be higher than what is required for new units.

Commenter s stated the regulation would require the state of North Carolina to meet a proposed target of a 39% reduction of CO2 intensity by 2030; North Carolina has been a leader in reducing our carbon footprint. The commenter s believe d this aggressive target ignores NC's position as an early leader of policies that have led to a decrease in emissions. The
commenter s said by using a 2012 baseline data in the rule, EPA punishes North Carolina

- a state th at spent over $2 billion to comply with the Clean Smokestacks Act, retire over 3,400 MW of coal generation since 2002, and considers the potential cost of carbon emissions when making decisions about the generation portfolio. The commenter s request ed that the EPA revise its emission goals to more accurately reflect the progress North Carolina has made in reducing emissions at the great expense of both utilities and ratepayers.

Comment 244: NC

- affected units (errors); existing units; under construction un its; capacity

Response 244: As explained in section V of the final rule preamble of the CPP , nuclear is not part of the final rule CPP. As explained in the CO 2 Emission Performance Rate and Goal Computation TSD for the CPP Final Rule, the EPA has revised its categorization of under construction units to treat units such as Dan and Lee that commenced operation in 2012 as under257 construction. The EPA also notes that building block assumptions are assumptions about the fleet

- wide capability for a region, not an expectation that every unit can operate in that manner. In this final rule, the EPA relies on net electric output. At proposal, the EPA was folding useful thermal output into the goal and the use of net energy output. Based on comments, the EPA no lon ger folds useful thermal output into its BSER quantification, but states are still permitted to use it when demonstrating compliance. The EPA followed the methodology as explained in Appendix 9 of the CO 2 Emission Performance Rate and Goal Computation TSD for the CPP Final Rule to determine the net electric generation and carbon dioxide emissions

. In summary, the generation is from the EIA

- 923 form, the emissions for Edgecombe Genco, LLC GEN1 is the sum of the Part 75 emissions from Units BLR01A and BLR01B, the emissions for Edgecombe Genco, LLC GEN2 is the sum of the Part 75 emissions from Units BLR02A and BLR02B, the emissions for the Roanoke Valley Energy Facility I GEN1 are the Part 75 Unit 1 emissions, and the emissions for Roanoke Valley Energy Facilit y II GEN2 are the Part 75 Unit 2 emissions.

The following are summaries of the specific public comments under this comment:

Commenter s stated EPA appears to have incorrectly assigned Electric Generation for all three IPP/CHP (Independent Power Producers/C ombined Heat and Power) coal

- fired plants in North Carolina. The commenter s said this includes the following plants: Edgecombe Genco LLC, Roanoke Valley Energy Facility I, and Roanoke Valley Energy Facility 11.

Commenter s stated EIA

- 923 reports only Net G eneration; EPA appears to have incorrectly assigned this value as equal to Electric Generation and recalculated Net Energy Output. The
commenter s believe d the correct method for determining Electric Generation would be to take the ratio of Electric Fuel co nsumption over Total Fuel consumption (as reported in EIA

- 923, Schedule 2

- 5, UtiiPg6_PiantFrame) and multiply this ratio by Net Generation. The commenter s said the difference between Net Generation and Electric Generation equals Useful Thermal Output (UTO) . The commenter s believe d EPA's error is propagated further in determining "Other'' emissions because it relies on UTO derivation.

Commenter s stated as a result of correcting errors the Sum of Electric Generation and the Sum of Net Energy Output should be 50.350,683 MWh and 50.607.838 MWh, respectively.

Commenter s stated EPA has double counted CO2 emissions for CHP plants characterized under coal and "Other." The commenter s said the total 2012 CO2 emissions for North Carolina's Edgecombe Genco Plant is 41 6,411 tons; EPA determined that 223,731 tons of these emissions are associated with thermal output; EPA determined the baseline rate by assigning 416,411 tons under coal and 223

, 731 tons under "Other". The commenter s said this results in a total plant

wide CO2 emissions of 640,142 which is clearly higher than recorded emissions data. The
commenter s said the correct method for this plant would be to assign 192.680 tons for coal (416,411 minus 223,731) and 223,731 tons for "Other'. The commenter s said this error correction also applies to North Carolina's other two CHP plants: Roanoke Valley Energy Facility I and II; it also applies to all CHP plants nationally.

Move from "Existing" to "Under Construction"258 Commenters stated EPA has incorrectly assigned the Le e EGUs as Existing NGCC; according to EIA Form 860 and NCDAQ records, the Lee plant began operations in late December 2012. The
commenter s said EIA Form 923 shows no reported electricity generation and EPA CAMD shows no reported air emissions for this plan t in 2012. The commenters said although the proposed rule has assigned no CO2 emissions levels or electricity generation levels, the EPA has counted this plant's capacity as part of North Carolina's "Existing NGCC" The commenters believe d that 1.068 MW NGC C capacity for the Lee plant should be included as "Under Construction" NGCC since EPA has not accounted for emissions or generation for this plant in the 2012 baseline calculation.

Commenters stated the Dan River EGUs should be moved from "Existing NGCC" to "Under Construction" NGCC; the new combined cycle units came on line in late December 2012, and operated for less than 10 days; the reported net generation was 135,081 MWh, which equates to approximately 2.5% capacity. The commenters said the EPA used t he 135,081 MWh generation and associated CO2 emissions to calculate unadjusted CO2 for existing NGCC. The
commenters asserted that the 2012 data for the Dan River plant are unrepresentative of an annual operation, and should be excluded from the goal calcu lation; based on the same reasoning, the
commenters asserted the plant's NGCC capacity of 691.1 MW should be added to the "Under Construction" NGCC capacity.

Commenter s stated given the significant emphasis EPA has placed on ramping up existing NGCC capac ity to 70% and the corresponding displacement in coal generation, the
commenter s point ed out that by including Dan River and Lee in the existing mix of NGCC EGUs, both of which generated little to no electricity, North Carolina's existing capacity is artif icially deflated. The commenter s said EPA applied a capacity factor of 37% in the proposed rule to determine BSER under Building Block 2.

Peaking Unit

Commenter s stated Butler Warner

- Fayetteville is owned and operated by the Fayetteville Public Works Comm ission; it originally consisted of 8 peak shaving gas turbines that produced a maximum of 200 MW; in 1988, six of these units were converted to a combined

- cycle system which increased the capacity by 65 MW. The commenter s said historically the plant has op erated as a peak power facility; in addition, Butler

- Warner has an agreement with Duke Energy from 2012 to 2017 to provide electricity during high demand period; in return, the customers of the PWC receive lower electricity rates. The commenter s said this plant generally operates at an annual capacity factor of less than 5%; during peak months January, June, July and August, it operates at less than 15% of capacity and during off peak months it operates at less than 2% of capacity. The commenter s asserted t his unit should be considered a peaking unit under the proposed rule and excluded from use in Building Block 2 Re

- Dispatch of Existing Units; and is
not capable of increasing its capacity to 70% and operating as a base load unit.

Commenter s stated the But ler

- Warner NGCC unit is owned by the Fayetteville Public Works Commission ("PWC") and is dispatched by an IOU by contract for the exclusive benefit of PWC. The commenter s said this unit is not subject to the regulation of the NCUC or oversight by the Publi c Staff. The commenter s said including the Butler

- Warner facility in existing NGCC capacity incorrectly presumes that the unit can be freely dispatched consistent with the Proposed259 Rule's 70% capacity threshold. The commenter s said the Butler

- Warner NGCC u nit has operated as a peaking facility and operates at a capacity factor of less than 15% during peak months and less than 2% during off

- peak months. There is no indication that the Butler

- Warner NGCC unit could be physically dispatched at a 70% capacity f actor for a sustained period of time going forward. The commenter s added the Butler

- Warner facility is subject to contractual terms between PEC and PWC that control its dispatch through 2017; the NCUC and Public Staff lack authority to alter the terms of t his contract to force compliance with EPA's NGCC dispatch targets. The commenter s said no one can obligate the parties to renew the contract after 2017 or force PWC to enter into a new contract with other parties. The commenter s said based on these limitat ions, the Butler

- Warner NGCC unit should be removed from existing NGCC capacity.

Merchant Plant

Commenter s stated Plant Rowan is a merchant plant owned by Southern Power Company and contractually dispatched for the benefit of Duke Energy Progress, Wester n municipalities, and an electric membership cooperative authority. The commenter s said the Rowan plant is subject to separate contractual terms between Southern Company and three other entities with expiration dates ranging from December 2015 to December 2015; the plant is not subject to the regulation of the North Carolina Utilities Commission (NCUC) or oversight by the Public Staff. The
commenter s said the current long

- term contract terms may inhibit running the Rowan units at the 70% level stated in the Proposed Rule, and the NCUC and Public Staff lack authority to alter the terms of the contracts to force compliance with EPA's NGCC dispatch targets.

Commenter s stated the Rowan units and Butler Warner units do not comprise the retail electric system in North Carolina, and are not under the authority of the state regulatory agencies; as such, the commenter s asserted they should not be included in the calculation of existing NGCC capacity. The commenter s said the inclusion of these plants in the calculatio n of the goal under Building Block 2 assumes that both plants can be part of a new dispatch methodology, when there is no mechanism by which a state plan can force either plant to run greater or lesser amounts to affect dispatch of the electric unities gen eration fleet.

Commenter s stated the Rowan NGCC unit is owned by Southern Company and contractually dispatched for the benefit of an IOU, municipal power agencies and an electric membership cooperative. The commenter s said this unit is not subject to the regulation of the NCUC or oversight by the Public Staff. The commenter s said including the Rowan facility in existing NGCC capacity incorrectly presumes that the unit can be freely dispatched consistent with the Proposed Rule's 70% capacity threshold. The commenter s added the Rowan facility is subject to separate contractual terms between Southern Company and three other entities with expiration dates ranging from December 2015 to December 2025. The commenter s said the NCUC and Public Staff lack authority t o alter the terms of these contracts to force compliance with EPA's NGCC dispatch targets; likewise, no one can obligate the parties to renew the contracts as they expire or otherwise force Southern Company to enter into new contracts with new parties. Th e commenter s said based on these limitations, the Rowan NGCC unit should be removed from existing NGCC capacity.

Existing NGCC Capacity260 Commenter s stated the Rosemary Plant has been operational since 1990; from 2001 through 2012 (144 months of operation) , Rosemary did not exceed a monthly capacity factor of 34%. The commenter s said the NGCC units are smaller, older vintage types owned by Dominion North Carolina Power; the operation is dispatched through the PJM auction process. The
commenter s said due to the age and poor economics, Rosemary units operate at a reduced capacity compared with the newer NGCC units. The commenter s said the more efficient Sherwood H. Smith units and Buck units operate at 30% higher capacity rate and 50

- 70% lower costs than Rosem ary. The commenter s said due to the operational and economic limitations associated with the Rosemary Plant, it is unrealistic to expect attaining a capacity factor of 70% as proposed in the rule. The commenter s said significant upgrades and major modifica tions would be required to operate Rosemary to 70% capacity factor which would trigger 111(b) and PSD/NSR.

Commenter s stated the Rosemary NGCC unit possesses unique operational characteristics and limitations that render it unsuitable for inclusion in the Building Block 2 calculation. The
commenter s said the Rosemary NGCC unit is a small, older vintage NGCC unit owned by DNCP that operates more like a combustion turbine ("CT") unit than a NGCC as evidenced by its annual capacity factors for calendar years 2 010 through 2013: 2010

- 7.40%; 2011

- 9.36%; 2012

- 5.51%; and 2013

- 4.66%. The commenter s said from January 2001 through December 2012 (144 months), Rosemary did not exceed a monthly capacity factor of 34%; its operation is dispatched through the PJM au ction process; thus if it is not dispatched pursuant to PJM's auction process then it cannot be dispatched to displace other units within PJM as contemplated by Building Block 2. The commenter s said as DNCP does not have other generating facilities located within its North Carolina service territory, there is no further generation that can be offset. The commenter s said the fact that it operates so rarely is indicative of its relatively poor economics within the PJM footprint, which is illustrated by its 20 12 operating data: heat rate of 9,654 Btu/kWh and Operating and Maintenance ("O&M") Expense of $82.16/MWh (compare with the Smith units which had a combined 2012 heat rate of 6,946 Btu/kWh and O&M Expense of $37.28/MWh; and the Buck unit which had a 2012 h eat rate of 7,087 Btu/kWh and O&M Expense of $26.36/MWh). The commenter s added the Rosemary NGCC is subject to EPA permit restrictions that limit the amount of time that it can run; due to the limitations associated with the Rosemary NGCC unit, it is unrea listic to expect it to attain a capacity factor of 70%, and it should not be included in the calculation for Building Block 2. The commenter s said operating the Rosemary unit at a capacity factor in the 65%

- 75% range would require significant upgrades and modifications that would likely trigger EPA's proposed 111(b) rule, notwithstanding the other limitations of its currently existing air permit.

Commenter s request ed that Lee and Dan River EGUs be moved to "Under Construction" NGCC (1,759.1 MW nameplate ca pacity or 1,541 MW net summer capacity); and North Carolina's Existing NGCC nameplate capacity be revised from 4.709.1 MW to 1.930.4 MW (1.722 MW net summer capacity) which moves Buck and Smith units to "Under Construction" and Butler Warner, Rowan, and Ro semary to "Excluded" NGCC category.

Under Construction Capacity

Commenter s reviewed EPA's NEEDS v. 5.13, and found that the 2,249 MW value is based on a generic assignment. The commenter s said EPA did not identify which specific "planned

-261 committed'' units this capacity is based on, and cited data confidentiality restrictions. The
commenter s believe d that EPA must disclose the basis upon which 2,249 MW was derived for North Carolina. The commenter s said EPA also does not provide any justification of how it assigned 2,249 MW to North Carolina from a regional (North and South Carolina combined) planned capacity estimate of 4,203 MW.

Commenter s stated applying the definition contained in Section 4.3 of NEEDS documentation, the commenter s believe d only three NG CC plants as "Under Construction" because ground has been broken, financing obtained, or other demonstrable factors indicate a high probability that the unit will be built before 2016; this includes Lee, Dan River, and LV. Sutton:

• LV. Sutton Combined Cycl e Units (730 MW nameplate capacity, 622 net summer capacity)

• Lee Combined Cycle Units (1,068 MW nameplate capacity, 921 net summer capacity)

• Dan River Combined Cycle Units (691.1 MW nameplate capacity, 620 net summer capacity).

• Total Under Construction" NGCC = 2.489.1 MW nameplate capacity. 2.163 net summer capacity.

The commenter s said LV. Sutton EGUs (ORIS ID 2713) started operation in January 2014; EPA's Appendix 7 (Unit

- Level

- Inventory) in the TSD does not show 730 MW of new NGCC capacity for this p lant. The commenter s said based on this finding, EPA should add 730 MW to the "Under Construction" NGCC category.

The commenter s said North Carolina's "Under Construction" NGCC nameplate capacity needs to be revised from 2.249 MW to 2.489.1 MW or 2.163 MW net summer capacity. The commenter s said if EPA chooses to not move Lee and Dan River to "Under Construction", North Carolina's NGCC nameplate capacity should be 730 MW (622 MW net summer capacity) to represent the LV. Sutton plant.

Commenter s stated EPA calculates North Carolina's existing natural gas combined cycle ("NGCC") capacity as of 2012 to be 4,709 MW (nameplate); EPA erred in its baseline calculation by including several plants that were under construction in 2012. The commenter s said including the full capacity for H. F. Lee and Dan River in Building Block 2 calculations significantly understates the capacity values for NGCCs. The commenter s said for H. F. Lee NGCC, zero existing NGCC capacity should be attributed to 2012 because zero generation was reported for 2012 in EIA Form 923. The commenter s said for Dan River NGCC, only 135,081 MWh of generation was reported for 2012 in EIA Form 923, representing minimal operation as it came online at the end of the year; as Dan River NGCC was not operati onal for more than a week or two in 2012, zero existing NGCC capacity should be attributed to 2012. The
commenter s said reclassification of the H. F. Lee NGCC and Dan River NGCC units from existing capacity to "under construction" reduces North Carolina's existing NGCC capacity from 3,869 MW to 2,110 MW.262 Commenter s stated alternatively, EPA should recalculate its numbers using the pro

- rata share of H.F. Lee NGCC and Dan River NGCC units that were operational in 2012 to more accurately reflect the availabil ity of NGCC generation during the year. The commenter s said as there was zero electric generation reported for H.F. Lee NGCC in 2012, the calculation yields an effective nameplate capacity of 0 MW for H.F. Lee NGCC for 2012. The commenter s said applying a 64.5% capacity factor to the Dan River generation (the average combined capacity factor for Smith 4 and 5, Rosemary,13 and Buck NGCC generation for 2012) yields an effective existing nameplate capacity of 24 MW for Dan River for 2012.

Nuclear Capacity

Co mmenter s stated EPA has used an incorrect value for North Carolina's nuclear capacity; both EIA Form 860 and Appendix 7 in the 111(d) rule show total nameplate capacity of 5,394.7 MW; instead, EPA used 5,016.2 MW in North Carolina's goal calculation in App endix 7. The
commenter s said the GHG Abatement Measures TSD shows yet a different nuclear capacity for North Carolina

- 4,970 MW. The commenter s said this error needs to be fixed by correcting North Carolina's total nuclear nameplate capacity to 5,394.7 MW or 4,998.0 net summer capacity.

Comment 245: NC

- The EPA should set lower target for NC based on expected growth of RE and EE in NC; strengthen target

Response 245: For the EPA’s response to this comment, see sections V.A, V.E, and the CO 2 Emission Per formance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenter s stated if EPA had taken into account the actual expected renewable and energy ef

ficiency growth in North Carolina, the State's target would be much lower. The commenter s said that North Carolina is poised to achieve a target of 809 lbs/MWh, taking into account the expected renewable and energy efficiency growth; EPA should revise Nort h Carolina's target to match the real

- world reductions that are expected to occur in the state.

Commenter s stated North Carolina is well positioned to not only meet, but surpass the proposed goal of 992 pounds of CO2 per net MWh from all affected units by 2030. The commenter s said the state has great potential for growth in renewable energy generation and energy efficiency, and the EPA's assumptions should be strengthened to more closely represent the state's current trajectory and opportunities for growth

.
Commenter s stated North Carolina has seen tremendous growth in renewable energy generation over the last decade; spurred in part by the adoption of the state's Renewable Energy and Energy Efficiency Portfolio Standard ("REPS") in 2007 and the state tax credit, solar electric generation has grown exponentially. The commenter s said in 2013 alone, North Carolina installed 335 MW of solar electric capacity, ranking it 3rd in the nation; as of summer 2014, North Carolina ranked263 4th in the nation in total inst alled capacity, and in May 2014, ranked 2nd in the country for new solar capacity under development.

Commenter s stated it is important to note that a large amount of this development took place after 2012, the baseline year used to calculate the emission rate goals; in addition, North Carolina's REPS mandate will continue to increase through the year 2021, at which point utilities will be required to meet 12.5 percent of electricity demand with renewable energy and energy efficiency measures.

Commenter s s tated North Carolina also has incredible wind energy potential, and a number of wind developers have shown interest in developing large projects in coastal North Carolina. The
commenter s said based on the growth of renewable energy generation that took pla ce after 2012, the state's solid and continuing growth in solar development, increasingly affordable solar technology and strong wind energy potential, North Carolina's proposed emission rate goal should be strengthened to better represent its renewable en ergy future.

Commenter s stated Building block 4, energy efficiency, also carries strong potential; energy efficiency programs can be implemented quickly and at low cost, often resulting in direct savings to consumers, businesses and governmental entities. The commenter s said while North Carolina currently lags behind other states in energy efficiency programs and progress, demand

- side programs will likely be spurred along with more urgency toward the end of the decade as the final REPS goal, 40 percent of which may be achieved through energy efficiency measures, approaches. The commenter s said there is incredible potential for energy efficiency gains in North Carolina, and stronger standards will help to drive innovation and investment in programs, technolo gy and incentives; stronger building codes, more comprehensive utility programs and a greater focus on multi

- family and low

- income dwellings will help the state to achieve greater demand

- side energy efficiency.

Commenter s stated the EPA should strengthen North Carolina's emission rate goal to take into account greater potential for energy efficiency measures.

Commenter s stated "The Responsible Energy Future 2015" (www.ncwarn.org/publications) calls for North Carolina to achieve the following by 2029: 7% r enewable energy, 24% energy efficiency, and 10% combined heat and power, as a percentage of total energy sales; phasing out all coal

- fired power plants; no new natural gas or nuclear plants; and closing the dirtiest natural gas and most dangerous nuclear u nits. The commenter s said this transition to cleaner energy will benefit North Carolina's economy and health; eliminating coal from North Carolina's energy mix, and reducing the use of natural gas keeps the $1.7 billion for out

- of

- state coal in North Carol ina's economy, while drastically reducing the climate

- harming pollution pumped into the air. The
commenter s said it is clear that a balanced mix of distributed power (putting electricity where it is needed) and energy efficiency is the most reliable, cost effective and readily available path over the next 15 years.

Comment 246: NC

- BB1

- HRI264 Response 246: See section V.C. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 1.

The followin g are summaries of the specific public comments under this comment:

Commenter s stated North Carolina's 2002 Clean Smokestacks Act resulted in significant reductions in nitrogen oxide (NOx) and sulfur dioxide (SO2) emissions from coal

- fired generation plan ts; this law also played a key role in decisions to retire older, inefficient coal units in order to comply with state law; it also had corresponding carbon emission benefits. The
commenter s said according to the nonpartisan May 2014 report, Benchmarking A ir Emissions of the 100 Largest Electric Producers in the United States, North Carolina's coal fleet is the most efficient in the country with a carbon emission rate of 2,062 lb /MWh. The commenter s said achieving the NOx and sulfur dioxide SO2 reductions m andated in Clean Smokestacks require $7.5 billion in capital improvements; North Carolina ratepayers contributed $2.5 billion of that total. The commenter s said if the NC efficient coal units are unable to achieve EPA's projected heat rate improvement and EPA's interim and final carbon intensity reduction targets reduce the useful life of these plants, the ratepayers would be penalized for funding investments that significantly cut harmful emissions and led to the retirement of many of the state's older coa l units.

Commenter s stated EPA's draft rule projects that North Carolina's coal

- fired units can operate 6% more efficiently through heat rate improvements; this target might be achievable for states with less efficient coal generation fleet, but it is unc lear whether NC's highly efficient coal

- fleet can achieve comparable heat rate improvements. The commenter s said if the projected efficiency gains are not technologically or economically feasible, North Carolina would need to find likely more costly emissi on cuts elsewhere.

Commenter s stated if North Carolina's baseline power needs are increasingly met by gas rather than coal

- fired units, and with coal

- fired units operating less efficiently as their utilization rate decreases, EPA needs to reexamine whethe r the projected heat rate improvements are feasible for existing coal

- fired units in NC and appropriately adjust the required rate reductions.

Comment 247: NC

– Nameplate capacity

- BB2

Response 247: The EPA uses summer net capacity values for estimating building block 2 potential in the final CPP.

The following are summaries of the specific public comments under this comment:

Commenter s stated utilizing nameplate capacity for estimating future generation potential and associated CO2 overestimates potenti al CO2 reductions from adjusted generation profiles. The
commenter s recommend ed that EPA utilize the "summer net capacity values" rather than nameplate capacity to more accurately reflect the generation profile for North Carolina. The
commenter s recognize d that CO2 is produced throughout the year, and not just in summer, thus further recommends that the EPA utilize a weighted value of seasonal net capacity (summer and winter) in calculations involving existing generation.265 Comment 248: NC

- BB3 RE , the EP A's Building Block 3 is based on an undemonstrated regional portfolio approach

Response 248: The EPA has revised its block three quantification based on comments and our further consideration. See section s V.A.4.c and V.E. of the final rule preamble of th e CPP for a discussion of building block three in the final CPP. Section VI of the final rule preamble of the CPP explains that the EPA is capturing the replacement effect of renewable on baseline fossil generation levels as discussed in the NODA and supp orted by commenter s

. The following are summaries of the specific public comments under this comment:

EPA should account for actual and expected renewables growth between 2013 and 2017.

Commenter s stated EPA should account for actual and expected renewabl es growth between 2013 and 2017. The commenter s said EPA starts with each state's 2012 renewable energy generation, and then assumes that states will not begin ramping up renewable energy from 2012 levels until 2017. The commenter s said this approach fails to capture any of the recent or expected growth in renewable energy in North Carolina between 2012 and 2017, ignoring the significant investments that are already underway. The commenter s said since 2012, North Carolina's renewable energy generation has i ncreased from 2,704 GWh to 3,224 GWh; these increases are expected to continue due to North Carolina's ongoing RPS obligations and the ongoing dramatic cost declines in solar and wind technologies. The commenter s said this growth in renewable generation to date reduces North Carolina's emission rate by 56 lbs/MWh. The
commenter s said EPA should strengthen the renewable assumptions underlying its target for North Carolina to take into account the significant increase in renewable energy since 2012. The

comme nter s added, EPA should update these numbers again prior to 2017 to ensure that renewable energy targets reflect the real world investments that have already been made, allowing state targets to become more aggressive as states ramp up their renewable gene ration.

EPA should assume full compliance with current RPS requirements that are set by state law.

Commenter s stated North Carolina's REPS requires that the state's electric power suppliers (investor

- owned utilities, electric membership corporations or c o

- operatives, and municipal utilities) supply an increasing portion of their retail electricity sales from renewable energy or energy efficiency resources. The commenter s said beginning in 2012, each electric power supplier was required to meet 3% of the p rior year's retail electricity sales from renewable energy resources; this percentage ultimately increases to 10% of retail sales in 2018 for all suppliers (capping out at this level for EMCs and municipal utilities), and 12.5% in 2021 for the investor

own ed utilities. The commenter s said through 2020, up to 25% of the total requirement (3.125% of sales) can come from implementation of energy efficiency and demand

- side management measures, and in 2021 and after up to 40% of the requirement (5% of sales) can come from EE/DSM. The commenter s said under the REPS, renewable energy generated out of state may be purchased and used for compliance as long as it is delivered to a public utility that serves retail electric customers in North Carolina; in addition, uti lities may comply by purchasing renewable266 energy certificates ("RECs"); no more than 25% of the requirements may be met with out

- of

state RECs, however. N.C. Gen. Stat. section 62

- 133.8(b)

- (c).

Commenter s stated under EPA's proposed approach, 17 of the 29 states with RPS obligations under state law have lower targets under the EPA approach than what is required to meet their existing state laws; this includes North Carolina, whose electric suppliers have an obligation under its REPS to achieve approximatel y 34 million MWh of clean energy by 202117, but only11.7 million MWh by 2030 under EPA's proposed rule. The commenter s said this cannot reflect the "best" system of emission reduction; EPA should assume that state will achieve the greater of their EPA regi onal target or the level of renewables needed to comply with their state RPS obligations, and adjust the targets for states like North Carolina accordingly.

EPA should ensure that the rate of renewables deployment is at least as aggressive as historical

r ates.

Commenter s urge d EPA to ensure that the rate of renewable energy deployment assumed in the CPP's analysis is at least as aggressive as the historical rates of deployment. The commenter s said this will ensure that renewable energy targets truly refle ct the "best" system of emission reduction, based on real world information. The commenter s said EPA can use this information to set a national renewable energy growth rate benchmark based on demonstrated growth nationally from 2009 to 2013. The commenter s said the Union of Concerned Scientists ("UCS") has developed a "Demonstrated Growth" approach, which calculates a national average renewable energy benchmark growth rate of 1% of annual electricity sales based on actual state data from 2009 to 2013 from E IA. The commenter s encourage d EPA to adopt the UCS Demonstrated Growth approach; for states below the benchmark, EPA should assume that these states can gradually achieve 1% by 2020 and continue at that level through 2030, similar to the approach that EPA takes for the energy efficiency building block. The commenter s said for the leading 15 states, EPA should assume that they can continue at their five

- year average rate up to 1.5% per year; this approach will better reflect recent growth in renewable energy across the country and allow those states with the best renewable energy policies to be captured in the rule rather than diminishing these aggressive state goals through averaging.

The commenter s said if EPA adopts these recommendations

- increasing rene wable energy growth rate benchmarks to reflect national best practices, assuming full compliance with state RPS policies and accounting for renewable energy growth from 2013

- 2017

- UCS projects that these tweaks would increase the state's renewable energy target in 2020 from EPA's proposal of 4,477 GWh to 11,621 GWh. The commenter s said in 2030, North Carolina could achieve 26,674 GWh of renewables, compared to EPA's proposed target of 11,668 GWh; this analysis confirms that much more ambitious renewable en ergy targets are achievable.

EPA should update its formula to account correctly for emission reductions from renewable
energy.

Commenter s stated in its October 27, 2014, Notice of Data Availability ("NODA"), EPA explains that the formula used in its prop osed rule did not adequately account for the emission reductions from renewable energy; as EPA explains, the original formula failed to account for the reduction in generation at coal and gas power plants that will occur when generation from267 additional ren ewables is added to the grid. The commenter s said when EPA sets final state targets, it should use the corrected formula proposed in the Notice of Data Availability to ensure that renewable energy is given full credit for its ability to displace fossil gen eration and reduce emissions from carbon dioxide.

Other

Commenter s stated the 2007 North Carolina Renewable Energy and Efficiency Portfolio Standard (NC REPS) law requires investor

- owned utilities to annually generate 12.5% of electricity from renewable sources by 2021. The commenter s said the law allows energy efficiency to account for up to 25% of the mandate through 2020 and 40% after 2021. The
commenter s said North Carolina remains the only state in the Southeast with a mandatory renewable electricity law. The commenter s are concerned that EPA's methodology for setting state renewable targets could result in higher compliance costs for North Carolina.

The commenter s said in 2012 renewables represented 0 .4% of Kentucky's total electricity production; E PA projects that amount can grow to 2% by 2030; during that same period, North Carolina's percentage of electricity from renewables is projected to grow from 2% to 10%. The
commenter s said while this represents a five

- fold increase in renewable generation for both states, the incremental costs achieving a 1.6% increase would presumably be much less than attaining an 8% increase.

The commenter s said EPA should adjust North Carolina's carbon reduction targets to reward NC for enacting mandatory renewable pow er standard that reduced carbon emissions. The
commenter s said North Carolina demonstrated that a southeastern state could embrace renewables in a cost

- effective manner and should not be burdened with higher compliance costs because elected officials in ot her states did not to take similar actions.

Commenter s stated in Table 4

- 2 of the TSD, EPA concluded that North Carolina's 2020 "Effective RE Rate" is 10%, which is used to establish final RE generation targets for North Carolina and other Southeast state s; however, North Carolina's REPS law and North Carolina Utility Commission (NCUC) orders allow that 10% RE to be met through several other means besides in

- state RE including the following:

• Energy efficiency / demand side management

• Out of state generat ion

• Small hydroelectric generation

• Out of state purchases / Renewable Energy Certificates (REC)

• Thermal purchases

Commenter s said because of these provisions, North Carolina is not expected to implement in

state RE at a level of 10% of electricity sale s; therefore, using North Carolina's REPS law to establish 10% RE as BSER for the Southeast is incorrect. The commenter s said EPA should have268 subtracted out the expected implementation rate of these other provisions from the 10% "Effective RE Rate" prior t o establishing BSER.

Commenter s said under the rule, EE can account for up to 40% of the RE target in 2021; as stated in the proposed rule and experienced in North Carolina, EE actions are considered lower cost options; therefore, the commenter s asserted that the entire allowable EE percentage will be implemented by the utilities, and should be separated from RE rate calculation.

Commenter s said based on the NCUC's evaluation, the actual 2020 "Effective RE Rate" should be 3.14% of retail sales for Investo r Owned Utilities and 5.53% of retail sales for municipalities and cooperatives; the weighted average REPS for all suppliers (total in state renewable portion) is 3.75% of 2020 sales. The commenter s said by 2021, the RE rate drops to 3.07% of sales because state law allows higher portion of the REPS supplied through energy efficiency

measures.

Commenter s said since EPA is using a single RE rate to establish future RE generation targets, the commenter s are requesting EPA to change the 10% "Effective RE Rate " in the rule to that based on each state's technical and economic potential; in North Carolina's case, the state's REPS represents the product of such analysis and the appropriate targets/provisions contained in the REPS be used as BSER for North Carolina

. EPA has misinterpreted Renewable Energy (RE) requirements under the NC REPS.

Commenter s stated the NC REPS specifies RE requirements in terms of total sales, not in

- state electricity generation; since North Carolina imports electricity, actual generat ion is less than the annual sales amount. The commenter s said in the proposed rule, EPA started with 2012 RE generation for each state, and defined a "Region Target'' level of RE performance in 2020 based on the average of each state's REPS. The commenter s said for North Carolina and other states in the Southeast Region, EPA used a 2020 Effective RE rate of 10% based North Carolina's REPS to represent the "Region Target;" EPA then calculated each region's RE goal by multiplying the total region

- wide 2012 ge neration with the "Region Target" (i.e., 10%). The commenter s said for North Carolina, EPA multiplied the 2012 RE in

- state generation (116,681,763 MWh) with 10% to arrive at 11,668,176 MWh state goal. The commenter s said the true "Region Target'' using EPA 's approach should be based on each state's own technical and cost analysis of RE potential; for North Carolina, the REPS represents the results of such analysis and its associated 2020 target of 3.75% of sales and 2021 target of 3.07% of sales should be u sed by EPA North Carolina's REPS is based on a percent of sales, EPA must revise its calculation by correcting for instate generation as a function of annual sales. The commenter s said in 2012, North Carolina's in

- state electricity generation was 86.12% of total sales, which means 13.88% was imported; EPA can do one of the following to most accurately represent North Carolina's REPS into its goal calculation:

1. Divide the 2012 in

- state generation by 86.12% or

2. Divide the 3.07% of sales RE "Region Target'' by 86.12%

The commenter s said applying the above method results in North Carolina's RE goal of 4,159.464 MWh instead of 11,668,176 MWh used in the proposed rule.269 Recalculate Annual Growth Factor for the Region

Commenter s stated errors from misinterpreting the RE requirements under the NC REPS propagates to the "Annual Regional Growth Factor'' calculation. The commenter s said when the 3.07% of sales RE "Region Target" is applied and in

- state generation is replaced with total sales, the corrected "Annual Reg ional Growth Factor'' is 4.8% instead of 13.4% used in the rule.

Biomass

Commenter s stated removing biomass from the 2012 RE generation that EPA used in the rule for North Carolina, results in 139.491 MWh of RE as a starting point. The commenter s said thi s significantly changes the proposed interim and final RE targets.

Commenters stated, EPA bases its renewable energy ("RE") target for every state in the Southeast exclusively on one legislatively adopted, undemonstrated RPS

- the North Carolina Renewable Energy and Energy Efficiency Portfolio Standard ("REPS"). Commenters said, EPA's approach would thus impose one state's legislative choice onto numerous surrounding states, ignoring North Carolina's policy priorities and other state

- specific factors that l ed to enactment of that state's standards. Commenters said, moreover, EPA conveniently omits significant aspects of North Carolina's REPS that make EPA's version of the standard much more stringent than the version actually adopted.

Commenters stated, unli ke EPA's version, the North Carolina REPS is not simply a mandate for utilities to generate a certain percentage of their electricity from renewable resources by a certain date. Commenters said, to the contrary, it is a combined program for RE and energy e fficiency in which regulated parties can use a combination of renewable generation, efficiency projects or demand reduction to meet a single standard. Commenters said, because EPA's proposal fails to recognize this fact, Building Block 3 is without precede nt anywhere in the southeastern United States and fails to satisfy the requirements of BSER.

Commenters stated, pursuant to N.C.G.S. Section 62

- 133.8(b)(1), public utilities are subject to an RPS requirement that increases from three percent "of retail sal es" in 2012 to 12.5 percent "of retail sales" in 2021. Commenters said, section 62

- 133.8(b)(2) then provides that utilities can meet this requirement through a variety of means. Commenters said, importantly, public utilities may use reduced energy consumpt ion from the implementation of energy efficiency measures to satisfy between 25 percent and 40 percent of their requirement, and they can use electricity demand reduction to meet 100 percent of their requirement. Commenters said, in other words, EPA's assu med levels of renewable generation for southeastern states are based on a standard that allows utilities to comply without any reliance on renewable energy whatsoever. Commenters said, given that utilities can use energy efficiency

- oriented actions to comp ly with the North Carolina REPS fully, the North Carolina REPS cannot be viewed as a judgment by the state of North Carolina as to its ability to generate electricity from renewable resources practically nor should it be used to make judgments about any ot her state's ability to do so.

Commenters stated, what is more, the statute itself confesses the RPS may be unrealistic. Commenters said, it authorizes the North Carolina Utilities Commission ("NCUC") to delay or270 modify

- in whole or in part

- all of the su bstantive requirements of the North Carolina REPS upon a showing that it is in the public interest to do so. [ S ee N.C.G.S. section 62

- 133.8(i)(2).] Commenters said, utilities need only demonstrate that they have made a reasonable effort to comply. Commente rs said, in contrast, any RPS that is included in a state's section 111(d) plan could not be changed without prior approval of EPA, and then only if the state shows that such a change is necessary in order to meet the emissions goal. Commenters said, moreo ver, North Carolina requires utilities to either shift generation to renewable resources or to achieve equivalent reductions in non

- renewable generation through energy efficiency and demand reduction, but it allows utilities to use both mechanisms to meet the overall 12.5 percent RPS target. Commenters said, as a result, the proposal treats the North Carolina REPS as far more than what it really is.

Commenters stated, nonetheless, EPA assumes southeastern states can obtain 10 percent of their generation fro m renewable energy and meet separate, aggressive energy efficiency levels. Commenters said, in addition, North Carolina has left itself the equivalent of an "escape hatch" from its more modest requirements

- in order to protect the public interest

- due to the potential difficulties that could arise during implementation. Commenters said, EPA's proposal has no such escape hatch. Commenters said, because no state in the Southeast region has come close to demonstrating the level of renewable generation EPA as sumes, EPA has failed to establish that its estimates of renewable generation in the Southeast have been Adequately Demonstrated.

Comment 249: NC

- BB4 EE

Response 249: See section V.A. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 4.

The following are summaries of the specific public comments under this comment:

Commenter s stated EPA has made an error in the assumption that EE savings can keep growing at the same rate (1.5% of retai l sales) for years into the future. The commenter s said the type of EE measures that have been implemented to date and those that are likely to be pursued in the future will be different. The commenter s said beyond energy efficiency lighting measures and

o ther "low hanging fruits" which North Carolina has implemented in the recent past, future EE savings will need to come from costly equipment upgrades and replacements and consumer behavior modification programs. The commenter s said the cost and outcome of such measures is unknown and should not be assumed to be easily implementable or achievable. The commenter s said because of the calculation errors and incorrect assumptions underlying the EE savings goal of the Proposed Rule, EPA should withdraw the 1.5% a nnual incremental savings goal, and the 10.3% annual cumulative goal for 2029, and work with the State to develop goals that are technically and economically feasible for North Carolina based on North Carolina

- specific facts.

Comment 250: NC

- Proposed r ule relies on NC RPS, but it contains no provision for determining which state takes credit across state lines271 Response 250: See section VIII. L . of the final rule preamble of the CPP for the EPA’s response to this comment.

The following are summaries of th e specific public comments under this comment:

According to c ommenter s , the North Carolina RPS standard allows for out of state power purchases to account for up to 25% of the renewable standard. Commenter s indicate d , however, that in the North Carolina R PS there is no provision for determining who can take credit across state lines in the RPS, negating the type of negotiation required by the proposed rules.

Comment 251: NC

- Calculated gross heat rate for NC and all states for 2012, NC has lowest
state

- wide average heat rate in country, Clean Smokestacks Act changed fleet and lowered CO2 emissions significantly

Response 251: See section V.C. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building B lock 1.

The following are summaries of the specific public comments under this comment:

Commenter s indicated that since the EPA did not provide the data for individual EGUs analyzed in its statistical approach, they were unable to discern where North Caro lina's fleet ranked relative to others. Commenter s said to assess the relative performance of their coal fleet, they calculated the state

- level gross heat rate using EPA AMPD data for year 2012. Commenter s said they found that North Carolina's 2012 gross h eat rate for coal

- fired EGUs was 9,071 Btu/kWh, which is significantly lower than EPA's national average of 9,753 Btu/kWh and the lowest in the country. Commenter s said North Carolina's heat rate performance results are before making corrections that EPA m ade to account for variability in meteorology and capacity factors, and would most likely be lower when these factors are accounted for.

Commenter s said having the lowest gross heat rate reflects that some or most of North Carolina's coal

- fired EGUs have successfully implemented efficiency measures prior to the proposed rulemaking . Commenter s said North Carolina's heat rate values can be correlated with the actions taken by the state legislature with the enactment of the Clean Smokestacks Act in 2002 which required significant reductions in NOx and SO2 emissions from coal

- fired EGUs. Commenter s said that compliance with the law resulted in multiple retirements, natural gas conversions, and add

- on pollution control equipment, with 2013 being the final compli ance year for meeting emissions targets.

Commenter s said the 2012 heat rate data presented here reflect the operating changes that occurred at the EGUs as each of the affected plants were retrofitted with NOx, SO2, and PM controls. Commenter s said it shou ld be noted that in 2012, a significant shift to natural gas had already occurred, and many coal

- fired EGUs were operating at much lower capacity than previous years, yet despite this change, North Carolina's state

- wide average heat rate remained the lowes t in the nation. Commenter s indicated the cumulative effect of the EGU fleet change was to reduce CO2 emissions. Commenter s said that North Carolina's CO2 rate declined during272 the recession and increased post

- recession, and the CO2 rate was at the lowest level in 2012 due to compliance with the CSA and a shift to lower carbon emitting fuels.

Comment 252: NC

- The EPA should provide state

- specific cost/benefit projections

Response 252: For the EPA’s response to this comment, see the Regulatory Impact Anal ysis for the Clean Power Plan Final Rule, EPA

- 452/R

- 15

- 003 supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenter s stated with EPA offering state

- specific emission reduction projections for
regu lators to consider when developing Implementation Plans, EPA should also provide state

specific cost/benefit projections; the commenter s ask ed :
a) What impact would the carbon intensity reductions that EPA projects North Carolina can achieve under "Option 1" have on retail electricity prices for the state's residential, commercial, and industrial users in 2020, 2025, and 2030

. b) What are the net economic benefits that EPA projects North Carolina will receive from the proposed rule

.

Comment 253: ND

- ge neral goals

Response 253: For the EPA’s response to this comment, see sections VI and VII of the final rule preamble and CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenter s stated the technical basis for the calculation of the North Dakota CO2 emission requirements in that proposal contains numerous serious errors. The commenter s believe d that the Proposed Rule is flawe d, and should not be finalized.

Commenters remarked primarily about ND's IRP process. Commenters continued (verbatim)

“ North Dakota's IRP process results in long

- range plans that seek the optimal combination of resources to meet forecasted load requirement s at the lowest reasonable cost. The Proposed Rule ignores the existing rigor of the North Dakota IRP process and the state level decisions and orders that govern it, in an attempt to decree a new standard to which North Dakota would have to comply. Once u tility assets are placed in service that investment is ratably charged back to customers so long as the asset remains "used and useful" in the provision of utility service. Over time, assets may become less efficient, not have the same capabilities as othe r assets of more recent design, or have operating expenses that differ from the estimates made when the asset was new. But those circumstances do not prompt the premature retirement of those assets. Instead, state Commissions closely evaluate and monitor r esource types, capacity, fuel usage and cost,273 condition of the resources, anticipated retirements, and have investigated the prudence of additional capital investments to improve unit efficiency and lower emissions for years in advance, all for the benefit of customers. Various scenarios and sensitivity analyses are conducted, major assumptions are reviewed, and revenue requirements are evaluated to determine the incremental impacts of changed circumstances. The Commission engages in an ongoing and iterativ e regulatory process that allows for careful planning and review, and timely reaction to the dynamic changes in load characteristics and resource mix. Capacity additions are made under these process guidelines and are traditionally secured from the asset t ype that provides the most benefit to customers at the least cost, while satisfying the need for adequate and reliable service. Uneconomic choices are discarded in favor of the more economic and reasonable options. State IRPs, and specifically the North Da kota IRP process, is established to allow the utility, customers, other stakeholders and the Commission to review the planning assumptions, projected fuel costs, and resource options with sufficient frequency to adjust to changes in technology, fuel prices , economic conditions, and other factors in a reasoned way. Orders and directives of the Commission, including this inclusive stakeholder process, would be discarded by the Proposed Rule, in favor of a system of arbitrary goals built on inaccurate informat ion and disregard for the proper functioning of the electricity system, all to the detriment of North Dakota, the Commission, utility customers and other stakeholders. ”

Comment 254: ND

- projected electrical load growth in ND due to development of Bakken oil reserves, existing lignite

- fueled based EGUs would be forced to retire early though they could meet demand

Response 254: See section VIII. G . of the final rule preamble of the CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:

Commenter s stated the Williston Basin Oil and Gas Related Electrical Load Growth Forecast Study forecasts an expected electrical load growth for the next 20 years, from 2012 to 2032, in the study area whic h spans regions across North Dakota, South Dakota and Montana. The
commenter s said numbers and figures were calculated from a demand amount averaged between historically observed energy use values and maximum oilfield electrical load requirements, and
repr esent the study's most likely (consensus) scenario. The commenter s said energy use for prior years was provided by the Partners and used to establish a 2011 baseline. The commenter s said by the end of the study period in 2032, the 43 counties within the Wi lliston Basin are projected to require 2,512 megawatts (MW) of additional electrical demand, related to oil and gas development, to accommodate population growth, new ancillary business development and more than 30,000 additional wells.

Commenter s stated the results of the extensive Study will be used by the State of North Dakota and certain utilities to effectively plan for critical infrastructure needs and development in North Dakota, South Dakota and Montana. The commenter s said the study and report inc ludes analysis of petroleum

- sector commercial and industrial development, employment, population growth and secondary employment. The commenter s said the Commission shares EPA's concern that274 "state plans for emission reductions...must be consistent with a vibrant and growing economy and supply of reliable, affordable electricity to support that economy." The commenter s said efficient existing lignite

- fueled baseload electric generation facilities should not be prohibited by the Proposed Rule from being avai lable for meeting the substantial electrical demands in North Dakota. T he commenter s said the Proposed Rule directly threatens the ability of existing lignite generation to address these demands.

Comment 255: OH

- Regulation would have disparate impacts among the states

Response 255: See section I.A. of the final rule preamble of the CPP for the EPA’s response to this comment. Also see section V of the final rule preamble for a discussion of the building blocks and final BSER determination. See section VI II of the final rule preamble for a discussion of state plans.

The following are summaries of the specific public comments under this comment:

Commenter s stated that the Existing Source Proposal is unreasonable and unlawful because it would have disparat e impacts among the states. Commenter s said that Ohio, for example, which has been identified as the state most impacted by the proposal in the Midcontinent Independent System Operator region, would have to reduce its CO2 emission rate by 25 percent in 203 0 (relative to EPA's base case assumptions). Commenter s indicated that this is a considerably greater rate reduction than what most other states would be required to achieve. Commenter s said further, Ohio would have to increase its renewable energy generat ion by 10 percent and its energy efficiency savings by 8 percent (relative to 2012 levels), which far surpasses the increases that would be required for a majority of states.

Commenter s said that Ohio would take the brunt of the Existing Source Proposal, due, at least in part, to the fact that Ohio has a significant amount of coal

- fired generation, and also has some available NGCC capacity. Commenter s said that unlike states with little or no coal

- fired generation, or states with a significant amount of c oal

- fired generation but no or little available NGCC capacity, the EPA assumed that Ohio can make significant reductions under building block 2 (i.e., redispatch to NGCC).

Commenters stated, U.S. EPA identifies what they call "state

- specific goals... based on consistent application of a single goal

- setting methodology across all states, the goals account for these key differences...because EPA used data specific to each state's EGUs and certain other attributes of its electricity system (e.g., current mix o f generation resources)." [79 FR 34836] U.S. Commenters said, EPA further states they are using a output

- weighted

- average emission rates for all affected EGUs in a state rather than nationally uniform emission rates for all affected EGUs of a particular ty pe which is consistent with the varying types of EGU's and varying magnitude of shifting that can occur among individual states, thereby giving consideration to CAA Section 111(d) which "calls for standards of performance to be established in state plans

r ather than on a nationwide basis." [79 FR 34894] Commenters disagreed and believe U.S. EPA is searching for a justification for this proposal. Commenters said, U.S. EPA's use of the four275 building blocks to effectively reduce Ohio's state goal does not take into account state specifics at all as discussed in their comments.

Commenters stated, this is undoubtedly a national plan and a forcing of a regional approach. Commenters said, U.S. EPA has clearly set BSER in every building block based on some method of averaging whether at a regional or national level. Commenters said, in no way is U.S. EPA proposing a goal or standard that is state

- specific or allows for the states to apply the standard in a state plan based on what has been and can be achieved in the state itself. Commenters said, justifying this averaging for all affected EGUs rather than a national uniform rate is in consideration of Section 111(d)'s requirement for standards of performance to be on a state rather than national basis is actually coun terintuitive to what actually is intended. Commenters said, states are charged with developing a standard of performance, taking into account remaining useful life, for their individual units based on U.S. EPA's determination of a cost

- effective and techni cally feasible BSER for those unit types. Commenters said, states have the ability to a make adjustments based on remaining useful life and apply a standard of performance to each unit rather than an average across units. Commenters said, U.S. EPA has fail ed to give consideration to this very specific element of the CAA.

Commenters stated that Ohio supports maintaining the flexibility to develop its own standard of performance for individual EGUs based on state specific information, cost and technical feasi bility because EPA relies on "non

- BSER" options for "state flexibility," but these are flawed and will not be feasible.

Commenter s stated that in the NODA, the EPA acknowledges concerns that, with respect to states with large amounts of coal

- fired generati on, the proposed approach to building block 2 creates significant disparities in state goals between those states with little or no available NGCC generating capacity, and those with significant amounts of available NGCC capacity. (79 Fed. Reg. at 64549). Commenter s said that the EPA then goes on to suggest that this problem could be alleviated by requiring states with little or no available NGCC capacity to build new NGCC plants and/or for existing coal

- fired plants to co

- fire with natural gas. (79 Fed. Re g. at 64550). Commenter s stated that aside from the fact that co

- firing with natural gas may be prohibitively expensive for some coal

- fired units and potentially raises New Source Review concerns, the fact that the EPA believes it has the authority to requ ire states to build new NGCC plants demonstrates just how far afield of its lawful authority the agency has gone with the Existing Source Proposal.

Comment 256: OH has robust EE and RE sectors in place, on plan to reduce CO2

Response 256: The EPA recogniz es the current EE and RE sectors in place in OH to reduce CO2 emissions.

The following are summaries of the specific public comments under this comment:276 Commenter s stated in cutting carbon emissions from power plants, Ohio is already of the game with robu st energy efficiency and renewable energy sector in place. The commenter s said Ohio's efficiency and renewable's law is on hold for two years, but the law, once fully implemented, can be an important part of the calculus as the state devises a compliance p lan. The commenter s said these energy efficiency investments can reduce carbon emissions by a conservative 32 million tons in Ohio, the amount emitted by 6.7 million cars.

Comment 257: OH

- goal assumption errors: mathematical flaws; inappropriate relianc e on IMP and EIA; Affected Units

Response 257: As explained in section V .D of the final rule preamble of the CPP

, the EPA is relying on net summer capacity to assess building block two potential in this final rule. In regards to the Dresden facility, the EPA emission performance rate and state goal calculation recognize that it began operation in 2012, and thus the data may not be representative. Therefore, the final rule treats the facility as under construction and assumes a 55% capacity factor for the unit which increases the assumed baseline generation level to be more consistent with the commenters suggested level. The EPA has removed Orville and Hamilton from the baseline inventory of likely affected units per the comment and a review of the namepla te capacity.

Please see the Regulatory Impact Analysis for the Clean Power Plan Final Rule, EPA

- 452/R

- 15

- 003 and IPM documentation for a discussion of IPM assumptions.

The following are summaries of the specific public comments under this comment:

Mathem atical Flaws

Commenter s stated in calculating the state of Ohio's goal emission rate, the CPP relies on faulty assumptions instead of using the best available information; in Appendices 1 and 2, the CPP does not use correct generation figures for Ohio; to illustrate, consider the following:

• The Dresden Plant's net generation for 2012 was 2,599,011 megawatt hours (MWh), whereas US EPA's eGRID data calculated it as 470,486 MWh.

• The "Under Construction NGCC Capacity (MW)" for Ohio is stated at 539 megawatts (MW) for the Dresden Plant; however, the Dresden Plant has been built and is already accounted for by US EPA in the existing NGCC calculations.

• US EPA calculates existing Ohio nuclear capacity at 2,150 MW using United States Energy Information Administra tion (US EIA) data; US EIA Form 860 states that Ohio's existing nameplate capacity is 2,282.5 MW.

The commenter s said the CPP assumes that all generation units can run on nameplate capability; both summer and winter capabilities are significantly less tha n nameplate capability. The
commenter s said in Ohio, the summer capability for NGCC plants is 447.2 MW less than the277 nameplate capability; this error most impacts building block 2, which relies extensively on generation dispatch capabilities.

Inappropriat e Reliance on IPM and EIA

Commenter s stated 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
commenter s ha ve concerns with this approach, based o n a number of assumptions and results that do not seem technically sound, feasible, or reasonable. The commenter s conducted an analysis of the limited parsed IPM results made available on the docket as well as those IPM scenarios for which parsed files wer e 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 commenter s ' primary concern is that a decrease of between 4 and 7 mill ion tons of CO2 (dependent upon which scenario is in question) was predicted between the base and policy cases in 2025. The commenter s said overall, IPM projects a ~26% decrease in CO2 tonnage from 2005 levels in Ohio; this will be extremely challenging an d practically impossible for several reasons. The commenter s said 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
commenter s underst ood that the creation of a plan in accordance with the proposal would be an intensive, complex, and costly process for many states. The commenter s f ound it difficult to reconcile the considerable expenditure of re sources 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 OH expect to already achieve significant reductions absent this proposal.

Affected Units

Commenter s stated USEPA's Carbon Guidelines, specifically the inclusion of the City of Hamilton, Ohio and the City of Orrville, Ohio's small fossil fuel

- fired units in USEPA's baseline calculations, will likely lead to unwarranted and unrea sonable increases in electricity rates if those units continue to be included in USEPA's calculation of Ohio's baseline and carbon goal computation. The commenter s said the Carbon Guidelines directly impact Hamilton and Orrville because USEPA has incorrect ly identified the fossil fuel

- fired units at the Hamilton Municipal Power Plant and the Orrville Utilities Power Plant as affected sources subject to the Carbon Guidelines; as such, US EPA included these units in the agency's determination of Ohio's carbon baseline and goal computation.

Clarification

Commenter s stated in reviewing the example for Ohio from the TSD, it appears that the historical, unadjusted emission rate does not include in its denominator any megawatt contribution from renewables or nucl ear. When the commenter s went to the EPA state maps, the pulldown notes suggest that the megawatt includes non

- fossil sources; can EPA please clear this inconsistency up; does the historical, unadjusted, fossil emission rate have any contribution from

non

- fossil sources in its denominator.278 Comment 258: OH RE targets are inconsistent with OH law; regulation reflects bias against states with RPS standards, hydropower generation excluded in determining annual growth for OH, etc

. Response 258: See section V.E. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 3.

The following are summaries of the specific public comments under this comment:

Commenter s stated the CPP's attempt to apply a blank et, national approach to renewable energy (RE) ignores the intricacies of Ohio's laws and policy. The commenter s said assuming the CPP survives likely legal challenges, the proposed RE targets fail to utilize state

- specific approaches in determining their respective building block requirements. The commenter s said individual state renewable portfolio standards (RPS) and energy efficiency programs reflect state

- specific energy policy objectives, existing generation portfolios, varying degrees of electric mar ket restructuring, participation in RTOs and other diverse characteristics embodied in state legislation and policy. The commenter s said the CPP, while preaching flexibility, does not fully take these individual state approaches into account in developing building block 3; the following issues exist.

a. The CPP's Ohio RE targets are inconsistent with state law in Ohio.

The commenter s said the RE targets utilized in the CPP do not reflect current law in Ohio; US EPA should utilize 6.5 percent as the 2020 e ffective RE level for Ohio in deriving Ohio's RE targets, rather than the number included in the original calculation. The commenter s said as state legislatures control the adoption and amendment of RPS policies, US EPA must account for this by allowing st ates to amend their implementation plans and adjust goal emission rates accordingly, assuming RPS mandates are included in state plans.

b. The CPP's NERC

- based regions reflect a bias against states with RPS standards.

The commenter s said the CPP creates a RE generation target for Ohio based upon the average of all 2020 RPS requirements in the NERC

- based East Central region. The commenter s said states without RPS mandates in this region, however, are excluded from this calculation. The
commenter s said this exclusion manufactures more aggressive RE targets for the RPS states within the region, ignoring the reality across the country that renewables have not yet penetrated all state market

- places. The commenter s said the CPP can correct this by utilizing stat e

- specific RPS requirements (or lack thereof) in considering RE benchmarks, as opposed to using this regional approach.

c. The CPP wrongfully excludes hydropower generation in determining the annual growth formula for Ohio.

The commenter s said the CPP in correctly excludes hydropower generation from the calculations used to determine Ohio's growth factor rate (as discussed in a subsequent section). The
commenter s said although the CPP correctly notes that hydropower generating capacity has been279 relatively flat over the last 20 years, this broad generalization does not take into account Ohio's distinctive characteristics. The commenter s said it is true that only a handful of states have large, existing hydroelectric facilities; however, over the past 15 year s, significant hydropower projects have been developed and are continuing to be developed along the Ohio River within the PJM footprint in the East Central region. The commenter s said the CPP should recognize these investments in hydropower capacity in Ohi o and the region. The commenter s said the CPP should include Ohio's 2012 hydropower generation in the 2012 historical baseline RE data and utilize hydropower generation in determining the annual growth factor used for calculating Ohio's RE generation targe ts.
d. Ohio's growth factor rate is incorrect.

The commenter s said the proposed RE targets in the CPP should be modified to reflect a state

specific approach that is consistent with state law and adjusts for the numerical flaws discussed above.

e. The C PP does not account for deviations from historical norms.

The commenter s said the CPP uses an unrealistic assumption in its calculations by failing to account for the expansion of RPS requirements that are not within historical norms of deployment. The co mmenter s added the CPP could create an unintended consequence of driving

up costs for RE resources. The CPP assumes that costs associated with implementing the BSER would be "reasonable" by analyzing historical RPS compliance costs. The commenter s said RE generation at the levels represented in the best practices scenario can be achieved at reasonable costs; this finding has been confirmed with more recent RPS cost data, including a report that determined 2010

- 2012 retail electricity price impacts due to st ate RPS policies to be less than two percent, with only two states experiencing price impacts greater than three percent. The
commenter s said the CPP evaluation does not take into consideration the cost suppression effect of the federal Production Tax Cred it and the Investment Tax Credit, which expire at the end of 2013 and 2014, respectively. The commenter s added 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. The commenter s said 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 tha t address unusual pressure for cost increases to ratepayers.

f. The CPP does not include Ohio's force majeure or cost

- cap provisions in calculating the RE target.

The commenter s said Ohio includes force majeure and cost

- cap provisions in its alternative energy rules that are codified in the state statute. The commenter s said an electric utility or electric service company may modify its RPS compliance obligation, based on the demonstration of the electric utility or electric service company. The commenter s said at the time of requesting such a determination from the commission, an electric utility or electric services company shall demonstrate that it pursued all reasonable compliance options including, but not limited to, renewable energy credit (REC) sol icitations, REC banking, and long

- term contracts. The
commenter s said an electric utility or electric services company may not be required to fully280 comply with a specific RPS benchmark if determined that the cost cap provisions have been met based on proof provided by the electric utility or electric service company: An electric utility or electric services company may file an application requesting a determination from the commission that its reasonably expected cost of compliance with a renewable energy r esource benchmark, including a solar energy resource benchmark, would exceed its reasonably expected cost of generation to customers by three percent or more. The commenter s said the process and timeframes for such a determination shall be set by entry of the commission, the legal director, deputy legal director, or attorney examiner. The commenter s said if the commission makes a determination that a three percent provision is triggered, the electric utility or electric services company shall comply with ea ch benchmark up to the point that the three percent increment would be reached for each benchmark.

Commenter s stated the CPP's floor

- based approach for setting Ohio's RE targets is faulty. The
commenter s said the CPP uses US EIA's 2012 net generation from RE sources (wind, hydroelectric conventional, other biomass, wood and wood derived fuels, and solar thermal and photovoltaic) for the total electric power industry in Ohio. The commenter s said if Ohio's goal is modified to include specific floor

- based req uirements it would limit the ability of the state to create a plan for compliance with the state goals, and would operate contra to the flexibility principles preached by US EPA in developing this plan.

Comment 259: OH

- BB1 HRI

Response 259: See section V.C. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 1.

The following are summaries of the specific public comments under this comment:

Commenter s stated many Ohio facilities have alre ady implemented many of the heat
rate improvements cited by U.S. EPA; the improvements cannot be achieved again, but U.S. EPA has included them in calculating a reduction target. The commenter s said the following projects have all taken place and should be addressed in Ohio's targeted reductions:

• High Pressure Turbine improvements on multiple units utilizing state of the art computational techniques;

• Rebuilt Cooling Towers for 3 Supercritical Units to improve heat rejection to reduce backpressure on the t urbine for more efficient operation;

• Replace Air Heater Baskets and Seals as needed to reduce wasted energy by recycling heat back into the boiler that would otherwise go to the stack;

• Repair and/or Replace Feedwater Heaters as needed to allow energy wit hin the steam to be returned to the boiler rather than discarded in the condenser;281 • Repair Condensers as needed to keep turbine backpressure low promoting higher efficiency but also keep contaminated cooling water out of the boiler and turbine cycle; and

• Any additional types of projects.

Comment 260: OH

- BSER (BBs 2, 3, 4 )

Response 260: See sections V.A., V.D., and V.E. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 4, 2, and 3.

The following are summaries of the specific public comments under this comment:

Commenter s stated U.S. EPA's proposed rule has emission reduction targets based upon the assumption that building blocks 2, 3, and 4 can be implemented by a state as a part of it s implementation plan; for the state of Ohio, that is inapplicable. The commenter s said in regard to building block 2 concerning the dispatch of electricity, the state of Ohio has no authority nor can it by itself craft the authority to dictate the sale or purchase of electricity. The commenter s said the dispatch of electricity is controlled by independent system operators beyond the authority of the state's lawmaking; further, because Ohio is a deregulated generation state, the state has no regulatory auth ority over the generation of electricity. The commenter s said simply put, Ohio cannot dictate to independent system operators or consumers from which electricity generator they purchase; all of the emission reduction targets calculated from this sector sho uld be removed from Ohio's BSER.

Commenter s stated Ohio faces a similar problem with the requirement of renewables as BSER; while the state has an existing renewal portfolio standard ("RPS") program, the program requires the generators to construct or oth erwise invest in renewables. The commenter s said the state cannot dictate the dispatch or purchase of this renewable generation; Ohio may be able to require the generation industry to build a certain amount of renewable assets but it has no mechanism by wh ich to require others to either dispatch or purchase the electricity.

Commenter s stated as with building blocks 2 and 3, Ohio has no authority to create an energy efficiency mandate for all consumers which could be enforced to lower demand. The
commenter s said the proposal is impractical both legally and practically and even if such statutory authority could exist, the ability to create a program that would have enforceable energy use targets is almost impossible.

Commenter s stated all three of the last t hree building blocks, in addition to being "outside the fence line,'' are as impractical as they are illegal for creating a state implementation plan. The
commenter s said U.S. EPA cannot create emission reduction targets for the state of Ohio by considerin g what reductions could be achieved by these types of programs. The commenter s said U.S. EPA should set BSER for the state of Ohio based on what can be achieved inside the fence line (which is, essentially, what could be achieved under building block 1) an d then allow the state to, as best it can, achieve those reductions through a flexible SIP implemented by the state; however, U.S. EPA cannot use the other possible building blocks as a part of setting BSER.282 Building Block 4

-- Energy Efficiency

Commente r s stated based on an analysis of observed and expected energy efficiency achievement in 12 states, EPA determined that the "best practices" performance target for all states should be 1.5 percent. The commenter s said EPA assumes that the energy efficiency component of the rate equation begins in 2017, and states can increase energy efficiency achievements over time to reach a rate of 1.5 percent annually. The commenter s said given Oregon's long

- term commitment to acquiring energy efficiency, the commenter s are concerned that EPA's methodology did not adjust the energy efficiency potential by the amount of conservation previously acquired or the amount of conservation that is available. The
commenter s said this may have the effect of requiring a state like O regon, with established and robust conservation programs, to acquire conservation at a much higher cost (non

- cost effective). The commenter s said clarification is needed on the type of conservation that would meet the federal standard. The commenter s said adjust recommendations for a state by the cumulative amount of conservation previously acquired and/or by the amount of achievable conservation potential in that state.

State RE and EE Programs

- RPS Changes

Commenter s stated in developing goals, U.S. EP A incorrectly applied outdated Ohio law to develop Ohio RE and East Central regional goals; specifically, U.S. EPA appears to have used Ohio Senate Bill (SB) 221 as a baseline for Ohio's state plan. The commenter s said on September 12, 2014, SB 221 was rep laced by SB 310; the revised RPS outlined in SB 310 reduces long term targets and freezes the annual benchmarks for RE and solar energy resource development for two years. The commenter s said by using outdated and incorrect benchmarks, U.S. EPA has inflate d Ohio goals and the goals of states within the East Central region; this must be corrected.

Commenter s stated SB 310 created an Energy Mandates Study Committee in an effort to: ensure Ohio customers have access to affordable energy; incorporate as many f orms of inexpensive, reliable energy sources as achievable; better understand how energy mandates impact jobs and the economy of Ohio; minimize government mandates; and ensure Ohio's current law is not unrealistic or unattainable. The commenter s said a com mittee will study Ohio's RE, EE, and peak demand reduction mandates and finalize a recommendation report by September 30, 2015. The
commenter s said the potentially revised RPS and EE goals for Ohio, if enacted, will be in effect after U.S. EPA projects fin alization of CPP rule; as a result, the targets established by CPP will be based upon incorrect potential EE/RE assumptions for Ohio. The commenter s said U.S. EPA must revise the analysis for Ohio and the East Central region to reflect SB 310 and not SB 22 1.

Comment 261: OH

- Alternative target generation for wind power

Response 261: See section V.E. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 3.

The following are summaries of the specific public comments under this comment:283 Commenter s stated the alternative target generation for wind power in Ohio, 11,663,046.41 MW

h, is overly optimistic; this value is approximately half of the NGCC power generated in 2012 in Ohio, when natural gas prices were historically low. The commenter s said using the EIA capacity factor for onshore wind, 0.34, Ohio estimates that the target appears to call for 3,916 MW of wind power in the state. The commenter s acknowledge d that there is some additional
po tential for wind power in the state, this estimate is overly optimistic; even if such a large amount of wind capacity could be built, such generation could not be relied upon for base load power, and would be available to only a limited portion of the grid when dispatched; thus, the projected wind power could not realistically replace gas or coal

- fired generation in a sustained base load capacity. The commenter s said although Ohio may have additional wind generation potential, the development of such capaci ty relies upon federal subsidies for construction and utilization; without the federal subsidy (and a federal commitment to provide this subsidy until 2030 and beyond) little new generation capacity will be built.

Comment 262 : OK

- general BSER

Response 2 62: See section V.A. of the final rule preamble of the CPP for the EPA’s response to this comment

. The following are summaries of the specific public comments under this comment:

Commenter s stated the CAA authorizes EPA to implement a best system of emiss ion reduction as part of state guidelines; citing that authority, EPA devised a system to calculate state emission

- reduction targets, referred to as its four Building Blocks. Those four Building Blocks

are:

• Building Block 1

- Improve heat rates at coal

- fi red EGUs by 6 percent;

• Building Block 2

- Increase operation of existing natural

- gas combined cycle units ("NGCCs") to a 70 percent capacity factor (up from a state average of 43 percent in Oklahoma);

• Building Block 3

- Increase deployment of zero

- emitti ng renewable energy ("RE") generating resources (up to 20 percent in Oklahoma);

• Building Block 4

- Offset fossil

- based generation by increasing deployment of end

- use energy efficiency ("EE") measures (up to 10 percent for Oklahoma)

Commenter s said Oklaho ma's overall state target is a 43 percent reduction below the 2012 baseline rate; that number was reached after EPA chose to set targets in accordance with the high end of ranges established within each Building Block. The commenter s said once the Building Blocks were added up, the result is an unrealistically high and largely unattainable state goal that does not provide Oklahoma or its EGUs with meaningful flexibility in their compliance efforts. The commenter s said a better approach would be for EPA to s upport compliance by setting lower targets in line with results achieved by demonstrated technology and in keeping with284 Section 111(d) language; then, if it wants to, EPA could incentivize higher rate reductions without compromising much needed flexibility

.

Comment 263: OK

- BB2

Response 263: See section V.D. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 2 and the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

EPA does not apply capacity factor increases at the unit

- level, but rather at the state

- level at proposal and the regional level in the final CPP. In the final CPP, EPA is assuming the 1,018,724 MWh of existing generation fo r the three units and a reported capacity of just under 300 MW, so the values feeding the regional calculation seem to be consistent with those provided by commenter s . EPA has a summer capacity of 94 MW for each unit, so the baseline capacity factor estim ation evidenced in Appendix 1 is 41% for the three units.

The following are summaries of the specific public comments under this comment:

Commenter s stated as a threshold matter, EPA applied incorrect capacity factors for Western Farmer's Anadarko NGCC Un its 4, 5, and 6; EPA applied a 19 percent capacity factor for each of these units, but should have applied a 38 percent capacity factor for each of these units. The
commenter s said consistent with Western Farmers' January 2013 report to the Generating Avai lability Data System, the 2012 capacity factor for Anadarko Units 4, 5, and 6 is the product of the following calculation: (1,018,724 MWh / (8,724 hours * 300 MW)) * 100 = 38.65%. The
commenter s said by applying the incorrect capacity factor, EPA overestim ated the capacity presumed to be "available" for redispatch and arbitrarily lowered the Oklahoma emission rate goal.

Comment 264: OK

- BB3 RE

Response 264: See section V.E. of the final rule preamble of the CPP for the EPA’s response to this comment and m ore information about Building Block 3 and the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenter s stated that in co rrecting the RE Goal for the South

- Central Region to 12 percent by including the Texas RPS in the region's goal calculation, and correcting a numerical error in the Kansas RPS goal. The commenter s said that a Renewable Energy Goal for the South

- Central Reg ion of 12 percent is a more accurate representation of an achievable goal. The commenter s said the original option described in the Proposed Rule, i.e., using the average of states' RPS to set a goal, is more realistic, as it represents the expertise of st ates and is based on a more real

world scenario with diverse factors impacting development; therefore, the original option with an RE Goal based upon existing RPS is preferred, and the commenter s request ed that EPA correct285 the South

- Central Region RE Goal to 12 percent as specified in the Kansas Department of Health and Environment (KDHE) comments.

Comment 265: OR

- Although Oregon is an importer of significant carbon

- intensive generation, the EPA has characterized Oregon as a net exporter

Response 265: Fo r the EPA’s response to this comment, see the CO2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP. As building block four is no longer in the quantification of BSER, EPA does not make any judgement on the ele ctricity importer/exporter status of a unit in the final CPP.

The following are summaries of the specific public comments under this comment:

Commenter s stated that the EPA has identified eight fossil

- fuel EGUs in Oregon that are subject to the Proposal; five of these EGUs are owned by Oregon's investor

- owned utilities and are, in part, used to serve a portion of their Oregon loads. Commenter s indicated that although Oregon is an importer of significant carbon intensive generation, the EPA has characterize d Oregon as a net exporter of generation, largely because of Federal Columbia River Power System (FCRPS) generation. Commenter s noted that as a result of Oregon's net

- exporter status, the EPA does not apply a net import factor to Oregon's BB4 BSER determin ation, resulting in an unadjusted Block Four goal that represents 1.5 percent of all statewide load. Commenter s said on average, however, these five in

- state, investor

- owned EGUs only make up roughly 12 percent of the total generation used to serve Oregon load.

Comment 266: OR interim goal unreasonably stringent

- Boardman plant will close year later per agreement with the EPA

Response 266: See section I.A. of the final rule preamble of the CPP and the CO 2 Emission Performance Rate and Goal Computation T SD for CPP Final Rule supporting the final CPP for the EPA’s response to this comment.

Moreover, EPA has adjusted its start date for the compliance period to 2022. Therefore, the Boardman closure will occur prior to the start date of the CPP compliance re quirements.

The following are summaries of the specific public comments under this comment:

Commenters stated the Boardman Plant will cease burning coal on December 31, 2020 under a federally

- enforceable agreement approved by EPA. The commenters said the Boardman 2020 Plan was a collaborative effort between PGE, state regulators, customers, environmental groups and EPA to benefit the environment and customers; however, EPA's 111(d) proposal effectively assumes Boardman will shut down on January 1, 2020 bas ed on the mistaken assumption that there is currently sufficient gas capacity in Oregon to displace Boardman's generation. Commenter s said as a result, the proposal penalizes Oregon for leadership action on carbon emissions, and makes Oregon's interim goal unreasonably stringent due to a timing mismatch of286 one year. Commenter s said EPA can correct this issue in a number of ways: i) eliminating the interim goals and allowing states to determine their own emission reduction trajectories to achieve the 2030 go als, ii) modifying the interim goals to allow states to more gradually meet the final goal, or iii) applying a regulatory adjustment to coal

- fired plants that have already committed to enforceable retirement dates.

Commenter s stated the key features that helped the Boardman 2020 Plan achieve broad support include:

• A state

- adopted agreement with broad and diverse stakeholder support;

• An enforceable agreement to end coal operations by a date certain (December 31, 2020);

• A reasonable amount of time before the end of coal operations to address concerns regarding community impacts, including jobs at the facility, replacement of the Boardman Plant that considers cost to customers, reliability and resource diversity, and consistency with Clean Air Act requirem ents;

• Interim emission controls that appropriately address human health and environmental impacts for the remaining period of coal

- fired operations;

• A robust resource planning process that considers low carbon replacement resources among the viable alter natives; and

• A determination by the OPUC in PGE's 2009 IRP that the Boardman 2020 Plan represented the least cost, lowest

- risk plan for PGE's customers.

Commenter s stated in addition to the incorrect assumption that Oregon has excess NGCC capacity avai lable to displace Boardman, the proposal's assumption that all of Boardman's generation will be displaced prior to 2020 creates an interim goal for Oregon that is unreasonably stringent. The commenter s said the Clean Power Plan's assumption that all of the emission reductions from Building Blocks 1 and 2 happen prior to the interim compliance period creates an emissions trajectory that resembles a cliff.

Commenter s s aw three ways to correct the proposal's treatment of the Boardman Plant:

1. Apply a regulator y adjustment to account for coal plants that committed to enforceable retirement dates prior to the Clean Power Plan proposal. The commenters said the rule could stipulate that coal plants with federally approved and enforceable plans to retire between 202 0 and 2029 or a "book life" that ends between 2020 and 2029 are not subject to Clean Power Plan regulations. The commenters said alternately, the final rule could amend state goals to account for their emissions prior to their agreed

- upon retirement dates.287 2. Modify the glide path and interim goals to allow states to more gradually meet the final goal. The commenters said modifying the glide path and interim goals such that states are not required to achieve the majority of emission reductions prior to 2020 c ould mitigate many of the issues Oregon faces with regard to the Boardman Plant. The commenters said for a modified glide path to work for Oregon and properly incorporate the early action to end coal

- firing at the Boardman Plant, the 2020

- 2029 period must include at least one full year of Boardman's average annual emissions; the calculation of the interim goal could include Boardman's full generation and associated emissions during calendar year 2020; the state goals could assume that no coal plant's output is displaced by more than 90% in the interim period; or the interim period could begin on January 1, 2021 or thereafter.

3. Commenter s said allow states to begin meeting interim goals as soon as EPA approves their compliance plans; this approach has the ad ded benefit of eliminating the proposal's inherent incentive to delay investment in renewable energy and energy efficiency until 2020. The commenter s said similarly, the final Clean Power Plan could apply a "floor" and "ceiling" to the amount of a coal pla nt's output displaced by NGCCs; a ceiling of 90% or less of a coal plant's output being displaced by NGCCs would hold Oregon harmless for maintaining the timeline of the Boardman 2020 Plan.

4. Allow states to determine their own emission reduction trajectori es to achieve the 2030 goals. The commenter s said states are best positioned to manage the transition of the generating fleet to meet the final goals established by the Clean Power Plan; the final rule should eliminate the interim goals and instead require states to propose emission reduction trajectories to EPA in their state plans. The commenter s said giving states the flexibility to appropriately consider the cost and reliability implications

- including costs resulting from significant job and other los ses in communities that are often highly reliant on local power plants as economic engines, non

- air environmental impacts, the remaining useful life of units scheduled for retirement, and the implications of a massive shift to different generating resource s for much of the electricity supply

- provides a possible avenue for properly recognizing early action to retire coal plants.

Comment 267: OR

- RE

Response 267: See section V.E. of the final rule preamble of the CPP for the EPA’s response to this commen t and more information about Building Block 3 and the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Physical Location

Co mmenter s stated in determining the emission reductions possible from renewable resources, the proposal establishes annual renewable energy targets based on the physical location of renewable generation; the commenter s said this assumption distorts the prop osal's goals for288 Oregon and creates a potential compliance conflict between Oregon and the states that currently use the renewable energy produced in our state for RPS compliance in theirs.

Commenter s stated though the proposed rule bases most of its rene wable energy assumption on RPS policies, the proposal relies upon the physical location of generation to establish state goals. The commenter s said the vast majority of RPS policies require utilities (or "load

- serving entities") to meet a percentage of the ir retail electric sales with renewable resources. The
commenter s said by and large, state RPS policies do not dictate that the renewable resources that utilities use to meet their RPS obligations must be physically located in the same state as the
custome rs that benefit from and pay for the RPS policy.

Commenter s stated by basing the renewable energy assumptions on the physical location of generation, EPA introduces several problems; first, EPA uses existing renewable projects to set goals for one state, when those projects today are used by other states for RPS compliance. The
commenter s said as the proposal currently stands, it is unclear which state would be able to use such a project for 111(d) compliance purposes. The commenter s said the proposed rule making states that "consistent with existing RPS policies, a state could take into account all of the CO2 emissions reductions from renewable energy measures implemented by the state, whether they occur in the state or in other states." The commenter s said that approach may make sense when the renewable resources in question have not been included in the calculation of a state's goals; however, when a state's target is based on the physical presence of a resource within its borders, it should also have the ability to use that resource for compliance purposes.

Commenters stated if EPA is going to base its assumption on the physical location of generation, the physical location of all generating resources must be properly defined. The commenters said the prop osal assigns nearly all of the generation from hydropower facilities located on Oregon's border to Oregon. The commenters said if generation from those projects

- which span the borders between Oregon and neighboring states

- were evenly split between Oreg on and its neighbors, the proposal would cap Oregon's renewable target at 9.6 million MWh rather than the proposal's target of 12.6 million MWh.

Commenter s stated six out of seven dams located on Oregon's borders are fully allocated in EPA's eGRID dataset to Oregon's 2012 generation. The commenter s said Bonneville Dam, the Dalles Dam, John Day Dam, and McNary Dam are four federally

- owned, hydroelectric projects located on the section of the Columbia River that acts as the border between Oregon and Washingto n. The commenter s said John Day and The Dalles are the fifth and seventh largest dams (by MW capacity) in the nation. The commenter s said all of the energy produced by these four dams is allocated to Oregon's 2012 generation in the eGRID dataset used by EP A to develop the emission goals. The commenter s said of the three dams (Browlee, Oxbow, and Hells Canyon) located on the section of the Snake River separating Oregon from Idaho, two are allocated to Oregon and one to Idaho.

Commenter s stated together, the generation from these six dams (Bonneville, the Dalles, John Day, McNary, Browlee, and Oxbow) was more than 30 million MWh in 2012, and all of it was applied to Oregon's 2012 baseline generation for use in Building Blocks 3 and 4. The
commenter s said unde r Building Block 3's in

- state generation based methodology, this generation causes Oregon's renewable goal to increase by over 6 million MWh, an amount289 greater than is necessary to serve the entire city of Portland annually. The commenter s said assigning t he six dams in this manner distorts Oregon's renewable goal in an arbitrary manner and should be corrected. The commenter s said the power that the Bonneville Power Administration (BPA) generates from the four dams on the mainstem of the Columbia River

serv ed customers in the four Pacific Northwest states in 2012 as follows: 4% of the power served Montana customers, 6% served Idaho, 24% served Oregon, and the remaining 67% served Washington. C ommenter s said given this historic allocation, splitting the gener ation evenly from the projects physically on the border between Oregon and Washington states is, at the very least, a reasonable approach.

RE targets do not match targets in existing state RPS plans

Commenter s stated the proposed renewable targets for m any states do not closely resemble the renewable generation required from the RPS programs that the building block is based on. The
commenter s said for example, building block 3 caps Oregon's assumed non

- hydro renewable generation at 12.6 million MWh, or 2 1 percent of the state's 2012 generation. The commenter s said Oregon's actual RPS obligation, however, is calculated as a percent of retail sales. The
commenter s said according to EPA's own data, 21 percent of the state's retail electric sales in 2012 woul d be 9.6 million MWh. The commenter s said Building block 3 caps California's renewable generation at 41.2 million MWh (21 percent of 2012 in

- state generation), but 21 percent of 2012 retail electric sales would be 53.4 million MWh.

Comment 268: OR

- affe cted units

Response 268: Although not an applicability determination, EPA did not consider Cary Generating Station a likely affected EGU in its baseline.

The following are summaries of the specific public comments under this comment:

Commenter s stated in the proposal, EPA includes "under construction" natural gas combined cycle (NGCC) units to calculate state goals. The commenter s said PGE is currently constructing the Carty Generating Station near Boardman, Oregon, and the commenter s asserted that Cart y is a 111(b) resource and not a 111(d) resource. The commenter s said EPA presumably excluded Carty from the establishment of Oregon's Clean Power Plan goals because it agrees with our understanding of Carty's classification. The commenter s said on Septemb er 9, 2014, PGE's outside counsel sent a letter to EPA asking for clarification on the determination that Carty is a 111(b) resource subject. The commenter s said EPA should clarify that the Carty Plant is a 111(b) resource and not covered by 111(d). The co mmenter s said if EPA determines that Carty is among the resources that must comply with the Clean Power Plan, then EPA must include Carty's generation and emissions in setting Oregon's goal as it has for "under construction" NGCC units in other states.

C omment 269: OR

- general goal comments290 Response 269: For the EPA’s response to this comment, see sections VI and VII of the final preamble and the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The fo llowing are summaries of the specific public comments under this comment:

Commenter s appreciate d the opportunity to comment on EPA's proposed Clean Power Plan. The
commenter s said as these comments have illustrated, the focus is to ensure that the carbon intensity goals EPA sets for Oregon's existing power sector are fair, reasonable, accurate, and credit the action the electric power customers and state are taking to address climate change. The
commenter s said the proposed rule contains technical and fact ual errors, incorrect assumptions, and unclear language that need to be corrected to accurately reflect the state's responsibility for and contributions to national GHG reductions.

Comment 270: OR

- The EPA should accommodate exceptional events outside th e control of states, such as extreme or unusual weather events

Response 270: See section V III . of the final rule preamble of the CPP for the EPA’s response to this comment. Also see section VI of the preamble and the CO2 Emission Performance Rate and Goal Computations TSD for a description of the hydro adjustment that EPA had made. This adjustments will facilitate compliance in hydro

- intensive states where fossil generation is more sensitive to fluctuation from 2012 levels due to the predominance of hydro generation.

The following are summaries of the specific public comments under this comment:

Commenter s stated that the EPA should accommodate exceptional events outside the control of states that occur during the compliance period, such as extreme or unu sual weather events that are significantly different from conditions during the baseline period. Commenter s felt the three

year rolling average (for compliance after 2030) should be tempered by an allowance for unusually unfavorable conditions that inhibi t a state's ability to achieve the emission goal during a certain period. According to c ommenter s , this is especially important for Oregon and states in the Northwest given their reliance on generation from a hydroelectric power system that is directly inf luenced by annual temperature and precipitation patterns. Commenter s said this could become increasingly important in the future as weather patterns are expected to become more variable and generally less favorable for hydroelectric power generation in the region as the climate warms.

Commenter s stated the EPA already provides a similar approach to avoid determining that areas of the country exceed the National Ambient Air Quality Standards by excluding air quality monitoring data collected during a period for which a state adequately demonstrates an exceptional event caused the exceedance. Commenter s suggested that the EPA use a similar approach in the Proposal that would allow states to show that an exceptional event has created conditions that made it inf easible for the reliable generation and transmission of electricity to achieve emission reduction requirements in a specific compliance period.291 Comment 271: PA should be able to meet target, already cutting emissions.

Response 271: The EPA appreciates th e emission reductions the PA is achieving, please see the the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP for the revised goals.

The following are summaries of the specific public comments under this c omment:

Commenter s stated that in Pennsylvania they already have some good ongoing models that will help the commenter s to meet the state target of a 32 percent reduction of carbon intensity by 2030. Commenter s stated that since EPA used fairly conservati ve assumptions to generate its estimates of their renewable energy and energy efficiency potential, Pennsylvania could harvest significantly greater cost effective carbon reductions with increasing benefits.

Commenter s noted that on the renewable energy fr ont, while the state's alternative energy portfolio standard definitely needs to be strengthened, Pennsylvania is well positioned to ramp
up. Commenter s stated that even in its currently relatively modest form, the standard has already driven the installa tion of more than 1,300 megawatts of wind power, 25 wind farms, providing 1.5 percent of the state's energy in 2013 and powering the equivalent of 300,000 homes.

Commenter s stated that a solid solar power foundation has been established as well. Commenter s stated that there are more than 440 solar companies in their state, employing 2,900 workers and their installed solar capacity is 11th in the nation.

Commenter s stated that they can give Pennsylvania more jobs, more energy savings, a more stable climate, and healthier families by meeting and exceeding the targets in the proposed plan.

Commenter s stated America, as a whole, is only at 16 percent of the world's contributions; but in fact, since 2005 the power plant industry in Pennsylvania has cut their gre enhouse gases by 14 percent, a very notable contribution. The commenter s said it's not the only reductions, points or submissions that have gone down in Pennsylvania. The commenter s said SO2, according to DEP is down 68 percent, NOx by about 30 percent, an d VOCS by 21 percent, and that's having a demonstrated impact on air quality with fewer and fewer ozone action days being called each
year.

Commenter s stated research has shown that over the next 40 years Pennsylvania can take the road to 100 percent ren ewable power generation, create over 350,000 jobs in the process, and continue to save residents money on their energy bills as compared to the retentive fixation on fossil fuel.

Commenter s stated Pennsylvania has already had some good ongoing models that will help PA to meet the state target of a 32 percent reduction of carbon intensity by 2030. The commenter s said in fact, since EPA used fairly conservative assumptions to generate its estimates of renewable energy and energy efficiency potential, Pennsylv ania could harvest significantly greater cost effective carbon reductions with increasing benefits.

Commenter s stated EPA's goals for Pennsylvania are achievable. The commenter s said Pennsylvania has the tools to achieve the proposed goals and to grow its economy and without292 the need to retire additional power plants. The commenter s said low energy prices have forced a number of older coal plants to retire since the 2012 base year, and a number of others are scheduled to retire in the next few years; this i s in part the result of PA's aging fleet. The
commenter s said while coal

- fired power plants nationwide tend to last 48 years, most of PA's plants are in their 60s when they close; this is also the natural result of PA's competitive energy markets combined with low natural gas prices. The commenter s said First Energy President, James Lash, recognized this in testimony last year before a state Senate when he admitted that even without the EPA, his plants that were closing would still be losing money. The comm enter s said fortunately, newer and cleaner sources of power are already making up for the lost capacity and more is on the way; because of this, PA is on track to exceed EPA's expectations for re

- dispatch of coal generation to cleaner sources.

Commenter s stated Pennsylvania is also likely to exceed expectations related to PA's nuclear resources. The commenter s said all five of PA's nuclear generating stations are currently licensed until after the 20/30 compliance period. The commenter s said PA may also se e additional nuclear capacity from uprates at existing facilities; such uprates, like any additions to nuclear capacity, will offset reductions needed from other sources. The commenter s said PA's alternative energy portfolio standards are all also currentl y providing more renewable energy than EPA expected, and data suggests that EPA's goals could be met with modest additional effort. The commenter s said new solar and wind capacity will not only bring more clean domestic energy to the market, but recent mod eling has shown that construction of these resources creates more jobs than building the equivalent fossil fuel capacity.

Commenter s stated energy efficiency, however, may be the star of the show. The commenter s said the PA Act 129 program sets specific t argets for energy efficiency improvement across the state. The commenter s said all electric distribution companies ultimately have met their phase one goals and are now working on phase two. The commenter s said that success is good news, but the best news is that an independent evaluator, using a total resource cost test, found that these programs return $3 in direct economic benefits to consumers for every $1 spent; and that doesn't include health and environmental benefits. The commenter s said the evaluat or also examined 579 energy efficiency measures and found that Pennsylvania could more than double the reductions EPA expects and do so and still save money.

Commenter s stated PA must choose to take full advantage of all the opportunities presented to us
t hrough the Clean Power Plan such as building on the success of renewable portfolio standard that is making strides towards generating 18 percent of the state's electricity and using renewable energy sources by 2021. The commenter s stated while progress on the Lake Erie wind project is taking longer than expected, PA is optimistic that the leadership of the Lake Erie Energy Development Corporation and other stakeholders offshore wind will grow and become part of PA's energy portfolio.

Comment 272: PA

- BB3 RE & BB4 EE

Response 272: See section V.E. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 3 and the CO 2 Emission Performance293 Rate and Goal Computation TSD for CPP Final Rule supportin g the final CPP for the final goals. The EPA has determined that demand

- side EE programs (proposed building block 4) are not a component of the final BSER. See section V.A.3 of the final rule preamble for discussion of this issue.

The following are summari es of the specific public comments under this comment:

Commenter s stated that the proposal requires Pennsylvania to increase its current renewable generation from two percent of total net generation to 16 percent. Commenter s indicated that this represents an increase of approximately 35,000,000 MWh from renewable energy, which is approximately equal to the total net generation of Maryland in 2012. Commenter s said that this result is due to the arbitrary regional growth factor set by the RPS of other states in their region, none of which exceed three percent of their total net generation in renewable energy. Commenter s added that this unrealistic increase in renewable generation represents 48.4 percent of the proposed target for Pennsylvania.

Commenter s stat ed increased generation from renewables comprises the single largest component in EPA's development of Pennsylvania's overall carbon emission rate target; specifically, under EPA's scenario, increased renewables would account for nearly 50 percent of the t otal carbon emission reductions needed to move Pennsylvania from its 2012 emissions rate to the 2030 target rate prescribed for it by EPA. The commenter s said the sharp disparity between the inflated renewables target EPA used to establish Pennsylvania's e mission rate goal, and the state's limited renewable energy potential relative to other states, is directly traceable to flaws in EPA's methodology for computing renewable energy targets. The commenter s said these flaws produce biases both across regions o f the country, as well as within the East Central region to which Pennsylvania was assigned, all of which work to the detriment of Pennsylvania.

Commenter s stated in order to meet EPA's renewable energy target, Pennsylvania would need to increase the amou nt of electricity it obtains from renewable sources by a multiple of eight times between 2012 and 2030. The commenter s said this multiple exceeds what EPA is expecting of any other state in the country outside the East Central region to which Pennsylvania was assigned for purposes of developing renewable energy targets; outside the East Central region only seven states would even be expected to increase renewables as a percentage of total generation by a factor as much as four times; another fifteen states would only be expected to increase renewables as a percentage of generation by a factor of two times or less, or in some cases not at all. The commenter s said there is a stark disconnect between Pennsylvania's limited potential

- relative to other states

- for expanding its renewable generation capacity, and the highly ambitious rate of increase in renewable energy

- exceeding that of nearly every other state

- which EPA assumed for Pennsylvania in developing the state's overall emission rate target.

Comme nter s stated EPA relies largely on a Black & Veatch Report titled Economic Impacts of Renewable Energy in Pennsylvania (2004) as the basis for many of its PA

- specific recommendations regarding the costs associated with deployment of RE resources. For more up

to

- date information, the commenter s recommend ed the PAPUC annual AEPS/Act 129 Report. The commenter s said the latest report estimates that the cost to meet the 2021 18% AEPS target will be $149.2 million, of which $146 million will be attributed to meet ing the 8% Tier I requirement.294 Commenter s stated Pennsylvania was assigned to the East Central region which also includes Delaware, District of Columbia, Maryland, New Jersey, Ohio, Virginia, and West Virginia; EPA then calculates a "renewable generation t arget" for each region, from which it derives an "annual growth factor" that would allow the region as a whole to reach its renewable target in 2029. The
commenter s said this regional annual growth factor is then applied to individual states' historic 2012 renewable levels to calculate each state's interim and final renewable targets.

Commenter s said the disparate annual growth factors developed for each of the eight regions

- in particular, the annual growth factor for the East Central region, at 17 perce nt, is the highest among all eight regions in the country. The commenter s said as a consequence, several states in the East Central region

- including Pennsylvania, Maryland, New Jersey, and Ohio

- would need to grow their renewables by eight times or more to achieve their ultimate renewables targets.

1. EPA's Flawed Methodology Produces Biases Between Regions of the Country that Work to the Detriment of Pennsylvania and Other States in the East Central Region.

2. EPA's Flawed Methodology Produces Biases Within the East Central Region by Ignoring Pennsylvania's Role as the Region's Predominant Producer and Consumer of Electricity and Imposing on Pennsylvania the Policy Choices of Neighboring States with Very Dissimilar Economic and Energy Profiles.

3. Correcting f or the Biases Created by EPA Within the East Central Region Produces a More Plausible and Equitable Renewables Target That Reflects Pennsylvania's Own Policy Choices and Gives Full Consideration to the Conditions of the State's Electricity Market.

Comment er s stated if, however, EPA remains committed to relying on RPSs to establish regional renewables targets, a more plausible approach, which dramatically reduces the biases inherent in its equal weighting method, would be to weight each state's RPS to refle ct its proportionate share of overall generation in the region; using this more reasonable and equitable approach would further reduce the renewable target for the East Central region from 12 percent to less than 9 percent. The commenter s said this 9 perce nt regional renewable target translates to a regional annual growth factor of 12 percent (versus 17 percent using equal weighting of state RPSs). The
commenter s said applying this more realistic regional growth factor would then require Pennsylvania to inc rease its reliance on renewables by 4.3 times (versus eight times under EPA's approach) to achieve its final renewables target.

Commenters stated, the PAPUC, pursuant to the Electricity Generation Customer Choice and Competition Act, established one of th e first successful retail customer choice programs in the nation. Commenters said, currently, 38% of Pennsylvania customers participate in the customer choice program. Commenters said, the PAPUC also oversees a vibrant market in alternative energy and ener gy efficiency by virtue of passage of the Alternative Energy Portfolio Standards (AEPS) Act of 2004 and Act 129 of 2008. Commenters said, Pennsylvania, like many other states, has implemented an aggressive AEPS program for promotion of renewable resources and energy efficiency measures. Commenters said, EPA's proposed CAA Section 111(d) emissions standards purport to regulate renewable energy (RE) resources under BB3 and demand

side/energy efficiency (DS/EE) programs under BB4. Commenters said, EPA's propos ed targets295 for both BB3 and BB4 are not credible and will be unattainable given current legislative constraints and structural and economic obstacles to further expansion of RE and DS/EE programs in Pennsylvania.

Comment 273: PA

- The EPA should ensure n atural gas, coal waste, and trash are not allowed as electricity generating sources, and that only zero

- emissions energy sources such as EE, wind, solar, and geothermal should be used for compliance credit

Response 273: See section VIII. of the final rule preamble of the CPP for the EPA’s response to this comment. Also see IV.D for a description of affected sources, and V.E for a description of renewable resources considered in block three.

The following are summaries of the specific public comments under this comment:

Commenter s stated Pennsylvania is off to a bad start, the commenter s said the Pennsylvania Department of Environmental Protection's recommended framework for implementing the rule includes exemptions and credits for dirty types of energy tha t will greatly limit the rule's effectiveness.

Commenter s stated EPA should ensure that natural gas, coal waste, and trash have no place in this rule and that only zero

- emissions energy sources such as energy efficiency, wind, solar and geothermal should be allowed to be used for credits in the program. The commenter s said please ensure that Pennsylvania's implementation of the Clean Power Plan is designed and implemented in a way that truly cuts carbon pollution and protects public health.

Comment 274: PA

- PA is disproportionately and unfairly burdened

Response 274: See section I.A. of the final rule preamble of the CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:

Commenter s ge nerally support ed EPA's approach, however is concerned with several elements that would disproportionately and unfairly burden the Commonwealth of Pennsylvania. The
commenter s said the transition to clean energy must include a pathway for multiple forms of electricity generation including coal, nuclear energy and hydropower, as well as consider our manufacturing and industrial sectors. The commenter s said Pennsylvania ranks fourth in coal production and coal provides about 40 percent of its electricity; mor eover, the reliability and reasonable cost of coal

- based electricity is critical to the energy

- intensive industries in Pennsylvania (including steel, cement, pulp and paper, and glass) and to Pennsylvanians who must balance their household budgets. The com menter s said PA needs to keep coal in the energy mix, but in a manner that reduces pollution. The commenter s said coal is an important domestic resource that cannot simply be ignored for the sake of expediency.296 Commenter s stated costs imposed by EPA's infl ated renewables target cannot be mitigated by obtaining additional emission rate reductions from other building blocks.

a) Coal Heat Rate Improvement. The commenter s said in constructing Pennsylvania's overall emission rate reduction target of 575 lbs/MW , EPA included reductions of 77 lh/MWh from building block 1, coal heat rate improvement; thus under EPA's scenario, increased efficiency at existing coal fired power plants would account for 13 percent of the total carbon emission reductions needed to mov e Pennsylvania from its 2012 emissions rate to its 2030 target rate.

Commenters stated that their assessment of how the Proposed Rule would affect Pennsylvania and their facility differs substantially from EPA's assessment. Commenters stated that in sever al areas, their analysis shows that EPA has over

- predicted the amount of emission reductions that would be achieved through implementation of the Building Blocks. Commenters stated EPA projects that 77 lbs. CO2/MWh can be reduced in Pennsylvania through im plementation of heat rate improvements ("HRI") at existing units. Commenters stated this level of reduction is unlikely to be achieved since many units in the State have already undergone modifications to improve their heat rates or they are already highly efficient.

b) Natural Gas Redispatch. The commenter s said in constructing Pennsylvania's overall emission rate reduction goal, EPA included reductions of 70 lbs/MWh from building block 2, redispatch from coal

- fired EGUs to natural gas

- fired EGUs; thus, under EPA's scenario, substituting generation from less carbon intensive natural gas EGUs for more carbon intensive coal EGUs would account for 12 percent of the total carbon emission reductions needed to move Pennsylvania from its 2012 emission rate to it s 2030 target
rate.
c) Energy Efficiency. In constructing Pennsylvania's overall emission rate reduction goal, EPA included reductions of 105 lb/MWh from building block 4, demand

- side energy efficiency; thus, under EPA's scenario, reduced electricity gener ation, from the adoption of demand

- side energy efficiency measures, would account for 18 percent of the total carbon emission reductions needed to move Pennsylvania from its 2012 emission rate to its 2030 target rate.

Comment 275: PA's energy profile de tails

Response 275: The EPA appreciates the information regarding PA’s energy profile.

The following are summaries of the specific public comments under this comment:

Commenter s stated Pennsylvania has a diverse energy profile; Pennsylvania energy sourc es encompass all forms of energy production including nuclear, coal, natural gas, waste

- to energy, hydroelectric and renewables. The commenter s said Pennsylvania is the fourth largest coal producer in the U.S. and produced 68 million tons of coal (bitumino us and anthracite) in 2011. The commenter s said the coal industry directly employs about 8,700 employees and indirectly297 supports about 32,800 jobs such as employment in the state's coal

- fired power plants and the railroad industry. The commenter s said Penn sylvania's abundant coal reserves assure decades of reliable, low cost energy for the state and the region; coal consumption for electric generation in the state was 47,324,852 tons in 2011.

Commenter s stated Pennsylvania is also a national leader in the production of natural gas; natural gas production in the Marcellus region generally exceeded 15 billion cubic feet per day through August 2014. The commenter s said Pennsylvania's Marcellus Region possesses the largest shale gas producing resources in the n ation with over 100 rigs currently operating and each rig supporting more than 6 million cubic feet per day in new well production each month. The
commenter s said Pennsylvania's annual gross natural gas production, primarily from the Marcellus Shale, excee ded 2 trillion cubic feet in 2012, a 72% increase over 2011 production; Pennsylvania's net energy generation by natural gas amounted to 41,792,165 MWH or 28% of the total generation in 2014.

Commenter s stated nuclear generation also represents a significa nt portion of Pennsylvania's energy profile; currently, there are five nuclear generation facilities operating in the state representing 7,000 GWH or 35% of net electricity generation.

Commenter s stated Pennsylvania also derives an increasing amount of el ectric generation from hydro

- electric sources and renewables representing 162 GWH and 400 GWH respectively; these figures represent approximately 1.0% and 2.0% of Pennsylvania's electric energy generation.

Comment 276: SC

- C ommenters question ed whether goals and methods are inaccurate

Response 276: For the EPA’s response to this comment, see sections VI and VII of the final preamble and the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The followin g are summaries of the specific public comments under this comment:

C ommenters expressed concerns about whether current changes and proposed future actions can achieve the CO2 reduction goals that EPA has set for South Carolina, and that those goals have been incorrectly computed.

Commenter s stated that South Carolina utilities have made significant changes to their generating fleet to comply with other regulatory requirements. Commenter s said these changes have reduced emissions and have allowed utilities to continue to diversify their generation mixes. Commenter s said in preparation of expected requirements to reduce criteria and air toxic pollutants, as well as anticipated CO2 regulations, all of the older, less efficient coal units (fourteen units in al l) are to be shut down or switched to natural gas and operated as backup units by 2018. Commenter s said almost all of these units' physical changes were completed before 2012. Commenter s said all remaining units (thirteen newer and more efficient ones) hav e complete suites of emission controls installed, reducing criteria and air toxic emissions to meet existing and expected regulations.298 Commenter s stated that there are concerns with other building blocks you have recommended as well, in that they are not r eadily useful to South Carolina. Commenter s said that although Santee Cooper and other utilities are promoting energy efficiency, more than a third of South Carolina's retail sales are to industrial customers. Commenter s said it is not reasonable to assume that large increases in energy efficiency are available to this customer class; they are already doing all they can do to conserve. Commenter s said achieving a 10 percent increase in energy efficiency savings in South Carolina as proposed in this regulati on is not feasible.

Commenter s stated that currently, South Carolina has the third most stringent reduction target of any state and the largest numerical reduction, from 1587 lbs. CO2/MWh to 772 lbs. CO2/MWh, a difference of 815 lbs. CO2/MWh. Commenter s sa id that under the Proposed Rule, South Carolina would be required to reduce its emission rate by 51% relative to 2012. Commenter s said in EPA's calculation of South Carolina's goal, the under

- construction nuclear component accounts for 33% of the total red uctions required from the affected fossil

- unit rate. Commenter s said if the under

- construction nuclear component were removed from the goal calculation, South Carolina's target rate would be 990 lbs. CO2/MWh instead of 772 lbs. CO2/MWh. Commenter s said tha t consequently, South Carolina's 2030 goal is 22% more stringent because of EPA's inclusion of under

- construction nuclear.

Commenter s stated that Santee Cooper has a direct interest in how EPA establishes South Carolina's state goal. Commenter s said Santee Cooper owns existing affected fossil

- fueled EGUs that will be required to implement performance standards whose stringency will be specifically based on the assumptions that EPA makes in calculating South Carolina's state emission goal. Commenter s said th at Santee Cooper also owns a 45% stake in the two V. C. Summer nuclear reactors that are currently under construction. Commenter s said that EPA's fundamentally flawed approach to including under

- construction nuclear generation in state goal

- setting and com pliance will directly affect Santee Cooper's investment in that facility. Commenter s said that as a load

serving utility, Santee Cooper will also be affected by the increases in costs and by reliability issues that could result from the manner in which EPA establishes South Carolina's state goal.

Commenter s stated that each of EPA's assumptions about the "building blocks" that comprise BSER are overly aggressive and based on arbitrary and erroneous assumptions

- particularly as applied to South Carolina and Santee Cooper. Commenter s said EPA should revise South Carolina's state goals to account for the significant problems with building blocks one through four.

Commenter s stated that EPA's Alternate State Goals also suffer from flaws. Commenter s said that w hile the Alternate State Goals use a 4% rather than a 6% assumption for heat rate improvements in block one, even that lower assumption significantly exceeds attainable levels at Santee Cooper's units and other affected coal

- fueled EGUs within the State of South Carolina. Commenter s said the Alternate State Goals' reductions in NGCC utilization (from 70% to 65%) in block two, and estimated annual energy efficiency savings (from 1.5% to 1%) in block four, similarly exceed the achievable levels in South Carol ina. Commenter s said the Alternate State Goals would still pose a substantial compliance challenge because they would become fully effective in 2025 with only a five

- year averaging period (rather than a ten

- year period in EPA's primary proposal). Commenter s said the Alternate State Goals do not remedy the problems of the Proposed Rule. Commenter s said EPA has no choice but to withdraw the Proposed Rule due to299 arbitrary and grossly erroneous building

- block assumptions used for computing South Carolina's
stat e goals.

Comment 277: SC

- formulas question

Response 277: EPA engaged frequenly with states and stakeholderds during the comment period. EPA has clarified its methodology in this final rule as described in Section VI and VII of the preamble as well as t he CO2 Emission Performance Rate and Goal Computations TSD.

The following are summaries of the specific public comments under this comment:

Commenter s had questions about the formulas, and asked for clarification about the specific methodology for calc ulating SC's goal.

Comment 278: SD

- Multiple comments about inaccurate baseline data affecting goal computation

Response 278: See section VI of the final rule preamble of the CPP and the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Fina l Rule for the EPA’s response to this
comment. The Ben French facility has been excluded and b ased on comments, the EPA identified Deer Creek Station generators 01 and 02 as under construction

- commenced operation in 2012 and is estimating incremental gen eration and emissions for the st ate reflective of a capacity factor assumption of 55% for these NGCC units.

The following are summaries of the specific public comments under this comment:

C ommenters expressed concerns that EPA's goal computation for Sout h Dakota used inaccurate data.

Commenter s stated that even if re

- dispatch were workable in this setting, the South Dakota target would need to be adjusted because the lone combined

- cycle unit did not begin operating until late 2012, resulting in an unrepre sentative 1

- percent capacity factor. Commenter s said the combined

- cycle unit should be considered an under

- construction unit in the South Dakota target calculation, similar to the treatment of the combined

- cycle units that began operation or construction i n 2013, in other states.

Commenter s stated that Otter Tail Power Company has long demonstrated best practices in environmental stewardship, and their cost

- effective addition of renewables is ahead of the national curve. Commenter s said before EPA issued it s proposed Clean Power Plan, Otter Tail Power Company already had a plan to reduce carbon dioxide emissions intensity by 24% by 2021. Commenter s said they are concerned that faulty assumptions and arbitrary inconsistencies in the proposed rule, however uni ntentional, will strand hundreds of millions of dollars of recent clean energy improvements and counterproductively penalize Otter Tail and the State of South Dakota for being early adopters of clean energy resources and technology.300 Commenter s stated that EPA's selection of an unrepresentative baseline year for South Dakota and its consideration of Deer Creek Station as a fully operational NGCC plant in calculating the state's baseline emissions threatens to shutter Big Stone Plant, which by 2016 will be am ong the less than 10% of coal plants in the nation using similar state

- of

- the

- art technology for SO2, NOx, and particulate matter removal. Commenter s said that not only would closing Big Stone Plant strand the considerable capital Otter Tail expended in go od faith to modernize the facility, it will also threaten the company's ability to provide reliable energy to its customers, subjecting them to rate increases of about 20% to replace the plant.

Commenter s stated that there are two issues related to the Ben French data represented in the EPA's eGRID data. Commenter s said the 2012 year is not an accurate representation of Ben French's typical contribution to the state's coal generation because the unit began an economic outage on 8/31/2012 which lasted throug h the end of the year. Commenter s said the CO2 emissions calculated by EPA's emission factor are not as accurate as the CO2 emissions calculated under 40CFR98 (EPA's Mandatory Reporting Rule for Green House Gas emissions). Commenter s said the 2012 source d ata should be adjusted to 2011 generation when the unit operated the entire year and the CO2 emissions have been adjusted to the 2011 40CFR98 reported CO2 emissions.

Comment 279: SD

- Goal computation involved flawed assumptions in BB1, BB2, and BB3

Respo nse 279: See sections V.C., V.D., and V.E. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Blocks 1, 2, and 3 and the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

Deer Creek Station is categorized as under construction consistent with the comment.

The following are summaries of the specific public comments under this comment:

Commenter s discussed issues involving the use of Building Bl ocks 1, 2, and 3 in computing South Dakota's goals.

BB1. Commenter s stated that under Building Block 1, EPA makes the assumption that every affected coal

- fired generating plant can achieve an average heat rate improvement of 6 percent. Commenter s said EPA further identifies that coal generating plants could achieve heat rate improvements through either best practices for operations and maintenance or equipment upgrades. Commenter s said according to EPA's analysis, affected coal

- fired generating plants could achieve, on average, a 4 percent improvement in heat rate through best operating practices and a 2 percent heat rate improvement through equipment upgrades. Commenter s said that the application of national averages for heat rate improvements to each indiv idual affected coal

- fired generating plant is flawed, with South Dakota being a prime example of this flaw (as set forth in the following paragraphs). Commenter s said EPA must use unit

- specific data when applying Building Block 1.301 Commenter s stated that So uth Dakota has one affected coal

- fired generating plant, BSP, which would need to achieve the 6 percent heat rate improvement identified in Building Block 1. Commenter s said this heat rate improvement is not technically achievable at BSP as identified by i ts owners. Commenter s said that according to BSP's owners, "Big Stone [Plant] has a proud history of 'best operating practices' and efficiency upgrades." Commenter s said the owners state "Big Stone Plant has already made or plans to make all applicable [h eat rate improvements] identified by Sargent and Lundy." Commenter s said the owners are in the process of installing a state of the art air quality control system (AQCS) to comply with EPA's Regional Haze and MATs rules. Commenter s said the AQCS system wil l consume approximately 8 to 9 MWs of the energy produced by the plant, resulting in the degradation of the plant's heat rate by 1.7 percent.

Commenter s stated that since EPA did not account for unit

- specific circumstances when including the 6 percent heat rate improvement in South Dakota's goal computation, EPA's final goal calculation for South Dakota is in error. Commenter s said EPA's assumed heat rate improvement of 6 percent for South Dakota's coal

- fired generation cannot be achieved at the one affecte d coal

- fired plant, BSP. Commenter s said three factors that make the 6 percent heat rate improvement unattainable at BSP include: 1) the owners already implement best operating practices at the plant, 2) the owners already completed, or are in the process of completing, all applicable equipment upgrades identified by Sargent and Lundy, and 3) parasitic load from BSP's new AQCS will decrease the plant's heat rate by 1.7 percent. Commenter s said that, based on these site

- specific circumstances for Big Stone P lant, which make heat rate improvements at the plant not technically feasible, commenter s recommend ed that EPA exclude Building Block 1 from South Dakota's final goal calculation.

BB2 . Commenter s stated that under Building Block 2, EPA expects existing NGC C plants to ramp generation up to a 70 percent capacity factor, with the additional generation offsetting an equal amount of coal generation within the same state. Commenter s said EPA's application of this block to South Dakota results in the largest reduc tion of emissions assumed possible by all four blocks. Commenter s said that South Dakota is the perfect example of why this block is flawed.

Commenter s stated that EPA's one

- size

- fits

- all building block approach ignores the unique, real

world operation of the bulk electric system in each state. Commenter s said that in South Dakota, only two units will be affected by EPA's proposal: BSP and DCS. Commenter s said BSP is a 475 MW coal

- fired power plant owned by three IOUs. Commenter s said DCS is a 324 MW NGCC
p ower plant owned by Basic Electric Power Cooperative (Basin Electric). Commenter s said the two plants operate in separate dispatch areas

- BSP in MISO, DCS in SPP. Commenter s said they serve independent loads, where BSP serves IOU customers and DCS serves cooperatives. Commenter s said they also serve different purposes, where BSP provides base load power and DCS provides intermediate power.

Commenter s stated that despite concluding "that increments of generation are to some extent interchangeable" in the p roposed rule, EPA's Building Block 2 assumes that all increments of generation within a state are fully interchangeable and that security

- constrained economic dispatch (SCED) is prevalent throughout the bulk electric system. Commenter s said this is not the case. Commenter s said in South Dakota, increments of generation between BSP and DCS are not interchangeable for the reasons stated above. Commenter s said the two plants operate in302 separate dispatch areas, serve independent loads and different purposes, an d will operate in different electricity markets. Commenter s said in attempting to achieve EPA's proposed goal, increasing generation from DCS would not result in a decrease at BSP. Commenter s said the application of Building Block 2 in South Dakota is not technically feasible, and EPA should not include it in determining the state's goal.

Commenter s stated if Building Block 2 is not removed from the state's goal, EPA must correct major flaws in the baseline assumptions for DCS NGCC, at a minimum. Commenter s said in the proposed rule, EPA assumes normal operation for DCS is at a 1 percent capacity factor because of the hours it operated in 2012. Commenter s said this conclusion was despite the fact that it was under construction for more than half of that year . Commenter s said DCS should be considered "under construction" with an assumed 55 percent capacity factor, similar to other new NGCC plants. Commenter s said DCS is assumed to have a maximum capacity of 324 MW by EPA. Commenter s said the plant is limited b y an interconnection agreement of only 300 MW, consistent with the siting permit approved by the SD PUC. Commenter s said these technical errors in EPA's proposal must be corrected in the final rule if Building Block 2 is used.

Commenter s stated that Buildi ng Block 2 should not be applied to South Dakota's goal. Commenter s said generation cannot be redispatched from the state's single coal

- fired plant to the state's single NGCC plant. Commenter s said if EPA chooses to ignore this fact, it must at least

corre ct the technical errors mentioned above in the block's baseline assumptions for DCS.

BB3 . Commenter s stated that in calculating South Dakota's goal, EPA included all generation produced in the state. Commenter s said that EPA has indicated that compliance m ay be based on ownership of the renewable energy certificates (RECs) associated with that generation, regardless of the state where it is physically located. Commenter s said the calculation of a state's baseline in determining its goal, then, should also b e based on which states actually have a legal claim to the environmental benefits associated with that generation.

Commenter s stated that RECs were developed to facilitate the tracking of renewable energy, allowing purchasers of renewable energy to claim t he attributes and benefits of that specific renewable resource. Commenter s said each REC represents the claim to the environmental benefits associated with 1 MWh of renewable electricity. Commenter s said that RECs have been tracked for more than a decade i n this country for such purposes as complying with renewable portfolio standards and claiming the use of "green" energy in the production of goods. Commenter s said REC tracking systems have been established nationwide to verify and provide integrity to tho se claims, as many RECs are sold separately (or unbundled) from the electricity they represent. Commenter s said that most of these systems define a REC as including all environmental attributes (including the emissions reductions) associated with that gene ration. Commenter s said if EPA allows states to claim the emission reduction benefits of renewable electricity generated within their state, they are technically claiming the same benefits as those held by the owners of those RECs. Commenter s said this sce nario would create confusion and uncertainty in the REC marketplace and in state RPS compliance programs as well. Commenter s said if EPA decides to base compliance on REC ownership, renewable baselines in Building Block 3 should be based on REC ownership l ocation rather than generator location.303 Commenter s stated that in South Dakota, approximately 24 percent of generation produced in the state came from wind energy in 2012. Commenter s said that a large majority of the RECs associated with that wind generati on is contracted to out

- of

- state utilities for compliance within their own states. Commenter s said the Buffalo Ridge I and II projects in eastern South Dakota, which make up approximately 260 of the state's 784 MW of installed wind capacity, are contracted to a utility in northern Indiana. Contractor said the SD PUC believes REC ownership makes up less than 10 percent of in

- state generation. Commenter s said that the result of the incorrect baseline (EPA

- calculated 24 percent versus the SD PUC

- calculated les s than 10 percent) will be a state goal that is even more onerous than EPA suggests in its proposed rule. Commenter s said that given the already high penetration of wind generation in the state, integrating additional intermittent wind resources will be mo re difficult than in states that have lower penetration. Commenter s said if Building Block 3 is applied with the proper baseline, South Dakota's renewable target should be reduced in acknowledgement of the current export of RECs and the already high levels of wind penetration.

Commenter s stated that REC tracking systems have been developed nationwide. Commenter s said in South Dakota, this includes the development of two tracking systems, the Midwest Renewable Energy Tracking System (MRETS) and the Western R enewable Energy Generation Information System (WREGIS). Commenter s said that these two regional systems were built with volunteer hours from state and regulatory agencies, and funded by ratepayers across the West and Midwest. Commenter s said that both syst ems employ inclusive stakeholder processes for the accommodation of policy needs and changes, such as this proposal. Commenter s said the final rule should allow the use of established tracking system for compliance purposes.

Comment 280: SD

- Questions ab out consistent inclusio n/exclusion of generation/consumption in Indian Country when computing SD state goals

Response 280: For the EPA’s response to this comment, see sections VII and VIII of the final preamble and the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP. EPA does not include building block four in the final CPP quantification of BSER, which would appear to obviate the commenters concern here.

The following are summaries of the specific public c omments under this comment:

Commenter s stated that EPA solicits comments on setting goals in Indian Country which contain affected electric generating units. Commenter s said on page 4.5 of the Technical Support Document

- GHG Abatement Measures, Energy In formation Administration, EPA indicates
state

- level total generation was adjusted to remove utility

- scale fossil generation located in Indian Country. Commenter s said South Dakota is unable to determine if EPA excluded retail sales in Indian Country when d etermining South Dakota's energy efficiency goal. Commenter s said EPA does not address in any of the technical support documents how EPA proposes to handle renewable energy or energy efficiency in Indian Country, particularly with respect to Indian Country having no affected electric generating units. Commenter s said EPA should give the state the flexibility to use renewable energy or energy efficiency that occurs in Indian Country. Commenter s said if EPA will not, EPA should re

- evaluate the state goals to eliminate304 calculating renewable energy and energy efficiency goals that include electricity produced and sold in Indian Country.

Comment 2 8 1 : SD

- Comments stating that meeting HRI targets may impact a reliable, economic source of steam for other projects

Re sponse 2 8 1 : As described in the CO2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule, the EPA is not making any unit

- level requirements assumptions when implementing the building blocks. It is only make assumptions about what the regiona l fleet, in this case the eastern interconnect could achieve on average. There is no requirement or expectation that Big Stone make a specific heat rate improvement. See Section V.A.4.a for more discussion.

The following are summaries of the specific pub lic comments under this comment:

Commenters stated that since 2003 Big Stone Plant has provided a co

- generation benefit to the nearby ethanol plant owned by Northern Lights Ethanol, LLC, providing the plant with a reliable, economic source of steam. Commen ters stated that EPA and the State of South Dakota reviewed this project and Big Stone Plant's Title V permit was amended on August 8, 2001 specifically for the purpose of authorizing this activity. Commenters stated that this co

generation project has a 2 % to 3% negative impact on Big Stone Plant's overall heat rate, but the steam is used for the critical purpose of producing biofuel with very low lifecycle GHG emissions. Commenters stated that if EPA were to proceed with requiring 6%, or even 4%, HRI at B ig Stone Plant based on the baseline found in the proposed rule, then this economically and environmentally responsible co

- generation of steam may be terminated. Commenters stated that by depriving states of authority to consider "other factors" in determi ning how to apply BSER to each designated unit within the state, EPA would cripple another of the Administration's own GHG reduction efforts: the effort to ramp

- up production of low

- GHG biofuels.

Commenters stated that EPA should reconsider the emission ta rgets proposed for South Dakota. Commenters stated that because EPA has not comprehended the unique circumstances within the state, and because it has not allowed the state to consider unit

- specific factors in determining what Big Stone Plant can achieve, EPA has overestimated what South Dakota can achieve. Commenters stated that much, if not all, of this problem could be avoided if EPA confined itself to the role expressly contemplated by Section 111(d)

- determining BSER

- and left to the states their sta tutorily

- assigned task of establishing standards of performance applicable within their borders and applying those standards to individual units after consideration of statutorily

specified factors such as the remaining useful life of each existing source.

Comment 282 : SD

- Improper baseline data; limited flexibility to use BB2

Response 282 : See sections I.A. and V I of the final rule preamble of the CPP for the EPA’s response to this comment. EPA deemed the Deer Creek Station to be "under construction" in 2012, and adjusted South Dokata assigned incremental generation and emissions to South Dakota reflective of Deer Creek Station assumed capacity factor at 55% utilization.305 The following are summaries of the specific public comments under this comment:

C ommenter s stated that South Dakota's unique generation profile, including just one coal

- tired steam electric generating unit (EGU) and a single natural gas combined

- cycle plant (NGCC), severely constrains flexibility in meeting the state

- level target. Comm enter s requested that EPA review the Plan's classification of the state's sole NGCC power plant as operational in 2012, even though it did not operate commercially until August of that year.

Commenter s stated that nearly all of South Dakota's power sector carbon emissions are attributable to the state's only coal

- fired steam EGU, the Big Stone Plant in northeastern South Dakota. Commenter s said the facility is co

- owned by Otter Tail Power Company, Montana

Dakota Utilities Co., and NorthWestern Energy and is dispatched primarily by the Midcontinent Independent System Operator. Inc. (MISO). Commenter s said the Big Stone Plant serves customers in Minnesota, North Dakota, South Dakota and Montana.

Commenter s stated that the Big Stone Plant is in the midst of an approximately 400 million dollar environmental upgrade project to comply with the South Dakota regional haze state implementation plan approved by EPA in 2011. Commenter s said that public utilities commissions in Minnesota and North Dakota granted advance prudence determinations for the project, after carefully weighing replacement generation alternatives. Commenter s said that construction of the environmental upgrade project is now nearly 70 percent complete. Commenter s said approximately 400 employees of the prime contractor and subcontractors arc working diligently to complete the project earlier than required and under budget.

Commenter s stated that South Dakota also has only one NGCC EGU, the Deer Creek Station in eastern South Dakota. Commenter s said t he Deer Creek Station is owned by Basin Electric Power Cooperative and is presently dispatched by the Western

- Integrated System. Commenter s said after the Western Area Power Administration, Basin and Heartland Consumers Power District have joined the South west Power Pool (SPP), as presently contemplated, Deer Creek Station will be dispatched by the SPP.

Commenter s stated because Big Stone Plant and Deer Creek Station are South Dakota's only coal

- fired steam and NGCC EGUs, a heavy reliance on the re

- dispatch of electricity from coal to natural gas (Building Block 2) to achieve the state's required carbon reductions allows for little flexibility. Commenter s said the Plan uses Deer Creek Station's actual 2012 capacity factor of a mere 1 percent in calculating S outh Dakota's required carbon emission rate reduction, even though Deer Creek Station did not become commercially operational until August of 2012. Commenter s said these anomalies would require dispatch or Deer Creek Station at up to a 70 percent capacity factor while essentially relegating Big Stone Plant, a baseload unit, to intermediate or even seasonal operation. Commenter s said had EPA deemed the Deer Creek Station to be "under construction" in 2012, the Plan would have assigned Deer Creek Station an

a ssumed capacity factor of 55 percent in 2012.

Commenter s stated that electric consumers served by Otter Tail Power Company, Montana

Dakota Utilities Co., and NorthWestern Energy should not have to absorb the costs or Big Stone Plant environmental upgrades to meet Clean Air Act regional haze requirements only to have access to a fraction of the energy the facility is capable of producing, at much higher costs per306 unit or energy. Commenter s said that Basin constructed the Deer Creek Station for its unique ele ctric utility system requirements, not to meet consumer electric energy demand of neighboring electric utilities in an entirely different regional transmission organization.

Commenter s urged EPA to consider revising the Plan to more accurately classify the Deer Creek Station as being under construction in 2012.

Comment 283 : TN

- The Proposed Carbon Rule leads to uneconomic and inefficient decision

making

. Response 283 : For the EPA’s response to this comment, see the Regulatory Impact Analysis for the Clean Power Plan Final Rule, EPA

- 452/R

- 15

- 003 supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenter s stated that the Proposed Carbon Rule is contrary to the Tennessee Valley Authority Act of 1933 (T VA Act), specifically the amendments to the TVA Act contained in the Energy Policy Act of 1992. Commenter s said both the TVA Act and Energy Policy Act were acts of Congress passed by the legislative branch, yet with the Proposed Carbon Rule, the executive branch acting through EPA seeks to obviate the will of Congress by administrative fiat.

Commenter s stated that the Proposed Carbon Rule ignores the purpose and history of the TVA Act. Commenter s said this irreconcilable conflict is particularly acute when the sweeping scope of the rule is put against the Energy Policy Act amendment to the TVA Act. Commenter s said the Energy Policy Act of 1992 amended the TVA Act and added the "Tennessee Valley Authority least

- cost planning program." Commenter s said under t his statutory section, TVA "shall conduct a least

- cost planning program" and "employ and implement a planning and selection process for new energy resources which evaluates the full range of existing and incremental resources ... in order to provide adequa te and reliable service to electric customers of the Tennessee Valley Authority at the lowest system cost." Commenter s said the least

- cost planning mandate is also consistent with TVA's overall objectives under the TVA Act: "The Corporation shall charge r ates for power ... having due regard for the primary objectives of the Act, including the objective that power shall be sold at rates as low as are feasible."

Commenter s stated that the Proposed Carbon Rule, in concert with other EPA overreach in recent y ears, has forced TVA to deviate from this least

- cost planning mandate in contravention of the express language of the statute. Commenter s said least

- cost planning is a term of art in utility regulation, and provides the analytic goal for utilities in devis ing a resource portfolio. Commenter s said the Proposed Carbon Rule creates an irreconcilable conflict between the intent of an 80

- year

- old statute that has been integral to the economic development and improvement of lives in the Tennessee Valley and an ad ministrative rule that lawlessly seeks to impose a federal energy policy on the state of Tennessee. Commenter s said this is a "federal energy policy" not passed by Congress.

Commenter s stated that abandoning least

- cost planning principles and policy has an d will continue to lead to uneconomic and inefficient decision

- making.307 Comment 284 : TX

- Disparate state goals would result in inequitable treatment of states, and rule penalizes early efforts made in TX; general BB concerns

Response 284 : See sections I.A ., VI VIII.B., and VIII.C. of the final rule preamble of the CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:

Commenter s said that disparate state goals proposed by EPA would resu lt in inequitable treatment of the states as well as the affected individual EGUs, and Texas will be severely and disproportionately impacted by the rule. Commenter s indicated that the rule penalizes states that have made early reductions.

Commenter s said that states where the electrical generation is predominantly coal

- based would be expected to make significantly less reductions under the proposal than states such as Texas that have a diversified portfolio of generation. Commenter s indicated that under th e proposed rule, some states would receive credit for renewable energy generation in the state goal calculation, yet Texas, which actually produces more non

- hydro renewable energy than any other state, is being penalized by the EPA by assuming that Texas c an produce even more renewable
energy

- without considering the costs and time necessary to do so. Commenter s stated that Section 111(d) does not allow the EPA to establish emissions guidelines on a state

- by

- state basis in such a disparate and inequitable manner.

Commenter s stated that the proposed rule will have a severe and disproportionate impact on Texas. Commenter s stated that based on EPA's Integrated Planning Model (IPM) projections of state CO2 emissions from EGUs for the proposed rule, Texas would be required to make approximately 19% of all CO2 reductions necessary for the United States. Commenter s said that Texas has more CO2 emissions from electric generation than any other state, and noted that Texas is the second most populous state in the Unit ed States, and has a large and diverse industry base. Commenter s also noted that approximately 85 percent of Texas' electrical load is confined within a single region, and that region has limited interconnections to other transmission regions within Texas

.
Commenter s stated that Texas has made significant efforts in developing a diversified and balanced energy generation mix, and is the nation's leader in wind generation. Commenter s stated that in 2012, Texas produced 23% of all wind energy produced in t he United States, and more than twice as much wind energy as the next highest wind energy producing state. Commenter s noted that the data the EPA used for this proposed rule demonstrates Texas' efforts in developing a diversified clean energy fleet while s imultaneously meeting the tremendous energy needs of the state. Commenter s said that the EPA is using these efforts to impose a more stringent standard on Texas than other states that are predominantly coal or have implemented little renewable energy.

Comm enter s ha d concerns about the building blocks and assumptions used in the calculation of the emission targets for Texas; for example "The improvements offered by Block 1 may be illusory" and "that within the ERCOT interconnection, there likely is little ro om for improvement308 in Block 1's heat rate improvement goal because much of the assumed efficiencies have already been implemented by coal

- fired generation because of the competitive market". The commenter s also explain ed that "increasing the amount of rene wable electricity may result in undesirable consequences such as the need to shutdown or ramp down much of the coal fired and nuclear fleet during certain times of the year, and those large nuclear generating units are not designed to ramp up and down quic kly or easily."

Commenter s stated that the assumed re

- dispatch of power markets cannot be done to the scale proposed by EPA and that the difference between the actual 2012 coal generation and the EPA assumed generation is the equivalent of shutting down 11 ,000 MW of ERCOT coal plants or running coal plants only in the summer months. The commenter s expressed concerns that the requirement for renewable energy targets for the South Central portion of the USA should be 12% not 20%.

Commenter s stated EPA's expe cted emissions reductions for Texas, and resulting costs and economic impacts, are staggering. The commenter s said Texas' 2012 CO2 emissions rate, as calculated for the purposes of the rulemaking, is 1,284 lbs/MWh

- yr. The commenter s said Texas has a lower emissions rate than 32 other states, far below the median state. The commenter s said it is anticipated that Texas will have to reduce its overall CO2 emissions by 42% by 2030 under EPA's plan to meet the final emissions target of 791 lbs/MWh

- yr. The commen ter s said this reduction far outpaces every other state in the country, with Texas shouldering roughly 18% of the entire country's CO2 reductions and nearly three times as much as the next state

- Florida; this is despite having an emissions rate far less than the median state and produces only roughly 11% of the country's electricity. The commenter s said in fact, certain states are actually expected to increase their CO2 emissions, as a result of the rule; a significant component of these reductions will e ffectively have to be accomplished by the 2020 deadline.

Commenter s were concerned with the extremely aggressive Texas 2020 and 2030 goals (853 lb CO2/MWh, 791 lb CO2/MWh, respectively) because (1) they are unachievable with respect to the existing fleet i n Texas, and (2) even the newest, most efficient units, such as new NGCC, would not be able to meet these goals.

Commenters stated that NERA's analysis identified flaws and errors in EPA's "building block" assumptions and methodology that indicate that EPA 's analysis does not support its 791 pounds CO2 per megawatt

- hour target for Texas. Commenters stated that indeed, NERA's analysis shows that, at best, using EPA's own methodology, while correcting some but not necessarily all of EPA's errors, EPA's approa ch actually results in a Texas goal of approximately 940 pounds of CO2 per megawatt

- hour. Commenters stated that their internal analysis confirms this and identifies other adjustments that show EPA's approach would, if applied without the errors that have been identified thus far, result in a Texas goal of well over 1,100 pounds CO2 per megawatt

- hour. Commenters stated that hence, if Texas was forced to meet EPA's goal of 791 pounds of CO2 per megawatt hour, the state would have to apply the building blocks even more aggressively than EPA falsely assumes, and the resulting economic impacts would be even more

severe.309 Comment 285 : CPP would require disproportionate reductions from TX and result in disproportionate impacts and severe economic costs

. Response 2 8 5 : See section I.A. of the final rule preamble of the CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:

Commenter s said the proposed regulation would cause both substantial disprop ortionate impacts on Texas and severe economic costs for Texas consumers, and these impacts have not been adequately considered in the EPA's analysis. Commenter s said even though Texas has already made significant progress in developing a generation portf olio based on a diverse fuel mix, EPA's proposal would require more CO2 reductions from Texas than any other state and in amounts well out of proportion to its current share of CO2 emissions. Commenter s said under EPA's assumptions used in developing the s tate goals, Texas is required to make 18% of the total U.S. CO2 reductions, yet it produces only 11% of CO2 emissions by EPA's own 2012 baseline. Commenter s said by this same baseline, Texas is required to reduce CO2 emissions by 57.9 million tons per year by 2030

- this is more than double the amount of the next closest state (Florida).

Commenter s said further, EPA's modeling disproportionately penalizes Texas for proactively investing in a diverse generation portfolio, including efficient natural gas comb ined cycle units ("NGCC") and renewables. Commenter s said the EPA re

- dispatch modeling from coal to NGCC's shows 72 million megawatt

- hours of reduced output by the Texas coal fleet by 2020 (versus a 2012 baseline)

- this output reduction is 78% more than t he next closest state (Florida). Commenter s said a reduction of 72 million megawatt

- hours amounts to 52% of Texas's 2012 coal

- fueled generation, representing 19%

- nearly one fifth

- of the entire nationwide reduction in coal generation that EPA requires (even though Texas generation accounts for just 11% of U.S. coal generation). Commenter s said this is extremely disproportionate and overly burdensome as to Texas.

Commenter s said EPA's proposal sets a standard for Texas that is clearly unreasonable and di sproportionate compared to other states. Commenter s said the Texas 2030 target of 791 pounds CO2 per megawatt

- hour is 20% more stringent than the national average of 991 pounds CO2 per megawatt

- hour and also well below EPA's proposed standard for new coal

- fueled power plants of 1,100 pounds CO2 per megawatt

- hour. Commenter s said the EPA's targets vary widely among the states

- from about 200 pounds CO2 per megawatt

- hour to nearly 1,800 pounds CO2 per megawatt

- hour. Commenter s said thirty

- one other states ha ve final (2030) targets that are higher than Texas's on a pounds CO2 per megawatt

- hour basis. Commenter s said incredibly, thirteen states have final (2030) targets that are higher than Texas's 2012 baseline rate of 1,292 pounds CO2 per megawatt

- hour.

Comm ent 286 : Texas has been disproportionately targeted and will be disproportionately impacted, especially east Texas310 Response 286 : See section I.A. of the final rule preamble of the CPP for the EPA’s response to this comment.

The following are summaries of t he specific public comments under this comment:

Commenter s said that Texas is a state that has been disproportionately targeted, and will be disparately impacted, by the Proposed Rule.

EPA has taken a regionalized approach the building blocks and quantif ying BSER in this final CPP which will address some of the commenters concerns about the impact of incremental NGCC generation being observed purely in state at proposal.

Forced early retirements . Commenter s said based upon the proposed EPA scenario,
app roximately 17,000 MW of total capacity is to be retired in Texas, of which 13,000 MW is coal capacity. The commenter s said moreover, Texas already has a lower carbon emission rate than 30 other states, but is required to reduce more carbon tonnage than any other state and achieve proportionately greater reductions than many states with higher emission rates.

Emissions Reduction . Commenter s said state

- by

- state standards vary widely in the Proposed Rule, with the EPA proposing that Texas should account for 18 % to 25% of national CO2 reduction (and that Texas reduce the overall production of carbon by its power plants by over 40% in the next 18 years). The commenter s said this is true even though Texas is one of the nation's fastest growing states and has one o f the most robust and expanding economies to support.

Commenter s said Texas power plants account for only about 11 percent of the nation's carbon emissions, but those Texas facilities are expected by the EPA to make cuts that will amount to about 20 perce nt of the nation's total carbon reductions. The commenter s said according to Kathleen Harnett White, former TCEQ chair and current director of the Texas Public Policy Foundation Armstrong Center for Energy & the Environment, "The (Clean Power Plan) would h ave a disproportionately large impact on Texas

- more than any other state." The commenter s noted that "the regulatory mandate imposed on Texas is almost two times that of the next two states combined."

Credit for early reductions . Commenter s said unfairly , the State of Texas gets zero credit under the Proposed Rule for the substantial improvements in renewable

- energy resource usage (particularly with regard to adding wind power) made in the last decade. The commenter s said ETEC and other Texas power genera tors have added biomass and hydro

- electric facilities to their generation portfolios and wind power to their purchased power portfolios; but it is unclear whether those renewable facilities will receive any credit under the EPA's plan.

Costs and reliabilit y impacts . Commenter s said the Proposed Rule imposes on Texas unfair costs and illusory implementation alternatives. The commenter s also said the scheme creates system

reliability challenges for Texas as a whole, and some even say that for Texas to comply with the rule would be physically impossible (at least within the timelines being proposed by the EPA). The commenter s said this is especially true in east Texas, a unique part of the state from a
power

- planning and socioeconomic perspective, which (being largely outside of ERCOT and in the rural, heavily

- wooded piney woods region) often suffers from greater reliability challenges311 than most other areas of Texas. The commenter s said moreover, expert opinions suggest that the overall structure of the Texas' e nergy

- only electric market may not survive the rule's implementation in its current form.

Three RTOs . Commenter s said adding complexity, administrative burden and cost for the State of Texas is the fact that Texas is the only state that has a physical pres ence within three electric interconnections, or regional transmission organizations (RTOs), including (i) the Electric Reliability Council of Texas power region (ERCOT) ; (ii) Southwest Power Pool (SPP); and (iii) Midcontinent Independent System Operator ( MISO). The commenter s said all of the Texas utilities (public or private) located in the eastern interconnection are members of SPP or MISO (as well as ERCOT in some cases). The commenter s said attempting to comply with the EPA's rule will be extremely com plex for Texas and will effectively cede to the EPA the authority currently held in Texas by the Texas legislature, the PUCT, ERCOT, and these other two RTOs operating in Texas. The commenter s said from a practical perspective, the State of Texas will clea rly face enormous complications in terms of trying to create a state implementation plan that adequately addresses all three RTOs that operate in Texas.

East Texas . Commenter s said East Texas, which includes some of the poorest counties in the state, is p erhaps most disparately impacted by the rule. The commenter s said the East Texas Cooperatives are situated in all three RTOs (MISO, SPP and ERCOT). The commenter s said the ETCs are primarily operating outside of ERCOT, and the ETCs have historically strugg led to achieve adequate sources of generation and transmission in order to provide electric energy to their members. The commenter s said ETEC (and the ETCs) in rural East Texas have attempted to diversify their generation alternatives, but are faced with l imited renewable resources available in the region. The commenter s said in East Texas, wind and solar opportunities are just not abundantly available. Commenter s said while ETEC has recently invested in hydroelectric and biomass resources, the ETCs still r ely on coal plants for about 63% of their wholesale power. The commenter s said most of these coal plants have recently undertaken significant capital expenditures to improve their environmental controls in order to comply with EPA's Utility MATS and CSAPR (even before the rule was temporarily stayed); but many of these plants would be required to close under the EPA's proposed plan.

Commenter s said due to historical concerns with lack of transmission infrastructure in East Texas, rural East Texans are gener ally just as concerned with reliability of electricity as with cost. The commenter s said particularly disconcerting for ETEC, and its members in rural East Texas, is a recent Government Accountability Office ("GAO") report stating that even more coal

- fired power plants will close because of environmental regulations and competition from other energy sources than previously thought. The commenter s said the GAO report also indicates that these changes "may contribute to reliability challenges in some regions and these actions would likely increase electricity prices in some regions

... "; further, industry stakeholders and RTOs indicated to the GAO that they cannot reliably estimate the effects of the coal

- plant retirements because of the complexities of the m arkets impacted by the Proposed Rule.

Local economic impacts . Commenter s said finally, the practical effects of ETC

- owned plants shutting down would be devastating to local communities in rural east Texas. The commenter s312 said each plant that is forced to s hut down, or even has to curtail operations, would have harmful consequences on the small communities in East Texas that rely on revenue streams from such a plant to help fund local school systems and county governments. The commenter s said further, the em ployment opportunities provided at the plants in which ETEC and its members have an ownership stake also provide necessary economic support in those communities, and each job that is lost will be felt.

Comment 287 : Texas is far and away the most signific antly affected state, and the significant variation and seemingly random allocation of emission targets to different states are impacts that demand a far more detailed and reasoned explanation before the EPA proceeds any further

. Response 287 : See section I.A. of the final rule preamble of the CPP for the EPA’s response to this comment.

EPA also suggest comparing relative burden among states using an absolute metric may not be the best metric to use for assessing disparate impacts. EPA also suggest that th e percent reduction and percent change metrics be examined for the state goals for Texas in the final CPP.

EPA quantifies BSER using a regionalized approach based on the availability of the three identified building blocks.

The following are summaries of t he specific public comments under this comment:

Commenter s said it must be recognized that Texas is singled out for special treatment under this proposed rule. The commenter s said while Texas' required percentage reduction in GHG emissions is not as large as some states (42%), when applied to the actual magnitude of Texas' electric generation capacity the figures become very revealing of the real impact of the rule. The
commenter s said Texas is clearly the largest producer and consumer of power in the U.S, but that status is merely a reflection of Texas' position as a producer of fuel, manufactured goods and other products that meet the needs of the other states and our global trading partners. The
commenter s said under the Clean Power Plan, Texas is far an d away the most significantly affected state:

By 2030, Texas must reduce coal

- fired electric generation by over 72 million megawatt hours (MWH), Florida is a distant second at just over 40 million MWH.

Texas' required GHG reductions by 2030 are almost thre e times greater than those required of second place Florida and dwarf the requirements for any other state.

To comply, Texas must reduce its coal

- fired electric generation by over 53%; Indiana and Kentucky, the two closest states to Texas in terms of coal

- fired generation, must reduce their generation from coal by 4.8% and 1%, respectively.

Texas leads the nation in the production of renewable energy. But by 2030, Texas must increase its use of renewable energy almost five times as much as the state closes t to Texas in renewable energy capacity, California.313 Commenter s said the significant variation and seemingly random allocation of emission targets to the different states, and certainly the significantly greater impact of the rule on Texas, are clearly imp acts that demand a far more detailed and reasoned explanation before this rule receives any further consideration by EPA.

Comment 288 : States must receive credit for early emissions reductions; without it, Texas target cannot be achieved

. Response 288 : Se e sections VI VIII.B., and VIII.C. of the final rule preamble of the CPP for the EPA’s response to this comment

. The following are summaries of the specific public comments under this comment:

Commenter s said CPS Energy supports and has made substantial i nvestments already to implement the Building Blocks identified in the proposed rule, in order to reduce the company's carbon footprint. The commenter s said given this strong and proactive commitment, CPS Energy is concerned that the Building Block assumpti ons used for computing the CO2 emission rate goal for Texas need to be revised to reflect reasonable performance levels for affected EGUs. The
commenter s said without adjustments, the state target is not achievable, even by those electric utilities, such a s CPS Energy, who have undertaken proactive, voluntary efforts and will continue to significantly reduce their CO2 emissions. The commenter s said CPS Energy is concerned that the proposed framework for the implementation of the Building Blocks will not all ow any credit for CO2 emissions achieved by these early, voluntary actions during the period prior to the start of the regulatory program in 2020.

Commenter s said in regards to early action credit, switching from coal generation to NGCC has been part of ou r overall generation strategy. The commenter s said CPS Energy purchased an NGCC unit in 2012 in preparation for replacing the lost capacity of the Deely 1 and 2 coal units at the end of 2018. The commenter s said, however, since CPS Energy purchased a NGCC unit (Rio Nogales) already in operation in 2012, the generation from Rio Nogales is already included in the 2012 data used for setting the state targets, so shutting down Deely has a diminished impact on the affected units' emission rate. The commenter s sa id as mentioned, CPS Energy wants to ensure the rule allows for the state to give credit for this early action.

Comment 289 : TX

- Commenter s indicated that review of the IPM files indicates errors were made in the EPA's assumptions

. Response 289 : For the EPA’s response to this comment, see the CO2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP. EPA did not consider CFP Power Plant an affected source at proposal or model in its 111(d) baseline for quantifyin g state goals.

EPA’s power sector modeling is an illustrative model to capture system

- wide impacts of a least cost compliance sceneario. The compliance model is not meant to replicate the building block314 levels, but rather recognizes on the way reductions and changes in fuel market conditions that may leads EGUs and states towards compliance without replicating the levels observed in the individual building blocks. This is consistent with the compliance flexibilities discussed in section VIII. EPA does u se power sector modeling when informing its assessment of building block two. See section V.D. and corresponding modeling for further details on this analysis.

The following are summaries of the specific public comments under this comment:

Commenter s sai d that the EPA's IPM files indicate that the CFB Power Plant in Calhoun County (ORIS Code 56708, IPM ID Numbers 56708_B_H1101 and 56708_B_H1201) would be subject to the rule and would even shut down as a result of the rule by 2020. However, c ommenter s said

, the CFB Power Plant should not be subject to the rule. Commenter s said that based on the TCEQ's information, the CFB Power Plant is predominately a dedicated industrial power provider and while CFB Power Plant might have the capability of putting power t o the electrical grid, the facility has not put sufficient power to the grid to trigger the applicability threshold the EPA used for the proposed rule. Commenter s said that the EPA should not consider the CFB Power Plant as an applicable unit in the IPM fi les for this proposal.

Commenter s stated that only announced shutdowns should be included in the IPM base case modeling. Commenter s said that three of the coal

- fired utility unit retirements in the 2018 IPM results for Texas have been announced by the com panies, specifically Welsh Unit 2 and JT Deely Units 1 and 2. Commenter s said however, as the TCEQ commented on the EPA's 2018 emissions modeling platform, IPM also predicts that the San Miguel unit in Atascosa County will retire before 2018 even though th e San Miguel Electric Cooperative has made no announcement of plans to retire their facility. Commenter s stressed that only announced shutdowns should be included in the IPM base case modeling. Commenter s said that a company's decision to retire an asset a s substantial as a coal

- fired utility unit is based on many factors the EPA is not privy to and that cannot be factored into IPM.

Comment 29 0 : TX

- Cannot achieve any meaningful improvement in efficiency at Spruce 2, a
state

- of

- the

- art facility

. Response 290 : See section V.C. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 1.

The following are summaries of the specific public comments under this comment:

Commenter s said at Spruce 2, it is not possible to achieve any meaningful improvement in efficiency. Commenter s said completed in 2009, Spruce 2 is a state of the art, high efficiency unit, and every effort was made during its design and construction to ensure that it was as efficient a s possible. Commenter s said the heat rate of this unit cannot be improved.

Comment 291 : TX

- BB1315 Response 291 : See section V.C. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 1. EPA B SER quantification reflects the regional potential of the building blocks, and does not assume any particular unit will perform at the exact building block level.

The following are summaries of the specific public comments under this comment:

Commenter s s tated EPA's prescribed heat rate improvement requirements are not technically achievable in Texas. The commenter s said Texas is a deregulated competitive electricity market; without government subsidy or price setting, power plants are compelled to obtain the greatest level of efficiency possible, without triggering new source review ("NSR") permitting requirements. The commenter s said Texas units have already implemented all best practices and equipment upgrades that are available; any megawatt of power th at is not generated, but could be obtained through efficiency improvements, is a megawatt of unsold power and lost profit. The
commenter s added Texas' coal fleet is one of the youngest coal fleets in the country, meaning that the units are built to run mor e efficiently and do not have the heat rate improvement potential that older units may have.

Commenter s stated lignite units in Texas are faced with even additional complication and compliance difficulties. The commenter s said as noted by EPA, "EGUs burni ng higher quality coals (e.g., bituminous) tend to be more efficient than EGUs burning lower quality coals with higher moisture contents (e.g., lignite). The commenter s said bituminous coals have higher heating values of greater than 10,500 British thermal units per pound and lignite coals have higher heating values of less than 8,300 British thermal units per pound." The commenter s said with a lower heat rate fuel, lignite units are compelled to be that much more efficient, and operators of these units wil l struggle that much more to extract more efficiencies from these EGUs. The commenter s said many of Texas' lignite units also possess advanced environmental control technologies that have significant parasitic load; this parasitic load is typically greater than on other non

- lignite power plants, if for no other reason than the lower heat content in lignite will result in great auxiliary loads created by the need to treat larger volumes of flue gas when compared to higher BTU fuels.

Commenter s stated Texas generators have already achieved all of the efficiencies that are economically achievable at their units, making it "[in ] feasible" for EPA "to prescribe or enforce a standard of performance;" therefore, if EPA intends to pursue future controls for coal

- fi red EGUs, the only viable means is through a work

- practice standard. The commenter s said work

practice standards have been components of EPA's recent rulemakings, including the MATS Rule.

Comment 292 : TX

- BB2

- Texas is disproportionately impacted by th e proposed rule; effect of 2012 baseline; 70% CF, nameplate capacity

Response 292 : See sections I.A., V.D., and V I of the final rule preamble of the CPP for the EPA’s response to this comment

. The following are summaries of the specific public comments und er this comment:316 Texas disproportionately impacted. Commenter s stated ignoring EPA's expected off

- the

- top 6% reduction to coal in Block 1 and looking solely at the reductions to coal

- generation due to forced coal

- to

- NGCC switching, Texas must reduce its c oal

- fired generation of electricity by 52% under Block 2 of the BSER model. The commenter s said this is over 72 million MWh

- yr (from 139 million MWh

- yr to 67 million MWh

- yr), far more than any other state; Florida is second with a 40 million MWh

- yr reducti on. The commenter s said EPA itself predicts that by 2020, Texas will retire 13,072 MW of coal generation, in addition to nearly 3,500 MW of natural gas generation; other states may be required to retire as little as zero coal generation.

Effect of 2012 ba seline . Commenter s stated by selecting 2012 as the baseline year, EPA has significantly understated the proposed reduction in the dispatching coal

- fired plants that will occur because 2012 was a year in which coal generation ran less due to depressed natur al gas prices. The commenter s said Texas generated 149,404,244 MWh of coal

- generated electricity in 2013; over 10 MWh more than 2012, so the actual reduction in coalfired generation is much greater than predicted in the rule. The commenter s said the majori ty of this reduction will have to occur by 2020

- less than four years after the rule is finalized.

70% Capacity factor. Commenter s said the EPA has not demonstrated that NGCC gas turbine plants in Texas can run reliably and continuously at the 70% capaci ty factor that EPA's building block 2 requires

- certainly not on EPA's proposed timeline. Commenter s said the EPA's analysis concluded that in recent years, due to "historic lows" in natural gas prices, "operators have shifted significant quantities of ge neration from coal units to NGCCs." Commenter s said yet, EPA could identify very few NGCCs that operated at a capacity factor of 70% or higher, despite the favorable economic conditions.

Nameplate Capacity . Commenter s said the EPA overstated the capacity o f the existing NGCC units by using nameplate capacity rather than feasible capacity as reflected in EPA's modeling. Commenter s said in Texas, EPA assumed 37.5 GW of existing NGCC capacity in calculating the CO2 rate target; however, EPA's own modeling data base, NEEDS, indicates that only 34.8 GW of capacity would actually be available. Commenter s said using nameplate capacity results in EPA adding an erroneously high level of gas

- fired generation into a state's goal calculation, thereby excessively reducing the amount of coal

- fueled generation included in determining a state's goal. Commenter s said the summer net capacity, which for Texas is 32.8 GW, is the most appropriate measure to reflect actual available capacity. Commenter s said when corrected for

name plate error, the capacity factors that would actually be required to reach these generation levels when applied to summer net capacities in Texas is 80.3%, not 70%. Commenter s said the difference in generation adds to the excessive level of NGCC re

- dispatc h that EPA includes in building block 2.

Comment 293 : TX

- BB2

- natural gas generation and infrastructure limitations

Response 293 : See section V.D. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about B uilding Block 2.

The following are summaries of the specific public comments under this comment:317 Commenter s said the EPA says on the one hand that it "does not presume that states with limited natural gas generation or infrastructure will have to develop those resources," but then it concedes that "[u]pgrades to pipeline and transmission infrastructure" will be "potentially needed to meet additional use of existing facilities." Commenter s said the EPA has not demonstrated that Texas can meet EPA's building block 2 target without further developing its natural gas generation or infrastructure and can meet those targets within EPA's stated timeline.

Natural Gas Generation Capacity

Commenter s said in 2012, the existing NGCC fleet for the state of Texas consum ed approximately 1,111 bcf of natural gas, and in order for the existing NGCC fleet to increase in capacity factor from 45% to 70%, an increase of approximately 648 bcf over the 2012 consumption would be required. Commenter s said this increase of 58% in na tural gas consumption for the existing NGCC fleet in Texas would result in a total of 1,759 bcf. Commenter s said in addition to the existing NGCC resources, other existing natural gas

- fired resources will have to provide energy (either simple cycle units o r boilers). Commenter s said the total existing natural gas

- fired fleet under the proposed rule's assumptions may utilize over 2,100 bcf. Commenter s said to meet energy load requirements, new natural gas

- fired resources will need to be constructed to provid e electric generation above and beyond the assumptions outlined above for existing units. Commenter s said new natural gas

- fired resources could be expected to utilize an approximately 350 bcf on average no earlier than 2020 to 2030. Commenter s said thus,

n ew and existing units in Texas may require over 2,450 bcf/year of natural gas, which would represent about 35% of Texas's total natural gas production.

Pipeline Capacity

Commenter s said the necessary studies have not been conducted to determine whether T exas has the natural gas pipeline capacity to distribute the quantity of natural gas needed to meet EPA's building block 2 target for Texas within EPA's deadline. Commenter s said the EPA's review of national averages and trends certainly does not make this demonstration. Commenter s said as assumed within building block 2, the existing NGCC fleet must increase its generation over historical levels, thus requiring significantly more natural gas for fuel than historically utilized.

Commenter s said the EPA has assumed that existing NGCC plants will operate at a 70% capacity factor. Commenter s said under that assumption, a 500 MW plant burning approximately 100,000 MMBtu/day of natural gas would consume approximately 24 bcf of natural gas annually. Commenter s sa id the natural gas usage of one baseload 500 MW NGCC plant operating in Texas will be nearly equivalent to, if not exceeding, the quantity of gas consumed by the residents of the city of Austin each a year (excluding the commercial and industrial
sectors o f Austin). Commenter s said the state of Texas has 54 NGCC plants, only 3 of which operated with capacity factors of 70% or above in 2012. Commenter s said both the existing interstate and intrastate natural gas pipeline systems have proven to be constrained during peak periods, and rules that force increased reliance on gas

- fired generation will only exacerbate constraint conditions on the current system.318 Comment 294 : TX

- Individually, the Building Blocks appear to be workable, however, when implemented al l at once in a complex power generation market the workability factor decreases, especially in meeting the 70% CF for NGCC

Response 294 : See sections V.A., V.D., and V.E. of the final rule preamble of the CPP for the EPA’s response to this comment . Also, EPA takes a regionalized approach in this final CPP for quantifying BSER. Why it notes the building blocks for each region include, among other elemetns, the ability for NGCC to increase utilization to 75% level. Its regional approach to quantifying sour ce

- category rates means this potential is not always fully utilized.

The following are summaries of the specific public comments under this comment:

70% capacity factor difficult to achieve . Commenter s said individually the Building Blocks appear to be w orkable, however, when implemented all at once in a complex power generation market, such as ERCOT, the workability factor decreases, especially in meeting the 70% capacity factor for NGCC. The commenter s said the ERCOT region of Texas where CPS Energy is located has several distinguishing characteristics that impact the interaction of the Building Blocks. The commenter s said ERCOT and CPS Energy have summer peaking systems, the ERCOT record summer peak is 68,305 MW and the winter peak is significantly lowe r at 57,265 MW. The commenter s said the region also has a high level of natural gas generation accounting for 40.5% of energy in 2013 and 56% of installed capacity in 2014. The commenter s said the combination of these characteristics makes a 70% capacity f actor for NGCC extremely difficult to achieve. The commenter s said if an entity fails to achieve the objective in Building Block 2 and tries to compensate with additional wind, solar, or Energy Efficiency and Demand Response (EE/DR), its actions will actua lly reduce the capacity factor of NGCCs by reducing the amount of time they will run. The commenter s said therefore, the Building Blocks are not as flexible and as substitutable as envisioned in the rule.

Dynamics between wind resources and NGCC . Commenter s said for example, wind generation is currently Texas' the primary Renewable Energy (RE) resource and is likely to be the main contributor to Building Block 3. The commenter s said the 12,000 MW of wind capacity installed already is expected to grow to 18, 000 MW over the next five years. The commenter s said the energy from wind is offered into the market at the lowest price of any resource and is dispatched first. The commenter s said maximum wind output comes in the winter and spring seasons in ERCOT; durin g the summer, wind output tends to be lower. The commenter s said at all times and seasons, wind output varies significantly. The commenter s said in ERCOT, as wind varies, gas units make up for the variance by increasing their output. The commenter s said a wind integration study commissioned by ERCOT (and authored by GE) found that wind generation most significantly impacted the dispatch of NGCC units by forcing them to cycle off and on as wind ramped up and down. The commenter s said experience validates the GE study; the modeling was particularly accurate during lower load seasons. The commenter s said the result of the dynamics between wind resources and NGCC suggests that the 70% capacity factor cannot be achieved.

Dynamics of EE/DR and NGCC . Commenter s sai d another example is in regards to how EE/DR can lower NGCC dispatch. The commenter s said EE/DR programs attempt to permanently reduce or shift peak demand, and programs that shave or eliminate peak consumption exclusively319 are likely to reduce the need for peaking units. The commenter s said customers benefit from lower bills and energy efficiency in the form of more efficient air conditioning systems or other measures that reduce demand. The commenter s said demand reductions can lower the capacity factors f or NGCC units because not as much output is needed from them. The commenter s said given these dynamics, it is important for the rule to recognize that Texas already has a very high utilization of NGCC units that interact in the ERCOT market with significan t renewable capacity and robust DR and EE programs.

Comment 295 : TX

- BB3 RE

Response 295 : See section V.E. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 3 and the CO2 Emission Perfo rmance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Texas can easily achieve RE target . Commenter s stated in Texas, the RE target is calculated b ased on the South Central Region's renewable energy goal of 20 percent; according to EPA, Texas can feasibly increase its renewable energy capacity from 34,017 GWh in 2012, to 85,963 GWh in 2030.

Commenter s stated although the proposed rule suggests that these estimates are not intended to represent the business

- as

- usual rate of renewable energy deployment, for many states, including Texas, EPA's arbitrary use of 2012 data as a baseline combined with its arbitrary cap on renewable deployment produces that very result. The commenter s said by 2013, Texas had already met more than 10 percent of its electricity use with wind power and other renewable resources, and is therefore already exceeding EPA's renewable energy target for 2019. The
commenter s said this i s due, in large part, to EPA's unsupported assumption that Texas's 2012 renewable energy generation will remain stagnant through 2017, when state implementation plans are due and the CPP compliance period; from 2007 through 2013, Texas's overall renewable energy deployment has increased annually at a steady rate of approximately 1.1% of total generation. The commenter s said in 2014, ERCOT anticipates that total renewable energy generation capacity will increase to 14.4% of total capacity, exceeding EPA's fo recast for 2023; ERCOT expects Texas to double its wind energy capacity between 2013 and 2017, to some 21,000 MWs, and this does not include wind projects being developed to serve the Southwestern Power Pool outside of ERCOT.

Commenter s stated at these ra tes

- that is, under a "business

- as

- usual" approach and largely independent of the CPP

- Texas will exceed EPA's renewable energy goal by 2022

- 8 years before the end compliance date. The commenter s said ERCOT's long

- term study assessment confirms that ev en without any significant new environmental regulations, the statewide trend in renewables will continue. The commenter s said even assuming a "business as usual" scenario (i.e., without the CPP), ERCOT estimates that nearly 10,000 MW of solar will be adde d by 2029. The commenter s said on the back of the compliance period, the EPA arbitrarily caps each state's forecasted renewable generation when it reaches what the EPA describes as the "maximum state320 target." The commenter s said thus, once Texas achieves t he 20% goal, the state's renewable energy deployment is assumed to be flat for the remainder of the compliance period. The
commenter s said by arbitrarily assuming Texas's renewable energy deployment remains flat from 2012 through 2017, and then capping the state's target when it reaches 20% in 2022, the CPP does nothing to actually drive renewable energy development in Texas, and instead acts to weaken the state's overall target. The commenter s said this does not meet the best system of emission reduction s tandard, but rather represents the status quo without taking into account any of the technological and market dynamics that will likely drive further renewable energy development over and above current "business as usual" forecasts.

Commenter s urge d the E PA to recalculate Texas's renewable energy goal in a manner that accurately accounts for the state's historical performance, and therefore drives future change. The
commenter s said renewable energy generation is growing very quickly; in 2012 alone, install ed wind capacity increased by nearly 28% and installed solar PV grew by over 83%. The
commenter s said it is well

- established that Texas has significantly greater potential for renewable energy than the CPP forecast. The commenter s said in light of Texas's tremendous renewable energy growth, there is no basis in the record to assume zero growth in renewable energy between 2012 and 2017; similarly, there is no basis in the record to assume Texas will achieve no more than 20% renewable energy deployment, given that the state is on target to exceed that goal within the next 5

- 7 years.

Texas RPS must be considered . Commenter s stated Texas has an RPS that was not considered by EPA nor included in the averaging for the South Central region; specifically, the Texas Utilities Code includes the following:

(a) It is the intent of the legislature that by January 1, 2015, an additional 5,000 megawatts of generating capacity from renewable energy technologies will have been installed in this state; the cumulative installe d renewable capacity in this state shall total 5,880 megawatts by January 1, 2015, and the commission shall establish a target of 10,000 megawatts of installed renewable capacity by January 1, 2025.

Commenter s said including Texas' RPS into the regional a verage would reduce the average imposed on Texas and other states within the region; this is a significant oversight that directly impacts the interim and final emissions targets and undermines the renewable targets applied to every state within the South Central region.

Texas has largest RE burden . Commenter s said the EPA assumes massive and unprecedented increases in renewables in Texas on an unreasonable timeline. Commenter s said the 2030 Texas renewables target is set at 20% (based solely on the EPA's interpretation of the Kansas Renewable Portfolio Standard ("RPS"), and Texas is deemed to have 2.3 terawatt

- hours of "at

risk" nuclear. Commenter s said this means that Texas would need to increase its share of renewable and "at

- risk" nuclear generation fro m 7.9% in 2012 to 20.5% in 2030. Commenter s noted that the average target for the U.S. as a whole is much lower at 15.2% of 2012 total generation.

Commenter s stated Kansas' model should not be a model for Texas or the rest of the South Central region; the electric market of Kansas is extremely different than Texas'; as an initial321 matter, Kansas is much smaller than Texas without nearly the amount of electricity

- intensive industry. The commenter s said Texas' total electricity generation in 2012 was nearly te n times greater than Kansas' total electricity generation. The commenter s said Texas' renewable generation was 34,016,697 MWh in 2012, while Kansas' was only 5,252,653 MWh. The
commenter s said in order for Texas to reach the renewable target, it will there fore have to install roughly 10 times the amount of renewable energy that Kansas will have to do under the Rule Proposal; this makes a 20% renewable target, practically, much easier for Kansas to meet over Texas.

Commenter s stated no state has a greater bu rden under Block 3 than Texas; Texas has significantly more renewable generation than any other state. The commenter s said the renewable generation component of Texas' generation mix took over four decades to develop into its current capacity; it was heavi ly subsidized by the federal government. The commenter s said EPA in this Rule Proposal assumes, without consideration of economics or grid stability, that renewable generation in Texas will increase by 153% (51,946,805 MWh) in just 8

- 14 years (from the current ~34 million MWh

- yr to 86 million MWh

- yr

-- a difference of 52 million MWh

yr).

Commenter s stated the assumed renewable electricity increase for Texas is far greater than any other state (almost twice as much as the second highest state

- Pennsylvania ). The commenter s said compared to the top ten current generators of renewable electricity, Texas' expected increase is dramatically higher than the 2nd highest generator of renewable electricity, California, which is assumed to increase by just 37%. The c ommenter s said EPA even models decreases in renewable electricity production in Iowa and Minnesota, currently the 3rd and 4th highest generators of renewable electricity.

Solar Potential

Commenter s asserted that the EPA significantly underestimated the am ount of achievable and
cost

- effective solar energy generation in Texas; indeed, Texas has the highest solar potential in the nation and a study by the National Renewable Energy Lab demonstrated that Texas has the technical potential to generate more than 7 8,717 GWh/year from rooftop solar. The commenter s said although there is currently only 231 MW of installed solar generation capacity in Texas, there is over 5,800 MW of utility

- scale solar generation in various stages of ERCOT's interconnection process. T he commenter s urge d the EPA to incorporate this data into its renewable energy projections, and modify Texas's renewable energy goal to more accurately reflect the actual and expected deployment of solar.

Commenter s stated the EPA must correct its renewab le energy goals to account for the potential for DG, which has shown exceptional growth in recent years. The commenter s said unlike EPA's approach, the Union of Concerned Scientists' Demonstrated Growth approach rightly accounts for DG potential, and recog nizes that the number of rooftop solar installations grew by an average of more than 50 percent per year between 2008 and 2013, nationally. The commenter s said while Texas's current level of installed DG is relatively small, it is growing at a tremendous

r ate, and recent changes allowing third

- party leasing have heated up the market in areas like Dallas and Houston.322 Comment 296 : Texas's market

- based renewable program will likely exceed the EPA's 20% energy goal. Rather than set a goal likely to be exceede d, the EPA should encourage a higher standard to maximize Texas renewable energy. Brief discussion of the status of various RE is provided

Response 296 : See section V.E. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 3.

The following are summaries of the specific public comments under this comment:

Renewables as a whole . Commenter s said Texas's market

- based renewable program will likely exceed the EPA's 20% energy goal. The commenter s said Texas should submit a rate of progress report on these gains, and if the state fails to realize the goal by the mid

- 2020s, the EPA should commit to asking the Texas state legislature for action on this issue.

Commenter s said as calculated by the Union of Concerned Scientists (UCS) in their comments on the Plan, Texas is likely to significantly exceed EPA's renewable energy goal simply by following a business

- as

- usual growth plan. The commenter s said the UCS calculates that Texas, which is in the UCS's high renewable growth area, should be able to grow its renewable industry until it represents 27% of electrical sales, compared to the EPA projection of 17%. The
commenter s said rather than set a goal likely to be exceeded, the EPA should encourage a highe r standard to maximize Texas's potential for increasing reliance on renewables and reducing carbon emissions.

Wind. Commenter s offered the following points:

• 12,824 MW of wind power generates 11 % of Texas energy

• With 7,988 MW of additional wind resources expected to be built by the end of 2016, wind will produce a total of 19,430 MW, or nearly 20% of the state's
energy

• 25,500 MW in additional requests have been filed for interconnection of wind plants to the utility grid

By the end of this year, CO2 will a lready have been reduced by 7.9 MMT through use of renewables, and new wind power is expected to reduce CO2 by an additional 13 MMT by 2020.

Solar . Commenter s said Texas has the nation's largest solar potential, which is just beginning to be developed and can be expanded very rapidly. Commenter s said there are currently 5,811 MWs of interconnections requested for utility

- scale solar plants in ERCOT.

Energy storage . Commenter s said energy storage projects, which use batteries and compressed air in undergroun d salt domes to capture renewable energy and save it for later use, are being developed and permitted across the state. The commenter s said if built, these facilities should eliminate the need for other gas peakers. The commenter s said storage facilities s hould be counted in any analysis of Texas's ability to reduce carbon emissions.323 Commenter s said 640 MW of compressed

- air energy storage has been permitted in Texas, and Oncor, the state's largest electric transmission and distribution service provider, is proposing a 5,000 MW

- storage project at distribution stations across the state, which would enable much of the state's excess renewable energy to be stored and redistributed later.

Publicly

- announced energy storage

. Commenter s provided the following infor mation:

Apex Corp. has announced 370 MW of CAES (compressed air energy storage) in East Texas and Dresser

- Rand Group Inc. has announced that Apex has ordered the equipment and posted the financial security to back up the order.

Chamisa Energy has announced that it will build 270 MW of CAES in the Texas Panhandle.

Duke Energy has already built 36 MW of lead

- acid battery storage, now online in Notrees, Texas.

All of those publicly announced projects will generate a total of 640 MW by summer 2016.

Texas grid o perator ERCOT's last System Planning Report shows that 874 MW of storage is undergoing a full interconnection study, indicating that it is likely to be built.

By 2018, 300

- 500 MW (mostly Li) more energy storage will be added as UPS systems on customer prem ises behind the meter.

By 2020, Texas is expected to have a total of up to 1GW

- 1.5 GW of storage online.

Geothermal

. Commenter s said Texas has vast untapped geothermal resources located near the oldest and most

- polluting coal plants and which should be co unted in the EPA's analysis of Texas's renewable potential.

Interconnections

. Commenter s said two large solid state direct current interconnections

- expected to be built in the next three years in the Panhandle and East Texas

- will be able to transfer 3 ,000

- 5,000 MW of energy, most of it renewable energy, to other parts of the country.

Comment 297 : TX

- BB4

- not clear if goals are realistic; scope of goals may have to change; effect of deregulated competitive market and regulatory structure; forced pow er rationing may be required

Response 297 : See section V.A. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 4.

The following are summaries of the specific public comments under this com ment:

Commenter s stated that the building block 4 goals contained in the rule would require Texas to institute new, more aggressive energy efficiency requirements, and it's not clear that reaching the goals in the proposed timeframe is realistic. The com menter s said to reach the cumulative324 energy efficiency savings proposed in Option 1, the Joint Utilities predict they will have to ramp up energy savings to approximately 6,700,000 MWh per year. The commenter s said energy efficiency savings would most like ly not be able to significantly ramp up until 2020; this could create a situation where the annual savings rate would have to increase at a far more aggressive rate than the already aggressive annual rate included in the proposed rule.

Commenter s stated t he scope of the utilities' energy efficiency goals will likely need to change as well; Texas's statute provides for an energy efficiency goal based on demand savings; in order to decrease CO2 emissions by increasing energy savings at the rate suggested in Rule 111(d), both the statute and the rule may need to be amended to include demand savings outside of summer or winter peak demand. The commenter s said the utilities' current energy savings goal that requires utilities to meet an energy goal calculated fr om its demand savings goal using a 20 percent conservation load factor will not be sufficient to meet EPA's target for energy efficiency improvements. The commenter s said furthermore, even if the PUCT [Public Utility Commission of Texas] increased the cons ervation load factor to 100 percent of the current demand savings goal, it would still not be sufficient to meet the target set by Rule 111(d).

Commenter s stated energy efficiency measures and demand reductions have historically been achieved through volu ntary programs; this typically involves the state or other entity creating an incentive program allowing end users to opt

- in. The commenter s said EPA's Rule Proposal contemplates that certain rigid targets are met every year in order to reach an ultimate t arget efficiency level; for example, EPA projects that Texas electricity use will be 9.91% lower in 2029 than if the Rule Proposal were not adopted; however, EPA does not account for regional variations between the states including differences in: demograp hics, economic growth, regulatory structures, load growth, and other key factors.

Commenter s stated there are many unique obstacles impacting each state's ability to comply with EPA's proposed efficiency targets. The commenter s said one of the key obstacl es to achieving these reductions in Texas is its unique deregulated competitive market and regulatory structure; Texas is not a vertically integrated state, and EPA's reliance on vertically integrated states to establish energy efficiency targets to be app lied to states with deregulated electricity markets is misguided. The commenter s said ERCOT has found that EPA's "cumulative 9.91% savings from energy efficiency by 2029... is not consistent with current trends in energy efficiency in Texas;" further, Texa s is an industrial state with many high demanding users of electricity. The commenter s said these users may not be able to meet requisite increases in demand

- side efficiency due to numerous production purposes; but yet, EPA maintains that Texas can meet th ese incredible Block 4 requirements.

Commenter s stated EPA also does not allow for any variations or modifications in instances where these targets cannot be met through voluntary or incentivized actions; in a recessionary market, end

- users may not be inc lined, regardless of incentive, to undertake investments that would reduce their demand. The commenter s said despite this change in economics, the targets under EPA's Rule Proposal would remain the same. The commenter s said in order to guarantee that the R ule Proposal's target reductions are met, it would likely require forced power rationing regardless of external factors; this is a power that few, if any, states possess or would desire to impose. The commenter s said Texas is one of these states that has n either the power nor desire to mandate reduced electricity demand; it is also certainly not a power that EPA possesses.325 Comment 298 : TX

- BB4

- increase existing state agency efficiency goals; track CO2 reductions; create an efficiency market

Response 298 : See section V.A. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 4.

The following are summaries of the specific public comments under this comment:

Increase state agencies' efficiency goals. Commenter s said the Texas Emissions Reduction plan requested that each state agency save 5% of the energy they consume per year. The commenter s said however, most agencies don't report their progress, and there is no penalty for failure. The

commen ter s said since this program requires that state agencies save money, it is plausible that the Texas legislature could be convinced to put teeth into the requirements. The commenter s said savings from the state agencies' 5% energy reduction program were 90 9,903 MWh/year, which, in turn, is reducing CO2 emissions by 435.000 tons per year.

Track CO2 reductions

. Commenter s said Texas A&M University's Energy Systems Lab has been designated to keep track of NOx reductions under Texas's SIP and certified by the EPA as the agency responsible for that activity. The commenter s said the Energy Systems Lab should likewise be responsible for tracking CO2 emissions reductions and offsets under whatever state or federal carbon reduction plan is implemented.

Create an ef ficiency market . Commenter s said Texas's 1999 Electrical Deregulation Act separated the old integrated utilities into three parts

- retailers, generators, and transmission and distribution companies (TDU's). The commenter s said the law prohibits generators from funding
energy

- efficiency programs operated by the transmission and distribution companies. The
commenter s said however, there may be a way to set up an energy

- efficiency market within ERCOT that allows generators that can't meet the carbon goals to bid for efficiency and thus fund efficiency programs at TDU's.

Commenter s recommended that ERCOT run this program outside the state's utility managed Energy Efficiency Resource Standard (EERS) program. The commenter s said this would allow additional clarit y and independence. The commenter s said it would also help avoid the disincentive that occurs as a result of having the regulated TDU

- whose revenue is based on the volumetric charges of energy that they carry on their system

- operate a program that furt her reduces energy sales. Revenue for these programs could come out of offset payments made by generators or carbon fees charged to the generators.

Comment 299 : TX

- BB4

- Texas can easily meet the EPA target of 10% of peak energy, but EE programs are not popular with Texas regulators or legislators because they cut into natural gas and coal sales

- in current political climate may be almost impossible to increase EE goal. The EPA significantly overestimated the costs of EE programs. The EPA should require something of industrial class re EE, and should credit municipalities for EE reductions

Response 299 : See section V.A. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 4.326 The following are summaries of the specific public comments under this comment:

Significant potential for use of energy efficiency . Commenter s said Texas has tremendous potential for use of energy efficiency and reduction of carbon emissions and costs. The
commenter s said the state can easily meet EPA's target of saving 10% of the peak energy, or about 1.5% per year of peak demand, by 2030. The commenter s said, however, efficiency programs are not popular with Texas regulators or legislators because they cut into natur al gas and coal sales. The commenter s indicated that in the current political climate, it may be almost impossible to increase the state's energy

- efficiency goal from 0.4 % to 1.5% of peak demand per year, or 10% of peak energy per year. The commenter s sai d the current Public Utility Commission (PUC) and the legislature have been resistant to increasing energy

- efficiency goals, and that dynamic is expected to continue under the new governor. The commenter s said, however, there are several ways to meet the 1 .5 % target.

Commenter s said savings from the PUC's 2013 program, currently at 0.4% of peak were 2,205,082 MWh/year or 1.115 MMT of CO2. The commenter s said however, Texas can and should do more. The commenter s said the following studies demonstrate Texas has enormous but untapped energy

- efficiency potential:

"Meeting Aggressive New State Goals for Utility

- Sector Energy Efficiency: Examining Key Factors Associated With High Savings," by the American Council for an Energy Efficient Economy (ACEEE) in 2009.

" Assessment of the Feasible and Achievable Levels of Electricity Savings from Investor Owned Utilities in Texas: 2009

- 2018," by Itron (Itron Inc. is a technology and services company dedicated to the resourceful use of energy and water.) in 2009.

"A Profile of Energy

- Efficiency Opportunities in Texas, appendix G of the Duke University

- Georgia Tech study of Energy Efficiency in the South."

"The Benefits of Energy Efficiency in Texas" by ACEEE in 2011, "Energy Efficiency Investments as an Economic Productivity Strategy for Texas" by ACEEE March 2011.

"Energy Efficiency and Demand Response

- A Survey of Expert Opinion," by the Brattle Group 2011.

Commenter s said these studies show that by 2020, the potential savings could reach 15,309 MW (Itron) and result in sa vings of $330 for a household, $31,000 for a commercial customer and $404,000 for an industrial customer. The commenter s said further, they demonstrate that by 2030, an aggressive program can reduce overall electricity consumption by 12% to 19% below 2010 levels, saving businesses and households a cumulative $14 billion on utility bills, and creating 47,000 local jobs per year. The commenter s said if implemented, the recommendations in these studies could reduce costly energy at peak demand and reduce as mu ch as 30 MMT of CO2 by 2030.327 Commenter s said in their comments on the EPA Plan, the ACEEE performed an extensive state

by

- state analysis, which found that Texas could reach a cost

- effective, 25% reduction in overall energy consumption through energy effici ency programs. The commenter s said compared to 2012 standards, the 25% reduction would result in no net increase in cost to consumers and achieve significant savings for consumers. The commenter s said pointing out that energy efficiency is not given the sa me weight as natural gas generation in the proposed Plan, the ACEEE said: "A rule that sets a weak standard or does not clear the path for efficiency would leave states with more expensive compliance options"

- and that "not only should a rulemaking that l imits greenhouse gas emissions recognize the emissions benefits of energy efficiency, but it should also be stringent enough to overcome existing market barriers."

EPA overestimated cost of EE programs . Commenter s said the EPA's proposed Plan significantly overestimates the cost of energy efficiency programs. The commenter s said the EPA estimates the cost to be 6.5 to 9.1 cents per KWH when the real cost in Texas is 2 to 3.5 cents, according to the PUC.

Additional recommendations. Commenter s said what the Plan should do is require states to achieve all energy efficiency that is cost effective . The commenter s said in addition, an adjustment for the losses incurred during transmission and distribution of energy should be factored in to give a true measure of cost effectiveness and CO2 reduction.

Industrial class EE . Commenter s said in Texas the industrial class has opted out of the state efficiency program. The commenter s said they claim that in an effort to improve business practices they have already achie ved all the cost

- effective energy efficiency that they can achieve. The commenter s said at the very least, industries should be required to report and document investment and savings according to a state or national standard. The commenter s suggested anoth er possibility would be to set them up as a separate class and use a "self

- directed program" to encourage and maximize the consumption savings.

Credit for municipal EE programs

. Commenter s said some municipalities that own their electricity generation hav e moved forward aggressively with energy

- efficiency programs, and they are on track to save over 1,500 MW of generation capacity by 2020. The commenter s said the EPA Plan should include some method for counting these gains and giving them credit for them. The commenter s said at the moment, these early adopters are penalized because they're not given credit for the billions they've put into aggressive energy

- efficiency programs. The
commenter s said the EPA Plan should include evaluation, measurement and vali dation guidelines to insure that these programs are credited with the long

- term saving they provide. The
commenter s said annual tracking of achievements should be conducted by an independent agency. The commenter s said for example, the Energy Systems Lab a t Texas A&M already performs similar duties and could expand its program to include robust reporting and tracking of the state's carbon

- reduction programs.

Comment 300 : TX

- The EPA's IPM modeling parameters do not always match assumptions used in develop ing goals, and modeling identifies flaws with building block methodology328 Response 300 : EPA compliance modeling is not meant to replicate the building block levels, but rather demonstrate an illustrative system

- wide results of a least cost compliance pathwa y taking into account future infrastructure and market conditions affecting the power sector. Therefore, the source

- category rates quantified based on building block one will not necessarily result in a building block one abatement technology being used t o comply with that rate in the model or in the actual state plans.

The following are summaries of the specific public comments under this comment:

Commenters said the results of EPA's modeling show as to Texas (to the extent they can be relied on at all) i s that the EPA's building block methodology is deeply flawed and does not reflect EPA's modeled conditions.

Heat Rate Improvement

. Commenters said the IPM reveals the unrealistic nature of EPA's 6% proposed heat rate improvement. The commenters said for e xample, EPA's 2025 model run has each coal

- fueled EGU remaining in service modeled as if it has achieved a 6% heat rate improvement over the base case. The commenters said but, since units that IPM has not retired by 2025 would only generate 51 terawatt

- ho urs in 2030 under EPA's goals (compared to 67
terawatt

- hours used in the Texas goal setting computations), those remaining units would not be operating at peak efficiency making the assumption of any heat rate improvement improbable, much less the modeled 6%. The commenters said this poor assumption of heat rate improvement is just the beginning of where the model fails to adequately simulate how the electricity sector would function under EPA's proposal.

Change in NGCC generation

. Commenters said for examp le, EPA's building block 2 accounts for more than one

- half of the Texas CO2 rate reductions in EPA's goal calculation. The
commenters said as shown in Appendix G, under building block 2, EPA bases its Texas goal on an increase in existing NGCC generation f rom 148 million megawatt

- hours in 2012 to 231 million megawatt

- hours in 2030. The commenters said EPA's IPM modeling, however, shows existing NGCC generation decreasing in Texas to 131 million megawatt

- hours in 2030. The
commenters said in other words, EPA 's own IPM modeling does not support the generation shifting EPA is mandating with its building block methodology.

NGCC Capacity Factor

. Commenters said the IPM output also shows flaws in EPA's assumptions for NGCCs in building block 2. The commenters said in EPA's 2025 IPM compliance scenario, existing NGCC units do not all operate at a 70% capacity factor. The
commenters said, in fact, of the 221 units, only 71 have capacity factors over 70% and most of those have capacity factors between 80% and 87%. The commenters said eighty

- four of the units have capacity factors less than 20%.

Change in renewable energy generation

. Commenters said under building block 3, as shown in Appendix G, EPA bases its Texas goal on an increase in renewable generation from 34 mi llion megawatt

- hours in 2012 to 86 million megawatt

- hours in 2030. Commenters said however, EPA's IPM modeling shows renewable generation only increasing in Texas to 45 million megawatt

- hours in 2030, nowhere near the goal set by EPA. Commenters said thus, while EPA's IPM modeling increases renewable generation, it only increases it by 33%, not by 153% as EPA assumes in its goal setting.329 Energy efficiency assumptions

. Commenters said the EPA manipulates the building block 4 inputs to IPM "exogenously"

- i.e ., external to the model. The commenters said thus, instead of a demand side decrease of 38,158,249 net MWh from 2012 to 2030 used to calculate the State Goal for Texas, EPA's IPM modeling uses a decrease of 57,590,239 MWh

- a substantial difference and mu ch more aggressive and completely unfounded goal. The commenters said the EPA claims it applied energy efficiency measures "consistently" between its goal setting and its IPM modeling. The commenters said but there is a vast difference, in terms of economi c and social impacts, between meeting electricity demand by shifting to another form of generation (blocks 2 and 3) and simply reducing generation (block 4). The commenters said taken at face value, what EPA's IPM modeling shows is that EPA's aggressive st ate goals will not result in a the emergence of "clean" generation, as EPA claims, but will simply mandate a reduction in the generation of electricity and thus economic growth. The commenters said in effect, then, EPA has not demonstrated that its own sta te goals can be met in any reasonable compliance scenario.

Electricity Prices

. Commenters said the EPA's IPM modeling also predicts substantially higher electricity prices for Texas consumers. The commenters said the EPA's files show the wholesale price o f electricity in Texas for 2030 is predicted to be just over $57 per megawatt

- hour. The
commenters said using sales of about 327 terawatt

- hours predicted for 2030, wholesale cost alone would be almost $19 billion. The commenters said according to the Energ y Information Administration, the average wholesale price in 2012 for the ERCOT Houston Zone was just under $36. The commenters said that is, EPA's $57 per megawatt

- hour projection for 2030 would be a more than 60% increase in wholesale prices relative to 2012. The commenters said with about 365 terawatt hours of sales, the cost would have been just over $13 billion. The
commenters said that is an added cost of over $5 billion for less generation before even adding the cost of new transmission lines to brin g in more wind to the load centers as EPA would mandate.

Other Flaws

. Commenters said the IPM output shows other fundamental flaws in EPA's goal setting methodology. In the "parsed" files for 2025 that EPA made available, there are 45 coal

fueled units (in cluding three petroleum coke

- fired units) in Texas, of which two are retired in the base case and 27 are retired in the Option 1 State Case. The commenters said of the 18 units that remain in the Option 1 State Case, only two coal

- fueled units are operatin g in the SPP in 2015, Tolk Unit 1 and Tolk Unit 2, but at a 9.1% capacity factor. The commenters said even in a regulated reliability region, this low level of operation cannot be sustained. The commenters said in the competitive ERCOT region, three units are operated at less than a 30% capacity factor, and two of them, J.K. Spruce Unit 2 and Sandy Creek 2, are two of the newest, most efficient units in Texas. The commenters said the "compliance scenario" EPA modeled thus shows the distortions and unreasona ble assumptions built into its goal

- setting methodology.

Conclusion. Commenters said thus, far from validating EPA's methodology or demonstrating its reasonableness, EPA's own IPM modeling (to the extent it can be relied on at all) shows that its state go als are unrealistic and based on flawed assumptions. The commenters said certainly, EPA's modeling does not demonstrate the validity of EPA's building block methodology. The
commenters said the EPA should heed the warning of its own modeling and withdraw i ts unreasonable proposal.330 Comment 30 1 : TX

- strengthen goals Response 30 1 : For the EPA’s response to this comment, see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenters stated Texas not only leads the country in the production of oil and natural gas and the overall consumption of electricity, but it is also leads the country in the emission of CO2; indeed, in 20 11, Texas produced more carbon dioxide from industrial facilities, including power plants, than any state in the Union, and more than the next two states combined. The
commenters said although there are 121 power plants in Texas, nearly 40% of the state's total carbon emissions from the electric sector come from just ten plants

- all of which are approaching the end of their useful lifespan. The commenters said given Texas's role as the nation's single largest source of carbon pollution emissions from elect ric generating facilities and the fact that many Texas facilities are already nearing the end of their useful life, the
commenter s asserted the CPP can and should be strengthened, so as to drive the permanent retirement of these facilities within the next 15 years. The commenters said by prioritizing and more accurately accounting for recent and expected renewable energy development and energy efficiency in Texas, the CPP could more effectively drive the kinds of carbon emission reductions that will have a meaningful impact on the spiraling costs of global warming

- retirement of coal

- burning generation.

Commenters stated Texas has the technical ability and experience to be a leader in clean energy solutions:

• Texas is already a leader among the states in p assing legislation that promotes clean energy development; renewable energy is now a key component of Texas's energy mix, with wind energy alone providing approximately 10% of the state's electricity supply.

• Texas employs over 28,000 renewable energy work ers; these jobs span a number of industries, from wind turbine maintenance to semiconductor manufacturing.

• Job growth is expected to remain strong over the next decade; expanding wind and solar energy industries are projected to add 6,000 jobs in Texas pe r year through 2020.

• Over 1,300 Texas companies employ nearly 100,000 workers in industries directly and indirectly related to renewable energy in 2013.

• EPA should recognize and account for these potential economic benefits in its final rule.

Commenters stated according to the EPA, the application of EPA's building block methodology to Texas's 2012 energy portfolio results in a need to reduce its carbon emissions rate (CO2 lbs/MWh) from a 2012 emissions rate of 1,420 lbs/MWh to a 2030 emissions rate of 79 1 lbs/MWh

- a nearly 45% reduction. The commenters said using EPA's target puts Texas among331 the states with the largest emissions reduction goal, but an analysis of Texas's current and expected renewable energy, energy efficiency, and planned natural gas c apacity makes clear that EPA's target emissions rate for Texas is unduly conservative. The commenters said Texas can and should be required to do more.

Comment 302 : UT

- UT can do more with RE, and EPA should set more ambitious target for UT

Response 302 : For the EPA’s response to this comment, see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenters stated in 2012, Utah got 76% of its electricity from coal; this is nearly double the national average 39%; it got only 2.3% from eligible renewables, which is less than half the national average of 4.9%; Utah's electric rates are 20% below the national average.

Commente rs stated even though it has invested relatively little in renewable energy, Utah has enormous unused potential for utility

- scale solar power, as well as substantial potential for wind and geothermal power. T he commenter s said the Utah Geological Survey pr epared a Utah Renewable Energy Zone assessment in 2009; it identifies 826 Gigawatts of utility

- scale capacity, 9.1 Gigawatts of utility

- scale wind capacity, and 2.2 Gigawatts of utility

- scale geothermal capacity; 1 Gigawatt is enough to light over 5 millio n homes.

Commenters stated of particular significance is the UREZ assessment's finding that a high concentration of solar, wind, and geothermal resources comes together in three southwestern Utah counties (Iron, Beaver, and Millard). The commenters said t heir close proximity would make it feasible to construct shared transmission lines to Utah's heavily

- populated Wasatch Front communities; Utah's exceedingly modest carbon emissions rate reduction target does not seem to recognize the relative ease with whi ch Utah could shift investments from dirty to clean energy by the year 2030.

Commenters stated Utah's exceedingly modest carbon emission

- rate reduction target also does not seem to recognize how little Utah has done so far to adopt regulatory incentives t o shift its electric power generation from dirty to clean sources. The commenters said Utah is nominally a member of the Western Climate Initiative

- a regional organization of states whose purpose is to reduce the causes and mitigate the effects of climate change in the West; it recommends a diverse set of regulatory measures to achieve these goals, almost all of which must be implemented by the Utah state legislature.

Commenters stated the Western Climate Initiative has a diverse list of recommended regula tory steps designed to encourage a shift from dirty to clean energy that the Utah legislature, so far, has refused to take. The commenters said Utah has no restrictions on greenhouse gas emissions on any timetable, no enforceable Renewal Energy Portfolio s tandard for electric power or for transportation fuel, no provision allowing utilities to combine heat and power service, no automobile fuel economy standards, and no energy efficiency standards for appliances. The332 commenters said the large potential for s uch regulatory programs to shift investment in power generation from dirty to clean sources, therefore, remains largely untapped.

Commenters stated there are large potential reductions in carbon emissions if Utah were to catch up to its fellow members of the Western Climate Initiative. The commenters said the Southwest Energy Efficiency Project (SWEEP) has conducted a study that identifies end

- user efficiency programs alone that could reduce Utah's electricity consumption by 1.4 Gigawatts (20%) by 2020. Th e commenters said exploiting these opportunities would increase employment by 3,100 jobs by 2020, and save 3.2 billion gallons of water a year. Over the period 2010

- 2030, it would save $1.7 billion.

Commenters stated if it is economically and technically feasible for Utah to reduce its carbon emissions through end

- user efficiency by 20%s by 2020, it would seem that by 2030 technology would have advanced enough to bring that level to 27%; in other words, it should allow Utah to reach its carbon emission

- rat e target without further investment in other alternatives to coal

either NGCC or renewables. The commenters said this suggests that the EPA should take more account of the large potential of end

- user efficiencies to quickly reduce Utah's carbon emissions, and use it to set a more ambitious final emissions target for the state of Utah.

Comment 303 : UT

- Errors; Affected Sources

Response 303 : For the EPA’s response to this comment, see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP. For the Final Rule, Lake Side 2 was categorized as under construction in the final CPP analysis.

The following are summaries of the specific public comments under this comment:

Commenters stated Utah's rate

- based target con tains serious errors. The commenters said the Lake Side 2 natural gas power plant should not have been included as an existing unit in the state's building block two calculation because it was still under construction in 2012. The
commenters said instead, Lake Side 2 should be classified as "under construction" in calculating Utah's carbon dioxide emissions target. The commenters said preliminary analysis suggests that correctly classifying the Lake Side 2 facility would change Utah's compliance target by 4 6 lbs CO2/MWh.

Commenters stated the capacity of the Lake Side 2 natural gas power plant should not have been included in the state's capacity factor calculation because it was still in construction in 2012. The
commenters said in EPA's Goal Computation Te chnical Support Document, EPA defines "under construction" as "anything that came online in 2013 or that was under construction, site prep, or testing by January 8, 2014." The commenters said Lake Side 2 went on line in May 2014 and by EPA's own definition should have been classified as "under construction". The commenters said preliminary analysis suggests that correctly classifying the Lake Side 2 facility would change Utah's compliance target from 1,322 lbs/MWh to 1,368 lbs/MWH. The commenters request ed EPA to reclassify Lake Side 2 as under construction for the purpose of calculating Utah 2030 emission target.333 Commenters stated in calculating Utah's goal EPA classified Lake Side 2 as operating in 2012; this is an error on the part of EPA. The commenters said for purposes of calculating Utah's goal EPA should have defined Lakeside 2 as being "under construction". The commenters said in its Goal Computation Technical Support Document EPA defines "under construction" as "anything that came online in 2013 or that was under construction, site prep, or testing by January 8, 2014." The commenters said Lake Side 2 went on line May 2014 and by EPA's own definition should have been classified as "under construction".

Commenters stated reclassifying Lake Side 2 as u nder construction reduces the amount of coal generation that can be redispatched to NGCC plants and increases Utah's goal to 1,368 lbs/MWH, making it less stringent; a higher goal reduces Utah's compliance gap from 391 lbs/MWH to 345 lbs/MWH.

Commenters s tated in calculating Utah's target for building block 2, EPA incorrectly lists the natural gas combined cycle unit Lake Side 2 as operational in 2012. The commenters said the plant achieved commercial operation in June of 2014 and was not operational in 20 12. The
commenter s Utah interim and final goals should be recalculated reflecting the fact that Lake Side 2 was an NGCC facility under construction during 2012.

Commenters stated Utah's baseline emission rate and target should be recalculated to correctly account for emissions from one of its largest EGUs for which its 2012 emissions were significantly lower than average. The commenters said by utilizing average emissions and generation data for this EGU from 2005 through 2009, Utah's corrected baseline rat e would be 1,926.75 lb of CO2/MWh rather than 1,873.69 lb of CO2/MWh, as listed in the proposal. The
commenters said this correction results in a revised Utah 2030 goal of 1,348.73 lb of CO2/MWh. The commenters said Utah's ultimate and interim targets also need to be adjusted to account for the Lakeside NGCC plant, which was incorrectly included as being operational in 2012 while, in fact, this plant was under construction during the 2012 baseline year. The commenters said fixing this error results in Utah' s target being increased by approximately 47 lb of CO2/MWh, resulting in a revised final emission rate target of approximately 1,395 lb of CO2/MWh. The commenters said since any change to a State's emission rate

- based target correspondingly affects its mas s

based goal, these adjustments need to be accounted for in the State's mass

- based goal.

Comment 304 : UT

- BB1 HRI

Response 304 : See section V.C. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Build ing Block 1.

The following are summaries of the specific public comments under this comment:

Commenters stated the EPA's application of a six percent improvement to Utah is not based on any specific analysis of potential heat

- rate improvements at Utah coa l plants. The commenters said Utah's coal plants have little, if any, room for significant additional improvements in efficiency. C ommenters said consistent with a recent EPRI study, six percent efficiency improvements at Utah coal plants are not attainabl e; conducting their own unit

- by

- unit assessment of potential efficiency gains, Utah's plant operators concluded that potential334 improvements would be minimal at best. The commenters said preliminary modeling suggests that a heat rate improvement of 1 percen t across the Utah coal fleet will result in an overall reduction of the state's carbon dioxide emission rate of only 15 lbs CO2/MWh, rather than the 100 lbs CO2/MWh projected by EPA. The commenters added many heat

- rate improvement measures are simply recov ering efficiency lost due to degradation from the original operating condition. The commenters said according to Utah's plant operators, achieving additional heat

rate improvements will be very costly and subject to the law of diminishing returns.

Commente rs stated the proposed rule does not give credit for existing plant efficiencies. The
commenters said this approach penalizes power plants that have already made significant investments in cleaner, more efficient processes and technologies. The commenters said Utah's coal

- fired power plants are among the most efficient in the nation; Utah has the third best coal fleet in the country for emissions rate and should be rewarded for its investment in plant efficiencies. The commenters said even after making the efficiency improvements proposed in block one, (improvements that are not feasible), twenty nine states would still have higher emission rates than Utah does today. The commenters said this result is patently unfair, resulting in less efficient power plant s receiving unfair preference over Utah's more efficient power plants. The commenters said the EPA's one

- size fits all efficiency assumptions, and its assignment of different carbon reduction targets to each state will result in less efficient coal

- fired p ower plants being preferred over Utah's more efficient coal

- fired power plants. The commenters said along with the inherent unfairness of this approach, it is inconsistent with the EPA's stated goal of reducing overall greenhouse gas emissions.

Comment 30 5 : UT

- BB2 Re

- dispatch

Response 305 : See section V.D. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 2

. EPA’s 70% capacity factor, as described at proposal reflected its historical as sessment of the amount of net generation expected as a percent of total nameplate capacity. It did not reflect the amount of gross generation expected as described by commenter s . EPA has switched its building block two approach in this final rule to 75% capacity factor based off summertime dependable capacity.

The following are summaries of the specific public comments under this comment:

Commenters stated EPA's target for increased natural gas generation actually reflects a calculation of "gross" genera tion because EPA developed its gas generation target based on applying a 70 percent capacity factor to the "nameplate" capacity of existing gas units. The
commenters said "Nameplate" capacity refers to the total "gross" MW because it reflects the maximum a mount of electricity that a unit's generator is designed to deliver, not the amount of electricity that could be sold to the grid; therefore, EPA's 70 percent capacity factor calculation actually reflects gross MWH, not net MWH, whereas EPA's calculation o f 2012 coal

- fired generation is based on "net" generation.335 Commenters stated EPA's goal calculations for Block 2 (re

- dispatch) are based on an inconsistent analysis that compares gross MWH of gas generation and net MWH of coal generation; as a result, "ne t" coal MWH are redispatched in Building Block 2 to "gross" NGCC MWH. The commenters said the difference between net and gross generation is not insignificant

- as EPA explains, "the difference between gross and net electricity is the amount of electricity used at the plant to operate components such as pumps, fans, motors, and pollution control devices," which "may represent from 4 to 12 percent of gross generation at a coal

- fired steam EGU." The commenters said in other words, EPA's unfair "re

- dispatch" c omparison of net gas generation to gross coal generation itself may account for as much twice the difference in total generation as EPA's entire building Block 1 assumption of six percent.

Commenters stated EPA needs to be consistent in its treatment gene ration capacity from natural gas generation and coal generation in calculating its goal for Utah. The commenters ask ed EPA to recalculate its Building Block 2 assumptions for the "re

- dispatch" of coal generation to natural gas generation using the summer n et dependable capacity of all of the affected units. The
commenters said in the case of Utah, the total nameplate rated capacity of the NGCC units relied upon by EPA in the building Block 2 calculation is 1,298 MW, whereas the total summer net capacity is only 1,227 MW, a six percent difference. The commenters said use of the summer net capacity in determining the state goal from Utah's 2030 goal would change from 1,322 lb/MWh to 1,348 lb/MWh.

Comment 306 : UT

- Treatment of Renewable Energy Under the Mult i

- state Process (MSP)

Response 306 : See section VIII.C. of the final rule preamble of the CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:

Commenters stated language in EPA's pro posed rule and NODA would allow states to count out

of

- state renewable energy as part of their compliance plans creates the opportunity for Utah to consider including renewable energy allocated to Utah ratepayers through the PacifiCorp multi

state process (MSP) towards its 2030 compliance obligations. The commenters said the MSP process, adopted by 5 states Public Utility Commissions, could be considered an "enforceable measure" with respect to the generation of renewable under the jurisdiction of Utah. The
commenters said this scenario evaluates what impact including imported renewable resources through the MSP allocation process has on both Utah's goal and emission rate.

Commenters stated PacifiCorp serves load in 6 States and since 2002 the benefits and cost PacifiCorp's system have been allocated based on the multistate process and assigned on the percentage of PacifiCorp's load served in each state; for example, between June 2014

- June 2015 Utah is projected to represent approximately 42.63 percent of Pa cifiCorp's load and will be allocated 42.63 percent of PacifiCorp's benefits and costs. The commenters said PacifiCorp has significant renewable energy on its system and it allocates the benefits and costs of its renewable energy based on the MSP allocatio n; for this scenario Energy Strategies has collected data for all of PacifiCorp's system

- wide renewable energy and allocated it's generation to each state using336 the MSP Allocation formula and compared how the state's 2030 goal and emissions rate would be i mpacted relative to the Base Case 2020

- 2030 scenario. The commenters said for purposes of this analysis, and to be consistent, it was assumed that MSP renewable energy would be included in both the 2030 goal and 2020

- 2030 emissions rate calculation.

Comme nters stated the difference between the renewable energy generated in Utah and the renewable energy allocated to Utah rate payers is significant. The commenters said Utah produced 1,099,724 MWH of renewable energy in 2012, while Utah's MSP allocation from PacifiCorp's system was 2,575,879 MWH. The commenters said changing from EPA's method to an MSP allocation method has the effect of decreasing Utah's 2030 "business as usual" emission rate from 1,713 lbs/MWH to 1,561 lbs/MWH. The commenters said re

- calcula ting Utah's EPA 2030 goal using the MSP allocation increases the stringency of Utah's 2030 goal from 1,322 lbs/MWH to 1,220 lbs/MWH. The commenters said the effect of these two changes (that is, a higher emission rate, but a less stringent goal) on Utah's compliance obligation is a reduction of Utah's compliance gap by 50 lbs/MWH to 341 lbs/MWH.

Comment 307 : VT

- Goals

Response 307 : For the EPA’s response to this comment, see the CO2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule su pporting the final CPP. EPA notes that the potential new units contemplated by commenter would be covered under 111(b) emission guidelines, and not any 111(d) rulemaking which only applies to affected sources. Therefore, while not this particular rulemak ing, there are emission limitations that would be applied to new units that otherwise meet the applicability critiera described in this rulemaking.

The following are summaries of the specific public comments under this comment:

Commenters recommend ed that all states be held accountable for maintaining a clean energy portfolio. The commenters said as the CPP is currently written, Vermont is excluded from any form of carbon reduction goals. The commenters said the EPA has justified this exception contending that Vermont does not contain carbon

- emitting power plants; even though this is true, excluding Vermont from the CPP will not hold them accountable to maintaining a carbon

- free electricity grid. The commenters said as a result, Vermont will be able to intr oduce carbon

emitting sources without being penalized; this is especially important as Vermont currently plans to shut down the Vermont Yankee nuclear power plant, which could conceivably be replaced with a carbon

- emitting source without any repercussions. The commenters said it is crucial to include all states in any future carbon regulations to ensure that every state implements a responsible energy plan and that newly built nonrenewable energy sources are both regulated and energy efficient.

Comment 308 : VA

- Goal Opposition

Response 308 : For the EPA’s response to this comment, see the CO2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.337 As discussed in section V of the preamble, the 111(b) and 111(d) goal c omparision is not a comparision of equal metrics. Moreover, EPA has modified its quantification of BSER in this final rulemaking to a regionalized approach from which uniform source

- category rates are derived. These are then equally applied across state’ s existing unit fleet to estimate the state goals. This has the impact of reducing the numeric disparity in state goals described by
commenter s . EPA does not believe the goals or source

- category rates require any particular EGU to retire as suggested by c ommenter s . Moroever, for those retirements already scheduled post 2012 in Virginia, the state will be able to take advantage of those reductions when demonstrating compliance with its state goal.

The following are summaries of the specific public comments under this comment:

Commenters stated EPA's 2012 data and calculation of the proposed State emissions
rates indicate that Virginia would need to eliminate and replace approximately 9 million annual megawatt hours of coal

- fired generation with new zero

- ca rbon resources by 2020.

Commenters stated EPA's modeling replaces the 2,851 MW of fossil

- fuel generation it projects will retire in the Dominion transmission zone by 2020 with only 351 MW of intermittent onshore wind; it is not clear how EPA concludes (if indeed it has) that reliability could be maintained in the Dominion transmission zone given this significant net reduction in capacity that the model EPA relied on to develop its Proposed Regulation. The commenters said even without the Proposed Regulatio n, other factors, including the Mercury Air Toxics Standard and moderate natural gas prices, are causing a historic amount of fossil

- fuel generation retirements across the country during the next two years. The commenters said requiring a second wave of su bstantial retirements before the country has ridden out the first is disquieting. The commenters said to conclude that the Dominion transmission zone can replace 2,851 MW of dispatchable, fossil

- fuel generation with 351 MW of intermittent wind, at a time o f unprecedented retirements throughout the country, reveals a troubling lack of consideration for, if not threat to, maintaining a reliable electrical system for Virginia businesses and residents.

Commenters stated the amount of new, zero

- carbon energy pr oduction that EPA's data indicates Virginia would require to meet the Mandatory Interim Goal by 2020 is daunting; Virginia would need to add the equivalent of approximately 1,140MW of nuclear generation at the 90% "average utilization rate for U.S. nuclear units" (which EPA indicates is "consistent with long

- term average annual utilization rates observed across the nuclear fleet") in order to achieve the emission reductions inherent in EPA's calculation of Virginia's proposed emissions rate. The
commenters said the construction of 1,140 MW of additional nuclear capacity by 2020 is unrealistic for Virginia or anywhere else in the nation. The commenters said currently, one nuclear project is under consideration in Virginia, though its need and cost have not ye t been submitted to or reviewed by the Virginia SCC, as required by Virginia law; this project remains in the early stages of development, with an array of regulatory approvals needing to be sought and received should the project move forward; in fact, thi s project has been under review by the federal Nuclear Regulatory Commission for more than a decade.

Commenters stated with regard to wind or solar, even if the operational concerns associated with replacing dispatchable, fossil

- fuel generation with the v ariable, intermittent, and nondispatchable production from these renewable resources could be managed, there is still zero probability that338 wind and solar resources can be developed in the time and on the scale necessary to accommodate the zero

- carbon gene ration levels needed to meet the Mandatory Interim Goal in 2020. The commenters said using a 31% capacity factor that the Department of Energy ("DOE") indicates was the national average for wind turbines in 2012, Virginia would need to add 3,300 MW of wind generation by 2020. The commenters said arbitrarily increasing the historic 31% capacity factor for wind, which DOE indicates has not improved since 2000, to 50% would still require Virginia to add 2,050 MW of wind generation by 2020.

Commenters stated n or can solar, with capacity factors lower than wind generation, realistically bridge the resource gap that would be created in Virginia by the Proposed Regulation; assuming an ambitious 25% capacity factor for Virginia solar, the Commonwealth would need to add 4,100 MW of solar generation by 2020. T he commenter s said a combination of solar and wind of the magnitude needed to meet the Mandatory Interim Goal (adding, for example, 1,650 MW of wind and 2,050 MW of solar in Virginia) would be no less daunting.

Commenters stated under EPA's proposal, Virginia will be one of the hardest hit states, with a 32% reduction in carbon intensity required by 2020. The commenters said attempting to achieve this reduction will require a significant re

- engineering of electri city in Virginia, and a significant

re

- dispatching of coal to natural gas. The commenters said this is contrary to the Commonwealth's commitment to fuel diversity and does not reflect the fundamental importance of coal in achieving our state's goals of: (1 ) ensuring that the cost of energy for Virginia consumers remains highly competitive, (2) maximizing our available reserves, (3) expanding and attracting business, and (4) increasing the reliability of Virginia's existing energy infrastructure.

Commenters stated while EPA touts "flexibility" for states, this is an illusory claim in Virginia, since the schedule is far too short to achieve the required reductions without dramatic "slash and crash" tactics. The commenters said in short, there is no way to ach ieve EPA's proposed target for Virginia without significantly reducing coal, a consequence that will have a devastating impact on Virginia's coal industry, the communities of southwest Virginia, their two major freight railroads, Virginia's ports, electric ity consumers, and the countless businesses and citizens who derive their livelihoods from coal or keep their lights on and systems running with reliable, coal

- fired electricity.

Commenters stated state flexibility in achieving EPA's target reductions is further restricted by EPA improperly restricting a state's ability to consider the remaining useful life of individual existing sources when applying the 111 (d) guidelines. The commenters said certain coal plants likely would have to shut down, regardless of their efficiency or whether they are needed to assure system reliability, unless a state is able to employ the flexibility expressly granted under Section Ill (d) to regulate exiting sources on a case

- by

- case basis. The commenters said by depriving sta tes of this needed flexibility, the CPP will result in significant stranded investments made at Virginia facilities to be responsive to other recent EPA mandates

- e.g. , Virginia City Hybrid Energy Center, which was placed in service in 2012 at an initial capital cost of $1.8 billion; Chesterfield Power Station scrubbers, which were placed in service in 2011 and 2008 at an initial capital cost of $275 million; and the Clover Power Station, which was constructed and placed in service in 1995 and 1996 at an initial capital cost of $1.2 billion with a planned service life of over 50 years.339 Commenters stated EPA's proposed CO2 emission performance "goals" for Virginia are unrealistic, arbitrary, capricious and unlawful. The commenters said it is important for EPA to realize that generators of electricity in the Commonwealth of Virginia have made great progress in reducing GHG emissions since 2005 while providing for greater flexibility and reliability in energy production. The commenters said according to the Virginia Department of Environmental Quality ("VDEQ"), emission reductions through 2012 of 39 percent have been achieved; these significant improvements have been made through natural market forces and voluntary actions. In light of this progress, the comm enter s urge d EPA to reconsider the mandates in its proposed Section 111 (d) guidelines and look for solutions that will promote future progress.

Commenters stated in Table 1 of EPA's proposed rule, the agency sets interim and final "rate

based CO2 emissio n performance goals" of 884 and 810 pounds of CO2 per MWh of net energy output for existing EGUs in Virginia subject to the rule. The commenters asserted these goals are completely unrealistic. The commenters note d that EPA's rate

- based CO2 emission standa rd for new and modified EGUs is between 1,000 and 1,100 pounds of CO2 per MWh; in other words, the CO2 emission goal for existing EGUs in Virginia is more stringent than the CO2 emission standard for new EGUs. The commenters said Sections 111 (b) (New Sour ces) and 111 (d) (Existing Sources) are intended to function together, the premise being that new sources have a greater opportunity to design and construct in a more efficient, lower emitting manner. The
commenters said by requiring more stringent standar ds for existing units, it is clear that EPA has expanded the scope and intent of 111 (d).

Commenter s w ere concerned that the proposed regulations will greatly increase the costs its members pay for electricity and raise several cost

- related issues:

• The P roposed Regulation imposes substantially more stringent emission requirements for affected, existing generating units in Virginia than the standard for new units, yet to be built.

• The Proposed Regulation fails to recognize substantial, recent investments that have significantly reduced carbon dioxide and other emissions in Virginia.

• The Proposed Regulation fails to recognize Virginia's significant investment in and utilization of nuclear generation and, in fact, effectively penalizes Virginia for this zer o

- carbon generation.

• The Proposed Regulation incorporates generic and unsupported expectations of levels of renewable generation and energy efficiency that, when applied to Virginia, are extremely ambitious, almost certainly unachievable, and uneconomic u nder traditional standards.

Commenters stated of particular concern is the proposed emission rates for Virginia are too low to provide the Commonwealth with meaningful options for compliance. The commenters said given the limited options afforded Virginia , compliance can only be achieved at a cost to Virginia that would be significant; analyses of utility planning data, for example, indicate that, using conservative assumptions, the incremental cost of compliance for one utility operating in Virginia would conservatively be $5.5 to 6.0 billion on a net present value basis.340 Commenters stated the impact on Virginia would be particularly severe because it will put at risk at least two new NGCC facilities that commenced construction before the Proposed Emissi on Guidelines were published in the Federal Register. Commenters said moreover, because Virginia's goal of 810 lb/MWh is well below the lowest CO2 emission rate a new state

of

- the

- art NGCC can achieve, it is possible that no NGCC plants will be built in Vi rginia in the future because it may not be economical to do so.

Comment 309 : VA

- Goal Opposition

- Disparity from other states

Response 309 : See section I.A. of the final rule preamble of the CPP and the CO2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:

Commenters stated Virginia's rate

- based CO2 emission performance goals are significan tly more stringent than the goals for its neighboring states. The commenters said a stark example is West Virginia, Virginia's final goal of 810 pounds of CO2 per MWh is twice as stringent as West Virginia's final goal of 1620 pounds of CO2 per MWh. The co mmenters said CAA Section 111 is a source

- based regulatory program; Section 111(d) authorizes the states (or EPA) to establish "standards of performance for any existing source" that would be subject to regulation under Section 111(b) if it were a new sour ce. The commenters said setting different state

- based emission requirements is incompatible with this source

- based approach; the requirement should apply uniformly to the entire source category, taking into account an existing source's remaining useful lif e. The commenters said setting different CO2 emission targets on a state

- by

- state basis violates this principle and would hold similarly situated EGUs located in different states to different emission reduction standards; for example, two identical EGUs bu ilt at the same time using the same technology may be faced with radically different emission reduction obligations under EPA's proposed rule simply because of the relative availability of natural gas and renewable energy resources in the states where they are located. The commenter s asserted it is arbitrary and capricious for EPA to propose a rule under which sources in Virginia will suffer much higher "per ton" compliance costs than equivalent sources in West Virginia or other states.

Commenters stated a central premise of any fair and reasonable regulatory scheme is that like sources should be treated similarly; this is particularly true in the case of GHG emissions where the pollutant at issue is truly global in nature and there are no localized impacts that could justify treating similar sources differently. The commenters said thus, after taking into account remaining useful life and other related factors, the standards of performance established under CAA Section111 (d) should apply uniformly to all e xisting sources; EPA's proposed emission reduction targets fail to meet this goal.

Commenters stated that despite the impressive progress Virginia has made reducing CO2 emissions and developing its low carbon intensity electric generating system, the "Fou r Building Block" approach of the Proposed Emission Guidelines assigned the Commonwealth a final goal of 810 pounds of CO2 emitted per megawatt hour of electricity generated from "affected" fossil341 fuel

- fired units. Commenters said the goal proposed for Vir ginia is substantially lower and stricter than that assigned to most other states with generating systems of greater carbon intensity. Commenters said that although the "Four Building Block" approach taken by the proposal to regulate each state according t o its potential to reduce CO2 emissions appears reasonable at first glance, it creates state

- by

- state imbalances in compliance obligations and costs, is inconsistent with the Clean Air Act's objective to achieve nationally consistent standards, and is unfa ir to states that have achieved lower carbon

- intensive electric generating systems.

Comment 310 : VA

- Goal Opposition

- more stringent than New Sources

Response 310 : See preamble section V.B.7 for a response to the comment regarding 111(b) and 111(d) rate comparision.

Based on comments received, the EPA is promulgating a final expression of the BSER as sub category rates, where every EGU in a given affected sub category is given the same rate. This addresses some of the commenters concern about inequitable treatment of technologies depending on geographic location.

The following are summaries of the specific public comments under this comment:

Commenters stated the Proposed Regulation arbitrarily, capriciously, and unlawfully imposes a standard for affected , existing generating units that is more stringent than the standard for new units. The commenters said the Proposed Regulation requires existing fossil fuel units located in Virginia to achieve a carbon emission rate that is as much as 26% lower than the carbon emission rate that the EPA recently determined can be achieved by new units using the best available control technology. The commenters said compared to Virginia's Mandatory Goals of 884 and 810 pounds of CO2/MWh," the new source performance standar d for a new coal unit is 1,000 to 1,050, and for a new gas unit is 1,100. The commenters said thus, a new fossil unit in Virginia

- which can only be constructed using the absolute best control technology and without physical and other engineering limitat ions attendant to existing infrastructure

- faces a far less stringent compliance requirement than existing units.

Commenter s turn ed regulation on its head in this way

- requiring older, but still useful equipment to meet a standard that the EPA admits ca nnot be achieved even by entirely new equipment

- is a recipe for stranding prior investments and requiring significant additional investment, both of which will likely be paid for in large part, if not entirely, by consumers. The commenters said in finali zing its Proposed Regulation, the EPA should correct this irrational and inequitable result, consistent with the logic found elsewhere in the Proposed Regulation. The commenters said when considering carbon capture and sequestration, for example, the Propo sed Regulation recognizes that modifications of existing units "entail additional considerations beyond those at issue for new units"

- including the expectation that such costs "would be expected to be substantial," and that "some existing EGUs might have space limitations and thus might not be able to accommodate...expansion." The commenters said existing generating units cannot rationally be expected to achieve more than new units of the same type. The commenters said342 there is no legal or rational basis to set Virginia's Mandatory Goals for existing units below the standards required for new units; this is arbitrary and capricious regulation at its plainest.

Commenters stated EPA's NODA presents some alternative proposals that would make the Mandatory Go als for Virginia more stringent. The commenters cannot support any aspect of the NODA that would contribute to a carbon emission rate for existing generation facilities in Virginia that is more stringent than the standard for new facilities.

Comment 311 : VA

- Goal Opposition

- BB1, BB2, coal retirements, re

- dispatch

Response 311 : See sections V.C. and V.D. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Blocks 1 and 2. In the final CPP, the compliance period for the interim rate begins in 2022. However, because the interim rate reflects an average performance over an eight year period, the EGUs have an option to begin reduction later than 2022 as well. As provided in section VII of the prea mble, the state mass goal for Virginia is well above the 20 million metric tons reflected below.

Neither the proposed or final rule assumes a heat rate improvement at oil

- fired EGUs.

The following are summaries of the specific public comments under this co mment:

Commenters stated the two mandatory carbon emission rate goals assigned to affected fossil

- fuel electric generation units located in Virginia ("Mandatory Goals") substantially limit Virginia's options for complying in the compressed timeframe requi red by the Proposed Regulation. The
commenters said the carbon emission rate on Virginia's existing fossil

- fuel electric generation units ("EGUs") imposed by the EPA, beginning in 2020, is substantially more stringent than the standard that EPA has identif ied for new fossil

- fuel units using the best available control technology. The commenters said to achieve Virginia's Mandatory Goals, production from existing fossil

- fueled power plants not currently intended for retirement would need to be significantly r educed.

Commenters stated as released on November 6, 2014, the EPA's mass

- based compliance calculation of 20.6 million annual metric tons of carbon emissions for Virginia during the interim compliance period of 2020

- 2029 further confirms EPA's expectation of generation retirements beyond those that are currently planned. The commenters said operating the 7,055 megawatts of affected natural gas combined cycle units in Virginia (including the two stations currently under construction) at the 70% capacity fact or EPA identifies as an achievable best practice in its second compliance target "building block" for such facilities would produce approximately 17.1 million metric tons of carbon emissions. The commenters said but since the Proposed Regulation effectivel y caps emissions at 20.6 million metric tons, on average for 2020

- 2029, only 3.5 million annual metric tons could be emitted from the remaining 5,800 megawatts of affected existing units not currently planned for retirement or fuel conversion. The commente rs said by 2030, this 5,800 megawatts of existing generation becomes further constrained by the Proposed Regulation, as the EPA

- calculated cap for Virginia decreases to 18.9 million metric tons of carbon emissions in 2030

- leaving only 1.8 million metric tons of such emissions after Virginia's affected natural gas combined cycle generation operates at EPA's 70% capacity factor.343 Commenters stated EPA's calculations illustrate the substantial constraint that the Mandatory Goals establish on generation in Vir ginia currently used to maintain reliable electric service at just and reasonable rates to customers. The commenters said although the affected oil units in Virginia operate as peaking facilities that produce relatively little energy on an annual basis, th e five largest coal units in Virginia operated at capacity factors between 60% to 82% during a recent twelve

- month period (April 2013 to March 2014). The commenters said these five units, which total approximately 2,500 megawatts, are located at three diff erent power stations. The
commenters said the EPA's first "building block" for calculating the emission targets for Virginia assumes that these units will increase their productivity by 6%; however, coal generation at any one of these three power stations can, at recent production levels, exceed the 3.5 million annual metric tons remaining for all affected existing coal and oil units in Virginia if, as EPA assumes, combined cycle generation in Virginia can achieve a 70% capacity factor. The commenters said operating only these five coal units at a mere 17% capacity factor during 2020

- 2029, or a 8% capacity factor beginning in 2030, would cause carbon emissions in Virginia to exceed the compliance caps for Virginia identified by EPA's NODA if the natural gas combined cycle fleet operates at EPA's 70% capacity factor.

Commenters stated the reality, as recognized by, among others, EPA and the North American Electric Reliability Corporation ("NERC"), is that the Proposed Regulation, if adopted, is expected to cau se a second wave of retirements of coal

- fired generation units shortly after the upcoming retirements caused by the MATS Rule. The commenters said a key difference between the MATS retirements and those expected from the Proposed Regulation is the type of power plants that the Proposed Regulation places at risk of retirement and, more specifically, the extent to which customers rely on those power plants. The commenters said EPA's modeling results, and basic math using EPA's mass

- based compliance caps for V irginia, show that the Proposed Regulation is expected to cause the retirement of dispatchable, base load facilities that currently generate a large quantity of power. The commenters said for example, EPA's 2012 data identifies approximately 657,000 megawa tt

- hours of total electric generation from the two coalfired units at the Yorktown Power Station already planned for retirement due to the MATS Rule; in contrast, coal

- fired generation at the base load Chesterfield and Clover power stations for the
same ye ar were 3.6 million and 4.4 million megawatt

- hours, or approximately 6 and 7 times such generation from the retiring Yorktown units.

Comment 312 : VA

- RE and EE

Response 312 : See sections V.A. and V.E. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Blocks 3 and 4

. The following are summaries of the specific public comments under this comment:

Commenters’ analysis shows that Virginia can achieve its remaining reductions through a combinatio n of renewable resource additions and increased energy efficiency investments. The
commenters said renewable energy and energy efficiency have been adequately demonstrated in Virginia to be a cost

- effective and clean way to meet our energy needs. The comme nters said VA344 is already beginning to make investments in these clean energy technologies, and we can do much more.

Commenters stated Virginia would only need to achieve a fraction of the renewable and energy efficiency goals that are already set forth in the Virginia Code and the Virginia Acts of Assembly to reach the carbon reduction target. The commenters said Virginia's General Assembly enacted a voluntary Renewable Energy Portfolio Standard goal in 2007, which now states that electric utilities would procure 15 percent of electric sales from renewable resources. The commenters said this voluntary goal is readily achievable; in addition, the Virginia General Assembly established a goal of reducing electricity consumption by 10 percent by 2022. The comme nters said the Virginia State Corporation Commission has found that this energy efficiency goal is reasonable and achievable. The commenters said if Virginia were to achieve just 50 percent of both of these voluntary goals, it would reach the 810 lbs/MWh e missions rate.

Commenters stated if EPA modified its methodology in line with the recommendation provided in its October 28, 2014 NODA by assuming that the level of incremental renewable energy and energy efficiency resources would reduce proportionally t he level of existing coal and gas fired generation, Virginia would only need to achieve 37 percent of both goals. This represents roughly half of the renewable energy and energy efficiency levels that EPA assumed in building blocks 3 and 4.

Commenters sta ted if Virginia were to get credit for 100 percent of its energy efficiency investments

- rather than 58 percent

- it would only need to achieve 31 percent of the renewable energy and energy efficiency goals.

Commenters requested clarification about the A nnual Renewable Energy Generation for Virginia in 2012. The commenters said in the Proposed Renewable Energy Approach Excel file provided by EPA, the 2012 RE (MWh) number for Virginia is 2,358,444, which the commenters traced back to the EIA's Annual Gener ation by State data file. The commenters said using ""Wood and Wood Derived Fuels"" and ""Other Biomass"", the commenters were able to get the same number; however, when the commenter s look ed at the 2012 Unit Level Data using e

- Grid Methodology file provid ed by EPA, using those same fuel types (BLG, LFG, MSB, OBG, WDS), the commenters calculated 2,713,084. The commenter s ask ed what is not being included in the first files that is being included in that last file.

Comment 313 : WA

- See no reason to limit th e amount of new RE expected of Washington based on its 2012 fossil generation

Response 313 : See section V.E. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 3.

The following are summari es of the specific public comments under this comment:

Commenters stated EPA asks whether "the difference between a state's RE generation target and its 2012 level of corresponding RE generation does not exceed the state's reported 2012 fossil fuel

- fired generation." Id. at 34,868

- 69. Commenters said this issue only affects Washington,345 whose 2012 fossil generation (9.4 million MWh) is less than the amount of new generation from renewables the state would produce if it met its RE generation target under Blo ck 3(15.9 million MWh). Commenters stated they see no reason to limit the amount of new RE expected of Washington based on its 2012 fossil generation. Commenters said that strategy might make sense if EPA's plan supposed that each and every new MWh from RE were to replace an MWh from an existing fossil unit, but that is not the case: at least some of that new RE generation will meet demand growth rather than displace existing fossil generation. Commenters said Washington also imports some power from neighbo ring states, much of which is from fossil generating units. Commenters said and even if that additional 15.9 million MWh of clean energy were to displace all fossil

- fired generation and exceed the state's demand growth, Washington could sell any additional clean electricity to nearby states, such as Montana and Wyoming, which lack strong renewable industries. Commenters stated finally, it is worth noting that under EPA's current plan, Washington is not expected to actually meet its state RE target, but need only meet the regional growth factor. Commenters said as such, Block 3 only expects Washington generate an additional 9.5 million MWh from RE, which is only marginally higher than its 2012 fossil generation of 9.4 million MWh. Commenters stated if the age ncy decides to retain its proposal for Block 3, we urge it to require all states to meet their RPS targets, as noted above, rather than simply the regional growth factors.

Comment 314 : WA

- The EPA's Dispatch Assumptions (Building Block 2) are Incorrec t for Setting the Washington State Goals

Response 314 : See section V.D. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 2 and the CO2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP. EPA’s final rule approach to building block two differs from its proposed approach. The fossil steam generation supporting the source category rates informing the state goals in the final rule do not assume a zeroeing out of coal generation.

The following are summaries of the specific public comments under this comment:

Commenters stated his organization is an independent power producer (IPP) located in Washington State. Commenters said more commonly known as a merchant power plant, his organization is a non

- utility generating station that sells electricity on a wholesale basis to other companies to distribute and deliver to their utility customers. Commenters stated under current deregulation of electricity ge neration, his organization must compete in a free economic wholesale power market to sell the power it produces. Commenters said as such, the decisions on how much power to generate and when to generate that power (i.e. dispatch the plant) by his organizat ion are not governed by any Washington State Utility or Regulatory Agency. Commenters stated since the State cannot dispatch the plant to reduce GHG emission rates in any manner, the EPA cannot use assumptions of dispatch for his organization in the Washin gton goal calculation. Commenters said the State goal must be adjusted to account for the existing GHG reduction agreements between Washington and his organization.346 Commenters stated in 2011, the Washington Legislature passed Senate Bill 5769, which was

co dified at RCW 80.80.040, to regulate the emissions of GHG from his organization and clearly define the timeline for GHG reductions from the Plant. Commenters said one of the two coal fired Units must cease burning coal by the end of 2020, at that time cutt ing the facility's GHG emissions approximately in half, and the other Unit must cease burning coal by the end of 2025.

Commenters stated while the requirement for his organization to completely cease burning coal by the end of 2025 will allow the State of Washington to meet the EPA intentions of eliminating GHG emissions from coal fired power generation in Washington by 2030, the staged shutdown of his organization means that EPA's proposed 2020 GHG goal for Washington is not achievable. Commenters said Was hington's 2020 interim goal for reducing GHG by reducing coal fired generation must recognize that his organization will be fully operational and generating electricity from both coal fired Units through the end of 2020 at levels well above 2012 levels as described below. Commenters stated per the agreed upon State Law, emissions will be reduced to one Unit operating through 2025. Commenters said this staged reduction schedule must be addressed by the EPA in the goal setting to allow Washington State to ach ieve the goals developed under the State and the EPA plan.

Commenters stated his organization requests that the EPA update Washington State's interim and final emission rate goals to reflect the operational realties of the EPA's incorrect dispatch assumpti ons on the State's only coal plant. Commenters said this must be done to ensure that the commitments made by Washington State in exchange for the early shutdown of his organization are addressed.

Comment 315 : WA

- Heat Rate Improvement Measures Already T aken at TCG

Response 315 : See section V.C. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 1 and the CO2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenters stated i n 2001 and 2002, his organization voluntarily installed wet Flue Gas Desulfurization units (FGD's) and low NOx burners to reduce haze and ac id rain causing emissions. Commenters said this was a major emissions reduction project and included some of the heat rate reductions recommended by the EPA in the proposal. Commenters stated the project included heat rate improvements from improved combus tion controls, upgrades to steam turbine efficiencies, and efficient induced draft fans; all projects described by the EPA for improving heat rate.

Commenters stated in 2008 and 2009, the coal EGUs were converted to efficiently burn coal from the Powder Ri ver Basin (PRB) instead of the locally mined coal that they had been designed and constructed to burn. Commenters said PRB coals are lower in sulfur, nitrogen, and ash but have higher British thermal unit (BTU) content than the local coal and resulted in l ower emissions of NOx and SO2. Commenters said in order to increase the EGUs efficiency when burning 100 percent PRB coal his organization needed to replace heat transfer surfaces to allow347 greater steam recovery which included the addition of an economizer bank. Commenters stated other changes included enhanced soot

- blower controls, reduced pulverizer energy consumption, and Electrostatic Precipitator energy management systems.

Commenters stated the FGD and PRB conversion projects were reviewed by the South west Clean Air Agency (SWCAA) and the Washington Department of Ecology (DOE) for PSD applicability and information was also supplied to the EPA regarding the projects for the EPA's review. Commenters said for his organization to invest additional capital i nto heat rate improvements (Building Block 1) given prior improvements and such a short remaining lifespan for the plant is completely impractical.

Commenters stated as an IPP, his organization regularly reviews and updates operating procedures to achieve peak efficiency from our EGUs. Commenters said as such, we have previously implemented all of the appropriate operational improvements to reduce heat rate as listed in the proposal. Commenters stated there are no additional operational changes on the EPA's list that have not already been considered or implemented and which could result in any economical heat rate improvement for his organization. Commenters stated his organization requests that the EPA update Washington State's interim and final emission ra te goals to reflect the operational improvements already made at his organization and recognize that no additional heat rate improvements are achievable.

Comment 316 : WV

- West Virginia can achieve the emission reduction targets proposed by the EPA

Resp onse 316 : For the EPA’s response to this comment, see the CO2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenters stated West Virginia can achieve the emission reduction targets proposed by EPA.

Coal

- Commenters said the Clean Power Plan recognizes the importance of coal in America's energy portfolio. Commenters stated while coal faces economic challenges, coal is projecte d to continue to be the primary electric generating fuel for the United States for at least the next two decades (natural gas does not surpass coal for electricity generation until 2035), and coal mining will continue to be an important sector of the West Virginia economy under the Clean Power Plan. Commenters stated coal will continue to support West Virginia jobs, education, infrastructure and important public services under the Clean Power Plan. Commenters said important that funds budgeted for carbon ca pture & sequestration R&D be made available to continue to develop this technology.

Natural Gas

- Commenters stated the Clean Power Plan recognizes the emission benefits of natural gas relative to coal. Commenters said West Virginia has significant natural gas resources in the Marcellus Shale that are currently being developed. Commenters stated developing West Virginia's natural gas resources and investing in natural gas for electric generation will help the348 state comply with the Clean Power Plan, diversif y the state's energy economy, and create new jobs.

Comment 317 : WV

– RE and EE

Response 317 : See section s V.A. and V.E. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block s 3 and 4 and the CO2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenters stated West Virginia, also has much to gain from its very achi evable and realistic target under the Clean Power Plan; the state is the third windiest east of the Mississippi and already home to six large wind farms.

Commenters stated in West Virginia there's enough wind power to potentially supply almost 20 percent of the state's electric needs.

Commenters stated electric rates that have skyrocketed recently due to an overreliance on one fuel source, coal, can be brought down as the state capitalizes on its largely untapped energy efficiency resources, saving consum ers money on energy and creating jobs simultaneously.

Commenters stated that even if it is assumed that EPA does have the authority it claims to force EE goals on states, in so doing it should not arbitrarily discriminate between states. Commenters said un der its proposed regulation, states like West Virginia that export power are expected to meet one hundred percent of the EE goal EPA sets for it while states that import all of their power have no EE goals. Commenters said states that produce only a portio n of their power have EE goals that are scaled down, based on the amount of power they import. Commenters said a state's ability, or lack thereof, to produce its own power has no relationship to its ability to implement EE measures, yet this is a criterion EPA uses to limit or entirely do away with EE goals. Commenters continued this regulation would make arbitrary distinctions. Commenters said states like West Virginia that produce enough inexpensive coal

- fired power to export some of it to other states wi ll be responsible for reducing carbon emissions from all of this coal

- fired power, regardless of where it is sold; however, the regulation gives the sales location of renewable power controlling weight. Commenters said other states, where the more expensiv e renewable power produced in West Virginia is sold, will be allowed to utilize this renewable power in meeting EPA's goals.

Comment 318 : WI

- Not feasible and almost impossible to meet the proposed reductions in carbon emissions without de

- commissioning existing circulating fluidized bed (CFB) units

. Response 318 : For the EPA’s response to this comment, see the CO2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.349 The EPA understands the unique circumstances of the The Kewaunee Nuclear Plant closure. It has not made an adjustment to the baseline or the final Wisconsin state goal. EPA has consistently used a 10% threshold when considering similar adjustments for unit outage or hydro concerns. While it recogni zes the immediate impact on fossil generation in 2013, the first year of compliance in the final CPP had been moved to 2022

– which provides more time for changes in the states power supply. Moreover, the EPA notes that there are significant capacity addi tions (e.g., under construction capacity) in the same region that are accounted for elsewhere in the baseline thay could conceivably be providing replacement generation for scheduled closures such as this one. For more information about how the final goal s were calculated please see the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final R ule supporting the final CPP.

Additionally, EPA has not made any adjustements for planned closures. There are a varirety of closures expected across reg ions in the coming years from both fossil and non

- fossil sources. Adjsuting the historical baseline for all of these closures would require projecting where the replacement generation would come from. This would move the baseline analysis from a historic al basis towards a projected one. EPA believes the regions on average will experience closures that facilitate movement towards compliance (e.g., closures of higher emitting sources), and therefore views it as conservative to not make adjustments for clos ures. For example, Wisconsin also has significant amoutns of coal steam capacity that appear to scheduled to require during the same timeframe as Kewaunee. Making an adjustment for one type of closure (e.g., nuclear), but the other types (high emitting f ossil) would introduce a bias to the baseline.

The following are summaries of the specific public comments under this comment:

Commenter s stated their organization is a community owned, not

- for

- profit utility located in Manitowoc, Wisconsin and has two coa l/petroleum coke/biomass

- fired and two natural gas

- fired units totaling 118 MW of fossil

- fired generation. Commenters stated it is not feasible and almost impossible for his organization alone to meet the proposed reductions in carbon emissions without de

- commissioning our existing circulating fluidized bed (CFB) units. Commenters said this action would make our community totally dependent on an outside supply of electricity and a significant upgrade of the transmission supply would be required to provide r eliable energy to our citizens.

Commenters stated o ur rate payers invested over $80 million into our newest CFB unit and it is less than 10 years old. Commenters said t he CFB technology was identified as "Clean Coal Technology" by the Department of Energy and was one of the reasons MPU selected this technology. Commenters stated i n fact this unit was selected by the EPA as one of the floor units for the new MATS rule. Commenters said a s a new unit it was built to be as efficient as possible and an expectat ion that they or any other utility left 6% waste on the table is nonsensical. Commenters stated t he possibility that they may needlessly strand the largest investment their City has ever made is frightening.

Commenters stated Wisconsin will not be able to comply with block 3 as they already lost one of their two nuclear power plants when the Kewaunee 600 MW plant was closed. Commenters said they fail to see where this loss was included in the EPA analysis for Wisconsin.350 Comment 319 : WI

- Analysis of Wis consin's Compliance Options for Compliance with the EPA's Clean Power Plan

Response 319 : See section I.A. of the final rule preamble of the CPP and the CO2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP for the EPA’s response to this comment. Also see section VIII of the preamble which discusses compliance pathways and options.

The following are summaries of the specific public comments under this comment:

Commenters stated this analysis used two energy mod eling tools to compare the cost

effectiveness of two strategies Wisconsin could choose to achieve compliance with the EPA's CO2 standards for existing electric generating units. Commenters said the analysis compares a 30% by 2030 RPS against a natural gas switching scenario in conjunction with the state's existing 10% RPS to achieve the 2030 CO2 intensity reductions. Commenters stated using the MyPower economic dispatch model, and a groundup spreadsheet model based on data from the EPA's technical support d ocuments, this analysis shows that the 30% RPS will achieve deeper CO2 reductions at a lower cost than the fuel switching scenario by the late 2020's. Commenters said the analysis also shows that the 30% RPS can insulate utilities and ratepayers against fo ssil fuel price volatility by comparing the two scenarios and applying historical natural gas prices to calculate total cost estimates.

Commenters stated this analysis is meant to provide an independent, alternative viewpoint in addition to work done by th e Wisconsin Department of Natural Resources and the Public Services Commission. Commenters said it does not address electric reliability, transmissions or natural gas distribution/supply constraints. Commenters stated however, further research will be
purs ued to quantify the amount of new natural gas pipelines needed to support the fuel switching scenario.

Commenters stated in summary, Wisconsin can achieve significant CO2 reductions by pursuing a 30% by 2030 RPS. Commenters said the 30% RPS is a more cost

- effective option for Wisconsin's utilities and ratepayers over the long

- term, as well as a hedge against unpredictable fossil fuel prices. Commenters stated Wisconsin should not fight implementation of the Clean Power Plan, but embrace it as an opportunity to stimulate new economic growth in the clean energy and smart grid sectors.

Comment 3 20 : WI

- The EPA must adjust Wisconsin's baseline to account for the May 2013 closure of Kewaunee Nuclear Plant

. Response 3 20 : See section V.E. of the final rule pream ble of the CPP for the EPA’s response to this comment and more information about Building Block 3 and the CO2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP. See response 318.351 The following are summaries of the specific public comments under this comment:

Commenters stated the Kewaunee Nuclear Plant, which provided 7.3% of Wisconsin's electricity generation in 2012, closed in May of 2013, resulting in increased generation (and emissions) from fossil generato rs working to fill the void. Commenters said the EPA must adjust Wisconsin's 2012 baseline to account for the replacement of the retired, carbon

- free generation from Kewaunee. Commenters stated we discuss possible approaches the EPA could take to this adju stment in our Technical Corrections document.

Comment 321 : WI

- building block 2

Response 321 : See sections V.D. and VI of the final rule preamble of the CPP for the EPA’s response to this comment and the CO2 Emission Performance Rate and Goal Computat ion TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenters stated the highest annual capacity factors for the Wisconsin NGCC fleet is 37%. Commenters said the EPA shou ld therefore assume, when developing building block 2 goals, that this is the maximum capacity factor available to Wisconsin.

Commenters stated 2012 was an outlier for NGCC operation in Wisconsin. Commenters said the state's capacity factor in 2012 (46%) is approximately 70% higher than the average capacity factor for the entire NGCC fleet from 2005 through 2013 (28%). Commenters stated this supports the contention that 2012 was an unusual year and must not be used as the sole year in determining achievab le NGCC capacity factors for each state. Commenters said note that, if 2012 is treated as an outlier and removed from the analysis, the three

- year average capacity factor would be just 29%.

Commenters stated Based on the 2012 eGrid dataset, only one of Wis consin's 35 natural gas plants operated at a capacity factor above 50% (the 620MW Fox Energy Center at 53%). The
commenters said only four other natural gas plants operated at capacity factors above 20% (Port Washington Generating Station, Domtar Paper Mil l, LSP

- Whitewater and the Rhinelander Mill) and 24 plants operated at capacity factors below 5%; Wisconsin has an abundance of natural gas capacity that is severely under

- utilized.

Commenters stated for WI power sector pursuing a 30% RPS by 2030 would res ult in natural gas plants larger than 50MW operating at a capacity factor of 25

- 26% in 2030; this is well below the EPA target of 70% and represents a level of fuel consumption that should not be difficult to meet without modest improvements to Wisconsin's existing natural gas delivery infrastructure. The
commenters said the 30% RPS scenario results in natural gas consumption of an estimated 171 million mcf per year compared to 126 million mcf under the business

- as

- usual (BAU) scenario.

Commenters stated t his represents an increase of 35% over 15 years, or 2.4% per year; the 30% RPS scenario also assumes that all coal plants that operate at capacity factors below 50% will be idled or retired with the generation gap being filled by increased dispatch of natu ral gas and new352 renewables; as a result, coal consumption under the 30% RPS scenario is estimated at 9 million short tons in 2030 compared to 28 million tons under the BAU scenario. The commenters said from 2014

- 2030, coal declines from 52% of Wisconsin's total generation to 20%, while natural gas increases from 17% to 25%; renewables account for 30% of total generation and nuclear accounts for 16%. The commenters said under the BAU scenario, coal holds steady at 51%, natural gas rises slightly to 21%, nucl ear makes up 20% (assuming Dominion's Kewaunee plant reopens), and renewables account for just 6% of total generation.

Commenters stated in 2014, 15 of Wisconsin's 35 coal

- fired units larger than 25MW are at least 50 years old and 22 will be that age or o lder in 2020. The commenters analyzed a scenario where Wisconsin meets EPA's CO2 reduction targets by displacing coal with increased dispatch of natural gas; under this scenario, renewables are held constant at current levels that reflect the 10% by 2015 R PS, natural gas is increased to the point where Wisconsin meets EPA's system

wide CO2/MWh target, and coal is reduced proportionally. The commenters said by 2030, natural gas would account for approximately 56% of Wisconsin's total generation, while coal d eclines to around 23%. Natural gas plants larger than 50MW will operate at capacity factors of 58% (compared to 27% under the 30% RPS scenario), and total natural gas consumption will rise to 384 million mcf. The commenters said this is triple the amount o f gas consumed under the BAU scenario and more than double the amount consumed under the 30% RPS scenario. The
commenters said this level of consumption would likely require large

- scale, capital intensive expansion and upgrades of the existing natural gas distribution network.

Commenters stated pursuing a massive shift toward natural gas to meet the EPA targets would also make Wisconsin's utilities, electric customers and economy extremely vulnerable to historically volatile natural gas prices; it would al so expose utilities to the risk of CO2 compliance costs if a state, regional or national emissions trading program were implemented in the future. The commenters said while the results of this analysis show that Wisconsin could meet EPA's carbon reduction targets without ramping its natural gas units up to a 70% annual capacity factor, it highlights the risks inherent in pursuing a one fuel compliance strategy. The
commenters said the 30% RPS strategy results in a diversified energy mix with much lower
expo sure to fuel price volatility and potential CO2 compliance costs. The commenters said other Midwestern states are pursuing far more aggressive RPS goals on shorter timelines that have stimulated job growth; Wisconsin can and should take a similar path.

Co mment 322 : WI

- Adjustments to the EPA's Emission Rates for Wisconsin

Response 322 : For the EPA’s response to this comment, see the CO2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are su mmaries of the specific public comments under this comment:

Commenters stated f our scenarios were tested to adjust the EPA's rate

- based goals for the state for the loss of Kewaunee's carbon

- free generation. All provide similar results.353 Commenters stated S cenario 1: Replacement with coal. Commenters said this scenario assumes that all of the 2012 generation from Kewaunee would be taken up by the newer coal plants (Elm Road and Weston 4), which have enough extra capacity to do so.

Commenters stated Scenario 2: Replacement with NGCC and coal. Commenters said this scenario assumes that Kewaunee's 2012 generation would be made up by NGCC and coal units in the proportions in which they expanded from 2011 to 2013 (72% NGCC and 28% coal).

Commenters stated Scenario 3: Commenters said replacement with NGCC, coal and renewables. Commenters stated this scenario assumes that the generation would be made up by NGCC, coal and renewables units in the proportions in which they expanded from 2011 to 2013 for the fossil units or 2012 to 2013 for renewables (66% NGCC, 25% coal, and 8% renewables). Commenters said note that PSCW expects this amount of additional renewable generation to be added in 2014 irrespective of this rule.

Commenters stated Scenario 4: Commenters said 12 m onth baseline from July 2013 to June 2014. Commenters stated for this scenario, the actual generation was analyzed for the 12 months after Kewaunee closed (July 2013

- June 2014) based on data reported to the EPA's CAMD and determined the estimated net2 MWh of coal, NGCC and oil/gas boilers based on this data. Commenters said this data should reflect actual in

- state emissions without Kewaunee. Total estimated net fossil generation is very similar to the 2012 baseline + 2012 Kewaunee generation.

Commenters st ated the results of these corrections cluster into two sets based on whether renewables are allowed to compensate for some of the lost generation. Commenters said the first set includes the first two scenarios, in which all of the generation is assumed to be replaced by fossil sources. Commenters stated the goals for these two scenarios are identical after applying building blocks 1 and 2 because the total amount of fossil generation remains the same as does the amount of NGCC capacity, so the emissions fro m coal and NGCC are the same after expanding NGCC operation to 70% of capacity. Commenters said the second set includes replacement by fossil and renewables and the actual 12

- month generation (2013

- 14

- in which renewable energy was in the system; scenario 4). Commenters stated these scenarios end up with identical goals, likely because both analyses rely on data from 2013. Commenters stated all of these scenarios give similar adjusted overall goals, with final goals of 1271

- 1277 lbs CO2/MWh

net. Commenters said all of these goals are less stringent in comparison with the proposed goal of 1203 lbs CO2/MWh

- net. Commenters stated these adjusted goals more accurately reflect the current status of Wisconsin's power sector, and the EPA must adjust the state's goa l in a similar manner to reflect the significant impact of the retirement of the Kewaunee Nuclear Plant.

Commenters stated if the EPA uses a multi

- year baseline as we recommend in our general comments, the EPA should make the Kewaunee adjustment based on a s many years of data as they can. Commenters said the EPA is unlikely to have three years of post

- retirement data available but should use data from as long a time period as is available at that point.

Comment 323 : WI

- The EGEAS runs demonstrate the nece ssity of staging rule requirements and allowing states to determine the appropriate schedule for interim requirements

.354 Response 323 : See section I.A. of the final rule preamble of the CPP for the EPA’s response to this comment and the CO2 Emission Performa nce Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

EPA’s interim performance rates and goals do not begin until 2022 in this final CPP Rule. Moreover, there are no new NGCC builds assumed in their estimation. EPA believes
stat es/EGUs have a variety of compliance options available to them to meet the emission guidelines without building new generation.

The following are summaries of the specific public comments under this comment:

Commenters stated the modeling runs indicate th at at least 1,800 to 2,400 megawatts (MW) of new NGCC capacity will have to be built by 2020 in order to meet the interim goals as currently proposed by the EPA. Commenters said this is a substantial undertaking that will have to go through environmental p ermitting processes and approval by PSCW. Commenters stated it is questionable whether the amount of new NGCC capacity can be permitted and built by 2020. Commenters stated it is estimated that such work would require five to seven years from start of the process to bringing the units online. Commenters said if a state rule is not approved until 2019, the new NGCC units would not be available until 2024 to 2026 at the earliest. Commenters stated this modeling performed by the PSCW shows the importance of al lowing states to determine the appropriate schedule for reducing carbon emissions.

Commenters stated PSCW conducted several EGEAS modeling runs, including a reference case run, to evaluate EPA's proposal under various conditions and assumptions; in all of the runs, the model was allowed to optimize electric generating units (EGU) dispatch in meeting the same electricity load. The commenters said the electricity load was projected by applying the MISO growth rate of 0.8% per year based on 2012 Wisconsin elec tricity sales plus transmission losses; in

- state and out

- of

- state EGUs dedicated for Wisconsin plus additional market purchases were dispatched in an optimized manner. The commenters said EGEAS estimates 13 percent of Wisconsin's electricity to be generate d from out

- of

- state capacity in 2014, plus a smaller percentage of out

- of

- state energy purchases. The commenters said the in

- state EGUs available for operation under the EGEAS model do not include the Kewaunee nuclear plant that was shutdown in 2013.

Comm enters stated in all of the runs, the model was allowed to pick from various new options in meeting CO2 requirements and load demand, including additional energy efficiency measures, renewable energy generation, natural gas combined cycle, and combustion t urbines.

Commenters stated assumptions were also made so that the building blocks presented by the proposal could be applied realistically to Wisconsin's fleet; for building block 1, a 6% heat rate improvement is not feasible for Wisconsin's coal

- fired fl eet; the maximum HRI potential may range from 0.5% to 2.3% of the gross heat rate. The commenters said PSCW's EGEAS model runs assumed an ambitious 3% heat rate improvement for units that were not built after 2005, supercritical units, or retiring during t he compliance period; because the results tended to show coal

- fired generation running at less than full capacity, which often negates HRI investments, no additional improvements were included for any of the limit runs.355 Commenters stated due to the ambigu ity of the proposed rule, multiple assumptions were made to determine the final mass

- based goal for Wisconsin; for example, the emission rate formula, as stated in the draft rule, uses "in

- state, non

- hydro renewable resources" in setting the baseline

renew able generation in the denominator of the formula. The commenters said this may be correct if Wisconsin was an island that did not import or export electricity; however, Wisconsin is an importing state connected to the rest of MISO, and relies heavily on o ut

- of

- state renewable resources to meet the renewable portfolio standard (RPS). The commenters said while this renewable generation might not be in Wisconsin's emission rate baseline, this generation would most likely be in Minnesota's and Iowa's baseline. The commenters said if the current rule counts these out

- of

- state renewable resources for the states in which they are located, this will change these respective states' baselines and this will make their goals more stringent.

Commenters stated another a ssumption made for the purpose of modeling was to increase the

mass

- based goal proportional to the amount of non

- renewable energy imported from other states. The commenters said the treatment of out

- of

- state resources dedicated to Wisconsin is not clearly addressed in the Clean Power Plan as proposed; for example, Minnesota may be responsible for reducing carbon emissions attributable to the non

- renewable energy it exports to Wisconsin. The commenters said as a result, there will be extra costs associated w ith compliance in exporting states; as it is unlikely that ratepayers in exporting states will cover the costs associated with generation allocated for supplying out

- of

- state load, these costs will be passed on to Wisconsin ratepayers in some form, either through increased rates for imported electricity or through construction of new generation in Wisconsin to meet the load currently being met with imports. The commenters said it is necessary to take into account out

- of

- state resources in determining an act ual cost of compliance to Wisconsin ratepayers.

Comment 324 : WI

- Renewable Energy

Response 324 : See section V.E. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 3 and the CO2 Emissi on Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenters stated the EPA sets a goal for Wisconsin to produce 7,476 MWh of renewable electricity by 2030, or 12% of the state's 2012 demand. Commenters said the results of IPM modeling forecast that Wisconsin will need to generate 3,977MWh from wind, 1,212 MWh from biomass, and 2,287 MWh from hydro to meet the 2030 carbon reduction goal. Commenters stated under the 30% RPS scenario, Wisconsin would generate 11.5 million MWh from wind, 2.1 million MWh from solar, 4.9 million MWh from biomass and 6.8 million MWh from biogas. Commenters said coal falls from 51% to 24% of the state's total gen erating mix (15.2 million MWh), while natural gas holds steady at 22% (13.8 million MWh).

Commenters asked is it possible for Wisconsin to expand renewable generation to 11% of total generation, what are the associated costs.356 Comment 325 : WI

- Credit fo r Early Actions of WPS to Reduce CO2 Emissions

Response 325 : See sections VI

, VIII.B. and VIII.C. of the final rule preamble of the CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:

Commenters stated the EPA should recognize and provide credit for early actions that reduce CO2 emissions. Commenters said not providing credit for investments and actions that reduced emissions would penalize electric utilities and their customers. Comme nters stated t he i r organization has made significant investments in renewable generation and energy efficiency
programs. Commenters said also, t he i r organization will be retiring Pulliam Units 5&6 and Weston Unit 1 by June 2015 and as a result, should be g iven credit for the avoided CO2 emission from June 2015 until the start of the CO2 compliance period. Commenters stated the avoided CO2 emissions could be estimated from the 2005 actual CO2 emissions for those units.

Comment 326 : WY

- Oppose goals

Respons e 326 : For the EPA’s response to this comment, see the CO2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP. EPA has also provided state mass goals as a compliance flexibility in this final rule. Usinga mass based metric may better capture some of the reduction actions discussed in the WY PSC analysis. Moreover, EPA does allow for the use of out of state NGCC credits and Renewable credits in its final CPP which can further facilitate compliance if the state c hooses to use a rate based compliance approach.

The following are summaries of the specific public comments under this comment:

Commenters prepared a comparison calculation between the EPA's proposed goal and what they felt would be the outer limit of the practical for Wyoming. Commenters present ed the calculation in a step

- by

- step manner, making changes to the calculation based on their comments. Commenter s ’ calculations indicated that if three coal

- fired generating facilities are retired prematurely (Da ve Johnston, Naughton, and Jim Bridger), it may be enough to meet 2020 goal, but even if an additional facility is retired prematurely (Wyodak), they would still be short of the 2029 target. Commenters indicated that by the time they got to the 2020 closu res, there would be serious threats to regional reliability and a financial catastrophe for ratepayers. The stranded investments would include not only those associated with the facilities but also regional haze compliance related upgrades currently being made to the Jim Bridger facility. Commenters requested that the EPA adjust Wyoming's goal to a rate that poses a fair and reasonable challenge to comply.

Specific changes to calculations are not detailed here , but c ommenters made the following general com ments concerning the EPA's goal calculation:

The misuse of gross renewables generation is a central problem in the EPA's proposed goal, one which renders meaningless any general appeal to flexibility357 The Block 1 goal cannot be sustained because the other B locks work against heat rate by reducing plant capacity

The EPA goal poses an enormous risk for the State: no solution may emerge, particularly between now and 2020, to close the enormous gap between the goal and the practical reality.

Their analyses elimi nated plants in order of scheduled full depreciation dates, because this would minimize stranded investment, although they realize this is not necessarily how state would proceed.

It is not clear what incentive a state will have to assume responsibility fo r the Section 111(d) program if the only foreseeable result is catastrophe

- besides risk that if state does not assume responsibility the EPA will claim broad enforcement powers under the guise of state law pertinent to the state plan

Commenters stated th e Proposed Rule sets a CO2 emission rate for Wyoming based on the EPA's determination of what constitutes a "Best System of Emissions Reduction" ("BSER") for all existing power plants on a state

- wide basis. Commenters said the Proposed Rule rejects the
pos sibility of a "less stringent standard" or final compliance time. Commenters stated instead, the Proposed Rule requires that any Wyoming CAA Section 111 (d) Plan must show "achievement of emission performance equivalent to the goals established by the EPA , on a timeline equivalent to that in the Proposed Rule." Commenters said under the Proposed Rule, Wyoming would be required to reduce the CO2 emissions rate of its electric generating fleet by 19 percent. Commenters stated what this means is the Propose d Rule, if approved, will force Wyoming to 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 turn, deliver that electricity to consumers within Wyoming.

Commenters stated the Agency's renewable energy targets (based on inaccurate analysis) are unachievable b y Wyoming. Commenters said the EPA, in developing a target, incorporated all of the renewable energy generated in Wyoming when only 15% of this renewable energy is consumed in

- state. Commenters stated this simplistic approach and the EPA's required growth rate would require Wyoming to increase its consumption of wind energy from 666,212 megawatt hours of wind energy in 2012 to 9,427,996 megawatt hours by 2030. Commenters said this represents a 1,415% increase in intrastate consumption of wind energy (equati ng to a 52% RPS). Commenters stated Wyoming will not have the demand to meet this excessive supply of electricity nor the infrastructure to support it.

Commenters stated the Agency is frontloading emission reductions; Wyoming's carbon emission rate in 201 2 was 2,115 lbs/MWh. The commenters said in 2020, the first year of compliance, the EPA expects Wyoming to reduce emissions to 1,899 lbs/MWh

- representing 10% of the required 19% reduction in year one; this requirement is not present for many other states. The
commenters said the EPA claims to have given broad authority to states to determine the most reasonable compliance path, but the stringent and rushed deadlines leave few options.358 Commenter s were concerned about the calculations that resulted in Wyomin g's emission goal. The commenters said the Wyoming Public Service Commission (PSC) has provided an in

- depth analysis of the outright errors and unreasonable assumptions that undergird EPA's calculation of Wyoming's proposed state goal. The commenters said EPA proposes state goals based on a state

specific analysis of available efficiency gains from each of the four building blocks; Wyoming's state goal as proposed by EPA is based upon clear errors and irrational assumptions; as a result, EPA's proposed acti on is arbitrary and capricious.

Comment 327 : WY

- Support for goals

Response 32 7 : The EPA appreciates the support for the goals, please see the CO2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule for the final goals.

The following ar e summaries of the specific public comments under this comment:

Commenters stated the goal for CO2 pollution from Wyoming EGU would be a reduction in the 2012 emission rate of 2,115 pounds of CO2 per megawatt of electricity generated to a level of 1,714 lb /MWh by 2030; this represents about a 19 percent reduction in CO2 emissions from Wyoming EGU; the overall goal of EPA's goals nationwide is a 30 percent reduction in CO2 emissions by 2030 compared to 2005 emissions levels. The commenters said given that Wy oming has the third highest current CO2 emissions rate of any state from its coal

- fired power plants, this represents a reasonable and needed goal.

Comment 328 : WY

- The EPA's heat rate improvements are not representative for Wyoming

sources

. Response 328 : See section V.C. of the final rule preamble of the CPP for the EPA’s response to this comment and more information about Building Block 1. The EPA uses a 2.1% heat rate improvement assumption for Western EGUs in this final rule.

The following are sum maries of the specific public comments under this comment:

Commenters stated t he goal for heat rate improvement (HRI) in the Proposed Rule is too high. Commenters said a HRI of 2% is a more realistic challenge for Wyoming's EGUs. Commenters said the EPA's position that the coal fleet average net heat rate can be reduced by 6% under BSER Building Block 1 is based on a hypothetical scenario and not based on real

- world data and examples. Commenters stated the EPA relied upon apparent HRI for EGUs in Wyoming t hat were in error. [ Heat Rate Improvements Rev 091514 ]

. Commenters said the first example where erroneous data resulted in incorrect HRI is data reported for Dave Johnston Unit 4. Commenters stated new pollution control equipment was installed on Unit 4 in 2012 that required relocation of the flue gas flow monitoring equipment. Commenters said heat rate data collected after the monitoring equipment was relocated and calibrated showed an apparent 21% HRI for 2012. Commenters stated his organization reviewed subsequent submittals and determined that heat rate data, prior to the relocation of the monitoring equipment, was in error and grossly359 overstated. Commenters said his organization's evaluation found that the HRI was only about 1%. Commenters stated second , at Jim Bridger Unit 3, a reported 11% HRI was found to be in error because the difference in heat rates was later attributed to are

- calibration of a flow monitor. Commenters said his organization's review confirmed there was no HRI for Unit 3.

Commenters stated according to the utility industry, based on historical data and real

- world experience, potential HRI resulting from an EGU overhaul could restore a range of less than 1% to a maximum of 2.8% of a unit's net heat rate that has degraded since the las t overhaul. Commenters said the EPA's expectation of a sustainable fleet

- wide improvement of 6% therefore, is unrealistic and not consistent with real world application.

Commenters stated turbine upgrades provide the best opportunity for significant HRI. S ee the EPA's GHG Abatement Measures Document and PSC Letter. Commenters said Wyoming's fleet of existing EGUs has largely accomplished turbine upgrades, making further HRI upgrades difficult to achieve. Commenters stated his organization issued authorizati ons starting in 2007 to PacifiCorp Energy and Basin Electric Power Cooperative for turbine upgrades at their Jim Bridger and Laramie River Station facilities, respectively. Commenters said the majority of the upgrades have been completed over the last five years. Commenters stated because turbine replacement is typically done on a 30 year cycle, it is unreasonable to expect that either Jim Bridger or Laramie River Station could economically introduce and sustain a further 6% reduction in CO2 emissions by 20 19. Commenters stated if the EPA chooses to move forward with the rule and the establishment of state emissions goals, Wyoming must be given flexibility to establish achievable HRI goals that are based on unit

- specific performance, and the flexibility
to c hoose a baseline period most representative of the unit's operation.

Comment 329 : WY

- Data Corrections

Response 329 : For the EPA’s response to this comment, see the CO2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP. Also see section VI of the preamble discussing EPA uses of 2012 data to inform its baseline.

The following are summaries of the specific public comments under this comment:

Commenters stated the proposed rule incorrectly specifies Cheyenne Pr airie Generating Station's (CPGS) combined cycle capacity as 220 MW name plate. The commenters said the actual name plate capacity of the CPGS combined cycle units is 100 MW. The commenters said EPA used this combined cycle capacity in the goal setting spr eadsheet "20140602tsd

- state

- goal

- data

computation_1.xlsx". The commenters said the error lies in column "K" of the WYOMING row: "Under Construction NGCC Capacity (MW)." The commenters said the EPA dataset is correct

on a source

- by

- source basis; thus, no ch anges are required in that instance. The commenters said modification of this spreadsheet value yields new interim year goals and a final 2030 state goal of 1,727 lbs. CO2/MWh (in lieu of 1,714 lbs. CO2/MWh).

Commenters stated 2012 Data Year is not a norma l operating year for Neil Simpson II (NS2), Wygen I (WYG1) and Wygen II (WYG2). Wygen III (WYG 3) is included for an unaffected source reference; see details on each source below:360 a. Neil Simpson II

- based upon routine operations over the past 4 years, 2 012 represented an unusually low capacity factor for the facility; a more representative year is 2013, which is neither the highest nor the lowest year, but a good representation at 94% capacity as opposed to 81% capacity in 2012.

b. WYGEN 1

- based upon routine operations over the past 4 years, 2012 represented an unusually low capacity factor for the facility; a more representative year is 2013, which is neither the highest nor the lowest year, but a good representation at 92% capacity as opposed to 89% capacity in 2012.

c. WYGEN 2

- based upon routine operations over the past 4 years, 2012 represented an unusually low capacity factor for the facility; a more representative year is 2013, not the highest or the lowest year, but a good representation at 83 % capacity as opposed to 71% capacity in 2012.

Commenters requested that the agency change the data in its final rule to accurately reflect Black Hills' newer generation fleet. The commenters said the changes call for changes in the EPA rule that alter 20 12 Data year and also alter the state's 2020 interim goal and 2030 final goal. The
commenters said these goals will be modified, but as other numbers may also change, the
commenters will not suggest to the EPA what the state's goals should be in the final rule.

Comment 330 : WY

- The EPA must commit to a consistent timeframe for the baseline and compliance in this proposal

Response 330 : See section V I . of the final rule preamble of the CPP for the EPA’s response to this comment.

The following are summarie s of the specific public comments under this comment:

Commenter s stated the EPA proposed a compliance period of a rolling three year average while using a single year, 2012, to determine the baseline for this Proposed Rule. Commenters said if the EPA is go ing to base compliance on a three

- year rolling average, then the baseline for this Proposed Rule must also be based on a three

- year average to ensure consistency for the proposed emission reductions. Commenters stated the EPA must commit to a consistent ti meframe for the baseline and compliance in this proposal.

Commenters stated if the EPA chooses to use a three

- year average for the baseline emission limit in this proposal, careful consideration should be given to the data used. Commenters said his organi zation found discrepancies with regard to several EGUs. Commenters stated the supplemental CO2 emissions data from 2010 and 2011 provided by the EPA in October, 2014 indicated that CO2 emissions from the three coal

- fired EGUs at the Laramie River Station w ere equal, which differs from the data available in the EPA Air Markets Program. http://ampd.epa.gov/ampd (October 31, 2014). Commenters said furthermore, WDEQ notes that the hours of operation for the three EGU uni ts range from 6,877 to 8,422 in 2010 and 7,135 to 8,385 in 2011 making equivalent CO2 emissions from these three units statistically impossible.361 Commenters stated additionally, his organization notes discrepancies between the supplemental EPA technical da ta and the EPA Air Markets Program for CO2 emissions in 2011 for the Wygen I and the Wygen II facilities.

Commenters stated the scope of this proposed rule is unprecedented and requires the utmost diligence in insuring the information used is accurate. Co mmenters said if the EPA does not use reliable data, then it is acting in an arbitrary and capricious manner. Commenters stated his organization urges the EPA to perform a thorough quality assurance review of any data that it relies upon.

Comment 3 31 : WY

– BB3

Response 3 31: The EPA has revised its block three quantification based on comment s and our further consideration . See section V.A. and V.E of the final rule preamble for more information about building block three.

The following are summaries of the specific public comments under this comment:

Commenters stated that, the agency did not adequately demonstrate non

- air environmental impacts and energy requirements of Building Block 3. Commenters said, Wyoming will have significant and unique non

- air envi ronmental impacts. Commenters said, that the rule is a direct violation with the CAA.

Commenters stated that, Building Block 3 which replaces carbon intense electrical generation with zero carbon generation does not consider Wyoming's unique circumstances. Commenters said that Wyoming produces 4,369,107 MWH of wind energy per year and 85% of which is exported to South Dakota, California, Utah, Oregon, Washington, and Idaho. Commenters said that if required by the rule, these states will come to Wyoming to p urchase more wind energy and Wyoming will also need additional wind energy to meet the regulation. Commenters said, the effect of Building Block 3 will be additional wind energy projects.

Commenters stated that, Wyoming's greatest challenge to siting the w ind farm is the affects it has on the habitat of the Greater Sage

- Grouse (Centrocercus urophasianus). Commenters said that the increase level of wind energy expected would negatively impact the Greater Sage

Grouse's core habitat. Commenters said that EPA h ad failed to look at the impact of other species such as the bald eagles and bats. Commenters said that EPA failed to look at the non

- air impacts of the proposed rule.

Comment 332 : Building Blocks 3 and 4 should be used for compliance purposes only, not state goal setting.

Response 332 : The EPA has revised its block three quantification based on comment s and our further consideration . See section V.A. and V.E of the final rule preamble for more information about building block three. The EPA has determi ned that demand

- side EE programs (proposed362 building block 4) are not a component of the final BSER. See section V.A.3 of the preamble for discussion of this issue.

The following are summaries of the specific public comments under this comment:

Commenters stated the Proposed Rule claims that states should be able to dramatically increase their use of renewable resources by the adoption of "best practices," meaning every state should adopt renewable portfolio standards ("RPS") and most of those who have alre ady done so should adopt more aggressive standards. Commenters said the amount of renewable power EPA thinks can be brought on line within the compliance timeframes of the rule is not based on accurate assumptions and, as a result, is not reasonable or fea sible. Commenters added Building Block 3 reveals EPA's fundamental misunderstanding of state RPS programs (which the State of Wyoming has not adopted) and confuses EPA's role as an environmental rather than an energy regulator. Commenters agreed with the C ommission's conclusion with respect to EPA's specific determination of Building Block 3 in Wyoming, that "EPA started its Wyoming calculation with the wrong number, applied an unrealistic growth factor and reached a wrong conclusion." Commenters said in ca lculating Wyoming's proposed compliance rate, EPA included all wind generation in the state, despite the fact that several wind facilities export power out of state. Commenters said renewable energy exported out of Wyoming should not be included in setting Wyoming's requirement. Commenters estimated that the effect of this error improperly increases the stringency of the Wyoming goal by 10%.

Commenters stated EPA proposed two ways to calculate a generation shift resulting from the application of Building Bl ocks 3 and 4, either by replacing all historical fossil generation on a pro rata basis or by replacing historical fossil generation on a prioritized basis. Commenters said EPA requests comment on which approach better reflects the BSER, and commenters answ ered that neither approach reflects the BSER and EPA should not adopt either one. Commenters said BSER is a system of emissions reduction

- it is not a system of generating

- source elimination, nor is it a system of maximum emissions reductions. Commenters said the approach EPA used in the June 2014 proposal is appropriate and should not be changed in the final rule. Commenters said EPA explains that the change in methodology proposed in the NODA may be warranted in order to ensure consistency in application among the various building blocks; however, such an understanding assumes that incremental renewable generation and incremental generation avoided through energy efficiency are equivalent to fossil generation. Commenters said in reality, incremental renew able energy and energy efficiency cannot meet baseload requirements due to the variable nature of these resources. Commenters said the best system of emission reduction is most appropriately based on a system that augments

- not replaces

- historical fossi l generation. Commenters said this allows states to achieve meaningful emissions reductions by prioritizing operation of less carbon

- intensive resources while using baseload fossil generation to backstop functionality and reliability of the national electr ic system.

Commenters stated EPA needs to update the 2 CPP approaches for calculating renewable energy deployment targets or goals for BB3 in order to analyze and select the BSER.

Comment 333 : New England

- general363 Response 333 : For the EPA’s response t o this comment, see the CO2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Commenter s asserted that it is not well appreciated that New England's mix of power generation resources have resulted in a generation fleet with one of the lowest carbon emission intensities of any region in the country. The commenters said with very little coal and significant nuclear, hydro

- electric and natural gas generation, the regions generation portfolio emits 828lbs/MWh of carbon dioxide, more than 30% below the national average of 1,230 lbs/MWh.

Commenters said in New England the largest sources of greenhouse gas emissions are the transportation sector (44.5%) and emissions from space heating (29.6%); power generation is only the third source of emissions (21.2%) in New England; thus the significant focus should be placed on those sectors while continuing to drive for a cleaner power generation fo otprint.

Commenters said New England has made significant improvements in lowering its carbon emissions footprint; since 2001, New England has reduced emissions by 17%, driven primarily by a 30% reduction in emissions from the power generation sector. The commenters said EPA should acknowledge, recognize and credit these efforts in the final rule.

Comment 334 : TX, AR, LA

- complex practical issues

- three RTOs, potentially three state plans

Response 334 : See section VIII of the final rule preamble of the CPP for the EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:

Complying with multiple SIPs

. Commenters said the proposed rule raises many complex practical issues, including potentially having to comply with multiple state implementation plans and the complexities of operating in multiple RTOs. The commenters expressed concern about the many complex practical issues that are raised by the proposed rule, and the ETCs urge EPA to consider these p ractical issues and strive to give clear guidance to states and stakeholders when drafting the final rule. The commenters said first and foremost, because the ETCs own plants in Texas, Arkansas, and Louisiana, we are concerned about having to comply with
p otentially three separate state implementation plans. The commenters said in addition to added compliance costs in dealing with three states, there are many unanswered questions such as:

How will out

- of

- state minority owners of a particular coal plant be t reated under that state's SIP

ETEC has a 50MW minority interest in the Turk coal plant in Arkansas, yet ETEC imports and consumes that power in Texas

- how will Arkansas's SIP treat ETEC's minority ownership in Turk and will ETEC be unfairly treated by Ark ansas
The same concern would hold true for the ETC's plants in Louisiana.364 How will hydropower imported from the Southwestern Power Administration's system be treated by Texas

Which agency (PUCT, TCEQ, or perhaps some new agency) in Texas will be respons ible for enforcing the Texas SIP and how can state laws be crafted to ensure equitable enforcement

Operating in multiple RTOs

. Commenters said another unique concern facing the ETCs is that they currently operate in three RTOs

- SPP, MISO, and ERCOT. The c ommenters said the footprint of these three RTOs spans more than 21 states, with each state having different generating portfolios, different emission targets, and potentially different individual SIPs or some combination of individual SIPs within regional plans. The commenters said since the RTO model is currently based on the lowest

- cost electricity, how is that reconciled with RTOs suddenly considering the environmental impacts of generating units

. The commenters said having said that, a RTO solution/app roach appears to be better than a state

- by

- state approach given the market structures associated with the RTOs, particularly for entities such as the East Texas G&Ts that own power plants in multiple states and are participants in multiple RTOs.

Comment 3 35 : Raise the targets for TX, AR, and LA by 300 lb/MWh (or one

- half in each state), or alternatively, replace Building Block #2 with end

- of

- useful

- life requirement

Response 335 : For the EPA’s response to this comment, see the CO2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP.

The following are summaries of the specific public comments under this comment:

Raise state targets in TX, AR, and LA

. Commenters said in addition to removing the interim goals and dela ying compliance by five years, the East Texas Cooperatives ask that EPA consider increasing emissions targets for Texas, Arkansas and Louisiana by 300 lbs/MWh (or one

- half in each state). The commenters said currently, the three states in which the ETCs ow n generation have above average reduction requirements of approximately 600 lbs/MWh. The commenters said these targets create a higher burden for the Cooperatives and the other utilities in these states, and the severe negative economic impacts would be re duced if the targets were raised. The commenters said the concept is that reductions for 2020 and each year beyond that through 2029 would be reduced by 50%. The commenters said for example in Texas the 2020 reduction would be 1,107lbs/MWh instead of 930 l bs/MWh, as compared to the 2012 base case rate of 1,284lbs/MWh.

Commenters said increasing the emissions target by 300 lbs/MWh in Texas, Arkansas and Louisiana will positively impact the East Texas G&Ts by reducing the requirements by roughly half (e.g., t wo instead of four coal plants retired, replacement capacity reduced by half, impact on gas and transmission externalities by half

- resulting in $1.3 billion decrease from the $2.9 billion impact).

Replace BB2 with end

- of

- useful

- life requirement

. Commente rs said alternatively, because many projected closures are at plants that have many years left on their useful life, EPA could consider eliminating building block #2

- re

- dispatch

- and instead just allow those plants to live out their365 useful lives before being retired. The commenters said this approach would involve replacing re

dispatch with the assumption that the retirement of the units at the end of their lives achieves this portion of the requirement, thus reducing the annual carbon emission targets f rom 2020 to 2029. The commenters said the remaining three building blocks would remain in effect. The
commenters said three of the four east Texas G&Ts' coal projects that are projected to be retired were built in the 1980s and as such have useful lives be yond 2030, and the fourth plant projected to be retired went into service in 2010. The commenters said allowing these plants to live out their useful lives before being retired would greatly reduce the negative financial impact on the cooperatives.

Comment ers said essentially what this proposal would do to the G&Ts is require them to reduce the output from coal units unless they can otherwise achieve the efficiency target in building block #1, as well as pursue renewables and energy efficiency measures at t he rates assumed by EPA for the other two building blocks, which as previously stated, are aggressive. The
commenters said eliminating building block #2, and allowing the coal projects to operate until the end of their useful lives would help the East Texa s G&Ts by reducing the impacts by roughly half (e.g., two instead of four coal plants retired, replacement capacity reduced by half, impact on gas and transmission externalities by half

- resulting in $1 .3 billion decrease from the $2.9 billion impact). T he commenters said the results of this mitigation case are very similar to the 300 lbs/MWh reduction case for the East Texas G&Ts.

Comment 336 : RGGI States

Response 336 : See section VIII of the final rule preamble of the CPP for the EPA’s response to this comment.
The following are summaries of the specific public comments under this comment:

Commenters request ed that EPA add several provisions to the final version of the rule to facilitate the use of RGGI as a CPP compliance mechanism. The commenters sai d because RGGI requires specific CO2 emissions reductions and EPA's CPP proposes emissions rate reductions (although states are permitted to convert to a mass

- based target), EPA should ensure that it appropriately translates its emissions rate targets into mass

- based targets for the RGGI states. The commenters said EPA's emissions reduction targets should be updated periodically in states that utilize the mass

- based approach to take into account changes in electric system operations.

Commenters stated EPA s hould specifically state in the final rule that RGGI is an appropriate CPP compliance mechanism and also should recognize the emissions reductions already achieved by the northeastern states pursuant to RGGI in assessing whether a state or regional plan me ets the CPP's requirements.

Comment 337 : GA, SC, TN

- Inclusion of under

- construction nuclear generation dramatically increases the stringency of goals in only three states: GA, SC, and TN; significant compliance risk results

.366 Response 337 : See section V of the final rule preamble of the CPP . Under construction nuclear is not part of BSER quantification in this final rule

The following are summaries of the specific public comments under this comment:

Commenters stated that the inclusion of under

- construct ion nuclear generation dramatically increases the stringency of GA, SC, and TN goals and presents unique compliance risks of the under

- construction units (the loss of a single unit's generating capacity would be so significant).

Commenters stated that the EPA's proposal to include expected generation from new, under

construction nuclear facilities in setting state goals affects only three states' goals: Georgia, South Carolina, and Tennessee. Commenters said that whereas the other aspects of EPA's proposed BSER "building blocks" increase the stringency of nearly every state, EPA's proposal for under

- construction nuclear singles out and penalizes the three states that have done the most in recent years to replace their emitting fossil generators with new, zer o

- emission generation. Commenters indicated that due to the large size of the five under

- construction generators that EPA singles out for this unfair treatment, Georgia, South Carolina, and Tennessee's goals are 14%, 22%, and 14% more stringent, respective ly, than these goals would be without including under

- construction nuclear.

Commenters indicated that the EPA's incorporation of 90% of the expected generation from the five under

- construction reactors in state goals creates compliance risks for Georgia, South Carolina, and Tennessee that are unlike those faced by any other state. The commenters said that in Georgia's case, under

- construction nuclear generation accounts for 31% of the emission reductions EPA expects Georgia to achieve, relative to the 2012 baseline. Commenters indicated that this impact would be even greater if the EPA adopts the proposed changes to the goal

computation methodology that are discussed in the October 30 Notice of Data Availability. Commenters said that the required reduction from under

- construction nuclear is the single largest component of Georgia's required reductions, and is greater than the reductions the EPA projects from RE, EE, and at

- risk nuclear generation combined. Commenters added that because Georgia is already exp ected to increase the capacity factor of its natural gas combined cycle (NGCC) units to 70% under the Proposed Rule, if the under

- construction nuclear facilities fail to come

on

- line, or are later shut down due to safety or other unforeseen reasons, Georgi a would have to more than double the already ambitious levels of RE and EE that EPA expects the State to develop in the coming years just to meet the State CO2 emission goal. Commenters said therefore, if the EPA's assumptions about the level of generation that the two under

- construction nuclear facilities in Georgia will produce by 2020 are incorrect, Georgia will likely be unable to meet its emission goal.

Commenters stated that the size of the five under

- construction nuclear facilities, as well as their high expected capacity factor, thus present compliance risks for Georgia, South Carolina, and Tennessee that are unlike those faced by any other state. Commenters stated that the other building blocks on which state goals are based generally involve relati vely small changes in generation and emission, and the loss of these compliance options could theoretically be made up for through increases in other compliance measures. Commenters said that by contrast, the loss of even one of the 1,117 MW under

- construc tion Vogtle reactors in Georgia would lead to a compliance gap of nearly 9,000,000 MWh in a single year. Commenters indicated that to make367 up for such a gap, Georgia would have to obtain an amount of new, carbon

- free electricity equivalent to the annual el ectrical output of more than 11 large wind farms

- putting aside that wind, unlike nuclear energy, is not a viable baseload power source in Georgia.

Commenters stated that the magnitude of this compliance risk from a single facility dwarfs that faced by oth er states. Commenters noted that states that fail to complete construction of a single proposed wind farm or fail to increase the capacity factor of one of the NGCC units in the state to the levels anticipated by EPA will also face a compliance deficit, bu t the relatively small size of this deficit means that it can relatively easily be made up. Commenters said that for Georgia, by contrast, the loss of a single under

- construction reactor will all but guarantee that the State will fail to meet its goal. Com menters stated that this aspect of EPA's proposal therefore puts Georgia and the other two states with under

- construction nuclear facilities, more than any others, on a dangerous high

- wire for compliance.

Commenters indicated that even without including un der

- construction nuclear in the goal calculation process, Georgia's final emission target would still be extremely stringent. Commenters said that in particular, if under

- construction nuclear generation were excluded from the goal calculation, Georgia woul d be expected to reduce its fossil emission rate from 1,598 lbs. CO2/MWh in 2012 to 970 lbs. CO2/MWh by 2030

- a decrease of 39 percent. Commenters said that in other words, EPA's incorporation of under

- construction nuclear generation

- apart from being unfa ir and illegal

- is not necessary to ensure that Georgia is incentivized to further reduce emissions from existing EGUs. Commenters added that conversely, excluding the five under

construction units from state goals would have almost no impact on the Propos ed Rule's contribution to nationwide emission reductions. Commenters said that the five under

construction units account for only 1.4% of the 2030 generation total that is included in the EPA's goal computations. Commenters stated that were the EPA to trea t the five under

construction reactors like new units (i.e., excluding them from the goal calculation, but allowing states to count MWh from these units toward compliance if the units are actually built), the national average emission rate would increase b y only 1.2% compared to the rate as currently proposed. Commenters noted that consequently, despite exposing the three under

- construction nuclear states and their citizens to an insurmountably high compliance penalty if even a single reactor is delayed or later decommissioned, the inclusion of these five units in state goals has almost no impact on the stringency of the Proposed Rule. Commenters concluded that in light of the unfairness of singling out these three states, and the massive risk to which this aspect of the Proposed Rule exposes Georgia, the EPA should abandon its proposal to include generation from under

- construction nuclear facilities in calculating state goals.

Comment 338 : WA & OR

- By establishing 2012 as the baseline year from which carbo n reductions must be achieved, the EPA has assumed artificially low emissions rates for both Washington and Oregon

. Response 338 : See section VI of the final rule preamble of the CPP for a discussion of baseline adjustments made to account for outlier hydr o generation levels in in 2012.

The following are summaries of the specific public comments under this comment:368 Commenters stated b y establishing 2012 as the baseline year from which carbon reductions must be achieved, the EPA has assumed artificially low emissions rates for both Washington and Oregon. Commenters said Northwest hydro output was at 128% of normal in 2012. Commenters stated the result was carbon emissions in Oregon and Washington that were 1.6 million and 5.5 million metric tons lower than th e average of the last ten years, respectively. Commenters stated this means that both coal

- and gas

- fired plants ran at capacity factors significantly below the historical average. Commenters said the number of combined MWhs produced by coal and natural ga s in Oregon in 2012 was 14.3 million. Commenters stated this compares to 19.8 million MWhs in 2010 and 19.3 million MWhs in 2009. Commenters said in Washington, 2012 combined coal and natural gas output was 9.2 million MWhs, while it was 18.9 million MWhs in 2010 and 19.4 million MWhs in 2009 (more than double the 2012 output).

Commenters stated despite these massive discrepancies in fossil output (and the corresponding emissions), the EPA is requiring Washington to reduce its carbon emissions by 72 percent from below average 2012 levels, and Oregon by 48 percent. Commenters said when one compares the emission rate reduction goals to prior years with lower hydro output and higher emission rates, it is clear that these percentage reductions are significantly greater when based on these higher carbon years. Commenters stated the consequence is that EPA's goals will likely be unattainable in years with low hydro output when fossil generators will need to run at higher capacity factors, and therefore, do not repr esent the true BSER for these states. Commenters said the EPA should not penalize Oregon and Washington simply because these states rely heavily on a clean, but variable, energy source.

4.12 OTHER

Section 4.12 covers public comments related to other final and interim goals calculation issues.

Commenters have raised a number of issues related to this subsection which are organized by topics (comments) below. Responses are provided for these topics.

Comment 1 : Aggressive CO2 reduction goals may place smalle r utilities at economic disadvantage and may affect reliability

Response 1 : For the EPA’s response to this comment, see the Regulatory Impact Analysis for the Clean Power Plan Final Rule, EPA

- 452/R

- 15

- 003 supporting the final CPP.

The following are summari es of the specific public comments under this comment:

Commenter s indicated that Michigan's 41 municipal utilities, as well as the vast majority of Michigan's 10 electric cooperatives, are not rate

- regulated by the Michigan Public Service Commission (Comm ission). Commenter s said that Commission authority is limited to certain statutory requirements such as compliance with the state's ten percent RPS by 2015 and the state's EE target of a one percent reduction in annual retail electricity sales. Commenter s said that369 it is important to note, however, that these utilities typically lack the size and/or capability of larger investor

- owned utilities (IOU) in both their energy requirements and magnitude of energy generation. Commenters said hence, additional burd ens to meet aggressive carbon dioxide (CO2) reduction targets may place these smaller utilities at an economic disadvantage that in some cases would raise the question of continued reliability in already constrained areas of the state.

Comment 2 : The EPA must resolve implementation issues. The EPA must provide full set of outputs and documentation of IPM analysis

Response 2 : For the EPA’s response to this comment, see section VIII of the final rule preamble for the CPP and the CO2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule supporting the final CPP. The Regulatory Impact Analysis and corresponding power sector modeling and documentation in the docket for this final rule provide for an evaluation of the model. The system

- wide impa cts of a compliance scenario informed by the model are available through year 2054.

The following are summaries of the specific public comments under this comment:

Commenter s said that prior to final promulgation, the EPA should, at a minimum, fully evalu ate the broad scope of implementation issues that must be resolved and the corresponding regulatory agencies and other parties involved. Commenter s also stated that the Integrated Planning Model (IPM) output files provided by the EPA do not allow for a pr oper evaluation of the suite of measures that states and affected sources are projected to utilize under the proposed rule.

Commenter s indicated that the EPA has only provided the IPM "parsed" model output files only for one select model compliance year fo r each of the cases run, which does not allow for a full evaluation of state

- by

- state compliance actions across the full timeline the proposal
encompasses. Commenter s also indicated that the model year provided is not consistent between the cases run. Com menter s said additionally, the outputs for the IPM model run consisting of only building blocks 1 and 2 appears to be based on a single integrated model compliance year which does not allow for proper assessment of the emission caps as utilized by EPA. C ommenter s indicated that full outputs and documentation are critical to the evaluation of the rule, particularly as the state agencies responsible for rule administration do not possess the tools or resources to assess potential electric sector compliance strategies.

Comment 3: The EPA should establish formal process that allows states and other stakeholders to identify technical errors that requires the EPA to respond substantively

Response 3: The EPA appreciates the comments and has revised the goals, E PA received significant feedback through public outreach and subsequent comment submittal to the document. It has made a significant number of updates to its 2012 data and methodology for quantifying BSER based on these comments.

The following are summari es of the specific public comments under this comment:370 Commenter s argue d that EPA should include a mechanism for making technical corrections based on a review of the data and assumptions used in calculating state goals. The commenter s EPA should be cogni zant that errors may occur, and likely have occurred, in the formulation of the CPP. Toward that end, the commenter s were supportive of a formal process that allows states and other stakeholders to identify errors that requires EPA to respond substantively , especially if any error(s) has an impact on compliance costs.

Comment 4: Commenter s stated defined targets by 2020 should be maintained as a requirement of the rule as well as interim targets for 2025 without allowance for averaging.

Response 4: See se ction I.A. of the final rule preamble of the CPP for the EPA’s response to this
comment.

Comment 5 : Commenters stated that they favor EPA recognizing states need to reduce emissions and that there is a need to consider future scenarios.

Response 5 : The E PA’s CO2 performance rates and state goals are based on determining the level of emission performance that reflects application of the BSER. Therefore, the emission guidelines will require the degree of improvement that the agency has determined is achieva ble for states.

The EPA agrees that the calculation of the emissions performance levels that reflect BSER should reflect the potential for reducing generation by affected EGUs through increase in renewable energy generation. The agency disagrees that calcu lations of the emissions performance levels achievable through the BSER should be based on projections of the future state of the electricity system , such as assumptions about future plant retirements

. W e believe that historical data provides a stronger ba sis for this rulemaking. We are applying the BSER, as we have done in calculating other section 111(d) standards, to a defined population of existing affected sources, represented in this case by the generation of the source category in the 2012 adjusted b aseline. This provides an empirical historical baseline against which we define the performance rates and their state goal equivalents. It is essential that we apply the building blocks in a way that avoids creating a level of stringency in the performance standards for affected EGUs that goes beyond what we have determined to be the BSER

– while at the same time ensuring that equations apply the building blocks to generate performance standards that represent the full application of the BSER to the affecte d EGUs. See final CPP preamble sections V

- VII.
The following are summaries of the specific public comments under this comment:
Commenters stated that the targets need to recognize that states can and should do more to reduce carbon emissions. Commenters st ated that the EPA based the reductions on the agency's calculations of what each state could do. Commenters stated that the EPA need to set standards that push states to do more.371 Commenters stated that the EPA's calculations on the states' best system of e mission reductions need to account appropriately for the ongoing changes in state energy sources. Commenters stated that the EPA should ensure, for example, that it fully accounts for the on

- going retirement and reduced demand for coal

- fired power generati on created through growth in renewable energy

sources.