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- **ENVIRONMENTAL PROTECTION AGENCY (EPA): Final Rule**  **Standards of Performance for Greenhouse Gas Emissions from New, Modified, and Reconstructed Stationary Sources: Electric Utility Generating Units**  **RIN 2060**

**- AQ91** 

**General Comments** 1) Reviewer recommends revising the format of the federal register notice to divide sections by what was proposed, what the significant comments were, how EPA is responding to them, and how it affects the final rule. Currently , it is unclear what the comments are on, what EPA’s stance is on the comment, and how, if any , the comment affected the proposed rule. **EPA Response** : The notice preamble has not be restructured; however, the EPA has attempted to provide more information on significant comments and how those comments affecte d EPA’s approach in the final rule. All comments will be responded to in the companion ‘Response

- to

- Comments’ document which will be available in the rulemaking docket. 2) Reviewer recommends providing clarification whether brownfield construction qualifies a s reconstruction if the 50% capital cost threshold is met and it is technologically and economicall y feasible to meet the applicable standards. Could mothballed units be treated differentl y than the affected units identified within the rule? **EPA Response:** The EPA does not discuss specific or general scenarios on what presumptively

would or would not constitute a reconstruction. However, we will add more detail on the procedure for determining applicability as a reconstructed unit. 40 CFR 60.15 specifies that “ If an owner or operator of an existing facility proposes to replace components, and the fixed capital cost of the new components exceeds 50 percent of the fixed capital cost that would be required to construct a comparable entirely new facility , he s hall notify

the Administrator of the proposed replacements. ” The notice must be postmarked 60 day s (or as soon as practicable) before construction of the replacements is commenced and must include specified information. “ The Administrator will determine,
w ithin 30 day s of the receipt of the notice [...] and any additional information [s] he may reasonabl y require, whether the proposed replacement constitutes reconstruction. ” The Administrator's de termination will be based on: (1) The fixed capital cost of the replacements in comparison to the fixed capital cost that would be required to construct a comparable entirel y new facility ; (2) The estimated life of the facility after the replacements compared to the life of a comparable entirely new facility ; (3) The e xtent to which the components being replaced cause or contribute to the emissions from the facility ; and (4) An y economic or technical limitations on compliance with applicable standards of performance which are inherent in the proposed replacements. 3) Revie wer recommends making the statement that natural gas co

- firing provides an alternative compliance pathway for steam turbines be made consistent throughout.

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- Currently the preamble say s “may” be available in some places and is unequivocal elsewhere. **EPA Resp onse:**  Done 4) Commenter notes that there is new cost information for affected units that is in draft format and may be finalized before the completion of this rule. Commenter recommends considering whether this new information should be included in the preamble for the final rule. **EPA Response:** The EPA has incorporated new cost information from both DOE/NETL and from AEO2015

. 5) Commenter notes that combining a continuous emission standard with a tighter “efficiency” standard that must be met once each y ear under specified conditions would seem to provide the appropriate technology

- forcing incentive and be responsive to the effects of utilization on emission rate, ensuring that plants are as low

- emitting as possible and are maintained to retain their efficien cy even if the continuous standard is not binding

. Would this be possible for gas plants? **EPA Response:** The EPA continues to evaluate the merits of a periodic short term performance testing. However, our current thinking is that the advantages listed abov e are outweighed b y the difficulties in selecting an appropriate numerical limit for a short term annual performance test. 6) Reviewer recommends providing additional clarification as to why co - firing natural gas is not considered Best Sy stem of Emission Redu ction (BSER) as it has a lower Levelized Cost of Electricity

(L COE) than partial

- carbon capture and storage/sequestration (CCS) and the effects of determining how providing co

- firing natural gas as an acceptable way for meeting BSER and not BSER itself. **EP A Response:**  EPA agrees and additional clarification on the use of co

- firing as a compliance option and why we do not determine it to be BSER if provided in the revised p reamble. 7) Reviewer recommends clarifying why international and national CCS projects pro vided within the FRN are provided in overall capture levels and not in lb CO 2 /MWh. **EPA Response:** In most instances, the EPA is providing the information in the form that can be references. The performance of most CCS projects are provided in capture levels and not as a resulting emission rate. 8) Reviewer recommends considering whether the final standar ds of performance should apply to sources that commenced construction on or after the date of publication of the proposed standards, January 8, 2014, or if it should apply to sources as of the date of promulgation of the final rule. Regardless of the comp liance date, EPA should provide additional clarification why that date was chosen. **EPA Response:** The date of applicabilit y is specified in CAA 111(a)(2)

– The term “new source” means any stationary source, the construction or modification of which is
comme nced after the publication of regulations (or, if earlier, proposed regulations) prescribing a standard of performance under this section which will be applicable to such
source. This has been clarified in the preamble. 9) Reviewer recommends ensuring that the discussion of “technology” in the BSER context should instead refer to “sy stems of emission reduction” to parallel with the language in §111 on sy stems rather than technologies.

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- **EPA Response:** The word “technology” appears over 300 times. We reviewed th em, and changed a half

- dozen or so of them to address this comment. 10) Reviewer recommends providing additional clarification for the use of calculating emissions on a gross approach and not a net approach. What is the nexus between the choice of approach in this rule to the §111(d) rule? Specifically since a net approach provides potential benefits such as: (1) better reflecting environmental objectives of a policy as it relates to each MWh of electricity produced, (2) motivates operators to pursues more ef ficient auxiliary

equipment and unit designs and to choose fuels that require less emissions controls, (3) provides a level field across fossil steam generating technologies, including a more appropriate comparison between IGCC and PC, and (4) would result in CO 2 capture requirements that are similar for IGC C and PC units. **EPA Response:** The EPA describes our approach on the use of gross and net output based standards in section III.F. 11) Commenter notes that th e preamble condenses the case law on consideration of costs under §111 to require that costs be “reasonable” that is not fully reflective of the law that costs not be “excessive,” “greater than the industry could bear and survive,” or “exorbitant.” Commenter recommends revising the case law discussion to reflect the above. **EPA Response:** As with the preamble for the proposal, the preamble for the final rule summarizes the D.C. Circuit case law on costs, which uses various formulations (“exorbitant,” “excessive,” etc.), and states that we think they are s yn ony

mous and that for convenience, we will use the term “reasonable.” 12) Commenter recommends providing additional explanation why oil

- fired turbines are exempt from this rule. **EPA Response:** The current applicability includes all c ombustion turbines except those that are not capable of burning natural gas (e.g., oil

- fired combustion turbines not connected to a natural gas pipeline). Exemptions 1) Reviewer recommends clarifying whether a new combustion turbine generator with a design efficiency

greater than 40% that obtains a federall y enforceable permit restriction that restricts the generator’s output to less than 40% of the generator’s potential electric output be exempt from regulation under this rule. If so, would this exemption also be applicable for exi sting sources regulated under § 111(d)? What are the implications of revising the exemptions to not allow exemptions from units with design ef ficiencies greater than 40%? **EPA Response:** The revised applicability does not exempt turbines based on permit restrictions that limit electric sales. Electric sales relative to the potential electric output will instead be used as a subcategorization crite rion. Station ary combustion turbines meeting the electric sales criterion would be subject to an output based standard consistent with the performance of a combined cycle combustion turbine. Stationary combustion turbines not meeting the electric sales cri terion would be subject to an emission standard consistent with the use of clean fuels. Since this applicability approach covers combustion turbines regardless of permit restriction s that limit the amount of electricit y that can be sold (i.e., covers both simple and combined cycle units) there would not be implications for existing combustion turbine s regulated under § 111(d)

.

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- 2) Reviewer recommends clarifying that if an area lacks access to a natural gas pipeline (see Page 22) such that it cannot practicall y build new combustion turbines, why would the unit need to be exempt from the standard for combustion turbines? If an area has onl y limited access to gas, it appears that there would be an incentive to build the most efficient unit possible. **EPA Response:** An area that lacks access to a natural gas pipeline still can practicall y build a new combustion turbine ... but it will instead be fired using distillate oil or some other non

- natural gas fuel. Inthe current version of the preamble, these units are onl y exempt from the standards if they are ph ys ically

incapable of burning natural gas (i.e., the unit is not connected to a natural gas pipeline) . This has been clarified in the preamble. 3) Commenter recommends providing additional clarification on the implications of the “sliding scale” exemption for peaking units and the relation to the §111(d) rule. Could the sliding scale limitation on operating hours be the §111(b) standard for those sources to e liminate that problem potentially as a work practice standard? **EPA Response:** As described earlier, combustion turbines selling electricity below the electric sales threshold are not exempt from 111(b) and would instead be covered b y an emission standard ba sed on the use of clean fuels. Since the emissions can be readil y measured we have concluded that work pr actice stand ard is not appropriate
Emission Rates
New Sources 1) Reviewers recommend expanding on the justification for EPA finalizing an emission rate of 1,400 lb C O 2 /MWh

- gross instead of the proposed emission rate of 1,100 lb CO 2 /MWh

- gross. Including a discussions relating to: a. whether an y IGCC unit without any CCS or natural gas co

- firing can potentially comply with the finalized standard; **EPA Response:** Additional discussion has been added. b. how the LC OE relates to this determination, including the revenue derived from enhanced oil recovery

(EOR) referenced on page 231 that, according to the preamble,

“ can significantly

lower the net cost of implementing CCS” ; **EPA Response:** The EPA does not rel y on revenue from EOR or an y other revenue opportunities to justify

or determine the BSER or to set the final standard of performance. We believe that is clear in the current version but will review to e nsure that it is clear. We do point out that there are opportunities to reduce the costs; however, as stated, we do not rely on those opportunities to justify the reasonableness of costs. c. any other emission rates , both net and gross, between 1,100 lb CO 2 /M Wh and 1,400 lb CO 2 /MWh that were considered and any data points; and **EPA Response:** The EPA believes that we have adequatel y presented our logic and methodology

for arriving at the final standard of 1,400 lb/MWh

- g. d. that the state standards for California, New York, Oregon, and Washington provided within the Regulatory

Impact Anal ys is (RIA) are all below 1,400 lb C O 2 /MWh. **EPA Response:** We have noted this in the preamble. 2) Reviewer recommends providing additional clarification for finalizing 1,080 lb CO 2 /MWh

- n et (1,000 b CO 2 /MWh

- gross) for Natural Gas Combined Cy cle (NGCC )

.

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- EPA’s Continuing Emissions Monitoring Sy stem (CEMS) provides an average intensit y of the NGCC fleet as of 2012 at approximately 900 lb/CO 2 MWh

- net. Also over 50 existing NGCC units have an emission rate below 800 lb CO 2 /MWh

- net and over 400 existing NGCC units have an emission rate below 900 lb CO 2 /MWh

- net. **EPA Response:** The alternate net output based emission standard has been reduced to 1,030 lb CO2/MWh

- net. The EPA acknowledges that many new NGCC will be operating significantl y below this emission rate, but we have concluded this standard is appropriate taking into the account we are not subcategorizing by size and the use of limited amounts of backup distil late oil.
Modified Sources 1) Reviewer requests additional explanation for the 10% trigger threshold for modified sources, including data and anal ys is (including costs) supporting the 10% threshold. What consideration was given to setting higher modificati on trigger thresholds to dissuad e units from modifying out of § 111(d) requirements to §111(b) requirements? **EPA Response:** We have added additional information on selection of the 10% threshold. 2) Reviewer recommends providing additional clarification where the historical emissions data for before 2009 would be obtained from for sources as Mandatory Reporting of Greenhouse Gases rule was not finalized until 2009. What recordkeeping requirements were required before 2009 that ensures that the information provi ded b y sources is reliable and accurate? I f a unit is missing y ear(s) of emissions data, what is the requirement for that unit? **EPA Response:** Historical emissions data come from the Acid Rain Program; not the GHG Reporting Program. 3) Reviewer recommends pro viding additional clarification on why a source that has increased their emission rate b y at least 10 percent, but was still below 1,800 lb CO 2 /MWh

- gross (for a source with a heat input > 2,000 MMBtu/h) would not be required to continue to meet that rate. **EPA Response:** We have concluded that 1,800 lb CO 2 /MWh

- gross is an appropriate never to exceed standard for modified and reconstructed EGUs. That emission rate has been demonstrated as continually achievable b y the best performing EGUs and takes into account different coal t ypes. 4) Reviewer recommends providing additional clarification as to why EPA is not finalizing the 2% emissions reduction and is finalizing the historical performance

. **EPA Response:** We will add additional clarification. [Still need to do th is.] 5) Reviewer recommends providing a discussion between the 4% heat rate improvement and the expected delta between a unit’s emission rate post

- modification (including at different capacity

factors) and its best historical performance. **EPA Response:** We wil l add additional clarification. [Still need to do this.] 6) Reviewers recommend providing additional clarification of the word “potential” (see on page 154, for example) in relation to “potential hourly increases in CO 2 emissions”. Can modifications be made to increase the capacit y of a unit that the “potential” emissions trigger §111(b) even if the new capacity is not utilized? Reviewer recommends adding a requirement that modification must result in an actual hourly CO 2 emissions increase.

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- **EPA Response:** Th e term “potential” has been removed when used in this context. 7) Commenter recommends clarifying whether EPA could consider not finalizing standards for those sources that conduct modifications resulting in a potential hourl y i ncrease in CO 2 emissions (mass per hour) of more than ten percent (similar to the decision EPA made not to finalize standards for sources that conduct modifications resulting in a potential hourly

increase in CO 2 emis sions of less than ten percent). **EPA Response:** The pr eamble clearly states the EPA’s intention of finalizing standards for those sources that conduct “larger” modifications.
Reconstructed Sources 1) Reviewer recommends clarifying the choice of the 1,800 lb CO 2 /MWh

- gross emission rate and how it relates to his torical data on supercritical units. **EPA Response:** This is provided in a Technical Support Document (TSD) accompanying the proposal for Modified and Reconstructed sources. However, the preamble for the final action will be edited to provide more clarification. 2) Commenter recommends clarification i f a reconstructed unit is not required to meet the standards if doing so is “technologicall y and economically” infeasible, wh y wouldn’t BSER be partial CCS (or IGCC) with units that cannot meet the standard due to space constraints, etc. remaining (d) sources? **EPA Response:** We will add additional clarification. [Still need to do this.]
Interaction between Clean Air Act (CAA) §111(b) and §111(d) Rules 1) Reviewers recommend providing a dditional clarification on how new, modified, and reconstructed sources (§111(b) sources) interact with the §1 11(d) rule on existing sources. What actions has EPA considered or implemented to ensure the prevention of developing detrimental incentives? **EPA Response:** See response to the next comment. 2) Reviewers recommend providing clarification how state targets under the §111(d) rule would be affected b y modified or reconstructed sources. **EPA Response:** This is not a section 111(b) rule issue. Accordingl y, we do not need to discuss this issue in this rule. Instead, this is a section 111(d) rule issue, and we intend to address it in that rulemaking. That’s because all the sources subject to 111(b) need to know from the 111(b) rule is that if they modify , they

will be subject to the modification standard, and what that standard will be. In the section 111(d) rulemaking, we intend to discuss what happens to a 111(d) state plan if an existing source modifies and becomes subject to 111(b). A paragraph was adde d to the summary of requirements subsection (in section IV) explaining this point.
Biomass 1) Reviewer recommends providing additional clarification if biomass that is co

- fired at a rate less than 90% of the unit’s heat input capacity on an annual basis wou ld be covered under this rule.

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- **EPA Response:** The current exemption for dedicated non

- fossil fuel

- fired EGUs is based on permit condition limiting the amount of fossil fuel use to less than 10 percent of the annual heat input capacity

. 2) Reviewer recommends clarifying how CO 2 emissions from biomass combustion are treated for a unit that is covered under this rule. Additionally , will this rule utilize EPA’s forthcoming biogenic guidance to quantify the CO2 emissions with biomass combustion? **EPA Response:** Treatment of biomass is discussed in the preamble. 3) Reviewer recommends providing discussion on how a co

- firing unit with biomass combustion retrofits to a near, but not equal to or greater than, 90% rate of the unit’s heat input capacit y on an annual basis , would be regulated under this rule or the §111(d) rule. **EPA Response:** We will add additional clarification. [Still need to do this.] Combined Heat and Power (CHP) Applicabilit y 1) Reviewer recommends providing further clarification on what “technically capable” of selling electricity

on Page 111. Does this mean the total electricit y that can be produced on an hourl y basis that is not required b y onsite electricity loads? I f so, please produce a description; if not, please specify how it is different. **E PA Response:**  Technically capable refers the amount that could be sold to the grid minus auxiliary

loads at the base load rating of the unit. 2) Reviewer recommends that EPA reconcile the descriptions of CHP applicability on Pages 111, 149, and 574

- 575 in support of the intended applicability described on pages 111

- 112 shown below: a. “This approach both limits applicability to the intended [utility] CHP units and encourages the installation of the most efficient CHP sy stems since more efficient designs would be able to have higher permitted electric sales while not being subject to the GHG standards included in this rulemaking.” **EPA Response:** The descriptions have been edited. 3) Commenter recommends clarifying why 100% of the thermal output is included in the d enominator of the CHP and how this impacts the §111(d) rule. **EPA Response:** Both the 111(b) and 111(d) rules provide 100 percent credit for useful thermal output. We have concluded 100 percent credit is appropriate because the reported emission rate is simi lar to the theoretical overall emission rate for separate heat and power. The 111(d) impacts would be limited for multiple reasons. First, the change is reported emission rate would be incorporated into both the base line and goals calculations so while th e numerical goal might change, the relative stringency of the requirements would not. In addition, the revised 111(b) applicability expands the exemption for industrial CHP units. The only existing CHP units that would remain subject to 111(d) would have r elatively low useful thermal outputs. Therefore, the different between the reported emission rates using either a 75% or 100% credit would not be as large as for CHP units with relatively large useful thermal outputs. Finally , since fewer CHP units would b e included in the 111(d) baselines, their impact on overall goals will be reduced.

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- **Technical Comments** 1) Reviewer recommends correcting a t ypo and including planned geothermal, unplanned geothermal, and unplanned hydro base load generation in the discussion of the AEO 2015 projection on Page 73. T he unplanned capacity additions for hydro and geothermal were derived from AEO 2015 Table 16

– Renewable Generation and Capacit y and the remainder of the traditional capacity additions can be found in the AEO 2015 Table 9

– Electric Generating Capacity . The reviewer recommends the following text: a. “Specificall y, the AEO 2015 projects the need for **30.3** GW of additional base load or intermediate load generation capacit y through 2020 (this includes projects that are under development

– - i.e., being constructed or in advance planning

-- and model

projected nuclear, coal, and NGCC projects). The vast majori ty of this new electric capacity (20.4 GW) is already

under development (under construction or in advanced planning); it includes about **0.7 GW** of new coal

- fired capacit y, 5.5 GW of new nuclear capacity , and 14.2 GW of new NGCC capacity . The EPA believes th at most current fossil fuel

- fired projects are alread y designed to meet limits consistent with this rule (or they

have already

commenced construction and are thus not impacted by this notice). The AEO 2015 also projects an additional **9.9** GW of new base loa d capacity additions, which are model

- projected (unplanned). This consists of 7.7 GW of new NGCC capacit y, **1.2 GW of new geothermal capacity, 0.7 GW of new hydroelectric capacity,**  and 0.3 GW of new coal equipped with CCS (incentivized with some government funding).” **EPA Response:** Done 2) Reviewer recommends citing to the Quadrennial Energy Review ( http://energy .gov/epsa/quadrennial

- energy - review

- qer ) on Page 63

- 64 to support the paragraph beg inning “The change in the resource mix...” as it discusses power sector infrastructure and the need for modernization and investment. **EPA Response:** Done 3) Reviewer recommends clarifying on Page 107 the paragraph below how the capacity factor to calculate the p ercent of fuel use is determined. The clarification should include how the calculation would be performed and specifically how capacit y factor would be used in place of percent of fossil fuel burned. a. “We considered the fossil use restriction on both an annual and 3

- ye ar average. We have concluded that the single ye ar average fossil

- fuel use based on the annual capacity factor, and not the actual percent of fossil burned, provides sufficient flexibility for dedicated non

- fossil fuel

- fired units to combust f ossil fuels for flame stabilization and other ancillary purposes.” **EPA Response:** The annual capacity factor is a defined term that EPA has used previously

in the industrial boiler NSPS. 4) Reviewer recommends clarifying on Page 107 the sentence below. Specifically , is this sentence saying that a 3

- ye ar average fossil use restriction would not exempt limited use fossil fuel EGUs and that the intent of the provision is to exempt the limited use fossil fuel EGUs? a. “A 3

- ye ar exemption based on capacit y facto r would not cover limited use fossil fuel EGUs, which is not the intent of the provision.”

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- **EPA Response:** Lo w capacity factor/limited use fossil fuel

- fired EGUs would not be exempt. Only

dedicated non

- fossil fuel

- fired units (capable of burned > 50% non

- fos sil fuel) that limit fossil fuel use to 10% or less of the annual capacity factor would be exmept. 5) Reviewer recommends clarifying the following sentence found on Page 149 in relation to the use of “or”: a. "...that are not subject to a federall y enforceable p ermit limiting annual net electric sales to this amount (design efficiency times potential electric output) **or** 219,000 MWh (whichever is greater) **or** less." (emphasis added). **EPA Response:** The revision will include that are not subject to a federall y enforc eable permit limiting **either** annual net electric sales to this amount (design efficiency times potential electric output) **or less** or 219,000 MWh **or less** ." 6) Reviewer recommends clarifying what “reduced by 5 times” means in the sentence provided below found o n Page 172 : a. “For example the heat duty ...has been reduced b y about 5 times from the amine process ...” **EPA Response:** Done

- Heat dut y for the amine scrubbing process used at Trona in the mid

- 70’s was about 12 MJ/mt CO 2 removed as compared to a heat duty of about 2.5 MJ/mt CO 2 removed for the amine processes to be used at Boundary Dam and WA Parish. 7) Reviewer recommends providing clarifying the weight that EPA provides in relation to capital costs, L COE, and overall costs on Page 209. How does this weight relate to previous rulemakings? **EPA Response:** [We are still working on this response]. 8) Reviewer recommends noting that the initial uncontrolled units are not on cost parity in the sentence on Page 213 as uncontrolled IGC C has costs significantl y greater than that of an uncontrolled SCPC. a. “Incremental capital costs of control for a new IGCC unit would be even less.” **EPA Response:** This sentence is no longer in the preamble as the EPA is removing discussion of the use of par tial CCS with I GCC as we do not believe it is a reasonable compliance option. Many new IGCC designs will be able to meet the final standard of performance without the need for additional control technology and those that do not can use natural gas co

- firi ng to meet the standard. 9) Reviewer recommends adding a sentence on Page 240 as the EIA’s LCOE projection for geothermal from AEO 2014 reflects only the lowest cost possible form the best resources. New geothermal projects are estimated to have LCOE’s high er than EIA’s range. Therefore, the following is recommended: a. “ The range presented for the EIA AEO2014 LCOE values is intended to represent regional variation for new generating sources (reflecting regional differences in construction labor costs, capital costs, and resource availability). Overall, as can be seen from the results in Table 10, the range of LCOE estimates from the different groups are in reasonable agreement. **Note that AEO2014 geothermal LCOE value represents the lowest cost from the best re**  **source and is not directly comparable to the EPRI and EPA numbers.**  ” EPA Response: We have removed references to Geothermal generation.

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- 10) Reviewer recommends discussing how the conclusion of the Summit Power study on page 243 that CCS can be competitive with NGCC raises an y concerns about the validity of the study

and EPA reliance on the study

. **EPA Response:** This has been clarified in the preamble text ... but the conclusion is that adding retrofit CCS to an existing coal

- fired plant

– one near an EOR opportunity, with modern control technology , with available space, relativel y new, etc.

– can be cost competitive with development and construction of a new NGCC. The EPA believes that this is a reasonable conclusion

– though may be only in idealized situations. The EPA further notes that others have come to similar conclusions

– that retrofit of CCS technology

at existing coal

- fired power plants can be feasible

– e.g., “ The results indicate that for about 60 gigawatts of the existing coal

- fired capacit y, the implementation of partial CO 2 capture appears feasible, though its cost is highly dependent on the unit characteristics and fuel prices. [...] Note that this yields a conservative estimate of feasible CCS retrofits since we assume that the alternative to a CCS retrofit is an existing NGCC plant with spare capacit y, rather than a new NGCC plant whose LCOE would be greater than assumed here. ” (Zhai, H.; Ou, Y.; Rubin, E.S.; “Opportunities for Decarbonizing Existing U.S. Coal

- fired Plants via CO 2 Capture, Utilizati on, and Storage”, accepted for publication in Env. Sci & Tech. (2015). 11) Reviewer recommends adding modifying the text and ad ding a footnote on Page 246

- 247 within the paragraph provided below as the difference between the AEO 2013 and AEO 2014 geothermal LCOE reflects a change in interest rates rather than a change in estimated capital costs. a. “The estimated cost for all of these technologies decreased from AEO2013 to AEO2014. This was primarily due to changes in interest rates that resulted in lower financ ing costs in AEO2014 relative to the AEO2013. **[INSERT FOOTNOTE]** The EIA did not make an y major updates to the initial cost inputs for most technologies, including nuclear. **The EIA commissioned a comprehensive update of its capital cost assumptions for all**  **generation technologies in 2013. Fuel cost and financial assumptions are updated for each edition of the Annual Energy Outlook**  .” b. Footnote: **The lower geothermal LCOE for AEO 2014 as compared to AEO 2013 is due largely to a methodological change: the AEO 201**  **4 number represents the least** 

**- cost geothermal plant that could be built and does not reflect the cost of**  **future greenfield resources developed through enhanced geothermal technologies.**  **EPA Response:** Done 12) Reviewer recommends clarifying the definition of “ge ologic timeframe” provided below on Page 294, Section V. a. “In 2010, the EPA finalized an effective and coherent regulatory framework to ensure that CO2 is safely

sequestered

-- that is, that CO2 can be injected and remain securel y underground for geologic t imeframes.” **EPA Response:** Clarified sentence to use the term “permanentl y”. 13) Reviewer recommends providing clarification if EPA considered an ultra

- supercritical unit as discussed on Page 368. If so, EPA should provide additional discussion.

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- a. “...which we hav e concluded is a supercritical pulverized coal (SCPC) or supercritical circulating fluidized bed (CFB) boiler for large units, and subcritical for small units.” EPA Response: We considered the use of ultra

- supercritical steam conditions as an option for certain coal t ypes, but consider ultra

- supercritical steam conditions as included when discussing supercritical steam conditions. 14) Reviewer recommends clarifying whether “s ys tem emergency” (appears on Pages 378, 395) and “grid emergency” (appears on Page 385) are referring to the same thing. If they are not referring to the same thing, reviewer recommends providing clarification as to the differences between the two. **EPA Respons e:**  The text has been change d to use sy stem emergency consis tently

. 15) Reviewer recommends providing additional evidence to support the statement on Page 361 provided below: a. “ EPA expects that, to the extent actions undertaken by existing steam generating units in response to 111(d) requirements trigger modifications, the magnitude of the increases in potential hourly CO2 emissions associated with such modifications would generall y be small and would therefore generally not subject such modifications to the stan dards of performance that the EPA is finalizing today

for modified steam generating units with large increases in potential hourly

CO2 emissions. ” **EPA Response:** Additional infor mation on steam unit modifications has been included in the revised preamble R eviewer recommends explaining how advanced and conventional NGCC facilities are defined and provide data sources that were used to quantify the 8% lower emissions rates provided on page 401, Section IX. **EPA Response:** As described in the preamble, advanced NGCC are onl y i ncremental improvements and not a separate technology compared to conventional NGCC. 16) Reviewer recommends clarifying the sentence on Page 402 provided below. Does the sentence mean that high efficiency simple cycle turbines that are not exe mpt from §111(b) were found to have the same BSER (i.e., efficient combined cycle technology) as combined cycle units? a. “Furthermore, we have concluded that high efficiency simple cycle turbine technology

is a sub

- component of the selected BSER.” **EPA Respon se:**  The BSER description has been clarified. The BSER for base load units is the use of efficient NGCC and the BSER for peaking units is clean fuels. 17) Reviewer recommends modifying the sentences on Page 403 as provided below: a. **“** The EPA has reviewed the comments on the use of CCS for combined cycle facilities and has concluded that even if CCS is demonstrated as a technical and reasonable cost option for combined cycle units on an individual basis, **the record does not support a co**  **nclusion that it would qualify as BSER** it would not qualify as BSER based on the nationwide economic impacts

. **Nearly all new fossil fuel**

**- fired**  **EGUs being constructed today are using combined cycle technology for generating intermediate and base load power.**  Therefore, the EPA is not making a determination as to the technical availability or individual cost reasonableness of CCS for new combined cycle units. Nearl y all new fossil fuel

- fired EGUs being

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- constructed today

are using combined cycle technology for generating intermediate and base load power and requiring partial CCS on these units would result in unreasonable nationwide impacts .” **EPA Response:** The text has been revised. 18) Reviewer recommends clarifying the sentence on Page 407 stated below whether the sentence is referencing a data set. Also, the text in the paragraphs following this sentence suggest trends over the 2008 to 2014 timeframe. Therefore, should the sentence be modified to “2014” from “2012” and, if not, reviewer recommends clarifying in the preamble wh y and how trends are discussed through 2014. a. “Interstate flow of electricity is available from 2008 through 2012.” **EPA Response:** Generation data is available through 2014, but interstate flows of electricit y are onl y available through 2012. 19) Reviewer recommends clarifying the sentence on Page 414 stated below as it was difficult to follow. Does the threshold refer to 1/3 electric sales threshold or to the maximum permit restriction for exemption mentioned in the next sentence? What does “it” refer to where rule say s “...threshold it is cost effective...”? Also, reviewer recommends clarifying whether adding the heat recovery to the turbine exhaust is the same as the LHV efficiency for the aeroderative designs mentioned on Page 413? a. “...for combusti on turbines operation above this threshold it is cost effective and the BSER is the additional of heat recovery to the turbine exhaust.” **EPA Response:** The addition of heat recovery is the same as saying use combined cycle technology . The “sliding scale” applicability has been replaced with the “sliding scale” subcategorization approach. For base load units, we have concluded it is cost effective to use combined cycle technology

. 20) Reviewer recommends either deleting the apparent duplicated sentences below o n Page 419 or, if not duplicative, to provide additional language to clarify the differences. a. “Other commenters stated that since the standards were developed based on emission rates that are being achieved by the majority

of existing units, the final stan dards should be the same for new, modified, and reconstructed units. These commenters stated that since the standards were developed based on emission rates that are being achieved b y the majority of existing units, the final standards should be the same f or new, modified, and reconstructed units.” **EPA Response:** The text has been deleted. 21) Reviewer recommends clarifying “recentl y” in the sentence on Page 425 provided below to provide the range of years that were anal yz ed. a. “The EPA reviewed the GHG limitation s in recently issued construction permits for NGCC facilities.” **EPA Response:** Recent includes post that commenced operation in 2000 or later.

Tables 1) Reviewer recommends clarifying the asterisk in Table 6 on Page 155 whether compliance is determined on a rolling 12

- month compliance period or on a 12

- month operating compliance period (e.g., on a calendar

- ye ar basis). On page 155

- 157, the description of the compliance period appears inconsistent.

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- 2) **EPA Response:** The intent is that compliance be determine on a 12

- operating month period. 3) Commenter notes that the basis of the information in Table 7 on Page 213 comes from an interpolation between 0% and 30% capture case in the 2011 NETL report, “Cost of Performance of PC and IGCC Plants for a Range of Carbon Dioxi de Capture,” updated by EPA to 2011 dollars. Commenter recommends identifying potential concerns with using this my

thological [  ?] approach and how this could lead to inaccurate costs

. 4) **EPA Response:** Costs are being updated in the next version of the preamble and a clearer explanation of how costs were determined will be provided. 5) Reviewer recommends revising Table 8 on P age 217 by adding concentrating solar power (CSP) with thermal energy storage as an additional non

- natural gas alternative base load dispatchable power generation source (see http://www.nrel.gov/analysis/data_tech_baseline.html for cost); that EPA note that purchase power agreements (PPAs) related to geothermal are in the $60

- 70 MWh range and that EIA LCOEs for geothermal are generall y for h ydrothermal resources, reflecting the cost of additional development at existing sites rather than greenfield development or the application of enhanced geothermal s ys tems; and addin g a footnote that states the following: a. “The AEO 2014 geothermal cost estimate is representative of the costs from the best resource locations and does not reflect the cost of future greenfield resources developed through enhanced geothermal technologies.” **EPA Response:** The footnote has been added. The reference materials at the provided link are labeled as “DRAFT” and “Do not cite”. 6) Commenter recommends revising Table 8 on Page 217 to use NETL’s cost estimates as the cost estimates in Table 8 likely used different methods (e.g., scope of the estimate, inclusions/exclusions, site assumptions). The commenter also notes that another issue related to the economic evaluation of generation technologies involves differential investment risks that may justify the use of varying financial assumptions across technologies. For example, the risk that further reductions in emissions will be imposed during the lifetime of generation projects being considered for development may lead to higher financing rates. Therefor e, it may be appropriate for EPA to consider the financing assumptions, including the use of risk adjustments that vary with the emissions performance of specific technologies. 7) **EPA Response:** Table 8 has been revised. [Will look at this further]. 8) Reviewer r ecommends revising Table 9 on Page 229 to clarify what the price of natural gas is for natural gas co

- firing in SCPC and I GCC units and include the other natural gas price (i.e., $6.11/mmBtu or $10.00/mmBtu) as the other end of the range. Also, EPA should provide in the table (or footnote) what percent of co

- firing is used to derive the cost and emission data provided. 9) **EPA Response:** Done 10) Reviewer recommends defining the term “nuclear” and “new nuclear” used throughout the preamble. Table 10 on Page 239 ap pears to be referring to the Westinghouse AP1000 whereas the dataset from EPRIseems to take a broader definition of what is considered nuclear. Reviewer also recommends indicating which technology is described here as the cost estimates vary

from differe nt technologies. **EPA Response:** [Still considering this comment.]

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- 11) Reviewer recommends providing additional explanation as to why SCPC has a climate uncertaint y adder to the cost of capital and not for the other forms of generation (e.g., nuclear) and how th is could affect any decisions made by

EPA. See Table 10 on page 239. **EPA Response:** [Will provide additional information on the CUA, however it does not affect decisions b y EPA] 12) Reviewer recommends providing the costs in Table 10 on page 239 in the same year or explain why

the information has not been normalized and how that affects any final calculations. Reviewer also recommends clarifying whether “MWh” refers to net, gross, or both. EPA Response: [We have not done this y et] 13) Reviewer recommends modifying Table 12 on Page 246

- 247 to remove “Nuclear w/subsidy” and to include concentrating solar power (CSP) with thermal energy storage as an additional non

- natural gas alternative base load dispatchable power generation source. Nuclear w/subsidy is for the nuc lear energy

production tax credit (PTC) that requires construction commence b y J anuary 1, 2014 in order to be eligible for the subsidy . Since consideration of future projects would commence after January 1, 2014 cut

- off date, these projects are ineligible for the study and therefore are not relevant in cost estimates for future nuclear energy projects. **EPA Response:** Agree; nuclear with subsid y has been removed.
Rule L anguage 1) Reviewer recommends revising §60.5520(d) and §60.5535. As the preamble states o n page 402

- 403 that for bi

- modal combustion turbine units the use of combined cycle technology

is BSER for periods of i nter mediate and base load operation and that the use of simple cycle technology alone is BSER for periods of peaking operation. a. Section 60.5520(d) should state: For combined cycle installations that allow the associated combustion turbine to operate in either combined cycle mode or simple cycle mode, the CO 2 emission standard in Table 2 applies only for operation in combined cycle mode pr ovided that the annual net sales during simple cycle operation is limited through a federally enforceable permit to the design efficiency of the combustion turbine times the potential electric output or less. **EPA Response:** The use of combined cycle technology is the BSER for units that operate above the percent electric sales threshold and the use of clean fuels is the BSER for units that operate below this threshold. b. Section 60.5535 should be amended to include compliance demonstration requirements for bi

- modal units for both modes of operation. **EPA Response:** As described above, the suggested edit would not reflect the intent of the requirements and has not been made. 2) Reviewer recommends clarifying whether “or” is supposed to be “of” and if it is “or” whether additional language should be added such as “whichever is greater ” on page 574

- 575 defining “potential electric output”. a. “Potential electric output means 33 percent **or** the design efficiency on a net output basis multip lied by

the base load rating (expressed in MMBtu/h) of the EGU,

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- multiplied by

10 6 Btu/MMBtu, divided by 3,413 Btu/KWh, divided by 1,000 kWh/MWh, and multiplied by 8,760 h/ yr(e.g., a 35 percent efficient affected EGU with a 100 MW (341 MMBtu/h) fossil

- fuel heat input capacit y would have a 310,000 MWh 12 month potential electric output capacit y). ” (emphasis added). **EPA Response:** “Whichever is greater” has been added to the definition. 3) Reviewer recommends providing a definition for “sy stem emergency” statu s. Reviewer also recommends explaining that/whether/how the definition of “sy stem emergency” relates to other definition (e.g., that the definition of “s ys tem emergency” may not consistute an emergency

under §202(c) of the Federal Power Act, 16 USC §824a(c)). Finally , reviewer recommends that EPA consider developing a definition that requires sy stem operators to exhaust commonly available approaches for preventing such an emergency

before approaching EPA. For information, EPA’s proposed definition and some other examples are provided below: a. EPA proposal: The definition of "sy stem emergency " presented in the proposal was "an y abnormal s ys tem condition that the Regional Transmission Organizations (RTO), Independent S ys tem Operators (ISO) or control ar ea Administrator determines requires immediate automatic or manual action to prevent or limit loss of transmission facilities or generators that could adversel y affect the reliability of the power s ys tem and therefore call for maximum generation resources to operate in the affected area, or for the specific affected facility to operate to avert loss of load." b. NERC definition (FERC approval March 16, 2007): Emergency or BES Emergency : Any abnormal s ys tem condition that requires automatic or immediate manual action to prevent or limit the failure of transmission facilities or generation suppl y that could adversel y affect the reliability of the Bulk Electric Sy stem. c. PJM Operating Agreement 1.10 Emergency : “Emergency” shall mean: (i) an abnormal s ys tem condition requiring manual or automatic action to maintain sy stem frequency , or to prevent loss of firm load, equipment damage, or tripping of sy stem elements that could adversely affect the reliability of an electric s ys tem or the safet y of persons or propert y; or (ii) a fuel shortage requiring departure from normal operating procedures in order to minimize the use of such scarce fuel; or (iii) a condition that requires implementation of emergency procedures as defined in the PJM Manuals. d. DOE’s emergency

authority that uses the following definition of “emergency” which limits the events for which DOE can exercise its Federal Power Act §202(c) authority (10 CFR 205.371): “Emergency ,” as used herein, is defined as an unexpected inadequate suppl y of electric energy whi ch may result from the unexpected outage or breakdown of facilities for the generation, transmission or distribution of electric power. Such events may

be the result of weather conditions, acts of God, or unforeseen occurrences not reasonabl y within the po wer of the affected “entity” to prevent. An emergency

also can result from a sudden increase in customer demand, an inability

to obtain adequate amounts of the necessary fuels to generate electricity , or a regulatory

action which prohibits the use of certa in electric power supply facilities. Actions under this authority are envisioned as meeting a specific inadequate power suppl y situation. Extended periods of insufficient power suppl y as a result of inadequate planning or the failure to construct necessary facilities can result in an emergency

as contemplated in these regulations. In such cases, the impacted “entity”

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- will be expected to make firm arrangements to resolve the problem until new facilities become available, so that a continuing emergency order is not needed. Situations where a shortage of electric energy is projected due solel y to the failure of parties to agree to terms, conditions or other economic factors relating to service, generall y will not be considered as emergencies unless the inability to supply electric service is imminent. Where an electricit y outage or service inadequacy qualifies for a section 202(c) order, contractual difficulties alone will not be sufficient to preclude the issuance of an emergency order. **EPA Response:** The propos ed definition has been added to the regulatory text. 4) Reviewer recommends providing or referencing guidance within the preamble with respect to how an affected EGU can be operated and maintained “in a manner consistent with safet y and good air pollution co ntrol practice[s]” as stated in §60.5525(c). **EPA Response:** [Still considering this comment] **Typographical Comments** 1) Reviewer recommends defining “SCPC” within the terms and acron ym s table and after the first use. **EPA Response:** Done 2) Reviewer notes that the affected source category of newl y constructed fossil fuel

- fired steam generating units is defined to include IGCC units. This is clarified on p. 145, but would be useful to explain this earlier. **EPA Response:** Done (parenthetical description added to executive summary) 3) Reviewer recommends revising on Page 161, Section V as shown below: a. “...and significantl y more than completing **competing** technologies such as nuclear

powered generation.” **EPA Response:** Done 4) Reviewer recommends revising on Page 163, Section V as shown below: a. “The EPA notes that information from facilities that did not receive any DOE assistance standing alone is sufficient to support its BSER determination.” **EPA Response:** Done 5) Reviewer recommends revising on Page 255, Section V as shown belo w: a. “They contented **contended** instead that it is the CCS

- based NSPS that would preclude such new generation.” **EPA Response:** Done 6) Reviewer recommends clarifying the sentence on Page 293, Section V as shown below: a. “In addition, as discussed in the proposal, e lectricity demand in states that may not have geological sequestration sites may be served by

coal

- fired electricity

generation built in nearby

areas with geological sequestration, which generation **and this electricity**  can be delivered through transmission lines.” **EPA Response:** Done 7) Reviewer recommends clarifying the sentence on Page 318, Section V as shown below: a. “The safeguards that protect USDWs also serve as an earl y warning mechanism for releases **of CO 2**  **to the atmosphere** to air .” **EPA Response:** Done

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- 8) Re viewer recommends clarifying whether the units described in the sentence below on Page 324, Section V are metric, short, or long tons. a. “Injection rates in 2010 and 2011 were approximately 1 million tons per y ear.” **EPA Response:** Edited to clarify metric ton s. 9) Reviewer recommends clarifying the sentence on Page 394, Section IX as shown below: a. “...to a permit restriction limiting annual net electric sales to **the lesser of** the design efficiency of the unit **or 40 percent** times the potential electric output.” **EPA Response:**  The text has been removed since permit restrictions are not used as an applicability

criterion in the current version.