November 28, 2011

Delivered Electronically

Revisions to Federal Implementation Plans to Reduce Interstate Transport of Fi ne Particulate Matter and Ozone; Proposed Rule

EPA Docket Center (EPA/DC) Docket ID No. EPA-HQ-OAR-2009-0491 Environmental Protection Agency Mailcode: 2822T, 1200 Pennsylvania Ave, NW Washington, DC 20460

RE: Comments for Docket ID No. EPA-HQ-OAR-2009-0491
Attached are the comments of the Kansas City Po wer & Light Company regarding the Revisions to Federal Implementation Plans to Re duce Interstate Transport of Fi ne Particulate Matter and Ozone proposed rule. If you have any questions, please cont act me at (816) 556-2899 or paul.ling@kcpl.com.
Sincerely,

/s/ Paul M. Ling

Paul M. Ling, P.E. Manager of Environmental Services Kansas City Power & Light Company

AttachmentComments of Kansas City Power & Light Company
on the Proposed Revisions to Federa l Implementation Plans to Reduce Interstate Transport of Fine Particulate Matter and Ozone; (Proposed Revisions to the Transport Rule)

76 Fed. Reg. 63860 (October 14, 2011) Docket ID No. EPA-HQ-OAR-2009-0491 November 28, 2011

________________________________________________________________________

On October 14, 2011, the U.S. Environmental Pr otection Agency (“EPA” or the “Agency”) published its Proposed Revisions to Federal Implem entation Plans to Reduce Interstate Transport of Fine Particulate Matter and Ozone (“Proposed Revisions to the Tran sport Rule”) with the public comment period ending on November 28, 2011.
Kansas City Power & Light Company (“KCP& L”) submits the following comments on the Proposed Revisions to Transport Rule. KCP&L is a regulated utility operating 15 generating facilities with a capacity of over 6,100 megawatts to serve more than 820,000 customers in both
Kansas and Missouri. As a member of th e Utility Air Regulatory Group (“UARG”) and the Edison Electric Institute (“EEI”), KCP&L has reviewed and is suppor tive of the comments submitted by these groups.Introduction

KCP&L commends EPA’s proposed changes to the final Cross-State Air Pollution Rule (“CSAPR”) which generally constitute an appr opriate first step toward remedying significant flaws in the rule. KCP&L proposes more changes are necessary to correct deficiencies in the rule. KCP&L urges EPA to address thoroughl y and comprehensively all of the CSAPR’s deficiencies before mandating compli ance with the rule’s requirements.

Specific Comments

I. KCP&L Supports EPA’s Proposal to Defer the Assurance Penalty Provisions Until the 2014 Compliance Periods.

KCP&L supports EPA’s proposal to amend the effective date of the assurance provisions under the CSAPR to make them effective begi nning January 1, 2014, instead of January 1, 2012.
See 76 Fed. Reg. at 63870. Electric generating units regulated under the rule face substantial uncertainty when the first compliance periods be gin because, although the rule is “final,” state budgets and unit-level allocations und er the rule remain in flux. Deferring the effective date of the assurance provisions until the complian ce periods beginning in 2014 will mitigate a significant additional category of uncertainty and provide a measure of badly needed flexibility for regulated entities during the first two co mpliance periods under this extraordinarily demanding and stringent rule.

II. KCP&L Supports EPA’s Proposed Revision s to Units Covered by Existing Consent
Decrees.

KCP&L supports EPA’s incorpor ation of the emission reduc tion requirements of existing utility consent decrees. See 76 Fed. Reg. at 63868. EPA now r ecognizes that the unit-level
allowance allocations under the CSAPR did not properly account for provisions in those consent decrees that effectively require the surrender of “excess” CS APR allowances. As a result,

2CSAPR allowance allo cations to certain units reduced the availability of some of those
allowances to other sources in the state.
EPA should finalize revisions of CSAPR unit-leve l allocations for the specific units subject
to these consent decrees. These revisions would not alter the state budgets but would have the effect of increasing the number of allowances within the budget that are available for compliance purposes and that would not otherwise be ava ilable without this pr oposed change to the
allocation of allowances.

III. KCP&L proposes additional changes to correct deficiencies in the rule.

1. New Unit Set-Aside for KCP&L’s Iatan Unit 2 KCP&L requests increased new un it set-aside allowances for SO 2, ozone season NOx,
and annual NOx because the final CSAPR calcula tion of the new unit set-aside erroneously omitted Iatan Unit 2’s projected emissions. This re quest is similar to the request granted to
Arkansas’s Plum Point Unit 1 in the Pr oposed Revisions to Transport Rule. See 76 Fed. Reg. at 63864. It appears from the Technical Support Docu ments associated with the final CSAPR that only one new unit in Missouri was modeled by EPA. The NEEDSv4.10 FTransport file indicates a SPPN_MO_Coal Steam unit with 300 MW capacity which appears to be the John Twitty Unit 2, formerly Southwest Power Station Unit 2. KCP&L requests that EPA increase Missouri’s SO 2, ozone season NOx, and annual NOx budget to include an increased new unit set- aside. EPA should increase the portion of that budget dedicated to the ne w unit set aside. In the CSAPR, EPA had determined a 3 percent new unit set-aside for ozone season NOx and annual NOx in Missouri. Both of those values should be changed to 6 percent. In the CSAPR, EPA had determined a 2 percent new unit set-aside for SO 2 in Missouri. This value should be changed to 3 percent.
The revision is consistent with the ne w unit set-aside methodology described in the CSAPR. The 2 percent allocati on should be maintained for future “planned” new units in
Missouri. See 76 Fed. Reg. at 48291. The updated values simply reflect the revised classification of one unit to be treated as a new unit for purposes of unit-level allo wance allocation. This unit, Iatan Unit 2,

3commenced commercial operation on or afte r January 1, 2010, and therefore would be
considered a new unit under the final CSAPR’s unit-level allocation m ethodology ( See 76 Fed. Reg. at 48290); however, the final CSAPR erroneously omitted this unit’s projected
emissions from the calculation of Missouri’s SO 2 , ozone season NOx, and annual NOx budget new unit set-aside. Includ ing this unit’s projected emi ssions in the calculation would yield a revised new unit set- aside of 3 percent for SO 2 and 6 percent for ozone season NOx and annual NOx of Missouri’s budget instead of the previous 2 percent and 3 percent values for the respective new unit set-asides. This change should be made for both Phase 1 compliance commencing in 2012 and Phase 2 compliance commencing in 2014.

Missouri New Unit 2011 Annual NOx Emissions

through Q3 (tons) 2011 Ozone Season NOx

Emissions through Q3 (tons) 2011 SO 2 Emissions through Q3 (tons)

KCP&L – Iatan Unit 2 918 521 117
City Utilities –

John Twitty Unit 2 596 281 1657

Total Through Q3 1514 802 1774

Annual Projection (x 1.33) 2019 - 2365

Missouri New Unit 2012 Annual NOx Allowances 2012 Ozone Season NOx Allowances 2012 SO 2 Allowances

Current 3%, 3%, 2% 1571 683 4149

Proposed 6%, 6%, 3% 3142 1366 6224

2. Operational Constraints Necessitate Non-economic Dispatch at KCP&L Units KCP&L has identified unit-specific operati onal constraints not accounted for in the final CSAPR whose inclusion may warrant re visions in state budgets, with associated

4revisions to the state assurance levels and uni t-le vel allocations for existing units. KCP&L is submitting additional unit-level operational information that would have a material impact on the calculation of CSAPR st ate budgets (with associated impacts on corresponding assurance leve ls and unit-level allocations for existing units). See 76 Fed. Reg. at 63868. Operational requirements necessitating non- economic generation occur at KCP&L’s combustion turbine peaking units because of transmission congestion. These units include KCP&L’s Hawthorn 6-9, Northeast Station 11-18, Lake Road 5, Greenwood 1-4, Ralph Green 3, and South Harper 1-3 in Missouri a nd West Gardner 1-4 and Osawatomie 1 in Kansas. Each of these units was required to generate for reasons other than the regional economic sale of electricity which most of ten was transmission congestion management. KCP&L estimates during the ozone season and during the calendar year that such noneconomic generation is necessitated from these units about 20 percent of the time in 2010. Consistent with a similar requests granted in the Proposed Revisions to the Transport Rule, See 76 Fed. Reg. at 63868, KCP&L requests addi tional allowances for these units to account for the necessitated non-economic genera tion in an amount of 15 ozone season
NOx and 30 annual NOx. These additional al lowances are material and significant to KCP&L operations where we have very limited alternate compliance options.

3. Flexibility to use Group 1 SO 2 allowances for Compliance in a Group 2 State KCP&L operates electric generating units in bo th Kansas and Missouri. The final rule designated Kansas as an SO 2 Group 2 state and Missouri as an SO 2 Group 1 state. KCP&L’s La Cygne Generating Station stack is located in Kansas approximately 2 miles from the Missouri border. Obviously, the air shed is the same with such close proximity. Consistent with the Proposed Revisions to the Transport Rule goal “to promote the development of allowance market liquidity as these revisions are finalized, thereby smoothing the transition from the Clean Air Interstate Rule (CAIR) programs to the Transport Rule programs in 2012”, KCP&L request s EPA finalize the revisions to allow the
use of SO 2 Group 1 allowances for compliance in SO 2 Group 2 states. This should be allowed because Group 1 states are subject to greater SO 2 reduction stringency than Group
2 states. See 76 Fed. Reg. at 48212. At a minimum, this request should be allowed for

56 electric generating utilities where their system spans across both Group 1 and Group 2
states as is the case with KCP&L.

4. Flexibility to use Future Allowances for Compliance in Earlier Years Similarly, consistent with the Proposed Re visions to the Transport Rule goal “to promote the development of allowance market liquidity as these re visions are finalized, thereby smoothing the transition from the Clean Air Interstate Rule (CAIR) programs to the Transport Rule programs in 2012”, KCP&L request s EPA finalize the revisions to allow the use of the next five years of allowances for compliance in an earlier year. KCP&L seeks this to provide for the additiona l flexibility to install emission controls that are underway but will not yet be operational in the coming years. For example, at KCP&L’s La Cygne Generating Station we ha ve commenced construction of an SCR, scrubbers, and baghouses for compliance with the Regional Haze Rule requirements. Even though construction has commenced the emission c ontrols will not be fully operational until 2015. Currently, the La Cygne Generating Statio n is short about 25% of the required
allowances for SO 2 , ozone season NOx, and annual NOx for 2012 and 2013. After 2015 when the emission controls are fully operationa l, the Station will have excess allowances. EPA should provide the additional flexibility to use these future allowances for compliance in early years to facilitate the implementation of the CSAPR.

Summary

KCP&L requests that EPA analyze, res pond to, and accept these comments identifying deficiencies in the CSAPR. At a minimum, EP A should defer the start of the first compliance periods until the state budgets and unit-level allocations have been revised and put in final form. EPA should also promptly make final its proposal to defer the effective date of the assurance provisions under the CSAPR until 2014, finalize revi sions of CSAPR unit-level allocations for the specific units subject to these consent decr ees, and revise the Missouri new unit set-aside to include KCP&L’s Iatan Unit 2. In addition, EPA should provide additiona l flexibility in the implementation of the CSAPR by allowing the use of SO 2 Group 1 allowances for compliance in
a SO 2 Group 2 state and allowing the use of future allowances for compliance in early years.