# EPA Clean Power Plan

Phase I

- Preliminary Technical Report WECC Staff September 1 9 , 2014

155 North 400 West, Suite 200
Salt Lake City, Utah 84103

- 1114EPA Clean Power Plan: Phase I

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W ESTERN E LECTRICITY C OORDINATING C OUNCIL 

### Overview

The recently proposed Environmental Protection Agency ( EPA ) Clean Power Plan has the potential to significantly impact the Western electric generation and transmission industry . This is a highly complex rule for an industry that is as dynamic and challenging as ever. WECC’s efforts surrounding the proposed Clean P ower Plan are intended to provide information that can help state officials, public utility commissioners, utilities, and other interested stakeholders understand the potential reliability impacts of the proposed rule

. WECC, in an effort to fulfil its rel iability mission, has embarked on a phased

- study process that will provide the industry with unbiased and independent analysis of this issue

. Since the rule is currently in draft form, these initial efforts are preliminary and will have to be revised and updated once EPA finalizes the rule and states create compliance plans. Through the initial efforts summarized in this document
, WECC ha s per formed preliminary analyses in order to provide a starting point for additional discussions and more detailed assessments

. T his analysis leverages WECC’s new cross

- functional analytical approach where the focus is on a single reliability issue , in this cas e the proposed Clean Power Plan, studying it from a number of different perspectives. In doing so, WECC uncovered some interesting observations pertaining to the proposed Clean Power Plan:

• Coal retirements are not mandatory under the EPA’s proposed rule

– states have flexibility in terms of how they reach the proposed emission goals set forth by the EPA. However, the retirement of some amount of coal generation may be an economic and practical reality for certain states. Based on this line of thinking, WECC conducted initial frequency response studies designed to investigate the reliability impacts of removing ~7,000 MW of coal generation. Results showed that for the specific condition studied (peak summer condition only), the system was able to recover from a large contingency and frequency response was not significantly compromised. Importantly, these initial studies focused only on frequency
respons e
– which is one aspect of the broad er system reliability picture

. Reliability concerns outside this narrow area of study include remedial action schemes (RAS), path ratings, and voltage stability

. These areas must be addressed in future work by WECC and others.

• Western states are already taking actions to reduce emissions
, prior to Clean Power Plan implementat ion

– the effectiveness of these plans in meeting the proposed EPA goals appears to vary from state to state . WECC’s preliminary analysis showed that states planning to retire carbon intensive generation, implement energy efficiency, and build out robust levels of renewable resources could make strides toward achieving th e EPA goals in the next 10

- years. However , some states have emission rates short of the goals in that same timeframe, despite their planned activities

.

• Although it is still early to consider the impact of state compliance plans, preliminary WECC results have shown that d ecisions made regarding Clean Power Plan compliance in a state canEPA Clean Power Plan: Phase I

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W ESTERN E LECTRICITY C OORDINATING C OUNCIL dra stically impact grid operations , system resiliency, and potentially
, compliance opportunities for a neighboring state. As proposed or potential compliance plans are developed, WECC sees value in a holistic I nterconnection

- wide assessment of the plans. While changes in the resource
mix and forecasted load in one or two states may not drastically impact the system, significant changes in four, five, or all western states at once is exponentially more concerning for a system that is inherently interconnected

. There are countless analytical opportunities surrounding the proposed Clean Power Plan. At this early stage, WECC’s work has been limited to analyzing some basic assumptions provided by the EPA

– as summarized in this document

. A s states and other stakeholders shift their focus to developing compliance scenarios and understanding their potential impl ications , WECC intends to gather this information and provide objective perspective s to the West
, striv ing to assure future reliability of the system

.


### Introduction

On June 2, 2014, the Environmental Protection Agency (EPA) issued its proposed Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units , also commonly referred to as the Clean Power Plan , which proposes carbon dioxide emission limits for existing electric generation facilities. On August 29, WECC posted a short overview document titled “EPA Clean Power Plan: An Overview of WECC’s Phased Approach 1 ” that presented WECC’s cross

- functional , phased approach to evaluating the proposed rule.
This report presents WECC’s initial Phase I work to e valuate the proposed rule. A s WECC continues its evaluation of the proposed rule over the coming months , additional reports will follow.
WECC does not own, operate, or build transmission or generation ; therefore, WECC has no direct compliance obligation u nder the proposed rule. However, a s the Reliability Assurer for the Western Interconnection, WECC does have an interest in the proposed rule’s potential impact on r eliability. This impact will depend on state implementation plans . Knowledge of the contents of the states’ plans will be critical to WECC’s evaluation of the reliability impact. However, s tates are not required to submit their implementation plans to the EPA until June 201 6 (or later in some cases)

. There is a role for WECC to play in the interim. One way WECC support s B ulk

- P ower S ystem reliability in the Western
Interconnection is by providing information about the system under a wide range of plausible future s that reflect the implications of propo sed policy, varied resource mixes, and changes in transmission development. WECC will use t his information and its analytical tools to evaluate the developing

1 http://www.wecc.biz/library/WECC%20Documents/140829_EPA

- 111(d)_Overview_Final.pdf

.EPA Clean Power Plan: Phase I

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W ESTERN E LECTRICITY C OORDINATING C OUNCIL reliability and planning issue s surrounding the proposed rule and share that information with sta tes as they develop their plans

. 

### Goals of this Report
Since the release of the proposed rule, WECC has adapted parts of its existing analyses and data sets to provide the information in this initial report.
The purposes of this initial report are to:

• Pro vide insight into how planned generation retirements, load growth, renewable resource development , and energy efficiency measures might impact carbon dioxide ( CO 2 ) emissions , and how these emission changes compare to the target

- driv en assumptions used by the EPA;

• Discuss the potential impact s that resource mix changes, such as coal resource displacement and/or retirements, could ha ve on regional and West

- wide planning reserve margins or other reliability criteria ; and

• Investigate how coal plant retirement s and/or displacement may impact certain aspects of system reliability

. Equally as important, t his report and its findings are not intended to :

• Promote any specific compliance approach or provid e formal comments to any state’s regulatory proceedings

.

• Advocate any policy position for a utility, generation facility owner or other organization to adopt as part of compliance, reliability or planning responsibilities in the W estern I nterconnection.

• Support the policy goals of any particular stakeholder or i nterests of any particular organization.

• Give the impression that WECC’s reliability assessment of the proposed EPA Clean Power Plan is complete. Like many others, WECC is just beginning its work and this document represents a starting point for additional analyses.



### Overview of the Proposed EPA Clean Power Plan

The purpose of the Clean Power Plan is to reduce CO 2 emissions from existing power generation
sources to 30 perce nt below 2005 levels by 2030. The proposed rule places the onus for compliance on the states but provides flexibility in how states may comply. The rule provides state

- specific rate

- based goals for CO 2 reduction and guidelines for states to follow in developing their compliance plans. This provides states with the flexibility to tailor the ir plans to their specific circumstances. In addition, statesEPA Clean Power Plan: Phase I

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W ESTERN E LECTRICITY C OORDINATING C OUNCIL may develop individual plans or work together on multi

- state or regional plans, and states may convert the EPA’s rate

- based goal to a mass

- based equivalent goal.



### The Building Blocks
The EPA defined four “Building Blocks” that were used in the development of the proposed rule to determine state

- specific reduction targets. Table 1 depicts how each building block represents a different approach for achieving the proposed targets. Accordi ng to the EPA, the four building blocks represent the “best” system of emissions reduction (BSER) taking into consideration the impacts on cost of electricity and system reliability. 2

Table 1 : EPA BSER Building Blocks
Building Block 1:
Coal Plant Efficiency Improving the heat rates of coal

- fired power plants by 6 percent would reduce the amount of coal needed per MWh of generation, increasing the overall combustion efficiency of the coal

- fired EGUs. This would result in less car bon per MWh of generation.

Building Block 2:

Increased Natural Gas Utilization Increasing the utilization of existing natural gas combined

- cycle (NGCC) plants up to 70 percent capacity factor would result in a redispatch away from higher carbon

- intensive fuel sources like coal and oil/gas

- fired steam boilers. Relying on energy from less carbon

- intensive resources would reduce the carbon intensity profile for a particular state.

Building Block 3:

Renewable and Nuclear
Power Increasing the penetration of re newable (zero carbon) resources (like wind, solar, hydro) and nuclear, while also delaying or canceling the retirement of nuclear plants currently at risk of being shut down would result in more zero

- carbon energy and a decreased emission rate for a partic ular state.

Building Block 4:
Energy Efficiency Increasing energy efficiency programs (or targets under existing programs) to reduce energy demand by 1.5 percent per year would avoid CO 2 emissions associated with the resulting reduction in generation.

To determine the proposed 2030 target emission rate for each state, the EPA used 2012 emission levels as the baseline emission and generation starting points, then applied each of the building blocks in a manner tailored to each state’s specific circumstance s

. This process relied on many assumptions

2 Although not listed as a BSER, it is implied by the EPA that the constructi on of new nuclear units, carbon capture and storage, hydro/nuclear uprates, coal co

- firing and other emission reduction methods could serve as compliance strategies for states. EPA has requested comments on many of these reduction methods.EPA Clean Power Plan: Phase I

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W ESTERN E LECTRICITY C OORDINATING C OUNCIL about demand, resources, transmission topology and emissions. Figure 1 depicts how the four building blocks were applied individually to each state’s 2012 emission rate, resulting in the 2030 target
emission rate being proposed by the EPA

. The data for this graphic illustration is taken directly from the EPA.

Figure 1 : EPA 111(d) State Goal Breakdown with Building Blocks (lbs./MWh)

Affected 

### E lectric G enerating U nits ( EGU )
The proposed Clean Power Plan is a point

- source emission rule, meaning it regulates emissions for a specific set of electric generation units (EGUs), not the industry as a whole. In developing the 2030 target emission rates, the EPA considered generation only from EGU s that met certain criteria, referred in the proposed rule as “affected EGUs” or occasionally “covered or qualified EGUs.” Table 2 highlights the criteria used to identify the affected EGUs that are subject to the proposed Clean Power Plan. 0 500 1,000 1,500 2,000 2,500 3,000

MT WY CO UT NM AZ WA NV OR CA ID Total Reduction
Coal Heat Rate

Gas CCs
Nuclear At-Risk
Renewables Efficiency Proposed 2030 Goal 2012 Rate

2030 RateEPA Clean Power Plan: Phase I

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W ESTERN E LECTRICITY C OORDINATING C OUNCIL Table 2 : Crit eria for Affected EGUs

Criteria Time Basis Steam Gen

or IGCC Stationary CT

Construction started on or before January 8, 2014 x x
Base load rating > 73 MW (250 MMBtu/h) x x

Purpose to supply one

- third or more of potential electric output and more than 219,000 MWh net

electric output to a utility distribution system Annual Basis x

3

- year Rolling Average x

Combusts fossil fuel for more than 10% of the heat input 3

- year Rolling Average x

Combusts over 90% natural gas on a heat input basis 3

- year Rolling Average x



### State Emission Targets

As described above, t he building blocks were used to determine a final goal for 2030 , considering only the generation coming from the affected EGUs

. But, unique to this rule is the fact that both “inside the fence” measures, such as Block 1 (heat rate improvements) , and “outside the fence” techniques, such as Block s 3 and 4 (renewables/nuclear and energy efficiency) , can be used for com pliance purposes.

In addition to the final 2030 target emission rate , the EPA created an interim goal for each state, effective from 2020 through 2029. Figure 2 shows the proposed final goals for each Western s tate as well as the interim goal that is to be satisfied by the states on an average from 2020

– 2029. Notably, the interim state emission rate goal is only slightly higher than the final emission goal, putting pressure on states to make significant progress toward the interim goal in the y ears prior to the compliance period

.EPA Clean Power Plan: Phase I

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W ESTERN E LECTRICITY C OORDINATING C OUNCIL Figure 2 : EPA Proposed State CO 2 Emission Goals (lbs/MWh)



### Additional Resources
The proposed Clean Power Plan is complex. For additional information, including industry analysis, t he following documents were particularly useful to WECC and we encourage stakeholders to rely on these and other resources for a more thorough briefing:

• EPA Rule 111(d) webpage: http://www2.epa.gov/carbon

- pollution

- standards/clean

- power

plan

- proposed

- rule

• EPA Proposal for State Plan Implementation

http://www2.epa.gov/sites/production/files/2014

- 07/documents/webinar_part_3_implementation_presntation_0.pdf

• EPA Rule 111(d) Goal Computation document: http://www2.epa.gov/carbon

- pollution

standards/clean

- power

- plan

- proposed

- rule

- goal

- computation

• EPA Informational Briefing: Carbon Emissions from Power Plants: http://www2.epa.gov/carbon

- pollution

- standards/learn

- about

- carbon

- pollution

- power

plants

• R egulatory Assistance Project (R AP ) Factsheet : http://westernenergyboard.org/wp

content/uploads/2014/07/06

- 27

- 14RAP_EPA111dSynopsis.pdf

• Duke Nicholas Institute Policy Brief: http://nicholasinstitute.duke.edu/sites/default/files/publications/ni_pb_14

- 01_0.pdf 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2,200

AZ CA CO ID MT NM NV OR UT WA WY

EPA Interim State Goal EPA Final (2030) State GoalEPA Clean Power Plan: Phase I

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### WECC’s Phase 1 Approach

The draft EPA Clean Power Plan presents numerous opportunities for technical investigation. WECC looks at the draft rule through the reliability lens . However, as with the development of nearly all energy polic y , economics and environment al considerations are key drivers of the analysis and decision maki ng. Most EPA briefing documen ts circulating through the industry focus on EPA data and analysis with efforts to analyze, dissect, and in some cases critique the building block approach used to establish the goals. To round out these viewpoints , WECC’s Phas e 1 approach focuses on analyz ing the potential impacts of the assumptions core to the EPA building blocks
, leveraging several tools and studies in an effort to develop a truly cross

functional perspective on this issue.

WECC’s cross

- functional approach for evaluating the potential impacts of the proposed Clean Power Plan relies on three components:

1. Resource Adequacy Assessment: The resource adequacy perspective is essential to ensuring that there will be enough resources to serve peak load under various compliance scenarios. Resource adequacy assessments look at forecasted load and expected resources and apply reserve margin calculations to determine if resources meet demand.

2. Production S imulation Modeling: Also known as production cost simulation , this perspective gives insight into operational, economic , and emission impacts the system might face under a particular future

. 3. System Stability Studies: This perspective provides a check on whether potential compliance scenarios create stability issues. The se studies take a snapshot of the grid and investigate how the unexpected loss of equipment could impact grid reliability

. There is merit and value in understanding how the EPA’s proposed BSER could impact resource adequacy, system operations, grid stabil ity, and state

- level emissions even though states currently do not have any obligation to implement the BSER as proposed by the EPA. For each of the EPA building blocks, WECC a ttempted to use these approaches wherever applicable and feasible

. These
perspec tives will also be leveraged in future WECC work products surrounding this issue.

Over the next several months , WECC ’s objective will shift from providing analysis around the foundational assumptions of the proposed rule to evaluating potential impacts of a range of specific 

## EPA Clean Power

Plan Production Simulation

Model

Sysetm Stability Studies Resource AdequacyEPA Clean Power Plan: Phase I

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W ESTERN E LECTRICITY C OORDINATING C OUNCIL compliance strategies. This will help states consider the range of compliance options and their impacts, helping them to further hone their plans.


### Analysis and Preliminary Results

In the short time since the release of the proposed rule, WECC has used its tools, information, and experience to provide useful information appropriate for this stage of the issue. WECC’s analysis is not complete and WECC will continue its Phase 1 analysis over the next se veral months. In an effort to release information in a timely manner, WECC will release additional portions of its Phase 1 work as the information becomes available.
The remainder of this document reflects the work WECC has completed over the last two mon ths. The work is organized by Building Block. The Building Blocks are not given equal treatment in this report. This is due to a lack of applicable analyses for a particular Building Block or to the fact that additional work will be completed on that Build ing Block. The results presented below should be read and taken as the first in a series of investigations by WECC on this topic. E mphasis on a single building block or elements therein should not be construed as WECC recommending any compliance mechanism to another.



### Block 1: Heat Rate Improvements
Building Block 1 includes the improvement of heat rates of affected coal

- fired steam EGUs by 6 percent (on average). This would effectively reduce emission s of those EGUs by 6 percent

. For the W estern states, Bl ock 1 accounted for 25 percent of the total emission reductions from 2012 through 2030. The Block 1 assumptions impact Wyoming and Montana the most as these two states house a large proportion of the West’s coal fleet.
The EPA has identified several optio ns for improving the heat rates of coal

- fired plants, such as :

• Installation of control systems using current technologies

• Operator training

• Smart soot blowing

• Steam turbine upgrades

• Boiler draft fan/driver upgrades
WECC has not collected any data or conducted studies that allow for an assess ment of plant

- level or system impacts of implementing this building block. Although WECC could study a scenario that included a reduction in heat rates for coal generation, it may be premature to perform such a study

. T o properly assess which heat rate improvement measures are available for each coal

- fired facility, it would be n ecessary to discover which technologies have already been implemented for each affectedEPA Clean Power Plan: Phase I

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W ESTERN E LECTRICITY C OORDINATING C OUNCIL EGU in the Interconnection . The G enerator O wners could best address the improvements that could be considered, and the overall heat

- rate improvements that might be obta ined. Since certain plants may already have improved their heat rate , making further enhancements could be technically or economically infeasible. At this point, it is difficult to assess the cau s al impacts of heat

- rate improvements on resource adequacy, p roduction system and overall reliability of the electric system.
WECC intends to collaborate with stakeholders in Phase II of our work to better investigate the implications of implementing Block 1

.


### Block 2: Increased Natural Gas Utilization

The second b lock of the EPA’s proposed BSER assumes a state

- level redispatch from high

- carbon EGUs , such as coal burning resources, to lower

- carbon EGUs , like natural gas combined

- cycle generators

. By providing energy from less carbon

- intensive resources, it is presumed by the EPA that a state could reduce its emission rate from all EGUs in aggregate

. C entral to this is the EPA assum ption that the redispatch could occur up to the point where natural gas EGUs were operated at a 70 percent capacity factor , a s a n annual maximum . It must be noted that emission reductions would vary based on current dispatch levels and related emissions profile

. Since this block assumed that a reduction in coal generation would be offset by gas

- fired combined

- cycle units, states with large fleets of both coal

- and
gas

- fired plants were impacted significantly. Building Block 2 was analyzed from three perspectives, as detailed below.



### Key Technical A ssumptions
The following assumptions influenced and/or limited the analyses of Building Block 2 :

1. Resource adequacy analysis is limited to only peak

- hour periods and does not account for variations in generation profile due to changes in time (off

- peak, winter or shoulder months).
2. The current analysis does not focus on any subregional or locational situations (load pockets) or any EGU

- specific operational conditions.
3. Frequency response studies were only performed for one “peak” hour for a single scenario. Comprehensive analyses, considering RAS, voltage stability, and path rating impac ts, among other reliability aspects, are still needed for finalize any conclusions around system reliability.



### Resource Adequacy

Planning Reserve Margins

A p lanning r eserve margin is a target that L oad

- S erving E ntities often use in long

- term resource plan ning to ensure that adequate generation resources are available for reliable operations of the electric system. It is used to capture the uncertainties associated with long

- term planning such as load forecast errors and unplanned generation and transmissio n outages. WECC collects electric generationEPA Clean Power Plan: Phase I

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W ESTERN E LECTRICITY C OORDINATING C OUNCIL capacity and forecasted demand information from Balancing Authorities annual ly and
, using that information, calculates p lanning r eserve margins for the WECC R egion and subregions within the United States. A 15 p ercent p lanning r eserve margin is a typical target used in resource planning, and is used by NERC as a default margin in the Long

- Term Reliability Assessment.

There were 848 MW of coal

- fired generating capacity retired in 2013. As reported in WECC’s 2014 annual Loads and Resources data , which WECC received before the EPA rule was issued , over the next 10 years at least 2,343 MW of coal

- fired generating capacity is expected to be retire d ( before taking the proposed EPA Clean Power Plan into account )

.


### Potent ial Impacts
The reserve margin for WECC

- US is greater than 15 percent through 2020 when generating resources that exist or are under construction today are included in the analysis. For 2024, the end of the 10

- year study period

– including resources that exi st or are under construction today as well as resources that are planned for future addition or retirement

– also results in a planning reserve margin greater than 15 percent

. An analysis of the Anticipated Planning Reserve margins calculated in the NERC 20 14 Long

- Term Reliability Assessment shows that in 2020, the beginning of the enforcement period, all four of the WECC subregions have capacity in excess of the 15 percent target. However with the loss of approximately 400 MW (or .53 percent ) of capacity in the US portion of the NW subregion, 700 MW (2.97 percent ) in the Southwest subregion, 3,500 MW (35 percent ) in the Rocky Mountain subregion, or 200 MW (.32 percent ) in the US portion of the California/Mexico subregion, the calculated Planning Reserve marg in for those subregions could drop below the 15 percent target. Note that the surplus capacity was calculated with the assumption that any additional generation retirements above that reported in the Long

- Term Reliability Assessment ( LTRA ) were not replace d nor were entities able to transfer additional excess energy between subregions above that reported in the LTRA

. The electric generation resources in the US portion of the Western Interconnection are a diverse mix with h ydro capacity located in the Pacifi c Northwest, s olar resources in the Southwest, w ind resources in the Rocky Mountain area , and g eothermal resources in the Great Basin area. By 2024 , the resource mix could look different as additional wind (6,900 MW) and solar (8,600 MW) generation resourc es are planned to be added, and more natural gas

- fired generation is planned to be added to replace potential coal

- fired generation retirements or displacement in some cases

.EPA Clean Power Plan: Phase I

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W ESTERN E LECTRICITY C OORDINATING C OUNCIL Figure 3 : Resource Mix in US Portion of the Western Interconnection

With the current planning reserve margins and the possible resource additions, L oad

- S erving E ntities within the United States portion of the Western Interconnection should have adequate reserves through 2020. The margin should allow time for L oad

- S erving E ntities to respond to new policies and requirements as they continue to reliably serve the changing nature of demand of electric customers.



### Production Simulation

The Transmission Expansion Planning Policy Committee's ( TEPPC ) 2024 Common Case is a compilat ion of planned generation, load forecasts, and expected transmission that was developed as part of the TEPPC planning process . The case represents a trajectory of recent Western Interconnection planning information, developments, and policies looking out 1 0 years. TEPPC stakeholders participated in the development of the assumptions that were included in the case. The platform for the various inputs is a production cost model that is used to study future transmission needs by simulating the hour

- to

- hour
ope ration of the transmission system

. The model is well

- suited to study transmission use , generator dispatch, variable production costs and effluent emissions from generation resources. The key input parameters that are used by the model for generation commit ment, dispatch and emissions are listed
in Table 3

. Coal 32,500 MW

Gas 85,900 MW Hydro 52,700 MW Nuclear 7,300 MW Solar 5,700 MW Wind 19,100

MW Other Renewable 3,900 MW Other Thermal 1,200 MWEPA Clean Power Plan: Phase I

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W ESTERN E LECTRICITY C OORDINATING C OUNCIL Table 3 : Thermal G eneration P arameters

Parameter Units Parameter Units Capacity (max) MW Startup cost $ per start Capacity (min) MW Startup fuel MMBtu
Heat r ates MMBtu/MWh Emission rates Lbs/MMBtu
Fuel cost $/MMBtu Forced outage rates %
O&M cost $/MWh Planned outages From date to date Ramp rates MW/hour Must

- run status True/False



### Coal Retirements and Displacement

The Common Case reflects known and already announced generator retirements

– including coal plants. The Data Work Group (DWG) leads an effort to review Loads and Resources d ata submittals, Energy Information Administration ( EIA ) data, and a number of other public data sources with the goal of ident ifying planned retirement dates for generators. The 2024 Common Case assumes 7,016 MW of coal

- fired EGUs that are retired from 201 0 through 2024 , as shown in Figure 4 . This final total 3 includes 859 MW of retirements in Alberta, which would have no bearing on the EPA draft rule . The remaining 6,157 MW of coal retirements impact the state emissions results that come out as result of the production cost model. The TEPPC Common Case also includes several pre

- scheduled retirements and conversions of coal

- fired generators

.

3 The Common Ca se has 42,283 MW of coal generation before retirements, of which 7,016 MW are retired (16.6 percent ) by the end of 2024.EPA Clean Power Plan: Phase I

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W ESTERN E LECTRICITY C OORDINATING C OUNCIL Figure 4 : TEPPC 2024 Common Case Cumulative Coal Retirements by Year (MW)

The proposed EPA BSER framework assumes that there will be a reduction in emissions rate (lbs/MWh) associated with coal

- fired generation as per the assumptions in Build ing Block 2. These reductions
, according to EPA
, are translated on an energy (MWh) basis. T o draw a comparison between the WECC
2024 Common Case planned coal retirements and the coal reduction s in Building B lock 2, WECC converted the EPA reduction energy t o a capacity (MW) parameter by assuming a n 85 percent capacity factor for coal generation. This interpretation of the EPA coal

- based generation reduction create s an equivalent level of “interpreted retirements /removals ” on a capacity basis rather than ener gy basis
, as originally presented by the EPA . This information can then be compared to the “pre

- EPA draft rules” planned retirements in the 2024 Common Case, as presented in Figure 5

. Since the Common Case is a 2024 data set (i.e.
, 10

- year planning horizon) , the Block 2 portion of the EPA 2020

- 2029 interim goal was used for the purposes of this comparison

. 4 The goal of this analysis is to gain some insight into how the EPA assumptions compare with current plans for generator retirem ents.

4 Note that this comparison fails to account for the operational displacement of coal generation in the 2024 Common Case. The Common Ca se coal displacements due to renewable generation and the California Green House Gas initiative are difficult to measure, but would improve the comparison. The disposition of coal plants located on tribal lands is currently unclear and these plants are exc luded from the comparison.

-10,000

-9,000 -8,000 -7,000 -6,000 -5,000 -4,000 -3,000 -2,000 -1,000 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025EPA Clean Power Plan: Phase I

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W ESTERN E LECTRICITY C OORDINATING C OUNCIL Figure 5 : Coal Retirements by State (2010

- 2024)

The resulting analysis shows that most Western states are already planning to reduce coal generation
to levels roughly equivalent or beyond WECC ’s interpretation of the EPA’s B lock 2 compliance optio n

. 5 Arizona and Utah are clearly the outliers. The Common Case has identified about 500 MW of retirements in Arizona. This is small in comparison to the nearly 3,500 MW of coal

- fired reductions and/or displacement assumed by the EPA in building B lock 2 ( WE CC 's capacity interpretation)

. Utah appears to have a significant gap between its planned retirements and the level assumed by the EPA. However, this analysis is based on 2024 data and there are about 1,600 MW of additional Utah coal retirements expected i n 2025 that would decrease the apparent gap. U nits that are expected to retire
in 2025 are listed in Table 4

.

5 Changes to the coal generation capacity factor assumption significantly impact this comparison. 0 500 1,000 1,500 2,000 2,500 3,000 3,500

AZ CA CO ID MT NM NV OR UT WA WY

2024 Common Case Coal Retirements Estimated EPA Coal Displacement MWEPA Clean Power Plan: Phase I

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W ESTERN E LECTRICITY C OORDINATING C OUNCIL Table 4 : Coal Retirements expected in 2025
Unit Retired in 2025 Capacity (MW) State Centralia 2 730 Washington
Intermountain 1 & 2 1640 Utah Valmy 2 116 Nevada

One of the key elements of the EPA’s building B lock 2 assumptions was to increase the dispatch of combined

- cycle resources (NGCC) such that coal and oil/gas steam resources are displaced
, resulting in less carbon

- intensive energy . The proposed combined

- cycle dispatch increase varies from state

- to

state impacting those states that have both a large coal fleet and significant gas capacity, like Arizona and Colorado. There is a stated expectation to bring the capacity factor of the NGCC g eneration up to 70 percent if the resource mix supports that amount of displacement.
The production simulation model performs a security

- constrained economic dispatch, so generators are dispatched by the model as it minimize s system operation costs, while also observing transmission constraints and operational para m eters. In an effort to investigate how the West’s combined

- cycle gas fleet would react in response to any state (or multiple states) effort(s) to adopt policy measures to internalize the soci etal cost of CO 2 - induced environmental externalities, the following scenarios featuring the removal of coal generation and CO 2 adders ($/Metric Ton) in separate studies . The scenarios are described below :

• Common Case

– The 2024 “expected future” serves as the base

- case business

- as

- usual
scenario

.

• Common Case with EPA Coal

– M aintains all Common Case assumptions except an additional 3 , 900 MW of coal

- fired generation are retired to reflect WECC’s capacity interpretation of EPA B uilding B lock 2 (as presented i n Figure 5 ). These retired or displaced units are replaced by combined

- cycle gas generation at the same location.

• Common Case Carbon $40

– Maintains all Common Case assumptions except CO 2 emissio ns are assigned a $40/ Metric Ton cost (no incremental coal retirements beyond Common Case assumptions )

.

• Common Case Carbon $60

– Maintains all Common Case assumptions, except CO 2 emissions are assigned a $60/ Metric Ton cost (no incremental coal retirements beyond Common Case assumptions)

. Figure 6 shows resulting annual capacity factors for affected EGU NGCC units , on a state

- by

- state basis, for the studies listed above . As expected, remocving 3 , 900 MW of coal to reflect WECC’s interpretationEPA Clean Power Plan: Phase I

– Preliminary Technical Report 17

W ESTERN E LECTRICITY C OORDINATING C OUNCIL of the EPA’s Block 2 assumptions results in incr eased NGCC operation in every state, especially in Arizona and New Mexico. However, the system dispatch the resulted from a carbon price of $40/ton ( and no coal removals) results in even greater utilization of the NGCC fleet.

Figure 6 : Combined

- Cycle Re

- d ispatch Scenarios

The results of this study validate the EPA’s decision to prioritize considerable flexibility in state’s compliance plans. As shown, it is possible to increase the utilization of natural gas resources (and reduce carbon emissions) by retiring select coal generation units. It is also possible to increase the utilization of the existing g as fleet by introducing a “CO2 adder” that shift s the dispatch away from
emission

- intensive resources like coal and rel ies more heavily on natural gas resources since the added cost of carbon makes gas combined cycle a more economic resource , from the oper ational perspective.


### System Reliability Considerations

As the W estern resource mix continues to evolve, it is important to track future system reliability. EPA Building Block 2 assumes a significant reduction in coal generation , as described above

. T o ev aluate the potential impact of this, WECC performed technical planning studies that help to identify important system reliability considerations. The studies required high

- level assumptions that are necessary due to 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

AZ CA CO ID MT NV NM OR UT WA WY WEST 

## NGCC Annual Capacity Factor Comparison

2024 Common Case 2024 Common Case EPA Coal 2024 Common Case Carbon $40 2024 Common Case Carbon $60EPA Clean Power Plan: Phase I

– Preliminary Technical Report 18

W ESTERN E LECTRICITY C OORDINATING C OUNCIL a lack of more detailed information. An attempt has been made to highlight a number of considerations that should be investigated when more detailed information is available. Only system frequency response has been investigated in depth.



### System Voltage Stability
Implementation of the proposed E PA rule could impact system voltage stability . Voltage stability is the ability for the power system to maintain the voltage at every point in the system
, within an acceptable range. If voltage stability is not maintained
, there is the potential for voltag e collapse and subsequent loss of load or equipment outages. Large base load

- generating units , such as large coal

- generating units, are generally depended on to provide system voltage support. System voltage stability issues can

occur on both the regional and local levels

.
The extent that v oltage stability is impacted by a changing resource mix is heavily dependent on the generating resources added or removed. T he generator type s , locations, and sensitivity of the surrounding transmission network to voltag e changes can impact voltage stability . Voltage stability will most likely need to be addressed case

- by

- case on a more localized scale where issues can be addressed at the sub

- transmission

- system level . While voltage stability is a highly local issue, the I nterconnection relies on it to maintain system reliability and it should be considered in a fully comprehensive analysis. In Phase I and Phase II of this work, WECC will continue to investigate analysis options and coordinate with stakeholders around this aspect of system reliability.



### Path Rating Impacts

In the Western Interconnection a Path is one or more facilit ies between transmission systems or internal to a system for which schedules and/or actual flows are monitored for reliability purposes. Facilit ies in a path may originate and terminate at the same point (substation or generating station) or at different points. Two or more individual paths can be combined into a single path for rating purposes, although they may be separate scheduling paths. Path s are often called cut

- planes. As shown in F igure 7 , there are a number of paths throughout the Western Interconnection. Generation

c hanges that impact path ratings will be noticed throughout the region.EPA Clean Power Plan: Phase I

– Preliminary Technical Report 19

W ESTERN E LECTRICITY C OORDINATING C OUNCIL Figure 7 : Map of WECC Transmission Paths

Many existing WECC transmission path ratings are dependent on the location, size and type of nearby generation. If the generation resources are changed (or removed) , path ratings could be impacted and studies would need to be conducted to re

- evaluate the i ndividual path ratings. Several path ratings depend on the ability to trip large amounts of generation to maintain reliability of the system. If this generation was removed via implementation of the EPA Clean Power Plan
, the path rating could be impacted

. One example of this is Path 5 4 : Coronado

– Silver King 500 kV
, which has a rating of 1,494
MW n orth

- to

- south . The rating of Path 5 4 depends on the ability to trip generation at the Coronado substation

. If this generation was retired or offline, the path r ating may have to be decreased

.



### R emedial Action Schemes Impacts
Remedial Action Schemes (RAS) help to better utilize the transmission system by mitigating reliability risks , increas ing system transfer capability, and meeting project schedules. RAS are def ined as an automatic protection system designed to detect abnormal or predetermined system conditions, and take corrective actions other than and/or in addition to the isolation of faulted components to maintain system reliability. One type of RAS is event based

- generator tripping

. In this type of RAS, transmission equipment trips and RAS actions cause the adjustment or tripping of generation. Changes in the generation resources would require evaluation of RAS effectiveness and may require changes to the schemes. Many of the WECC RAS are voltage dependent so modifications to the voltage support will require investigation and potential changes. RAS a rming could become more dynamic
, depen dingEPA Clean Power Plan: Phase I

– Preliminary Technical Report 20

W ESTERN E LECTRICITY C OORDINATING C OUNCIL on how generation resources are replaced. In general, generation resources that have a large amount of variability could significantly change the effectiveness of RAS.



### System Frequency Response
According to NERC, frequency r esponse is “ a measure of an Interconnection’s ability to stabilize frequency immediately following the sudden loss of generation or load. ” Frequency response is a critical component to the reliable operation of the Western Interconnection
, especially during disturbances and system r estoration. The EPA assumes that Block 2 would reduce the output from coal generation, replacing it with generat ion from less carbon

- intensive resources (i.e.
, gas) . Many coal units in the West provide critical frequency response support to the system. Giv en this, WECC embarked on a n effort to investigate how coal retirements could impact system frequency response.
The studies were performed on a WECC 2023 Heavy Summer B ase C ase that was approved by the Technical Studies Subcommittee ( TSS )

. The studies wer e focused on frequency response and did not examine any of the other potential issues that could be introduced by changing resources and locations of large power generation units , many of which are discussed above

.
T o perform the system frequency response analysis, a number of assumptions were made:

• Replacement generation would be located at the same location as the generation removed / retired in the study;

• Replacement generation would use generic dynamic models; and

• In an attempt to study a “ worst case sc enario ” in terms of frequency response, all displaced generation would be replaced by inverter

- based resources that do not provide frequency
response. The study relied on generation assumptions from the WECC 2024 Common Case and WECC’s interpretation of the EPA B uilding B lock 2 . These two information sources were used as a basis for changing resources in the 2023 Heavy Summer B ase C ase. The study was formed using the following approach:

1. Coal retirements in the 2024 Common Case were comp ared with those in the 2023 Heavy
Summer B ase C ase. With a couple of exceptions, coal units that were assume d to be retired by 2024 in the Common Case were retired in the Heavy Summer B ase C ase.

2. With the Heavy Summer B ase C ase and the Common Case now refl ecting similar coal retirements, WECC interpreted the EPA Building Block 2 into a megawatt “reduction” equivalent

– as described earlier in this paper . Block 2 is by nature a coal energy reduction assumed by the EPA. WECC created an equivalent capacity or megawatt reduction value by assuming an 85 percent capacity factor. The difference o f Common Case/Base Case retirements and EPA “displacements” is reflected below.EPA Clean Power Plan: Phase I

– Preliminary Technical Report 21

W ESTERN E LECTRICITY C OORDINATING C OUNCIL Figure 8 : Coal Retirements by State (201 0

- 2024)

3. To reflect the estimation of the EPA’s ass umed coal “displacement
, ” WECC further adapted the 2023 Heavy Summer Base Case by removing an additional 3,000 MW of coal

– mostly located in Arizona and Utah

– and replaced it with inverter

- based generation, assuming that to be the worst case scenario for frequency response. 6 WECC selected generation to retire within each state based on a reverse economic prioritization of the generation (i.e. the least efficient generators are removed first) . In doing so , the coal units were ordered by state and then by he at rate ( taken from the 2024 Common Case)

. Based on efficiency and location, the units were incrementally selected and removed until the EPA assumptions were met. In total, 7,107 MW of coal resources were removed from the original 2023 Base Case.
To highl ight the difference in the frequency response posed by different resource types, Figure 9 shows the same unit with three different scenarios . The first model used is a typical large thermal unit at max output, the second is an inverter

- based generating uni t, and the third is a typical large thermal unit that is able to respond both short

- term and long

- term to frequency excursions. T he inverter

- based unit

6 The term inverter

- based generation is used to indicate that the generation is not synchronous and will have power electronics bet ween the generation and the rest of the interconnected system. The reason that inverter

- based renewable generation is assumed to be the worst case for frequency response is due to the model being used to simulation the generation. The transient stability m odel for each displaced generator was replaced with a WTG4 model
, which is a generic
inverter

- based stability model. 0 500 1,000 1,500 2,000 2,500 3,000 3,500

AZ CA CO ID MT NM NV OR UT WA WY

2024 Common Case Coal Retirements Estimated EPA Coal Displacement MWEPA Clean Power Plan: Phase I

– Preliminary Technical Report 22

W ESTERN E LECTRICITY C OORDINATING C OUNCIL stays at the same output throughout the simulation, the base

- loaded thermal unit gives an initial
respon se but returns to the original output, and a responsive thermal unit will respond and keep its response based on unit settings.

Figure 9 : Emission Reduction Impacts to Generator Response

To study frequency response, a large amount of generation is tripp ed during a simulation to investigate how the system responds and recovers. WECC has used a two

- unit Palo Verde outage for many years to examine a number of reliability issues

– this practice was continued for this study . In the 2023 H eavy S ummer Base C ase , the loss of the two units resulted in 2756 MW being tripped during the dynamic simulation.

The three scenarios studied were :

1. 2023 Heavy Summer Base Case unmodified ;

2. 2023 Heavy Summer Base Case modified by replacing approximately 3000 MW of coal generation with inverter

- based generation ( to replicate the TEPPC Common Case Assumptions ) ; and 355 360 365 370 375 380 385 390

0 5 10 15 20Power Generated(MW)

Time(sec) Base Load Thermal

Inverter Based Renewable

Responsive ThermalEPA Clean Power Plan: Phase I

– Preliminary Technical Report 23

W ESTERN E LECTRICITY C OORDINATING C OUNCIL 3. 2023 Heavy Summer Base Case modified by replacing approximately 7000 MW of coal generation with inverter

- based generation (to replicate the TEPPC Common Case
A ssumptions and EPA Building Block 2 interpretation , taken together )

. There were two other scenarios , identical to (2) and (3) in terms of capacity, where the coal generation

was substituted with a combustion turbine model. However, due to the responsive na ture of the gas generation used to replace the coal generation, these simulations r esulted in little change from the original case. Given that, we focus on the other three scenarios.
The plots of the system frequency response are provided for each of the three scenarios. As shown, the “worst case” scenario, where 7,000 MW of coal generation was replaced with an inverter

- based model, did not significantly change the system frequency response for the specific condition studied (heavy summer)

. Similar results were observed in the TEPPC case where 3,000 MW of generation was replaced.

Figure 10 : Coal Reduction

– System Frequency Response

The study results suggest that removing the specified about of coal generation , given the assumptions, would have minimal impact on system frequency response. The minimal change in frequency response is not surprising given that 7
, 000 MW of incremental retirements represents only about 3.5 percent of the total generation (198,000 MW) in the heavy summer case. Preliminary analysis suggest that t he 59.82 59.84 59.86 59.88

59.9 59.92 59.94 59.96 59.98 60 60.02

0 10 20 30 40 50 60Frequency(Hz)

Time(sec) 2023 Base Case

EPA - Inverter

TEPPC - InverterEPA Clean Power Plan: Phase I

– Preliminary Technical Report 24

W ESTERN E LECTRICITY C OORDINATING C OUNCIL effects would also be minimal in a typical lightly loaded case as the total generation typically being represented is closer to 100,000 MW and still would only result in 7 percent of the generation being displaced. While a light

- l oad scenario was not studied at length
, some preliminary work was performed

. This work was different in that “headroom” (i.e.
, remaining capacity) from existing

resources dispatched to make up for the loss of coal generation

. T he findings were similar to t he summer peak study in that there was not a significant impact on system frequency response. However, the light

- load scenario needs further investigation and a more robust scenario analyses in order to confirm the results.
As described above, I nterconne ction

- wide frequency response was not significantly impacted by the specific scenarios analyzed . That is not to say that there are no other reliability issues that should be examined

. WECC and other entities need to study more scenarios under various loadi ng and operating conditions in order to fully investigate potential reliability concerns. Other potential reliability issues that should be considered include:

• Load

- serving ability

– Changing the location and size of generation will have some effect on whe re energy can be sent throughout the system. In some instances this may make delivering power to local load a challenge.

• Resource availability

– If replacement generation resources rely on some source of fuel
, such as natural gas or wind, it must be determ ined whether those resources are available in the locations where transmission infrastructure is present.

• Time required to site and construct any newly required generation to meet load

– Siting and locating new transmission and generation facilities is a long process.

• Operational issues related to a more dynamic resource mix

– Changes in the generation being used may require additional operating practices and procedures to be developed. The change in resources may also require certain generators to be run to accommodate for resources that are difficult to dispatch.



### Block 3: Renewable and Nuclear Generation

EPA’s B uilding B lock 3 calls for increased energy generation from zero

- carbon sources , specifically renewable s and nuclear power

. The block assumes cha nges in nuclear generation capacity ( e.g., planned capacity , avoided retirement) and also increasing renewable energy to achieve a regional average of current Renewable Portfolio Standard ( RPS ) mandates. Figure 11 depicts the EPA’s construction of the renewable energy portion of B lock 3

. Here, the EPA assum ed that states could develop renewable resources to a level similar to that of their neighboring states

. Note that states like Oregon, Washington, and California that are relatively rich in renewable resource potential
, and haveEPA Clean Power Plan: Phase I

– Preliminary Technical Report 25

W ESTERN E LECTRICITY C OORDINATING C OUNCIL made substantial progress in developing these resources, are assumed to be capable of developing more renewable energy than states with less development to date, such as Montana and Utah.

Figure 11 : EPA Proposed State Goals an d Block 3 (MWh)

One of the key components of the WECC Common Case is that it reflects enacted state policies

- RPS are assumed to be met within the data set and the assumptions are fully accounted for and vetted through a stakeholder process . Comparing the EPA assumptions with state enacted RPS targets produces interesting observations. Figure 12 introduces this state

- level data. The comparison shows that the EPA varied their assumptions across the states. For example, California , Colorado, and Arizona are already subject to state RPS requirements , and these requirements are in excess of the RPS assumption the EPA used in Building Block 3 . In other words, RPS

- driven emission reductions of this
nature are already being planned for due to the statutory req uirement

. The opposite is true for states like Wyoming, where the EPA used Block 3 to develop a target that is beyond Wyoming’s statutory requirement. 0 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 40,000,000 45,000,000

AZ CA CO ID MT NM NV OR UT WA WY
EPA 2012 RE Exist (MWh) EPA Goal RE New (MWh)EPA Clean Power Plan: Phase I

– Preliminary Technical Report 26

W ESTERN E LECTRICITY C OORDINATING C OUNCIL Figure 12 : Renewable Energy versus Emissions Targets by State (GWh) in 2024



### Block 4: Energy Efficiency

EPA’s B uilding B lock 4 calls for a reduction in demand for carbon

- intensive generation through demand

- side efficiency improvements. Specifically, the EPA seeks to encourage states to consider increased investments in energy

- efficiency, demand

- side management and other market

- based programs that would enable reduction in energy consumption
, thereby reduc ing CO 2 emissions. In the development of this building block, the EPA assumed that every state would implement energy

efficiency policies, eventually reaching 1.5 percent annual

- incremental energy savings. The EPA considered that some states would need to “ramp up” their programs to achieve this. Based on this , in the EPA’s calculations the timing for when states hit the 1.5 percent target varies.

The load forecasts in the TEPPC 2024 C ommon C ase account for reductions due to energy efficiency. The load forecasts submitted to WECC are reviewed by Lawrence Berkeley National Laboratory ( LBNL ) and adjusted
, if necessary
, to account for expected and enacted energy efficiency policies. These energy efficiency projections are developed by LBNL and they consider energy efficiency resource standards and utility Integrated Resource Plan ( IRP ) in each state
, building the information up from the individual utility

- l evel. LBNL has created a number of reports outlining the process used to estimate anticipated energy efficiency measures

. 7

7 LBNL Report: http://emp.lbl.gov/sites/all/files/lbnl

- 5803e.pdf 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 RPS Target EPA

Note that Idaho and Wyoming do not have an RPS targetEPA Clean Power Plan: Phase I

– Preliminary Technical Report 27

W ESTERN E LECTRICITY C OORDINATING C OUNCIL C omparing the energy efficiency in the 2024 Common Case (LBNL EE) with EPA’s Building Block 4 interim period (2020

- 2029) assumptions can provide an understanding of how current Energy Effic iency ( EE ) plans compare with the EPA’s building block assumptions. This comparison is provided
on a state

- by

- state basis in Figure 13

. The LBNL energy efficiency estimates in 2024 represent the total savings from utility

- ratepayer

- funded EE programs implemented over the ten preceding years. Like the EPA building blocks
, LBN L does not include certain EE policies
, such as federal or state appliance efficiency standards or state building efficiency standards
, making it possible to directly compare the two projections with some degree of accuracy

. In most states , the EPA Buildin g Block 4 assumed fewer incremental savings from energy efficiency than what is already anticipated
, according to the LBNL data

. Figure 13 : Energy Efficiency Comparison using EPA Assumptions (GWh)

T o better align the underlying assumptions of this comparison , further information may be needed on the EPA’s assumptions regarding timing , the types of programs and sectors covered, and whether EPA assumptions are gross or net of free

- riders.
WECC has explored policy high

- energy

- efficiency scenarios throu gh past TEPPC studies and this information will serve WECC and other stakeholders well as compliance scenarios featuring EE are investigated in the coming months.


### Emissions Analysis

Although the evaluation of CO 2 emissions is not the primary purpose of t he TEPPC C ommon C ase, the model and study results are highly supportive of this type of work . Over the next few months the data 0 5,000 10,000 15,000 20,000 25,000 30,000 EPA EE 2024 LBNL EE Est. 2024EPA Clean Power Plan: Phase I

– Preliminary Technical Report 28

W ESTERN E LECTRICITY C OORDINATING C OUNCIL inputs and other assumptions will be reviewed and updated as necessary to improve the quality of the emission results. The CO 2 e mission rates were calculated for the states that are entirely or mostly included in the Western Interconnection and compared to the 2012 rates and the EPA interim state goals

. 8

T o evaluate the CO 2 emission rates from the TEPPC C ommon C ase, it was necessa ry to integrate the proposed Clean Power Plan calculation methodology into the evaluation process, including the EPA criteria for including in

- state “affected” generation in the State Goal equation . State emission rates are calculated using the equation re served in the Appendix. WECC used the same technique as the EPA.

Figure 1 4 : Preliminary Comparison of TEPPC 2024 Common Case Emissions

The comp arison shows that emission rate improvement since 2012 varies across the Western state s

. The emission rates from the 2024 Common Case are driven by load

- growth projections, planned coal retirements, compliance with RPS policies, and ongoing investments in energy efficiency

. Even with the

8 The proposed EPA Clean Power Plan provides limited guidance on a few iss ues that will be addressed by the states as their plans are developed, leading to the following assumptions.
1. For the most part the CO 2 emissions and corresponding energy output were assigned to states based on their geographical locations. The EPA has a sked for comments on this assumption.
2. Incremental hydro and biomass additions that may be considered renewable by state definitions were excluded.

3. A few errors related to unit criteria in the EPA calculations were corrected.

0 500 1,000 1,500 2,000 2,500

AZ CA CO ID MT NV NM OR UT WA WY West CO 2 Emission Rates by State (lb/MWh) Based on EPA 111(d) guidelines

2012 Rate (lb/MWh) 2024 Common Case RateGeo (lb/MWh) EPA 2020-29 Interim Goal (lb/MWh)EPA Clean Power Plan: Phase I

– Preliminary Technical Report 29

W ESTERN E LECTRICITY C OORDINATING C OUNCIL assumed coal retirements (and other assumptions) in th e Common Case , seven of the states are short of the proposed interim goal , while others appear to have plans in place that may bring them close to the goal. More generally, results vary greatly from state

- to

- state and the underlying data and assumptions ne ed further vetting and review. Looking forward, this type of emission analysis will be a valuable resource to WECC, states, and utilities as many models do not have the operational,
transmission , and generation granularity that is supplied by the Common Ca se production cost model.



### Policy Scenarios

- Carbon Price Sensitivities
To exhibit how the valuation of carbon can impact state emission rates , WECC ran t he 2024 C ommon C ase (Aug ust 15 th version) with five different combinations of carbon adders to record their effect on the system dispatch and the resulting emission rates . The California Greenhouse Gas Initiative ($27.51 per metric ton) modeling was retained initially , but once the WECC

- wide carbon adder became higher than the California adder , a uniform tax was used for all of WECC. Studies between $0

- 60/Metric Ton were conducted and t he state

- level emission rate results for the EPA

- qualified resources are provided
in Figure 15 , with the carbon adder combinations indicated in the legend

. 9 The EPA interim goal is provided as well. This allows readers to observe how an increasing cost of carbon impacts the system dispatch and
, in turn, each state ’ s emission rate.

Figure 1 5 : EPA CO 2 Goal and 2024 Carbon Price Sensitivities (lbs/MWh)

9 First value is WECC, second value is California 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000

AZ CA CO ID MT NV NM OR UT WA WY
CO2 Rate 2024 Carb$00/27 CO2 Rate 2024 Carb$15/27 CO2 Rate 2024 Carb$27/27 CO2 Rate 2024 Carb$40/40 CO2 Rate 2024 Carb$50/50 CO2 Rate 2024 Carb$60/60
EPA Proposed Interim GoalEPA Clean Power Plan: Phase I

– Preliminary Technical Report 30

W ESTERN E LECTRICITY C OORDINATING C OUNCIL The re sults of these exploratory sensitivities highlight the interconnected nature of the Western grid. As the cost of carbon in the sensitivity studies increases , each state ’ s emission rate would be expected to fall. However, as shown above, that isn’t the case

. In some states the expected happens and emission rates in that state decrease as carbon costs rise . However, due to the operational dependencies inherent to the grid, the emission rate in other states increases with the price of carbon because now, that state may house low cost resources . These resources are dispatched more frequently , resulting in higher emissions

. While this set of sensitivities may not represent a realistic EPA Clean Power Plan compliance scenario, it exhibit s two critical point s : (1) a ctions taken in state A can impact state B ; and (2) through this type of analysis the industry has an effective means through which to track and identify those impacts.

A s states be g in to identify potential or proposed compliance plants, it is critical t hat th ese plans be evaluated jointly in addition to their individual assessments. Individual evaluation may lead to a completely different conclusion then joint evaluation when it comes to system reliability and overall system impact

. Joint evaluation of t he plans would (1) ensure that individual and/or regional state plans achieve their intended goals and do n o t unintentionally impact one another; and (2) allow for a thorough investigation into any potential reliability impacts that may not be apparent whe n looking at plans on an individual basis.



### Conclusions

Key observations from this technical report are summarized below
, with recommendations for future assessment of the EPA rules and resulting compliance plans.

• Resource adequacy

– WECC’s contribution to the most recent NERC Long

- Term Reliability
Assessment shows that p lanning reserve margins are currently in excess of their targets and
, based on the current assumptions posed by the EPA Building Blocks, impacts to resource adequacy may be minimal. WECC pl ans to further investigate resource adequacy in the coming months as compliance scenarios are identified by states. Like other reliability assessments, resource adequacy cannot be properly assessed absent realistic and/or proposed compliance scenarios.

• Emissions

– Based on results from the WECC Common Case, c urrent plans for state RPS, energy efficiency, and the retirement of carbon

- intensive generation reduce s 2024 state emission rates from 2012 levels

. However, the degree of reductions fluctuates state to state. T he reductions put a handful of states near the interim targets proposed by the EPA
, while other states have 2024 emission rates higher than the EPA interim goals

.

• Reliability

– In a frequency response study where 7,000 MW of coal resources were replaced by less responsive “inverter

- based” resources, the system respon d ed to a large contingency nearly the same as it did before the coal units were r eplaced

. This studyEPA Clean Power Plan: Phase I

– Preliminary Technical Report 31

W ESTERN E LECTRICITY C OORDINATING C OUNCIL represents a strong “first step” reliability asses sment , but the results are not conclusive or overarching . T his area requires further monitoring and review

– additional scenarios must be studied across varying operational and load conditions in order to draw meaningful conclusions about system reliabilit y

. More i mportantly, frequency response is only one aspect of reliability and the removal of coal resources could impact other areas such as RAS, path ratings, and voltage stability, among others

. Central to all of these studies is the assumptions on repla cement generation posed by potential compliance scenarios

. 

### Next Steps

While WECC has no role in creating or approving compliance plans
, it can support the efforts of the
states and industry stakeholders in a variety of ways. As WECC fulfills its Phase I work and moves into Phase I I , potential areas of focus include the following:

• Work with states and other stakeholders to continue to refine and adjust the underlying data sources that provide the analytical foundation for this report and future analyses ;

• Provide data and information useful to the development of state compliance plans;

• Investigate potential reliability issues by conducting cross

- functional analyses on potential or conceptual compliance plans using WECC’s production cost model and powerflow model capabilities;

• Compare impacts of emission rate compliance with mass

- based emission methods;

• Analyze possible multistate compliance options;

• Investigate how proposed state compliance plans could interact and impact one another; and

• Convene groups of stakeholders, such as impacted utilities and state officials, to inform them of analyses related to any of the above topics and discuss regional impacts of state compliance plans.

WECC will continue to communicate with the State

- Provincial Steering Commit tee / Western Interconnection Regional Advisory Body
, Planning Coordination Committee , TEPPC , individual state offic i als, and other stakeholders, seeking their input and expertise in WECC’s continued efforts. Studies and reports created as a part of WECC’s o ngoing efforts will be released on an “as completed” basis over the coming months

.EPA Clean Power Plan: Phase I

– Preliminary Technical Report 32

W ESTERN E LECTRICITY C OORDINATING C OUNCIL 

## Appendix 1

What is The Common Case?

The Transmission Expansion Planning Policy Committee (TEPPC) 2024 Common Case is a compilation of generation, load forecasts, and transmission that was developed by WECC as part of the 2014

- 2015 TEPPC Study Cycle. It represents an “expected” ten

- year horizon outlook of the Western Interconnection that is us ed by WECC and many stakeholders to conduct production cost simulations, mostly to address transmission needs. The Common Case includes the trajectory of recent Western Interconnection planning information, developments and policies looking out 10 years. T EPPC stakeholders assisted WECC in develop ing the thousands of assumptions that depict the Western Interconnection and how it is expected to change over the next 10 years. A simple diagram of the data inputs and changes is provided in Figure A

- 3

. Figure A

- 3 : Summary Diagram of Data Changes



## Production Cost Database ADD

• Power Flow Network

• New Transmission Projects

• Transmission ratings

• Load Forecasts

• Load Adjustments (DG/DR/EE)

• Reserve requirements

• Existing and planned generation

• Generator parameters (capacity, location, fuel, heat

- rates, etc.)

• Generation shapes (hydro, wind, solar)

• Costs for fuel and wheeling

• Emission rates

REMOVE

• Canceled/Delayed transmission projects

• Retired generationEPA Clean Power Plan: Phase I

– Preliminary Technical Report 33

W ESTERN E LECTRICITY C OORDINATING C OUNCIL The GridView production cost model was used to build the 2024 Common Case data set where all of the data resides in support of conducting the production cost simulations. The next sub

- sections describe each of these pieces in more detail.



### Building the Load Assumptions
The Common Case load assumptions are derived from the 10

- year forecasts for monthly peak (megawatts) and energy (gigawatt

- hours) loads that are submitted to WECC by the Balancing Authorities (BA) each year. An hourly load shape is then created by taking a historical load shape (e.g., from 2005) and re

- scaling and re

- shaping it to match the targeted monthly peak and energy forecasts. These values are then assig ned to TEPPC Load Area s, shown in Figure A

- 2

. The load distribution to the individual electrical buses in each area is based on one or more WECC Technical Studies Subcommittee ( TSS) power flow base case that reflect seasonal load distribution variations.

Figure A

- 2 : WECC Balancing Authorities



### Building the Transmission Network

The transmission network is based on a WECC TSS 10

- year power flow base case (e.g., 2023 HS1A1 Heavy Summer Base Case or 23HS1A1). The power flow base case is then reconciled with the Common Case Transmission Assumptions (CCTA), which are recommended by the Regional Planning Coordination Group (RPCG) as a list of regionally significant transmission projects that have a high expectation of being in

- service within a 10

- year timeframe

. Figure A

- 3 shows the CCTA for the 2024EPA Clean Power Plan: Phase I

– Preliminary Technical Report 34

W ESTERN E LECTRICITY C OORDINATING C OUNCIL Common Case. The RPCG also identified projects in the power flow case that are not expected to be completed by 2024. Basically, any of the CCTA projects that were not already included in the power flow case are added and the canceled or delayed projects are removed.

Figure A

- 3 : Common Case Transmission Assumptions

- 2024

In general all branches with ratings of 230 kV or higher are constrained to the provided limits in the PCM. The WECC transfer paths that are defin ed in the WECC Path Rating Catalog are also constrained to their limits.



### Building the Generation Resource Portfolio
The electrical generating plants that currently provide the electricity to the power grid provide an obvious starting point for the generation resource portfolio. Changes to the portfolio to support future load growth and replace units that retire are part of the planning process. The development status or class is the primary driver behind which generators are included in the resource portfolio. The codes are described in Figure A

- 4

.EPA Clean Power Plan: Phase I

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W ESTERN E LECTRICITY C OORDINATING C OUNCIL Figure A

- 4 : Description of the Development Status Codes for Generation

Figure A

- 5 : Process for Building the Resource PortfolioEPA Clean Power Plan: Phase I

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W ESTERN E LECTRICITY C OORDINATING C OUNCIL 

### Overriding Assumptions
The majority of the data inputs are based on information provided by the Balancing Authorities and Planning Authorities in WECC; however
, there are some issues that require making additional assumptions to model a ten

- year horizon case. Some of these key assumptions are listed below and a complete list of the assumptions can be found in the 2024 Common Case Release Notes.

• It is assumed that the utilities comply with the Stat e Renewable Portfolio Standards (RPS) for the loads in the state(s) that they serve. The RPS standards are usually set as a percentage of retail sales. For example, a utility with annual retail sales of 100,000 MWh in a state with a n RPS of 25 percent, wou ld be expected to serve 25,000 MWh with renewable generation. If the qualifying renewable generation in a state is deficient, additional resources are selected from the generation in the next class of generation.

• It is also assumed that the BAs intend to m eet their projected loads and reserve requirements. As outlined in Figure A

- 5 , resources are selected from the class portfolios in order of class, until the RPS requi rement is met and the load and reserve are met.

• Although many of the of the contractual arrangements between G enerator O wners and L oad

S erving E ntities are modeled, there is a significant portion that are not modeled.

• Several operating constraints that res trict certain aspects of the transmission system are modeled using nomograms.



### PCM Solution
The production cost model performs a security constrained economic dispatch to arrive at a n overall least

- cost solution for each hour of the year. For each hour
, the loads are met by first applying the
must

- run/must

- take resources, and then the least

- cost dispatchable resources, subject to the transmission and generation constraints. The cost

- ranked generation list is called a resource stack. The delivered cost of each generator to each load is different depending on factors such as wheeling cost, transmission losses, etc. The PCM accounts for all the cost factors and constraints as it converges on a solution for each hour.
Some of the key results from a PCM run ar e listed below. Most results are available on an hourly, weekly, monthly, and annual basis.

• Area and Region

o Load served and not served

o Load weighted locational marginal prices

• Generation

o Energy delivered and undelivered (dumped)

o Variable costEPA Clean Power Plan: Phase I

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W ESTERN E LECTRICITY C OORDINATING C OUNCIL o Emissions

• Tra nsmission and Network

o Branch and Path utilization

o Bus locational marginal price

o Transmission losses The results from a scenario or base case can easily be compared to the results from another scenario. Some of the results can be compared with historical da ta to evaluate changes in trends and patterns.



## Appendix 2

The state goals are calculated using the following equation with the goal in pounds per megawatt

- hour (lbs/MWh).

Equation 1 : State CO 2 Rate State goal = ( Coal gen × Coal erate ) + ( OG gen × OG erate ) + ( NGCC gen × NGCC erate ) + Ot h er emissions Coal gen + OG gen + NGCC gen + Ot h er gen + Nuclear gen + RE gen + EE gen
Where:

- “erate” is short for emiss ion rate in lbs/MWh

- “OG” is short for oil

- or gas

- fired steam

- “Nuclear” is only the nuclear generation that is under construction or deemed at

- risk by the EPAEPA Clean Power Plan: Phase I

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## Glossary

Acronym Term Definition

WTG4 Model A generic inverter

- based model used to model transient stability.

BA Balancing Authority The responsible entity that integrates resource plans ahead of time, maintains load

- interchange

- generation balance within a Balancing Authority Area, and supports Interconnection frequency in real time.

Base Load The minimum amount of electric power delivered or required over a given period at a constant rate.

BSER Best System of Emission Reduction The degree of emission limitation achievable through the application of the best system of emissio n reduction that, taking into account the cost of achieving such reduction and any non

- air quality health and environmental impact and energy requirements , the EPA determines has been adequately demonstrated

.

LSE Load

- Serving Entity An entity that s ecures energy and transmission service (and related Interconnected Operations Services) to serve the electrical demand and energy requirements of its end

- use customers.

Boiler Draft Fan A fan that maintains pressure differentials in a boiler to induce or increase drafts of combustion gases.

Branch or Branch Group A group of transmission branches treated as a single entity for purposes of running a congestion management market.

BES Bulk Electric System T he electrical generation resources, transmission lines, interconnections with neighboring systems, and associated equipment, generally operated at voltages of 100 kV or higher.

BAU Business As Usual T he normal execution of standard functional operations within an organization in c ontrast to projects or program s which might introduce change.EPA Clean Power Plan: Phase I

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W ESTERN E LECTRICITY C OORDINATING C OUNCIL Acronym Term Definition

CA Greenhouse Gas Initiative An initiative in California, designed to transition the State to a low

- carbon future, that r equires California to reduce its Greenhouse Gas ( GHG ) emissions to 1990 levels by 2020

— a red uction of approximately 15 percent below emissions expected under a “business as usual” scenario.

Capacity Factor T he ratio of a power plant’s actual output over a period of time, to its potential output if it were possible for it to operate at full nameplate capacity indefinitely.

CC Combined Cycle Any power generator in which a generator generates electricity and the waste heat is used to mak e steam to generate additional electricity via a steam turbine

.

CT Combustion Turbine A type of internal combustion engine that has an upstream rotating compressor coupled to a downstream turbine, and a combustion chamber in

between.

Common Case A compi lation of planned generation, load forecasts, and expected transmission that represents a trajectory of recent Western Interconnection planning information, developments, and policies looking out 10 years

.

CCTA Common Case Transmission Assumptions A stake holder

- vetted list of transmission projects that have a high expectation of being in service in the approaching 10

- year timeframe resulted in the development of a transparent, repeatable and consistently applied process.

Cut

- Plane In the context of the Path Rating Process, a path is defined as a facility(ies) between systems or internal to a system, for which schedules and/or actual flows

can be monitored for reliability purposes. Facilities in a path may originate and terminate at the same point (substation or generating station) or at different points. Two or more individual paths can be combined into a single path for rating purposes, although they may be separate scheduling paths. Paths are oftenEPA Clean Power Plan: Phase I

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W ESTERN E LECTRICITY C OORDINATING C OUNCIL Acronym Term Definition

called cut

- planes

.

DWG Data Work Group A work group of the Transmission Expansion Planning Policy Committee's (TEPPC) Technical Advisory Subcommittee (TAS)
, which is responsible for the collection and verification of the data in the TEPPC data set

. The DWG uses publicly available informa tion to populate the database

. DSM Demand

- Side Management The term for all activities or programs undertaken by a Load

- Serving Entity or its customers to influence the amount or timing of electricity they use.

EGU Electrical Generating Unit A solid fuel

- fired steam generating unit that serves a generator that produces electricity for sale to the electric grid.

EE Energy Efficiency Reducing the amount of energy required to provide products and services through technology or operating practices.

EIA Energy Information Administration An agency of the United States government that collects, analyzes, and disseminates independent and impartial energy information to promote sound policymaking, efficient markets, and public understanding of energy and its interaction with the economy and the environment.

Frequency Response The ability of a system or elements of the system to react or respond to a change in system frequency.

Heat Rate T he amount of energy used by an electrical generator or power plant to generate one kilowatthour (kWh) of electricity. Heat rate is usually expressed in British thermal units (Btu) per net kWh generated

.

IGCC Integrated Gasification Combined Cycle A techno logy that uses a gasifie r to turn coal and other carbon

- based fuels into gas and then uses e xcess heat from the primary combustion generation to power a steam cycle, similar to a combined

- cycle gas turbine.

IRP Integrated Resource Plan An integrated resou rce plan (IRP) is a comprehensive decision

- support tool and road map for meeting aEPA Clean Power Plan: Phase I

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W ESTERN E LECTRICITY C OORDINATING C OUNCIL Acronym Term Definition
company's objective of providing reliable and least

cost electric service to all of its customers while addressing the substantial risks and uncertainties inherent in the el ectric utility business.

Inverter

- Based Generation Three

- phase generators that output AC current like most traditional generators, but that then convert the
current to DC, and then “invert ” it back to clean AC power that maintains a single phase, pure sine wave at the required voltage and frequency.

LBNL Lawrence Berkeley National Laboratory A member of the national laboratory system supported by the U.S. Department of Energy through its Office of Science. It is managed by the University of California (UC) and is charged with conducting unclassified research across a wide range of scientific di sciplines.

LSE Load

- Serving Entity An entity that s ecures energy and transmission service (and related Interconnected Operations Services) to serve the electrical demand and energy requirements of its end

- use customers.

LMP Locational Marginal Price The marginal cost of supplying, at least cost, the next increment of electric demand at a specific location (node) on the electric power network, taking into account both supply (generation/import) bids and demand (load/export) offers and the physical aspects of the transmission system including transmission and other operational constraints.

LTRA Long

- Term Reliability Assessment An independent assessment of the 10

- year reliability outlook for the North American BES that identifies trends, emerging issues, and potential risks. Additional insight will be offered regarding resource adequacy, security, and operating reliability, as well as an overview of projected electricity demand growth for individual assessment areas.

NGCC Natural Gas Combined Cycle An advanced power generation technology in which a gas turbine generator generates electricity and the waste heat is used to make steam to generateEPA Clean Power Plan: Phase I

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W ESTERN E LECTRICITY C OORDINATING C OUNCIL Acronym Term Definition
additional electricity via a steam turbine

.

NERC North American Electric Reliability Corporation A not

- for

- pro fit international regulatory authority whose mission is to ensure the reliability of the B ulk

P ower S ystem in North America

.
Palo Verde A three

- unit nuclear power plant near Phoenix, AZ.

Path One or more facilities between transmission systems or inter nal to a system, for which schedules and/or actual flows are monitored for reliability purposes. Facilities in a path may originate and terminate at the same point (substation or generating station) or at different points. Two or more individual paths can be combined into a single path for rating purposes, although they may be separate scheduling paths.

PCC Planning Coordination Committee A WECC member committee created to advise and make recommendations to the WECC Board of Directors (Board) on all matter s within the jurisdiction of WECC that pertain to maintaining the reliability of the Western Interconnection through evaluating potential future generation and load balance (two years or greater time frame); and adequacy of the physical infrastructure of t he interconnected Bulk

Electric System.

PRM Planning Reserve Margin T he amount of generation capacity available to meet expected demand in planning horizon

. Planning Reserve Margin equals the difference in Deliverable or Prospective Resources and Net Internal Demand, divided by Net Internal Demand.

PSLF Positive Sequence Load Flow A load flow modeling tool built by GE that describes the positive sequence network for the steady

- state initial condition from which simulations of system additions, deletio ns, status changes and data changes can be built.

Powerflow Model A model used in electrical engineering to analyze power grids that provides a nonlinear system which describes the energy flow through each transmissionEPA Clean Power Plan: Phase I

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W ESTERN E LECTRICITY C OORDINATING C OUNCIL Acronym Term Definition

line.

PCM Production Cost Model or Production Simulation Model A model that captures all the costs of operating a fleet of generators and develops an hourly chronological security constrained unit commitment and economic dispatch simulation.

Redispatch A means to resolve transmission con gestion by changing generator output levels to reduce congestion.

RPCG Regional Planning Coordination Group A group consisting of a member from each TEPPC

recognized Subregional Planning Group. The purpose of the group is to coordinate planning activities between each other and TEPPC.

RAP Regulatory Assistance Project A global, non

- profit team of experts that provides technical and policy assistance to policymakers and regulator s on a broad range of energy and environmental issues.

Reliability Assurer T he entity that c oordinates activities of functional entities to secure the reliability of the Bulk Electric System within a Reliability Assurer area and adjacent

areas.

RAS Remedial Action Scheme An automatic protection system designed to detect abnormal or predetermined system conditions, and take corrective actions other than and/or in addition to the isolation of faulted components to maintain system reliability.

REC Rene wable Energy Credit T radable, non

- tangible energy commodities in the United States that represent proof that 1 megawatt

hour (MWh) of electricity was generated from an eligible renewable energy resource

.

RPS Renewable Portfolio Standard A regulation that requires the increased production of energy from renewable energy sources, such as wind, solar, biomass, and geothermal.

Resource Adequacy A mandatory planning and procurement process to ensure adequate resources to serve all customers inEPA Clean Power Plan: Phase I

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W ESTERN E LECTRICITY C OORDINATING C OUNCIL Acronym Term Definition
real time. The program requires that Load

- Serving Entities (LSE) meet a Planning Reserve Margin for their obligations

.

SCED Security

- Constrained Economic Di spatch A system that evaluates resource and transmission system information to produce a least

- cost dispatch of generation resources that meets current system demand while complying with or resolving network constraints and resource limits.

Smart Soot Bl owing A technology used in coal

- fired generation in which instrumentation is used to identify the exact location of slag accumulation to allow the operator to target and adjust clean intensity based on slagging condition, thus minimizing tube leakage and c linker formation.

Societal Cost Economic, environmental or other costs that are borne by society at large, rather than by the entity that caused the cost to be incurred.

SPSC State

- Provincial Steering Committee A committee consisting of appointees from each State and Province in the Western Interconnection that was created to providing input into regional transmission planning; improve the efficient use of the existing grid; and enable the integrating of large amounts of variable generation.

SPG Subregional Planning Group A group that has been organized to address common issues within a particular portion of the Western Interconnection and have a close relationship with smaller L oad

- S erving E ntities such as municipal utilities and rural electric c ooperatives.

TSS Technical Studies Subcommittee A subcommittee of WECC’s Planning Coordination Committee that performs studies, maintains data files, evaluates proposed system additions or alterations, prepares reports and recommendations, and performs

su ch other duties as directed by the Planning Coordination Committee.

TEPPC Transmission Expansion Planning Policy Committee A WECC Board of Directors committee that oversees and maintains a public database for production cost and related analysis; develops and implementsEPA Clean Power Plan: Phase I

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W ESTERN E LECTRICITY C OORDINATING C OUNCIL Acronym Term Definition

Interconnection

- wide expansion planning processes; guides and improves the economic analysis and modeling of the Western Interconnection and conduct transmission studies; and prepare Interconnection

wide transmission plans consistent with a pplicable NERC and WECC reliability standards.

Voltage Stability The ability of a power system to maintain acceptable voltage at all buses under normal operating conditions and after being subjected to a contingency.

WI Western Interconnection O ne of th e two major alternating current (AC) power grids in North America that includes all or parts of 14 Western states, British Columbia and Alberta in Canada and a portion of Baja California in Mexico.

WIRAB Western Interconnection Regional Advisory Body A group created by Western Governors under Secti on 215 of the Federal Power Act to advise WECC and FERC on whether proposed reliability standards and the governance and budgets of WECC are in the public interest.