Document ID: EPA-HQ-OAR-2013-0602-25085
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2014-12-13T05:00Z

EPA

Moderator:	Reid Harvey

November 7, 2014

12:00 p.m. ET

Operator:	Good afternoon, my name is (Angie) and I will be your
conference operator today.  At this time, I would like to welcome
everyone to the Clean Power Plan, Rate to Mass Technical Support
Document.  

	All lines have been placed on mute to prevent any background noise. 
After the speakers’ remarks, there will be a question and answer
session.  If you will like to ask a question during this time, simply
press star then the number one on your telephone keypad.  To withdraw
your question, please press the pound key, thank you.  

	I would now like to turn the conference over to Reid Harvey, please go
ahead.  

Reid Harvey:	Thank you.  And hello every one, thanks for joining the
call.  Yesterday, EPA posted a technical support document that provides
examples of how States, Tribes or Territories could translate rate-based
goals to mass-based equivalent.  That’ll be expressed as total funds
of Tier 2 emissions in their compliance plans.  

	So, we wanted to take this opportunity today to walk you through those
examples and to field any questions you may have.  But providing the
rates to mass TSD, responds to requests we’ve received from you and
others and provides information to all stakeholders as we worked towards
the end of the proposed Clean Power Plant coming period on December 1st.
 

	I hope you’ve had a chance to look over the TSD, and if actually that
we posted online yesterday afternoon.  But, if you haven’t, it’s OK.
 Because the purpose of the call is to walk through those calculations
with you and we tried very hard to make those calculations as clear as
possible.  

	So, before I turn over to Ryan Sims in our office to walk through the
equations with you, let me give you a little bit more background in the
June 2014 proposal in the October supplemental.  EPA gave States, Tribes
and Territories the option to convert their rate-based goals then to
mass equivalent.  

	So, that translate – that translation is not based on any new
information, it does not change the rate-based goals that are outlined
in June proposal or the recent supplemental proposal.  It simply
illustrates two possible methods for doing that translation.  So, our
States, Tribes and Territories decide to use a mass-based number.  That
would need to demonstrate that it’s equivalent to their rate-based
goal.  

	We are continuing to seek your ideas and your comments on this
rate-to-mass conversion. and different options for doing that.  As we
worked towards, what we hope to be a flexible and effective final rule. 

	And over the past several months, we’ve received an enormous amount
of input through hundreds of meetings and conversations in conference
calls with you and others and I know that the administrator and the
acting administrator Janet McCabe and all the staff at EPA are very
grateful to everyone who’s taken the time to review the proposal and
all the supporting material to tell us what you think.  

	We know, we feel for you well that – like we’re overloading you but
we appreciate your input.  So, it’s been incredibly instructive.  So,
just to wrap up, I wanted to thank you for spending time again with us
today to thank you for your willingness to dive into these issues with
us.  To lend us your expertise and to share your perspectives on this
and all the other aspects of the Clean Power Plant.  

	So, we – we’re listening because, you know, together we know that
the Clean Power Plant will be better for all this input.  So, with that,
I’ll turn it over to Ryan.  

Ryan Sims:	Thanks Steve.  So, I think we’re going to spend the next 15
minutes going over the mechanics of the two example methodologies as
well as the rationale for why we made some of the choices that we did in
the methodologies has laid out in the TSD.  

	For those who have the TSD in front of them, I’ll try to refer to
page numbers.  For those who may not, that’s OK, as we’ve mentioned,
we’ve tried to make this a very concise TSD.  It’s six pages of
text.  And we’ll make sure to walk through each step and I’ll
probably pause for questions in between some steps as they do build on
top of one another.  I want to make sure that that we’re all
understanding where we are and why we are where we are.  

	So, first as you all are undoubtedly aware there are two methodologies
for them (to the) TSD.  One that applies mass-based equivalents to
existing affected possibly fuel choices.  And one that calculates mass
equivalent for existing affected fossil fuel fire sources, as well as
new sources.  The second methodology reflects that we flip through
comments, and the (June) proposal about the inclusion of new fossil fuel
fire sources as a component of state plan.  

	So, we’re going to start the conceptual overview of both
methodologies.  They’re very similar.  And, we’re going to start on
page two of the CSD and just talk generally about how any mass-based
outcome is essentially a product (fuel to emission rate) times
generation.  

	And what we did with both of these methodologies is that for the CO2
emission rate, we used the proposed rate-based goals from the June
proposal or from the October supplemental.  And then, we needed to
define a certain generation level that we’d apply to those rate-based
goals that would produce a mass equivalent.  

	And so, since we know the proposed rate-based goals, the majority of
the TSD is dedicated to qualifying what we’re calling this mass
equivalent generation level.  So, that’s how we’re going to spend
the majority of my time here but on the Q&A session, we’re certainly
open to entertaining a broader range of questions.  

	So, to begin, there are several shared concepts that both of these
methodologies rely on to produce that mass equivalent generation level. 
Those concepts are discussed beginning on page three of the CSD.  

	The first concept is that the deployment of the best system of emission
reduction building blocks will affect total generation from effective
fossil fuel fire sources.  This is an important concept throughout the
proposal (to further due) proposal, that new resources under building
block three and building block four will displace generation and
therefore emission from affective sources.  

	Any mass equivalent, we expect will be the result of applying all four
building blocks and the result of applying those blocks three and four
– again, it’s important to see the displacement between the new
resources deployed under those building blocks and the affective source
generation.  

	The second shared concept is that there is a consistency between the
mass (and coal) and generation sources – so, the sources that
contribute to the mass equivalent generation level.  And those sources
covered by the mass equivalent.  And so, this essentially is how we get
to two methodologies.  

	The first methodology, again, just applies to existing affected sources
and therefore does not include consideration of generation of new
sources.  Whereas the second methodology does include new sources, and
therefore it was important for us to quantify some level of future
generation so that we can add that the mass equivalent generation level
to arrive at an appropriate mass equivalent.  

	The third concept, and we’re on page four now for those signing on
– is that we took a historically based approach with both these
methodologies.  The preamble staked out a rather broad ground when it
comes to how effective jurisdiction may choose to translate their
rate-based goals to mass equivalent.  

	And in the (red packed cells), we posed one option that is based on a
projection base forward looking model based approach.  And, we lay out
– we fully articulate this vision of how this translation could occur
in a TSD.  And so, during the common period, we heard a lot of feedback
on this approach but also requests for further illustration as to how
this translation could occur in other contexts.  

	And so, this context – instead of a model-based forward looking
projection based approach, is simply a calculation based approach in
which we rely on historical data.  So, both approaches again apply the
(BSC) or building blocks to 2012 historical data, which is very similar
to the rate-based goals setting methodology in which we rely on 2012
data from affected sources.  And we apply each of the four building
blocks to arrive at the rate-based goal.  

	So, those are the three concepts that’s bring in our approach to how
we calculate the mass prevention ration level.  And then, starting on
page four, we begin to walk through the mechanics of how we get from
historical data to a mass equivalent generation level.  

	So, beginning on page five, the first step is quantifying what the
historical affective possible generation level is.  And what you’ll
find in this TSD, is it has the equation and then it ties those
equations to an example stake.  The stake given as Ohio, which is
stemming sample state as the goal computation TSD provides in the June
proposal.  

	And so, the first step again is quantifying this historical affective
fossil generation level.  And then from that generation level, when we
deploy the BSCR building blocks, we expect that the new resources under
building blocks three and four will display emission and generation from
that historical level.  

	And so, that is the equation provided at the bottom of page five.   And
that’s a generation level that we refer to in the (TST) as the
adjusted, affective fossil generation level.  So, again, we’re taking
historical and we’re removing the new resources under building block
three.  So, that’s (RE) and under construction nuclear.  As well, as
the (EE) under building block four.  

	The next step on page 6 is the massive function generation level – is
to add in the total resources under building blocks three and four.  So,
we started with the historical fossil.  We took away the new resources
and now we’re adding all the resources under building blocks three and
four.  Because at building block three, also contains existing (RE) as
well.  And (at risk) nuclear.  

	So, I think I’ll provide a little commentary on that.  In that the
rates that we’re applying to the massive (clone) generation level,
again it’s a proposed rate-based goal.  And in forming that proposed
rate-based goal is the full suite of affected entities.  

	So, it includes fossil, it includes (RE), it includes nuclear, it
includes (avoided) generation from (EE).  So in defining a massive
(clone) generation, we wanted consistency between the proposed
rate-based goal and the sources that were contributing to the mass
equivalent generation level.  

	So, that informs the decision to add in the total resources from
building blocks three and four.  

	So, we’ve arrived at the mass prevention generation level for
existing affected sources.  The methodology for mass prevention level
for existing, affected and new sources pick off where just on this
generation level and simply add the generation anticipated to satisfy
future demand.  

	And so, what we did for quantifying this level of generation, is we
looked at demand projections from AEO 2013.  And the reason we feel like
the demand projections from AEO 2013 is that it’s the same demand
projection that are part of not only our compliance modeling, but part
of how we specify building blocks for generation when we look forward in
deploying energy efficient resources against a future level of demand.  

	So, there’s consistency again between the June proposal and the
methodologies outlined in the TSC.  And so, for each state, we can
quantify an average annual growth rate from 2012, through, in this case
– 2029.  And, again, that growth rate is taken directly from the AEO
projection.  And each state we can observe what the 2012 historical
sales data is for that state.  And then, we can apply the average annual
growth rate to 2012 and we can specify what – our reason like
expectation of sales, going forward, from each year from 2012 on.  

	Then, to convert from a sales level to a generation level, we gross up
by transmission boxes – 7.5, 1 percent – this is the same as June
transmission (boxes) that we used to calculate the rate-based goals.  

	And then, we have a level of generation required to meet this new
demand.  And then, we can just take the increment from 2012 to any
future year.  So, then we have the difference in generation required to
meet demands from some future year to 2012 – that is increment that
can used and added into the mass and generation level to accommodate the
inclusion of new sources.  

	We can see that final equation, so on page six, is where we lay out the
equation for how we are arriving at projected sales.  Then on page
seven, we convert those sales into a generation number.  

	And then, finally, we (rethink) what the mass-prevention generation
level is that incorporates new resources which is the adjust-affected
fossil generation level plus total resources under building blocks three
and four plus this new increment that we can assign to new sources.  

	So, now that we’ve established a massive prevention generation level
for both existing sources and in existing in new sources, we can finally
apply the proposed (emissionary) goal and to arrive at the mass
equivalent for each affected jurisdiction.  

	And so, what you’ll see in the appendix is each of these components
for each affected jurisdiction for the proposed goals.  So, in the June
proposal for States, that would be the option one goals.  In the
supplemental, it would be the option one A goal.  As part of this
release, we also posted a data file that contains mass equivalent,
(staunchly) associated with the proposed goals or option one but the
alternative for option two goals as well.  

	For the inter-mass equivalent – inter-mass equivalent similar to how
we arrive with interim rate-based goal is the simple average of 2020
through 2029 for option one.  And then, the final mass equivalent is the
2029 value.  And that applies to 2030, and also to the nearest.  

	So, I think perhaps that is a good overview of the methodologies.  And
I think we can now turn it over to questions.  

Operator:	If you would like to ask a question, please press star one on
your telephone keypad.  Again, that’s star one to ask an audio
question.  Please hold for your first question.  

	Again, if you would like to ask an audio question please press star
one.  

	Your first question comes from the line of Ben Cohen with NYISO.  

Peter Corning:	Hi, this is Peter Corning from New York Independent
System Operator.  And when we take a quick look at the data that you
posted yesterday, we know that the emission reduction on the (connage)
basis in New York would be 71 percent from our 2005 reference level, 66
percent for the (Reggie) states and 45 percent on a national level.  

	Those numbers seem to be quite at odds with the announced goal of a 30
percent reduction.  Perhaps, you could clarify the situation?  

Jeb Stenhouse:	Yes, hi Peter, this is Jeb Stenhouse at EPA.  I think it
is a good opportunity to clarify as we’ve been reminding folks since
the June proposal went out that while we did some illustrative system
wide modeling to look at, you know, what we thought some potential
impacts might be from states putting plans together to achieve the state
goals.  That that 30 percent below 2005 at the national level was, you
know, an analytic observation as a result of that illustrative modeling.
 

	And so, it’s useful to remind folks that that – that in it of
itself is not a goal, if you will.  

Operator:	Your next question comes from the line of Floyd Gilzow of
MPUA.  

Floyd Gilzow:	Good morning this is Floyd Gilzow with Missouri Public
Utility and Lines.  

	In the earlier discussion describing the difference between option two
– or option one and option two, you referenced the fact that option
two also included new sources.  Could you clarify what you intended with
the term new sources?  

Male:	Sure, the intent was to mirror the proposal.  Now the proposal
took comment on the inclusion of new fossil fuel fire sources as a
component of the state plan.  So, to preserve that flexibility that the
proposal afforded states and effects of jurisdiction.  We proposed two
options.  One that was inclusive of new sources and one that was just
existing effective buyer.  Because it is a mass equivalent – those new
sources would be fossil fuel fire sources of course.  

Floyd Gilzow:	Thank you.  

Operator:	Your next question comes from the line of Scott Weaver with
AEP.  

Scott Weaver:	Good morning guys.  Thanks for taking the time to sit down
and walk us through this proposal.  Two questions.  First question is
related to this proposed methodology.  

	You can (see assume) that, now that you have a – I guess – one
option laid out in terms of the mass-based equivalent that if States
were to – assuming the rule goes forward in some similar fashion. 
Assuming States would take these (CAP) numbers, would it be as simple as
writing these (CAP) numbers into their SIP for approval?  

	And is this kind of a, I guess, pre-determination of this being an
acceptable approach?  

	That’s my first question.  My second question relates to the actual
generation calculation.  It appears that you’re adding in and then
subtracting out the a – or actually – subtracting out then adding in
the renewable energy and energy efficiency components?  

	Based on my simple math, it looks like the affective generation used to
calculate the mass – it’s simply historical generation plus under
construction natural gas combined cycle plus existing renewable energy
when you get to that final megawatt hour number.  But, I just wanted to
verify that.  

Reid Harvey:	Hi, Scott, this is Reid.  We’ll sort of (divide) this up.
 

	I’ll take the first question and then Ryan will take your second
question.  I think, you know, the intent here is simply to put out a
different way of calculating these estimates.  But, they’re based on
the June proposal.  We’re seeking feedback on all aspects of the June
proposal including some of the topics that we erased in the NODA.  And
so, this is not in any way intended to focus on the outcomes of the
numbers as if they were binding.  

	Obviously, to the extent that the June proposal changes with respect to
the – the way that the building blocks are handled or other features. 
Then the conversion from a rate to a mass-based equivalent which I need.
 

	So, I think – I would strongly encourage folks to view this simply as
yet another way to convert the rate that we proposed.  But, remember
that the rates, you know, to the extent that the final rule as different
from the proposed rule – what else could be different as well.  So,
Ryan you’re going to take the second one?  

Ryan Sims:	Sure, on the question the equation – that – in astute
observation and true for most States.  I think the intent of the
methodology and the breaking up those steps and that we are subtracting
new resources and then in the next step adding them back in, is just to
be really clear about how we’re thinking about how BSCR applies in
this case as we’re thinking about demonstrating equivalency with the
rate-based goal.  

	So, the methodology could be simplified for many states, but we thought
I was important to show the interim steps just so that our thinking was
clear on what the equation means not just the quickest way to get to the
end point of the mass equivalent generation.   

Scott Weaver:	Thank you very much.  

Operator:	Your nest question comes from the line of Andy Kellen with
WPPI Energy.  

Andy Kellen:	Thanks guys.  I think this kind of follows on to the
previous question.  But, as I understand it, if this method is intended
to be consistent with the proposal in that – the – that the number
that you multiply, the emission rate goal by – would be the generation
by affected EGUs in kind of a business as usual or reference case
scenario?  

	That – that in that case, that would be what this mass equivalent
generation level is intended to represent.  And – in as I – probably
(Steven) point out, that if you look at the equation for the vast
majority of states it breaks down to simply be 2012 generation by
affected EGUs plus at risk nuclear plus existing renewables which is,
you know, a number that’s flat throughout the year.  I guess, I’m
having trouble figuring out how that can be a (property) for a
generation by affected EGUs.  

	You know, I would expect for example, in a reference case scenario,
where you’re not adding renewables or efficiencies that the generation
by affected EGUs would be a little higher each year as those you’d
intend to ramp up to serve low growth.  In this case, your numbers are
flat every year under the option one scenario.  So, I guess, I’m just
a little confused there.  

Ryan Sims:	Sure, I think the number of (common) to (Neginar) is our one
is that this is a historically based approach.  Two, is that we’re
talking about effective EGUs.  Is that I think the intent is to
encompass affected entities.  Which is a broader universe of sources and
affected EGUs which we think as particularly as the fossil fuel fire
sources, existing fossil fuel fire sources.  

	As far as the generation level being flat, that’s correct.  But,
it’s being applied again, the rate-based goal, which continues to
decline over time which produces a declining cap.  I think I can stop
there unless there’s a specific follow-up.  

Jeb Stenhouse:	Hey, I would just add this is Jeb Stenhouse, EPA, I would
add that I think that the length of the question and the details that
hit are a great example of the kind of thinking we hope that (GSG) will
help facilitate.  Where folks can think across all of the different
options, the proposal in June put on the table for public comment about
how rates and mass translation might be done.  

	And how that states relate to the particular illustrate of approaches
of we’ve laid out here.  

Ryan Sims:	Yes, I think that’s a good point.  Just to ride on Jeb’s
comment is I think one of the benefits of this approach is that it’s
simple enough and concise enough.  That it allows people to explore the
implications of various ways to conceive of what is equivalent to the
rate-based goal.  And it brings clarity to a lot of issues that we
supposedly did comment on in regards to (BSGR), rates versus goals
(seeking) methodology et cetera.  

	So, it’s our hope that the (SCT), serves more a function of
furthering the ability – the public to comment on the proposal and
less thinking about what the specific implications of these numbers are.
 

Andy Kellen:	Thanks.  

Operator:	Your next question comes from the line of (Beth Tenorspiel) of
Massachusetts Department of Environment.  

(Beth Tenorspiel):	Hello, I have a question building on the previous
couple.  So both on the NODA, and the rates to mass TSD is discussed
that the potential offsetting of existing fossil generation with new
renewable energy, nuclear energy efficiency generation from building
blocks three and four.  

	Could we calculate it in and if the state were to use the rate to mass
calculation described in the TSD, my question is, would both the
proposed emission goal and the mass equivalent generation level be
adjusted by subtracting the building blocks between four and generation
from the existing fossil generation?  Or would that adjustment be made
only once?  On – it looks like from note 9 that the implication is –
it would be only made once.  

	And if that is the case, if rate-based stay – if you say you take a
rate-based approach and that goal were not adjusted to account for this
displacement.  Whereas another state were to take a mass-based approach,
and that were to be adjusted according to the TSC.  How would the
equivalence stringency being maintained between those two approaches?  

Jeb Stenhouse:	Yes, this is Jeb again.  I think that what I hear you
describing are some really useful to observations crossing the space of
what we proposed in the June rule that how state goals were calculated. 

	What we recently released in the NODA, about different ideas, we’ve
already heard that from stakeholders on the way that the building blocks
and their generation are reflected in the copy, you know the
calculations behind those state goals per rate based as well as the
information in this illustrative approach for translation of rate to
mass.  And the proposal certainly posted a comment on the way all of
this might play out as states take different paths in their state plans.
 

	And so, I’m hearing some really rich thinking there that we certainly
hope to get, you know, both in your comments as well as others who are
thinking about these things.  

Operator:	Your next question comes from the line of James Boylan with
the Georgia Department of Natural Resources.  

James Boylan::	Hi, my question is under the mass based goal approach,
the assumption is that all new generation from renewable and under
construction nuclear will replace existing fossil generation.  While
under the rate-based goal approach, the assumption is that all new
generation from renewable energy and under construction nuclear will be
added on top of the existing fossil generation.  

	So, to me that seems like an inconsistency across the two approaches.  

Jeb Stenhouse:	Yes, James, this is Jeb.  I think that that linked nicely
with – that’s a question a minute ago as well.  I think what I would
say is that in the June proposal as we laid out the BSCR element and
created a rate goal, I’m not sure we really at that point adopted an
explicit assumption about the relationship of generation between these
blocks.  

	And at that’s partly why the NODA was reflecting some of the
exchanges we’ve been having with folks who’ve been looking at the
June proposal and thinking about what that ultimately means.  And how
that affects the calculation of the state goal.  And so, I think you put
your finger on an issue we need to think about carefully on state goal
computations going into the final rule.  

	(Is there a reason?)

Operator:	Your next question comes from the line of Robert Kappelmann
with FMEA.  

Robert Kappelmann:	Yes, thanks for having this explanation of the TSD. 
I guess I’m following up on the same question that’s coming up.  I
noticed in the NODA some of the stakeholders pointed out the fact that
building block three and four don’t displace existing generation. 
But, we had sort of a understanding or in reading this initial proposal
in June – that that could accommodate some growth on some of the
existing generating units.  

	In the state of Florida, a lot of your existing units have sufficient
reserve capacity.  That’s one of the reasons, I guess in your proposal
you had so much generation shifting from coal to combined cycle gas. 
So, now in the NODA, it looked like EPA was entertaining some
suggestions from stakeholders, asking for comment.  But, it looks like
you’ve already gone ahead and made up your mind based on what I’m
seeing in the mass base.  Which you’ve used that assumption in your
mass base.  

	Am I incorrect that you’re leaning towards additional stringency in
the June proposal?  

Jeb Stenhouse:	Yes, yes.  This is Jeb.  You know, I think that – and I
appreciate you laying that out so that we have a chance to be very clear
in this message here.  in laying out in this TSD, a (lot sure) of ways
of crossing from a rate based goal to a mass based equivalent – it
necessitates addressing that question and coming out with some
representation.  We’ve shown you in these approaches one way of making
that translation and obviously, that’s in the zone of what we need to
get feedback on.  

	That does not in any way address the root issues about how you
calculate state goals which are already in front of the commenters
through the proposal we started in June.  And then, enriched by the NODA
discussion of the exchanges we’ve been having that you were just
reflecting as well.  

	And so, I think you’re indulging in some tea leaves there that are
very much not part of what were focusing folks on with this illustrative
demonstration of how you might be rate to mass translation.  

Robert Kappelmann:	Thank you.  

Operator:	Your next question comes from the line of Peter Ashcroft of UT
Office of Energy.  

Peter Ashcroft:	Oh, yes other people have asked exactly my questions so
I’ll pass.  

Operator:	Your next question comes from the line of Darrell Preble, with
the Space Phila Power.  

Darrell Preble:	Yes, thank you for having this opportunity for
discussion and looking at the four blocks that you’ve got the building
blocks, in my opinion, there are folks keen on things which are not
adequate to address the carbon lowering goals which I understand the EPA
is attempting to embrace.  And, looking at the history of the $2
trillion which has been spent on working on (RPS) and (REs) the results
have – worldwide.  Then, a increase of four and a half faster carbon
dioxide growth in the world.  

	The opportunities that utilities have to address these carbon dioxide
lowering goal in inadequate to accomplish the goals which has been laid
out – which are admirable goals.  

	And, I would question the opportunities which are being provided to the
utilities which are inadequate in my opinion address these.  Looking at
the – the last ten or twenty years or more of history, of how the
goals have been set and approached.  

	Not only in this country but in Europe and in others.  The results –
well in the U.S. has been a 42 percent increase in electricity cost. 
While during the last…

Male:	Can I – can I interrupt you?  

Darrell Preble:	Yes.  

Male:	I’ve got other people who are…

Darrell Preble:	Yes.  

Male:	Who are in the queue, I just want to say thank you for that
comment…

Darrell Preble:	Yes.  

Male:	We, you know, we set the rate goals for states based on an
evaluation of the best system of emission reduction.  

Darrell Preble:	I understand.  

Male:	But we certainly encourage you to submit that comment to us before
December 1st, thank you.  

Darrell Preble:	That’s great …

Female:	Yes, and I think we’re ready for the next question.  

Operator:	Certainly if you would like to ask a question, please press
star one.  Your next question comes from the line of Lois New, from New
York State Department of Environmental Conservation.  

Lois New:	Hello, thank you for the opportunity to review this and ask
questions.  I would like to know more about how the expected increase in
deployment of electric vehicle is factored into the growth rate.  

Jeb Stenhouse:	Yes, this is (Jeb Steinhaus).  We, as I think the TSD
describes and cites – we use the same electricity demand projection
that we had already used in parts of the June proposal.  Here, in order
to quantify that factor, and so that means that how the energy
information administration is anticipating that as one ingredient and
all the ingredients they consider better electricity demands trend kind
of flows through and into this process.  

Operator:	Your next question comes from the line of Matt Roussy with
State Corporate Commissioner.  

Matt Roussy:	The additions and subtractions for building blocks three
and four appear to be based on the levels on 2029 in the interim mass
equivalent seems to be based on 2029.  Why wouldn’t it be more
appropriate to base that on the average of 20 – 20 through 2029?  

Male:	That is how the (interim) is calculated, it’s just a simple
average for all the years, 2023 to 2029 and then the final is the 2029
value it applied to 2030 and all subsequent years.  And there is some
limited space in the TSD but the data file shows that clearly and give
(a phrase) to that.  

Matt Roussy:	No, the megawatt hours are consistent from year to year in
the megawatt hours.  

Male:	Sir, you’re (got) the megawatt hours as the mass equivalent
generation level.  

Matt Roussy:	Right, applied to the interim – like with the (gladta)
for the interim level.  And then you average that with megawatt hours
themselves.  For each year, we changed based on whether you used 2020 or
2029 or an average.  

Male:	And so, I’m not a 100 percent sure that I was getting the
question.  But I can assure you that the – say – 2024 values are a
function of the building block three and four generation that we project
in 2024 and the emission rate based goal that we see in 2024 from
Appendix 1.  So, those values all come together to produce some 2024
value which has no meaning in it of itself because of the interim goal
– it’s simply the simple average of 2020 through 2029.  But, I guess
I’ll leave it there and maybe this could be something that we could
follow up on.  

Matt Roussy:	Well, if you look at your – your spreadsheet – in which
you calculate the mass equivalent?  The megawatt hour figure is
consistent in 2020 through 2029.  And the megawatt hour figure could
change based on the way you said the additions and subtractions for
building blocks three or four.   And I’m confused by that.  The rate
did change.  The rate does change from year to year but the megawatt
hours do not.  

Male:	Right, and so the reason it’s a mass equivalent generation this
was back a few questions in the queue.  Is that as new resources under
building block three and four deploy, what they’re doing is that
they’re displacing generation from existing affected sources from the
historical level.  

	So, that the composition of the generation is changing to reflect how
building blocks three and dour deploy over time.  But, the overall mass
equivalent generation level may be static for that entire period.  

	But, that doesn’t imply that it’s all 2029 values or all 2020
values.  So, I think that’s a – that’s a good observation and is
something that I’m glad got brought up.  

Matt Roussy:	It’s – you know I’ll just make one last point.  It
change sthe waiting from year to year the way you’ve done it.  And I
– if you do it differently for each year, you get a far different
result.  

Female:	OK.  Let’s move on to the next question.  We want to give
everyone a chance and you can  use – could we have the next question
please?  

Operator:	Certainly, your next question comes from the line of Dave Coup
with NYSERDA.  

Dave Coup:	Hello, I wanted this all up on an earlier question about low
growth, the previous question was about whether (EZ) was included or
not.  I have a more general question as I’m looking at what you had
for an assumption of annual average growth rate at least for New York. 
It appeared to be 0.25 percent.  

	If I look at our (ISOs), the kind of metric low growth, which seems to
be the right thing to compare to look at.  Because it’s devoid of
efficiency and real planners’ ease – it’s just kind of status quo
low growth.  The error rate is more like .  8 to .  83.  So, I’m just
trying to see if you can help me to better understand why the values are
so different?  

Male:	Sure, the values are so different is because those are regional
growth rates.  So, when we take demand projections from (AL) 2013,
we’re looking at (NEM), that we’re looking at the electricity market
module from (NEM).  

	And the regions in (NEM) are not as granular as those that are on the
state level and so what we can do is we can only work with the regions
that we have.  And so, a state maybe a single (NEM) region.  It can
encompass several states and therefore it would be the average demand
projection in each of those states.  

Dave Coup:	OK.  I don’t know if you can answer this question, but
would – are you open to considering alternative growth rates if it –
you know – if an individual state  just really isn’t seeming to
match with what the regional value is?  

Jeb Stenhouse:	Yes, this I, Jeb.  I think that’s a great example of
exactly why we wanted – you know, the kind of thoughtful input that
(we’ve) could use in response to just the illustrative way and the
data sets we have and what we’ve shown here.  You know, the – this
is a good example of a different data that may be – that may sit well
into this approach.  So, we’re very open to that type of input.  

Dave Coup:	OK, and thanks again for holding this session.  

Operator:	Your next question comes from the line of Thomas Wells, with
the Southern Company.  

Thomas Wells:	Yes, thank you.  In your June proposal, you referenced a
– kind of a forward looking approach to do a rate to mass conversion. 
Is this TSD foreclosed that type of option?  

Jeb Stenhouse:	Yes, this is Jeb, I’m glad you asked it so we can tell
everyone on the call that it very much does not.  This TSD is giving a
couple of additional illustrative approaches here but the June proposal,
the scope of what we invited (Cod) and (Todd) in that proposal – which
includes forward looking approaches – is not at all changed, right? 
Like sharing this additional TSD.  

Dave Coup:	Thank you.  

Operator:	We have time for one final question.  That question comes from
the line of Cassandra Jobe with Kentucky Division For Air Quality.  

Sean Alteri:	Yes, this is Sean Alteri, thank you for this illustrative
example for the mass conversion.  My question is will EPA publish these
mass equivalent state goals?  In Table 1 of sub part UUU?  

Jeb Stenhouse:	This is Jeb, hi Sean – I think the answer to that is no
for a couple of reasons.  One, being you know that what we’re trying
to illustrate here is a methodology or different methodologies and
approaches by which both can take the state goals which are expressed in
in a  rate based form.  And seek to quantify themselves a mass-based
equivalent.  If, you know, the state in question of a mass-based
equivalent.  If, you know, the state in question of the authority in
question is interested in that type of implementation.  

	So, I think that that means that – that’s why we released it in the
TSD just so to so we’re showcase that and get feedback on those
approaches.  

Dave Coup:	Thank you.  

Operator:	Your next question comes from the line of Ben Cohen with
NYISO.  

Ben Cohen:	Hey, thanks.  I had a call on – a question on the last call
and it was deferred to this one.  So, I’ll ask it now.  It’s a
little bit, slightly different topic.  For a state that choose to
convert to mass-based goal.  Do they still have to do energy efficiency,
EM&V?  Or do they, can improve compliance by just measuring CO2 stack
emissions?  

Male:	Yes, I mean I think it’s a – something that is being handled
in your state or in the (Reggie) regions are ready through compliance
just with stack emissions.  There’s not a separate – as I understand
it -- a separate EM&V process on the (EE) side.  

Ben Cohen:	So, as – so I’m trying to understand the state would not
be obligated to do EM&V if they did decide to go with the mass-based
goal?  

Male:	Yes, we noted in the proposal that that is one of the advantages
for states to choose to adopt a mass based approach is that there’s
less effort needed on the EM&D side for (EE).  

Operator:	Your next question comes from the line of Lois New with New
York State Department of Environmental Conservation.  

Jared Synder:	Hi, this is actually Jared Synder with New York DEC.  Just
following up on a question a few minutes ago about the growth rate. 
Does the growth rate that is used – the EAI growth rate, does that
include the effect of state energy efficiency program?  

	Because it – if it does we’re a little bit concerned that that is
– that that reduction is being counted twice.  Both in reducing the
growth rate and then it comes in again in multiplying the – you know
by the assigned rate.  So, can someone answer that question?  

Jeb Stenhouse:	Yes, hi Jared this is Jeb.  I think that’s an excellent
question and part of, you know, in June – when we proposed the rule
and talked about building block four and the quantification of the
electricity savings in each state that was – that was the (SAR)
potential.  

	Part of what we were inviting comment response on was – you know –
how that was quantified and the relationship between that and future
electricity demand from which you would be making these savings.  

	And so, I think your question kind of goes back to that root question
we could use some helpful input on.  And we can only note that in the
course of illustrating these approaches, here it was most convenient to
use the publicly available projected demand as Ryan was describing
earlier from the annual energy outlook.  

Jared Synder:	And well, does that project the demand, consider the
impact of state energy efficiency program.  

Jeb Stenhouse:	Well, to our understanding when we’ve worked with
(CEIA) on this question in the past, the answer is, you know, that’s
not a black and white issue.  Because that’s the – obviously a
dynamic thing over time.  

	And (DIA) at any point when they make projections, can only reflect
what they know at the point they make the projection.  So I think
that’s a – I think the answer again there is a bit too nuanced to
get into here.  

	I would note that I think we feel we’ve maintained internal
consistency in what we’ve just shown you in the TSD and the June
proposal.  Because we use the same demand projection both1 in
quantifying building blocks for potential.  So, you know, departing from
those projections as well as accounting for electricity demand  that
could be faulted into the trait to mass translation.  

	So, that struck as of the useful synchronicity here.  But, this is a
rich area that we look forward to your feedback on.  

Jared Synder:	OK, well thank you very much.  

Operator:	At this time, there are no further questions, Mr. Reid?  Do
you have any closing remark?  

Reid Harvey:	Thank you and thanks again to everyone for participating in
this call.  We hope this was a useful discussion for you and that this
document is responsive to your request for some additional ideas on how
to conduct a translation from the rate-based approach to massive
equivalents.  

	And, as always we appreciate your time and energy that you’re putting
into this and look forward to hearing from you soon.  

	Thank you.  

Operator:	Thank you for participating in today’s conference call.  You
may now disconnect your lines at this time.  

END

EPA

Moderator: Reid Harvey

11-07-14/12:00 p.m. ET

Confirmation # 32300775

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