Document ID: EPA-HQ-OAR-2013-0495-11873
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2015-10-23T04:00Z

Chapter 14
Statutory and Executive Orders
Contents
14.1	E.O. 12866 Regulatory Planning and Review and E.O. 13563	2
14.2	Paperwork Reduction Act	4
14.3	Regulatory Flexibility Act	5
14.5	E.O. 13175 Consultation and Coordination with Indian Tribal Governments	9
14.6	E.O. 13045 Protection of Children from Environmental Health Risks and Safety Risks	10
14.7	E.O. 13211 Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use	11
14.8	E.O. 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations	12

E.O. 12866 Regulatory Planning and Review and E.O. 13563
 Commenter 10098 stated that under the EPA's rationale, the proposed rule would be unnecessary under E.O. 13563 which requires agencies to promote coordination, simplification and harmonization of rulemakings to avoid redundancies and inconsistencies or overlapping regulation.
 The EPA disagrees with the commenter. This final action establishes the first uniform national limits on the amount of carbon pollution that newly constructed EGUs will be allowed to emit and thus, there is no overlap with other regulations. In addition, the EPA took deliberate efforts to promote coordination, simplification and harmonization of rulemakings and avoid redundancies and inconsistencies. Where possible, rule requirements are in accordance with 40 CFR part 75 requirements for monitoring, recordkeeping and reporting.
 Commenters 10087, 10023, and 10662 stated that because the proposed rule produces no net benefits to justify costs and because it cannot impose the least burdens for achieving regulatory ends, the proposed rule violates E.O. 12866 and E.O. 13563.  Commenters 10662 and 10023 also emphasized the Executive Orders' call to assess costs and benefits of all available regulatory alternatives.
 The EPA disagrees with the commenters. The EPA analyzed and assessed a wide range of potential scenarios and outcomes, using a detailed power sector model, other government projections for the power sector, and additional economic assessments and analysis to determine the potential impacts of this action. U.S. DOE, the EPA and industry projections indicate that, due to the economics of coal and natural gas, among other factors, new power plants that are built over the next decade or more would be expected to meet the standards even in the absence of the rule. Specifically, no new, unplanned conventional coal-fired capacity is projected to be built in the analysis period, and, absent this rule, any new NGCC that may be built is expected to have an annual emission rate in compliance with the standard. Because this rule does not change these projections, the EPA continues to expect that the rule will result in negligible CO2 emission changes, benefits or costs for new units constructed by 2022.
 Commenter 9396 stated that the EPA must take into account benefits and costs, and must also ensure that regulations are accessible, consistent, written in plain language, and easy to understand. The commenter believes that the EPA has been forced to argue how absurd the result of application of regulatory controls required under the Act would be for affected entities. Recognizing this absurdity and, in the context of clear direction from this President regarding how regulations should be a necessary conclusion of an unbiased evaluation of the facts, the EPA cannot conclude that CCS is BSER. 
   The EPA did consider the costs and benefits of the rule, as required by Executive Orders 12866 and 13563. The EPA's modeling, conducted using the Integrated Planning Model (IPM), as well as modeling conducted by the U.S. Energy Information Administration (EIA), showed that new generating capacity built through the period of analysis would be in compliance with the standard even in the absence of the regulation, since the likelihood is that any new capacity will be natural gas-fired and will meet the promulgated standard which reflects highly efficient operation. This finding held true even under a number of alternative scenarios. As a result, the EPA projected there would be negligible costs, benefits, or energy impacts (including changes to natural gas prices) associated with the rule in the period of analysis. However, the EPA also analyzed other potential alternatives where new coal-burning capacity would be built, for example to preserve fuel diversity or to provide a hedge against a substantial rise in natural gas prices (although the analysis indicates that a substantial rise in natural gas prices would be well outside the range of historical experience).  In these circumstances, the analysis indicates that the rule would provide net monetized benefits under a range of assumptions.  That is, the monetized benefits of SCPC plants with partial CCS meeting the promulgated standard of performance of 1400 lb CO2/MWh, would exceed the costs of additional control (i.e. partial CCS).  See RIA chapter 5.  The monetized benefits result both from the reduction in CO2 emissions over what an SCPC boiler without and with partial CCS would emit, and also from reductions insulfur dioxide, a precursor to fine particulate matter.  These emission reductions result from the need to scrub acid gases to very low levels prior to CO2 capture to prevent degradation of the solvent involved in the capture process.  Id. section 5.1.  IGCC plants could meet the promulgated standard by co-firing natural gas, which would also result in a net benefit under a range of assumptions as a result of CO2 reductions. See RIA at Table 5-1. 
The EPA disagrees with the commenter's belief that the EPA cannot conclude that CCS is BSER. The EPA proposed and reaffirms in the final action that CCS is the BSER because CCS has been demonstrated to be technically feasible and is in use or under construction in various industrial sectors, including the power generation sector. Specifically, the final standard of performance for newly constructed fossil fuel-fired steam generating units is based on implementation of partial CCS technology. After consideration of a wide range of comments, technical input received on the availability, technical feasibility, and cost of CCS implementation, and publicly available information about projects that are implementing or planning to implement CCS, the EPA remains convinced that CCS technology is available and technically feasible to implement at fossil fuel-fired steam generating units. However, the EPA's final standard does recognize that the proposed standards should be adjusted to address legitimate concerns regarding the cost to implement available CCS technology on a new steam generating unit. Accordingly, the EPA is finalizing an emission standard for newly constructed fossil fuel-fired steam generating units at 1,400 lb CO2/MWh-gross, a level that is less stringent than the proposed limitation (which was at 1,100 lb CO2/MWh-gross). This final standard reflects our identification of the BSER for such units to be a lower level of partial CCS than we identified as the basis of the proposed standards  -  one that we conclude better represents the requirement that the BSER be implementable at reasonable costs.
Comment 14.1-4: Commenter 9666 stated: 1) Executive Order 12866 states that "agencies should assess all costs and benefits of available regulatory alternatives, including the alternative of not regulating . . . ."  58 Fed. Reg. 51,735, 51,735 (Oct. 4, 1993);  2) OMB has directed agencies to "demonstrate that the proposed action is necessary" before they recommend action; and 3) a Congressional finding of the Regulatory Flexibility Act was that, when adopting regulations, federal agencies "should seek to achieve statutory goals as effectively and efficiently as possible without imposing unnecessary burdens on the public."  Regulatory Flexibility Act, Pub. L. No. 96-354, section 2(a)(1), 94 Stat. 1164, 1164 (1980) (Congressional findings and purposes) emphasis added); 5 U.S.C. sections 601-612 ("Regulatory Flexibility Act"); and  the Unfunded Mandates Reform Act of 1995 requires agencies to "select the least costly, most cost-effective or least burdensome alternative that achieves the objectives" of the regulation. (Unfunded Mandates Reform Act of 1995, Pub. L. No. 104-4, 205(a), 109 Stat. 48, 66 (1995) (emphasis added); 2 U.S.C. 1535(a).)  Commenter explains that Commenter contends that EPA has not fulfilled its obligations under statute and Executive Order by asserting there will be no costs and benefits to this proposed rule, and by not analyzing the impacts of the proposed rule.  The analyses called for by Executive Order are directly relevant to the Agency's obligations under the CAA.  Section 111(a)(1) requires consideration of economic and energy impacts, and Section 301(a) limits the Agency's rulemaking authority to such rules "as are necessary to carry out" its functions under the Act.  The Agency cannot satisfy its obligation to consider economic and energy impacts, or to demonstrate that its rule is "necessary," without undertaking these analyses. By not analyzing the acknowledged possibility that new coal-fired units without CCS will be built, EPA has not met its obligations under law.  Commenter closes, stating that EPA should withdraw the proposal and, if it decides to go forward, re-propose the rule after doing the required analyses.
Commenter 9666 stated EPA asserts that the requirements of the Regulatory Flexibility Act do not apply here because the rule would not have significant impacts on small entities and because electric utilities would build only those units that complied with the requirements of the rule anyway.  79 Fed. Reg. at 1500.  EPA also concluded that the Unfunded Mandates Reform Act of 1995 did not apply because the rule would not result in expenditures of at least $100 million in one year for state, local, or tribal governments or the private sector.  Id.  Commenter asserts that the actual costs of this proposed rule have been misstated (see Section VIII of comments), and EPA is mistaken with regard to the applicability of these two statutes.
Response 14.1-4: See previous response regarding EPA's consideration of costs and benefits. The EPA has carefully analyzed alternatives to the final standard of performance (see preamble section V.P), and also adopted a less stringent standard than proposed to reduce the cost of the standard.
Paperwork Reduction Act
 
 
 Commenter 9425 proposed that the EPA should limit the data retention period to three years, consistent with part 75, instead of the EPA's proposed limit of five years from occurrence unless the EPA can demonstrate the need for a longer retention period, as required under the Paperwork Reduction Act.  The commenter also asked the EPA to clarify that records stored "on-site" include electronic records that can be accessed "on-site" even if they are physically located off-site.
 
 
 
 The EPA agrees that records should be maintained for 3 years after the date of each occurrence, measurement, maintenance, corrective action, report or record, and has revised the final rule accordingly. The final rule clarifies that each record must be kept on site or be accessible from a central location by computer or other means that instantly provide access at the site for at least 2 years after the date of each recorded action and may be kept off site for the remaining year(s).
 Commenter 10034 stated that the EPA should measure whether its paperwork reporting burden estimates were approximately correct.
 When finalizing a proposed action, the EPA reassesses the information collection burden that it estimated at the time of proposal in light of OMB or public comments received regarding the EPA's burden estimates as well as revised information collection requirements included in the final rule. The EPA has not received such comments regarding the proposed information collection requirements. The EPA has reassessed its information collection burden estimates based on the information collection requirements in the final rule and submitted the revised information collection request to the OMB for approval.
Regulatory Flexibility Act
 
 
 
 Commenter 9666 stated that even while stating that the EPA "do[es] not include an analysis of the illustrative impacts on small entities that may result from implementation of this proposed rule . . . because we anticipate negligible compliance costs," the RIA concludes that "the Administrator of EPA certifies that this action will not have a significant economic impact on a substantial number of small entities." See RIA at 6-5. The commenter stated that this assertion is in error, saying the EPA did not to acknowledge that there are numerous "small entities" in the power sector-e.g., small rural electric cooperatives and many municipal power systems. The commenter stated that in addition, for all the reasons outlined elsewhere in their comment, this proposed rule will impose costs on the electric sector, will impose significant costs on numerous small entities, and thus, the EPA's conclusion that there will be no significant economic impact on a substantial number of small entities is plainly unsupported. The commenter stated that the EPA should have convened a small business advocacy review (SBAR) panel to consider regulatory alternatives that could lessen or eliminate the significant impacts on small businesses.
  The EPA disagrees with the commenter's statement that the EPA's determination that the action will not have a significant economic impact on a substantial number of small entities is incorrect. The EPA believes that electric power companies will choose to build new EGUs that comply with the regulatory requirements of the rule because of existing and expected market conditions. The EPA does not project any new coal-fired EGUs without CCS to be built. Furthermore, the EPA projects that any new NGCC that may be built is expected to have an annual emission rate in compliance with the standard. Accordingly, there are no anticipated economic impacts as a result of this rule. The EPA acknowledges that there are small entity owners in the power sector but has concluded that the rule will result in negligible compliance costs over a range of likely scenarios. Thus the cost-to-sales ratios  -  a standard test for the impact to small entities - for any affected small entity would be zero costs as compared to annual sales revenue for the entity. Commenters did not identify a specific small business that will be impacted. Nor did commenters identify any actual instances of plans of small entities to construct new coal-burning steam electric generating capacity. Based on these analyses, the Administrator of EPA properly certified that the action will not have a significant economic impact on a substantial number of small entities and, thus, did not convene a SBAR panel.
 Commenters 8964, 8970, 8995, 9318, 9494, 9671, 9672, 9736, 10392, and 10876 believe that the EPA should use its authority under Small Business Regulatory Enforcement and Fairness Act (SBREFA) to empanel groups of individuals representing various small entities to identify and address impacts of the proposed rule on small business as the EPA has done in past rulemakings. The commenters stated that the EPA failed to take impacts on small entities into consideration of the proposed rule, and urged the EPA to hold a SBAR panel called for under the Regulatory Flexibility Act (RFA).
  The EPA disagrees with the commenters. The EPA did consider the economic impacts on small entities. As explained in the RIA, the EPA did not include an analysis of the illustrative impacts on small entities that may result from implementation of the rule because we anticipate negligible compliance costs over a range of likely scenarios as a result of the rule. See RIA chapter 4. The EPA does not project any new coal-fired EGUs without CCS to be built. Furthermore, the EPA projects that any new NGCC that may be built is expected to have an annual emission rate in compliance with the standard. Accordingly, there are no anticipated economic impacts as a result of this rule. Thus the cost-to-sales ratios  -  a standard test for the impact to small entities - for any affected small entity would be zero costs as compared to annual sales revenue for the entity. Commenters did not identify any actual instances of plans of small entities to construct new coal-burning steam electric generating capacity. Based on these analyses, the Administrator of EPA certified that the action will not have a significant economic impact on a substantial number of small entities and, thus, a SBAR panel was not convened.
 Commenter 5604 asked that the EPA allow states and utilities a reasonable amount of time to comply with the proposed rule, and to develop plans that are flexible, market-based and affordable.
  Compliance dates for new sources are established by statute: "[s]tandards of performance or revisions thereof shall become effective upon promulgation."  CAA section 111(b)(1)(B).  In making reference to development of plans, the comment appears to address the proposed carbon pollution emission guidelines for existing EGUs (79 FR 34830, June 18, 2014) rather than the proposed standards of performance for GHG emissions from new EGUs. There are no state plans developed with regard to standards for new sources.
 Commenter 9494 stated that small businesses need affordable, reliable electricity and believes that the proposed rule will lead to increased energy prices and additional uncertainty. The commenter stated that electricity costs are a prominent concern for small business owners and cites the NFIB Research Foundation's 2012 Small Business Problems and Priorities, stating that the cost of electricity was ranked number 12, ahead of other major problems like cash flow and poor earnings1 (Small Business Problems and Priorities. NFIB Research Foundation. 2012. http://www.nfib.com/research-foundation/priorities) NFIB believes the proposed rule could cause electricity costs to rise substantially. The commenter contended that the uncertainty regarding how the rule will affect the cost and availability of electricity stands to be an ongoing deterrent for small businesses to plan for expansion and job growth. In addition, like other critical costs, electricity prices disproportionately impact small businesses, and these companies are unable to absorb price increases in the same way larger companies can. To try to make up the difference, small businesses must increase the prices of the goods and services they sell. As these prices go up, demand for those goods and services decreases, lowering sales and revenue. The commenter asserted that the EPA did not adequately analyze the impact of increased energy prices on small businesses.
  The EPA disagrees with the commenter that the rule will result in increased energy prices and that the EPA did not adequately analyze the impact of those increased energy prices on small businesses. U.S. DOE, EPA and industry projections indicate that, due to the economics of coal and natural gas, among other factors, new power plants that are built over the next decade or more would be expected to meet the standards even in the absence of the rule. That is, even in the absence of the final standards, new fossil fuel-fired capacity constructed through 2030 and the years following will most likely be NGCC capacity that complies with the final standards. Thus, because the standards are in line with current industry investment patterns, the standards are not expected to have notable costs or economic impacts, and are not projected to impact electricity prices or energy supplies.  Nor do we expect the rule to raise any reliability concerns, since reserve margins will not be impacted and the rule does not impose any requirements on existing facilities. 
 Commenter 10023 stated that the Regulatory Flexibility Act calls on federal agencies to "seek and achieve statutory goals as effectively and efficiently as possible without imposing unnecessary burdens on the public" that could create barriers in industry. 
  The EPA asserts that this rule does effectively and efficiently fulfill the requirements and goals of CAA section 111(b) and does so without imposing unnecessary burdens on the public. As explained in the previous response, U.S. DOE, EPA and industry projections indicate that, due to the economics of coal and natural gas, among other factors, new power plants that are built over the next decade or more would be expected to meet the standards even in the absence of the rule. That is, even in the absence of the final standards, new fossil fuel-fired capacity constructed through 2030 and the years following will most likely be NGCC capacity that complies with the final standards. Thus, because the standards are in line with current industry investment patterns, the standards are not expected to have notable costs or economic impacts, and are not projected to impact electricity prices or energy supplies. Nor do we expect the rule to raise any reliability concerns, since reserve margins will not be impacted and the rule does not impose any requirements on existing facilities.
14.4 UNFUNDED MANDATES REFORM ACT
 
 
 
 
  Commenter 9657-4268 states that in the EPA's proposed rule and RIA, the agency notes the proposal does not contain a federal mandate that may result in expenditures of $100 million or more for State, local, and tribal governments, in the aggregate, or the private sector in any one year. Thus, the proposal does not trigger the Unfunded Mandates Reform Act (UMRA). The analysis further notes that there are no new generating units expected without CCS, assuming that new generation could be built with carbon capture technology. The EPA then provides likely costs of both full and partial CCS. In 2011 dollars, the agency projects partial CCS costs of $29/MWh, and full CCS costs of $66/MWh. Based on these figures, if owners construct just one new coal plant with full CCS that generates three million MWh, the annual costs will eclipse $198 million; this should trigger the threshold under UMRA.  Commenter notes that based on 2010 EPA facility-level data, the average coal plant generated 3.7 million annual net MWh. Assuming a company constructs just one new coal plant with full CCS that produces 3.7 million MWh, annual costs could approach $247 million, well beyond UMRA's monetary threshold. One new coal plant with partial CCS that produces 3.7 million MWh would carry annual costs of $107 million. Furthermore, if CCS is the established technology that EPA claims in the proposed rule and the RIA, and coal comprises just one percent of the U.S. generation mix, annual costs could easily exceed $1 billion annually, assuming 2010 net generation levels. For partial CCS ($29/MWh), assuming just one percent of new U.S. generation is coal, annual costs would be $1.1 billion; assuming full CCS, costs would approach $2.7 billion annually. Under the assumption that just five percent of new U.S. generation is coal, these figures are $5.9 billion for partial CCS and $13.6 billion for full CCS. Commenter continues that even if advanced coal does not grow to represent five percent of total energy generation, this regulation will impose significant costs. The EIA anticipates coal to gain a greater share of generation after retirements hit their maximum in the next few years. According to their 2014 Annual Energy Outlook, between 2016 and 2029, coal will grow by 140 million MWh before declining slightly. If this incremental power comes from facilities that employ CCS under EPA guidelines, costs could span from $4 billion to $9 billion annually (for partial and full CCS, respectively). Commenter summarizes that using the EPA's cost figures for carbon capture technology, if just one new coal plant produces three million MWh with full CCS, annual costs could trigger UMRA's threshold. If CCS technology implementation is more widespread, annual costs could stretch into the billions of dollars annually. We recommend that the EPA revisit its UMRA analysis to capture these scenarios. If CCS is viable, as EPA assumes, and it will cost between $29 and $66 per MWh, this proposed rule will likely impose annual unfunded mandates in excess of UMRA's threshold. 
Response 14.4-1: The EPA believes the final rule will have negligible compliance costs on owners and operators of newly constructed EGUs over a range of likely sensitivity conditions because electric power companies will choose to build new fossil fuel-fired electric utility steam generating units or natural gas-fired stationary combustion turbines that comply with the regulatory requirements of the rule because of existing and expected market conditions. The EPA analyzed and assessed a wide range of potential scenarios and outcomes, using a detailed power sector model, other government projections for the power sector, and additional economic assessments and analyses to determine the potential impacts of the rule. The primary finding of the assessment is that in the baseline, all projected unplanned capacity additions affected by these standards during the analysis period would already be compliant with the rule's requirements (e.g., natural gas combined cycle units, low capacity factor natural gas combustion turbines, and small amounts of coal-fired units with CCS supported by federal and state funding). The analysis period is defined as through 2022 to reflect that CAA Section 111(b) requires that the NSPS be reviewed every eight years. The EPA's forecast of no new non-compliant coal-fired capacity remains robust beyond the analysis period (past 2030 in both EIA and EPA baseline modeling projections) and across a wide range of alternative potential market, technical, and regulatory scenarios that influence power sector investment decisions. As a result, the EGU New Source GHG Standards are not expected to change GHG emissions for newly constructed EGUs, and are anticipated to yield no monetized benefits and impose negligible costs, economic impacts, or energy impacts on the electricity sector or society. See RIA chapter 4.IPM projects no new non-compliant coal throughout the model horizon (there is a small amount of hardwired CCS, consistent with EIA assumptions). So we could say 2022 or 2030. EIA doesn't project any coal beyond the small amount of CCS until 2038, and even then it's very small and might be CCS.
 E.O. 13175 Consultation and Coordination with Indian Tribal Governments
 
 
 
 
 
 Commenters 10620, 8020, 8967 and 10525 disagreed with the EPA's finding that the proposed standards will neither have substantial direct compliance costs on tribal government nor preempt tribal law. The commenters stated that the EPA may not be aware of tribal interests because the consultation conducted with tribes was insufficient. All four commenters noted that letters were sent to 584 Tribal leaders during initial development of NSPS standards and EGU emission guidelines and that a consultation/outreach meeting was held for tribes; however these communications took place nearly three years ago and few additional calls and outreach meetings have been held since. The commenters believe that the EPA must do better in consulting with tribes under the proposed rule and its implementation as per E.O. 13175.
  As previously explained, U.S. DOE, EPA and industry projections indicate that, due to the economics of coal and natural gas, among other factors, new power plants that are built over the next decade or more would be expected to meet the standards even in the absence of the rule. That is, even in the absence of the final standards, new fossil fuel-fired capacity constructed through 2030 and the years following will most likely be NGCC capacity that complies with the final standards. Thus, because the standards are in line with current industry investment patterns, the standards are not expected to have notable costs or economic impacts, and are not projected to impact electricity prices or energy supplies. Nor do we expect the rule to raise any reliability concerns, since reserve margins will not be impacted and the rule does not impose any requirements on existing facilities. Thus, the EPA determined that the standards will neither impose substantial direct compliance costs on tribal governments, nor preempt tribal law.
The EPA disagrees with the commenters' assertion that the EPA may not be aware of tribal interests due to insufficient consultation with tribes. The EPA has offered additional consultation and conducted additional outreach since the EPA's offer of consultation prior to the April 13, 2012 proposal (77 FR 22392) and the consultation/outreach meeting that was held on May 23, 2011. On November 1, 2013, the EPA sent letters to 566 federally recognized tribes offering consultation with tribal officials. No consultation requests were made. In addition, during the March 27, 2014 NTAA and EPA Air Policy Call, the EPA provided an update/overview of the proposed standards for GHG emissions from new EGUs, including how the rulemaking fits within the larger context of the overall Climate Action Plan and other EPA efforts to address climate change. The EPA strives to conduct our efforts with sensitivity to the needs and culture of tribes and with attention to the potential impact of our actions. We continue to be interested in Tribal issues regarding the rule as well as its implementation.

E.O. 13045 Protection of Children from Environmental Health Risks and Safety Risks
 
 
 
 
 
 
 Commenter 9196 stated that the proposed rule is not among the wisest of societal investments in addressing premature mortality, noting President Obama's order for the EPA to protect public health and the environment.
  The EPA disagrees with the commenter. In 2009, the EPA Administrator found that elevated concentrations of GHGs in the atmosphere may reasonably be anticipated both to endanger public health and to endanger public welfare. As summarized in section II.A of the preamble to the final rule and the preamble to the proposed rule (79 FR 1437-1438, January 8, 2014), climate change threatens public health and welfare in a number of ways, including direct temperature effects, the effect of higher CO2 on other characteristics of air quality, the potential for changes in vector-borne diseases, and the potential for changes in severity and frequency of extreme weather events. With the increase in regional ozone pollution that is expected from climate change, there are associated risks in respiratory illnesses and premature mortality. Further, there are multiple pathways in which the GHG air pollution and resultant climate change affect climate-sensitive economic sectors and environmental media, including food production and agriculture; forestry; water resources; sea level rise and coastal areas; energy, infrastructure, and settlements; and ecosystems and wildlife. These adverse impacts as well as the fact that fossil fuel-fired EGUs are by far the largest stationary source emitters of GHGs in the United States, make it necessary and appropriate for the EPA to regulate GHGs from fossil fuel-fired EGUs.
E.O. 13211 Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use
 
 
 
 
 
 
 
 Commenters 7977 and 8957 strongly disagreed with the EPA's claim that the proposed rule is not considered a "significant energy action" as defined in E.O. 13211. Commenter 7977 noted that the proposed rule would result in significant adverse effects on the supply, distribution, and use of energy. Commenter 8957 additionally noted that the rule acts as a de facto mandate from the EPA that forces utilities to switch from coal-fired generation to natural gas in the future.
  The EPA disagrees with the commenters that the rule will result in a significant adverse effect on the supply, distribution or use of energy. For new sources, the EPA and other energy modeling groups, such as EIA, project no new, unplanned conventional coal-fired capacity will be built in the analysis period. This is due in part to the low, levelized cost of base load NGCC capacity relative to coal capacity, relatively low growth in electricity demand, and use of energy efficiency and renewable energy resources. Furthermore, absent this rule, any new NGCC that may be built is expected to have an annual emission rate in compliance with the standard. Because this rule does not change these projections, the EPA continues to expect that the rule will result in negligible CO2 emission changes, benefits or costs for new units constructed by 2022. Likewise, the EPA does not anticipate any notable impacts on the price of electricity or energy supplies, nor do we expect the rule to raise any reliability concerns, since reserve margins will not be impacted and the rule does not impose any requirements on existing facilities. Moreover, in EPA's analysis of potential impacts of illustrative individual investment decisions, whereby new coal-fired capacity might be constructed notwithstanding the national macro-economic considerations, benefits of the standard would exceed costs of regulation.  See RIA chapter 5.  That is, the benefits of reduced emissions as a result of meeting the standards would exceed costs of a coal-fired EGU meeting the promulgated 1400 lb CO2/MWh standard.  The one caveat would be for a source choosing to construct new IGCC, where IGCC itself would meet the standard without further control.  In that case (which is analogous to our projections for new NGCC capacity), the standard would be met by a well-constructed, efficiently operated source without the need (or expense) of further controls. 
The EPA disagrees with one commenter's belief that the rule acts as a de facto mandate that forces utilities to switch from coal to natural gas-fired generation in the future. Under a wide range of electricity market conditions, the EPA projects that the industry will choose to construct new units that already meet the standards, regardless of the rule. While the EPA does not project any new coal-fired EGUs without CCS to be built in the absence of this rule, the RIA for the proposed rule (see section 5.10) as well as the RIA for the final rule (see section 5.5) presents an analysis of the project-level costs of building new coal-fired capacity with and without CCS to demonstrate that a requirement of partial CCS would not preclude new coal construction. The final standard of performance for newly constructed fossil fuel-fired steam generating units provides a clear and achievable path forward for the construction of new coal-fired generating sources that addresses greenhouse gas emissions and supports continued technological innovation. 
 Commenter 9423 stated that the EPA's analysis for E.O. 13211 is not adequate, and a more thorough analysis is needed of the long-term impacts of the proposed rule on energy supply, distribution and use. The commenter further noted that the EPA has an obligation to perform a fully-reasoned analysis of the impact of their regulatory actions on the nation's electrical power system, and that the EPA will need to perform said analysis if natural gas prices are higher than projected and new coal-fired generation is no longer an option for the electric power industry.
  The EPA disagrees with the commenter's belief that the EPA's analysis is not adequate and that a more thorough analysis of the rule's long-term impacts on energy supply, distribution and use is needed. The EPA analyzed and assessed a wide range of potential scenarios and outcomes, using a detailed power sector model, other government projections for the power sector, and additional economic assessments and analysis to determine the potential impacts of this action. The primary finding of this assessment is that in the absence of the rule, all projected unplanned capacity additions (i.e., projected capacity additions that are not under construction) affected by the rule during the analysis period would already be compliant with the rule's requirements (e.g., combined cycle natural gas, low capacity factor natural gas combustion turbine, and small amounts of coal with CCS supported by Federal and State funding).
E.O. 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations
 
 
 
 
 
 
 
 
 Commenter 9202 stated that they affirm statements that describe the heightened climate impacts that will fall on the most vulnerable, and on future generations.  The commenter noted that E.O. 12898 provides a clear basis for highlighting the disproportionate impacts of power plant pollution.
  The EPA appreciates the support of the commenter.