EPA Rulemakings to Set GHG Emission Standards for

EPA Rulemakings to Set GHG Emission Standards for Power Plants National Hydropower Association Webinar Kyle Danish February 14, 2014

President’s July 2013 Climate Action Plan ◘ Directed EPA to regulate power plants under CAA section 111 • Section 111(b) new power plants • Section 111(d) existing power plants ◘ Timeline • Propose rule for new power plants by September 2013 (done) • Propose guideline for existing power plants by June 1, 2014 • Finalize guideline for existing power plants by June 1, 2015 • State plans due for existing power plants by June 30, 2016 • Compliance deadline for power plants (? ? ) National Hydropower Association

Section 111 of the Clean Air Act ◘ Standards of performance for major sources of pollution • Emission limitation based on “best system of emission reduction” that has been “adequately demonstrated” taking into account cost ◘ Sec. 111(b): standards of performance for new sources • EPA sets standard ◘ Sec. 111(d): standards of performance for existing sources • States set standard subject to EPA approval • Legal controversy about EPA authority National Hydropower Association

Proposed Rule for New Power Plants ◘ Published in Federal Register on Jan. 14 • Comment deadline: March 10 ◘ Natural gas-fired power plants • BSER = natural gas combined cycle power plant • 1, 050 – 1, 100 lbs CO 2/MWh ◘ Coal-fired power plants • BSER = partial carbon capture and sequestration • 1, 100 lbs CO 2/MWh National Hydropower Association

Issues with 111(b) Regulation ◘ Is CCS “adequately demonstrated”? • Absence of data • Effect of Energy Policy Act of 2005 ◘ If 111(b) rule for power plants is invalidated does that affect 111(d) authority? National Hydropower Association

Section 111(d) Rulemaking ◘ EPA issues “emission guideline” to states • Proposed rule due June 1, 2014 • Final rule due June 1, 2015 ◘ States submit plans with standards of performance • Plans due June 30, 2016 • “Equivalency” requirement ◘ EPA approves/disapproves National Hydropower Association

111(d) Federal-State Process • Benchmark “standard of performance” • Compliance schedule • Technical guidance for States State Plans • Standards of performance • Compliance schedule • Compliance plan EPA Guideline National Hydropower Association • Approve if “equivalent” to Guideline; or • Disapprove and impose EPA plan EPA Review

Issues in the 111(d) Rulemaking ◘ What is “best system of emission reduction” for existing fossil plants? • Inside-the-fence § § Efficiency upgrades Co-firing? • Outside-the-fence § § § Trading among plants? Additions of renewables? End-use energy efficiency? ◘ What is scope of state discretion to design plans? National Hydropower Association

For more information: Kyle Danish 202 -298 -1876 kwd@vnf. com