Donald R. van der Vaart NC DENR

 New Sources – 111(b)  Existing Sources – 111(d)

 Section 111(b) is not a health-based program. It is technology based.  This program was originally designed to hinder industrial migration by defining a national emission standard for new plants.

Clean Air Areas and Dirty Air Areas NAAQS Actual Concentration NAAQS Clean Air AreaDirty Air Area Concentration 7

 EPA has proposed a rule for new coal- fired power plants that require Carbon Capture and Sequestration (CCS).  Claims the impact will be minimal since only natural gas units will be built.  Remember that a standard under 111(b) is a required predicate for 111(d).

 Technology must be “adequately demonstrated”  Problem: None of the cited facilities are even operational.  Problem: Three of the four cited facilities were funded under the “Clean Coal Power Initiative” (CCPI). The law authorizing CCPI specifically prohibits these projects to be considered “adequately demonstrated” under section 111 of the CAA

 Standard under 111(b) is not correct.  Section 111(d) prohibits regulation of sources subject to 112.  Section 111(d) prohibits regulation of pollutant listed under Section 108.  Even if 111(d) is authorized, only Building Block 1 is consistent with CAA.

 Section 111(d) prohibits regulating “source categories” regulated under section 112 (as coal fired power plants are).  NC agrees with the NRDC and others:  “Thus, the text of §111(d)(1)(A) makes clear that EPA may not set standard for a pollutant that is “emitted from a source category which is regulated under section 112” or included on the §112(b) list of hazardous air pollutants.”

 Those in favor of using 111(d) to regulate Utility plants argue that the CAA language showing a conformance of House and Senate versions of amendments is in conflict and therefore ambiguous. EPA should be afforded “Chevron” deference.

 The CAA is not in conflict.  NC agrees with NRDC when they stated in 2007 that the ambiguity was “manufactured” by EPA in an “attempt to exploit a non-substantive difference between the two amendments to111.”

 CAA prohibits section 111(d) for any pollutant listed under section 108  By making an endangerment finding under section 202, GHG have already been listed under section 108

 Section 111(d) provides for controls on an individual emission unit  Applying 111(d) is a scientific – not political - endeavor  That is, each coal plant would be evaluated based on various factors, including its remaining useful life.  So each plant could have a different requirement.

 But that would not lead to outside the fence line reductions – that is, forcing the shut down of existing coal plants, further incentivizing of smart appliances, and codifying Renewable Energy Portfolio Standards

 Again, NRDC and others stated:  “This Court has previously rebuffed EPA’s efforts to authorize pollution trading under §111. In ASARCO, Inc., v. EPA, 578 F.2d 319(D.C. Cir. 1978), the Court rejected even a limited emission trading scheme, whereby existing plants could avoid §111 standards when making changes so long as offsetting emission reductions could be identified elsewhere at the same plant site.”

 Defines four “Building Blocks” of guideline

 Four Building Blocks are posited  EPA makes clear that the BB are severable – that is, if one or more BBs are struck down (as all but the first one should be) the guideline standard would be equivalent to the first BB.  Baseline year for the BBs is 2012

 Building Blocks are based on the following: Increase efficiency of existing coal units. Environmental dispatch of natural gas units over coal units. (Based on $30/ton) Increase fraction of non-carbon dioxide forming energy sources (i.e., nuclear and renewable sources). Note - >$30/ton Increase efficiencies outside the fence line of the plant (i.e., demand side management).

 EPA believes efficiency gains can be made on existing units of 6%

 EPA believes (based on >$30/ton GHG) that natural gas units should be used at 70% capacity.  In NC the capacity factors are roughly 30%.  Because many coal units were retired (in part due to Clean Smokestacks Act) and replaced with NG units, EPA assigned NC a large decrease in GHG under BB2.

 Assigns reductions to zero emitting energy sources (renewables and nuclear).  NC’s number (10.6%) was based, in part, on our having a RPS in place.  Unclear on many fronts.

 Energy Efficiency and Demand Side Management.  Set NC’s EE number at 10.3%.