1. Standards of Performance for Greenhouse Gas Emissions From Existing Stationary Sources: Electric Utility Generating Units OMB Meeting June 23, 2015

2. Page 2 EPA’s Building Block Assumptions lead to Unachievable State Emission Rate and Mass Limit Targets E NERGY V ENTURES A NALYSIS, I NC.

3. Page 3 Flawed BB Assumptions lead to Understatement of true CPP Compliance Cost and Impact on Industry and Fuel Markets  EPA assumes electricity demand would contract by 0.12%/year between 2020 and 2030 due to savings from increased energy efficiency measures under the Clean Power Plan  Contradicted by all other CPP analyses (NERC, EIA, NERA, EVA, NMA, etc.) which have electricity demand growing despite savings from increased energy efficiency measures under the Clean Power Plan  EPA assumes retail electricity rates would increase but reduced ratepayer power consumption would offset price impact and reduce annual cost  Contradicted by all other CPP analyses (NERC, EIA, NERA, EVA, NMA, etc.) which have reductions in electricity usage not fully offsetting price increases in retail electricity rates  EPA assumes natural gas demand would not change significantly, although natural gas market share would increase due to increased existing NGCC utilization and new natural gas generation capacity additions  All studies outside EPA assume that shift to higher natural gas market share will result in much higher natural gas prices that will adversely affect US industrial production and commercial/residential ratepayers Comparison of Total Generation under the CPP: E NERGY V ENTURES A NALYSIS, I NC.

4. Page 4 Flawed EE Assumptions lead to Understatement of Total Power Sector Generating Costs and Diminish CPP Cost Impacts Average (2020-30) Total Power Sector Generating Cost ($2013 B) :  EPA’s flawed assumptions for Building Block 4 (Energy Efficiency) and the resulting overestimated reduction in electricity demand leads to understating the total power sector generating cost and thus understates the true compliance cost of the Clean Power Plan by more than $15 B per year  Other major studies (EIA, NERC, EVA, NERA, etc.) show increase in generating cost, due to energy efficiency not wholly offsetting increase in wholesale power prices E NERGY V ENTURES A NALYSIS, I NC.

5. Page 5 Flawed EE Assumptions lead to Understatement of Henry Hub Price Impacts and Cost Impacts to the Non- Power Sector  All major CPP studies show that one of the most cost-effective ways to reduce CO 2 emissions is to displace higher emitting generation with lower emitting generation (coal-to-gas switching)  Although EPA’s natural gas’ generation mix share increases by more than 5% under the CPP, power sector natural gas demand DECREASES due to EPA’s unreasonably aggressive energy efficiency assumption  Because power sector natural gas demand falls below the baseline in the second half of the 2020’s, there is no significant difference in Henry Hub natural gas prices between the base line and the CPP compliance case  Therefore, EPA’s flawed energy efficiency assumption leads to an underestimation of natural gas demand/ price and ultimately leads to an understatement of CPP compliance cost (EIA’s aggressive renewable energy assumption also leads to understating gas demand/price and CPP cost impacts) Power Sector Gas Demand Change (avg. 2020-30, relative to baseline, TCF) EPA Henry Hub Price ($2013 / MMBtu) E NERGY V ENTURES A NALYSIS, I NC.

6. Page 6 EPA Greatly Underestimated the Overall Compliance Cost for the Clean Power Plan Compliance Cost Estimates by various CPP studies ($2013) : E NERGY V ENTURES A NALYSIS, I NC.

7. Page 7 EPA Understates Health, Standard-of-Living and Economic Impacts of the Clean Power Plan  EPA did not examine the adverse health and standard-of-living effects of higher energy prices on low income communities where higher prices reduce their disposable income at a higher rate  Families w/ less than $50,000 after-tax income (48% of all Americans) spent more than 17% on energy-related expenses (vs. 7% for higher-income families)  Disproportionately affects income of minority and elderly households (21% - 33% below national median income)  Responses by low-income families to high energy bills include:  Going without food for at least one day  Going without medical or dental care  Family members getting sick because their home was too cold  EPA did not directly examine impacts of higher energy prices and lost employment on future US economic growth E NERGY V ENTURES A NALYSIS, I NC.