Snake River Alliance Comments
Clean Power Plan Proposed Rule – Docket ID: EPA-HQ-OAR-2013-0602
Carbon Pollution Emission Guidelines for Existing Stationary Sources
Electric Utility Generating Units
December 1, 2014
The Snake River Alliance appreciates the opportunity to comment on Proposed Rule – Docket ID: EPAHQ-OAR-2013-0602 – the Clean Power Plan proposed revisions to Section 111(d) of the federal Clean Air
Act.
The Alliance is an Idaho-based non-profit organization, established in 1979 to address Idahoans’
concerns about nuclear safety issues. In 2006, the Alliance expanded the scope of its mission by launching
its Clean Energy Program. The Alliance’s energy initiative includes advocacy for renewable energy
resources in Idaho; expanded conservation and demand-side management programs offered by Idaho’s
regulated utilities and the Bonneville Power Administration; and development of local, state, regional,
and national initiatives to advance sustainable energy policies. Central to the Alliance’s clean energy
work are efforts to reduce power plant greenhouse gas emissions by regulated utilities serving Idaho
electric load, and as such the Alliance has worked directly with utilities as well as regulators, power
planners, and other entities to accomplish the goal of reduced coal consumption for electricity
production.
This proposed rule is an important and legally defensible step toward a nationwide lower-carbon
electricity portfolio, which is vital if the nation as a whole and each of its individual states are to make
overdue progress in reducing our greenhouse gas (GHG) emissions from existing electric generating units
(EGUs). It can be debated whether this progress can be made as a result of Congressional or Executive
actions, but the time for awaiting Congressional action has expired. The stakes involved in this issue are
simply too great to continue to tolerate further inaction and delayed decision-making, as difficult as it
may appear. The Clean Power Plan, despite flaws that can be remedied in the final rule and even
subsequent amendments to the rule at later dates as appropriate, is the opportunity to act and to
demonstrate global leadership in GHG reduction efforts. The United States has a moral imperative not
only to fulfill its obligations in reducing climate-altering GHG emissions, but also to lead by example as
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nations worldwide struggle to reverse their increasing emissions.
While we support the rule, as stated below we believe the greenhouse gas reduction targets must be
more ambitious – and that the means to achieve greater GHG reductions currently exist and can be
implemented without economic disruption. To do so, we recommend EPA more realistically examine the
true reductions that can be achieved through more robust energy efficiency and renewable energy goals
(Building Blocks 3 and 4) – both of which will help achieve greater reductions as well as reduce the
overall costs of state compliance with the rule. This is particularly important in light of the Natural
Resources Defense Council’s “Updated Costs and Performance” analysis by ICF International to run the
Integrated Planning Model (IPM) with updated data that in some cases dramatically alters the data inputs
and resulting conclusions of EPA – which also uses the IPM. That analysis, with updated data not reflected
in this draft rule, indicates that far greater emissions reductions are possible than envisioned in this draft
rule. It also indicates a huge difference in the costs and savings resulting from implementation of this
rule.
As explained in more detail below, we believe that for meaningful emission reductions to occur, EPA’s
proposed “outside the fence line” approach to identifying possible reductions must remain intact. Failure
to do so would render Building Blocks 3 and 4 meaningless, and in our view those Building Blocks are
where true reductions will be achieved. Were the Clean Power Plan to be restricted to activities inside the
fence line at the plant level, the GHG reductions would likely be limited to 4 percent or less – far below
the goals identified in the Clean Power Plan.
Multi-State Compliance Planning
In addition, the Alliance has co-signed and concurs with comments by Northwest U.S. non-government
organizations endorsing the use of a regional, or multi-state compliance regime when appropriate, as it is
in our region and with our interconnected western power grid – the Western Electricity Coordinating
Council, or WECC. We recommend that EPA allow and assist states preferring a multi-state approach the
flexibility to design one that does not by necessity mirror the Regional Greenhouse Gas Initiative (RGGI)
currently in use by northeast states. The states in the Northwest have much in common, particularly with
regard to grid operations, transmission, and development of energy efficiency and renewable energy
resources, in addition to the fact that much of the coal-fired generation used in the region comes from
power plants located primarily in intermountain states such as Montana, Wyoming, and Utah. As opposed
to a source-based, or plant-by-plant approach, a multi-state, or system-based, approach and shared goals
for our region would deliver compliance efficiencies, reduced costs to achieve greenhouse gas emissions,
and reduced redundancy in implementation measures.
At the same time, a state’s participation in a multi-state agreement should not require that state’s
compliance goal to be absorbed, or blended, into a regional goal.
In allowing a multi-state approach, however, the rule must include safeguards to prevent “double
counting” of emission reduction measures, such as in cases where energy efficiency or renewable energy
efforts in one state might be counted for emissions reductions in another state using a mass-based
regime where an exporting coal plant is located. The rule should ensure that states making energy
efficiency or renewable energy investments be given credit for those efforts. There are several possible
remedies for possible double counting, and flexibility must be provided as appropriate for states to
ensure it does not occur. At the same time, it is important that the rule establish a uniform standard to
credit emissions reductions for renewables and efficiency that occur across state lines, which would also
collaterally benefit forward-looking states that proactively adopt state-specific policies to encourage
efficiency and renewable energy development.
Baseline Metric
We are confident that EPA has already heard enough during stakeholder meetings and through
comments that establishing 2012 as the single baseline year to calculate and determine compliance with
our targets, particularly here in Idaho, is inappropriate and would undermine the intent of the proposed
rule, at least in our region, by underestimating the region’s average GHG emissions.
As proposed, the proposed rule selects a reference year in which states like Idaho experienced higherthan-normal stream flows. For states like Idaho that are heavily reliant on hydropower generation, that
has the inevitable result of skewing our emissions levels as the state was less dependent on its out-ofstate thermal power production due to greater use of lower-emissions hydropower. Our region’s year-toyear variability in stream flows and hydropower generation require a more accurate baseline as the
foundation for its compliance targets.
EPA should instead use an average of multiple years – at least five – to better account for the variability in
steam flows and, as a result, clean power generation. This would better normalize and more accurately
depict electricity generation conditions and minimize climate anomalies such as temperature and
precipitation that may affect a state’s reduction target.
Implementation Timing of the Rule
We appreciate that when EPA delayed the public comment period to Dec. 1, it did not likewise change
future timetables for release of the final rule and for states’ development of their respective plans by June
30, 2016.
EPA should adhere to its intended date for issuance of the final rule, as well as its timeline for states to
develop their compliance, or “state implementation” plans, for EPA to approve them, and ultimately to
ensure states are on track to meet their compliance targets. This is especially important because any
slippage of meeting those targets means GHG emissions are continuing at rates above the stated targets,
which in turn delays state development and implementation of the components of their plans, which in
turn erodes the intent of this Clean Air Act rule and the Act itself.
As states decide whether to partner with other states in a regional compliance approach, the additional
time to do so should appropriately be allowed. Furthermore, states should be permitted to join a regional
compliance regime if they decide to do so at a later date and after their individual plans have been
approved. At a minimum, however, any multi-state or regional compliance approach must ensure that the
result is no lower than what would have been achieved from individual state compliance plans, ensuring
that states do not recognize lower reduction targets as a result of their collaborating with other states.
Inasmuch as Idaho is a coal-fired generation “consumer state,” and given that it joins three of its
neighbors that compose the Northwest Power and Conservation Council, and given that much of our
region’s carbon emissions are generated elsewhere, a regional compliance approach makes the most
sense for states such as Idaho. Idaho is different from its neighboring states in that it does not have
renewable energy or energy efficiency standards, but as with its neighbors, its electric utilities operate in
and are regulated by other states in the region, further making a regional compliance regime more
practical and more effective.
In addition, EPA should remain firm with its 2020 interim compliance target date as reasonable to ensure
states remain on track in reaching their respective goals. The rule should also make it clear that states are
allowed to revise or update their compliance plans through the 2030 compliance period to adjust for
changes in technologies and other circumstances unforeseen during the coming period of initial
compliance plan development.
Best System of Emission Reduction
The federal Clean Air Act’s Section 111 allows EPA to establish emission targets for the states, using the
proposed “best system of emission reduction” (BSER) at issue in this proposed rule. BSER is the
appropriate method to reduce GHG emissions as it provides states the flexibility to employ carbonreducing measures beyond an EGU’s fence line. As mentioned above, Idaho has no utility EGUs within its
boundaries and instead imports significant amounts of power from out-of-state plants, so it is logical that
it be allowed to turn to energy efficiency and renewable energy alternatives in meeting its compliance
obligations. The alternative – attempting to reach GHG reductions strictly at the plant level – would
foreclose many of the opportunities for overall emissions reductions, chiefly those contemplated in
Building Blocks 3 and 4.
States opting to rely on individual compliance plans must include provisions to guarantee their stated
GHG reductions are met by the respective deadlines, including using a uniform measurement and
verification process. It is important that, as states work to determine how to reach their targets, they
have as many tools at their disposal as possible and as prescribed in the four Building Blocks.
However, given the significant amount of hydropower consumed in Idaho – including from hydropower
plants that straddle state boundaries (the Snake River serves as a portion of the Idaho-OregonWashington border), we believe EPA should resist efforts to include all hydropower when setting state
targets. We acknowledge the zero-carbon emissions from hydro generation, but do not believe
compliance targets should be decremented by subtracting that generation, which would relieve Idaho
from its obligation to reduce its portion of coal plant emissions. We also note that most hydropower is
generally not considered a “renewable” energy resource in calculations for utility compliance with state
renewable portfolio standards.
With regard to the solicitation for additional information in EPA’s Oct. 28, 2014, notice of data availability
(NODA), nuclear power in any form, including existing “at risk” reactors, should not be considered as a
BSER technology. It is neither a renewable generation resource, relying on a finite fuel source (uranium),
nor does it pass any rational cost-effective test that will be employed for purposes of determining BSER
alternatives. Nuclear power is the most expensive currently available generation resource in the nation
and its overall, levelized costs, including still-unsolvable waste management and unknown disposal
technologies, are incalculable. It appears that the draft rule would actually encourage states where
reactors are at some stage of construction to continue massive investments when far less expensive
alternatives – notably renewable energy and energy efficiency – are available. If the rule assumes there is
no cost of completing any of the reactors regardless of massive cost overruns and delays, then nuclear
would irrationally be viewed as competitive as a resource as solar or wind. Furthermore, the rule should
not suggest or assumer that decommissioned reactors must be replaced with thermal, GHG-emitting
resources. We see no justification to provide states with operating or planned nuclear reactors a credit
toward target compliance in exchange for further massive investments in reactors, as has been suggested.
Regardless of whether the rule considers nuclear to be a BSER-qualifying technology, for reasons stated
above it should be disqualified as a resource to help meet emission reduction targets.
The Energy Efficiency Building Block
As EPA knows, energy efficiency and conservation are the cleanest, least expensive, and in many cases
most effective way to reduce greenhouse gas emissions. States should be encouraged to apply all costeffective demand-side management programs as a compliance tool. Building Block 4, increasing energy
efficiency, is critically important if states are to meet their targets and will likely be the primary avenue
for Idaho to meet its 33 percent emission reduction compliance target.
However, a weakness in the draft rule deals with how states can apply energy efficiency in meeting
targets. Allowing energy efficiency to be applied only to offset in-state generation (again, Idaho has two
natural gas plants and no utility coal plants) has the effect of reducing the effectiveness of the energy
efficiency building block.
In addition, if EPA were to increase the percentage of energy efficiency states can apply to their targets
from 1.5 percent of retail sales/load to a greater percentage, states and regions such as the Northwest
that have adopted aggressive DSM programs could be allowed to capture the savings from such things as
building codes, voltage regulation, market transformation (such as accomplished by the multi-state
Northwest Energy Efficiency Alliance) and energy efficiency appliance standards. These and other
outside-the-fence line, non-utility efficiency measures must be counted toward a state’s compliance
target, and early adopter states must also be credited for measures implemented prior to 2017.
This is especially important to the Northwest region of the country, where the Northwest Power and
Conservation Council has projected the four-state region can meet 85 percent of its new load through
energy efficiency, with the all or most of the balance coming from renewable energy.
States with robust efficiency measures should not be punished by a rule that sets the 1.5 percent of retail
sales/load as a ceiling, thereby reducing the value of efficiency programs. The proposed 1.5 percent
threshold should be increased to at least 2 percent.
We also recommend that EPA consider a more rapid ramp rate of new energy efficiency than currently
reflected in the rule, which would remove some disincentives for states to implement efficiency measures
and to realize emission reductions as quickly as possible.
Building Blocks 1-3
The draft rule ‘s Building Block 1 (upgrading plants to increase their efficiency) is based on EPA’s
estimate that existing plants can see efficiency improvements of 6 percent. As with our concerns
regarding energy efficiency above, we believe upgrades to plants can achieve average heat rate
efficiencies greater than 6 percent.
The rule’s Building Block 2 (more efficient use of natural gas plants) will be employed by many states that
are home to coal plants. However, re-dispatching the bulk of the existing coal fleet to natural gas
generation must be done judiciously given that gas-fired generation is still a significant GHG emitter, and
given the uncertain future of natural gas availability and price vitality.
Building Block 3 (expanded renewable energy) can and should provide more ambitious emission
reduction estimates from renewables. For example, the rule should be revised to reflect recalculating
GHG reductions from renewables to include their role in reducing coal-fired generation. In addition,
renewable energy costs are extremely dynamic, but recent analyses, including the September Levelized
Cost of Energy Analysis – Version 8.0 by Lazard Ltd, demonstrate that the cost of wind and solar, for
instance, are more than competitive with the artificially understated cost of burning coal. The Lazard
study indicated the levelized cost of energy of leading PV technologies has fallen by 20 percent in the past
year and nearly 80 percent in the past five years. The cost of utility-scale solar energy is about 5.6 cents a
kilowatt-hour, with wind at 1.4 cents. That compares with natural gas at a minimum of 6.1 cents. It is
clear that the data used in EPA’s calculations are already very dated, and must be freshened in order for
the conclusions regarding renewable energy to be acceptable.
EPA must recalculate the costs assigned to renewable energy, which would establish that it overestimated those costs and as a result underestimated the amount of renewable energy that can be
deployed in the states, which in turn underestimated emission reductions that should be attributed to
renewables, let alone state reduction targets.
As with energy efficiency, establishing 2017 as the ramp start for renewable energy has the unintended
consequence of devaluing investments in renewables or efficiency within the 2012-2017 time frame. Just
as unfortunate, it would likely discourage such investments during that period, until such time they can
be counted toward a state’s compliance target.
Conclusion
EPA’s proposed draft revision of Rule 111(d) is an important and commendable platform to implement
long-overdue greenhouse gas emissions.
The Alliance concurs with the Natural Resources Defense Council’s October 2013 issue brief, “Questions
and Answers on the EPA’s Legal Authority to Set ‘System-Based’ Carbon Pollution Standards for Existing
Power Plants under Clean Air Act Section 111(d),” which outlined in detail EPA’s authority to promulgate
this proposed rule.
It is clear that this proposed rule will serve as the nation’s primary vehicle to reach is GHG reduction
obligations. The draft Clean Power Plan proposal is an excellent starting point for meaningful, but it is
clear that modifications such as those recommended above addressing the need for a deeper analysis of
potential emission reductions from expanded renewable energy and energy efficiency initiatives can
result in deeper reductions than currently contemplated.
Respectfully Submitted,
The Snake River Alliance
Ken Miller
Clean Energy Program Director
kmiller@snakeriveralliance.org
Box 1731
Boise, ID 83701
(208) 344-9161