Overview of NSPS Regulations

Sections 111(b) and 111(d)

Daniel Chartier Director, Environmental Markets & Air Quality Programs

NCSL Webinar October 31, 2013

Edison Electric Institute

Trade Association of Investor-Owned Electric Companies

Membership includes

All US investor-owned electric companies

70 international affiliates

250 associate members

US members

Directly employ over 500,000 workers

Provide electricity for 220 million electric utility customers

Our mission focuses on advocating public policy; expanding market opportunities; and providing strategic business information

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Federal Environmental Regulatory Challenges: 2012 and Beyond

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Air

Climate

Water

Land & Natural

Resources

Waste & Chemical

Management

Coal Ash

PCBs in Electrical

Equipment

HazMat Transport

Transmission Siting and Permitting

Avian Protection

Endangered Species

Vegetation Management

316(b)

Effluent Guidelines Limitations

Waters of the United States

NPDES Pesticide Permits

NSPS- New & Modified

Sources

NSPS-Existing Sources

BACT Permitting

International Negotiations

Utility MATS

Interstate Transport

(CAIR/CSAPR)

Regional Haze/Visibility

Multiple NAAQS

New Source Review (NSR)

Waterbody- Specific

Standards

National Climate Action Plan

On June 25, President Obama outlined his climate action plan, which contains three “key pillars”

Cutting U.S. carbon emissions

Preparing U.S. for the impacts of climate change (adaptation)

Leading international efforts to address climate change

Near-term mitigation focus is on power sector emissions reductions

Presidential Memo set schedule for EPA action

New source reproposal: September 2013

Final new source standards: “in a timely fashion”

Existing source emission guidelines for states: June 2014

Final existing source guidelines: June 2015

State compliance plans: June 2016 5

National Climate Action Plan (2)

Presidential memo also calls on EPA to:

Engage with states, the power sector and other stakeholders

Take into account other “environmental regulations and polices that affect the power sector”

Ensure the continued provision of reliable and affordable electricity

What does the President’s plan mean?

Legacy issue – likely to push hard to complete NSPS rulemakings

Consistent with messages since State of the Union

New spending will be difficult to get through Congress

Ramped up U.S. presence in international climate talks

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GHG Regulation – Introduction

EPA already is regulating GHG emissions under Clean Air Act’s (CAA) prevention of significant deterioration (PSD) Program

Pre-construction (BACT) permits addressing GHGs required for larger new and modified sources, such as power plants, since January 2011

Permits issued to date have largely focused on efficiency of technology being used in order to limit GHG emissions

Next wave of GHG regulations will be under CAA’s new source performance standards (NSPS) program

§111(b): covers new and modified sources; EPA will address modified and reconstructed sources under a separate standard

§111(d): covers existing sources

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GHG NSPS – New Sources, 111(b)

EPA required to issue unit-specific regulations for new sources; no compliance flexibility

EPA issued original proposal in April 2012

As part of President’s climate plan, EPA issued a reproposed NSPS for new sources on September 20

Not yet published in Federal Register; 60 day comment period once published

Sets separate standards for coal and gas

Coal standard requires use of Carbon Capture & Sequestration (CCS); effectively prohibiting new coal plants because technology is not commercially available

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Section 111(d)

Part of original 1970 version of statute

Directs EPA to promulgate regulations

Establishing a procedure

Similar to § 110

Under which state submit plans that establish “standards of performance”

Procedure must allow states to take into account remaining useful life, among other factors

EPA reviews and approves plan if satisfactory

If unsatisfactory, EPA may impose FIP-like plan

Standards enforced against sources, not states.

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Section 111(a)(1) Definition of “Standard of Performance”

“A standard for emissions of air pollutants which reflects the degree of emission limitation achievable through application of the best system of emission reduction (taking into account the cost of achieving such reduction and any nonair quality health and environmental impact and energy requirements) the [EPA] determines has been adequately demonstrated.”

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Potential Approaches to BSER

A recent EPA white paper sets forth a list of activities that might be included in an evaluation of BSER: Onsite actions at individual affected section 111(d) fossil-fuel sources.

Supply-side energy efficiency improvements (“heat rate improvements”)

Fuel switching or co-firing of lower-carbon fuels. Shifts in electricity generation among sources regulated under

section 111(d) (e.g., shifts from higher- to lower-emitting affected fossil units or environmental dispatch).

Offsite actions that reduce or avoid emissions at affected section 111(d) sources. Shifts from fossil generation to non-emitting generation Reduction in fossil generation due to increases in end-use energy

efficiency and demand-side management.

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The “Generic” 111(d) Implementing Regulations

40 C.F.R. 60.20-29 (Subpart B)

Response to statutory mandate to establish federal-state “procedure”

Promulgated in 1975 Some subsequent amendments

Legal challenge to generic regulations is foreclosed

EPA may deviate from generic regulations for specific source categories (Subpart C) However

EPA must justify approach as still consistent with § 111

Possible to challenge legality of such deviations

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EPA “Draft Guideline Document”

Contains information to guide development of state plans

Includes “emission guideline”:

“Guideline that reflects the application of the best system of emission reduction (considering the cost of such reduction) that has been adequately demonstrated for designated facilities, and

the time within which compliance with emission standards of equivalent stringency can be achieved.”

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Sub-categorization in the EPA Guideline

Regulations direct EPA to specify

Different emission guidelines or compliance times or both

For different sizes, types, and classes of designated facilities

When “appropriate” because of

costs of control

physical limitations

geographical location, or

similar factors

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Stringency of State Plans Relative to Guideline

Basic rule: must be at least as protective as the guideline 60.24(c): “Emission standards shall be no less stringent than the

corresponding emission guideline(s) specified in Subpart C of this part, and final compliance shall be required as expeditiously as practicable but no later than the compliance times specified in Subpart C of this part.”

Some exceptions: If EPA endangerment determination is not based on health,

state may balance guideline and other “factors of public concern” Note that GHG endangerment finding did cover health

Variances pursuant to 60.24(f)

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State Variances

State plan may have less stringent standards or compliance deadlines

Case-by-case basis – for particular facilities or classes of facilities

Must demonstrate

Unreasonable cost of control due to plant age, location or basic process design;

Physical impossibility of installing necessary control equipment; or

Other factors making reduced stringency significantly more reasonable

Variances available “unless otherwise specified in the applicable subpart” for the category of facilities

Added as part of 1995 amendments with addition of § 129.

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Key Takeaway

States will have a significant role in the implementation of the greenhouse gas NSPS for existing sources under Section 111(d)

States have flexibility in determining compliance options

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Contact Information

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