[Federal Register Volume 79, Number 5 (Wednesday, January 8, 2014)]
[Proposed Rules]
[Pages 1429-1519]
[FR Doc No: 2013-28668]

Vol. 79

Wednesday,

No. 5

January 8, 2014

Part II

Environmental Protection Agency

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40 CFR Parts 60, 70, 71, et al.

Standards of Performance for Greenhouse Gas Emissions From New
Stationary Sources: Electric Utility Generating Units; Proposed Rule

Federal Register / Vol. 79 , No. 5 / Wednesday, January 8, 2014 /
Proposed Rules

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 60, 70, 71, and 98

[EPA-HQ-OAR-2013-0495; FRL-9839-4]
RIN 2060-AQ91

Standards of Performance for Greenhouse Gas Emissions From New
Stationary Sources: Electric Utility Generating Units

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: On April 13, 2012, the EPA proposed a new source performance
standard for emissions of carbon dioxide for new affected fossil fuel-
fired electric utility generating units. The EPA received more than 2.5
million comments on the proposed rule. After consideration of
information provided in those comments, as well as consideration of
continuing changes in the electricity sector, the EPA determined that
revisions in its proposed approach are warranted. Thus, in a separate
action, the EPA is withdrawing the April 13, 2012, proposal, and, in
this action, the EPA is proposing new standards of performance for new
affected fossil fuel-fired electric utility steam generating units and
stationary combustion turbines. This action proposes a separate
standard of performance for fossil fuel-fired electric utility steam
generating units and integrated gasification combined cycle units that
burn coal, petroleum coke and other fossil fuels that is based on
partial implementation of carbon capture and storage as the best system
of emission reduction. This action also proposes standards for natural
gas-fired stationary combustion turbines based on modern, efficient
natural gas combined cycle technology as the best system of emission
reduction. This action also includes related proposals concerning
permitting fees under Clean Air Act Title V, the Greenhouse Gas
Reporting Program, and the definition of the pollutant covered under
the prevention of significant deterioration program.

DATES: Comments. Comments must be received on or before March 10, 2014.
Under the Paperwork Reduction Act (PRA), since the Office of Management
and Budget (OMB) is required to make a decision concerning the
information collection request between 30 and 60 days after January 8,
2014, a comment to the OMB is best assured of having its full effect if
the OMB receives it by February 7, 2014.
    Public Hearing. A public hearing will be held on January 28, 2014,
at the William Jefferson Clinton Building East, Room 1153 (Map Room),
1201 Constitution Avenue NW., Washington DC 20004. The hearing will
convene at 9:00 a.m. (Eastern Standard Time) and end at 8:00 p.m.
(Eastern Standard Time). Please contact Pamela Garrett at (919) (541-
7966) or at<EMAIL_ADDRESS>to register to speak at the hearing.
The last day to pre-register in advance to speak at the hearing will be
2 business days in advance of the public hearing. Additionally,
requests to speak will be taken the day of the hearing at the hearing
registration desk, although preferences on speaking times may not be
able to be fulfilled. If you require the service of a translator or
special accommodations such as audio description, please let us know at
the time of registration.
    The hearing will provide interested parties the opportunity to
present data, views or arguments concerning the proposed action. The
EPA will make every effort to accommodate all speakers who arrive and
register. Because this hearing is being held at U.S. government
facilities, individuals planning to attend the hearing should be
prepared to show valid picture identification to the security staff in
order to gain access to the meeting room. In addition, you will need to
obtain a property pass for any personal belongings you bring with you.
Upon leaving the building, you will be required to return this property
pass to the security desk. No large signs will be allowed in the
building, cameras may only be used outside of the building and
demonstrations will not be allowed on federal property for security
reasons.
    The EPA may ask clarifying questions during the oral presentations
but will not respond to the presentations at that time. Written
statements and supporting information submitted during the comment
period will be considered with the same weight as oral comments and
supporting information presented at the public hearing. Commenters
should notify Ms. Garrett if they will need specific equipment, or if
there are other special needs related to providing comments at the
hearing. The EPA will provide equipment for commenters to show overhead
slides or make computerized slide presentations if we receive special
requests in advance. Oral testimony will be limited to 5 minutes for
each commenter. The EPA encourages commenters to provide the EPA with a
copy of their oral testimony electronically (via email or CD) or in
hard copy form. Verbatim transcripts of the hearings and written
statements will be included in the docket for the rulemaking. The EPA
will make every effort to follow the schedule as closely as possible on
the day of the hearing; however, please plan for the hearing to run
either ahead of schedule or behind schedule. Information regarding the
hearing (including information as to whether or not one will be held)
will be available at: http://www2.epa.gov/carbon-pollution-standards/.

ADDRESSES: Comments. Submit your comments, identified by Docket ID No.
EPA-HQ-OAR-2013-0495, by one of the following methods:
    At the Web site http://www.regulations.gov: Follow the instructions
for submitting comments.
    At the Web site http://www.epa.gov/oar/docket.html: Follow the
instructions for submitting comments on the EPA Air and Radiation
Docket Web site.
    Email: Send your comments by electronic mail (email) to<EMAIL_ADDRESS>Attn: Docket ID No. EPA-HQ-OAR-2013-0495.
    Facsimile: Fax your comments to<PHONE_NUMBER>, Attn: Docket ID No.
EPA-HQ-OAR-2013-0495.
    Mail: Send your comments to the EPA Docket Center, U.S. EPA, Mail
Code 2822T, 1200 Pennsylvania Ave. NW., Washington, DC 20460, Attn:
Docket ID No. EPA-HQ-OAR-2013-0495. Please include a total of two
copies. In addition, please mail a copy of your comments on the
information collection provisions to the Office of Information and
Regulatory Affairs, OMB, Attn: Desk Officer for EPA, 725 17th St. NW.,
Washington, DC 20503.
    Hand Delivery or Courier: Deliver your comments to the EPA Docket
Center, William Jefferson Clinton Building West, Room 3334, 1301
Constitution Ave. NW., Washington, DC 20004, Attn: Docket ID No. EPA-
HQ-OAR-2013-0495. Such deliveries are accepted only during the Docket
Center's normal hours of operation (8:30 a.m. to 4:30 p.m., Monday
through Friday, excluding federal holidays), and special arrangements
should be made for deliveries of boxed information.
    Instructions: All submissions must include the agency name and
docket ID number (EPA-HQ-OAR-2013-0495). The EPA's policy is to include
all comments received without change, including any personal
information provided, in the public docket, available online at http://www.regulations.gov, unless the comment includes information claimed to
be Confidential Business Information (CBI) or other information whose
disclosure is restricted by statute. Do not submit information that you
consider to be CBI or otherwise protected through http://

www.regulations.gov or email. Send or deliver information identified as
CBI only to the following address: Roberto Morales, OAQPS Document
Control Officer (C404-02), Office of Air Quality Planning and
Standards, U.S. EPA, Research Triangle Park, North Carolina 27711,
Attention Docket ID No. EPA-HQ-OAR-2013-0495. Clearly mark the part or
all of the information that you claim to be CBI. For CBI information on
a disk or CD-ROM that you mail to the EPA, mark the outside of the disk
or CD-ROM as CBI and then identify electronically within the disk or
CD-ROM the specific information you claim as CBI. In addition to one
complete version of the comment that includes information claimed as
CBI, you must submit a copy of the comment that does not contain the
information claimed as CBI for inclusion in the public docket.
Information so marked will not be disclosed except in accordance with
procedures set forth in 40 CFR part 2.
    The EPA requests that you also submit a separate copy of your
comments to the contact person identified below (see FOR FURTHER
INFORMATION CONTACT). If the comment includes information you consider
to be CBI or otherwise protected, you should send a copy of the comment
that does not contain the information claimed as CBI or otherwise
protected.
    The www.regulations.gov Web site is an ``anonymous access'' system,
which means the EPA will not know your identity or contact information
unless you provide it in the body of your comment. If you send an email
comment directly to the EPA without going through http://www.regulations.gov, your email address will be automatically captured
and included as part of the comment that is placed in the public docket
and made available on the Internet. If you submit an electronic
comment, the EPA recommends that you include your name and other
contact information in the body of your comment and with any disk or
CD-ROM you submit. If the EPA cannot read your comment due to technical
difficulties and cannot contact you for clarification, the EPA may not
be able to consider your comment. Electronic files should avoid the use
of special characters, any form of encryption and be free of any
defects or viruses.
    Docket: All documents in the docket are listed in the http://www.regulations.gov index. Although listed in the index, some
information is not publicly available (e.g., CBI or other information
whose disclosure is restricted by statute). Certain other material,
such as copyrighted material, will be publicly available only in hard
copy. Publicly available docket materials are available either
electronically in http://www.regulations.gov or in hard copy at the EPA
Docket Center, William Jefferson Clinton Building West, Room 3334, 1301
Constitution Ave. NW., Washington, DC. The Public Reading Room is open
from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding federal
holidays. The telephone number for the Public Reading Room is (202)
566-1744, and the telephone number for the Air Docket is (202) 566-
1742. Visit the EPA Docket Center homepage at http://www.epa.gov/epahome/dockets.htm for additional information about the EPA's public
docket.
    In addition to being available in the docket, an electronic copy of
this proposed rule will be available on the Worldwide Web (WWW) through
the Technology Transfer Network (TTN). Following signature, a copy of
the proposed rule will be posted on the TTN's policy and guidance page
for newly proposed or promulgated rules at the following address:
http://www.epa.gov/ttn/oarpg/.

FOR FURTHER INFORMATION CONTACT: Dr. Nick Hutson, Energy Strategies
Group, Sector Policies and Programs Division (D243-01), U.S. EPA,
Research Triangle Park, NC 27711; telephone number<PHONE_NUMBER>,
facsimile number<PHONE_NUMBER>; email address<EMAIL_ADDRESS>or
Mr. Christian Fellner, Energy Strategies Group, Sector Policies and
Programs Division (D243-01), U.S. EPA, Research Triangle Park, NC
27711; telephone number<PHONE_NUMBER>, facsimile number (919) 541-
5450; email address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Comments on the April 13, 2012 proposal. The
EPA considered comments submitted in response to the original April 13,
2012, proposal in developing this new proposal. However, we are
withdrawing the original proposal. If you would like comments submitted
on the April 13, 2012 rulemaking to be considered in connection with
this new proposal, you should submit new comments or re-submit your
previous comments. Commenters who submitted comments concerning any
aspect of the original proposal will need to consider the applicability
of those comments to this current proposal and submit them again, if
applicable, even if the comments are exactly or substantively the same
as those previously submitted, to ensure consideration in the
development of the final rulemaking.
    Acronyms. A number of acronyms and chemical symbols are used in
this preamble. While this may not be an exhaustive list, to ease the
reading of this preamble and for reference purposes, the following
terms and acronyms are defined as follows:

AB Assembly Bill
AEP American Electric Power
AEO Annual Energy Outlook
ANSI American National Standards Institute
ASME American Society of Mechanical Engineers
ASTM American Society for Testing of Materials
BACT Best Available Control Technology
BDT Best Demonstrated Technology
BSER Best System of Emission Reduction
Btu/kWh British Thermal Units per Kilowatt-hour
Btu/lb British Thermal Units per Pound
CAA Clean Air Act
CAIR Clean Air Interstate Rule
CBI Confidential Business Information
CCS Carbon Capture and Storage (or Sequestration)
CDX Central Data Exchange
CEDRI Compliance and Emissions Data Reporting Interface
CEMS Continuous Emissions Monitoring System
CFB Circulating Fluidized Bed
CH4 Methane
CHP Combined Heat and Power
CO2 Carbon Dioxide
CSAPR Cross-State Air Pollution Rule
DOE Department of Energy
DOT Department of Transportation
ECMPS Emissions Collection and Monitoring Plan System
EERS Energy Efficiency Resource Standards
EGU Electric Generating Unit
EIA Energy Information Administration
EO Executive Order
EOR Enhanced Oil Recovery
EPA Environmental Protection Agency
FB Fluidized Bed
FGD Flue Gas Desulfurization
FOAK First-of-a-kind
FR Federal Register
GHG Greenhouse Gas
GW Gigawatts
H2 Hydrogen Gas
HAP Hazardous Air Pollutant
HFC Hydrofluorocarbon
HRSG Heat Recovery Steam Generator
IGCC Integrated Gasification Combined Cycle
IPCC Intergovernmental Panel on Climate Change
IPM Integrated Planning Model
IRPs Integrated Resource Plans
kg/MWh Kilogram per Megawatt-hour
kJ/kg Kilojoules per Kilogram
kWh Kilowatt-hour
lb CO2/MMBtu Pounds of CO2 per Million British
Thermal Unit
lb CO2/MWh Pounds of CO2 per Megawatt-hour
lb CO2/yr Pounds of CO2 per Year
lb/lb-mole Pounds per Pound-Mole
LCOE Levelized Cost of Electricity
MATS Mercury and Air Toxic Standards
MMBtu/hr Million British Thermal Units per Hour
MW Megawatt

MWe Megawatt Electrical
MWh Megawatt-hour
N2O Nitrous Oxide
NAAQS National Ambient Air Quality Standards
NAICS North American Industry Classification System
NAS National Academy of Sciences
NETL National Energy Technology Laboratory
NGCC Natural Gas Combined Cycle
NOAK nth-of-a-kind
NRC National Research Council
NSPS New Source Performance Standards
NSR New Source Review
NTTAA National Technology Transfer and Advancement Act
O2 Oxygen Gas
OMB Office of Management and Budget
PC Pulverized Coal
PFC Perfluorocarbon
PM Particulate Matter
PM2.5 Fine Particulate Matter
PRA Paperwork Reduction Act
PSD Prevention of Significant Deterioration
PUC Public Utilities Commission
RCRA Resource Conservation and Recovery Act
RFA Regulatory Flexibility Act
RGGI Regional Greenhouse Gas Initiative
RIA Regulatory Impact Analysis
RPS Renewable Portfolio Standard
RTC Response to Comments
RTP Response to Petitions
SBA Small Business Administration
SCC Social Cost of Carbon
SCR Selective Catalytic Reduction
SF6 Sulfur Hexafluoride
SIP State Implementation Plan
SNCR Selective Non-Catalytic Reduction
SO2 Sulfur Dioxide
SSM Startup, Shutdown, and Malfunction
Tg Teragram (one trillion (10\12\) grams)
Tpy Tons per Year
TSD Technical Support Document
TTN Technology Transfer Network
UIC Underground Injection Control
UMRA Unfunded Mandates Reform Act of 1995
U.S. United States
USGCRP U.S. Global Change Research Program
VCS Voluntary Consensus Standard
WGS Water Gas Shift
WWW Worldwide Web

    Organization of This Document. The information presented in this
preamble is organized as follows:

I. General Information
    A. Executive Summary
    B. Overview
    C. Does this action apply to me?
II. Background
    A. Climate Change Impacts from GHG Emissions
    B. GHG Emissions from Fossil Fuel-fired EGUs
    C. The Utility Power Sector and How its Structure is Changing
    D. Statutory Background
    E. Regulatory and Litigation Background
    F. Coordination with Other Rulemakings
    G. Stakeholder Input
III. Proposed Requirements for New Sources
    A. Applicability Requirements
    B. Emission Standards
    C. Startup, Shutdown, and Malfunction Requirements
    D. Continuous Monitoring Requirements
    E. Emissions Performance Testing Requirements
    F. Continuous Compliance Requirements
    G. Notification, Recordkeeping, and Reporting Requirements
IV. Rationale for Reliance on Rational Basis To Regulate GHGs from
Fossil-fired EGUs
    A. Overview
    B. Climate Change Impacts From GHG Emissions; Amounts of GHGs
From Fossil Fuel-Fired EGUs
    C. CAA Section 111 Requirements
    D. Interpretation of CAA Section 111 Requirements
    E. Rational Basis To Promulgate Standards for GHGs From Fossil-
Fired EGUs
    F. Alternative Findings of Endangerment and Significant
Contribution
    G. Comments on the State of the Science of Climate Change
V. Rationale for Applicability Requirements
    A. Applicability Requirements--Original Proposal and Comments
    B. Applicability Requirements--Today's Proposal
    C. Certain Projects Under Development
VI. Legal Requirements for Establishing Emission Standards
    A. Overview
    B. CAA Requirements and Court Interpretation
    C. Technical Feasibility
    D. Factors To Consider in Determining the ``Best System''
    E. Nationwide Component of Factors in Determining the ``Best
System''
    F. Chevron Framework
    G. Agency Discretion
    H. Lack of Requirement That Standard Be Able To Be Met by All
Sources
VII. Rationale for Emission Standards for New Fossil Fuel-Fired
Boilers and IGCCs
    A. Overview
    B. Identification of the Best System of Emission Reduction
    C. Determination of the Level of the Standard
    D. Extent of Reductions in CO2 Emissions
    E. Technical Feasibility
    F. Costs
    G. Promotion of Technology
    H. Nationwide, Longer-Term Perspective
    I. Deference
    J. CCS and BSER in Locations Where Costs Are Too High To
Implement CCS
    K. Compliance Period
    L. Geologic Sequestration
VIII. Rationale for Emission Standards for Natural Gas-Fired
Stationary Combustion Turbines
    A. Best System of Emission Reduction
    B. Determination of the Standards of Performance
IX. Implications for PSD and Title V Programs
    A. Overview
    B. Applicability of Tailoring Rule Thresholds Under the PSD
Program
    C. Implications for BACT Determinations Under PSD
    D. Implications for Title V Program
    E. Implications for Title V Fee Requirements for GHGs
X. Impacts of the Proposed Action
    A. What are the air impacts?
    B. What are the energy impacts?
    C. What are the compliance costs?
    D. How will this proposal contribute to climate change
protection?
    E. What are the economic and employment impacts?
    F. What are the benefits of the proposed standards?
XI. Request for Comments
XII. Statutory and Executive Order Reviews
    A. Executive Order 12866, Regulatory Planning and Review, and
Executive Order 13563, Improving Regulation and Regulatory Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132, Federalism
    F. Executive Order 13175, Consultation and Coordination With
Indian Tribal Governments
    G. Executive Order 13045, Protection of Children From
Environmental Health Risks and Safety Risks
    H. Executive Order 13211, Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act
    J. Executive Order 12898, Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations
XIII. Statutory Authority

I. General Information

A. Executive Summary

1. Purpose of the Regulatory Action
    On April 13, 2012, under the authority of Clean Air Act (CAA)
section 111, the EPA proposed a new source performance standard (NSPS)
to limit emissions of carbon dioxide (CO2) from new fossil
fuel-fired electric utility generating units (EGUs), including,
primarily, coal- and natural gas-fired units (77 FR 22392). After
consideration of the information provided in more than 2.5 million
comments on the proposal, as well as consideration of continuing
changes in the electricity sector, the EPA is issuing a new proposal.
Today's action proposes to establish separate standards for fossil
fuel-fired electric steam generating units (utility boilers and
Integrated Gasification Combined Cycle (IGCC) units) and for natural
gas-fired stationary combustion turbines. These proposed standards
reflect separate determinations of the best system of emission
reduction (BSER) adequately demonstrated for utility boilers and IGCC
units and for natural gas-fired stationary combustion turbines. In
contrast, the April 2012 proposal relied on a single standard and a
single BSER determination for all new fossil fuel-

fired units. In addition, the applicability requirements proposed today
differ from the applicability requirements in the original proposal. In
light of these and other differences, the EPA is issuing a document
(published separately in today's Federal Register) that withdraws the
original proposal, as well as issuing this new proposal.
2. Summary of the Major Provisions
    This action proposes a standard of performance for utility boilers
and IGCC units based on partial implementation of carbon capture and
storage (CCS) as the BSER. The proposed emission limit for those
sources is 1,100 lb CO2/MWh.\1\ This action also proposes
standards of performance for natural gas-fired stationary combustion
turbines based on modern, efficient natural gas combined cycle (NGCC)
technology as the BSER. The proposed emission limits for those sources
are 1,000 lb CO2/MWh for larger units and 1,100 lb
CO2/MWh for smaller units. At this time, the EPA is not
proposing standards of performance for modified or reconstructed
sources.
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    \1\ In this rulemaking, all references to lb CO2/MWh
are on a gross output basis, unless specifically noted otherwise.
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3. Costs and Benefits
    As explained in the Regulatory Impact Analysis (RIA) for this
proposed rule, available data--including utility announcements and EIA
modeling--indicate that, even in the absence of this rule, (i) existing
and anticipated economic conditions mean that few, if any, solid fossil
fuel-fired EGUs will be built in the foreseeable future; and (ii)
electricity generators are expected to choose new generation
technologies (primarily natural gas combined cycle) that would meet the
proposed standards. Therefore, based on the analysis presented in
Chapter 5 of the RIA, the EPA projects that this proposed rule will
result in negligible CO2 emission changes, quantified
benefits, and costs by 2022.\2\ These projections are in line with
utility announcements and Energy Information Administration (EIA)
modeling that indicate that coal units built between now and 2020 would
have CCS, even in the absence of this rule. However, for a variety of
reasons, some companies may consider coal units that the modeling does
not anticipate. Therefore, in Chapter 5 of the RIA, we also present an
analysis of the project-level costs of a new coal-fired unit with
partial CCS alongside the project-level costs of a new coal-fired unit
without CCS.
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    \2\ Conditions in the analysis year of 2022 are represented by a
model year of 2020.
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B. Overview

1. Why is the EPA issuing this proposed rule?
    Greenhouse gas (GHG) pollution \3\ threatens the American public's
health and welfare by contributing to long-lasting changes in our
climate that can have a range of negative effects on human health and
the environment. The impacts could include: longer, more intense and
more frequent heat waves; more intense precipitation events and storm
surges; less precipitation and more prolonged drought in the West and
Southwest; more fires and insect pest outbreaks in American forests,
especially in the West; and increased ground level ozone pollution,
otherwise known as smog, which has been linked to asthma and premature
death. Health risks from climate change are especially serious for
children, the elderly and those with heart and respiratory problems.
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    \3\ Greenhouse gas pollution is the aggregate group of the
following gases: CO2, methane (CH4), nitrous
oxide (N2O), sulfur hexafluoride (SF6),
hydrofluorocarbons (HFCs), and perfluorocarbons (PFCs).
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    The U.S. Supreme Court ruled that GHGs meet the definition of ``air
pollutant'' in the CAA, and this decision clarified that the CAA's
authorities and requirements apply to GHG emissions. Unlike most other
air pollutants, GHGs may persist in the atmosphere from decades to
millennia, depending on the specific greenhouse gas. This special
characteristic makes it crucial to take initial steps now to limit GHG
emissions from fossil fuel-fired power plants, specifically emissions
of CO2, since they are the nation's largest sources of
carbon pollution. This rule will ensure that the next generation of
fossil fuel-fired power plants in this country will use modern
technologies that limit harmful carbon pollution.
    On April 13, 2012, the EPA issued a proposed rule to limit GHG
emissions from fossil fuel-fired power plants by establishing a single
standard applicable to all new fossil fuel-fired EGUs serving
intermediate and base load power demand. After consideration of the
information provided in more than 2.5 million comments on the proposal,
as well as consideration of continuing changes in the electricity
sector,\4\ the EPA is issuing a new proposal to establish separate
standards for fossil fuel-fired electric steam generating units
(utility boilers and IGCC units) and for natural gas-fired stationary
combustion turbines. These proposed standards reflect separate
determinations of the BSER adequately demonstrated for utility boilers
and IGCC units and for natural gas-fired stationary combustion
turbines. Because, in contrast, the April 2012 proposal relied on a
single standard for all new fossil fuel-fired units, the EPA is
issuing, as a final action, a document (published separately in today's
Federal Register) that withdraws the original proposal, as well as
issuing this new proposal.
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    \4\ For example, since April 2012, there has been significant
progress on two CCS projects (Kemper County and Boundary Dam), and
they are now both over 75 percent complete. Two other projects have
continued to make progress toward construction (Texas Clean Energy
Project and Hydrogen Energy California Project).
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2. What authority is the EPA relying on to address power plant
CO2 emissions?
    Congress established requirements under section 111 of the 1970 CAA
to control air pollution from new stationary sources through NSPS.
Specifically, section 111 requires the EPA to set technology-based
standards for new stationary sources to minimize emissions of air
pollution to the environment. For more than four decades, the EPA has
used its authority under section 111 to set cost-effective emission
standards that ensure newly constructed sources use the best performing
technologies to limit emissions of harmful air pollutants. In this
proposal, the EPA is following the same well-established, customary
interpretation and application of the law under section 111 to address
GHG emissions from new fossil fuel-fired power plants.
3. What sources should the EPA include as it develops proposed
standards for GHGs for power plants?
    Before determining the appropriate technologies and levels of
control that represent BSER for GHG emissions, the EPA must first
identify the appropriate sources to control.
    The starting point is to consider whether, given current trends
concerning coal-fired and natural gas-fired power plants and the nature
of GHGs, the EPA should regulate CO2 from these power plants
through the same NSPS regulatory structure that EPA has established for
conventional pollutants. The EPA's NSPS regulations already regulate
conventional pollutants from these sources under two 40 CFR part 60
subparts: subpart Da, electric utility steam generating units, which
includes both steam electric utility boilers and IGCC units, and
subpart KKKK, stationary combustion turbines, which includes both
simple cycle and combined cycle stationary combustion turbines.
    For sources covered under subpart Da, the original proposal relied
on analyses,

primarily undertaken by EIA, indicating that, while substantial
reliance on coal-fired electricity generation would continue in the
future, few, if any, new coal-fired power plants were likely to be
built by 2025. Based in part on these results, the EPA concluded that
it was appropriate to propose in April 2012 a single fuel-neutral
standard covering all intermediate and base load units based on the
performance of recently constructed NGCC units. In light of
developments in the electricity sector since the April 2012 proposal,
and in response to numerous comments on the proposal itself, the EPA is
changing the approach in today's document and proposing to set separate
standards for new sources covered by subpart Da.\5\
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    \5\ While the emphasis of EPA's BSER determination is on coal-
and petcoke-fired units, the subpart covers all fossil fuel-fired
EGU boilers and IGCC units, including those burning oil and gas.
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    The EPA notes that, since the original April 2012 proposal, a few
coal-fired units have reached the advanced stages of construction and
development, which suggests that proposing a separate standard for
coal-fired units is appropriate. Since the original proposal, progress
on Southern Company's Kemper County Energy Facility, an IGCC facility
that will implement partial CCS, has continued, and the project is now
over 75 percent complete. Similarly, SaskPower's Boundary Dam CCS
Project in Estevan, Saskatchewan, a project that will fully integrate
the rebuilt 110 MW coal-fired Unit 3 with available CCS
technology to capture 90 percent of its CO2 emissions, is
more than 75 percent complete. Performance testing is expected to
commence in late 2013 and the facility is expected to be fully
operational in 2014.
    Additionally, two other IGCC projects, Summit Power's Texas Clean
Energy Project (TCEP) and the Hydrogen Energy California Project
(HECA)--both of which are IGCC units with CCS--continue to move
forward. Further, NRG Energy is developing a commercial-scale post-
combustion carbon capture project at the company's W.A. Parish
generating station southwest of Houston, Texas. The facility is
expected to be operational in 2015. Continued progress on these
projects is consistent with the EIA modeling which projects that few,
if any, new coal-fired EGUs would be built in this decade and that
those that are built would include CCS.\6\ The existence and apparent
ongoing viability of these projects which include CCS justify a
separate BSER determination for new fossil fuel-fired utility boilers
and IGCC power plants.
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    \6\ Even in its sensitivity analysis, the EIA does not project
any additional coal projects beyond its reference case until 2023,
in a case where power companies assume no emission limitations for
GHGs, and until 2024 in any sensitivity analysis in which there are
emission limitations for GHGs.
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    In addition to these projects, a number of commenters (on the April
2012 proposal) noted that, if natural gas prices increase, there could
be greater interest in the construction of additional coal-fired
generation capacity. This, too, is consistent with the EIA analysis,
which also suggests that, in a limited number of potential scenarios
generally associated with both significantly higher than anticipated
electric demand and significantly higher than expected natural gas
prices, some additional new coal-fired generation capacity may be built
beyond 2020. It is also consistent with publicly available electric
utility Integrated Resource Plans (IRPs).\7\
---------------------------------------------------------------------------

    \7\ IRPs are planning documents that many Public Utility
Commissions require utilities to file outlining their plans to meet
future demand. Many of the IRPs that the EPA has reviewed included
planning horizons of ten years or more.
---------------------------------------------------------------------------

    Many of those IRPs indicated the utilities' interest in developing
some amount of generating capacity using other intermediate-load and
base load technologies, in addition to new NGCC capacity, to meet
future demand (albeit, almost always at a higher cost than NGCC
technology). Only a few utilities' IRPs indicated that new coal-fired
generation without CCS was a technology option that was being
considered to meet future demand. Finally, a number of commenters
suggested that it was important to set standards that preserve options
for fuel diversity, particularly if natural gas prices exceed projected
levels. Given this information, the EPA believes that it is appropriate
to set a separate standard for solid fossil fuel-fired EGUs, both to
address the small number of coal plants that evidence suggests might
get built and to set a standard that is robust across a full range of
possible futures in the energy and electricity sectors.
    Utility announcements about the status of coal projects, IRPs, and
EIA projections suggest that, by far, the largest sources of new fossil
fuel-fired electricity generation are likely to be NGCC units. The EPA
believes, therefore, that it is also appropriate to set a standard for
stationary combustion turbines used as EGUs. These units are currently
covered under subpart KKKK (stationary combustion turbines).
    The EPA also proposes to maintain the definition of EGUs under the
NSPS that differentiates between EGUs (sources used primarily for
generating electricity for sale to the grid) and non-EGUs (turbines
primarily used to generate steam and/or electricity for on-site use).
That definition defines EGUs as units that sell more than one-third of
their potential electric output to the grid. Under this definition,
most simple cycle ``peaking'' stationary combustion turbines, which
typically sell significantly less than one-third of their potential
electric output to the grid, would not be affected by today's proposal.
    Finally, the EPA is not proposing standards today for one
conventional coal-fired EGU project which, based on current
information, appears to be the only such project under development that
has an active air permit and that has not already commenced
construction for NSPS purposes. If the EPA observes that the project is
truly proceeding, it may propose a new source performance standard
specifically for that source at the time the EPA finalizes today's
proposed rule.
4. What is the EPA's general approach to setting standards for new
sources under Section 111(b)?
    Section 111(b) requires the EPA to identify the ``best system of
emission reduction [hellip] adequately demonstrated'' (BSER) available
to limit pollution. The CAA and subsequent court decisions (detailed
later in this notice) identify the factors for the EPA to consider in a
BSER determination. For this rulemaking, the following factors are key:
feasibility, costs, size of emission reductions and technology.
    Feasibility: The EPA considers whether the system of emission
reduction is technically feasible.
    Costs: The EPA considers whether the costs of the system are
reasonable.
    Size of emission reductions: The EPA considers the amount of
emissions reductions that the system would generate.
    Technology: The EPA considers whether the system promotes the
implementation and further development of technology.
    After considering these four factors, we propose that efficient
generation technology implementing partial CCS is the BSER for new
affected fossil fuel-fired boilers and IGCC units (subpart Da sources)
and modern, efficient NGCC technology is the BSER for new affected
combustion turbines (subpart KKKK sources). The foundations for these
determinations are described in Sections VII and VIII.
5. What is BSER for new fossil fuel-fired utility boilers and IGCC
units?
    Power generated from the combustion or gasification of coal emits
more CO2 than power generated from the combustion of natural
gas or by other

means, such as solar or wind. If any new coal-fired unit is built, its
CO2 emissions would be approximately double that of a new
NGCC unit of comparable capacity. Thus, it is important to set a
standard for any new coal plant that might be built.
    The three alternatives the EPA considered in the BSER analysis for
new fossil fuel-fired utility boilers and IGCC units are: (1) highly
efficient new generation that does not include CCS technology, (2)
highly efficient new generation with ``full capture'' CCS and (3)
highly efficient new generation with ``partial capture'' CCS.
    Generation technologies representing enhancements in operational
efficiency (e.g., supercritical or ultra-supercritical coal-fired
boilers or IGCC units) are clearly technically feasible and present
little or no incremental cost compared to the types of technologies
that some companies are considering for new coal-fired generation
capacity. However, they do not provide meaningful reductions in
CO2 emissions from new sources. Efficiency-improvement
technologies alone result in only very small reductions (several
percent) in CO2 emissions, especially in contrast to those
achieved by the application of CCS. Determining that these high-
efficiency generating technologies represent the BSER for
CO2 emissions from coal-fired generation would fail to
promote the development and deployment of CO2 pollution-
reduction technology from power plants. In fact, a determination that
this efficiency-enhancing technology alone, as opposed to CCS, is the
BSER for CO2 emissions from new coal-fired generation likely
would inhibit the development of technology that could reduce
CO2 emissions significantly, thus defeating one of the
purposes of the CAA's NSPS provisions. For example, during its pilot-
scale CCS demonstration at the Mountaineer Plant in New Haven, WV,
American Electric Power (AEP) announced in 2011 that it was placing on
hold its plans to scale-up the CCS system, citing the uncertain status
of U.S. climate policy as a key contributing factor to its decision.
    An assessment of the technical feasibility and availability of CCS
indicates that nearly all of the coal-fired power plants that are
currently under development are designed to use some type of CCS. In
most cases, the projects will sell or use the captured CO2
to generate additional revenue. These projects include the following
(note that each of the projects has obtained some governmental
financial assistance):
    Southern Company's Kemper County Energy Facility, a 582 MW IGCC
power plant that is currently under construction in Kemper County,
Mississippi. The plant will include a CCS system designed to capture
approximately 65 percent of the produced CO2.
    SaskPower's Boundary Dam CCS Project, in Estevan, Saskatchewan,
Canada, is a commercial-scale CCS project that will fully integrate the
rebuilt 110 MW coal-fired Unit 3 with available CCS technology
to capture 90 percent of its CO2 emissions.
    Texas Clean Energy Project (TCEP), an IGCC plant near Odessa,
Texas, that is under development by the Summit Power Group, Inc.
(Summit). TCEP is a 400 MW IGCC plant that expects to capture
approximately 90 percent of the produced CO2.
    Hydrogen Energy California, LLC (HECA), is proposing to build a
plant similar to TCEP in western Kern County, California. The HECA
plant is an IGCC plant fueled by coal and petroleum coke that will
produce 300 MW of power and will capture CO2 for use in
enhanced oil recovery (EOR) operations. They expect to capture
approximately 90 percent of the produced CO2.
    The above examples suggest that project developers who are
incorporating CCS generally considered two variants: either a partial
CCS system or a full CCS system (i.e., usually 90 percent capture or
greater). Therefore, the EPA considered both options.
    In assessing whether the cost of a certain option is reasonable,
the EPA first considered the appropriate frame of reference. Power
companies often choose the lowest cost form of generation when
determining what type of new generation to build. Based on both the EIA
modeling and utility IRPs, there appears to be a general acceptance
that the lowest cost form of new power generation is NGCC.
    Many states find value in coal investments and have policies and
incentives to encourage coal energy generation. Utility IRPs (as well
as comments on the April 2012 proposal) suggest that many companies
also find value in other factors, such as fuel diversity, and are often
willing to pay a premium for it. Utility IRPs suggest that a range of
technologies can meet the preference for fuel diversity from a
dispatchable form of generation that can provide intermediate or base-
load power, including coal without CCS, coal with CCS and nuclear.
Biomass-fired power generation \8\ and geothermal power generation are
other technologies that are dispatchable and that could potentially
meet this objective. These technologies all cost significantly more
than natural gas-fired generation, which ranges from a levelized cost
of electricity (LCOE) \9\ of $59/MWh to $86/MWh, depending upon
assumptions about natural gas prices. In assessing whether the cost of
coal with CCS would have an unreasonable impact on the cost of power
generation, the EPA believes it is appropriate to compare coal with CCS
to this range of non-natural gas-fired electricity generation options.
Based on data from the EIA and the DOE National Energy and Technology
Laboratory (NETL), the EPA believes that the levelized cost of
technologies other than coal with CCS and NGCC range from $80/MWh to
$130/MWh. These include nuclear, from $103/MWh to $114/MWh; biomass,
from $97/MWh to $130/MWh; and geothermal, from $80/MWh to $99/MWh.
---------------------------------------------------------------------------

    \8\ The proposed CO2 emission standards would only
apply to new fossil fuel-fired EGUs. New EGUs that primarily fire
biomass would not be subject to these proposed standards.
    \9\ The levelized cost of electricity is an economic assessment
of the cost of electricity from a new generating unit or plant,
including all the costs over its lifetime: initial investment,
operations and maintenance, cost of fuel, and cost of capital. The
LCOE value presented here are in $2007.
---------------------------------------------------------------------------

    The EPA believes the cost of ``full capture'' CCS without EOR is
outside the range of costs that companies are considering for
comparable generation and therefore should not be considered BSER for
CO2 emissions for coal-fired power plants. The EPA projects
the LCOE of generation technologies with full capture CCS to be in the
range of $136/MWh to $147/MWh (without EOR benefits).\10\ Because these
``full capture'' CCS costs without EOR are significantly above the
price range of potential alternative generation options, the EPA
believes that full capture CCS does not meet the cost criterion of
BSER.
---------------------------------------------------------------------------

    \10\ The cost assumptions and technology configurations for
these cost estimates are provided in the DOE/NETL ``Cost and
Performance Baseline'' reports. For these cost estimates, we used
costs for new SCPC and IGCC units utilizing bituminous coal from the
reports ``Cost and Performance Baseline for Fossil Energy Plants
Volume 1: Bituminous Coal and Natural Gas to Electricity'', Revision
2, Report DOE/NETL-2010/1397 (November 2010) and ``Cost and
Performance of PC and IGCC Plants for a Range of Carbon Dioxide
Capture'', DOE/NETL-2011/1498, May 27, 2011. Additional cost and
performance information can be found in additional volumes that are
available at http://www.netl.doe.gov/energy-analyses/baseline_studies.html.
---------------------------------------------------------------------------

    Finally, the EPA considered whether implementation of ``partial
capture'' CCS should be proposed to be BSER for new fossil fuel-fired
utility boilers and IGCC units.
    Partial capture CCS has been implemented successfully in a number
of facilities over many years. The Great

Plains Synfuels Facility \11\ is a coal gasification facility that has
captured at least 50 percent of its produced CO2 for use in
EOR operations since 2000. Projects such as AEP Mountaineer have
successfully demonstrated the performance of partial capture CCS on a
significant portion of their exhaust stream. The Southern Company
Kemper County Energy Facility will use partial CCS to capture
approximately 65 percent of the produced CO2 for use in
nearby EOR operations. The facility is now more than 75 percent
complete and is expecting to begin operation in 2014. The Global CCS
Institute maintains a database of international CCS projects in various
stages of development.\12\
---------------------------------------------------------------------------

    \11\ While this facility is not an EGU, it has significant
similarities to a coal gasification combined cycle EGU, and the
implementation of the partial CCS technology would be similar enough
for comparison.
    \12\ The Global CCS Institute, http://www.globalccsinstitute.com/projects/browse.
---------------------------------------------------------------------------

    The EPA analysis shows that the costs of partial CCS are comparable
to costs of other non-NGCC generation. The EPA projects LCOE generation
ranging from $92/MWh to $110/MWh, depending upon assumptions about
technology choices and the amount, if any, of revenue from sale of
CO2 for EOR. This range compares to levelized costs in a
range of $80/MWh to $130/MWh for various forms of other non-natural
gas-fired electricity generation. When considered against the range of
costs that would be incurred by projects deploying non-natural gas-
fired electricity generation, the implementation costs of partial CCS
are reasonable.
    The projects in development for new coal-fired generation are few
in number, and most would already meet an emission limit based on
implementation of CCS.\13\ As a result, a standard based on partial CCS
would not have a significant impact on nationwide energy prices.
Moreover, the fact that IGCC developers could meet the requirements of
the standard through the use of a conventional turbine (i.e., a syngas
turbine, rather than a more advanced hydrogen turbine) reinforces both
the technical feasibility and cost basis of today's proposal to
determine that CCS with partial capture is the BSER.
---------------------------------------------------------------------------

    \13\ For example, the Hydrogen Energy California facility plans
to capture approximately 90 percent of the CO2 in the
emission stream.
---------------------------------------------------------------------------

    Partial CCS designed to meet an emission standard of 1,100 lb
CO2/MWh would also achieve significant emission reductions,
emitting on the order of 30 to 50 percent less CO2 than a
coal-fired unit without CCS. Finally, a standard based on partial CCS
clearly promotes implementation and further development of CCS
technologies, and does so as much as, and perhaps even more than, a
standard based on a full capture CCS requirement would.
    After conducting a BSER analysis of the three options described
above, the EPA proposes that new fossil fuel-fired utility boilers and
IGCC units implementing partial CCS best meets the requirements for
BSER. It ensures that any new fossil fuel-fired utility boiler or IGCC
unit will achieve meaningful emission reductions in CO2, and
it will also encourage greater use, development, and refinement of CCS
technologies. CCS technology has been adequately demonstrated, and its
implementation costs are reasonable. Therefore, the EPA is basing the
standards for new fossil fuel-fired utility boilers and IGCC units on
partial CCS technology operating to a level of 1,100 lb CO2/
MWh.
6. What is BSER for natural gas-fired stationary combustion turbines?
    We considered two alternatives in evaluating the BSER for new
fossil fuel-fired stationary combustion turbines: (1) modern, efficient
NGCC units and (2) modern, efficient NGCC units with CCS.
    NGCC units are the most common type of new fossil fuel-fired units
being planned and built today. The technology is in wide use. Nearly
all new fossil fuel-fired EGUs being constructed today are using this
advanced, efficient system for generating intermediate and base load
power. Importantly, NGCC is an inherently lower CO2-emitting
technology. Almost every natural gas-fired stationary combined cycle
unit built in the U.S. in the last five years emits approximately 50
percent less CO2 per MWh than a typical new coal-fired plant
of the same size. The design is technically feasible, and evidence
shows that NGCC units are currently the lowest-cost, most efficient
option for new fossil fuel-fired power generation.
    By contrast, NGCC with CCS is not a configuration that is being
built today. The EPA considered whether NGCC with CCS could be
identified as the BSER adequately demonstrated for new stationary
combustion turbines, and we decided that it could not. At this time,
CCS has not been implemented for NGCC units, and we believe there is
insufficient information to make a determination regarding the
technical feasibility of implementing CCS at these types of units. The
EPA is aware of only one NGCC unit that has implemented CCS on a
portion of its exhaust stream. This contrasts with coal units where, in
addition to demonstration projects, there are several full-scale
projects under construction and a coal gasification plant which has
been demonstrating much of the technology needed for an IGCC to capture
CO2 for more than ten years. The EPA is not aware of any
demonstrations of NGCC units implementing CCS technology that would
justify setting a national standard. Further, the EPA does not have
sufficient information on the prospects of transferring the coal-based
experience with CCS to NGCC units. In fact, CCS technology has
primarily been applied to gas streams that have a relatively high to
very high concentration of CO2 (such as that from a coal
combustion or coal gasification unit). The concentration of
CO2 in the flue gas stream of a coal combustion unit is
normally about four times higher than the concentration of
CO2 in a natural gas-fired unit. Natural gas-fired
stationary combustion turbines also operate differently from coal-fired
boilers and IGCC units of similar size. The NGCC units are more easily
cycled (i.e., ramped up and down as power demands increase and
decrease). Adding CCS to a NGCC may limit the operating flexibility in
particular during the frequent start-ups/shut-downs and the rapid load
change requirements.\14\ This cyclical operation, combined with the
already low concentration of CO2 in the flue gas stream,
means that we cannot assume that the technology can be easily
transferred to NGCC without larger scale demonstration projects on
units operating more like a typical NGCC. This would be true for both
partial and full capture.
---------------------------------------------------------------------------

    \14\ ``Operating Flexibility of Power Plants with CCS'',
International Energy Agency (IEAGHG) report 2012/6, June 2012.
---------------------------------------------------------------------------

    After considering both technology options, the EPA is proposing to
find modern, efficient NGCC technology to be the BSER for stationary
combustion turbines, and we are basing the proposed standards on the
performance of recently constructed NGCC units. The EPA is proposing
that larger units be required to meet a standard of 1,000 lb
CO2/MWh and that smaller units (typically slightly less
efficient, as noted in comments on the original proposal) be required
to meet a standard of 1,100 lb CO2/MWh.
7. How is EPA proposing to codify the requirements?
    The EPA is considering two options for codifying the requirements.
Under the first option EPA is proposing to codify the standards of
performance for the respective sources within existing 40 CFR Part 60
subparts. Applicable

GHG standards for electric utility steam generating units would be
included in subpart Da and applicable GHG standards for stationary
combustion turbines would be included in subpart KKKK. In the second
option, the EPA is co-proposing to create a new subpart TTTT (as in the
original proposal for this rulemaking) and to include all GHG standards
of performance for covered sources in that newly created subpart.
Unlike the original proposal, the subpart would contain two different
categories, one for utility boilers and IGCC units and one for natural
gas-fired stationary combustion turbines.
8. What is the organization and approach for the proposal?
    This action presents the EPA's proposed approach for setting
standards of performance for new affected fossil fuel-fired electric
utility steam generating units (utility boilers) and stationary
combustion turbines. The rationale for regulating GHG emissions from
the utility power sector, including related regulatory and litigation
background and relationship to other rulemakings, is presented below in
Section II. The specific proposed requirements for new sources are
described in detail in Section III. The rationale for reliance on a
rational basis to regulate GHG emissions from fossil fuel-fired EGUs is
presented in Section IV, followed by the rationale for applicability
requirements in Section V. The legal requirements for establishing
emission standards are discussed in detail in Section VI. Sections VII
and VIII describe the rationale for each of the proposed emission
standards, including an explanation of the determination of BSER for
new fossil fuel-fired utility boilers and IGCC units and for natural
gas-fired stationary combustion turbines, respectively. Implications
for Prevention of Significant Deterioration (PSD) and title V programs
are described in Section IX, and impacts of the proposed action are
described in Section X. In Section XI, the agency specifically requests
comments on the proposal. A discussion of statutory and executive order
reviews is provided in Section XII, and the statutory authority for
this action is provided in Section XIII. Also published today in the
Federal Register is the document withdrawing the original April 13,
2012 proposal.
    Today's proposal outlines an approach for setting standards of
performance for emissions of carbon dioxide for new affected fossil
fuel-fired electric utility steam generating units (utility boilers)
and stationary combustion turbines.

C. Does this action apply to me?

    The entities potentially affected by the proposed standards are
shown in Table 1 below.

               Table 1--Potentially Affected Entities \a\
------------------------------------------------------------------------
                                                 Examples of Potentially
             Category               NAICS Code      Affected Entities
------------------------------------------------------------------------
Industry.........................       221112  Fossil fuel electric
                                                 power generating units.
Federal Government...............   \b\ 221112  Fossil fuel electric
                                                 power generating units
                                                 owned by the federal
                                                 government.
State/Local Government...........   \b\ 221112  Fossil fuel electric
                                                 power generating units
                                                 owned by
                                                 municipalities.
Tribal Government................       921150  Fossil fuel electric
                                                 power generating units
                                                 in Indian Country.
------------------------------------------------------------------------
a Includes NAICS categories for source categories that own and operate
  electric power generating units (including boilers and stationary
  combined cycle combustion turbines).
b Federal, state, or local government-owned and operated establishments
  are classified according to the activity in which they are engaged.

    This table is not intended to be exhaustive, but rather to provide
a guide for readers regarding entities likely to be affected by this
proposed action. To determine whether your facility, company, business,
organization, etc., would be regulated by this proposed action, you
should examine the applicability criteria in 40 CFR 60.1. If you have
any questions regarding the applicability of this action to a
particular entity, consult either the air permitting authority for the
entity or your EPA regional representative as listed in 40 CFR 60.4 or
40 CFR 63.13 (General Provisions).

II. Background

    In this section we discuss climate change impacts from GHG
emissions, both on public health and public welfare, and the science
behind the agency's conclusions. We present information about GHG
emissions from fossil-fuel fired EGUs, and we describe the utility
power sector and its changing structure. We then provide the statutory,
regulatory, and litigation background for this proposed rule. We close
this section by discussing how this proposed rule coordinates with
other rulemakings and describing actions to obtain stakeholder input on
this topic and the original proposed rule.

A. Climate Change Impacts From GHG Emissions

    In 2009, the EPA Administrator issued the document we refer to as
the Endangerment Finding under CAA section 202(a)(1).\15\ In the
Endangerment Finding, which focused on public health and public welfare
impacts within the United States, the Administrator found that elevated
concentrations of GHGs in the atmosphere may reasonably be anticipated
to endanger public health and welfare of current and future
generations. We summarize these adverse effects on public health and
welfare briefly here and in more detail in the RIA.
---------------------------------------------------------------------------

    \15\ ``Endangerment and Cause or Contribute Findings for
Greenhouse Gases Under Section 202(a) of the Clean Air Act,'' 74 FR
66496 (Dec. 15, 2009) (``Endangerment Finding'').
---------------------------------------------------------------------------

1. Public Health Impacts Detailed in the 2009 Endangerment Finding
    Anthropogenic emissions of GHGs and consequent climate change
threaten public health in multiple aspects. By raising average
temperatures, climate change increases the likelihood of heat waves,
which are associated with increased deaths and illnesses. While climate
change also leads to reductions in cold-related mortality, evidence
indicates that the increases in heat mortality will be larger than the
decreases in cold mortality. Climate change is expected to increase
ozone pollution over broad areas of the country, including large
population areas with already unhealthy surface ozone levels, and
thereby increase morbidity and mortality. Other public health threats
also stem from increases in intensity or frequency of extreme weather
associated with climate change, such as increased hurricane intensity,
increased frequency of intense storms and heavy precipitation.
Increased coastal storms and storm surges due to rising sea levels are
expected to cause increased drownings and other health

impacts. Children, the elderly, and the poor are among the most
vulnerable to these climate-related health effects.
2. Public Welfare Impacts Detailed in the 2009 Endangerment Finding
    Anthropogenic emissions of GHGs and consequent climate change also
threaten public welfare in multiple aspects. Climate changes are
expected to place large areas of the country at serious risk of reduced
water supplies, increased water pollution, and increased occurrence of
extreme events such as floods and droughts. Coastal areas are expected
to face increased risks from storm and flooding damage to property, as
well as adverse impacts from rising sea level, such as land loss due to
inundation, erosion, wetland submergence and habitat loss. Climate
change is expected to result in an increase in peak electricity demand,
and extreme weather from climate change threatens energy,
transportation, and water resource infrastructure. Climate change may
exacerbate ongoing environmental pressures in certain settlements,
particularly in Alaskan indigenous communities. Climate change also is
very likely to fundamentally rearrange U.S. ecosystems over the 21st
century. Though some benefits may balance adverse effects on
agriculture and forestry in the next few decades, the body of evidence
points towards increasing risks of net adverse impacts on U.S. food
production, agriculture and forest productivity as temperature
continues to rise. These impacts are global and may exacerbate problems
outside the U.S. that raise humanitarian, trade, and national security
issues for the U.S.
3. The Science Upon Which the Agency Relies
    The EPA received comments in response to the April 2012 proposed
NSPS rule (77 FR 22392) that addressed the scientific underpinnings of
the EPA's 2009 Endangerment Finding and hence the proposed rule. The
EPA carefully reviewed all of those comments. It is important to place
these comments in the context of the history and associated voluminous
record on this subject that has been compiled over the last few years,
including: (1) the process by which the Administrator reached the
Endangerment Finding in 2009; (2) the EPA's response in 2010 to ten
administrative petitions for reconsideration of the Endangerment
Finding (the Reconsideration Denial) \16\; and (3) the decision by the
United States Court of Appeals for the District of Columbia Circuit
(the D.C. Circuit or the Court) in 2012 to uphold the Endangerment
Finding and the Reconsideration Denial.17 18
---------------------------------------------------------------------------

    \16\ ``EPA's Denial of the Petitions to Reconsider the
Endangerment and Cause or Contribute Findings for Greenhouse Gases
Under Section 202(a) of the Clean Air Act,'' 75 FR 49557 (Aug. 13,
2010) (``Reconsideration Denial'').
    \17\ Coalition for Responsible Regulation, Inc. v. Environmental
Protection Agency (CRR), 684 F.3d at 102 (D.C. Cir.), reh'g en banc
denied, 2012 U.S. App. LEXIS 25997, 26313 (D.C. Cir. 2012),
petitions for cert. filed, No. 12-1253 (U.S. Apr. 2013).
    \18\ We discuss litigation history involving this rulemaking in
more detail later in this section.
---------------------------------------------------------------------------

    As outlined in Section VIII.A. of the 2009 Endangerment Finding,
the EPA's approach to providing the technical and scientific
information to inform the Administrator's judgment regarding the
question of whether GHGs endanger public health and welfare was to rely
primarily upon the recent, major assessments by the U.S. Global Change
Research Program (USGCRP), the Intergovernmental Panel on Climate
Change (IPCC), and the National Research Council (NRC) of the National
Academies. These assessments addressed the scientific issues that the
EPA was required to examine, were comprehensive in their coverage of
the GHG and climate change issues, and underwent rigorous and exacting
peer review by the expert community, as well as rigorous levels of U.S.
government review. The EPA received thousands of comments on the
proposed Endangerment Finding and responded to them in depth in an 11-
volume Response to Comments (RTC) document.\19\ While the EPA gave
careful consideration to all of the scientific and technical
information received, the agency placed less weight on the much smaller
number of individual studies that were not considered or reflected in
the major assessments; often these studies were published after the
submission deadline for those larger assessments. Primary reliance on
the major scientific assessments provided the EPA greater assurance
that it was basing its judgment on the best available, well-vetted
science that reflected the consensus of the climate science community.
The EPA reviewed individual studies not incorporated in the assessment
literature largely to see if they would lead the EPA to change its
interpretation of, or place less weight on, the major findings
reflected in the assessment reports. From its review of individual
studies submitted by commenters, the EPA concluded that these studies
did not change the various conclusions and judgments the EPA drew from
the more comprehensive assessment reports. The major findings of the
USGCRP, IPCC, and NRC assessments supported the EPA's determination
that GHGs threaten the public health and welfare of current and future
generations. The EPA presented this scientific support at length in the
Endangerment Finding, in its Technical Support Document (which
summarized the findings of USGCRP, IPCC and NRC) \20\ and in the RTC.
---------------------------------------------------------------------------

    \19\ ``Endangerment and Cause or Contribute Findings for
Greenhouse Gases under Section 202(a) of the Clean Air Act: EPA's
Response to Public Comments,'' http://www.epa.gov/climatechange/endangerment/#comments (``Response to Comments'' or ``RTC'').
    \20\ ``Technical Support Document for Endangerment and Cause or
Contribute Findings for Greenhouse Gases under Section 202(s) of the
Clean Air Act (Dec. 7, 2009), http://www.epa.gov/climatechange/Downloads/endangerment/Endangerment_TSD.pdf (TSD).
---------------------------------------------------------------------------

    The EPA then reviewed ten administrative petitions for
reconsideration of the Endangerment Finding in 2010. In the
Reconsideration Denial, the Administrator denied those petitions on the
basis that the Petitioners failed to provide substantial support for
the argument that the EPA should revise the Endangerment Finding and
therefore their objections were not of ``central relevance'' to the
Finding. The EPA prepared an accompanying three-volume Response to
Petitions (RTP) document to provide additional information, often more
technical in nature, in response to the arguments, claims, and
assertions by the petitioners to reconsider the Endangerment
Finding.\21\
---------------------------------------------------------------------------

    \21\ http://www.epa.gov/climatechange/endangerment/petitions.html.
---------------------------------------------------------------------------

    The 2009 Endangerment Finding and the 2010 Reconsideration Denial
were challenged in a lawsuit before the D.C. Circuit. On June 26, 2012,
the Court upheld the Endangerment Finding and the Reconsideration
Denial, ruling that the Finding (including the Reconsideration Denial)
was not arbitrary or capricious, was consistent with the U.S. Supreme
Court's decision in Massachusetts v. EPA, which granted to the EPA the
authority to regulate GHGs,\22\ and was adequately supported by the
administrative record.\23\ The Court found that the EPA had based its
decision on ``substantial scientific evidence'' and noted that the
EPA's reliance on assessments was consistent with the methods decision-
makers often use to make a science-based judgment.\24\ The Court also
agreed with the EPA that the Petitioners had ``not provided substantial
support for their argument

that the Endangerment Finding should be revised.'' \25\ Moreover, the
Court supported the EPA's reliance on the major scientific assessment
reports conducted by USGCRP, IPCC, and NRC and found that:
---------------------------------------------------------------------------

    \22\ 549 U.S. 497 (2007).
    \23\ CRR, 684 F.3d at 117-27.
    \24\ Id. at 121.
    \25\ Id. at 125.

    The EPA evaluated the processes used to develop the various
assessment reports, reviewed their contents, and considered the
depth of the scientific consensus the reports represented. Based on
these evaluations, the EPA determined the assessments represented
the best source material to use in deciding whether GHG emissions
may be reasonably anticipated to endanger public health or
welfare.\26\
---------------------------------------------------------------------------

    \26\ Id. at 120.

---------------------------------------------------------------------------
    As the Court stated--

    It makes no difference that much of the scientific evidence in
large part consisted of `syntheses' of individual studies and
research. Even individual studies and research papers often
synthesize past work in an area and then build upon it. This is how
science works. The EPA is not required to re-prove the existence of
the atom every time it approaches a scientific question.\27\
---------------------------------------------------------------------------

    \27\ Id. at 120.

    In the context of this extensive record and the recent affirmation
of the Endangerment Finding by the Court, the EPA considered all of the
submitted comments and reports for the April 2012 proposed NSPS rule.
As it did in the Endangerment Finding, the EPA gave careful
consideration to all of the scientific and technical comments and
information in the record. The major peer-reviewed scientific
assessments, however, continue to be the primary scientific and
technical basis for the Administrator's judgment regarding the threats
to public health and welfare posed by GHGs.
    Commenters submitted two major peer-reviewed scientific assessments
released after the administrative record concerning the Endangerment
Finding closed following the EPA's 2010 Reconsideration Denial: the
IPCC's 2012 ``Special Report on Managing the Risks of Extreme Events
and Disasters to Advance Climate Change Adaptation'' (SREX) and the
NRC's 2011 ``Report on Climate Stabilization Targets: Emissions,
Concentrations, and Impacts over Decades to Millennia'' (Climate
Stabilization Targets).
    According to the IPCC in the SREX, ``A changing climate leads to
changes in the frequency, intensity, spatial extent, duration, and
timing of extreme weather and climate events, and can result in
unprecedented extreme weather and climate events.\28\'' The SREX
documents observational evidence of changes in some weather and climate
extremes that have occurred globally since 1950. The assessment also
provides evidence regarding the cause of some of these changes to
elevated concentrations of GHGs, including warming of extreme daily
temperatures, intensified extreme precipitation events, and increases
in extreme coastal high water levels due to rising sea level. The SREX
projects further increases in some extreme weather and climate events
during the 21st century. Combined with increasing vulnerability and
exposure of populations and assets, changes in extreme weather and
climate events have consequences for disaster risk, with particular
impacts on the water, agriculture and food security and health sectors.
---------------------------------------------------------------------------

    \28\ SREX, p. 7.
---------------------------------------------------------------------------

    In the Climate Stabilization Targets assessment, the NRC states:

    Emissions of carbon dioxide from the burning of fossil fuels
have ushered in a new epoch where human activities will largely
determine the evolution of Earth's climate. Because carbon dioxide
in the atmosphere is long lived, it can effectively lock Earth and
future generations into a range of impacts, some of which could
become very severe.\29\
---------------------------------------------------------------------------

    \29\ Climate Stabilization Targets, p. 3.

    The assessment concludes that carbon dioxide emissions will alter
the atmosphere's composition and therefore the climate for thousands of
years; and attempts to quantify the results of stabilizing GHG
concentrations at different levels. The report also projects the
occurrence of several specific climate change impacts, finding warming
could lead to increases in heavy rainfall and decreases in crop yields
and Arctic sea ice extent, along with other significant changes in
precipitation and stream flow. For an increase in global average
temperature of 1 to 2 [deg]C above pre-industrial levels, the
assessment found that the area burnt by wildfires in western North
America will likely more than double and coral bleaching and erosion
will increase due both to warming and ocean acidification. An increase
of 3 [deg]C will lead to a sea level rise of 0.5 to 1 meter by 2100.
With an increase of 4 [deg]C, the average summer in the United States
would be as warm as the warmest summers of the past century. The
assessment notes that although many important aspects of climate change
are difficult to quantify, the risk of adverse impacts is likely to
increase with increasing temperature, and the risk of surprises can be
expected to increase with the duration and magnitude of the warming.
    Several other National Academy assessments regarding climate have
also been released recently. The EPA has reviewed these assessments and
finds that in general, the improved understanding of the climate system
they and the two assessments described above present strengthens the
case that GHGs are endangering public health and welfare. Three of the
new NRC assessments provide estimates of projected global sea level
rise that are larger than, and in some cases more than twice as large
as, the rise estimated in a 2007 IPCC assessment of between 0.18 and
0.59 meters by the end of the century, relative to 1990. (It should be
noted that in 2007, the IPCC stated that including poorly understood
ice sheet processes could lead to an increase in the projections.) \30\
While these three NRC assessments continue to recognize and
characterize the uncertainty inherent in accounting for ice sheet
processes, these revised estimates strongly support and strengthen the
existing finding that GHGs are reasonably anticipated to endanger
public health and welfare. Other key findings of the recent assessments
are described briefly below:
---------------------------------------------------------------------------

    \30\ Climate Stabilization Targets; ``National Security
Implications for U.S. Naval Forces'' (2011) (National Security
Implications); ``Sea Level Rise for the Coasts of California,
Oregon, and Washington: Past, Present, and Future'' (2012) (Sea
Level Rise).
---------------------------------------------------------------------------

    One of these assessments projects a global sea level rise of 0.5 to
1.4 meters by 2100, which is sufficient to lead to rising relative sea
level even in the northern states.\31\ Another assessment considers
potential impacts of sea level rise and suggests that ``the Department
of the Navy should expect roughly 0.4 to 2 meters global average sea-
level rise by 2100.\32\ This assessment also recommends preparing for
increased needs for humanitarian aid; responding to the effects of
climate change in geopolitical hotspots, including possible mass
migrations; and addressing changing security needs in the Arctic as sea
ice retreats. A third NRC assessment found that it would be ``prudent
for security analysts to expect climate surprises in the coming decade
. . . and for them to become progressively more serious and more
frequent thereafter[.]'' \33\
---------------------------------------------------------------------------

    \31\ Sea Level Rise, p. 4.
    \32\ National Security Implications, p. 9.
    \33\ ``Climate and Social Stress: Implications for Security
Analysis'' (2012), p.3.
---------------------------------------------------------------------------

    Another NRC assessment finds that ``the magnitude and rate of the
present greenhouse gas increase place the climate system in what could
be one of the most severe increases in radiative forcing of the global
climate system in

Earth history.'' \34\ This assessment finds that CO2
concentrations by the end of the century, without a reduction in
emissions, are projected to increase to levels that Earth has not
experienced for more than 30 million years.\35\ The report draws
potential parallels with non-linear events such as the Paleo-Eocene
Thermal Maximum, a rapid global warming event about 55 million years
ago associated with mass extinctions and other disruptions. The
assessment notes that acidification and warming caused by GHG increases
similar to the changes expected over the next hundred years likely
caused up to four of the five major coral reef crises of the past 500
million years.
---------------------------------------------------------------------------

    \34\ ``Understanding Earth's Deep Past: Lessons for Our Climate
Future'' (2011), p.138.
    \35\ Ibid, p. 1.
---------------------------------------------------------------------------

    Similarly, another NRC assessment finds that ``[t]he chemistry of
the ocean is changing at an unprecedented rate and magnitude due to
anthropogenic carbon dioxide emissions; the rate of change exceeds any
known to have occurred for at least the past hundreds of thousands of
years.'' \36\ The assessment notes that the full range of consequences
is still unknown, but the risks ``threaten coral reefs, fisheries,
protected species, and other natural resources of value to society.''
\37\
---------------------------------------------------------------------------

    \36\ ``Ocean Acidification: A National Strategy to Meet the
Challenges of a Changing Ocean'' (2010), p. 5.
    \37\ Id.
---------------------------------------------------------------------------

    Comments were submitted in support of the Endangerment Finding,
which provided additional documentation showing that climate change is
a threat to public health and welfare. Commenters provided several
individual studies and documentation of observed or projected climate
changes of local importance or concern to commenters. The EPA
appreciates these comments, but as previously stated, we place lesser
weight on individual studies than on major scientific assessments.
Local observed changes must be assessed in the context of the broader
scientific picture, as it is more difficult to draw robust conclusions
regarding climate change over short time scales and in small geographic
regions.
    The EPA plans to continue relying on the major assessments by the
USGCRP, the IPCC, and the NRC. Studies from these bodies address the
scientific issues that the Administrator must examine, represent the
current state of knowledge on the key elements for the endangerment
analysis, comprehensively cover and synthesize thousands of individual
studies to obtain the majority conclusions from the body of scientific
literature and undergo a rigorous and exacting standard of review by
the peer expert community and U.S. government.
    Several commenters argued that the Endangerment Finding should be
reconsidered or overturned based on those commenters' reviews of
specific climate science literature, including publications that have
appeared since the EPA's 2010 Reconsideration Denial. Some commenters
presented their own compilations of individual studies and other
documents to support their assertions that climate change will have
beneficial effects in many cases and that climate impacts will not be
as severe or adverse as the EPA, and the assessment reports upon which
the EPA relied, have stated. Some commenters also concluded that U.S.
society will easily adapt to climate change and that it therefore does
not threaten public health and welfare, and some commenters questioned
the Endangerment Finding based on a 2011 EPA Inspector General's
report.
    The EPA reviewed the submitted information and found that overall,
the commenters' critiques of the rule's scientific basis were addressed
in the EPA's response to comments for the 2009 Endangerment Finding,
the EPA's responses in the 2010 Reconsideration Denial, or the D.C.
Circuit's 2012 decision upholding the EPA's 2009 Endangerment Finding.
The EPA nonetheless carefully reviewed these comments and associated
documents and found that nothing in them would change the conclusions
reached in the Endangerment Finding. These recent publications
submitted by commenters, and any new issues they may present, do not
undermine either the significant body of scientific evidence that has
accumulated over the years or the conclusions presented in the
substantial peer-reviewed assessments of the USGCRP, NRC, and IPCC.
    One commenter submitted emails between climate change researchers
from the period 1999 to 2009 that were surreptitiously obtained from a
University of East Anglia server in 2009 and publicly released in 2011.
According to the commenter, these emails showed that the climatologists
distorted their research results to prove that climate change causes
adverse effects. The EPA reviewed these emails and found that they
raised no issues that Petitioners had not already raised concerning
other emails from the same incident, released in 2009. The commenter's
unsubstantiated assumptions and subjective assertions regarding what
the emails purport to show about the state of climate change science is
not adequate evidence to challenge the voluminous and well-documented
body of science that underpins the Administrator's Endangerment
Finding.
    Some commenters argued for reconsideration based on uncertainty
regarding climate science. However, the EPA made the decision to find
endangerment with full and explicit recognition of the uncertainty
involved, stating that ``[t]he Administrator acknowledges that some
aspects of climate change science and the projected impacts are more
certain than others.'' \38\ The D.C. Circuit subsequently noted that
``the existence of some uncertainty does not, without more, warrant
invalidation of an endangerment finding.'' \39\
---------------------------------------------------------------------------

    \38\ 74 FR 66524.
    \39\ CRR, 684 F.3d at 121.
---------------------------------------------------------------------------

    Some commenters also argued that the U.S. will adapt to climate
change impacts and that therefore climate change impacts pose no
threat. However, the D.C. Circuit, in CRR, held that considerations of
adaption are irrelevant to the Endangerment determination. The Court
stated, ``These contentions are foreclosed by the language of the
statute and the Supreme Court's decision in Massachusetts v. EPA''
because ``predicting society's adaptive response to the dangers or
harms caused by climate change'' does not inform the ``scientific
judgment'' that the EPA is required to make regarding an Endangerment
Finding.\40\
---------------------------------------------------------------------------

    \40\ Id. at 117. The EPA took a similar position in the
Endangerment Finding, in which we responded to similar comments
regarding society's ability to adapt to climate change by stating:
``Risk reduction through adaptation and GHG mitigation measures is
of course a strong focal area of scientists and policy makers,
including the EPA; however, the EPA considers adaptation and
mitigation to be potential responses to endangerment, and as such
has determined that they are outside the scope of the endangerment
analysis.'' 74 FR 66512.
---------------------------------------------------------------------------

    Some commenters raised issues regarding the EPA Inspector General's
report, Procedural Review of EPA's Greenhouse Gases Endangerment
Finding Data Quality Processes.\41\ These commenters mischaracterized
the report's scope and conclusions and thus overstated the significance
of the Inspector General's procedural recommendations. Nothing in the
Inspector General's report questions the scientific validity of the
Endangerment Finding, because that report did not evaluate the
scientific basis of the Endangerment Finding. Rather, the Inspector
General offers recommendations for clarifying and standardizing
internal procedures for documenting data quality and peer

review processes when referencing existing peer reviewed science in the
EPA actions.\42\
---------------------------------------------------------------------------

    \41\ Report No. 11-P-0702 (September 26, 2011).
    \42\ Unrelated to the Endangerment Finding and its validation by
the Court, the EPA has made progress towards implementing the
recommendations from the Inspector General.
---------------------------------------------------------------------------

    In addition, some commenters argued that the Endangerment Finding
should be overturned because of the carbon dioxide fertilization
effect, that is, the proposition that increased amounts of carbon
dioxide can spur growth of vegetation. However, these commenters did
not show how the science they provide on the subject differs from the
carbon dioxide fertilization science already considered by the
Administrator in the Endangerment Finding or how the existence of some
benefits from the carbon dioxide fertilization effect could outweigh
the numerous negative impacts of climate change.
    In sum, the EPA reviewed all of the comments purporting to refute
the Endangerment Finding to determine whether they provide evidence
that the Administrator's judgment that climate change endangers public
health and welfare was flawed, because the Administrator misinterpreted
the underlying assessments, because the science in new peer reviewed
assessments differs from that in previous assessments, or because new
individual studies provide compelling reasons for the EPA to change its
interpretation of, or place less weight on, the major findings
reflected in the assessment reports. In all cases, the commenters
failed to demonstrate that the science that the Administrator relied on
was inaccurate or that the additional information from the commenter is
of central relevance to the Administrator's judgment regarding
endangerment. For these reasons, the commenters on the original
proposal that criticized the Endangerment Finding have not provided a
sufficient basis to cast doubt on the Finding.

B. GHG Emissions From Fossil Fuel-Fired EGUs

    Fossil fuel-fired electric utility generating units are by far the
largest emitters of GHGs, primarily in the form of CO2,
among stationary sources in the U.S., and among fossil fuel-fired
units, coal-fired units are by far the largest emitters. This section
describes the amounts of those emissions and places those amounts in
the context of the national inventory of GHGs.
    The EPA prepares the official U.S. Inventory of Greenhouse Gas
Emissions and Sinks \43\ (the U.S. GHG Inventory) to comply with
commitments under the United Nations Framework Convention on Climate
Change (UNFCCC). This inventory, which includes recent trends, is
organized by industrial sectors. It provides the information in Table 2
below, which presents total U.S. anthropogenic emissions and sinks of
GHGs, including CO2 emissions, for the years 1990, 2005 and
2011.\44\
---------------------------------------------------------------------------

    \43\ ``Inventory of U.S. Greenhouse Gas Emissions and Sinks:
1990-2011'', Report EPA 430-R-13-001, United States Environmental
Protection Agency, April 15, 2013.
    \44\ Sinks are a physical unit or process that stores GHGs, such
as forests or underground or deep sea reservoirs of carbon dioxide.
    \45\ From Table 2-3 of ``Inventory of U.S. Greenhouse Gas
Emissions and Sinks: 1990-2011'', April 15, 2013, EPA 430-R-13-001.

     Table 2--U.S. GHG Emissions and Sinks by Sector (Teragram Carbon Dioxide Equivalent (Tg CO2 Eq.)) \45\
----------------------------------------------------------------------------------------------------------------
                             Sector                                    1990            2005            2011
----------------------------------------------------------------------------------------------------------------
Energy..........................................................         5,267.3         6,251.6         5,745.7
Industrial Processes............................................           316.1           330.8           326.5
Solvent and Other Product Use...................................             4.4             4.4             4.4
Agriculture.....................................................           413.9           446.2           461.5
Land Use, Land-Use Change and Forestry..........................            13.7            25.4            36.6
Waste...........................................................           167.8           136.9           127.7
Total Emissions.................................................         6,183.3         7,195.3         6,702.3
Land Use, Land-Use Change and Forestry (Sinks)..................         (794.5)         (997.8)         (905.0)
Net Emissions (Sources and Sinks)...............................         5,388.7         6,197.4         5,797.3
----------------------------------------------------------------------------------------------------------------

    Total fossil energy-related CO2 emissions (including
both stationary and mobile sources) are the largest contributor to
total U.S. GHG emissions, representing 78.7 percent of total 2011 GHG
emissions. In 2011, fossil fuel combustion by the electric power
sector--entities that burn fossil fuel and whose primary business is
the generation of electricity--accounted for 39.6 percent of all
energy-related CO2 emissions. Table 3 below presents total
CO2 emissions from fossil fuel-fired EGUs, for years 1990,
2005 and 2011.\46\
---------------------------------------------------------------------------

    \46\ Note that for the purposes of reporting national GHG
emissions under the UNFCCC, the U.S. GHG Inventory is calculated
using internationally accepted methodological guidance from the
Intergovernmental Panel on Climate Change (IPCC). In accordance with
IPCC guidance, CO2 emissions from combustion of biogenic
feedstocks are not reported in the energy sector, but are instead
reported separately as a ``Memo item'' in the U.S. GHG Inventory.
Consistent with the IPCC guidance, any carbon stock changes related
to the use of biogenic feedstocks in the energy sector, and the
CO2 emissions associated with those carbon stock changes,
are accounted for under the forestry and/or agricultural sectors of
the U.S. GHG Inventory. Attribution of CO2 emissions from
the combustion of biogenic feedstocks by stationary sources in the
energy sector to the forestry and/or agricultural sectors, in the
context of U.S. GHG emissions reporting to the UNFCCC, should not be
interpreted as an indication that such emissions are ``carbon
neutral.''

     Table 3--U.S. GHG Emissions From Generation of Electricity From Combustion of Fossil Fuels (Tg CO2 Eq.)
----------------------------------------------------------------------------------------------------------------
                          GHG Emissions                                1990            2005            2011
----------------------------------------------------------------------------------------------------------------
Total CO2 from fossil fuel combustion EGUs......................         1,820.8         2,402.1         2,158.5
    --from coal.................................................         1,547.6         1,983.8         1,722.7
    --from natural gas..........................................           175.3           318.8           408.8
    --from petroleum............................................            97.5            99.2            26.6
----------------------------------------------------------------------------------------------------------------

    We are aware that nitrous oxide (N2O) and, to a lesser
extent, methane (CH4) may be emitted from fossil fuel-fired
EGUs, especially from coal-fired circulating fluidized bed (CFB)
combustors and from units with selective catalytic reduction (SCR) and
selective non-catalytic reduction (SNCR) systems installed for
NOX control. The estimated emissions for N2O and
CH4 from fossil fuel-fired EGUs are about 17.9 and 0.4 Tg of
CO2 equivalent in 2011, respectively, which is about 0.8
percent of total CO2 equivalent emissions from fossil fuel-
fired electric power generating units. However, we are not proposing
separate N2O or CH4 emission limits or an
equivalent CO2 emission limit in today's document because we
lack more precise data on the quantity of these emissions and
information on cost-effective controls. We request comment on this
approach and we solicit information about the quantity of
N2O and CH4 emissions from these affected sources
and possible controls.

C. The Utility Power Sector and How Its Structure Is Changing

1. Utility Power Sector
    The majority of power in the U.S. is generated from the combustion
of coal, natural gas and other fossil fuels.
    Natural gas-fired EGUs typically use one of two technologies: NGCC
and simple cycle combustion turbines. NGCC units first generate power
from a combustion turbine (the combustion cycle). The unused heat from
the combustion turbine is then routed to a Heat Recovery Steam
Generator (HRSG) which generates steam which is used to generate power
using a steam turbine (the steam cycle). The combining of these
generation cycles increases the overall efficiency of the system.
    Simple cycle combustion turbines only use a single combustion
turbine to produce electricity (i.e., there is no heat recovery). The
power output from these simple cycle combustion turbines can be easily
ramped up and down making them ideal for ``peaking'' operations.
    Coal-fired utility boilers are primarily either pulverized coal
(PC) boilers or fluidized bed (FB) boilers. At a PC boiler, the coal is
crushed (pulverized) into a powder in order to increase its surface
area. The coal powder is then blown into a boiler and burned. In a
coal-fired boiler using fluidized bed combustion, the coal is burned in
a layer of heated particles suspended in flowing air.
    Power can also be generated using gasification technology. An IGCC
unit gasifies coal to form a syngas composed of carbon monoxide (CO)
and hydrogen (H2), which can be combusted in a combined
cycle system to generate power.
2. Changing Structure of the Power Sector
a. Technological Developments and Costs
    Since the April 2012 proposal, a few coal-fired units have reached
the advanced stages of construction and development, which suggests
that setting a separate standard for new fossil fuel-fired boilers and
IGCC units is appropriate. Progress on Southern Company's Kemper County
Energy Facility, which will deploy IGCC with partial CCS, has
continued, and the project is now over 75 percent complete.
Additionally, two other projects, Summit Power's Texas Clean Energy
Project (TCEP) and the Hydrogen Energy California Project (HECA)--both
of which will deploy IGCC with CCS--continue to move forward. The EIA
modeling projects that coal-fired power generation will remain the
single largest portion of the electricity sector beyond 2030. The EIA
modeling also projects that few, if any, new coal-fired EGUs would be
built in this decade and that those that are built would have CCS.\47\
Continued progress on these projects is consistent with the EIA
modeling that suggests that a small number of coal-fired power plants
may be constructed. The primary reasons for this rate of current and
projected future development of new coal projects include highly
competitive natural gas prices, lower electricity demand, and increases
in the supply of renewable energy.
---------------------------------------------------------------------------

    \47\ Even in its sensitivity analysis that assumes higher
natural gas prices and electricity demand, EIA does not project any
additional coal beyond its reference case until 2023, in a case
where power companies assume no GHGs emission limitations, and until
2024 in a case where power companies do assume GHGs emission
limitations.
---------------------------------------------------------------------------

    Natural gas prices have decreased dramatically and generally
stabilized in recent years, as new drilling techniques have brought
additional supply to the marketplace and greatly increased the domestic
resource base. As a result, natural gas prices are expected to be
competitive for the foreseeable future and EIA modeling and utility
announcements confirm that utilities are likely to rely heavily on
natural gas to meet new demand for electricity generation. On average,
as discussed below, the cost of generation from a new natural-gas fired
power plant (a NGCC unit) is expected to be significantly lower than
the cost of generation from a new coal-fired power plant.\48\
---------------------------------------------------------------------------

    \48\ Levelized Cost of New Generation Resources in the Annual
Energy Outlook 2011 http://www.eia.gov/forecasts/aeo/electricity_generation.html.
---------------------------------------------------------------------------

    Other drivers that may influence decisions to build new power
plants are increases in renewable energy supplies, often due to state
and federal energy policies. Many states have adopted renewable
portfolio standards (RPS), which require a certain portion of
electricity to come from renewable energy sources such as solar or
wind. The federal government has also adopted incentives for electric
generation from renewable energy sources and loan guarantees for new
nuclear power plants.
    Due to these factors, the EIA projections from the last several
years show that natural gas is likely to be the most widely-used fossil
fuel for new construction of electric generating capacity through 2020,
along with renewable energy, nuclear power, and a limited amount of
coal with CCS.\49\
---------------------------------------------------------------------------

    \49\ http://www.eia.gov/forecasts/aeo/pdf/0383(2013).pdf; http://www.eia.gov/forecasts/aeo/pdf/0383(2012).pdf; http://prod-http-80-800498448.us-east-1.elb.amazonaws.com/w/images/6/6d/0383%282011%29.pdf.
---------------------------------------------------------------------------

b. Energy Sector Modeling
    Various energy sector modeling efforts, including projections from
the EIA and the EPA, forecast trends in new power plant construction
and utilization of existing power plants that are consistent with the
above-described technological developments and costs. The EIA forecasts
the structure and developments in the power sector in its annual
report, the Annual Energy Outlook (AEO). These reports are based on
economic modeling that reflects existing policy and regulations, such
as state RPS programs and federal tax credits for renewables.\50\ The
current report, AEO 2013,\51\ (i) shows that a modest amount of coal-
fired power plants that are currently under construction are expected
to begin operation in the next several years (referred to as
``planned''); and (ii) projects in the reference case,\52\ that a very
small amount of new (``unplanned'') conventional coal-fired capacity,
with CCS, will come online after 2012, and through 2034 in response to
Federal and State incentives. According to the AEO 2013,

the vast majority of new generating capacity during this period will be
either natural gas-fired or renewable. Similarly, the EIA projections
from the last several years show that natural gas is likely to be the
most widely-used fossil fuel for new construction of electric
generating capacity through 2020.\53\
---------------------------------------------------------------------------

    \50\ http://www.eia.gov/forecasts/aeo/chapter_legs_regs.cfm.
    \51\ Energy Information Adminstration's Annual Energy Outlook
for 2013, Final Release available at http://www.eia.gov/forecasts/aeo/index.cfm.
    \52\ EIA's reference case projections are the result of its
baseline assumptions for economic growth, fuel supply, technology,
and other key inputs.
    \53\ Annual Energy Outlook 2010, 2011, 2012, and 2013.
---------------------------------------------------------------------------

    Specifically, the AEO 2013 projects the need for 25.9 GW of
additional base load or intermediate load generation capacity through
2020 (this includes projects that are under development--i.e., being
constructed or in advance planning--and model-projected nuclear, coal,
and NGCC projects). The vast majority of this new electric capacity
(22.5 GW) is already under development (under construction or in
advanced planning); it includes about 6.1 GW of new coal-fired
capacity, 5.5 GW of new nuclear capacity, and 10.9 GW of new NGCC
capacity. The EPA believes that most current fossil fuel-fired projects
are already designed to meet limits consistent with today's proposal
(or they have already commenced construction and are thus not impacted
by today's notice). The AEO 2013 also projects an additional 3.4 GW of
new base load capacity additions, which are model-projected
(unplanned). This consists of 3.1 GW of new NGCC capacity, and 0.3 GW
of new coal equipped with CCS (incentivized with some government
funding). Therefore, the AEO 2013 projection suggests that this
proposal would only impact small amounts of new power generating
capacity through 2020, all of which is expected to already meet the
proposed emissions standards without incurring further control costs.
In AEO 2013, this is also true during the period from 2020 through
2034, where new model-projected (unplanned) intermediate and base load
capacity is expected to be compliant with the proposed standard without
incurring further control costs (i.e., an additional 45.1 GW of NGCC
and no additional coal, for a total, from 2013 through 2030, of 48.2 GW
of NGCC and 0.3 GW of coal with CCS).
    It should be noted that under the EIA projections, existing coal-
fired generation will remain an important part of the mix for power
generation. Modeling from both the EIA and the EPA predict that coal-
fired generation will remain the largest single source of electricity
in the U.S. through 2040. Specifically, in the EIA's AEO 2013, coal
will supply approximately 40 percent of all electricity in both 2020
and 2025.
    The EPA modeling using the Integrated Planning Model (IPM), a
detailed power sector model that the EPA uses to support power sector
regulations, also shows limited future construction of new coal-fired
power plants under the base case.\54\ The EPA's projections from IPM
can be found in the RIA.
---------------------------------------------------------------------------

    \54\ http://www.epa.gov/airmarkets/progsregs/epa-ipm/BaseCasev410.html#documentation.
---------------------------------------------------------------------------

c. Integrated Resource Plans
    The trends in the power sector described above are also apparent in
publicly available long-term resource plans, known as IRPs.
    The EPA has reviewed publicly available IRPs from a range of
companies (e.g., varying in size, location, current fuel mix), and
these plans are generally consistent with both EIA and EPA modeling
projections. Companies seem focused on demand-side management programs
to lower future electricity demand and mostly reliant on a mix of new
natural gas-fired generation and renewable energy to meet increased
load demand and to replace retired generation capacity.
    Notwithstanding this clear trend towards natural gas-fired
generation and renewables, many of the IRPs raise fuel diversity
concerns and include options to diversify new generation capacity
beyond natural gas and renewable energy. Several IRPs indicate that
companies are considering new nuclear generation, including either
traditional nuclear power plants or small modular reactors, and new
coal-fired generation capacity with and without CCS technology. Based
on these IRPs, the EPA acknowledges that a small number of new coal-
fired power plants may be built in the near future. While this is
contrary to the economic modeling predictions, the Agency understands
that economic modeling may not fully reflect the range of factors that
a particular company may consider when evaluating new generation
options, such as fuel diversification. By the same token, as discussed
below, it is possible that some of this potential new coal-fired
construction may occur because developers are able to design projects
that can provide competitively priced electricity for a specific
geographic region.

D. Statutory Background

    Section 111 of the Clean Air Act sets forth the standards of
performance for new sources (NSPS) program, and with this program,
establishes mechanisms for regulating emissions of air pollutants from
stationary sources that are key in this rulemaking.\55\ As a
preliminary step to regulation, the EPA must list categories of
stationary sources that the Administrator, in his or her judgment,
finds ``cause[ ], or contribute[ ] significantly to, air pollution
which may reasonably be anticipated to endanger public health or
welfare.''
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    \55\ CAA section 111(b)(1)(A). The EPA has regulated more than
60 stationary source categories under CAA section 111. See generally
40 CFR subparts D-MMMM.
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    Once the EPA has listed a source category, the EPA proposes and
then promulgates ``standards of performance'' for ``new sources'' in
the category.\56\ A ``new source'' is ``any stationary source, the
construction or modification of which is commenced after,'' in general,
the date of the proposal.\57\ A modification is ``any physical change .
. . or change in the method of operation . . . which increases the
amount of any air pollutant emitted by such source or which results in
the emission of any air pollutant not previously emitted.'' \58\ The
EPA, through regulations, has determined that certain types of changes
are exempt from consideration as a modification.\59\ The EPA's
regulations also provide that an existing facility is also considered a
new source if it undertakes a ``reconstruction,'' which is the
replacement of components to such an extent that the capital costs of
the new equipment or components exceed 50 percent of what is believed
to be the cost of a completely new facility.\60\ In establishing
standards of performance, the EPA has significant discretion to create
subcategories based on source type, class or size.\61\
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    \56\ CAA section 111(b)(1)(B).
    \57\ CAA section 111(a)(2).
    \58\ CAA section 111(a)(4).
    \59\ 40 CFR 60.2, 60.14(e).
    \60\ 40 CFR 60.15.
    \61\ CAA section 111(b)(2).
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    Clean Air Act section 111(a)(1) defines a ``standard of
performance'' as a standard for emissions of air pollutants which
reflects the degree of emission limitation achievable through the
application of the best system of emission reduction which (taking into
account the cost of achieving such reduction and any nonair quality
health and environmental impact and energy requirements) the
Administrator determines has been adequately demonstrated.
    This definition makes clear that the standard of performance must
be based on controls that constitute ``the best system of emission
reduction . . . adequately demonstrated'' (BSER).\62\

The standard that the EPA develops, based on the BSER, is commonly a
numerical emissions limit, expressed as a performance level (e.g., a
rate-based standard). Generally, the EPA does not prescribe a
particular technological system that must be used to comply with a
standard of performance. Rather, sources generally can select any
measure or combination of measures that will achieve the emissions
level of the standard.
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    \62\ As noted, we generally refer to this system of control as
the best system of emission reduction, or BSER, but we may
occasionally refer to it as the ``best demonstrated system.'' In the
past, this level of control was frequently referred to as the ``best
demonstrated technology'' (BDT).
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    Regarding other titles in the CAA, this rulemaking has implications
for EGUs and other stationary sources in the CAA PSD program under
Title I, part C, and the operating permits program under Title V. We
discuss these implications in section IX of this preamble.

E. Regulatory and Litigation Background

    The EPA initially included fossil fuel-fired EGUs (which includes
EGUs that burn fossil fuel including coal, gas, oil and petroleum coke
and that use different technologies, including boilers and combustion
turbines) in a category that it listed under section 111(b)(1)(A), and
the EPA promulgated the first set of standards of performance for EGUs
in 1971, codified in subpart D.\63\ As discussed in Section IV.D. of
this preamble, the EPA has revised those regulations, and in some
instances, revised the subparts, several times over the ensuing
decades. None of these rulemakings or codifications, however, have
constituted a new listing under CAA section 111(b)(1)(A).
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    \63\ ``Standards of Performance for Fossil-Fuel-Fired Steam
Generators for Which Construction Is Commenced After August 17,
1971,'' 36 FR 24875 (Dec. 23, 1971) codified at 40 CFR 60.40-46; 36
FR 5931 (Mar. 31, 1971).
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    In 1979, the EPA revised subpart D of 40 CFR part 60; as part of
this revision, the EPA formed subpart Da and promulgated NSPS for
electric utility steam generating units.\64\ These NSPS on June 11,
1979 apply to units capable of firing more than 73 megawatts (MW) (250
MMBtu/h) heat input of fossil fuel that commenced construction,
reconstruction, or modification after September 18, 1978. The NSPS for
EGUs also apply to industrial-commercial-institutional cogeneration
units that sell more than 25 MW and more than one-third of their
potential output capacity to any utility power distribution system.
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    \64\ ``Standards of Performance for Electric Utility Steam
Generating Units for Which Construction is Commenced After September
18, 1978,'' 44 FR 33580 (June 11, 1979)
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    The EPA promulgated amendments to subpart Da in 2006, resulting in
new criteria pollutant limitations for EGUs (the 2006 Final Rule).\65\
The 2006 Final Rule did not establish standards of performance for GHG
emissions. Two groups of petitioners--13 governmental entities and
three environmental groups--filed petitions for judicial review of this
rule by the D.C. Circuit.\66\ These petitioners contended, among other
issues, that the rule was required to include standards of performance
for GHG emissions from EGUs.
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    \65\ ''Standards of Performance for Electric Utility Steam
Generating Units, Industrial-Commercial-Institutional Steam
Generating Units, and Small Industrial-Commercial-Institutional
Steam Generating Units, Final Rule.'' 71 FR 9866 (Feb. 27, 2006).
    \66\ State of New York, et al. v. EPA, No. 06-1322. The two
groups of petitioners were (1) the States of New York, California,
Connecticut, Delaware, Maine, New Mexico, Oregon, Rhode Island,
Vermont and Washington; the Commonwealth of Massachusetts; the
District of Columbia and the City of New York (collectively ``State
Petitioners''); and (2) Natural Resources Defense Council (NRDC),
Sierra Club, and Environmental Defense Fund (EDF)(collectively
``Environmental Petitioners'').
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    The Court severed portions of the petitions for review of the 2006
Final Rule that related to GHG emissions. Following the U.S. Supreme
Court's 2007 decision in Massachusetts v. EPA, which gave authority to
the EPA to regulate GHGs, the D.C. Circuit remanded the 2006 Final Rule
to the EPA upon its own motion for further consideration of the issues
related to GHG emissions in light of Massachusetts. The EPA did not act
on that remand. Rather, these State and Environmental Petitioners and
the EPA negotiated a proposed settlement agreement that set deadlines
for the EPA to propose and take final action on (1) a rule under CAA
section 111(b) that includes standards of performance for GHGs for new
and modified EGUs that are subject to 40 CFR part 60, subpart Da; and
(2) a rule under CAA section 111(d) that includes emission guidelines
for GHGs from existing EGUs that would have been subject to 40 CFR part
60, subpart Da if they were new sources. Pursuant to CAA section
113(g), the EPA provided for a notice-and-comment opportunity on the
proposed settlement agreement and, after reviewing the comments
received, finalized the agreement in late 2010.
    In June 2012, the D.C. Circuit, in Coalition for Responsible
Regulation v. EPA, upheld the EPA's Endangerment Finding concerning
GHGs and the EPA's companion finding that GHGs from motor vehicles
contribute to the air pollution that endangers public health and
welfare.\67\ The Court also upheld standards for motor vehicles that
limited GHG emissions.\68\ In addition, the Court affirmed the EPA's
view that the CAA PSD and title V permitting requirements became
applicable to GHG-emitting stationary sources when the EPA regulated
GHG emissions from motor vehicles, because PSD and title V are
automatically applicable to a pollutant when that pollutant is
regulated under any part of the Act. The Court also dismissed
challenges to what we refer to as the Timing Decision,\69\ which
established the January 2, 2011 date when the PSD and title V
permitting requirements applied to GHG-emitting stationary sources; and
the Tailoring Rule,\70\ which is the EPA's common sense approach to
phasing in GHG permitting requirements to avoid an initial increase in
the number of PSD and title V permit applications that would overwhelm
the permitting authorities' administrative capacities.
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    \67\ CRR, 684 F.3d at 102.
    \68\ ``Light-Duty Vehicle Greenhouse Gas Emission Standards and
Corporate Average Fuel Economy Standards; Final Rule.'' 75 FR 25324
(May 7, 2010).
    \69\ ``Interpretation of Regulations that Determine Pollutants
Covered by Clean Air Act Permitting Programs.'' 75 FR 17004 (April
2, 2010).
    \70\ ``Prevention of Significant Deterioration and Title V
Greenhouse Gas Tailoring Rule; Final Rule.'' 75 FR 31514 (June 3,
2010).
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    In June 2012, several companies filed petitions for review of the
original proposal for this rulemaking action in the D.C. Circuit. In
December 2012, the D.C. Circuit dismissed these petitions on grounds
that the challenged proposed rule is not final agency action subject to
judicial review.\71\
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    \71\ Las Brisas Energy Center, LLC v. Environmental Protection
Agency, No. 12-1248, 2012 U.S. App. LEXIS 25535 (D.C. Cir. Dec. 13,
2012).
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    In April 2013, EPA completed rulemaking to regulate power plants in
the Mercury and Air Toxics rule (``MATS'').\72\ In this same
rulemaking, EPA promulgated revised standards of performance under CAA
section 111(b) for criteria pollutant emissions from EGUs.
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    \72\ ``Reconsideration of Certain New Source Issues: National
Emission Standards for Hazardous Air Pollutants From Coal- and Oil-
Fired Electric Utility Steam Generating Units and Standards of
Performance for Fossil-Fuel-Fired Electric Utility, Industrial-
Commercial-Institutional, and Small Industrial-Commercial-
Institutional Steam Generating Units, Final Rulemaking, '' 78 FR
24073 (April 24, 2013).
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F. Coordination With Other Rulemakings

    EGUs are the subject of several recent CAA rulemakings.\73\ In
general, most EPA rulemakings affecting the power sector focus on
existing sources.

Therefore, few interactions are likely between other power sector rules
and this rule, which focuses only on new sources.\74\
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    \73\ We discuss other rulemakings solely for background
purposes. The effort to coordinate rulemakings is not a defense to a
violation of the CAA. Sources cannot defer compliance with existing
requirements because of other upcoming regulations.
    \74\ Other pending EPA regulatory actions in the power sector
are discussed in more detail in Chapter 4 of the RIA.
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    We note that the EPA recently finalized revisions to the MATS rule
as related to new sources.\75\ The revised MATS new source emission
standards for air toxics and new source performance standards for
criteria pollutants, coupled with GHG performance standards in this
proposed rule, provide a clear regulatory structure for new fossil
fuel-fired generation.
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    \75\ 78 FR 24073.
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    The EPA recognizes that it is important that each of these
regulatory efforts achieves its intended environmental objectives in a
common-sense, cost-effective manner consistent with the underlying
statutory requirements and assures a reliable power system. Executive
Order (EO) 13563 states that ``[i]n developing regulatory actions and
identifying appropriate approaches, each agency shall attempt to
promote . . . coordination, simplification, and harmonization. Each
agency shall also seek to identify, as appropriate, means to achieve
regulatory goals that are designed to promote innovation.'' Recent
guidance from the Office of Management and Budget's Office of
Information and Regulatory Affairs has emphasized the importance of,
where appropriate and feasible, the consideration of cumulative effects
in regulated industries and the harmonization of rules in terms of both
content and timing. We believe that these recent finalized and proposed
rules will allow industry to comply with its obligations as efficiently
as possible, by making coordinated investment decisions and, to the
greatest extent possible, adopting integrated compliance strategies.

G. Stakeholder Input

    The EPA has extensively interacted with many different stakeholders
regarding climate change, source contributions, and emission reduction
opportunities. These stakeholders included industry entities,
environmental organizations and many regional, state, and local air
quality management agencies, as well as the general public. As part of
developing the original proposed rule, the EPA held five listening
sessions in February and March 2011 to obtain additional information
and input from key stakeholders and the public. Each of the five
sessions had a particular target audience; these were the electric
power industry, environmental and environmental justice organizations,
states and Tribes, coalition groups and the petroleum refinery
industry. Each session lasted two hours and featured a facilitated
roundtable discussion among stakeholder representatives. The EPA asked
key stakeholder groups to identify these roundtable participants in
advance of the listening sessions. The EPA accepted comments from the
public at the end of each session and via the electronic docket
system.\76\
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    \76\ Comments related to the listening sessions submitted via
the electronic docket system are available at www.regulations.gov
(docket number EPA-HQ-OAR-2011-0090).
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    On May 3, 2012, the EPA announced that it would hold two public
hearings on the original proposed rule. The hearings were both held on
May 24, 2012, in Washington, DC and Chicago, IL. Also on May 3, 2012,
the EPA announced an extension of the public comment period for the
original proposed rule, until June 25, 2012. The EPA received more than
2.5 million public comments on the original proposed rule.\77\ While
the Agency is not preparing a RTC document responding to the comments
it received as part of that process, the EPA has taken into
consideration those comments, as well as information received in the
listening sessions, in developing this new proposal.
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    \77\ Those comments are available at www.regulations.gov (docket
number EPA-HQ-OAR-2011-0660).
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III. Proposed Requirements for New Sources

    This section describes the proposed requirements in this rulemaking
for new sources. We describe our rationale for several of these
proposed requirements--the applicability requirements, the basis for
the standards of performance for fossil-fuel fired boilers, and the
basis for the standards of performance for combustion turbines--in
Sections V-VIII of this preamble.

A. Applicability Requirements

    We generally refer to sources that would be subject to the
standards of performance in this rulemaking as ``affected'' or
``covered'' sources, units, facilities, or simply as EGUs. These
sources meet both the definition of ``affected'' and ``covered'' EGUs
subject to an emission standard as provided by this rule, and the
requirements for ``new'' sources as defined under the provisions of CAA
section 111.
1. Covered EGUs, Generally
    Subpart Da currently defines an EGU as a boiler that is: (1)
``capable of combusting'' more than 250 MMBtu/h heat input of fossil
fuel,\78\ (2) ``constructed for the purpose of supplying more than one-
third of its potential net- electric output capacity . . . to any
utility power distribution system for sale'' \79\ (that is, to the
grid), and (3) ``constructed for the purpose of supplying . . . more
than 25 MW net-electric output'' to the grid.\80\ We are proposing to
define an EGU slightly differently than it is currently defined in
subpart Da or in the original proposal for this rulemaking. First, we
are proposing to add additional criteria to be met in addition to the
``constructed for the purpose of supplying more than one-third of its
potential electric output capacity'' to the grid. One new criterion
would be that a unit actually ``supplies more than one-third of its
potential electric output'' to the grid. Both criteria would also be
used in subparts KKKK and TTTT. Combined with the three year rolling
average methodology to determine if the one-third criteria is met (as
explained further below), this approach makes it clear that a unit that
was not originally constructed to supply more than one-third of its
potential electric output to the grid, but does so for one year does
not automatically become affected. The EPA believes that coal-fired
utility boilers, IGCCs and large NGCC units are constructed with the
purpose of supplying more than one-third of their potential electric
output to the grid, and, except in rare cases (such as very extended
outages), usually do. Small NGCC units and simple cycle combustion
turbines that are generally designed for operation during peak demand
will usually supply less than one-third of their potential electric