EO 12866_111(b) New-Mods 2060-AQ91 Final_20150507
                                                                        6560-50

ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 60, 70, 71, and 98
[EPA-HQ-OAR-2013-0495; EPA-HQ-OAR-2013-0603; FRL-XXXX-XX-OAR]
RIN 2060-AQ91
Standards of Performance for Greenhouse Gas Emissions from New, Modified, and Reconstructed Stationary Sources: Electric Utility Generating Units

AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
SUMMARY: The Environmental Protection Agency (EPA) is finalizing new source performance standards (NSPS) under Clean Air Act (CAA) section 111(b) that, for the first time, will establish standards for emissions of carbon dioxide (CO2) for newly constructed, modified, and reconstructed affected fossil fuel-fired electric utility generating units. This action establishes separate standards of performance for fossil fuel-fired electric utility steam generating units and fossil fuel-fired stationary combustion turbines. This action also addresses related permitting and reporting issues. In a separate action, under CAA section 111(d), the EPA is issuing final emission guidelines for states to use in developing plans to limit CO2 emissions from existing fossil fuel-fired EGUs.
 DATES: This final rule is effective on [insert date 60 days after date of publication in the federal register].
ADDRESSES: The EPA has established dockets for this action under Docket ID No. EPA-HQ-OAR-2013-0495 (Standards of Performance for Greenhouse Gas Emissions from New Stationary Sources: Electric Utility Generating Units) and Docket ID No. EPA-HQ-OAR-2013-0603 (Carbon Pollution Standards for Modified and Reconstructed Stationary Sources: Electric Utility Generating Units). All documents in the dockets are listed on the www.regulations.gov Web site. Although listed in the index, some information is not publicly available, e.g., Confidential Business Information 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 www.regulations.gov or in hard copy at the EPA Docket Center (EPA/DC), Room 3334, EPA WJC West Building, 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 legal holidays. The telephone number for the Public Reading Room is<PHONE_NUMBER>, and the telephone number for the Air Docket is<PHONE_NUMBER>.
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<PHONE_NUMBER>; email address<EMAIL_ADDRESS>SUPPLEMENTARY INFORMATION: 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
AEO			Annual Energy Outlook
AEP			American Electric Power
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
GHGRP		Greenhouse Gas Reporting Program
GS			Geologic Sequestration
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
MRV			Monitoring, Reporting, and Verification
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			n[th]-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
SDWA			Safe Drinking Water Act
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
USDW			Underground Source of Drinking Water
USGCRP		U.S. Global Change Research Program
VCS			Voluntary Consensus Standard
WGS			Water Gas Shift
WWW			World Wide Web

      Organization of This Document. The information presented in this preamble is organized as follows:
I. General Information
A. Executive Summary
B. Does this action apply to me?
C. Where can I get a copy of this document?
D. Judicial Review
E. How is this preamble organized?
II. Background
A. Climate Change Impacts from GHG Emissions
B. GHG Emissions from Fossil Fuel-fired EGUs
C. The Utility Power Sector
D. Statutory Background
E. Regulatory Background
F. Carbon Pollution Standards for Fossil Fuel-Fired Electric Utility Generating Units
G. Stakeholder Engagement and Public Comments on the Proposals
III. Regulatory Authority, Affected Sources and Their Standards, and Legal Requirements
A. Authority to Regulate Carbon Dioxide from Fossil Fuel-fired EGUs
B. Treatment of Categories and Codification in the Code of Federal Regulations
C. Affected Units
D. Units Not Covered by This Final Rule
E. Coal Refuse
F. Format of the Output-Based Standard
G. CO2 Emissions Only
H. Legal Requirements for Establishing Emission Standards
   IV. Summary of Final Standards for Newly Constructed, Modified, and Reconstructed Fossil Fuel-fired Electric Utility Steam Generating Units
A. Applicability Requirements and Rationale
B. Best System of Emission Reduction
C. Final Standards of Performance
V. Rationale for Final Standards for Newly Constructed Fossil Fuel-fired Electric Utility Steam Generating Units
A. Factors Considered in Determining the BSER
B. Partial CCS as the BSER for Newly Constructed Steam Generating Units
C. Rationale for the Final Emission Standards
D. Post-Combustion CCS
E. Pre-Combustion CCS
F. Vendor Guarantees, Industry Statements, Academic Literature, and Commercial Availability
G. Response to Key Comments
H. Consideration of Costs
I. Key Comments Regarding EPA's Consideration of Costs
J. Achievable Emission Reductions Utilizing Partial CCS
K. Further Development and Deployment of CCS Technology
L. Geologic and Geographic Considerations
M. Final Requirements for Disposition of Captured CO2
N. Options That Were Considered but Were Ultimately Not Determined to Be the BSER
VI. Rationale for Final Standards for Modified Fossil Fuel-fired Electric Utility Steam Generating Units
A. Rationale for Final Applicability Criteria for Modified Steam Generating Units
B. Identification of the Best System of Emission Reduction
C. BSER Criteria
VII. Rationale for Final Standards for Reconstructed Fossil Fuel-fired Electric Utility Steam Generating Units
A. Rationale for Final Applicability Criteria for Reconstructed Sources
B. Identification of the Best System of Emission Reduction
VIII. Summary of Final Standards for Newly Constructed, Modified, and Reconstructed Stationary Combustion Turbines
A. Applicability Requirements
B. Best System of Emission Reduction
C. Final Emission Standards
IX. Rationale for Final Standards for Newly Constructed, Modified, and Reconstructed Stationary Combustion Turbines
A. Applicability
B. Identification of the Best System of Emission Reduction
C. Achievability of the Final Standards
X. Summary of Other Final Requirements for Newly Constructed, Modified, and Reconstructed Fossil Fuel-fired Steam Generating Units and Stationary Combustion Turbines
A. Startup, Shutdown, and Malfunction Requirements
B. Continuous Monitoring Requirements
C. Emissions Performance Testing Requirements
D. Continuous Compliance Requirements
E. Notification, Recordkeeping, and Reporting Requirements Newly Constructed, Modified, and Reconstructed Fossil Fuel-fired Steam Generating Units and Natural Gas-fired Stationary Combustion Turbines
XI. Interactions with Other EPA Programs and Rules
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
F. Interactions with Other EPA Rules
XII. Impacts of this Action
A. What are the air impacts?
B. Endangered Species Act
C. What are the energy impacts?
D. What are the water and solid waste impacts?
E. What are the compliance costs?
F. What are the economic and employment impacts?
G. What are the benefits of the final standards?
XIII. 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 (PRA)
C. Regulatory Flexibility Act (RFA)
D. Unfunded Mandates Reform Act (UMRA)
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 (NTTAA)
J. Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations
K. Congressional Review Act (CRA)

XIV. Statutory Authority
 I. General Information
A. Executive Summary
1. Purpose of the Regulatory Action
      This action finalizes regulatory requirements to limit greenhouse gas (GHG) emissions from newly constructed, modified, and reconstructed fossil fuel-fired electric utility steam generating units and stationary combustion turbines, following the issuance of proposals for such standards and an accompanying Notice of Data Availability.
      On June 25, 2013, in conjunction with the announcement of his Climate Action Plan (CAP), President Obama issued a Presidential Memorandum directing the EPA to issue a proposal to address carbon pollution from new power plants by September 30, 2013, and to issue "standards, regulations, or guidelines, as appropriate, which address carbon pollution from modified, reconstructed, and existing power plants." Pursuant to authority in section 111(b) of the CAA, on September 20, 2013, EPA Administrator Gina McCarthy signed proposed carbon pollution standards for newly constructed fossil fuel-fired power plants. The proposal was published in the Federal Register on January 8, 2014 (79 FR 1430; "January 2014 proposal"). In that proposal, the EPA proposed to limit emissions of CO2 from newly constructed fossil fuel-fired electric utility steam generating units and newly constructed natural gas-fired stationary combustion turbines.
      The EPA subsequently issued a Notice of Data Availability (NODA) in which the EPA solicited comment on its initial interpretation of provisions in the Energy Policy Act of 2005 (EPAct05) and associated provisions in the Internal Revenue Code (IRC) and also solicited comment on a companion Technical Support Document (TSD) that addressed these provisions' relationship to the factual record supporting the proposed rule. 79 FR 10750 (February 26, 2014).
      On June 2, 2014, Administrator McCarthy signed proposed standards of performance, also pursuant to CAA section 111(b), to limit emissions of CO2 from modified and reconstructed fossil fuel-fired electric utility steam generating units and natural gas-fired stationary combustion turbines. 79 FR 34959 (June 18, 2014) ("June 2014 proposal"). Specifically, the EPA proposed standards of performance for: (1) modified fossil fuel-fired steam generating units, (2) modified natural gas-fired stationary combustion turbines, (3) reconstructed fossil fuel-fired steam generating units, and (4) reconstructed natural gas-fired stationary combustion turbines.
      In this action, the EPA is issuing final standards of performance to limit emissions of greenhouse gas (GHG) pollution manifested as CO2 from newly constructed, modified, and reconstructed fossil fuel-fired electric utility steam generating units and from newly constructed, modified, and reconstructed stationary combustion turbines. Consistent with the requirements of CAA section 111(b), these standards reflect the degree of emission limitation achievable through the application of the best system of emission reduction (BSER) that the EPA has determined has been adequately demonstrated for each type of unit. These final standards are codified in 40 CFR part 60, subpart TTTT, a new subpart specifically created for CAA 111(b) standards of performance for GHG emissions.
      In a separate action that affects the same source category, under CAA section 111(d), the EPA is issuing final emission guidelines for states to use in developing plans to limit CO2 emissions from existing fossil fuel-fired EGUs. States must then submit plans to the EPA following a schedule set by the guidelines.
      The EPA received numerous comments and conducted extensive outreach to stakeholders for this rulemaking. After careful consideration of public comments and input from a variety of stakeholders, the final standards of performance in this action reflect some changes from the proposals. Comments considered include written comments that were submitted during the public comment period and oral testimony provided during the public hearing for the proposed standards.
2. Summary of Major Provisions and Changes to the Proposed Standards
	The BSER determinations and final standards of performance for affected newly constructed, modified, and reconstructed EGUs are summarized in Table 1 and discussed in more detail below. The final standards for newly constructed fossil fuel-fired EGUs apply to those sources that commenced construction on or after the date of publication of the proposed standards, January 8, 2014. The final standards for modified and reconstructed fossil fuel-fired EGUs apply to those sources that modify or reconstruct on or after the date of publication of the proposed standards, June 18, 2014.
Table 1. Summary of BSER and Final Standards for Affected Sources
                                Affected Source
                                     BSER
                                   Standard
Newly Constructed Fossil Fuel-Fired Steam Generating Units
Partial carbon capture and storage (CCS)
1,400 lb CO2/MWh-gross.
Modified Fossil Fuel-Fired Steam Generating Units
Most efficient generation at the affected source achievable through a combination of best operating practices and equipment upgrades
Sources making modifications
resulting in an increase in potential CO2 hourly emissions of more than 10 percent are required to meet a unit-specific emission limit determined by the unit's best historical annual CO2 emission rate (from 2002 to the date of the modification); the emission limit will be no lower than:
1.	1,800 lb CO2/MWh-gross for sources with heat input > 2,000 MMBtu/h.
   OR
2.	2,000 lb CO2/MWh-gross for sources with heat input <= 2,000 MMBtu/h.
Reconstructed Fossil Fuel-Fired Steam Generating Units
Most efficient generating technology
at the
affected
source (supercritical steam conditions for the larger; and subcritical conditions for the smaller)
1. Sources with heat input > 2,000 MMBtu/h are required to meet an emission limit of 1,800 lb CO2/MWh-gross.
2. Sources with heat input <= 2,000 MMBtu/h are required to meet an emission limit of 2,000 lb CO2/MWh-gross.
Newly Constructed, Modified, and Reconstructed Fossil Fuel-Fired Stationary Combustion Turbines
Efficient NGCC technology
   1.    1,000 lb CO2/MWh-gross or
   2.    1,080 lb CO2/MWh-net

a. Fossil fuel-fired electric utility steam generating units.
      This action finalizes standards of performance for newly constructed fossil fuel-fired steam generating units based on partial carbon capture and storage (CCS) which the EPA determines to be the BSER for these sources. After consideration of the wide range of comments, technical input received on the availability, technical feasibility, and cost of CCS implementation, and publicly available information about projects that are implementing or planning to implement CCS, the EPA remains convinced that CCS technology is available and technically feasible to implement at fossil fuel-fired steam generating units. However, the EPA's final standard does recognize that the proposed standards should be adjusted to address legitimate concerns regarding the cost to implement the available CCS technology on a new steam generating unit. Accordingly, the EPA is finalizing an emission standard for newly constructed fossil fuel-fired steam generating units at 1,400 lb CO2/MWh-gross, a level that is less stringent than the proposed limitation (which was at 1,100 lb CO2/MWh-gross). This final standard reflects our identification of the BSER for such units to be a lower level of partial CCS than was the basis of the proposed standards  -  one that we conclude better represents the requirement that the BSER technology be implementable at reasonable costs.
      The EPA proposed and reaffirms here that this system is the BSER because CCS has been demonstrated to be technically feasible and is in use or under construction in various industrial sectors including power generation. For example, the Boundary Dam Unit #3 CCS project in Saskatchewan, Canada is a full-scale, fully integrated CCS project that is currently operating and is designed to capture more than 90 percent of the CO2 from the lignite-fired boiler. In addition, partial CCS designed to meet the final emission standard will promote implementation and further development of CCS technologies. A newly constructed conventional coal-fired utility boiler burning bituminous coal will be able to meet this standard of performance by capturing and storing approximately 20 percent of the CO2 produced from the facility. Many IGCC units will be able to meet the final standard of performance by capturing and storing less than 10 percent of the CO2 produced by the facility. All steam generating sources may also be able to meet the standard through alternative actions, such as the use of natural gas co-firing. This final standard of performance for newly constructed fossil fuel-fired steam generating units provides a clear and achievable path forward for the construction of new coal-fired generating sources that addresses greenhouse gas emissions and supports technological innovation. The standard of 1,400 lb CO2/MWh-gross is achievable by fossil fuel-fired steam generating units for all fuel types, under a wide range of conditions, and throughout the United States.
      We note that identifying CCS as BSER can provide a path forward for fossil steam generation in the current market context. Numerous studies have found that few new fossil-fuel fired steam generating units will be constructed in the future for multiple reasons, including low electricity demand growth, highly competitive natural gas prices, and increases in the supply of renewable energy. The EPA recognizes that in certain circumstances there may be interest in building fossil steam units despite these market conditions: in particular, to achieve or maintain fuel diversity within generating fleets and hedge against the possibility of natural gas prices far exceeding projections or to generate both power and chemicals, including CO2 for use in enhanced oil recovery projects. As regulatory history has shown, identifying CCS as BSER in this rule will likely further boost research and developments in this technology, making its application even more efficacious and cost-effective  -  and providing a competitive, low emission future for fossil steam generation.
      The EPA is also issuing final standards for steam generating units that implement "large modifications", (i.e., modifications resulting in an increase in potential hourly CO2 emissions of more than 10 percent when compared to the source's potential in the previous 5 years). The EPA is not issuing standards, at this time, for steam generating units that implement "small modifications" (i.e., modifications resulting in an increase in potential hourly CO2 emissions of less than or equal to 10 percent when compared to the source's potential in the previous 5 years).
      The standards of performance for the modified steam generating units that make large modifications are based on each affected unit's own best potential performance as the BSER. Specifically, such a modified steam generating unit will be required to meet a unit-specific CO2 emission limit determined by that unit's best demonstrated historical performance (in the years from 2002 to the time of the modification). The EPA has determined that this standard based on each unit's own best potential performance can be met through a combination of best operating practices and equipment upgrades and that these steps can be implemented cost-effectively at a time when a source is undertaking a large modification. To account for facilities that have already implemented best practices and equipment upgrades, the final rule also specifies that modified facilities will not have to meet an emission standard more stringent than the corresponding standard for reconstructed steam generating units (i.e., 1,800 lb CO2/MWh-gross for units with heat input greater than 2,000 MMBtu/h and 2,000 lb CO2/MWh-gross for units with heat input less than or equal to 2,000 MMBtu/h).
      The final standards for steam generating units implementing large modifications are similar to the proposed standards for such units. In the proposal, we suggested that the standard should be based on when the modification is undertaken (i.e., before being subject to requirements under a CAA section 111(d) state plan or after being subject to such plan). We also suggested that for units that undertake modifications prior to becoming subject to an approved CAA section 111(d) state plan, the standard should be its best historical performance plus an additional two percent reduction. In response to comments on the proposal, we are not finalizing separate standards that are dependent upon when the modification takes place, nor are we finalizing the proposed additional two percentage reduction.
      The EPA is not promulgating final standards of performance for, and is withdrawing the proposed standards for, modified steam generating sources that make modifications resulting in an potential increase of hourly CO2 emissions of less than or equal to 10 percent. As we indicated in the proposal, the EPA has been notified of very few modifications for criteria pollutant emissions from the power sector to which NSPS requirements have applied. As such, we expect that there will be few modifications for GHG emissions as well. Even so, we also recognize (and we discuss in this preamble) that the power sector is undergoing significant change and realignment in response to a variety of influences and incentives in the industry. We do not have sufficient information at this time, however, to anticipate the types of modifications that may result from these changes. In particular, we do not have sufficient information about the types of modifications that would result in increases in CO2 emissions of 10 percent or less, and what the appropriate standard for such sources would be. Therefore, we conclude that it is prudent to delay issuing standards for sources that undertake small modifications (i.e., those resulting in an increase in CO2 emissions of less than or equal to 10 percent).
	For reconstructed steam generating units, the EPA is finalizing standards of performance based on the performance of the most efficient generating technology for these types of units as the BSER (i.e., reconstructing the boiler if necessary to use steam with higher temperature and pressure, even if the boiler was not originally designed to do so.) The emission standard for these sources is 1,800 lb CO2/MWh-gross for large sources, (i.e. those with a heat input rating of greater than 2,000 MMBtu/h) or 2,000 lb CO2/MWh-gross for small sources (i.e. those with a heat input rating of 2,000 MMBtu/h or less). The difference in the standards for larger and smaller units is based on greater availability of higher pressure/temperature steam turbines (e.g., supercritical steam turbines) for larger units. The standards can also be met through other non-BSER technology options such as natural gas co-firing.
b. Stationary combustion turbines. This action also finalizes standards of performance for newly constructed, modified, and reconstructed stationary combustion turbines. The EPA originally proposed that newly constructed, modified, or reconstructed stationary combustion turbines would be subject to a standard of performance if they are constructed for the purpose of and actually sell one-third or more of their potential electric output and 219,000 MWh to the grid. Later, in the June 2014 proposal for modified and reconstructed sources, the EPA solicited comment on alternative approaches, including eliminating the 219,000 MWh electric sales criterion, the constructed for the purpose of criterion, and replacing the one-third sales criterion with an approach that would allow net-electric sales up to the design efficiency of the combustion turbine being installed multiplied by its potential electric output before a standard would apply. These proposed applicability requirements were intended to exclude combustion turbines that are used for the purpose of meeting peak power demand (i.e., "peaking units") as opposed to those that are used to meet intermediate or base load power demand.
      In this action, the EPA is finalizing a variation of the two approaches put forward in the June 2014 proposal. For newly constructed, modified, or reconstructed stationary combustion turbines the EPA is finalizing a standard of 1,000 lb CO2/MWh-gross based on modern, efficient natural gas combined cycled (NGCC) technology as the BSER. However, the final applicability excludes units subject to a federally enforceable permit that restrict annual net-electric sales to the design net efficiency of the combustion turbine (not to exceed 40 percent) multiplied by the potential electric output of the combustion turbine. For example, a stationary combustion turbine with a design net efficiency of 38 percent (on a higher heating value (HHV) basis) would be able to request a permit restriction to allow it to sell up to 38 percent of its potential electric output without becoming subject to this final standard.
      The EPA previously proposed to divide intermediate and base load stationary combustion turbines into two subcategories based on their size (as determined by heat input rating) and to set separate standards of performance for each of those subcategories. Based on our review of the comments on the proposed subcategories and standards and additional data analysis, however, we have determined that there is no need to set separate standards for different sizes of combustion turbines. The EPA has determined that all sizes of affected newly constructed, modified, and reconstructed stationary combustion turbines will be able to achieve the final standard.
      Stationary combustion turbines that are physically incapable of combusting natural gas, such as turbines in certain non-continental locations or in remote locations that lack access to a natural gas pipeline, will be exempt from the standard entirely.
      A more detailed discussion of the final standards of performance, the applicability criteria, and the comments that influenced the final standards is provided in Sections VIII and IX of this preamble.
3. Costs and Benefits
	As explained in the regulatory impact analysis (RIA) for this final rule, available data  -  including utility announcements and Energy Information Administration (EIA) modeling - indicate that, even in the absence of this rule, (i) existing and anticipated economic conditions are such that few, if any, fossil fuel-fired steam-generating EGUs will be built in the foreseeable future, and (ii) utilities and project developers are expected to choose new generation technologies (primarily NGCC) that would meet the final standards and renewable generating sources that are not affected by these final standards. These projections are consistent with utility announcements and EIA modeling that indicate that new units are more likely to be NGCC and that any coal-fired steam generating units built between now and 2020 would have CCS, even in the absence of this rule. Therefore, based on the analysis presented in Chapter 4 of the RIA, the EPA projects that this final rule will result in negligible CO2 emission changes, quantified benefits, and costs by 2022 as a result of the performance standards for newly constructed EGUs. However, for a variety of reasons some companies may consider coal-fired steam generating units that the modeling does not anticipate. Thus, in Chapter 5 of the RIA, we also present an analysis of the project-level costs of a newly constructed coal-fired steam generating unit with partial CCS that meets the requirements of this final rule alongside the project-level costs of a newly constructed coal-fired unit without CCS.
      As explained in the RIA for this final rule and further below, the EPA has been notified of few power sector NSPS modifications or reconstructions; and, based on that experience, the EPA expects that few EGUs will trigger either the modification or the reconstruction provisions that we are finalizing in this action. In Chapter 6 of the RIA, we discuss factors that limit our ability to quantify the costs and benefits of the standards for modified and reconstructed sources.
B. Does this action apply to me?
      The entities potentially affected by the standards are shown in Table 2 below.
                   Table 2. Potentially Affected Entities[a]

                                   Category

                                  NAICS Code

                   Examples of Potentially Affected Entities

                                   Industry

                                    221112

                 Fossil fuel electric power generating units.

                              Federal Government

                                   221112[b]

 Fossil fuel electric power generating units owned by the federal government.

                            State/Local Government

                                   221112[b]

     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 action. To determine whether your facility, company, business, organization, etc., would be regulated by this action, refer to Section III of this preamble for more information and examine the applicability criteria in 40 CFR 60.1 (General Provisions) and 40 CFR 60.550840 of subpart TTTT (Standards of Performance for Greenhouse Gas Emissions for Electric Utility Generating Units). 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).
C. Where can I get a copy of this document?
     In addition to being available in the docket, an electronic copy of this final action will also be available on the Worldwide Web (WWW). Following signature, a copy of this final action will be posted at the following address: http://www2.epa.gov/carbon-pollution-standards.
D. Judicial Review
     Under section 307(b)(1) of the CAA, judicial review of this final rule is available only by filing a petition for review in the U.S. Court of Appeals for the District of Columbia Circuit by [insert date 60 days after publication in federal register]. Under section 307(d)(7)(B) of the CAA, only an objection to this final rule that was raised with reasonable specificity during the period for public comment can be raised during judicial review. Moreover, under section 307(b)(2) of the CAA, the requirements established by this final rule may not be challenged separately in any civil or criminal proceedings brought by EPA to enforce these requirements. Section 307(d)(7)(B) of the CAA further provides that "[o]nly an objection to a rule or procedure which was raised with reasonable specificity during the period for public comment (including any public hearing) may be raised during judicial review." This section also provides a mechanism for us to convene a proceeding for reconsideration, "[i]f the person raising an objection can demonstrate to the EPA that it was impracticable to raise such objection within [the period for public comment] or if the grounds for such objection arose after the period for public comment (but within the time specified for judicial review) and if such objection is of central relevance to the outcome of the rule." Any person seeking to make such a demonstration to us should submit a Petition for Reconsideration to the Office of the Administrator, U.S. EPA, Room 3000, Ariel Rios Building, 1200 Pennsylvania Ave., NW., Washington, DC 20460, with a copy to both the person(s) listed in the preceding FOR FURTHER INFORMATION CONTACT section, and the Associate General Counsel for the Air and Radiation Law Office, Office of General Counsel (Mail Code 2344A), U.S. EPA, 1200 Pennsylvania Ave., NW, Washington, DC 20460.
E. How is this preamble organized?
      This action presents the EPA's final standards of performance for newly constructed, modified, and reconstructed fossil fuel-fired electric utility steam generating units and natural gas-fired stationary combustion turbines. Section II provides background information on climate change impacts from GHG emissions, GHG emissions from fossil fuel-fired EGUs, the utility power sector, the statutory and regulatory background relating to CAA section 111(b), EPA actions prior to this final action, and public comments regarding the proposed actions. Section III explains the EPA authority to regulate CO2 and EGUs, identifies affected sources, and describes the source categories. Section IV provides a summary of the final standards for newly constructed, modified, and reconstructed fossil fuel-fired steam generating units. Sections V through VII present the rationale for the final standards for newly constructed, modified, and reconstructed steam generating units, respectively. Sections VIII and IX provide a summary of the final standards for stationary combustion turbines and present the rationale for the final standards for newly constructed, modified, and reconstructed combustion turbines. Section X provides a summary of other final requirements for newly constructed, modified, and reconstructed fossil fuel-fired steam generating units and stationary combustion turbines. Interactions with other EPA programs and rules are described in Section XI. Projected impacts of the final action are then described in Section XII, followed by a discussion of statutory and executive order reviews in Section XIII and the statutory authority for this action in Section XIV. We address major comments throughout this preamble and in greater detail in an accompanying response to comments document located in the docket.
II. Background
      In this section we discuss climate change impacts from GHG emissions, both on public health and public welfare. We also present information about GHG emissions from fossil-fuel fired EGUs, explain the uniqueness of the utility power sector, and describe recent and continuing trends and transitions in this sector. We then summarize the statutory and regulatory background relevant to this final rulemaking. In addition, we provide background information on the EPA's January 8, 2014 proposed carbon pollution standards for newly constructed fossil fuel-fired EGUs, the June 18, 2014 proposed carbon pollution standards for modified and reconstructed EGUs, and other actions associated with this final rulemaking. We close this section with a general discussion of comments and stakeholder input that the EPA received prior to issuing this final rulemaking.
A. Climate Change Impacts from GHG Emissions
According to the National Research Council, "Emissions of CO2 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 CO2 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. Therefore, emission reduction choices made today matter in determining impacts experienced not just over the next few decades, but in the coming centuries and millennia."
      In 2009, based on a large body of robust and compelling scientific evidence, the EPA Administrator issued the Endangerment Finding under CAA section 202(a)(1). In the Endangerment Finding, the Administrator found that the current, elevated concentrations of GHGs in the atmosphere -- already at levels unprecedented in human history -- may reasonably be anticipated to endanger public health and welfare of current and future generations in the United States. We summarize these adverse effects on public health and welfare briefly here.
1. Public Health Impacts Detailed in the 2009 Endangerment Finding
      Climate change caused by human emissions of GHGs threatens the health of Americans in multiple ways. By raising average temperatures, climate change increases the likelihood of heat waves, which are associated with increased deaths and illnesses. While climate change also increases the likelihood of reductions in cold-related mortality, evidence indicates that the increases in heat mortality will be larger than the decreases in cold mortality in the United States. Compared to a future without climate change, climate change is expected to increase ozone pollution over broad areas of the U.S., including in the largest metropolitan areas with the worst ozone problems, and thereby increase the risk of morbidity and mortality. Climate change is also expected to cause more intense hurricanes and more frequent and intense storms and heavy precipitation, with impacts on other areas of public health, such as the potential for increased deaths, injuries, infectious and waterborne diseases, and stress-related disorders. 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
      Climate change impacts touch nearly every aspect of public welfare. Among the multiple threats caused by human emissions of GHGs, 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 a multitude of increased risks, particularly from rising sea level and increases in the severity of storms. These communities face storm and flooding damage to property or even loss of land due to inundation or erosion; as well as wetland submergence and habitat loss.
      Impacts of climate change on public welfare also include threats to social and ecosystem services. Climate change is expected to result in an increase in peak electricity demand. Extreme weather from climate change threatens energy, transportation, and water resource infrastructure. Climate change may also exacerbate ongoing environmental pressures in certain settlements, particularly in Alaskan indigenous communities, and is very likely to fundamentally rearrange U.S. ecosystems over the 21[st] 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. New Scientific Assessments and Observations
      Since the administrative record concerning the Endangerment Finding closed following the EPA's 2010 Reconsideration Denial, the climate has continued to change, with new records being set for a number of climate indicators such as global average surface temperatures, Arctic sea ice retreat, CO2 concentrations, and sea level rise. Additionally, a number of major scientific assessments have been released that improve understanding of the climate system and strengthen the case that GHGs endanger public health and welfare both for current and future generations. These assessments, from the Intergovernmental Panel on Climate Change (IPCC), the U.S. Global Change Research Program (USGCRP), and the National Research Council (NRC), include: IPCC's 2012 Special Report on Managing the Risks of Extreme Events and Disasters to Advance Climate Change Adaptation (SREX) and the 2013-2014 Fifth Assessment Report (AR5), the USGCRP's 2014 National Climate Assessment, Climate Change Impacts in the United States (NCA3), and the NRC's 2010 Ocean Acidification: A National Strategy to Meet the Challenges of a Changing Ocean (Ocean Acidification), 2011 Report on Climate Stabilization Targets: Emissions, Concentrations, and Impacts over Decades to Millennia (Climate Stabilization Targets), 2011 National Security Implications for U.S. Naval Forces (National Security Implications), 2011 Understanding Earth's Deep Past: Lessons for Our Climate Future (Understanding Earth's Deep Past), 2012 Sea Level Rise for the Coasts of California, Oregon, and Washington: Past, Present, and Future, 2012 Climate and Social Stress: Implications for Security Analysis (Climate and Social Stress), and 2013 Abrupt Impacts of Climate Change (Abrupt Impacts) assessments.
      The EPA has carefully reviewed these recent assessments in keeping with the same approach outlined in Section VIII.A. of the 2009 Endangerment Finding, which was to rely primarily upon the major assessments by the USGCRP, the IPCC, and the NRC of the National Academies to provide the technical and scientific information to inform the Administrator's judgment regarding the question of whether GHGs endanger public health and welfare. 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 findings of the recent scientific assessments confirm and strengthen the conclusion that GHGs endanger public health, now and in the future. The NCA3 indicates that human health in the United States will be impacted by "increased extreme weather events, wildfire, decreased air quality, threats to mental health, and illnesses transmitted by food, water, and disease-carriers such as mosquitoes and ticks." The most recent assessments now have greater confidence that climate change will influence production of pollen that exacerbates asthma and other allergic respiratory diseases such as allergic rhinitis, as well as effects on conjunctivitis and dermatitis. Both the NCA3 and the IPCC AR5 found that increasing temperature has lengthened the allergenic pollen season for ragweed, and that increased CO2 by itself can elevate production of plant-based allergens.
      The NCA3 also finds that climate change, in addition to chronic stresses such as extreme poverty, is negatively affecting indigenous peoples' health in the United States through impacts such as reduced access to traditional foods, decreased water quality, and increasing exposure to health and safety hazards. The IPCC AR5 finds that climate change-induced warming in the Arctic and resultant changes in environment (e.g., permafrost thaw, effects on traditional food sources) have significant impacts, observed now and projected, on the health and well-being of Arctic residents, especially indigenous peoples. Small, remote, predominantly-indigenous communities are especially vulnerable given their "strong dependence on the environment for food, culture, and way of life; their political and economic marginalization; existing social, health, and poverty disparities; as well as their frequent close proximity to exposed locations along ocean, lake, or river shorelines."  In addition, increasing temperatures and loss of Arctic sea ice increases the risk of drowning for those engaged in traditional hunting and fishing.
       The NCA3 concludes that children's unique physiology and developing bodies contribute to making them particularly vulnerable to climate change. Impacts on children are expected from heat waves, air pollution, infectious and waterborne illnesses, and mental health effects resulting from extreme weather events. The IPCC AR5 indicates that children are among those especially susceptible to most allergic diseases, as well as health effects associated with heat waves, storms, and floods. The IPCC finds that additional health concerns may arise in low income households, especially those with children, if climate change reduces food availability and increases prices, leading to food insecurity within households.
      Both the NCA3 and IPCC AR5 conclude that climate change will increase health risks facing the elderly. Older people are at much higher risk of mortality during extreme heat events.  Pre-existing health conditions also make older adults susceptible to cardiac and respiratory impacts of air pollution and to more severe consequences from infectious and waterborne diseases. Limited mobility among older adults can also increase health risks associated with extreme weather and floods.
      The new assessments also confirm and strengthen the conclusion that GHGs endanger public welfare, and emphasize the urgency of reducing GHG emissions due to their projections that show GHG concentrations climbing to ever-increasing levels in the absence of mitigation. The NRC assessment Understanding Earth's Deep Past projected that, without a reduction in emissions, CO2 concentrations by the end of the century would increase to levels that the Earth has not experienced for more than 30 million years. In fact, that assessment stated 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." Because of these unprecedented changes, several assessments state that we may be approaching critical, poorly understood thresholds: as stated in the NRC assessment Understanding Earth's Deep Past, "As Earth continues to warm, it may be approaching a critical climate threshold beyond which rapid and potentially permanent -- at least on a human timescale -- changes not anticipated by climate models tuned to modern conditions may occur." Moreover, due to the time lags inherent in the Earth's climate, the NRC Climate Stabilization Targets assessment notes that the full warming from any given concentration of CO2 reached will not be fully realized for several centuries, underscoring that emission activities today carry with them climate commitments far into the future. Future temperature changes will depend on what emission path the world follows. In its high emission scenario, the IPCC AR5 projects that global temperatures by the end of the century will likely be 2.6 degrees Celsius (°C) to 4.8 °C (4.7 to 8.6 degrees Fahrenheit (°F)) warmer than today. Temperatures on land and in northern latitudes will likely warm even faster than the global average. However, according to the NCA3, significant reductions in emissions would lead to noticeably less future warming beyond mid-century, and therefore less impacts to public health and welfare.
      While rainfall may only see small globally and annually averaged changes, there are expected to be substantial shifts in where and when that precipitation falls. According to the NCA3, regions closer to the poles will see more precipitation, while the dry subtropics are expected to expand (colloquially, this has been summarized as wet areas getting wetter and dry regions drier). In particular, the NCA3 notes that the western U.S., and especially the Southwest, is expected to become drier. This projection is consistent with the recent observed drought trend in the West. At the time of publication of the NCA, even before the last 2 years of extreme drought in California, tree ring data was already indicating that the region might be experiencing its driest period in 800 years. Similarly, the NCA3 projects that heavy downpours are expected to increase in many regions, with precipitation events in general becoming less frequent but more intense. This trend has already been observed in regions such as the Midwest, Northeast, and upper Great Plains. Meanwhile, the NRC Climate Stabilization Targets assessment found that the area burned by wildfire is expected to grow by 2 to 4 times for 1 °C (1.8 °F) of warming. For 3 °C of warming, the assessment found that 9 out of 10 summers would be warmer than all but the 5 percent of warmest summers today, leading to increased frequency, duration, and intensity of heat waves. Extrapolations by the NCA also indicate that Arctic sea ice in summer may essentially disappear by mid-century. Retreating snow and ice, and emissions of carbon dioxide and methane released from thawing permafrost, will also amplify future warming.
      Since the 2009 Endangerment Finding, the USGCRP NCA3, and multiple NRC assessments have projected future rates of sea level rise that are 40 percent larger to more than twice as large as the previous estimates from the 2007 IPCC 4[th] Assessment Report due in part to improved understanding of the future rate of melt of the Antarctic and Greenland Ice sheets. The NRC Sea Level Rise assessment projects a global sea level rise of 0.5 to 1.4 meters (1.6 to 4.6 feet) by 2100, the NRC National Security Implications assessment suggests that "the Department of the Navy should expect roughly 0.4 to 2 meters [1.3 to 6.6 feet] global average sea-level rise by 2100," and the NRC Climate Stabilization Targets assessment states that an increase of 3 °C will lead to a sea level rise of 0.5 to 1 meter (1.6 to 3.3 feet) by 2100. These assessments continue to recognize that there is uncertainty inherent in accounting for ice sheet processes. Additionally, local sea level rise can differ from the global total depending on various factors: the east coast of the U.S. in particular is expected to see higher rates of sea level rise than the global average. For comparison, the NCA3 states that "five million Americans and hundreds of billions of dollars of property are located in areas that are less than four feet above the local high-tide level," and the NCA3 finds that "[c]oastal infrastructure, including roads, rail lines, energy infrastructure, airports, port facilities, and military bases, are increasingly at risk from sea level rise and damaging storm surges." Also, because of the inertia of the oceans, sea level rise will continue for centuries after greenhouse gas concentrations have stabilized (though more slowly than it would have otherwise). Additionally, there is a threshold temperature above which the Greenland ice sheet will be committed to inevitable melting: according to the NCA, some recent research has suggested that even present day carbon dioxide levels could be sufficient to exceed that threshold.
      In general, climate change impacts are expected to be unevenly distributed across different regions of the United States and have a greater impact on certain populations, such as indigenous peoples and the poor. The NCA3 finds climate change impacts such as the rapid pace of temperature rise, coastal erosion and inundation related to sea level rise and storms, ice and snow melt, and permafrost thaw are affecting indigenous people in the United States. Particularly in Alaska, critical infrastructure and traditional livelihoods are threatened by climate change and, "[i]n parts of Alaska, Louisiana, the Pacific Islands, and other coastal locations, climate change impacts (through erosion and inundation) are so severe that some communities are already relocating from historical homelands to which their traditions and cultural identities are tied." The IPCC AR5 notes, "Climate-related hazards exacerbate other stressors, often with negative outcomes for livelihoods, especially for people living in poverty (high confidence).  Climate-related hazards affect poor people's lives directly through impacts on livelihoods, reductions in crop yields, or destruction of homes and indirectly through, for example, increased food prices and food insecurity."
      Carbon dioxide in particular has unique impacts on ocean ecosystems. The NRC Climate Stabilization Targets assessment found that coral bleaching will increase due both to warming and ocean acidification. Ocean surface waters have already become 30 percent more acidic over the past 250 years due to absorption of CO2 from the atmosphere. According to the NCA3, this acidification will reduce the ability of organisms such as corals, krill, oysters, clams, and crabs to survive, grow, and reproduce. The NRC Understanding Earth's Deep Past assessment notes four of the five major coral reef crises of the past 500 million years were caused by acidification and warming that followed GHG increases of similar magnitude to the emissions increases expected over the next hundred years. Similarly, the NRC Ocean Acidification 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." 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."
      Events outside the United States, as also pointed out in the 2009 Endangerment Finding, will also have relevant consequences. The NRC Climate and Social Stress assessment concluded that it is prudent to expect that some climate events "will produce consequences that exceed the capacity of the affected societies or global systems to manage and that have global security implications serious enough to compel international response." The NRC National Security Implications assessment recommends preparing for increased needs for humanitarian aid; responding to the effects of climate change in geopolitical hotspots, including possible mass migrations  -  and cites Egypt and Pakistan as two case studies of potential security issues linked to climate change within the next 10 years; and addressing changing security needs in the Arctic as sea ice retreats.
      In addition to future impacts, the NCA3 emphasizes that climate change driven by human emissions of GHGs is already happening now and it is happening in the United States. According to the IPCC AR5 and the NCA3, there are a number of climate-related changes that have been observed recently, and these changes are projected to accelerate in the future. The planet warmed about 0.85 °C (1.5 °F) from 1880 to 2012. It is extremely likely (>95 percent probability) that human influence was the dominant cause of the observed warming since the mid-20[th] century, and likely (>66 percent probability) that human influence has more than doubled the probability of occurrence of heat waves in some locations. In the Northern Hemisphere, the last 30 years were likely the warmest 30 year period of the last 1,400 years. U.S. average temperatures have similarly increased by 1.3 to 1.9 degrees F since 1895, with most of that increase occurring since 1970. Global sea levels rose 0.19 m (7.5 inches) from 1901 to 2010. Contributing to this rise was the warming of the oceans and melting of land ice. It is likely that 275 Gt/year of ice melted from land glaciers (not including ice sheets) since 1993, and that the rate of loss of ice from the Greenland and Antarctic ice sheets increased substantially in recent years, to 215 Gt/year and 147 Gt/year respectively since 2002. 360 Gt of ice melt will cause global sea levels to rise 1 mm. Annual mean Arctic sea ice has been declining at 3.5 to 4.1 percent per decade, and Northern Hemisphere snow cover extent has decreased at about 1.6 percent per decade for March and 11.7 percent per decade for June. Permafrost temperatures have increased in most regions since the 1980s, by up to 3 °C (5.4 °F) in parts of Northern Alaska. Winter storm frequency and intensity have both increased in the Northern Hemisphere. The NCA3 states that the increases in the severity or frequency of some types of extreme weather and climate events in recent decades can affect energy production and delivery, causing supply disruptions, and compromise other essential infrastructure such as water and transportation systems.
      In addition to the changes documented in the assessment literature, there have been other climate milestones of note. In 2009, the year of the Endangerment Finding, the average concentration of CO2 as measured on top of Mauna Loa was 387 parts per million, far above preindustrial concentrations of about 280 parts per million. The average concentration in 2013, the last full year before this rule was proposed, was 396 parts per million. The average concentration in 2014 was 399 parts per million. And the monthly concentration in April of 2014 was 401 parts per million, the first time a monthly average has exceeded 400 parts per million since record keeping began at Mauna Loa in 1958, and for at least the past 800,000 years. Arctic sea ice has continued to decline, with September of 2012 marking a new record low in terms of Arctic sea ice extent, 40 percent below the 1979-2000 median. Sea level has continued to rise at a rate of 3.2 mm per year (1.3 inches/decade) since satellite observations started in 1993, more than twice the average rate of rise in the 20[th] century prior to 1993. And 2014 was the warmest year globally in the modern global surface temperature record, going back to 1880; this now means 19 of the 20 warmest years have occurred in the past 20 years, and except for 1998, the ten warmest years on record have occurred since 2002. The first months of 2015 have also been some of the warmest on record.
      These assessments and observed changes make it clear that reducing emissions of GHGs across the globe is necessary in order to avoid the worst impacts of climate change, and underscore the urgency of reducing emissions now. The NRC Committee on America's Climate Choices listed a number of reasons "why it is imprudent to delay actions that at least begin the process of substantially reducing emissions." For example:
         *          The faster emissions are reduced, the lower the risks posed by climate change. Delays in reducing emissions could commit the planet to a wide range of adverse impacts, especially if the sensitivity of the climate to greenhouse gases is on the higher end of the estimated range.

         *          Waiting for unacceptable impacts to occur before taking action is imprudent because the effects of greenhouse gas emissions do not fully manifest themselves for decades and, once manifest, many of these changes will persist for hundreds or even thousands of years.

         *          In the committee's judgment, the risks associated with doing business as usual are a much greater concern than the risks associated with engaging in strong response efforts.

4. Observed and Projected U.S. Regional Changes
      The NCA3 assessed the climate impacts in 8 regions of the United States, noting that changes in physical climate parameters such as temperatures, precipitation, and sea ice retreat were already having impacts on forests, water supplies, ecosystems, flooding, heat waves, and air quality. Moreover, the NCA3 found that future warming is projected to be much larger than recent observed variations in temperature, with precipitation likely to increase in the northern states, decrease in the southern states, and with the heaviest precipitation events projected to increase everywhere.
      In the Northeast, temperatures increased almost 2 °F from 1895 to 2011, precipitation increased by about 5 inches (10 percent), and sea level rise of about a foot has led to an increase in coastal flooding. The 70 percent increase in the amount of rainfall falling in the 1 percent of the most intense events is a larger increase in extreme precipitation than experienced in any other US region.
      In the future, if emissions continue increasing, the Northeast is expected to experience 4.5 to 10 °F of warming by the 2080s. This will lead to more heat waves, coastal and river flooding, and intense precipitation events. Sea levels in the Northeast are expected to increase faster than the global average because of subsidence, and changing ocean currents may further increase the rate of sea level rise. Specific vulnerabilities highlighted by the NCA include large urban populations particularly vulnerable to climate-related heat waves and poor air quality episodes, prevalence of climate sensitive vector-borne diseases like Lyme and West Nile Virus, usage of combined sewer systems that may lead to untreated water being released into local water bodies after climate-related heavy precipitation events, and 1.6 million people living within the 100-year coastal flood zone who are expected to experience more frequent floods due to sea level rise and tropical-storm induced storm-surge. The NCA also highlighted infrastructure vulnerable to inundation in coastal metropolitan areas, potential agricultural impacts from increased rain in the spring delaying planting or damaging crops or increased heat in the summer leading to decreased yields and increased water demand, and shifts in ecosystems leading to declines in iconic species in some regions, such as cod and lobster south of Cape Cod.
      In the Southeast, average annual temperature during the last century cycled between warm and cool periods. A warm peak occurred during the 1930s and 1940s followed by a cool period and temperatures then increased again from 1970 to the present by an average of 2 °F. There have been increasing numbers of days above 95 °F and nights above 75 °F, and decreasing numbers of extremely cold days since 1970. Daily and five-day rainfall intensities have also increased, and summers have been either increasingly dry or extremely wet.
      The Southeast is exceptionally vulnerable to sea level rise, extreme heat events, hurricanes, and decreased water availability. Major consequences of further warming include significant increases in the number of hot days (95 °F or above) and decreases in freezing events, as well as exacerbated ground-level ozone in urban areas. Although projected warming for some parts of the region by the year 2100 are generally smaller than for other regions of the United States, projected warming for interior states of the region are larger than coastal regions by 1 °F to 2 °F. Projections further suggest that globally there will be fewer tropical storms, but that they will be more intense, with more Category 4 and 5 storms. The NCA identified New Orleans, Miami, Tampa, Charleston, and Virginia Beach as being specific cities that are at risk due to sea level rise, with additional impacts on coastal highways, wetlands, and energy and water supplies.
      In the Northwest, temperatures increased by about 1.3[o]F between 1895 and 2011. A small average increase in precipitation was observed over this time period. However, warming temperatures have caused increased rainfall relative to snowfall, which has altered water availability from snowpack across parts of the region. Snowpack in the Northwest is an important freshwater source for the region. More precipitation falling as rain instead of snow has reduced the snowpack, and warmer springs have corresponded to earlier snowpack melting and reduced streamflows during summer months. Drier conditions have increased the extent of wildfires in the region.
      Average annual temperatures are projected to increase by 3.3[o]F to 9.7[o]F by the end of the century (depending on future global greenhouse gas emissions), with the greatest warming is expected during the summer. Continued increases in global greenhouse gas emissions are projected to result in up to a 30 percent decrease in summer precipitation. Earlier snowpack melt and lower summer streamflows are expected by the end of the century and will affect drinking water supplies, agriculture, ecosystems, and hydropower production. Warmer waters are expected to increase disease and mortality in important fish species, including Chinook and sockeye salmon. Forest pests are expected to spread and wildfires burn larger areas. Other high-elevation ecosystems are projected to be lost because they can no longer survive the climatic conditions. Low lying coastal areas, including the cities of Seattle and Olympia, will experience heightened risks of sea level rise, erosion, seawater inundation and damage to infrastructure and coastal ecosystems.
      In Alaska, temperatures have changed faster than anywhere else in the United States. Annual temperatures increased by about 3 °F in the past 60 years. Warming in the winter has been even greater, rising by an average of 6 °F.  Arctic sea ice is thinning and shrinking in area, with the summer minimum ice extent now covering only half the area it did when satellite records began in 1979. Glaciers in Alaska are melting at some of the fastest rates on Earth. Permafrost soils are also warming and beginning to thaw. Drier conditions have contributed to more large wildfires in the last 10 years than in any previous decade since the 1940s, when recordkeeping began. Climate change impacts are harming the health, safety and livelihoods of Native Alaskan communities.
      By the end of this century, continued increases in greenhouse gas emissions are expected to increase temperatures by 10 to 12 °F in the northernmost parts of Alaska, by 8 to 10 °F in the interior, and by 6 to 8 °F across the rest of the state. These increases will exacerbate ongoing Arctic sea ice loss, glacial melt, permafrost thaw and increased wildfire, and threaten humans, ecosystems, and infrastructure. Precipitation is expected to increase to varying degrees across the state, however warmer air temperatures and a longer growing season are expected to result in drier conditions. Native Alaskans are expected to experience declines in economically, nutritionally, and culturally important wildlife and plant species. Health threats will also increase, including loss of clean water, saltwater intrusion, sewage contamination from thawing permafrost, and northward exten - sion of diseases. Wildfires will increasingly pose threats to human health as a result of smoke and direct contact. Areas underlain by ice-rich permafrost across the state are likely to experience ground subsidence and extensive damage to infrastructure as the permafrost thaws. Important ecosystems will continue to be affected. Surface waters and wetlands that are drying provide breeding habitat for millions of waterfowl and shorebirds that winter in the lower 48 states. Warmer ocean temperatures, acidification, and declining sea ice will contribute to changes in the location and availability of commercially and culturally important marine fish.
      In the Southwest, temperatures are now about 2 °F higher than the past century, and are already the warmest that region has experienced in at least 600 years. The NCA notes that there is evidence that climate-change induced warming on top of recent drought has influenced tree mortality, wildfire frequency and area, and forest insect outbreaks. Sea levels have risen about 7 or 8 inches in this region, contributing to inundation of Highway 101 and backup of seawater into sewage systems in the San Francisco area.
      Projections indicate that the Southwest will warm an additional 5.5 to 9.5 °F over the next century if emissions continue to increase. Winter snowpack in the Southwest is projected to decline (consistent with the record lows from this past winter), reducing the reliability of surface water supplies for cities, agriculture, cooling for power plants, and ecosystems. Climate change will also have impacts on the high-value specialty crops grown in the region as a drier climate will increase demands for irrigation, more frequent heat waves will reduce yields, and decreased winter chills may impair fruit and nut production for trees in California. Increased drought, higher temperatures, and bark beetle outbreaks are likely to contribute to continued increases in wildfires. The highly urbanized population of the Southwest is vulnerable to heat waves and water supply disruptions, which can be exacerbated in cases where high use of air conditioning triggers energy system failures.
      The rate of warming in the Midwest has markedly accelerated over the past few decades. Temperatures rose by more than 1.5 °F from 1900 to 2010, but between 1980 and 2010 the rate of warming was three times faster than from 1900 through 2010. Precipitation generally increased over the last century, with much of the increase driven by intensification of the heaviest rainfalls. Several types of extreme weather events in the Midwest (e.g., heat waves and flooding) have already increased in frequency and/or intensity due to climate change.
      In the future, if emissions continue increasing, the Midwest is expected to experience 5.6 to 8.5 °F of warming by the 2080s, leading to more heat waves. Though projections of changes in total precipitation vary across the regions, more precipitation is expected to fall in the form of heavy downpours across the entire region, leading to an increase in flooding. Specific vulnerabilities highlighted by the NCA include long-term decreases in agricultural productivity, changes in the composition of the region's forests, increased public health threats from heat waves and degraded air and water quality, negative impacts on transportation and other infrastructure associated with extreme rainfall events and flooding, and risks to the Great Lakes including shifts in invasive species, increases in harmful algal blooms, and declining beach health.
       High temperatures (more than 100 °F in the Southern Plain and more than 95 °F in the Northern Plains) are projected to occur much more frequently by mid-century. Increases in extreme heat will increase heat stress for residents, energy demand for air conditioning, and water losses. North Dakota's increase in annual temperatures over the past 130 years is the fastest in the contiguous U.S., mainly driven by warming winters. Specific vulnerabilities highlighted by the NCA include increased demand for water and energy, changes to crop growth cycles and agricultural practices, and negative impacts on local plant and animal species from habitat fragmentation, wildfires, and changes in the timing of flowering or pest patterns. Communities that are already the most vulnerable to weather and climate extremes will be stressed even further by more frequent extreme events occurring within an already highly variable climate system.
      In Hawaii, other Pacific islands, and the Caribbean, rising air and ocean temperatures, shifting rainfall patterns, changing frequencies and intensities of storms and drought, decreasing baseflow in streams, rising sea levels, and changing ocean chemistry will affect ecosystems on land and in the oceans, as well as local communities, livelihoods, and cultures. Low islands are particularly at risk.
      Rising sea levels, coupled with high water levels caused by tropical and extra-tropical storms, will incrementally increase coastal flooding and erosion, damaging coastal ecosystems, infrastructure, and agriculture, and negatively affecting tourism. Ocean temperatures in the Pacific region exhibit strong year-to-year and decadal fluctuations, but since the 1950s, they have exhibited a warming trend, with temperatures from the surface to a depth of 660 feet rising by as much as 3.6 °F. As a result of current sea level rise, the coastline of Puerto Rico around Rincón is being eroded at a rate of 3.3 feet per year. Freshwater supplies are already constrained and will become more limited on many islands. Saltwater intrusion associated with sea level rise will reduce the quantity and quality of freshwater in coastal aquifers, especially on low islands. In areas where precipitation does not increase, freshwater supplies will be adversely affected as air temperature rises.
      Warmer oceans are leading to increased coral bleaching events and disease outbreaks in coral reefs, as well as changed distribution patterns of tuna fisheries. Ocean acidification will reduce coral growth and health. Warming and acidification, combined with existing stresses, will strongly affect coral reef fish communities. For Hawaii and Pacific islands, future sea surface temperatures are projected to increase 2.3 °F by 2055 and 4.7 °F by 2090 under a scenario that assumes continued increases in emissions. Ocean acidification is also taking place in the region, which adds to ecosystem stress from increasing temperatures. Ocean acidity has increased by about 30 percent since the pre-industrial era and is projected to further increase by 37 to 50 percent from present levels by 2100.
      The NCA also discussed impacts that occur along the coasts and in the oceans adjacent to many regions, and noted that other impacts occur across regions and landscapes in ways that do not follow political boundaries.
B. GHG Emissions from Fossil Fuel-fired EGUs
      Fossil fuel-fired electric utility generating units (EGUs) are by far the largest emitters of GHGs among stationary sources in the U.S., primarily in the form of CO2. Among fossil fuel-fired EGUs, coal-fired units are by far the largest emitters. This section describes the amounts of these emissions and places these amounts in the context of the U.S. Inventory of Greenhouse Gas Emissions and Sinks (the U.S. GHG Inventory).
      The EPA implements a separate program under 40 CFR part 98 called the Greenhouse Gas Reporting Program (GHGRP) that requires emitting facilities over threshold amounts of GHGs to report their emissions to EPA annually. Using data from the GHGRP, this section also places emissions from fossil fuel-fired EGUs in the context of the total emissions reported to the GHGRP from facilities in the other largest-emitting industries.
      The EPA prepares the official 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 3 below, which presents total U.S. anthropogenic emissions and sinks of GHGs, including CO2 emissions, for the years 1990, 2005 and 2013.
Table 3. U.S. GHG Emissions and Sinks by Sector (million metric tons carbon dioxide equivalent (MMT CO2 Eq.))

      SECTOR
      1990
      2005
      2013
Energy
                                                                       5,290.5
                                                                        6,273.6
                                                                        5,636.6

Industrial Processes and Product Use
                                                                         342.1
                                                                         367.4
                                                                          359.1

Agriculture
                                                                         448.7
                                                                         494.5
                                                                         515.7

Land Use, Land-Use Change and Forestry
                                                                          13.8
                                                                          25.5
                                                                          23.3

Waste
                                                                         206.0
                                                                         189.2
                                                                         138.3
Total Emissions
                                                                       6,301.1
                                                                       7,350.2
                                                                       6,673.0

Land Use, Land-Use Change and Forestry (Sinks)
                                                                        (775.8)
                                                                        (911.9)
                                                                        (881.7)
Net Emissions (Sources and Sinks)
                                                                       5,525.2
                                                                       6,438.3
                                                                       5,791.2

      Total fossil energy-related CO2 emissions (including both stationary and mobile sources) are the largest contributor to total U.S. GHG emissions, representing 77.3 percent of total 2013 GHG emissions. In 2013, fossil fuel combustion by the utility power sector  - - entities that burn fossil fuel and whose primary business is the generation of electricity  - - accounted for 38.3 percent of all energy-related CO2 emissions. Table 4 below presents total CO2 emissions from fossil fuel-fired EGUs, for years 1990, 2005 and 2013.
Table 4. U.S. GHG Emissions from Generation of Electricity from Combustion of Fossil Fuels (MMT CO2)

      GHG EMISSIONS
      1990
      2005
      2013

Total CO2 from fossil fuel-fired EGUs
                                                                       1,820.8
                                                                       2,400.9
                                                                      2,039.8
    - from coal
                                                                       1,547.6
                                                                        1,983.8
                                                                        1,575.0
    - from natural gas
                                                                         175.3
                                                                         318.8
                                                                        441.9
    - from petroleum
                                                                          97.5
                                                                          97.9
                                                                          22.4

      In addition to preparing the official U.S. GHG Inventory to present comprehensive total U.S. GHG emissions and comply with commitments under the UNFCCC, the EPA collects detailed GHG emissions data from the largest emitting facilities in the U.S. through its Greenhouse Gas Reporting Program (GHGRP). Data collected by the GHGRP from large stationary sources in the industrial sector show that the utility power sector emits far greater CO2 emissions than any other industrial sector. Table 5 below presents total GHG emissions in 2013 for the largest emitting industrial sectors as reported to the GHGRP. As shown in Table 4 and Table 5, respectively, carbon dioxide emissions from fossil fuel-fired EGUs are nearly three times as large as the total reported GHG emissions from the next ten largest emitting industrial sectors in the GHGRP database combined.
Table 5. Direct GHG Emissions Reported to GHGRP by Largest Emitting Industrial Sectors (MMT CO2e)
Industrial Sector
                                                                           2013
Fossil Fuel-fired EGUs
                                                                      2,039.8
Petroleum Refineries
Onshore Oil & Gas Production
                                                                          176.7
                                                                           94.8
Municipal Solid Waste Landfills
                                                                          93.0
Iron & Steel Production
                                                                          84.2
Cement Production
                                                                           62.8
Natural Gas Processing Plants
                                                                           59.0
Petrochemical Production
                                                                           52.7
Hydrogen Production
                                                                           41.9
Underground Coal Mines
                                                                           39.8
Food Processing Facilities
                                                                           30.8

	It should be noted that the discussion above concerned all fossil fuel-fired EGUs. Steam generators emitted 1,627 MMT CO2e and combustion turbines emitted 401 MMT CO2e in 2013.
C. The Utility Power Sector
1. Modern Electric System Trends
   	The EPA includes a background discussion of the electricity system in the Clean Power Plan (CPP) rulemaking, which is the companion rulemaking to this rule that promulgates emission guidelines for states to use in regulating emissions of CO2 from existing fossil fuel-fired EGUs. Readers are referred to that rulemaking. The following discussion of electricity sector trends is of particular relevance for this rulemaking.
      The electricity sector is undergoing a period of intense change. Fossil fuels  -  such as coal, natural gas, and oil  -  have historically provided a large percentage of electricity in the U.S., with smaller amounts provided by other types of generation including nuclear, and renewables such as wind, solar, and hydroelectric power. Coal provided the largest percentage of the fossil fuel generation. In recent years, the nation has seen a sizeable increase in renewable generation such as wind and solar, as well as a shift from coal to natural gas.. In 2013, fossil fuels supplied 67 percent of U.S. electricity, but renewables made up 38 percent of the new generation capacity (over 5 GW out of 13.5 GW). From 2007 to 2014, use of lower- and zero-carbon energy sources has grown, while other major energy sources such as coal and oil have experienced declines. Renewable electricity generation, including from large hydro-electric projects, grew from 8 percent to 13 percent over that time period. Between 2000 and 2013, approximately 90 percent of new power generation capacity built in the U.S. has come in the form of natural gas or renewable energy facilities. In 2015, the U.S. Energy Information Administration's (EIA) projected the need for 28.4 GW of additional base load or intermediate load generation capacity through 2020, with approximately 0.7 GW of new coal-fired capacity, 5.5 GW of new nuclear capacity, and 14.2 GW of new NGCC capacity already in development.
      The change in the resource mix has accelerated in recent years, but wind, solar, other renewables, and energy efficiency resources have been reliably participating in the electric sector for a number of years. This rapid development of non-fossil fuel resources is occurring as much of the existing power generation fleet in the U.S. is aging and in need of modernization and replacement. For example, the average age of U.S. coal steam units in 2015 is 45. In its 2013 Report Card for America's Infrastructure, the American Society for Civil Engineers noted that "America relies on an aging electrical grid and pipeline distribution systems, some of which originated in the 1880s." While there has been an increased investment in electric transmission infrastructure since 2005, the report also found that "ongoing permitting issues, weather events, and limited maintenance have contributed to an increasing number of failures and power interruptions." However, innovative technologies have increasingly entered the electric energy space, helping to provide new answers to how to meet the electricity needs of the nation. These new technologies can enable the nation to answer not just questions as to how to reliably meet electricity demand, but also how to meet electricity demand reliably and cost-effectively with the lowest possible emissions and the greatest efficiency.
      Natural gas has a long history of meeting electricity demand in the U.S. with a rapidly growing role as domestic supplies of natural gas have dramatically increased. Natural gas net generation increased by approximately 36 percent between 2004 and 2014. In 2014, natural gas accounted for approximately 27 percent of net generation. The EIA projects that this demand growth will continue with its Annual Energy Outlook 2015 (AEO 2015) Reference case forecasting that natural gas will produce 31 percent of U.S. electric generation in 2040.
      Renewable sources of electric generation also have a history of meeting electricity demand in the U.S. and are expected to have an increasing role going forward. A series of energy crises provided the impetus for renewable energy development in the early 1970s. The OPEC oil embargo in 1973 and oil crisis of 1979 caused oil price spikes, more frequent energy shortages, and significantly affected the national and global economy. In 1978, partly in response to fuel security concerns, Congress passed the Public Utilities Regulatory Policies Act (PURPA) which required local electric utilities to buy power from qualifying facilities (QFs). QFs were either cogeneration facilities or small generation resources that use renewables such as wind, solar, biomass, geothermal, or hydroelectric power as their primary fuels. Through PURPA, Congress supported the development of more renewable energy generation in the U.S.  States have taken a significant lead in requiring the development of renewable resources. In particular, a number of states have adopted renewable portfolio standards (RPS). As of 2013, 29 states and the District of Columbia have enforceable RPS or similar laws. In its AEO 2015 Reference case, EIA found that renewable energy will account for 38 percent of the overall growth in electricity generation from 2013 to 2040. The AEO 2015 Reference case forecasts that the renewables share of U.S. electricity generation will grow from 13 percent in 2013 to 18 percent in 2040.
      Price pressures caused by oil embargoes in the 1970s also brought the issues of conservation and energy efficiency to the forefront of U.S. energy policy. This trend continued in the early 1990s. Some state regulatory commissions and utilities supported energy efficiency through least-cost planning, with the National Association of Regulatory Utility Commissioners (NARUC) "adopting a resolution that called for the utility's least cost plan to be the utility's most profitable plan."  Energy efficiency has been utilized to meet energy demand to varying levels since that time. As of April 2014, 25 states have "enacted long-term (3+ years), binding energy savings targets, or energy efficiency resource standards (EERS)."  Funding for energy efficiency programs has grown rapidly in recent years, with budgets for electric efficiency programs totaling $5.9 billion in 2012.
	Advancements and innovation in power sector technologies provide the opportunity to address CO2 emission levels at affected power plants while at the same time improving the overall power system in the U.S. by lowering the carbon intensity of power generation, and ensuring a reliable supply of power at a reasonable cost.
2. Fossil Fuel-Fired EGUs Regulated by This Action, Generally
      Natural gas-fired EGUs typically use one of two technologies: NGCC or 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) that generates steam which is used to produce power using a steam turbine (the steam cycle). Combining these generation cycles increases the overall efficiency of the system. Simple cycle combustion turbines 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 FB 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 or petroleum coke to form a synthetic gas or syngas composed of carbon monoxide and hydrogen, which can be combusted in a combined cycle system to generate power.
3. Technological Developments and Costs
      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.
      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. As previously discussed, many states have adopted 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.
      Reflecting 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.
      While EIA data shows that natural gas is likely to be the most widely-used fossil fuel for new construction of electric generating capacity through 2020, a few coal-fired units still remain as viable projects at various advanced stages of construction and development. One new coal facility that has essentially completed construction, Southern Company's Kemper County Energy Facility, deploys IGCC with partial CCS. 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 as viable projects. 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. 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 growth, and increases in the supply of renewable energy. We recognize, however, that a variety of factors may come into play in a decision to build new power generation and we want to ensure there are standards in place to make sure that whatever fuel is burned is done so in a way that minimizes CO2 emissions and continues to encourage the development of innovative technologies into the future, as Congress intended with CAA section 111.
4. 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's annual report, the AEO, forecasts the structure and developments in the power sector. These reports are based on economic modeling that reflects existing policy and regulations, such as state RPS programs and federal tax credits for renewables. The current report, AEO 2015, (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, that a very small amount of new ("unplanned") conventional coal-fired capacity, with CCS, will come online after 2012, and through 2037 in response to Federal and State incentives. According to the AEO 2015, 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.
      Specifically, the AEO 2015 projects the need for 28.4 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 (20.4 GW) is already under development (under construction or in advanced planning); it includes about 10.7 GW of new coal-fired capacity, 5.5 GW of new nuclear capacity, and 14.2 GW of new NGCC capacity. The EPA believes that most current fossil fuel-fired projects are already designed to meet limits consistent with this rule (or they have already commenced construction and are thus not impacted by this notice). The AEO 2015 also projects an additional 8 GW of new base load capacity additions, which are model-projected (unplanned). This consists of 7.7 GW of new NGCC capacity, and 0.3 GW of new coal equipped with CCS (incentivized with some government funding). Therefore, the AEO 2015 projection suggests that this final rule would only impact small amounts of new power generating capacity through 2020, all of which is expected to already meet the emissions standards without incurring further control costs. In AEO 2015, this is also true during the period from 2020 through 2030, where new model-projected (unplanned) intermediate and base load capacity is expected to be compliant with the standard without incurring further control costs (i.e., an additional 31.3 GW of NGCC and no additional coal, for a total, from 2015 through 2030, of 39 GW of NGCC and 0.3 GW of coal with CCS).
      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 2015, coal will supply approximately 40 percent of all electricity in the electric power sector 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. The EPA's projections from IPM can be found in the RIA.
5. Integrated Resource Plans
      The trends in the power sector described above are also apparent in publicly available long-term resource plans, known as integrated resource plans (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. These IRPs indicate that companies are 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 highlight the value of fuel diversity 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 a smaller number are considering 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 outcome would be 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. Further it is possible that some of this potential new coal-fired construction may occur because developers are able to design projects with specific business plans, such as the cogeneration of chemicals, which allow the source to provide competitively priced electricity in specific geographic regions.
D. Statutory Background
      The U.S. Supreme Court ruled, in Massachusetts v. EPA, that greenhouse gases (GHGs) meet the definition of "air pollutant" in the CAA, and premised its decision in AEP v. Connecticut that the CAA displaced any federal common law right to compel reductions in CO2 emissions from fossil fuel-fired power plants on its view that CAA section 111 applies to GHG emissions.
      CAA section 111 authorizes and directs the EPA to prescribe new source performance standards (NSPS) applicable to certain new stationary sources (including newly constructed, modified and reconstructed sources). 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." The EPA has listed and regulated more than 60 stationary source categories under CAA section 111. The EPA listed the two source categories at issue here in the 1970s: The EPA listed fossil fuel-fired electric steam generating units in 1971;  and combustion turbines in 1977.
      Once the EPA has listed a source category, the EPA proposes and then promulgates "standards of performance" for "new sources" in the category. A "new source" is "any stationary source, the construction or modification of which is commenced after," in general, final standards applicable to that source are promulgated or, if earlier, proposed. 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." The EPA, through regulations, has determined that certain types of changes are exempt from consideration as a modification.
      The The NSPS general provisions (40 CFR Part 60 Subpart A)NSPS general provisions (40 CFR part 60, subpart A) provide that an existing source is considered to be a new source if it undertakes a "reconstruction," which is the replacement of components of an existing facility to an extent that (1) the fixed capital cost of the new components exceeds 50 percent of the fixed capital cost that would be required to construct a comparable entirely new facility, and (2) it is technologically and economically feasible to meet the applicable standards.
      CAA 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 "the best system of emission reduction ... adequately demonstrated" (BSER).
      The standard that the EPA develops, reflecting the performance of the BSER, is commonly a numeric emission limit, expressed as a numeric performance level which can either be normalized to a rate of output or input (e.g. tons of pollution per amount of product produced  -  a so-called rate-based standard), or expressed as a numeric limit on mass of pollutant which may be emitted (e.g., 100 ug/m[3]  -  parts per billion). Generally, the EPA does not prescribe a particular technological system that must be used to comply with a standard of performance. Rather, sources generally may select any measure or combination of measures that will achieve the emissions level of the standard. In establishing standards of performance, the EPA has significant discretion to create subcategories based on source type, class or size.
      The text and legislative history of CAA section 111, as well as relevant court decisions identify the factors for the EPA to consider in making a BSER determination. The system of emission reduction must be technically feasible, the costs of the system must be reasonable, and the emission standard that the EPA promulgates based on the system of emission reduction must be achievable. In addition, the EPA must consider the amount of emissions reductions that the system would generate, along with considerations concerning energy and non-air quality pollutants. The case law addressing CAA section 111 makes it clear that the EPA has discretion in weighing costs, amount of emission reductions, energy requirements, and impacts of non-air quality pollutants, and that as a result, the EPA may weigh them differently for different types of sources or air pollutants. We note that under the case law of the D.C. Circuit, another factor is relevant for the BSER determination: whether the standard would effectively promote further deployment or development of advanced technologies. Within the constraints just described, the EPA has discretion in identifying the BSER and the resulting emission standard.
      For more than four decades, the EPA has used its authority under CAA section 111 to set cost-effective emission standards that ensure newly constructed, reconstructed and modified stationary sources use the best performing technologies to limit emissions of harmful air pollutants. In this final action, the EPA is following the same well-established interpretation and application of the law under CAA section 111 to address GHG emissions from newly constructed, reconstructed and modified fossil fuel-fired power plants. For each of the standards in this final action, the EPA considered a number of alternatives and evaluated them against the statutory factors. The BSER for each category of affected sources and the standards of performance based on these BSER are based on that evaluation.
E. Regulatory Background
      In 1971, the EPA initially included fossil fuel-fired EGUs (which includes natural gas, petroleum and coal) that use steam-generating boilers in a category that it listed under CAA section 111(b)(1)(A), and  promulgated the first set of standards of performance for sources in that category, which it codified in subpart D. In 1977, the EPA initially included fossil fuel-fired combustion turbines in a category that the EPA listed under CAA section 111(b)(1)(A), and the EPA promulgated standards of performance for that source category in 1979, which the EPA codified in subpart GG.
      The EPA has revised those regulations, and in some instances, has revised the codifications (that is, the 40 CFR part 60 subparts), several times over the ensuing decades. In 1979, the EPA divided subpart D into 3 subparts  -  Da ("Standards of Performance for Electric Utility Steam Generating Units for Which Construction is Commenced After September 18, 1978"), Db ("Standards of Performance for Industrial-Commercial-Institutional Steam Generating Units") and Dc ("Standards of Performance for Small Industrial-Commercial-Institutional Steam Generating Units")  -  in order to codify separate requirements that it established for these subcategories. In 2006, the EPA created subpart KKKK, "Standards of Performance for Stationary Combustion Turbines," which applied to certain sources previously regulated in subparts Da and GG. None of these subsequent rulemakings, including the revised codifications, however, constituted a new listing under CAA section 111(b)(1)(A).
      The EPA promulgated amendments to subpart Da in 2006, which included new standards of performance for criteria pollutants for EGUs, but no standards of performance for GHG emissions. Petitioners sought judicial review of the rule by the D.C. Circuit, contending, among other issues, that the rule was required to include standards of performance for GHG emissions from EGUs. The January 8, 2014 preamble to the proposed CO2 standards for new EGUs includes a discussion of the GHG-related litigation of the 2006 Final Rule as well as other GHG-associated litigation.
F. Carbon Pollution Standards for Fossil Fuel-Fired Electric Utility Generating Units
      On April 13, 2012, the EPA initially proposed standards under CAA section 111 for newly constructed fossil fuel-fired electric utility steam generating utility steam generating units. 77 FR 22392 ("April 2012 proposal"). The EPA withdrew that proposal (79 FR 1352 (January 8, 2014)), and, on the same day, proposed the standards addressed in this final rule. 79 FR 1430("January 2014 proposal"). Specifically, the EPA proposed standards under CAA section 111 to limit emissions of CO2 from newly constructed fossil fuel-fired electric utility steam generating units and newly constructed natural gas-fired stationary combustion turbines.
      In support of the January 2014 proposal, on February 26, 2014, the EPA published a notice of data availability (NODA) (79 FR 10750). Through the NODA and the technical support document, Effect of EPAct05 on Best System of Emission Reduction for New Power Plants, the EPA solicited comment on its interpretation of the provisions in the Energy Policy Act of 2005 (EPAct05), including how the provisions may affect the rationale for the EPA's proposed determination that partial CCS is the best system of emission reduction adequately demonstrated for fossil fuel-fired electric utility steam generating units.
      On June 18, 2014, the EPA proposed standards of performance to limit emissions of CO2 from modified and reconstructed fossil fuel-fired electric utility steam generating units and natural gas-fired stationary combustion turbines (79 FR 34959; June 2014 proposal). Specifically, the EPA proposed standards of performance for: (1) modified fossil fuel-fired electric utility steam generating units, (2) modified natural gas-fired stationary combustion turbines, (3) reconstructed fossil fuel-fired electric utility steam generating units, and (4) reconstructed natural gas-fired stationary combustion turbines.
G. Stakeholder Engagement and Public Comments on the Proposals
1. Stakeholder Engagement
      The EPA has engaged extensively with a broad range of stakeholders and the general public regarding climate change, carbon pollution from power plants, and carbon pollution reduction opportunities. These stakeholders included industry and electric utility representatives, state and local officials, tribal officials, labor unions, non-governmental organizations and many others.
      In February and March 2011, early in the process of developing carbon pollution standards for new power plants, the EPA held five listening sessions to obtain information and input from key stakeholders and the public. Each of the five sessions had a particular target audience: the electric power industry, environmental and environmental justice organizations, states and tribes, coalition groups, and the petroleum refinery industry.
      The EPA conducted subsequent outreach prior to the June 2014 proposals of standards for modified and reconstructed EGUs and emission guidelines for existing EGUs, as well as during the public comment periods for the proposals. Although this stakeholder outreach was primarily framed around the GHG emission guidelines for existing EGUs, the outreach encompassed issues relevant to this rulemaking and provided an opportunity for the EPA to better understand previous state and stakeholder experience with reducing CO2 emissions in the power sector. In addition to 11 public listening sessions, the EPA held hundreds of meetings with individual stakeholder groups, and meetings that brought together a variety of stakeholders to discuss a wide range of issues related to the electricity sector and regulation of GHGs under the CAA. The agency met with electric utility associations and electricity grid operators. Agency officials engaged with labor unions and with leaders representing large and small industries, many of which have been utilities and industry representatives directly related to the electricity sector. The agency also met with energy industries such as coal and natural gas interests, as well as with representatives of energy intensive industries, such as the iron and steel and aluminum industries, to help understand the potential concerns of large industrial purchasers of electricity. In addition, the agency met with companies that offer new technology to prevent or reduce carbon pollution. The agency provided and encouraged multiple opportunities for engagement with state, local, tribal, and regional environmental and energy agencies. The EPA also met with representatives of environmental justice organizations, environmental groups, and religious organizations.
      The EPA received more than 2.5 million comments submitted in response to the original April 2012 proposal for newly constructed fossil fuel-fired EGUs. Because the original proposal was withdrawn, the EPA instructed commenters that wanted their comments on the April 2012 proposal to be considered in connection with the January 2014 proposal to submit new comments to the EPA or to re-submit their previous comments. We received more comments in response to the January 2014 proposal, as discussed in the section below.
      The EPA has given stakeholder input provided prior to the proposals, as well as during the public comment periods for each proposal, careful consideration during the development of this rulemaking and, as a result, it includes elements that are responsive to many stakeholder concerns and that enhance the rule. This preamble and the Response to Comments (RTC) document summarize and provide our responses to the comments received by the agency.
2. Comments on the January 2014 Proposal for Newly Constructed Fossil Fuel-fired EGUs
      Upon publication of the January 8, 2014 proposal for newly constructed fossil fuel-fired EGUs, the EPA offered a 60-day public comment period. On March 6, 2014, in order to provide the public additional time to submit comments and supporting information, the EPA extended the comment period by 60 days, to May 9, 2014, giving stakeholders over 120 days to review, and comment upon, the January 2014 proposal, as well as the NODA. A public hearing was held on February 6, 2014, with 159 speakers presenting testimony.
     The EPA received more than 2 million comments on the proposed standards for newly constructed fossil fuel-fired EGUs from a range of stakeholders that included industry and electric utility representatives, trade groups, equipment manufacturers, state and local government officials, academia, environmental organizations, and various interest groups. The agency received comments on a range of topics, including the determination that partial CCS was the BSER for newly constructed fossil fuel-fired steam generating EGUs, the level of the CO2 standard based on partial CCS, the criteria that defines which newly constructed natural gas-fired stationary combustion turbines will be subject to standards, the establishment of subcategories based on combustion turbine size, and the rule's potential effects on the Prevention of Significant Deterioration (PSD) preconstruction permit program and title V operating permit program.
3. Comments on the June 2014 Proposal for Modified and Reconstructed Fossil Fuel-fired EGUs
     Upon publication of the June 18, 2014 proposal for modified and reconstructed fossil fuel-fired EGUs, the EPA offered a 120-day public comment period -- through October 16, 2014. The EPA held public hearings in four locations during the week of July 28, 2014. These hearings also addressed EPA's June 18, 2014 proposed emission guidelines for existing fossil fuel-fired EGUs (reflecting the connections between the proposed standards for modified and reconstructed sources and the proposed emission guidelines). A total of 1,322 speakers testified, and a further 1,450 attended but did not speak. The speakers were provided the opportunity to present data, views or arguments concerning one or both proposed actions.
     The EPA received over 200 comments on the proposed standards for modified and reconstructed fossil fuel-fired EGUs from a range of stakeholders similar to those that submitted comments on the January 2014 proposal for newly constructed fossil fuel-fired EGUs (i.e., industry and electric utility representatives, trade groups, equipment manufacturers, state and local government officials, academia, environmental organizations, and various interest groups). The agency received comments on a range of topics, including the methodology for determining unit-specific CO2 standards for modified steam generating units and the use of supercritical boiler conditions as the basis for the CO2 standards for certain reconstructed steam generating units. Many of the comments regarding modified and reconstructed natural gas-fired stationary combustion turbines are similar to the comments regarding newly constructed combustion turbines described above (e.g., applicability criteria and subcategories based on turbine size).
III. Regulatory Authority, Affected Sources and Their Standards, and Legal Requirements
	In this section, we describe our authority to regulate CO2 from fossil fuel-fired EGUs. We also describe our decision to combine the two existing categories of affected EGUs  -  steam generators and combustion turbines -- into a single category of fossil fuel-fired EGUs for purposes of promulgating standards of performance for CO2 emissions. We also explain that we are codifying all of the requirements for all new and modified affected EGUs in new subpart TTTT of part 60 of Title 40 of the Code of Federal Regulations. In addition, we explain which sources are and are not affected by this rule, and the format of these standards. Finally, we describe the legal requirements for establishing these emission standards.
A. Authority to Regulate Carbon Dioxide from Fossil Fuel-fired EGUs
      The EPA's authority for this rule is CAA section 111(b)(1). CAA section 111(b)(1)(A) requires the Administrator to establish a list of source categories to be regulated under section 111.  A category of sources is to be included on the list "if in [the Administrator's] judgment it causes, or contributes significantly to, air pollution which may reasonably be anticipated to endanger public health and welfare." This determination is commonly referred to as an "endangerment finding" and that phrase encompasses both the "causes or contributes significantly" component and the "endanger public health and welfare" component of the determination. Then, for the source categories listed under section 111(b)(1)(A), the Administrator promulgates, under section 111(b)(1)(B), regulations "standards of performance for new sources within such category."
      In this rule, the EPA is establishing standards under section 111(b)(1)(B) for source categories that were previously listed and regulated for other pollutants and now are being regulated for an additional pollutant. Because of this, there are two aspects of section 111(b)(1) that warrant particular discussion.
      First, because the EPA is not listing a new source category in this rule, the EPA is not required to make a new endangerment finding with regard to affected EGUs in order to establish standards of performance for the CO2 emissions from those sources. Under the plain language of CAA section 111(b)(1)(A), an endangerment finding is required only to list a source category. Further, though the endangerment finding is based on determinations as to the health or welfare impacts of the pollution to which the source category's pollutants contribute, and as to the significance of the amount of such contribution, the statute is clear that the endangerment finding is made with respect to the source category; section 111(b)(1)(A) does not provide that an endangerment finding is made as to specific pollutants. This contrasts with other CAA provisions that do require the EPA to make endangerment findings for each particular pollutant that the EPA regulates under those provisions. E.g., CAA sections 202(a)(1), 211(c)(1), 231(a)(2)(A).
      Second, once a source category is listed, the CAA does not specify what pollutants should be the subject of standards from that source category. The statute, in section 111(b)(1)(B), simply directs the EPA to propose and then promulgate regulations "establishing Federal standards of performance for new sources within such category." In the absence of specific direction or enumerated criteria in the statute concerning what pollutants from a given source category should be the subject of standard, it is appropriate for EPA to exercise its authority to adopt a reasonable interpretation of this provision. Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837, 843-44 (1984).
      The EPA has previously interpreted this provision as granting it the discretion to determine which pollutants should be regulated. See Standards of Performance for Petroleum Refineries, 73 Fed. Reg. 35838, 35858 (col. 3)(June 24, 2008)(concluding the statute provides "the Administrator with significant flexibility in determining which pollutants are appropriate for regulation under section 111(b)(1)(B)" and citing cases). Further, in directing the Administrator to propose and promulgate regulations under section 111(b)(1)(B), Congress provided that the Administrator should take comment and then finalize the standards with such modifications "as he deems appropriate."  The D.C. Circuit has considered similar statutory phrasing from CAA section 231(a)(3) and concluded that "[t]his delegation of authority is both explicit and extraordinarily broad."  National Assoc. of Clean Air Agencies v. EPA, 489 F.3d 1221, 1229 (D.C. Cir. 2007).
      In exercising its discretion with respect to which pollutants are appropriate for regulation under section 111(b)(1)(B), the EPA has in the past provided a rational basis for its decisions. See National Lime Assoc. v. EPA, 627 F.2d 416, 426 & n.27 (D.C. Cir. 1980)(court discussed, but did not review, the EPA's reasons for not promulgating standards for NOX, SO2 and CO from lime plants"); Standards of Performance for Petroleum Refineries, 73 Fed. Reg. at 35859-60 (June 24, 2008)(providing reasons why the EPA was not promulgating GHG standards for petroleum refineries as part of that rule). Though these previous examples involved the EPA providing a rational basis for not setting standards for a given pollutant, a similar approach is appropriate where the EPA determines that it should set a standard for an additional pollutant for a source category that was previously listed and regulated for other pollutants.
      In this rulemaking, the EPA has a rational basis for concluding that emissions of CO2 from fossil-fired power plants, which are the major U.S. source of greenhouse gas air pollution, merits regulation under CAA section 111. As noted, in 2009, the EPA made a finding that GHG air pollution may reasonably be anticipated to endanger public health or welfare, and in 2010, the EPA denied petitions to reconsider that finding. The EPA extensively reviewed the available science concerning GHG pollution and its impacts in taking those actions. In 2012, the U.S. Court of Appeals for the D.C. Circuit upheld the finding and denial of petitions to reconsider. In addition, assessments from the NRC, the IPCC, and other organizations published after 2010 lend further credence to the validity of the Endangerment Finding. As discussed below, no information that commenters have presented or that the EPA has reviewed provides a basis for rescinding that finding. Indeed, current and evolving science discussed in detail in Section II.A of this preamble is confirming and enhancing our understanding of the near- and longer-term impacts emissions of CO2 are having on Earth's climate and the adverse public health, welfare, and economic consequences that are occurring and are projected to occur as a result.
      Moreover, the high level of GHG emissions from the fossil-fired EGUs makes clear that it is rational for the EPA to regulate GHG emissions from this sector. EGUs emit almost one-third of all U.S. GHGs and comprise by far the largest stationary source category of GHG emissions; indeed, as noted above, the CO2 emissions from fossil fuel-fired EGUs are almost three times as much as the emissions from the next ten source categories combined. Further, the CO2 emissions from even a single new coal-fired power plant may amount to millions of tons each year. These facts provide a rational basis for regulating CO2 emissions from affected EGUs.