Commenter 10086 states EPA contends that the proposal has no real impact because other generation options are and will remain at lower cost, but EPA cannot possibly know this and at either rate it is outside of the agency's regulatory discretion to define reasonable cost based on what other generation options may or may not be available now or in the future.
The commenter is correct that no entity can predict the future with absolute probability.  The commenter is incorrect in thereby stating that reasonable predictions cannot be made and actions taken predicated on those reasonable predictions.  The EPA has done so here.
Need to measure CO2 benefits separate from PM, SO2, and NOx
Commenter 10023 states EPA does not separately measure the benefits associated with the control of CO2 emissions that would purportedly result from this proposed rule. Instead, EPA estimates the combined benefits of reducing CO2, fine particulate matter, SO2, and NOx emissions. If the purpose of the rule is to address CO2 emissions from EGUs, EPA cannot properly mix in to its estimates the purported benefits of controls of other emissions. Commenter states that EPA needs to measure separately the benefits of purported CO2 emission reductions.
 The EPA disagrees with the commenter's statement that the Agency did not separately measure the benefits associated with various emission reductions. OMB guidance requires agencies to consider all of the impacts of regulations, including benefits of co-emitted pollutants. In the Regulatory Impact Analysis, the EPA separately estimates the human health and climate benefits of this regulation and then adds these together to estimate the total benefits of the regulation.  Moreover, the EPA notes that the determination that the costs of the rule are reasonable are based on the analysis in sections V.H. and I. of the preamble to the final rule.  However, the EPA has also found that if new coal capacity is added, there will be net quantified benefits under a range of assumptions, in the form of both CO2 reductions and reductions in emissions of criteria pollutants that will occur due to implementation of the standard.  See RIA chapter 5.  This may be another reason to find the standard to be adequately demonstrated considering costs.  The commenter's evident view that the standard of performance can only be justified, and that a system of emission reduction is "best" is limited exclusively to the pollutant being directly does not make sense.  Suppose technology A removed 100 units of CO2 and no other pollutants (or had a negative impact on other pollutants), and technology B removed 99 units of CO2 and significant amounts of other air pollutants as well. The commenter suggests EPA would have to ignore the impact of technology B on air pollutants other than CO2 in deciding which one is the "best" system of emission reduction.  This approach would not be consistent with the requirement that EPA must consider collateral impacts in determining which technology is "best" under section 111.  See Essex Chemical Corp., 486 F. 2d at 439; Portland Cement. 486 F. 2d at 386. Moreover, the EPA notes that SO2 is a criteria pollutant (and indeed, is already regulated under NSPS for this industry), so no issue is raised regarding considering benefits of control of a pollutant not otherwise within the scope of section 111 standards.
Commenter 8954 states that in addition to the ongoing impacts of regulation already promulgated by EPA, proceeding down a regulatory path which effectively prohibits the development of new coal generation risks U.S. energy reliability, affordability, security and diversity for no identified benefits. It puts at risk more than 800,000 coal related jobs as well as our business and manufacturing base. It inflicts the risk of rising electricity prices on all people and businesses, but most importantly on those who can least afford it such as the poor and those on fixed incomes. Commenter requests that EPA significantly revise it to address the concerns and shortcomings outlined above.
Commenter 2471 states they are concerned that USEPA's plan to reduce carbon from fossil-fuel fired EGUs will drive United States' (US) energy policy away from coal, even though some research shows total lifecycle carbon emissions from gas are nearly as high as or higher than coal.
Commenters 9734, 9382 states coal-fired power plants in the U.S. contribute only approximately 4% to global GHG emissions. The U.S. power fleet has already reduced CO2 emissions by 16% below 2005 levels, with CO2 from coal-fired power plants reduced by almost 25%. These reductions are a result of the utility sector's shift to natural gas generation. EPA should allow coal-fired power plants to continue to make these reductions in a reasonable manner and in response to market pressures, instead of by regulatory fiat. Furthermore, the regulations at issue will not have a meaningful impact on global climate change. The minimal impact that these regulations will have on the environment further underscores the need for all GHG regulations to be economically achievable.
The EPA's modeling, conducted using the Integrated Planning Model (IPM), as well as modeling conducted by the U.S. Energy Information Administration (EIA) showed that new generating capacity built through the period of analysis would be in compliance with the standard even in the baseline scenario. As a result, this regulation is not expected to impact the mix of generation sources in the period of analysis. Additionally, the regulation does not ban the construction of coal-fired generation, but instead requires that newly-constructed coal EGUs use modern technology. The Regulatory Impact Analysis for the rule includes several illustrative analyses, examining the costs of the rule under a range of natural gas prices and the cost associated with building a coal plant with CCS. (See Chapter 5 of the RIA.) This analysis found that, while there are additional costs to building a coal-fired power plant with CCS, there are also climate and human health benefits which exceed those costs under a range of assumptions, as well as potential for revenue from enhanced oil recovery.
GHG emissions will increase regardless
Commenter 10951 states as shown in the National Mining Association's comments, EPA is mistaken that no new coal-fueled generation stations will be built in the United States. But there is a more fundamental reason why EPA's anti-coal policies will not meaningfully address the global level of atmospheric GHGs that EPA says will be the cause of deleterious climate change. Other countries are dramatically increasing their use of coal, and this increased coal usage and indeed the fact that the developing world will continue to develop and will continue to increase its usage of coal no matter what policies the U.S. pursues internally is resulting in increasing GHG emissions globally that far outstrip any U.S. reductions that EPA believes it will cause.
As discussed in Response to Comments Section 3.2 and in the RIA Chapter 4, EPA's modeling, conducted using the Integrated Planning Model (IPM), as well as modeling conducted by the U.S. Energy Information Administration (EIA) showed that new generating capacity built through the period of analysis would be in compliance with the standard even in the baseline scenario and, as a result, the rule would not lead to changes in behavior. This finding held true even under a number of alternative scenarios. As a result, the EPA projected there would be negligible costs, benefits, energy impacts (including changes to electricity prices), employment impacts, or economic impacts associated with the rule in the period of analysis. (See Chapter 4 of the RIA.) Based on these conclusions, we would not expect business relocation, impacts to manufacturing, or the transfer of industrial activity to other countries.

Furthermore, all countries contribute to climate change, and no one nation can stop it alone.  All nations that are significant emitters of greenhouse gases will need to take the steps necessary to reduce their emissions in the near and long term. We have an obligation to ensure that the world we leave behind for our children and our grandchildren is healthier and safer. This rulemaking further establishes the United States as a leader in international efforts to secure an ambitious and lasting climate agreement in 2015 that will include significant contributions from all major economies. Already, U.S. action has helped spur announcements from China and Brazil to limit their own greenhouse gas emissions, building momentum for broader global commitments later this year in Paris.  Moreover, as a sign that requirements to use CCS will spur further use, including internationally,   representatives from more than 30 countries have visited Boundary Dam #3, and SaskPower official Mike Monea was quoted in the Financial Times article as saying that a Chinese delegation visits BD3 "every two or three weeks." Mr. Monea stated "China is just gathering information right now. When it moves, it will be significant. I think that's where the next projects of size and number will be happening." POWER magazine, August 1, 2015 (available in the docket for this rulemaking).

This is not to say that foreign policy considerations are driving EPA's determination as to what BSER adequately demonstrated is here.  That determination rests exclusively on the decision factors in section 111 (a).  Nonetheless, the commenters' statements that U.S. rules addressing GHG emissions have no benefits due to the global scope of the issue are unfounded.
EPA's discretionary authority - petroleum refining precedent
Commenter 10662 states nothing compels EPA to propose these regulations at all and, if anything, the lack of a persuasive legal basis and adequate factual support for this proposed rule compel EPA not to promulgate the rule. In a recent decision not to adopt GHG NSPS for petroleum refineries, EPA concluded definitively that it has wide discretion in deciding whether to establish standards for a new pollutant when conducting the periodic review of existing NSPS.
The agency also has wide discretion to choose when to regulate.  The industry sector at issue here is the largest domestic source of CO2 (and CO2e) emissions, by a huge margin.  It is reasonable, therefore, to deal with the issue of control of GHG emissions which contribute to the endangerment resulting from emissions of the air pollutant GHGs by addressing the emissions from the largest contributors.  The EPA has done so by controlling vehicular GHG emissions from light duty vehicles and heavy duty vehicles and engines, and by issuing the standard of performance in this rulemaking.  There is no question that the EPA has legal authority to issue NSPS to control CO2 emissions from new fossil-fuel fired electricity generating units.  The Supreme Court indeed held so specifically in American Electric Power, relying on that authority to reject a claim under federal common law.

Natural Gas Price Assumptions
Multiple questions
Commenter 9686 calls for an open analysis of the effects on natural gas price of: the post 2015 demand for LNG exports, the influence of a natural gas cartel comprised of Russia, Qatar and Iran, the impact on natural gas supply from shale formations, especially the Marcellus, because of the growing bans on hydraulic fracturing, and the impact on the cost structure of natural gas production because of potential new regulations on methane emissions from the gas wellhead to the power plant.
EPA disagrees with this comment.  The IPM modeling for this rule took account of expected demand for LNG, and DOE has found that impacts of LNG on gas demand and prices are minimal.  Our IPM modeling also takes into account existing bans on development of shale resources. Impact analysis considers regulations currently on the books. Other factors identified in this comment are too speculative to realistically consider in the impact analysis.
Commenter 10092, 8974, 10951, 7433, 9407, 9772, 9590, 10024 state historically, it is important to note that fuel prices can be volatile and the US has seen dramatic shifts in the preferred fuel for energy based on the price of different types of fuels. Thus, it is difficult to forecast what type of fuel will be preferred for energy purposes. Commenter 9396, 10665 stated EPA also has not taken into account the potential impact of natural gas exports on pricing, particularly given far higher world natural gas prices compared with continental prices. Commenter 10097, 10665 stated that the price and availability of natural gas are too speculative to make it the only practical choice for new baseload generation.  Commenter added that EPA relies on natural gas pricing forecasts provided by the Energy Information Agency (EIA) of the Department of Energy (DOE), and the EIA has consistently failed to accurately predict natural gas prices, including during the period of significant price volatility from 2000-2008, even as the price spikes were occurring. More recently, regional costs of natural gas have fluctuated in increasingly volatile swings as a nexus of pipeline capacity constraints, volatile weather events, increased residential and commercial demand and electric sector demand has pushed prices higher. Commenter explains that electric utilities take a long term view of investments and plan for cost fluctuations in natural gas pricing. Citing EIA charts, commenter states that assuming that natural gas prices will be low and remain low is not a certainty.  Commenter continues that utilities build plants for diversification reasons not only to mitigate price fluctuations but also to assure reliability. Deliverability of energy at a reasonable price is a critical component of utility planning. Utility generating units are capital-intensive projects that are undertaken with expectations that the plants will have useful lives of 40-50 years. Utilities do not plan such long-term investments on short-term price projections for one fuel. Basing the standard on the short term natural gas price does not meet the evaluation criteria for determining BSER. Forcing dependence on one fuel in large parts of the country is a prescription for not only higher and more volatile natural gas and electric prices but threatens electricity supply shortages and potential rolling blackouts. Commenter endorses the extensive comments submitted by the American Public Power Association (APPA) on the multiple failures of EPA to fully examine these critical aspects of natural gas availability and prices.

Commenter 10618 states while EIA has examined the role that higher electricity sales and lower yields from shale gas could have on new capacity decisions, other factors could have even more dramatic impacts on natural gas pricing and new build economics such as a move to gas liquefaction. Export within either the U.S. or Canada has the potential to drive up domestic natural gas prices to levels seen internationally, which can be three to four times higher than current domestic prices. Commenter states that EPA's IPM model does not take into account the development of these facilities, even though announced facilities and current market conditions suggest they will be developed. Additionally, a drop in world oil prices could slow down oil and natural gas liquids production activities, reducing the supply of associated gas and increasing the price of natural gas.

Commenter 6870 provides two figures that indicate some of the riskiness of depending upon natural gas prices for policy: 1)  reference forecasts (the baseline forecasts) for the Annual Energy Outlooks for 2010 through 2013 along with the actual natural gas price for the year (noting that over  time, the forecasts fan out from the actual data. 2) a comparison of  the forecasts for 2010 through 2014 for the period 2013 to 2035, displaying significant variability in the forecasts which points to the riskiness of depending upon natural gas pricing and production as a basis for a policy change that will have a dramatic effect on a key sector of the economy- electric utilities. Comments states that EPA's forecast assumes the price of coal increases even though the demand for coal declines. The argument is that as more coal is mined, the cost of mining the coal will increase. Because of the increased use of Western United States coal, this has not been the case so far. Citing EIA and its AEO 2014, commenter states it is hard to see why future coal prices are expected to increase as much as EPA and EIA have forecasted.

Commenter 9401 states EPA's assumption of no new coal units is a very short-term assessment of the cost of constructing coal-fired generation versus natural gas. Commenter points out that electric generators or industrial consumers make capital investments decisions based on a minimum of 30 years or more time horizons, and natural gas prices will rise over that time frame and coal will be a competitive energy source for power generation. Commenter 9401 notes that demand for natural gas is surging and prices are forecasted to significantly increase. Commenter notes that the American Coalition for Clean Coal Electricity's (ACCCE) cost analysis indicates that new coal plants without CCS can be economic in many regions of the country if the price of natural gas is in the range of $7 per mmBtu or higher.

Commenter 10929 states it is presumptuous that natural gas based generation will be the predominate technology deployed over the next several years based on  natural gas fuel pricing and EPA should avoid attempting to impose a single performance standard on all new units that was drawn from assumptions applicable for a single technology, such as natural gas combined cycle units.

Commenter 8971 states the price of natural gas could continue to move significantly upward despite expectations to the contrary, just as it has fluctuated downward despite expectations to the contrary in the past. Because of this, USEPA's price impact estimate is flawed and does not to adequately account the impact the CO2 NSPS rulemaking may have on electricity prices.

Multiple comments were received describing the volatility of natural gas prices and expressing concerns about the price EPA assumed in its analysis (9033, 10050, 9034, 2471, 2471, 9426, 9592, 10023, 9770, 9201, 10017, 10048, 10048, 10952, 10952, 9666, 9666, 9593). Commenter 9033 states it should be noted that while natural gas is currently low in price and abundant (and projected by EIA to remain so), dependence on gas this winter has driven consumers price spikes with electricity reaching $7,000 per MWh due to infrastructure constraints on gas fuel supplies and that this figure is sharply different than EPA's expected $70 per MWHr. Commenter 10050 states that natural gas prices have more than doubled since their low of $1.82/ MMBtu in April of 2012, and this past winter, natural gas prices in some regions reached record highs with mid-points around $40/MMBtu and bids as high as $100/MMBtu, making EPA's analysis and assumptions for electricity and natural gas pricing are inadequate and unrealistic. Commenter 9593 states that prices reached over $10/mmBtu for a short time only a few years ago.  Winter of 2014 natural gas price spikes were cited by multiple commenters (9034, 9770, 10048, 10048, 10952). Commenters 10048, 10048 state that from January 8, 2014, to March 4, 2014, the price of natural gas increased by 78% nationally.   Commenter 9426 states it is incumbent upon the EPA to investigate the costs, impacts, and implications of the rule in the plausible future world where gas will not be nearly as inexpensive as the EPA currently predicts.  Commenter 9592 provided a natural gas price history graphic below, displaying gas price variability over 20 years, which is about half of the normal 40 year plus operating life of a typical EGU. Commenter adds that new electric generating units must consider fuel availability and cost projections for the 40-50-yr life of the unit.

Commenter 9201 provides additional cost information of natural gas prices throughout the country and how analysts project the cost trends.  Commenter 10017 states that the cost of the natural gas is sensitive to short-term phenomena and provides the example that, in the near future, many coal-fired units will be retired as a direct result of the CSAPR and MATS rules. Commenter notes that Ohio alone has 27 emitting units that are scheduled for retirement on or before 2015. At least some portion of the generating capacity of these units will need to be replaced by NGCC units, and the commenter predicts the demand for natural gas will increase rapidly in a very short time period as these new units go online. Likely, the costs of natural gas will increase with increased demand. The commenter believes rules such as the proposed NSPS, should not be based on predicted future costs of any commodity, especially those of fuels which have historically volatile markets. Commenter 10952 states that the price volatility and widespread availability of natural gas are too speculative to make it the only practical choice for new baseload generation. Commenter 9666 states that although the Agency acknowledges that gas prices have been highly volatile in recent decades (RIA at 4-31), EPA does not consider the possibility of significant increases in prices.

Commenter 3176 states by constraining the fuel options available to electric suppliers, the proposed rule imposes an unnecessary cost risk by forcing electric suppliers to rely predominantly on natural gas as the fuel choice for new generation resources, adding that this risk is particularly acute given the historic price volatility of natural gas.

Commenter 9725 states natural gas prices have more than doubled since their low of $1.82 mm/BTU in April of 2012. This past winter, natural gas prices in some regions reached record highs with mid-points around $40 mm/BTU and bids as high as $100 mm/BTU. Daily average power pricing followed swinging wildly from $40 to $800 MWh. In this regard, commenter believes EPA's analysis and assumptions for electricity and natural gas pricing are inadequate and unrealistic.

Commenter 9657 states this regulation favors electricity generated from natural gas, a fuel with a well-known volatile price and supply history. Commenter remarks that recent production increases related to the proliferation of fracking technology have emboldened a dramatic increase in the share of natural gas in the electricity market. Without any additional regulatory impetus, the Energy Information Administration anticipates that natural gas will grow to over 35 percent of the electricity supply by 2040; just last year, the same projection estimated that natural gas would supply 30 percent of the electricity supply by 2040.  Commenter cautions about the dangers of over reliance on natural gas for electricity generation, citing natural gas spot prices in New England this past winter. Prices reached a record high of nearly $34 per million British thermal units in February 2014, pushing up delivered electricity and home heating prices. This spike led the Federal Energy Regulatory Commission to waive an established cap of $1,000 per megawatt hour for generators.  Commenter contends that an overly stringent regulation for coal-fired power would build a permanent preference to consistently favor natural gas fired power, and this risks dramatically increasing costs and endangers the reliability of our electricity grid when the price of natural gas inevitably experiences perturbations.  Commenter closes, suggesting that EPA exercise restraint in finalizing this regulation.

Commenter 10097 states they are greatly concerned that future power markets will be so heavily dependent upon natural gas that periodic price volatility will impose significant economic hardships on a demographic already under financial stress.

Commenter 9486 states the change in demand for natural gas in recent years has resulted in a significant price increase over the most recent two months, and this troubling trend could continue forward. Commenter explains that if increased regulatory oversight and slower expansion of the natural gas market occurs, coal will likely become more economical again. However, with implementation of this rule, the cost of natural gas, as well as other fuel sources, would have to rise significantly to add coal as a possible fuel source. If this would occur, it would drive up electricity rates and decrease reliability due to the enormous costs associated with building any future coal-fired power plants.

Commenter 9486 states as the cost of electricity increases, public consumers and businesses small enough to currently be unregulated by the provisions of the Clean Air Act, will stop using electricity to heat water, homes, and businesses. In the Midwest, these people typically substitute the cheapest available fuel (typically coal or wood) and use it in facilities with no or limited emission controls. Commenter asks that EPA develop NSPS standards for residential and commercial sized coal and wood burning furnaces, heaters and water heaters to help maintain local air quality when people switch fuels. Otherwise, a net benefit cannot be assumed for this regulatory action.

Commenters 9197 and 9600 state they remain concerned that over-reliance on natural gas as a fuel source for our electric system could be harmful for the U.S. economy and energy security in the long term due to historically volatile prices.

Commenter 9497 requests that EPA commit to review the rule within four years of promulgation. The Commission is wary of the dangers of becoming reliant on natural gas given the potential for future price volatility.

Commenter 1959 states currently, a new NGCC plant is less expensive on a life cycle cost of electricity basis than a new coal plant. The current breakeven point for new coal vs. new gas is when natural gas costs rise above about $6 per MMBTU. If CO2 capture is required for new coal units, then the breakeven point will be when the natural gas cost exceeds $12 per MMBTU - hardly a hedge against volatile gas price swings.

Commenter 9423 states in the 2000 Annual Energy Outlook report, the Energy Information Administration (EIA) failed to predict the significant spikes and swings in the price of natural gas that occurred between 2000 and 2009. EPA's own regulations on natural gas production, such as the oil and natural gas NSPS and revisions to the National Emission Standards for Hazardous Air Pollutants (NESHAP) rules for oil and natural gas sectors, which were finalized at approximately the same time, April 2012, will increase costs for natural gas producers and thereby increase the cost of natural gas. Similarly, this proposed NSPS rule on CO2 emissions from electric utilities may affect the cost of natural gas by forcing a reduction in demand in other fuels such as coal. The possibility of increased exports of liquefied natural gas may also exert pressure on domestic natural gas supplies, and thus affect the cost and availability of natural gas for power generation. Finally, the price of natural gas is only one factor that power companies consider when evaluating options for new generation.

Commenter 9772 states Montana Governor Steve Bullock identified the importance of coal and coal-fired electricity generation to our state in a December 18, 2013 letter to EPA Administrator Gina McCarthy, and advised caution about issuing regulations dependent on low natural gas prices that won't last forever.
Commenter 9666 remarks EPA concludes "[i]t is only when natural gas prices exceed $10/MMBtu on a levelized basis (in 2011 dollars) that new coal-fired generation without CCS approaches parity with NGCC in terms of LCOE." Commenter continues that the Agency further determines that "[a]t natural gas prices above $10.94/MMBtu, the private levelized cost of electricity for a representative new [supercritical PC] unit falls below that of a new NGCC unit." The commenter states that EPA did not run any sensitivity analyses with natural gas prices approaching this price level, and that the highest projected gas price EPA examined was $6.64/MMBtu.
EPA disagrees.  Volatility is generally defined as short term, but planning for new capacity is based on expected returns for a longer period.     Although there is greater historical variation in fuel prices for natural gas than for coal, both fuels are subject to variation in the long term (See, "Trends in structure of Electric Power Sector Limiting Amount of New Coal" Section B.4 and Figures 7 and 8 in the docket for this rule.).  Moreover, long term contracting and price hedging over shorter periods provide well developed mechanisms to manage risk in natural gas markets.  Also, as new combined cycle gas units operate more in a baseload capacity, they are better able to support the long term contracting process because they can expect to have a steady stream of revenue to support the regular payments under such contracts.  This increased ability to support the longer term revenue stream also means that operators of NGCC facilities will provide greater support for the use of firm natural gas contracts.  These firm contracts will, in turn, support increased pipeline capacity to ensure the a reliable supply of gas where needed to forestall a recurrence of the "Polar Vortex" like winter emergency periods where natural gas and electricity peak demands intersect.  The combination of firm contracts and risk management through market mechanisms will provide the needed basis for managing natural gas pricing and delivery.  For these reasons, EPA believes the rule will aid in easing industry concerns of both natural gas price fluctuations and supply concerns.
Commenter 9514 addresses whether fuel diversity is needed with increasing demand (and price volatility) for natural gas. Commenter 9514 supports EPA's statement that while EIA and IEA project that modest increases in the price of natural gas may occur in the coming years as a result of increasing demand for this fuel, coal-fired power generation will continue to face stiff competition from existing natural gas plants for the provision of baseload power, and will also continue to be uncompetitive as a new source of generation. Commenter 9514 also states that market projections and utility sector analyses also suggest that the baseload shift from coal to natural gas generation in the existing EGU fleet will continue, regardless of whether there are small to moderate natural gas price changes and cites a recent study of the cost impacts of the Mercury and Air Toxics Standards (MATS), the Clean Air Interstate Rule (CAIR), and other regulations found that the implementation of these rules will make the operating costs of natural gas plants cost-competitive with most coal plants - at least up to a natural gas price-to-coal price ratio of 4.3, and even before the implementation of EPA's forthcoming standards for CO2 emissions from existing fossil-fired EGUs, stating that the ratio stood at just 1.8 in 2013, and EIA projects that it will remain at 2.4 or less through 2035. The same commenter concludes that the collective impact of market forces and current and future CAA regulations designed to protect public health are expected to reinforce the competitiveness of CCGT vis-a-vis coal as a source of baseload power. The commenter also concludes that new conventional coal-fired generation will be neither needed nor economically viable over the foreseeable future, regardless of the proposed NSPS and that the existing coal-fired generating fleet is expected to continue to face significant competitive pressure from gas-fired EGUs which are currently a competitive source of baseload power and will likely remain so over the coming decades, as well as from increasingly cost-competitive renewable resources and energy efficiency opportunities.
Thank you for your comments.
Commenters 8501, 10095, 9666 addressed the role of shale gas supply and hydraulic fracturing. Commenter 9426 states that while hydraulic fracturing, the method used to extract shale gas, is not currently subject to significant regulatory burdens, it is reasonably foreseeable that if and when shale gas is regulated, it could have a meaningful impact on the price of natural gas, adding there is no indication that the EPA considered the potential effect of significant shale gas regulation on natural gas prices.   Commenter 8501 states that EPA's statement that the supply of natural gas will increase from new exploration and extraction of shale gas ignores expert opinions about the costs and supplies of natural gas from shale, stating that gas prices are more likely to rise than remain at current levels. Commenter  10095 states  there are uncertainties surrounding: (1) the amount of recoverable reserves in unconventional reservoirs, (2) natural gas extraction techniques, (3) the pace and degree of natural gas exports, and (4) increased demand for natural gas from other sectors of the economy. Yet, commenter adds increased regulation of the natural gas sector, including the primary tool for extraction, hydraulic fracturing, is already occurring, and there is no doubt that it will have some impact on the cost and availability of natural gas in the future. Commenter adds it is unclear if EPA has considered the impact of evolving state- and local-level regulation such as fracking bans and moratoria on natural gas prices in the proposed rule. Commenter 9666 states none of the scenarios EPA assessed includes a future where shale gas extraction is regulated, stating the EPA does not account for this likelihood of regulation and for the gas price uncertainty that will accompany this regulation. Commenter adds it is not clear that EPA accounted for substantial future increases in electricity sector demand for gas, significant increases in demand for gas as a raw material in the manufacturing sector, or a possible substantial increase in natural gas exports.
Commenter 9486 states by limiting focus to direct emissions of CO2 at the electrical generating unit, the proposed rule fails to consider the lifecycle greenhouse gas emissions associated with alternative technology.
Commenter 9497 states shale gas production has driven natural gas prices in recent years, and shale gas has influenced the EIA's price, but there are substantial uncertainties about future shale gas production and prices.
The EPA has used EIA projected natural gas prices in analyses supporting development of the finals standards and believes them to be the best information available. See other responses to other comment regarding the EIA cost projections and uncertainties associated with future natural gas prices.
Commenters 9678 stated that EPA used up-to-date data on domestic natural gas supply data, noting in the RIA for this re-proposal, EPA reasserts EIA's projections for natural gas availability and updates its assumptions to reflect EIA's Annual Energy Outlook (AEO) 2013. Commenter 9678 agrees with EPA's use of up-to-date assessments in both the 2012 and 2013 GHG NSPS proposals and asks that EPA continue to use up-to-date assessments of natural gas supply and availability in future regulatory actions, including any rules addressing interstate transport of air pollution.
In the final RIA, EPA used data from AEO 2013 and 2014 and used NETL cost data from 2015.
Commenters 9678, 10952 stated that natural gas pipelines are not available in all regions of the U.S. and natural gas may not be available as a fuel for many EGUs. Commenter adds 10952 in many rural areas where electric cooperative baseload facilities are located natural, gas supplies are either significantly limited or nor available at all shows electric cooperative rural service areas where natural gas supply via pipeline is hundreds of miles away from where additional electric generation may be required.
Commenters 9396 and 10665 stated EPA did not take into account the costs of building out the required additional natural gas infrastructure necessary to supply the natural gas needed for new generation.
 EPA disagrees with these conclusions.  This rule will not impact the ability of existing sources to continue to meet generating requirements.  First, EPA notes that a electricity customer does not need to be connected to a natural gas pipeline to receive power from natural gas generation.  In addition, natural gas infrastructure issues are entirely manageable under this rule, where needed.  Natural gas pipeline capacity has historically expanded to meet the needs of new natural gas generation capacity, and the same developments will happen in the future, and the RIA demonstrates that future demand increases are within historical ranges.  This is particularly true where additional capacity will be required to meet the requirements of generation is already connected to the pipeline system, or areas where natural gas is already connected.  It is also true for areas not yet connected to the natural gas pipeline system.  Thus, the normal expansion process will address most cases where additional infrastructure is needed for continued reliable operation and new sources of fuel are added.  In the near term, there should be few additional infrastructure needs, as this rule does not affect the continued operation of any existing sources.  In the longer term, as the generating fleet turns over, much of the existing fossil generating will remain and continue to be diverse, while the normal infrastructure development noted above can accommodate much of the new demand, and electricity transmission can be expanded to deliver natural gas powered electricity to new customers.  Moreover, much of the new demand need not be met by natural gas, but by various forms of new renewable energy.

Economic Impact Assessment Required by Section 317
Commenter 9678 states that natural gas has increased the fuel diversity of the electric grid. Per the EIA the grid has become more diverse with growth of renewable generation resulting from public policy mandates and incentives and natural gas generation resulting from stable affordable natural gas prices in the wake of the shale gas revolution. They add the flexibility that natural gas provides makes natural gas the fuel of choice under energy and environmental policies that aim to ensure emission reductions while minimizing adverse economic impact.
Thank you for your comment.
Several commenters (9666, 10098, 10239) stated that the proposed rule does not contain the economic impact assessment required by CAA section 317.
Commenter 9666 states the RIA does not satisfy the section 317 requirements that EPA analyze: (i) how the estimated costs of compliance would vary depending on the effective date of the standard; (ii) how the estimated costs of compliance would vary with the development of less expensive, more efficient measures of compliance with the standard; (iii) the potential inflationary or recessionary impacts of the rule; (iv) the effects of the rule on consumer costs; and (v) the effects of the rule on energy use (See id. section 317(c)(1), (2), (4), (5)), and  as a result, the Agency has not fully examined the important implications of its proposed standards for the nation's economy. The commenter adds that because the economy relies on the energy sector for a reliable, affordable supply of electricity, any effect of this rule on the utility industry will be tied to impacts on the economy, and, for that reason, it is important that EPA's proposed rule contain the required economic impact assessment.  Further, the commenter states that an economic impact assessment should include an explanation of how that assessment informed its proposed action, and EPA cannot address the economic factors contemplated in section 317 in its final rulemaking. Instead, EPA must withdraw this proposed rule and, if it wishes to proceed, publish a new notice of proposed rulemaking containing the mandatory economic analysis. Not doing so could subject EPA to citizen suits seeking to enforce the Agency's nondiscretionary duty to conduct an economic impact assessment, and EPA could be subject to penalties for contempt of court if it violates a subsequent order compelling it to do so. (CAA Section 317(f)).  Another commenter (10098) states that EPA cannot ignore the requirement to conduct a complete cost benefit analysis by asserting that the rule will have no costs or benefits. Moreover, they add that EPA incorrectly asserts that no new coal-fired capacity will be constructed in the absence of this rulemaking. The final commenter (10239) states that EPA's analysis is deficient and underestimates the likely consequences of the EPA's proposal and violates the Clean Air Act. They state that Section 317 of the Act requires an economic impact analysis for "any new source standard of performance under section [111] of this title." The EPA does not mention Section 317 in the proposed rule or RIA. The economic impact analysis must be "as extensive as practicable," and the EPA's treatment of economic impacts does not account for the short- and long-term impacts. Likewise, under Executive Order 13563, the EPA must "take into account the benefits and costs, both quantitative and qualitative," and "propose or adopt a regulation only upon a reasoned determination that its benefits justify its costs..." The proposed rule will have a direct effect on the development of new coal-fired EGUs. An economic impact analysis compliant with CAA Section 317 and Executive Order 13563 would rebut the EPA's "no cost" conclusion and demonstrate the arbitrariness of the EPA's analysis.
Commenter 10098 states the cost-benefit analysis violates existing requirements, offering for example Section 317 of the Clean Air Act, entitled "Economic Impact Analysis." Commenter states the very first-listed category of rulemaking to which this section applies is "any new source standard of performance under section [111] of this title." CAA section 317(a)(1) yet nowhere in the  proposed rule does EPA reference this section of the Act. Nor is it mentioned in the RIA. Section 317 requires EPA to prepare an economic impact assessment that takes the following into account: the cost of compliance with the new standard, including based on the effective date of the standard; the potential inflationary or recessionary effects of the standard; the effects of the standard on competition with respect to small businesses; the effect of the standard on consumer costs; and the effect of the standard on energy use. The analysis is required to be "as extensive as practicable." While EPA has superficially treated some of these topics in the proposed rule and RIA, its analysis is insufficient because it fails to account for the impact of the de facto ban on coal both in the long and short terms. As explained above, new coal-fired EGU capacity will remain a viable economic option in the absence of this proposed rule and the proposed rule will thus result in a de facto ban on new coal-fired capacity. This fundamentally rebuts EPA's "zero cost' conclusion and demonstrates the arbitrariness of EPA's analysis.
Commenter 10051 states they recommends that EPA conduct a more in-depth cost benefit analysis regarding CCS implementation and that this additional cost-benefit analysis should assess the increased cost of electricity that utilities will pass on to consumers as a result of the requirement for partial CCS.
The EPA did consider the costs and benefits of the proposed rule, as required by Section 317 of the Clean Air Act, as well as by Executive Orders 12866 and 13563. This analysis is presented in the Regulatory Impact Analysis for the regulation. The analysis with respect to the proposed standard is found in the draft RIA, which was part of the record for the proposed rule.  See CAA section 317 (b).  This analysis also satisfies the economic assessment called for under section 317 of the Clean Air Act and is, for purposes of section 317(d), in the EPA's judgment, as extensive as practicable taking into account the agency's time, resources, and other duties and authorities.  This analysis is presented in the Regulatory Impact Analysis for the regulation (and, for purposes of CAA section 317 (b), was prepared in proposed form before publication of the proposed rule). The agency's analysis includes discussion of effects on energy use (see preamble section V.O.3 and sources there cited; 79 FR at 1480 and chapter 5 of the draft RIA).  The "effective date of the standard" (section 317(c) (2)) has no effect on the rule's costs, since the trigger date for new source status is the date of proposal.  In addition, the EPA has taken action to assure that sources under development are not subject to the final standard of performance.  See preamble section III.J.  The EPA also structured the proposed and final standard to avoid more costly alternatives, but rejected the 'business as usual' option as not reasonably fulfilling the requirement of section 111 (a) to base standards on the performance of the best system of emission reduction adequately demonstrated.  See 79 FR 1468-69; preamble section V.P.  The agency also noted the many opportunities (EOR and other by-product sales) as a further means of reducing regulatory costs.  79 FR at 1479; preamble section V.H.6.  Energy use and effect on consumer costs was likely addressed at proposal, and in the final determination.  79 FR 1480; preamble section V.O.3.

Commenters criticize this analysis as insufficiently robust because it showed (and continues to show) that the rule will have limited impact because new non-compliant coal capacity will not be built for reasons unrelated to the standards, chiefly well-documented price advantages NGCC has over coal.  The analysis shows that this price advantage will continue into the foreseeable future, and will continue even if natural gas prices rise (as the analysis predicts they will).  See RIA chapter 4.  Reasonable predictions from recognized sources, used government-wide, form the basis of this analysis.  See draft RIA chapter 5; RIA chapter 4.  With respect, it appears the commenters' chief criticism is the result of the analysis rather than the methodology.  The EPA continues to believe the regulatory analysis is sound and robust.

Finally, commenters chastise the EPA for not explicitly stating that the proposed RIA was also applicable to section 317 obligations.  The analysis fully satisfies the substance of the requirements of section 317, and that is what is important.  Cf. CAA section 307 (d)(8) ("[i]n reviewing alleged procedural errors, the court may invalidate the rule only if the errors were so serious and related to matters of such central relevance to the rule that there is a substantial likelihood that the rule would have been significantly changed if such errors had not been made").  Nor does section 317 require that analysis satisfying section 317 be labelled as such.
Renewables
Commenter 8971 states USEPA argues that increases in the supply of renewable energy will obviate the need for additional coal-fired generation. Commenter states that this is incorrect, noting first, EIA estimates that in 2040 renewable generation (including hydroelectric power) will make up less than 17% of U.S. electricity generation. This is obviously not a large enough share to crowd out coal-fired generation. Second, commenter states, intermittent generating technologies like wind solar, and other renewable sources is not a replacement for dispatchable sources like coal or natural gas that can provide power at all times regardless of weather conditions.
The EPA agrees that the relevant comparison is between baseload dispatchable technologies.  This is why a key cost comparison is between coal and nuclear.  See preamble section V.H.5.

Proposed Rule's Effect on Reliability and Affordability of Electricity
The proposed rule will impact reliability and affordability
Commenters (0585, 2471, 5604, 9731, 8974, 10967, 10239, 10396, 9723, 10387, 7533, 9471) state that the proposed rule will negatively impact reliability and affordability.
Commenter 0585 states, these rules have the potential to push energy costs up across the United States, thus forcing citizens and businesses to pay much more for energy in this country. Commenter says, all sectors of business will be impacted negatively as energy costs rise. Commenter urges the EPA to consider these factors as you move forward with the process of creating regulations.
Commenter 2471 states, the EPA's proposal will significantly drive up energy costs at a time when we are working our way out of the longest recession in US history, with negligible impact on global carbon emissions. Commenter says, any US GHG reduction plan must include a fuel-mix that is practical, reliable and reasonable in cost, and the plan must have a realistic timeframe to comply, along with consideration of the actual global impact from any US CO2 reductions.
Commenter 5604 states, the proposed regulation of CO2 and other greenhouse gases has the potential to impact electric grid reliability, damage our national and local economies and significantly increase electric rates. Commenter says, the proposed EPA regulation of CO2 will have a significant impact on the long-term reliability and affordability of electricity for our residents. Commenter asks for the EPA's consideration in this important matter and urges the continuance of reliable and affordable electricity.
Commenter 9731 states, that EPA should contemplate the long-term impacts of its regulation on the need for affordable power generation.
Commenter 8974 states, EPA needs to be careful in crafting regulations that force utilities to rely almost entirely on one fuel and assuming that there would be no additional costs to the consumer.
Commenter 10967 states, the proposed rule will dramatically inhibit companies from investing in the construction of new low-cost, high efficiency coal-fired power plants that would result in lower energy costs for residents and businesses. Commenter says, the new regulations will effectively ban new plants from being built and prevent states from generating more electricity with less fuel and fewer emissions. Commenter says, opportunities to provide economic stimulus and benefits from future energy efficiency projects and enhanced coal technologies will be lost. Commenter says, alternative approaches should be considered that will not harm the economy or endanger the affordable electricity supply of states.
Commenter 10239 states, there are significant concerns regarding EPA's regulation because of the potential impact it will have on energy prices and reliability and because of the potential precedent-setting nature of the approach on manufacturing sectors in the future. Commenter says, there are also concerns that the proposed rule will apply directly to future projects including cogeneration plants. Commenter says, EPA should withdraw this proposal and engage in a process with all interested stakeholders as to whether and how EPA should approach GHG regulation.
Commenter 10396 states, the proposal creates uncertainty for utilities making long-term investment decisions. Commenter says, once the NSPS has been established, the Administrator is required to review and revise the standard every eight years. Commenter says, EPA could tighten its standard in eight years requiring full carbon capture and sequestration for coal units and partial or full carbon capture for natural gas units. Commenter says, the current proposal is unreasonable and additional restrictions could be added in eight years which will jeopardize electrical reliability.
Commenter 9723 states, EPA should revise the emission limits for new units to address compliance concerns. Commenter says, if new EGUs are limited to high load operation through the very low emissions limits set in the proposal, regional transmission organizations may have to dispatch more fossil-fired electric generation resources than needed to assist in balancing the transmission system. Commenter says, applying too stringent of a CO2 emission limit to new EGUs could result in increasing emissions by creating inefficiencies in transmission grid management, requiring more than the necessary generation to be brought online to manage grid stability.
Commenter 10387 states, that it is necessary to have an adequate opportunity to plan, study and build the right generation options to keep electric service reliable, affordable, and sustainable. Commenter says, if decisions are made more difficult by regulatory uncertainty, then there will be a risk of being subjected to rising market prices or not having sufficient generation to meet demand.
 Commenter 7533 states, if EPA imposes regulations which require compliance that is not technically possible to meet or economically feasible then the nation could experience a large price increase for electric power and harm the economy. Commenter says, coal continues to provide a low cost energy solution for power plants and that customers have heavily invested in protecting the environment and will continue to do so in the future. Commenter says, EPA should not create rules and regulations that are unattainable as the results will eliminate jobs and increase energy costs.
Commenter 9471 states, the proposed rule would effectively eliminate new coal-fired generation from the nation's energy portfolio and would even discourage new gas generation through the imposition of overly stringent standards.
EPA understands that commenters have concerns about reliability and affordability, but disagrees with these comments.

There are a number of sources of these concerns, including the potential for reduced fuel diversity, a diminished role for coal, and the potential for increased fuel costs.  EPA has considered all these factors, and believes the rule will have at most a negligible impact on reliability and affordability of power.  See the RIA, Chapters 4 and 5 for EPA analysis.
 With respect to anticipated infrastructure needs, the rule will not result in fuel diversity problems for reliability.  This rule only applies to new sources of base load and intermediate load electricity, and does not affect existing sources.  Peaking units will continue to operate and be available for high load period to ensure continued reliability.  Even recognizing the potential for differences from EPA's projections, these projections show that the nation's electric generating mix will continue to be diverse, with coal accounting for a substantial share of generation well into the future (this finding is corroborated by EIA and many other independent forecasting groups).  Finally, EPA explored scenarios using alternative assumptions with considerably higher future electric demand and higher natural gas prices, and no scenario resulted in new conventional coal by 2020.  Independent analysis and projections from EIA confirm this trend. EPA does not project any change in energy prices as a result of this rule, and as such does not expect negative impacts on the affordability or reliability of electricity.
 EPA also disagrees with other concerns in the comments that suggest that moving away from coal and toward greater natural gas for new generating capacity will result in a less reliable power system.  Natural gas infrastructure issues are entirely manageable under this rule.  Natural gas pipeline capacity has historically expanded to meet the needs of new natural gas generation capacity, and the same developments will happen in the future.  As the RIA and EPA modeling make clear, expected growth in natural gas requirements is well within historical limits.  See Chapter 4, generally, and Figure 4.2 specifically. The ability to manage pipeline infrastructure development is straightforward where additional capacity will be required to meet the requirements of generation already connected to the pipeline system, or added to the current pipeline network.  It is also standard practice in adding pipelines in areas not yet connected to the natural gas pipeline system.  Thus, the normal expansion process will address most cases where additional infrastructure is needed for continued reliable operation and new sources of fuel are added.  In the near term, there should be few additional infrastructure needs, as this rule does not affect the continued operation of any existing sources.
 In the longer term, as the generating fleet turns over, much of the existing fossil generation will remain and continue to be diverse, while the normal infrastructure development noted above can accommodate much of the new demand.  Moreover, much of the new demand can be met by various forms of new renewable energy.  These new sources are becoming more competitive and are already reliably serving significant load previously served by older generation sources.  Many studies demonstrate the ability for these sources to serve as much as 30 percent of the total load in the US, and also identify how renewable capacity can assist in meeting  energy and reserve requirements, adding to the overall diversity of the generating fleet.

Also, as new combined cycle gas units are added and operate more in a baseload capacity, they are better able to support the long term contracting process because they can expect to have a steady stream of revenue to support the regular payments under such contracts.  This increased ability to support the longer term revenue stream also means that operators of NGCC facilities will provide greater support for the use of firm natural gas contracts.  These firm contracts will, in turn, support increased pipeline capacity to ensure the a reliable supply of gas where needed to forestall a recurrence of the "Polar Vortex" like winter emergency periods where natural gas and electricity peak demands intersect.  For these reasons, EPA believes the rule will aid in easing concerns over reliability as the mix of generating sources changes.

With respect to affordability, EPA expects the impact of the rule on costs to be negligible.  In the RIA, EPA has analyzed how natural gas prices that rise to unexpected, or even unprecedented levels, might affect costs, and concluded that even these unlikely scenarios would have no more than a small potential for impact on costs and, as a result, fuel reliability.  (See RIA, Chapter 5 for this analysis.)

The EPA's modeling, conducted using the Integrated Planning Model (IPM), as well as modeling conducted by the U.S. Energy Information Administration (EIA) showed that new generating capacity built through the period of analysis would be in compliance with the standard even in the absence of the regulation. This finding held true even under a number of alternative scenarios. As a result, the EPA projected there would be negligible costs, benefits, or energy impacts (including changes to energy prices) associated with the rule in the period of analysis. Additionally, there are not expected to be macroeconomic or employment impacts. See RIA Chapter 4.
Fuel diversity is needed for reasons of electric system reliability
Commenter 8937 states, a diverse portfolio of generating fuels is required to insure reliable cost effective power under all circumstances. Commenter says, the EPA's RIA indicates the rule will have negligible energy, cost and economic impacts by 2022. Commenter says, believing this rule will have no impact on the price of electricity, employment or the economy, ignores the significant reliability and cost concerns that flow from limiting generating fuel diversity and placing operating constraints on resources that will be needed to integrate renewables into the electric grid.
Commenter 8937 states, a case in point for Black Hills was the February 4-7, 2014 extreme cold weather event that resulted in natural gas curtailment for electricity generation, no wind farm output from two wind farms located in Cheyenne, Wyoming, Commenter says, Western Interconnection Bulk Electric System generation constraints causing resources to be sparse and transmission constraints causing additional supply flow issues-all resulting in dependence on our coal fired generation for a 2 day period to supply electricity to our customers, highlighting the critical importance of fuel diversity in maintaining a reliable supply of electricity.
Commenter 8937 states, by effectively preventing any new coal fired generation, this proposed rule jeopardizes the ability to hedge against future fuel price spikes and threatens the nation's reliable, affordable electric service.
Commenter 8937 states, the EPA states that new coal plants without CCS might be built in the period through 2020 in order to offer fuel diversity to a group of customers that are willing to pay a premium in electricity prices. Commenter says, the developer could add CCS to the plant and possibly rely on cost savings from EOR or in their customer's willingness to pay a higher premium. Commenter says, the Power4Georgians project that the EPA uses as an example of customers willingness to pay a premium, was designed as conventional coal without CCS in order to compete with natural gas. Commenter says, the "premium" the customers would pay would reflect the difference between the market price of gas-fired and coal-fired power. Commenter says, that premium is far less than the premium of an additional 50% or more in project costs for a coal plant with CCS. Commenter says, indeed, requiring CCS on this project will insure it never moves forward.
Commenter 9780 states in the Proposal and public record, EPA has gone to some lengths to address earlier stakeholder concerns about the need to be able to build coal plants as a hedge against the variability of natural gas prices. Commenter says, however, regardless of this additional analysis, the point remains that fuel diversity is needed for reasons of electric system reliability, not for the sake of diversity itself. Commenter says, even if a resource is not currently seen as cost competitive, market conditions may change unexpectedly, either for the short- or long-term, making use of different resources necessary and/or desirable to provide reliable (and affordable) generation at different times.
Commenter 9780 states as noted in their 2012 comments, the value of a separate standard is not just to ensure a diverse portfolio of generating technologies and fuels but also to ensure that there are economic alternatives should other technologies experience fuel supply disruptions or price increases (e.g., natural gas prices increase beyond expectations). Commenter says, electricity is dispatched on the basis of cost, with the lowest cost resources being dispatched first. Commenter says, in regulated markets, generators are required to provide the lowest cost service possible, and in competitive markets, market forces dictate that the lowest cost resources will dispatch first. Commenter states, thus, generators will "indeed, must" build and run the lowest cost generation source first. Commenter says, given the low cost of natural gas as a fuel currently, natural gas-fired plants now generally are dispatched before coal-fired plants. Commenter says, as a result, due to low fuel prices, lower capital costs and shorter permitting lead times, almost all new baseload generation built in the last several years has been natural gas-fired.
Commenter 9780 states, for example, as demonstrated this past winter and described in detail below, in times of natural gas supply disruptions and price spikes, coal-based units tend to offer lower cost generation. Commenter says, however, many of the coal-fired units that were relied upon for power are slated for retirement in the next several years, in part due to the costs of meeting current environmental regulations and the low cost of natural gas as a generating fuel. Commenter says, as a result, the availability of this alternative source of generation would be put at risk if the proposed standards are finalized: many existing units are retiring and it is not currently cost-effective to build coal-fired EGUs with CCS.
Commenter 9780 states as noted above, it is important that all baseload generation options, including conventional coal-fired plants, continue to be available resource choices. Commenter says, the EPA acknowledges this when it indicates that coal-based units might also be built for non-economic reasons and that there are "a range of factors that a particular company may consider when evaluating new generation options, such as fuel diversification." 79 Fed. Reg. at 1443. Commenter says, the importance of having a significant amount of baseload generation resources (of all technologies and fuels) to dispatch was demonstrated during episodes of extremely cold weather across the country in January and February 2014.
Commenter 9780 states, the effects of these extreme weather episodes on natural gas supply collectively serve as a case study on the importance of having a significant amount of generation available from a variety of technologies and fuels, and on the dangers of becoming overly reliant on any single technology or fuel for electric generation. Commenter says, all fuels, including coal- and oil-fired generation, were relied upon during the polar vortex episodes. Commenter says, the cold weather this winter and the resulting record demand for natural gas, both for heating and for power generation, has shown that the natural gas distribution network can become constrained in high-demand scenarios as a result of a demand "double peak" in winter months.
Commenter 9780 states, the Scott Madden report also highlights the region's growing reliance on natural gas, and notes that the coal- and oil-based power plants that helped the region meet the recent spike in demand are being retired and largely replaced by renewables, which require gas-based plants to run more to provide power when renewables, which are intermittent resources, are not available.
Commenter 9780 states, yet this situation is easily avoidable by creating a workable standard for coal. Commenter says, as existing units continue to retire due in part to current and future regulations, it is critical that EPA develop a workable standard to ensure that new conventional coal-based facilities can be built and be available as another reliable baseload resource.
Commenter 9401 states, when U.S. energy costs rise because of regulations promulgated by EPA to reduce GHG emissions, industries may not be able to compete with foreign competitors and may shut down U.S. facilities or move them offshore resulting in "GHG leakage". Commenter says, forcing facilities offshore accomplishes nothing environmentally, and damages the domestic economy and employment.
Commenter 9401 states, industries require highly reliable power and any EPA action that results in diminution of reliability increases both costs and creates a safety hazard for employees. Commenter says, this winter, manufacturers across the country were forced to curtail use of electricity because of electric generation reliability problems. Commenter says, this resulted in reduced manufacturing production rates, if not the shutdown of the entire manufacturing facility. Commenter says, power reliability is maintained by having a diverse fuel mix, as well as by installing a robust supply of distributed generation such as industrial combined heat and power (CHP) and waste heat recovery (WHR). Commenter says, enhancing end-use energy efficiency also promotes power reliability by relieving transmission congestion and limiting demand growth. Commenter says, it is vital that the rule is cost-effective and will not increase electricity prices or reduce electric reliability thereby not causing manufacturing facility production curtailments, causing safety issues for our employees, and GHG leakage.
Commenter 9195 asks the question, do regulated parties have an interest in "fuel diversity"? Commenter asks, would such an interest support construction of coal-fired power plants in the absence of the proposed NSPS?
Commenter 9777 states, EPA should reconsider how this rule adversely affects fuel diversity necessary for electric reliability by effectively banning new construction of new coal-fueled units.
Commenter 9397 states, diversity of energy supply is critical for keeping energy costs reasonable. Commenter says, the consideration of coal as a viable fuel option would be impacted by the technical infeasibility of the proposed standard.
Commenter 2864 states, conventional generation is needed as reliability requires EGUs to be able to: provide reactive power support which requires spinning resources, increase or decrease output immediately to respond to system frequency changes, limit production as needed for the promotion of reliability, and provide inertial response. Commenter says, non-conventional resources do not have the ability to provide these operating characteristics.
Commenter 2864 states concerns that the CCS technology will significantly increase electricity costs for consumers. Commenters says, conventional generation is very important for maintaining a reliable, stable, and low cost grid. Commenter says, utilities must be given credit for early investments and state and regional flexibility must be provided. Commenter says, EPA needs to consider a total system approach that includes consideration for emission reductions from renewable resources and customer load management programs versus a plant by plant approach.
Commenter 8024 states, the move toward natural gas becoming the dominant source of base load and peak power could have repercussions for energy security and electric reliability. Commenter says, without sufficient coal or other generation options, sustained cold weather events could lead to natural gas supply disruptions that could compromise the electrical system. Commenter says, the growth in international trade in natural gas cold also expose the power industry to significant price shocks or supply disruptions.
Commenter 9773 states, the requirements and costs imposed under this rule have the potential to impact the reliable delivery of electricity. Commenter says, this problem is compounded if utilities are forced to rely primarily on natural gas in replacing coal-fired generation.
 EPA disagrees.  See EPA response at the beginning of this section.
Foreclosing the use of coal-fired generation threatens electric reliability
Commenter 9196 states, foreclosing the use of coal-fired generation threatens electric reliability. Commenter says, given the regulatory uncertainty related to future EPA regulations on a wide variety of energy sources (and not just coal) keeping all options on the table for energy generation, as the President has suggested multiple times, is essential to maintaining America's energy supply. Commenter says, in recent years, coal-fired power plants have provided approximately 40 percent of the electricity used by US consumers and businesses each year. Commenter says, the number is lower now due to pending EPA regulations and market conditions associated with the price of natural gas, but even today, notwithstanding the historically low cost of natural gas and newly adopted regulatory obstacles for coal, Administrator McCarthy has noted that "coal will continue to represent a significant source of energy for decades to come."
Commenter 9196 states, as a result of the combination of EPA's regulations, including the proposed rule and the upcoming 111(d) rule for existing coal-fired units, the country may experience a shortage of electricity, and the reliability of our electricity grid will face substantial risks. Commenter says, the loss of future coal-fired generation, investment in current coal-fired generation, and closures of existing coal-fired generation capacity that may result from the combination of the proposed rule and other EPA regulatory actions risk a variety of reliability problems. Commenter says, in most cases, coal-fired plants cannot be replaced overnight by natural gas plants, as the time it takes to install pipeline and other infrastructure necessary even to begin conversion of an old plant or construction of a new one is considerable. Commenter says, additionally, as David Wright testified recently, coal-fired generation is an important aspect of "resource diversity," and EPA needs to "recognize the needs of States and regions to deploy a diverse portfolio of cost-effective supply-side and demand-side resources based on their own unique circumstances and characteristics."
Commenter 9196 is concerned that the proposed rule establishes a future for electricity generation that is narrowly limited to a small group of technologies, some of which do not even exist commercially at this time, and that EPA's plan for the future risks disruption in the reliable supply of electricity. Commenter says, last winter unleashed brutally cold temperatures on citizens around the U.S., teaching our country some hard lessons about the importance of reliable and affordable electricity, and the need for EPA to be very careful about limiting the flexibility and diversity of our electricity generation options. Commenter says, the cold weather during the winter spiked natural gas prices, caused shortages of propane used to heat many homes, and exposed the fact that without fuel flexibility our country could face serious electricity reliability problems in the future.
Commenter 9196 states, the cold weather this winter made it clear that coal-fired generation, much of which is currently scheduled to be retired as a result of EPA rules, is vital to the reliability of our electricity supply. Commenter says, in some areas, coal-fired plants thought to be obsolete were discovered to be essential to reliability, and one of the nation's largest electricity generators reported that 89 percent of the coal-fired generation slated for retirement by 2015 as a result of EPA rules was needed to supply electricity during the cold weather because natural gas and other alternatives were not suitable to address extreme conditions. Commenter says, these events were not isolated, as electricity generators in Texas and the Southeast faced extreme demands and had to take measures to ensure that coal-fired generation was available, even as those plants faced retirement in the coming years.
Commenter 9196 states, our electricity supply cannot rely on alternatives to coal to fill the gap that will be left by retired coal plants and a lack of investment in new coal technologies. Commenter says, in a review of the last winter, the Federal Energy Regulatory Commission (FERC) concluded that "cold temperatures stressed the bulk power system with high loads, increased generator forced outages, and other challenging operating conditions" and noted that "[w]ind turbines were also affected by the cold, with some wind turbine models reaching their minimum operating temperatures." Commenter says, daily use of natural gas reached a record high of 90.6 billion feet during this year's winter and prices soared to more than $5 per million Btu, according to the Energy Information Administration. Commenter says, additionally, as the CEO of a leading energy company explained, during "[o]ur peak demand between 7 and 8 am, which is when the peak is, there was almost no solar available because the sun is not up, so we need to have a system that can address those requirements and be prepared to provide the service our customers expect and the reliability they expect in those periods. That is the beauty of a portfolio."
Commenter 9196 states, the EPA needs to carefully consider the consequences of polices that may not allow for a flexible and reliable supply of electricity, because the impacts of reliability problems can be devastating. Commenter says, the downside impacts of reduced electric reliability are substantial and must be taken into account in any responsible analysis of the proposed rule. As ISO New England has stated:
"A reliable supply of electricity is a foundation of our prosperity and quality of life. Without it, our world literally grinds to a halt; businesses cannot plan and operate productively, hospitals and schools cannot provide their essential services, and residents cannot depend on the electricity they need simply to live their daily lives. Without reliable electricity, the financial and societal costs would be enormous. The Institute of Electrical and Electronics Engineers of the U.S. (IEE-USA) has further observed that even minor occurrences in the electric power grid can sometimes lead to catastrophic "cascading" blackouts, and that the loss of a single generator can result in an imbalance between load and generation. The resulting blackouts cause incalculable economic damage. For example, the direct costs to high-technology manufacturing in the San Francisco Bay Area alone during the California blackouts alone ran as high as one million dollars a minute due to lost production, and the relatively brief Northeast blackout of 2003 cost business about $13 billion in lost productivity. These are costs that our economy and communities cannot afford to bear, and EPA needs to carefully consider reliability concerns before moving forward with the proposed rule."
Commenter 9401 states, coal must remain as a viable low-cost energy source for power generation. Commenter says, the U.S. cannot have a reliable electricity system if it is too dependent upon natural gas and we have already crossed the line in various regions of the country. Commenter says, on a Btu basis, coal and natural gas must be allowed to compete. Commenter says, price competition between coal and natural gas is critically important in keeping electricity prices low and protecting the reliability of supply.
Commenter 9003 states, energy reliability is critical and the future is uncertain. Commenter says, the implementation of this proposal ensure no new coal powered generating plants will be built regardless of state energy needs or the associated costs.
Commenter 10083 states, the proposed rule should better reflect the impacts and challenges of eliminating coal generation as an electricity resource option, until CCS becomes an available control technology that can perform dependably.
Commenter 10607 states, grid reliability and security will decrease as a result of EPA's proposed rule. Commenter says, retirement of coal-fired EGUs and increased reliance on natural gas by the power industry are linked to spikes in electricity prices and reliability issues. Commenter says, the proposed rule would prevent replacement of coal-fired base load, creating a gap that natural gas cannot completely fill, thereby leading to decreased reliability and security of the power grid.
Commenter 10662 states, the proposed rule will have major negative consequences for grid reliability. Commenter says, if natural gas supply and price projections are wrong, and there is not adequate coal-fired power available, there will be a major impact on rate payers, reliability and grid stability. Commenter says, the effective ban of coal-fired generation threatens the reliability of the electricity grid. Commenter says, a shortage of available power generation in harsh winter weather is a serious reality. Commenter says, during these cold times, natural gas curtailments are the reduction of gas deliveries due to a shortage of supply or because demand for service exceeds a pipeline's capacity. Commenter says, usually there is a hierarchy of customers, in which some may be required to partially or totally cut back gas usage before others. Commenter says, industrial users, for example, are usually curtailed before service to residential users is reduced.
The final standard of performance is not a ban on new coal capacity.  The standard of performance is achievable by multiple means (not all of which involve sequestration), and can be done at reasonable cost.  The commenters posit a situation where natural gas prices rise precipitously during the review period.   However, as explained in RIA chapter 4.4, natural gas prices are expected to increase after 2020 in all scenarios. However, rising natural gas prices through 2040  -  including in EIA's low gas/oil resource scenario - are still not sufficient to support new, non-compliant coal-fired generation through 2022 in these scenarios. This demonstrates that natural gas prices do not have to continue at currently low levels for NGCC to maintain its economic advantage over coal-fired technologies. In addition, in Chapter 5 of the RIA, the EPA presents analysis of the potential costs and benefits of the standards under a range of natural gas prices, including unprecedentedly high gas prices. It is only when gas prices reach levels not observed in EIA data back to 1996 that an NGCC unit would become less economic than a non-compliant coal unit.
 Commenter 9666 states a final NSPS that is too stringent could undermine the reliability of this nation's electricity supply because owners and operators might be reluctant to invest in new NGCC generation. Commenter concludes, for these reasons, EPA should undertake further assessment of the proposed NSPS for NGCC EGUs and repropose the standard based on the best information available and consistent with EPA's established practice for setting an NSPS (based on 99 percent compliance among facilities in the category).
First, most commenters asserted that a too stringent NSPS would result in more investment in new NGCC.  (In any case, EPA's analysis shows more investment in new, compliant NGCC as part of the baseline, for reasons unrelated to the final standard of performance).  Second, a best system of emission reduction obviously does not have to be a standard that most existing sources are presently achieving.  See preamble section III.H.3; Portland Cement 1, 486 F. 2d at 391.
National policies that diminish coal as a fuel choice jeopardize reliability and affordability
Commenters (7994, 9407, 10097, 10952) comment on diminishing coal as a fuel choice jeopardizing reliability and affordability.
Commenter 7994 states, while they recognize that the agency action is undertaken at the request of the President, a standard that effectively eliminates coal as a generating resource goes too far and jeopardizes the reliability of the electric grid. Commenter says, they believe that regulating CO2 from new power plants will significantly increase electricity costs and hurt residential, commercial, and industrial customers, as well as impact reliability in certain parts of the country.
Commenter 10952 states many electric energy providers in the wholesale electric and gas markets recognize there are already significant impediments to providing reliable and affordable electricity under the present circumstances where significant baseload nuclear and coal-fired EGUs face retirement. Commenter says, many additional coal-fired EGUs will be retired because of the recent CAA Section 112 regulations, and as previously stated, under this proposal no new coal-fired EGUs will be built, making natural gas EGUs the remaining choice for new baseload electric generation.
Commenter 10952 notes the following points:
      - There are both physical gas pipeline constraints and gas-power process issues that need to be addressed to deal with the increasing growth of natural gas-fired generation.
       - Increased reliance on natural gas-fired generation will likely lead to both greater risk of electric reliability deficiencies and higher costs for consumers on future critical operating days. At times this winter gas was not available at any cost. When available in some areas the gas price was twenty times the monthly index price.
      - This past winter ACES itself experienced firsthand numerous gas and electric operational, physical, and process challenges that had profound impacts on the performance of our Members' loads and generation fleet.
      - The greatest challenges are in the East, but impacts were observed all the way to California.
Commenters (9407, 10097, 10952) state in summary, uncertainties about natural gas supply and price set natural gas generation apart from coal generation where electricity costs are driven by capital outlays, not by uncertain fuel costs or availability. Commenters say, for these reasons national policies that effectively negate or even significantly diminish coal as fuel choice for baseload electric generation place both electric reliability and affordability in jeopardy.
Commenters (10097, 10952) state considering the importance this proposal places on of the need for natural gas availability, based on this rulemaking's record, EPA has apparently spent little effort actually examining issues surrounding natural gas transportation infrastructure available to supply natural gas to electric generating facilities that must be strategically located throughout the nation to support electric grid reliability. Commenter 10952 says, EPA appears to base availability assumptions solely on available natural gas reserves coupled with recent low prices. Commenter says, while natural gas may be available at gas transmission hubs, its availability on needed generation sites is fundamental in determining whether its rational to promulgate a rule that leaves natural gas as the only practical choice for future fossil-fuel baseload generation. Commenter says, at a minimum, significant construction of additional pipelines and infrastructure would be needed. Commenter says, as stated previously, they do not dispute that significantly more natural gas is being utilized for electric generation than the recent past and that this trend is likely to continue. Commenters (10097, 10952) say, what is at issue here is whether this fuel is certain to be available at sites where new baseload generation may be needed to replace retiring coal-fired units or at new sites where new baseload generation is required for additional reliability purposes. Commenters state, such certainty is fundamental to this proposal rationality.
Commenter 10952 states that two recent studies by the Interstate Natural Gas Association of America (INGAA) address additional needs for gas pipeline infrastructure to meet increasing demands under several scenarios ranging from high to low increased natural gas market demand scenarios. Commenter says, under the scenario of increased natural gas needs within the electric utility sector, a very significant amount of mainline and lateral miles of new pipelines to power plant sites would need to be constructed. Commenter says, as these studies identify, while INGAA believes the physical capabilities are available to meet such needs, numerous obstacles beyond the control of the pipeline builders could "delay or derail" efforts to meet these projected needs. Commenter says, opposition by multiple stakeholders including landowners, environmental groups, and groups having competing interests as well as federal/state jurisdictional impediments well outside the control of EPA could delay significantly needed construction of additional pipelines. Commenters (9407, 10952) say, while additional pipelines will be necessary to sustain grid reliability and provide electric service to consumers at a reasonable cost, EPA has provided no information in connection this rulemaking to show that it has evaluated the timely need of additional gas supply capacity as a result of this rulemaking.
Commenters (10097, 10952) state, it is quite remarkable that EPA has either ignored these natural gas availability and pricing questions or has failed to realize that any reasonable evaluation of this proposed rule must include them. Commenters conclude, at either rate EPA's failure to include a reasoned analysis here is yet another deficiency that makes this proposal arbitrary and capricious.
Commenter 9401 states, EPA has not evaluated generation and reliability costs at "peak" electricity and natural gas demand and that reliability is a safety issue. Commenter says, natural gas delivery is dependent upon, among other things, pipeline capacity that is limited in its ability to deliver. Commenter says, as experienced this winter, natural gas demand for heating homes, industry and power generation exceeded the capacity of pipelines in several portions of the country. Commenter says, the shortfall of natural gas availability led to both electricity and natural gas outages, and staggering spot prices for both electricity and natural gas for consumers. Commenter says, the industrial sector was curtailed for both electricity and natural gas which forced them either reduce or stop production of our products at great cost. Commenter says, these costs must be included in the cost-benefit analysis.
Commenter 9401 states, the reliability of power due to lack of fuel diversification endangers the safety of homeowners who rely upon natural gas and electricity to keep their homes heated in the winter and cool in the summer. Commenter says, there is also a safety threat for manufacturing employees. Commenter says, EITE industries operate facilities that have high pressure vessels and/or furnaces that operate at thousands of degrees Fahrenheit and if the power goes off without warning, employee safety becomes an issue.
Commenter 9777 states, EPA acknowledges that power companies are still likely to construct new coal-fueled EGUs to replace existing baseload or demand-following capacity or for purposes of fuel diversity. Commenter says, the costs associated with this regulation would likely prohibit new coal-fueled generation construction absent a substantial increase in wholesale power prices. Commenter says, this regulation harms and disincentivizes the replacement and/or expansion of existing baseload and demand-following capacity that helps ensure fuel diversity which is vital to maintaining a reliable, competitive, and cost-effective power supply. Commenter disagrees with EPA's assumption that gas prices will remain at their current low levels for the indefinite future and does not take into account the benefit of fuel diversity to buffer against unexpected supply and price fluctuations.
Commenter 9777 states, the additional cost burdens associated with this rule will prevent the consideration of coal- generation construction unless a significant electricity cost increase can overcome those significant burdens. Commenter says, it will be the consumers who will bear the economic burden of this rule, either by the decreased energy supply diversification that will make U.S. energy more dependent on natural gas or by the cost associated with construction subject to this proposed rule.
The EPA disagrees that these final standards diminish the role of coal as a fuel choice and thereby jeopardize reliability and affordability of electricity. As described in the rule preamble, the electricity sector is undergoing a period of intense change. 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. This is primarily the result of historically low natural gas prices.
The proposed rule is Inconsistent with sound energy policy and sacrifices fuel diversity
Commenters (10095, 10388) provide comment on the rule's inconsistency with sound energy policy.
Commenter 10095 is concerned about the proposed rule's impact on the fuel diversity of the nation's electricity supply. Commenter says electric utilities' ability to maintain their diverse generating fleets helps protect customers against fossil fuel price volatility and potential supply disruptions. Commenter says the proposed rule, however, would discourage the construction of new coal-fired EGUs and the related development of carbon capture and storage (CCS) and other new control technologies. Commenter says rather than encourage a diverse electricity supply, the proposed rule heavily favors the construction of new, natural gas-fired combined-cycle units. Commenter says the underlying assumption that natural gas prices will remain low indefinitely contradicts historical price trends.
Commenter 10095 states EPA's proposed rule is a risky undertaking that would substantially narrow the future fuel diversity of the nation's electricity supply, which can ultimately impact the reliability and affordability of electricity and thus jeopardize the nation's future economic strength. Commenter says EPA assumes that "few, if any solid fossil fuel-fired EGUs will be built in the foreseeable future [because] electricity generators are expected to choose . . . natural gas combined cycle[s] . . . ." Commenter says EPA ignores the fact that its actions have already forced many companies to change their planning assumptions related to coal. Commenter says leading up to the publication of the 2012 proposed rule, many companies, including Southern Company, regularly restricted their planning models from considering the prospect of new coal-fired power plants without CCS even if the option were otherwise economic. Commenter says companies were discouraged from considering new coal-fired power plants without CCS where, even if not the absolute lowest-cost, the option was a desirable alternative due to qualitative features, such as stage of development, operating characteristics, and fuel diversity. Commenter says this proposal entirely prevents companies from building coal considering that integrated CCS is not Adequately Demonstrated. Commenter says if the rule is finalized as proposed, EPA will continue to hinder the ability of utilities to leverage fuel diversity to provide reliable and affordable service to its customers in the years to come.
Commenter 10095 realizes the danger of disregarding the uncertainty of future fuel prices and the potential benefits of utilizing a variety of fuels to mitigate those uncertainties. Commenter is dedicated to providing a diverse electricity generation portfolio to the benefit of approximately 4.4 million customers in the Southeast, nearly half of whom earn less than $40,000 per year. Commenter says in 2012, across the Southern Company system, fuel costs were reduced by over $1 billion by leveraging a diverse fuel mix to the benefit of its customers. Commenter says and while natural gas has been relatively cheap in the past few years, the ability to invest in and dispatch other generation resources (e.g., coal) is vitally important to maintaining a reliable and cost effective electricity supply when natural gas prices fluctuate; which history, especially recent events this past winter, proves is inevitable. Commenter says in fact, in the first quarter of 2014, Southern Company took advantage of its fuel diversity during a period of higher natural gas prices to deliver over $100 million in fuel cost savings from using coal over natural gas.
Commenter 10095 states it is in the national interest for utilities to have the opportunity to maintain generation fleet diversity in order to hedge against fuel price fluctuations and thereby protect customers. Commenter says fuel cost variability has been a reality for the utility industry for all of its existence. Commenter says for decades, available coal generation has mitigated against natural gas price increases and vice versa. Commenter says the wide pendulum swing of fuel costs can only be dampened by maintaining a diverse portfolio of generation assets. Commenter says, for their company, a balanced generation portfolio is not merely an objective-it is an obligation that comes with the Company's duty to serve its customers.
Commenter 10095 states for example, recent analysis conducted by one of its affiliates, Georgia Power Company, assessed the impact that various plausible natural gas price forecasts for the year 2020 would have on the most cost-effective mix of generation resources. Commenter says in that analysis, natural gas prices on the lower end of the expected range were projected to result in as much as 50 percent of generation being provided by natural gas and only 18 percent of generation from coal. Commenter says yet, under a higher natural gas price scenario, the Company would minimize costs for its customers by generating only 28 percent from natural gas and 40 percent from coal. Commenter says the EPA's proposal would prevent utilities, like Southern Company, from continuing to develop a fleet that relies on diverse fuel mixes for the benefit of their customers.
Commenter10388 states, as currently drafted, the rule is inconsistent with sound energy policy and would make America less attractive when competing for location of additional employers: affordable, reliable electricity.
The EPA has structured the final standard in partial response to the comments both to this proposal, and the 2012 proposal, that it was important for utilities to preserve fleet diversity in order to hedge against fuel p[rice fluctuations (e.g. Southern Co., commenter 10095). In assessing the cost of the final standard of performance, the EPA carefully compared the cost of the rule to fossil fuel-fired EGUs (expressed as LCOE) to the cost of new nuclear facilities.  This comparison is reasonable.  These are the two principal non-NGCC baseload dispatchable technologies.  The costs are in the same range.  See preamble section V.H.5 and V.I.1.
Moving away from coal and away from energy diversity is an irresponsible policy choice
Commenter 8954 states, for American families, the consequences of a shift in the energy mix away from coal are equally concerning. Commenter says the longest running recession in U.S. history has already caused great hardship for families. Commenter says, the cost of energy as a percentage of pre-tax income in the last decade has nearly doubled for the middle class. Commenter says, six in ten Americans say a $20 per month increase in utility bills would create hardship.  Commenter says, one in three Americans qualifies for energy assistance.  Commenter says, pushing more Americans towards having to choose between food or medicine or fuel - with negligible environmental results by EPA's own admission - is untenable. Commenter says, higher energy prices are regressive and will have the biggest impact on those who can least afford it.
Commenter 8954 states others, including those in the regulatory arena, are expressing concern about this close call and the ability to reliably meet electric demand. Commenter says, at an April 1, 2014 Federal Energy Regulatory Commission (FERC) Technical Conference, FERC staff presented their analysis of the natural gas and electricity markets during the "conditions of severe stress and market pressures" this winter, stating "The RTOs and ISOs declared emergency conditions on several occasions and some implemented emergency procedures, including emergency demand response, voltage reduction, emergency energy purchases, and public appeals for conservation." Commenter says, FERC's Acting Chairman Cheryl LaFleur stated in testimony before the Senate Energy and Commerce Committee on April 10, 2014, "Indeed, I believe that reliability is job one, a fundamental responsibility for FERC and the electric industry. From my past experience working directly for electricity and natural gas customers, I know firsthand how hard even a short outage can be on families, businesses, and communities. And a major interruption in service could have devastating effects on our nation's citizens and economy, whether it is caused by severe weather, a cybersecurity incident, or a physical attack".
EPA disagrees: any impacts of this rule on the choice of coal as a fuel for electric generation will not be harmful for reliability.  This rule only applies to new sources of base load and intermediate load electricity, and does not affect existing sources.  EPA's projections show that the nation's electric generating mix will continue to be diverse, with coal accounting for a substantial share of generation well into the future (this finding is corroborated by EIA and many other independent forecasting groups).  Finally, EPA explored scenarios using alternative assumptions with considerably higher future electric demand and higher natural gas prices, and no scenario resulted in new conventional coal by 2020.  Independent analysis and projections from EIA confirm this trend of no new conventional coal. EPA does not project any change in energy prices as a result of this rule, and as such does not expect negative impacts on the affordability or reliability of electricity.  EPA also disagrees with other concerns in the comments that suggest that moving toward greater natural gas will result in a less reliable power system.  Natural gas infrastructure issues are entirely manageable under this rule.  Natural gas pipeline capacity has historically expanded to meet the needs of new natural gas generation capacity, and the same developments will happen in the future.  This is particularly true in the case of comments where additional capacity will be required to meet the requirements of generation already connected to the pipeline system.  It is also true for areas not yet connected to the natural gas pipeline system.  Thus, the normal expansion process will address most cases where additional infrastructure is needed for continued reliable operation and new sources of fuel are added.  In the near term, there should be few additional infrastructure needs, as this rule does not affect the continued operation of any existing sources.  In the longer term, as the generating fleet turns over, much of the existing fossil generating will remain and continue to be diverse, while the normal infrastructure development noted above can accommodate much of the new demand.  Moreover, much of the new demand need not be met by natural gas, but by various forms of new renewable energy.  The new sources are becoming more competitive and are already reliably serving significant load previously served by older generation sources.  Many studies demonstrate the ability for these sources to serve as much as 30 percent of the total load in the US.EPA disagrees.  See also response at beginning of this section.

Also, as new combined cycle gas units are added and operate more in a baseload capacity, they are better able to support the long term contracting process because they can expect to have a steady stream of revenue to support the regular payments under such contracts.  This increased ability to support the longer term revenue stream also means that operators of NGCC facilities will provide greater support for the use of firm natural gas contracts.  These firm contracts will, in turn, support increased pipeline capacity to ensure the a reliable supply of gas where needed to forestall a recurrence of the "Polar Vortex" like winter emergency periods where natural gas and electricity peak demands intersect.  For these reasons, EPA believes the rule will aid in easing concerns over reliability as the mix of generating sources changes.
Proposed rule takes a risk on natural gas price trends
Commenters (1959, 9497, 4710, 8501, 9775, 10024, 10095, 10393, 10238) comment on the risk associated with natural gas price trends.
Commenters 1959 and 9497 states, as demonstrated by cold snaps just this winter, natural gas prices are volatile and spike even during shorter-term weather events. Commenters say, this has an immediate adverse effect on consumer electric bills.
Commenter 1959 states, coal and its stable price is a long-term proven hedge against natural gas volatility and is critical if we are to continue to provide affordable electricity for our members. Commenter says, while new, unconventional natural gas supply from shale has played a huge role in lowering natural gas prices; even this increased gas supply has not changed the built in volatility of natural gas. Commenter says, this is because price volatility is correlated with business cycles, weather extremes, and pipeline infrastructure issues. Commenter says, again, we are experiencing this with the 2014 winter weather across much of the nation. Commenter says, because we have an obligation to provide reliable electric service to our members, we cannot ever find ourselves in a situation where all of the dispatchable electricity generation comes from a single fuel source, lest disruptions in fuel supply should create electricity shortages. Commenter says, during the polar vortex this winter, high demand for electricity, high demand for gas and localized gas supply disruptions forced the grid to rely heavily on coal-powered resources to maintain reliability.
Commenter 4710 states, in its proposed rule, the EPA states that utility companies value fuel diversity. Commenter says, however, by effectively banning the use of coal for new electrical generating units, the proposed rule will increase utilities' reliance on natural gas, which has been subject to wide fluctuations in price and supply, as shown most recently by the 2014 spikes in natural gas prices throughout the Midwest and Eastern United States.
Commenter 8501 states, by legally mandating natural gas as the future fuel of choice, the EPA has chosen to place the nation's energy development bet on a fuel with a history of wild fluctuations and frequent shortages. Commenter says, that bet will leave the country vulnerable to wide swings in electricity prices, potential shortfalls in reliability, and unable to respond to long-term energy development needs should the natural gas market become too costly for widespread electrical generation.
Commenter 9775 states, the EPA's decision to forego the low-cost base power of coal-fired power plants and replace it with generally higher cost, more volatile alternatives will likely result in greater instability in electricity prices. Commenter says, historically, natural gas prices have been significantly more volatile than those of coal. Commenter says, forcing utilities to rely on a more volatile fuel source potentially puts utilities and their customers at increased economic risk. Commenter says, this rule will lead to a base-load electrical generation system that is abandoning the proven stability and affordability of coal, and the accompanying ability of communities and states to hedge against the volatility and price of other sources of power.
Commenter 10024 states, fuel diversity is key to ensuring that electric utilities can deliver power reliably. Utilities must have the ability to use coal and natural gas-fired generation, as well as renewables and other sources. Commenter says, the harsh winter of 2014 and its impacts on short-term natural gas prices demonstrates that EPA needs to be very careful in crafting regulations that force utilities to rely almost entirely to one fuel and assuming that there would be no additional costs to the consumer.
Commenter 10095 states, in its proposal, the EPA asserts that utilities will not build new coal-fired power plants in the foreseeable future and thus the rule has no detrimental economic impact based on two high-risk gambles: (1) that the results of its short-term evaluation are applicable to a rule with long-term impacts and (2) that EPA's snapshot of forecasted natural gas prices will be accurate. Commenter states not only is reliance on forecasted information to make absolute and permanent policy decisions dangerous, EPA's proposal exacerbates the matter by arbitrarily limiting the scope of the analysis to the year 2022. Commenter says, while EPA claims that it reviewed a range of fuel prices and other scenarios, EPA artificially constrained these scenarios by considering only the impacts on new generation construction in the immediate future. Commenter says, EPA then recklessly extrapolates this to make the claim that no new conventional coal plants will be built, period, under any scenario, even in the absence of this rule. Commenter says in order to responsibly serve customers and make the best investment decisions, utilities like Southern Company must utilize much longer planning horizons- decades, not years. Commenter says in addition, utilities must have the flexibility to make adjustments when forecasts do not match up to reality. Commenter says, in coming to the conclusion that no new conventional coal plants will be built in the foreseeable future, EPA's flawed analysis effectively makes the rash assumption that the low natural gas price trends currently reflected in the market will continue indefinitely.
Commenter 10095 states as illustrated [in Figure 1 of the original document] (Henry Hub Natural Gas Spot Price, pg 9) natural gas prices have been historically volatile and unpredictable. Commenter says, just recently, for example, wholesale power prices in New England jumped 55 percent reaching record levels in 2013 due to winter weather, high natural gas prices, and natural gas pipeline constraints. Commenter says, yet, EPA presumes natural gas prices will consistently remain at all-time lows. Commenter says, projections of natural gas prices from only a few years ago, however, have proven to be wildly incorrect. Commenter states, this rule relies on these potentially erroneous projections that may not only shift, but may drastically shift, and subjects the nation's energy future to such uncertain forecasts. Commenter concludes, the well-being of all electricity customers should not rest on such shifting sand.
Commenter 10393 states, the proposed rule also assumes continued low natural gas prices. Commenter says, as history indicated, predicting the price of natural gas is fraught with error and EIA has missed the mark almost every year. Commenter says, while natural gas prices are currently considerably lower than in 2009, they are twice the price from 2012. Commenter says, the harsh winter of 2014 and its impacts on short-term natural gas prices demonstrates that EPA needs to be very careful in crafting regulations that force utilities to rely almost entirely to one fuel and assuming that there would be no additional costs to the consumer.
Commenter 10238 states, EPA's proposed standards will push the industry primarily to natural gas and renewables. Commenter says, the current natural gas infrastructure may not be adequate to meet these needs, especially in instances of severe winter weather. Commenter says, these existing infrastructure issues should be addressed prior to imposing the proposed standards. Commenter says, EPA should allow a longer ramping-up phase so electric cooperatives can better prepare for the fuel and technology changes which can also help to better manage the increases to consumer electricity costs.
EPA disagrees.  Volatility is an inherent component of fuel markets, and choices of all fuels involve risks.  Volatility is generally defined as short term, but planning for new capacity is based on expected returns for a longer period and pertinent costs for customers are also general longer term.  Although there is greater historical variation in long term fuel prices for natural gas than for coal, both fuels are subject to variation in the long term (See, "Trends in structure of Electric Power Sector Limiting Amount of New Coal" Section B.4 and Figures 7 and 8 in the docket for this rule.).  Moreover, long term contracting and price hedging over shorter periods provide well developed mechanism to manage risk in natural gas markets.  Also, as new combined cycle gas units operate more in a baseload capacity, they are better able to support the long term contracting process because they can expect to have a steady stream of revenue to support the regular payments under such contracts.  This increased ability to support the longer term revenue stream also means that operators of NGCC facilities will provide greater support for the use of firm natural gas contracts.  These firm contracts will, in turn, support increased pipeline capacity to ensure the a reliable supply of gas where needed to forestall a recurrence of the "Polar Vortex" like winter emergency periods where natural gas and electricity peak demands intersect.  .  The combination of firm contracts and risk management through market mechanisms will provide the needed basis for managing natural gas pricing and delivery. For these reasons, EPA believes the rule will aid in easing industry concerns of both natural gas price fluctuations and supply concerns
The price and availability of natural gas are too speculative to make it the only practical choice for new baseload generation
Commenters (9601, 10043, 10097, 8024, 10662, 8032) state the price and availability of natural gas are too speculative to make it the only practical choice for new baseload generation.
Commenter 10043 states, as for the electric grid, the proposed rule gives short shrift to reliability concerns. Commenter says, in recent years, the electric generation industry has closed many coal plants and built natural gas plants in their place. Commenter says, that works as long as natural gas is readily available at reasonable prices. Commenter says, but the fuel supply risk inherent in overreliance on a single fuel source has put a strain on the grid and the next two years will be critical for electric grid health. Commenter says, as illustrated by the 2013-2014 winter, in the absence of coal generation, low temperatures can create a serious natural gas fuel supply risk. Commenter says, simply put, the power supply this winter could not keep up with the demand. Commenter says, the natural gas pipelines, distribution lines, and storage facilities have not grown at sufficient rates to keep up with increasing reliance on natural gas generation, which led to extremely high gas prices in the months of January and February of 2014. Commenter says in addition, the natural gas supply for many power plants had to be curtailed because the pipelines were at their maximum capacity, leaving no capacity for natural gas combined cycle and peaking plants even though their generation output was needed. Commenter says, the high natural gas prices and lack of available natural gas led to very high winter electric prices, costs which foreshadow price impacts under the proposed rule, but which were not accounted for in the EPA's analysis. Commenter says, this winter has given the industry a glimpse of what can happen to the generation industry if the number of coal-fired power plants continues to decrease. Commenter says, by forcing new generation towards natural gas, the EPA is putting the U.S. electric generation at the mercy of a natural gas market that is sure to see more price volatility and more pipeline capacity issues. Commenter says, with issues such as price volatility and lack of capacity, the exorbitant costs will be felt less by energy producers, but rather by customers and the U.S. economy as a whole as energy bills increase.
Commenter 10043 says, it is also worth noting that the electric utility sector has reduced CO2 emissions by 11 percent since 2006. Commenter says, this decrease has occurred without federal CO2 regulations and stands in sharp contrast to the CO2 emissions that are increasing in Germany, Canada, Australia, Japan, Venezuela, India, China, and Russia. Commenter urges the EPA to recognize what the U.S. electric utility industry has already done to reduce emissions and issue a final rule that ensures the continued use of both coal and natural gas for new generation, without the reliability and cost concerns likely to prevail under the proposed rule.
Commenter 10097 states, this rule effectively limits new generation to natural gas, and in doing so, is at odds with good energy policy. Commenter recognizes that natural gas electric generation is playing an increasingly larger role in supplying power to the electric grid. Commenter says, common sense and experience with the nation's energy use and energy policies dictates, however, that we should not enact regulations that have the effect of virtually eliminating coal for future electric generation and that leave the nation with natural gas as the sole fossil- fuel choice for our basic generation requirements.
Commenter 10097 states, historically, EIA has a poor track record of projecting natural gas prices and as noted in the RIA.  Commenter does not fault EIA for its failures to accurately predict future natural gas prices. Commenter says, such an endeavor is obviously difficult and wrought with uncertainties as clearly evidenced by past future projection failures. But Commenter does question the EPA's rationality to proposal a rule that banks on one fossil-fuel, natural gas, to supply all future base-load electricity generation, especially considering the price and availability uncertainties. Commenters (9407, 10097) say, moreover, the risk of overreliance on natural gas is significantly enhanced because the cost of electricity generated by natural gas is principally driven by the cost of the fuel itself. Commenters say, additionally on-site natural gas storage capacity at electric generation sites is limited at best and nonexistent at most sites. Commenters say, as we have recently witnessed, hurricanes and other inclement weather including prolonged cold snaps as with this most recent winter can significantly affect natural gas price and availability.
Commenter 8024 states, while the President has advocated for an "all of the above" energy policy, the proposed rule limits the nation's electric generation options regardless of future changes in energy markets. Commenter says, there are too many uncertainties about the future price of natural gas to justify a rule that would prevent future construction of economic coal generation facilities. Commenter says, removing new coal as a competitive generation option would largely eliminate inter-fuel competition in the electric generation market.
Commenter 10662 states, EPA's proposal will result in increased energy costs for consumers. Commenter says, the extreme volatility in natural gas pricing leads to questions regarding the validity of forecasts, which extend to 2020 and beyond, and are based on low initial prices. Commenter says, multiple natural gas price trajectories should be examined in conjunction with the cost analysis for the rule. Commenter says, EPA should also examine how a move to gas liquefaction and export within the United States or Canada has the potential to drive up domestic natural gas prices to levels seen internationally. Commenter says, EPA's IPM model does not take into account the development of these facilities. Commenter says, EPA's economic modeling to date has not adequately assessed the impacts of the final MATS rule and other pending regulations, which will lead to the retirement of many coal-fired generating units further increasing the demand for natural gas. Commenter says, the associated reduction in coal use will reduce coal prices, making coal-fired generation more viable economically.
Commenter 8032 states, as demonstrated by years of history and the recent cold snaps, natural gas prices are volatile and spike even during shorter term weather events which has an immediate adverse effect on consumer electric bills. Commenter says, coal and its stable price is a long term hedge against natural gas volatility and is critical if we are to continue to provide affordable electricity. Commenter says, coal generally is stored in significant quantities at the plant site, providing reliability during supply disruptions due to weather and other events that often do disrupt natural gas supplies. Commenter says, coal units allow customer pricing to stay relatively constant which will be given up if the entire fleet is natural gas.
EPA disagrees. We repeat that the base case for the IPM modelling accounts for the effects of the finalized MATS and CSAPR rules, New Source Review settlements and state rules through 2014 impacting sulfur dioxide (SO2), NOx, directly emitted particulate matter and CO2, and final actions the EPA has taken to implement the Regional Haze Rule. It also includes the Cooling Water Intakes (316(b)) Rule and the Disposal of Coal Combustion Residuals from Electric Utilities Rule (CCR).   See RIA at 4-7.
Adverse effects on reliability and prices due to less diverse generation mix
Commenters (9201, 9397) provide comment on adverse effects on reliability and affordability due to a less diverse generation mix.

Commenter 9201 states it is very difficult to follow EPA's final reason for not identifying CCS as BSER for NGCC power plants---"the adverse effects on national electricity prices, electricity supply and the structure of the power sector" -- because all of these considerations bear equal weight in any finding for coal-fired EGUs. Commenter says, to begin with, EPA's concerns about adverse effect on electricity prices, electricity supplies and the structure of the power sector would be obviated with a finding that CCS is not BSER for any EGU (coal or natural gas). Commenter says if EPA is so confident in its forecast that few if any new coal-fired EGUs will be built if EPA does not require that coal-fired EGUs install CCS, then EPA's concerns about CO2 emissions from such units are unfounded, and there is no reason for EPA to promulgate the proposed rule. Commenter add, moreover, even if new, higher-efficiency SCPC or IGCC plants are built without CCS, those units would have CO2 emissions substantially lower than the older, less efficient subcritical plants they would replace.
Commenter 9201 states ironically, while EPA professes to be concerned about higher electricity prices and the effects on supply that would result from requiring CCS for gas-fired units, it does not venture any discussion about the adverse effects on prices and reliability that are almost certain to result from the less diverse generation mix that will be the consequence of requiring CCS for coal-fired units but not gas-fired ones. Commenter says, instead, EPA states that it remains concerned that, absent a CCS requirement for coal-fired units, additional coal plants will not be retired. Commenter says nowhere does EPA acknowledge that additional coal plant retirements will lead to adverse effects on the reliability of the grid and to increases in the price of electricity and natural gas as the nation is denied the benefits of lower-emission coal plants that will moderate and offset any increases in natural gas prices, as happened this past winter. Commenter says, in short, any concerns about the adverse impacts on supply and prices are of EPA's own making. Commenter says they are the result of a poorly-thought-out combination of power plant rules that have forced the accelerated retirement of base load coal plants and that effectively bar the construction of new, higher efficiency plants that would maintain fuel diversity and supply security. Commenter says, in the end, EPA has it backwards. Commenter says it is not a finding that CCS is BSER for NGCC that presents the greatest threats of price increases and supply constraints it now uses to eschew such a finding. Commenter says, rather, it is the agency's unreasoned and unsupported finding that CCS is BSER for new coal-fired EGUs that is the greater source of these threats.
Commenter 9201 states the system performance this winter clearly demonstrates the need and value of a diverse grid with coal base load as its backbone. Commenter says coal-fired plant availability far exceeded gas-fired plant, wind and solar availability and provided much needed system stability and reliability. Commenter says, as John Sturm of the Alliance for Cooperative Energy Services informed FERC during its recent technical conference on winter grid performance, "The unreliability of gas, wind and solar provided the lesson that fuel diversity is needed for reliability as well as for other policy reasons." Commenter says, days later, FERC Commissioner Moeller informed the Senate Energy and Natural Resources Committee that:
"Our latest winter exposed an increasingly fragile balance of supply and demand in many areas. Prices at times were extraordinarily high. The experience of this winter strongly suggests that parts of the nation's bulk power system are in more precarious situation than I had feared in years past."
Commenter 9201 states at the same hearing, Nick Akins, Chairman & CEO, American Electric Power, testified that the "weather events experienced this winter provided an early warning about serous issues with electric supply and reliability." Commenter says, Mr. Akins noted that 89 percent of the coal capacity AEP will retire in 2015 due to EPA's MATS rule was called upon to meet electricity demand this winter. Commenter says, Mr. Akins warned that this reliability concern is imminent and EPA's GHG NSPS could make matters worse. Commenter says, Anthony Alexander, CEO, First Energy, recently commented that EPA rules will lead to less reliable service over time and that the EPA NSPS rules for power plants could have an impact similar to the UMATs rules that have brought the electric grid to the edge.
Commenter 9397 states, if regulations such as the 111 (b) proposal start taking fuel options off the table, energy prices will become more volatile, cost will increase and reliability will be threatened.
Commenter 9731 opposes any efforts by EPA that would increase the costs of using natural gas in electric generating units. Commenter says, the natural gas renaissance in the United States will result in America having the lowest long-term natural gas prices of any industrial nation and as a result, the United States has a built-in price advantage compared to our competitors. Commenter says, the abundance of affordable natural gas in the United States also allows the opportunity for the American economy to utilize natural gas for greater electricity generation. Commenter says, in addition to the economic benefits of affordable electricity, power generation from natural gas has fewer environmental emissions than other fuel sources.
Commenter 9497 states, Mississippi's concerns specific to fuel diversity are related to limits on potential renewable generation due to its climate and geography. Commenter says, the state now relies increasingly on natural-gas-fired power plants and on existing nuclear capacity but has several incentives and initiatives to promote commercial and residential energy efficiency and renewables.
EPA disagrees.  See previous response.