State CO2 Emission Rate Goals in EPA’s Proposed Rule for Existing Power Plants

Congressional research reportOct 22, 2014

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State CO2 Emission Rate Goals in EPA’s

Proposed Rule for Existing Power Plants

-name redactedSpecialist in Environmental Policy

October 22, 2014

Congressional Research Service

7-....

www.crs.gov

R43652

State CO2 Emission Rate Goals in EPA’s Proposed Rule for Existing Power Plants

Summary

On June 18, 2014, the Environmental Protection Agency (EPA) published a proposed rulemaking

that would establish guidelines for states to use when developing plans that address carbon

dioxide (CO2) emissions from existing fossil fuel-fired electric generating units. The proposal

creates CO2 emission rate goals—measured in pounds of CO2 emissions per megawatt-hour

(MWh) of electricity generation—for each state to achieve by 2030 and an interim goal to be

achieved “on average” between 2020 and 2029. EPA estimates that if the states achieve their

individual emission rate goals in 2030, the CO2 emissions from the electric power sector in the

United States would be reduced by 30% compared to 2005 levels.

This report discusses the methodology EPA used to establish state-specific CO2 emission rate

goals that apply to states’ overall electricity generation portfolio.

The emission rate goals do not apply directly to individual emission sources. EPA established the

emission rate goals by first determining each state’s 2012 emission rate baseline, which is

generally a function of each state’s portfolio of electricity generation in 2012. The resulting

baselines in each state vary considerably, reflecting, among other things, the different energy

sources used to generate electricity in each state.

To establish the emission rate goals, EPA applied four “building blocks” to the state baselines.

The four building blocks involve estimates of various opportunities for states to decrease their

emission rates:

•

Building block 1: coal-fired power plant efficiency improvements;

•

Building block 2: natural gas combined cycle displacement (NGCC) of more

carbon-intensive sources, particularly coal;

•

Building block 3: increased use of renewable energy and preservation of existing

and under construction nuclear power; and

•

Building block 4: energy efficiency improvements.

Building blocks 1 and 2 directly affect the CO2 emission rate at affected EGUs by factoring in

EGU efficiency improvements and opportunities to switch from high- to low-carbon power

generation. In contrast, building blocks 3 and 4 involve so-called “outside the fence”

opportunities that do not directly apply to electricity generation at affected EGUs.

The building blocks affect each state’s emission rate in different ways, depending on each state’s

specific circumstances. On average, block 1 has the smallest average impact, decreasing state

emission rate goals (compared to 2012 baselines) by a range of 0% to 6%.

Building block 2, on average, lowers rates by 13%, with a range of impacts from 0% to 38%

(compared to baseline). The largest rate changes are seen in states that have both coal-fired EGUs

and under-utilized NGCC plants. The smallest rate impacts are in states without any NGCC units

and states that already have relatively high NGCC utilization rates.

The under construction nuclear component of building block 3 only affects rates in three states,

but its rate impacts are considerable. An amount of at-risk nuclear generation was included in the

2012 baseline rates, lowering some state baselines by as much as 7%.

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State CO2 Emission Rate Goals in EPA’s Proposed Rule for Existing Power Plants

The renewable energy component of block 3, on average, reduces emission rate baselines by 9%,

with a range from 2% to 33%. This block has a greater impact in states that use renewable energy

(not counting hydroelectric power) to generate a substantial percentage of their total electricity.

Building block 4 reduces rates, on average, by 13%, with a range of impacts between 4% and

37%. This range is a result of several factors, including (1) the contribution of in-state electricity

generation that comes from hydroelectric power or nuclear power; and (2) whether the state is a

net importer or net exporter of electricity.

The results of applying the four building blocks do not require or predict a particular outcome in a

state’s electricity generation profile. The emission rates are a function of EPA’s specific emission

rate methodology. States may choose to meet emission rate goals by focusing on one or more of

the building block strategies or through alternative approaches.

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State CO2 Emission Rate Goals in EPA’s Proposed Rule for Existing Power Plants

Contents

Introduction...................................................................................................................................... 1

2012 Emission Rate Baseline .......................................................................................................... 2

EPA Data Sources ...................................................................................................................... 2

Affected EGUs .......................................................................................................................... 2

2012 Emission Rate Equation ................................................................................................... 3

CO2 Emission Rate Goals ................................................................................................................ 5

Building Block 1—Coal-Fired Generation Efficiency Improvements ...................................... 6

Building Block 2—Increased Utilization of Natural Gas Combined Cycle Units .................... 7

Building Block 3—Renewable Energy and Nuclear Power ...................................................... 8

Renewable Energy............................................................................................................... 9

Nuclear Energy .................................................................................................................. 13

Building Block 4—Energy Efficiency Improvements............................................................. 14

Concluding Observations............................................................................................................... 18

Figures

Figure 1. EPA’s 2012 State-Specific Emission Rate Baselines ........................................................ 5

Figure 2. EPA’s Proposed Regions in its Renewable Energy Methodology .................................... 9

Figure 3. Incremental Energy Efficiency Savings in 2012 by State .............................................. 16

Tables

Table 1. EPA’s “Adjusted” 2012 Baseline Emission Rate Equation ................................................ 4

Table 2. Illustration of Building Block 2 for Arizona’s Emission Rate Goal .................................. 8

Table 3. Renewable Energy Regions, Targets, and Growth Rates ................................................. 10

Table 4. Renewable Energy Generation......................................................................................... 11

Table 5. Equation for CO2 Emission Rate Goals ........................................................................... 20

Table 6. 2012 State Emission Rate Baselines and Building Block Applications ........................... 21

Table 7. Application of EPA’s Building Blocks in Isolation .......................................................... 23

Contacts

Author Contact Information........................................................................................................... 26

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State CO2 Emission Rate Goals in EPA’s Proposed Rule for Existing Power Plants

Introduction

On June 18, 2014, the Environmental Protection Agency (EPA) published in the Federal Register

a proposed rulemaking1 under Section 111(d) of the Clean Air Act.2 The proposal would establish

carbon dioxide (CO2) emission guidelines for states to use when developing plans that address

CO2 emissions from existing fossil fuel-fired electric generating units. For more background on

the statutory authority, history, and legal and administrative processes involving this rulemaking,

see CRS Report R43572, EPA’s Proposed Greenhouse Gas Regulations for Existing Power

Plants: Frequently Asked Questions, by (name redacted) et al.

The proposed rule establishes state-specific CO2 emission rate goals, measured in pounds of CO2

emissions per megawatt-hour (MWh) of electricity generation. This metric is generally described

as carbon intensity, which is a ratio of CO2 emissions per a unit of output, which is electric power

(MWh) in this context. EPA based its intensity goals on each state’s current portfolio of electricity

generation and various assumptions involving opportunities for states to decrease their carbon

intensity, including:

•

coal-fired power plant efficiency improvements;

•

natural gas combined cycle displacement of more carbon-intensive sources,

particularly coal;

•

increased use of low-carbon sources, namely renewable energies like wind and

solar, and continued use of existing nuclear power generation; and

•

energy efficiency improvements.

The proposal sets a final goal for each state3 for 2030 and an interim goal to be achieved “on

average” between 2020 and 2029.4 EPA estimates that if the states achieve their individual

emission rate goals in 2030, the CO2 emissions from the electric power sector in the United States

would be reduced by 30% compared to 2005 levels. However, the state emission rate goals are

based on a baseline year of 2012, not 2005.

This report discusses the methodology EPA used to establish the state-specific CO2 emission rate

goals. The first section explains the process by which EPA created state-specific 2012 emission

rate baselines. The emission rate equation EPA used to calculate the state baselines is provided at

the end of this section.

The second section discusses the four categories of emission reduction opportunities, described as

“building blocks” by EPA, that the agency used to determine the interim and 2030 emission rate

goals for each state. The emission rate equation that incorporates each building block is provided

79 Federal Register 34830, “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility

Generating Units,” June 18, 2014 (hereinafter EPA Proposed Rule).

42 U.S.C. §7411(d).

Vermont and the District of Columbia do not have emission rate goals, because they do not have electric generating

units affected by the proposal in their jurisdictions.

To satisfy the interim goal requirement, each state must demonstrate that the components of its plan would yield an

emission rate that is less than or equal to the interim goal. In addition, EPA proposes that states provide annual

performance updates to EPA during the interim period.

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State CO2 Emission Rate Goals in EPA’s Proposed Rule for Existing Power Plants

at the end of this section. In addition, Table 6 at the end of this section lists the state-specific

2012 emission rate baselines, the final emission rate goals, and the incremental effects of

applying each of EPA’s building blocks to the 2012 baselines.

2012 Emission Rate Baseline

EPA’s first step in establishing the state-specific CO2 emission rate goals involved setting statespecific baselines. The baseline is the starting point, from which future goals are measured. The

baseline year selection is an important issue for some states, because some states already have

regulations or policies that would directly (e.g., emissions cap) or indirectly (e.g., renewable

portfolio standards) reduce CO2 emissions. Some of these state requirements were in place well

before 2012.

EPA chose to use state-specific data from 2012 to establish the rate-based baselines, stating:

EPA chose the historic data approach as it reflected actual historic performance at the state

level. EPA chose the year 2012 as it represented the most recent year for which complete

data were available at the time of the analysis .... EPA also considered the possibility of

using average fossil generation and emission rate values over a baseline period (e.g., 2009 –

2012), but determined that there would be little variation in results compared to a 2012 base

year data set due to the rate-based nature of the goal.5

EPA Data Sources6

EPA used its Emissions & Generation Integrated Resource Database (eGRID) to provide the

underlying data for the vast majority of the inputs the agency used to generate state emission

rates. According to EPA, “eGRID integrates many different data sources on power plants and

power companies, including, but not limited to: the EPA, the Energy Information Administration

(EIA), the North American Electric Reliability Corporation (NERC), and the Federal Energy

Regulatory Commission (FERC).”7 In addition, EPA used its National Electric Energy Data

System (NEEDS) to identify nuclear and NGCC plants that were not operating in 2012 but are

under construction.

Affected EGUs

The 2012 state baselines are based on CO2 emissions from electric generating units (EGUs) that

are addressed in the proposal. These units are called “affected EGUs.” The terminology in this

proposal differs from other air pollutant regulations that apply directly to “covered sources” or

“regulated entities.” The emission rate goals described below do not apply directly to individual

power plants, but to the state’s overall electricity generation portfolio.

See EPA, Goal Computation Technical Support Document, June 2012, at http://www2.epa.gov/carbon-pollutionstandards/clean-power-plan-proposed-rule-technical-documents.

For more details, see EPA, “Goal Computation Technical Support Document,” June 2014, at

http://www2.epa.gov/carbon-pollution-standards/clean-power-plan-proposed-rule-technical-documents.

EPA, Technical Support Document, GHG Abatement Measures, at http://www2.epa.gov/carbon-pollutionstandards/clean-power-plan-proposed-rule-technical-documents.

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State CO2 Emission Rate Goals in EPA’s Proposed Rule for Existing Power Plants

In general, an affected EGU is a fossil fuel-fired unit that was in operation or had commenced

construction as of January 8, 2014, has a generating capacity above a certain threshold, and sells a

certain amount of its electricity generation to the grid. The specific criteria include the following:

1. has a base load rating greater than 73 MW;

2. combusts fossil fuel for more than 10% of its total annual heat input; and

3. sells the greater of 219,000 MWh per year8 or one-third of its potential electrical

output to a utility distribution system.9

Based on 2012 data provided by EPA, the “affected EGU” definition applies to over 3,100 EGUs

at 1,508 facilities throughout the United States.10 The number of “affected” power plant facilities

range by state, from 2 EGUs in Idaho to 115 EGUs in Texas, with a median number of 19.

Net Energy Output Versus Gross Output

In its proposed rule, EPA measures energy generation from affected EGUs in terms of net output rather than gross

output. Gross output is the total amount of electricity (and/or useful thermal output)11 that is produced at the

generator terminal. Some of this gross output is used on-site to operate equipment at the EGU (e.g., pumps, fans, or

pollution control devices). Net output equals gross output minus the amount of energy used on-site, thus capturing

only the electricity that is delivered to the transmission grid.

EPA explains that a net output measure would account for reduction opportunities in on-site energy use, which

would not be captured using a gross output measure.12 This would provide an incentive for on-site energy efficiency

improvements. However, EPA notes that its proposed rule for new EGUs measures gross generation. The agency is

requesting comment on the use of net generation for existing EGUs.

2012 Emission Rate Equation

EPA constructed the 2012 state baselines using CO2 emissions and electricity generation data

from the affected EGUs and several additional electricity generation categories described below.

First, EPA grouped the affected EGUs into different categories: coal-fired steam generation; oil

and gas (OG) steam generation; natural gas combined cycle (NGCC) generation; and “other”

affected EGUs. This last grouping includes fossil sources, such as integrated gasification

combined cycle (IGCC) units, high utilization combustion turbine units, and applicable thermal

output at cogeneration units. EPA separated the data from these units because they are not part of

the building block applications described below.13 On a national basis, the “other” category

This generally equates to a 25 MW unit (25 MW * 8,760 hours = 219,000 MWh).

This is measured on an annual basis for steam units and IGCC units and on a three-year rolling average basis for

stationary combustion turbine units. For more information, the proposed rule references a discussion in the proposed

rule for new sources at 79 Federal Register 1430 (January 8, 2014).

CRS calculations using EPA’s “Technical Support Document: Goal Computation-Appendix 7” Excel spreadsheet, at

http://www2.epa.gov/carbon-pollution-standards/clean-power-plan-proposed-rule-technical-documents-spreadsheets.

For the most part, energy generation refers to electricity, but some EGUs, namely combined heat and power

facilities, also produce heat (referred to as “useful thermal output”) that can be used on-site for other industrial

processes.

See EPA Proposed Rule, p. 34894.

According to EPA, “IGCCs represent a very small sample size of three operating plants and have a different

utilization pattern and different capital cost profile than NGCCs that result in a different set of redispatch economics.

Likewise, high utilization [combustion turbines] that may be covered by the rule are generally less efficient and have

higher emission rates than NGCCs, and are therefore generally less cost effective for redispatch purposes [i.e., building

(continued...)

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State CO2 Emission Rate Goals in EPA’s Proposed Rule for Existing Power Plants

accounts for approximately 1% of total U.S. electricity generation and CO2 emissions.14 And for

the vast majority of states, these sources have minimal impacts on emission rates.

To establish each state’s 2012 baseline, EPA calculated the pounds of CO2 generated from

affected EGUs in each state (the numerator in the Table 1 equation)15 and then divided that sum

by the electricity generated (the denominator in the Table 1 equation) from affected EGUs in

each state. This yields an emission rate measured in pounds (lbs.) of CO2 per megawatt-hour

(MWh) of electricity generation. EPA described this result as the “unadjusted” emission rate.

To establish the final, “adjusted” 2012 baseline for each state, EPA added two elements to the

denominator of the emission rate equation (in Table 1): “at-risk” nuclear power (discussed below)

and renewable energy generation. The addition of these elements produced the “adjusted”

emission rate equation, which is used to generate the 2012 baseline emission rate for each state.

The adjusted emission rate equation is provided below:

Table 1. EPA’s “Adjusted” 2012 Baseline Emission Rate Equation

coal generation

2012

Emission

Rate

OG generation

coal emission

rate

NGCC generation

OG emission

rate

“Other”

CO2

emissions

“Other”

generation

NGCC emission

rate

coal generation

OG generation

NGCC generation

“AtRisk”

Nuclear

Renewable

energy

generation

Notes: OG = oil and gas; NGCC = natural gas combined cycle; “other” generation includes fossil fuel EGUs,

such as integrated gasification combined cycle (IGCC) units, high utilization combustion turbine units, and

applicable thermal output at cogeneration units; “at-risk” nuclear includes 5.8% of a state’s nuclear power

capacity; renewable energy includes solar, wind, geothermal, wood and wood-derived fuels, other biomass, but

not hydroelectric power.

For the “at-risk” nuclear power element, EPA assumes that under a business-as-usual scenario

some amount of existing nuclear power will be unavailable for use in the near future. Using

projections from EIA, EPA determined that 5.8% of total U.S. nuclear power capacity was at risk

of being retired in the near future.16 EPA used this percentage value to estimate at-risk nuclear

power (in MWh) for each state with operating nuclear units in 2012.17 According to EPA, this

projected outcome is due to a “host of factors –increasing fixed operation and maintenance costs,

(...continued)

block 2].” See EPA, “Goal Computation Technical Support Document,” June 2014, at http://www2.epa.gov/carbonpollution-standards/clean-power-plan-proposed-rule-technical-documents.

CRS calculation based on 2012 data provided in EPA’s technical document spreadsheets.

At first glance, the numerator appears to have extraneous information. For example, it could simply contain pounds

of CO2 from the various categories, instead of generation and emission rate data (which ultimately yields pounds).

See EPA’s Technical Support Document, GHG Abatement Measures.

For states that use a greater portion of nuclear power as part of their electricity generation portfolio, adding this

element to the denominator has a more pronounced effect. For example, South Carolina generated the highest

percentage (53%) of its electricity generation from nuclear power in 2012. South Carolina’s unadjusted emission rate

decreased by 7% with the addition of at-risk nuclear power to the emission rate equation (CRS calculations, using EIA

electricity generation, by source and state, at http://www.eia.gov/electricity/data.cfm#generation).

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State CO2 Emission Rate Goals in EPA’s Proposed Rule for Existing Power Plants

relatively low wholesale electricity prices, and additional capital investment associated with

ensuring plant security and emergency preparedness.”

In addition, EPA added each state’s renewable energy electricity generation (in MWh) from 2012

into the state baseline calculation.18 As discussed below, renewable energy potential plays an

important role in determining EPA’s emission rate interim and final goals. Including renewable

energy in the state baseline rates allows for a more appropriate comparison between the 2012

baseline and interim and final rate goals.

Applying the above equation to each state’s specific circumstances yields a range of emission rate

baselines, as illustrated in Figure 1.

Figure 1. EPA’s 2012 State-Specific Emission Rate Baselines

Pounds CO2 Per Megawatt-Hour

2,500

2,000

1,500

1,000

500

Montana

Kentucky

Wyoming

West Virginia

Nebraska

North Dakota

Missouri

Kansas

Indiana

Tennessee

Illinois

Maryland

Ohio

Wisconsin

Utah

Colorado

Michigan

North Carolina

Arkansas

South Carolina

New Mexico

Iowa

Hawaii

Pennsylvania

Georgia

Minnesota

Louisiana

Arizona

Alabama

Oklahoma

Alaska

Virginia

Texas

Delaware

Florida

South Dakota

Mississippi

Nevada

New York

New Jersey

Massachusetts

Rhode Island

New Hampshire

Connecticut

Washington

Oregon

California

Maine

Idaho

Source: Prepared by CRS.

CO2 Emission Rate Goals

In its proposed rule, EPA identified four categories of CO2 emission reduction strategies that

states could employ to reduce the states’ overall CO2 emission rates. EPA proposed that the

combination of these four strategies—described as “building blocks”—represents the “best

system of emission reduction ... adequately demonstrated,” a key determination pursuant to CAA

Section 111(d).19 Using the state-specific 2012 baseline data as its starting point, EPA applied the

four building blocks to establish CO2 emission rate goals for each state.

For reasons discussed below, hydropower is not included in the 2012 renewable energy baseline.

See CRS Report R43572, EPA’s Proposed Greenhouse Gas Regulations for Existing Power Plants: Frequently

(continued...)

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State CO2 Emission Rate Goals in EPA’s Proposed Rule for Existing Power Plants

Building blocks 1 and 2 directly affect the CO2 emission rate at affected EGUs by factoring in

efficiency improvements at EGUs and opportunities to switch from high- to low-carbon power

generation. In contrast, blocks 3 and 4 involve so-called “outside the fence” opportunities that do

not directly apply to electricity generation at affected EGUs. These blocks decrease the states’

overall CO2 emission rates by (1) increasing the use of low- or zero-carbon electricity generation

and (2) reducing consumer demand for electricity through energy efficiency improvements.

The equation for the 2030 emission rate goals, which includes the application of all four building

blocks, is provided at the end of this section. Compared to the 2012 baseline emission rate

equation, building blocks 3 and 4 add more elements to the equation’s denominator. In its

proposal, EPA explained:

A goal expressed as an unadjusted output-weighted-average emission rate would fail to

account for mass emission reductions from reductions in the total quantity of fossil fuel-fired

generation associated with state plan measures that increase low- or zero-carbon generating

capacity [e.g., renewable portfolio standards] or demand-side energy efficiency.

Accordingly, under the proposed goals, the emission rate computation includes an

adjustment designed to reflect those mass emission reductions.... Mathematically, this

adjustment has the effect of spreading the measured CO2 emissions from the state’s affected

EGUs over a larger quantity of energy output, thus resulting in an adjusted mission rate

lower than the unadjusted emission rate.

The following discussion describes each of these building blocks and their relative contributions

to the state-specific emission rate goals.

Building Block 1—Coal-Fired Generation Efficiency Improvements

Building block 1 applies heat rate20 (i.e., efficiency) improvements to coal-fired, steam EGUs.

EPA maintains that these EGUs are “less efficient at converting fuel into electricity than is

technically and economically possible.”21 Almost all of the existing coal-fired EGUs are

considered steam EGUs. A small percentage of coal-fired EGUs are integrated gasification

combined cycle (IGCC) units, but the proposed heat rate improvements in building block 1 do not

apply to these units. EPA is seeking comment on whether the agency should include heat rate

improvements at other fossil-fuel EGUs as part of its emission rate calculations.

Potential heat rate improvements include the adoption of operation and maintenance best

practices and equipment upgrades. EPA determined that a combination of these potential options

could improve coal-fired EGU heat rates by 6%. A reduction in the heat rate leads to a

proportional reduction in CO2 emissions, because CO2 emissions are directly related to the

amount of fuel consumed. Therefore, building block 1 reduces each state’s CO2 emissions rate

(pounds of CO2 per MWh) for coal-fired affected EGUs by as much as 6%.22

(...continued)

Asked Questions, by (name redacted) et al.

Heat rate is the efficiency of conversion from fuel energy input to electrical energy output often expressed in terms of

BTU per kiloWatt-hour.

EPA’s Technical Support Document, GHG Abatement Measures, at http://www2.epa.gov/carbon-pollutionstandards/clean-power-plan-proposed-rule-technical-documents.

For a further discussion, see CRS Report R43621, EPA’s Proposed Greenhouse Gas Regulations: Implications for

(continued...)

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For example, if a state’s coal-fired affected EGUs averaged 2,000 pounds of CO2 emissions per

MWh in 2012, building block 1 could decrease this rate to 1,880 pounds CO2 per MWh. This

lowers one of the elements (“coal emission rate”) in the numerator of the emission rate equation

(Table 5), but has no effect on the denominator.

As indicated in Table 6, building block 1 decreases state emission rate goals (compared to 2012

baselines) by a range of 0% to 6%. The greater rate impacts are seen in states that have a

relatively high percentage of coal-fired electricity in their electricity generation portfolio.

Building Block 2—Increased Utilization of Natural Gas Combined

Cycle Units

Building block 2 lowers a state’s CO2 emission rate (pounds of CO2 per MWh) from the baseline

by shifting a state’s electricity generation from higher-carbon units, such as coal-fired EGUs, to

lower-carbon NGCC units.23 The carbon intensity of different types of EGUs can vary

considerably. According to EPA,24 the 2012 average CO2 emission rates by unit type category

were the following:

•

Coal steam units = 2,220 lbs. CO2/MWh

•

Oil and natural gas steam units = 1,463 lbs. CO2/MWh

•

NGCC units = 907 lbs. CO2/MWh

As electricity demand increases during the day, system operators or regional transmission

organizations call into service (“dispatch”) additional power plants to meet the electricity needs.

When electricity demand decreases, these additional units are taken off-line. In general, coal-fired

EGUs are dispatched before NGCC units, because coal-fired plants take hours or days to ramp up

to their design capacity and they have traditionally been cheaper to operate than most other

sources.

EPA concluded that there is “significant potential for re-dispatch” from steam EGUs to NGCC

units.25 The agency estimated that, in aggregate, NGCC units provided about 46% of their total

generating capacity in 2012. This measure is called the capacity factor. Based on its analysis, EPA

determined that a state’s capacity factor for its NGCC units could be increased to 70%. Building

block 2 uses the 70% capacity factor to increase the utilization of NGCC units and

correspondingly decrease generation from more carbon intensive EGUs.

As an example, Table 2 illustrates the application of building block 2 for Arizona. In 2012,

NGCC units in Arizona generated 26.8 million MWh of electricity, which represented

approximately 27% of the total NGCC nameplate capacity (11,202 MW) in the state.26 Under

(...continued)

the Electric Power Sector, by (name redacted).

For a further discussion, see CRS Report IN10089, The Role of Natural Gas in EPA’s Proposed Clean Power Plan,

by (name redacted).

EPA’s Technical Support Document, GHG Abatement Measures.

If the state had NGCC under construction, this generating capacity would also be included.

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building block 2 methodology, the increase in NGCC generation is capped at the lower of two

ceilings: 70% of the nameplate capacity or the total generation from coal and OG steam EGUs

and NGCC units in 2012. Applying the 70% NGCC capacity factor would increase NGCC

generation from 26.8 million MWh to 68.9 million MWh,27 well above the total generation from

all units in 2012 of 52.1 million MWh. Therefore, NGCC generation increases to 52.1 million

MWh, the total generation from fossil fuel units in 2012. Applying block 2 methodology, the

increased NGCC generation replaces generation from coal and OG steam EGUs, decreasing their

generation to zero.

As Table 2 indicates, building block 2 has a substantial effect on Arizona’s emission rate,

reducing it by 42%. Note that the results of applying building block 2 do not require or predict a

particular outcome in a state’s electricity generation profile. The results are a function of the

emission rate methodology. States may choose to meet their emission rate goals through

alternative approaches.

Table 6 shows the effect that building blocks 1-2 have on all of the 2012 state emission rate

baselines.

Table 2. Illustration of Building Block 2 for Arizona’s Emission Rate Goal

2012 Baseline

After Building Block 2

Coal steam generation

24.3 million MWh

OG steam generation

1.0 million MWh

NGCC generation

26.8 million MWh

52.1 million MWh

Total generation

52.1 million MWh

27%

53%

1,453 lbs. CO2/MWh

843 lbs. CO2/MWh

NGCC capacity factor

Emissions Rate

NGCC nameplate capacity = 11,202 MW

Source: Prepared by CRS; data from EPA Proposed Rule, technical support documents and spreadsheets, at

http://www2.epa.gov/carbon-pollution-standards/clean-power-plan-proposed-rule-technical-documents.

Building Block 3—Renewable Energy and Nuclear Power

Building block 3 factors in additional electricity generation from low- or zero-carbon emitting

sources, including renewable energy and nuclear power. Both types of generation are added to the

denominator for the emission rate equation (see Table 5 at the end of this section), but the

numerator is unchanged. The methodologies for incorporating these categories of electricity

generation are very different, thus they are discussed separately below.

11,202 MW * 8,784 hours (in 2012, a leap-year) * 0.7 = 68.9 million MWh.

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Renewable Energy

Building block 3 projects annual renewable energy (RE) increases for each state. Current RE use

varies by states and the potential to utilize different types of renewable energy sources—wind,

solar, geothermal—varies by geographic location. To “account for similar power system

characteristics as well as geographic similarities in [renewable energy] potential.”28 As illustrated

in Figure 2, EPA placed each state into one of six regions (Alaska and Hawaii have individual

targets). EPA determined a RE 2030 target for each region based on an average of existing RE

targets that are required by states in the relevant region.29 Then, EPA calculated an annual growth

rate for each region that would allow each region to reach its specific target by 2030.

Figure 2. EPA’s Proposed Regions in its Renewable Energy Methodology

Source: Figure 4-3 from EPA, Technical Support Document, GHG Abatement Measures.

Table 3 lists the six regions and their states, the regional targets, and the average annual growth

rates for each region. The regional targets range from 10% to 25%, and the growth rates range

from 6% to 17%. As the table indicates, a region can have a relatively high regional target (e.g.,

the West region’s target of 21%) but have a relatively low growth rate (6% in the West region).

Unofficial proposed rule, p. 195.

As of March 2013, 29 states (and the District of Columbia) have established renewable portfolio standards (RPS),

requiring retail electricity suppliers to supply a minimum percentage or amount of their retail electricity load with

electricity generated from eligible sources of renewable energy, as defined by the state. An additional nine states have

voluntary goals. See the Database of State Incentives for Renewables and Efficiency, at http://www.dsireusa.org/.

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State CO2 Emission Rate Goals in EPA’s Proposed Rule for Existing Power Plants

Conversely, a state can have a relatively low target (10% in the Southeast region) and a relatively

high growth rate (13% in the Southeast region). These outcomes are a function of EPA’s

methodology. For instance, the West region’s growth rate is relatively low, because some of the

states—namely California, which accounts for 28% of the region’s total electricity generation—

are more than halfway toward the regional goal. In contrast, the states in the Southeast are starting

with relatively low percentages (0% to 3%) of RE generation in 2012, which accounts for the

relatively high growth rate needed to achieve their regional target.

Table 3. Renewable Energy Regions,Targets, and Growth Rates

Region

States

Regional Target

Average Annual

Growth Rate

East Central

Delaware, District of Columbia, Maryland, New Jersey, Ohio,

Pennsylvania, Virginia, and West Virginia

16%

17%

North Central

Illinois, Indiana, Iowa, Michigan, Minnesota, Missouri, North

Dakota, South Dakota, and Wisconsin

15%

Northeast

Connecticut, Maine, Massachusetts, New Hampshire, New York,

Rhode Island, and Vermont

25%

13%

South Central

Arkansas, Kansas, Louisiana, Nebraska, Oklahoma, and Texas

20%

Southeast

Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina,

South Carolina, and Tennessee

10%

13%

West

Arizona, California, Colorado, Idaho, Montana, Nevada, New

Mexico, Oregon, Utah, Washington, and Wyoming

21%

Alaska

10%

11%

Hawaii

10%

Source: Prepared by EPA; data from EPA, Technical Support Document, Greenhouse Gas Abatement Measures.

Notes: Although Vermont does not have an emission rate goal, EPA included Vermont’s RE generation when

the agency determined the annual growth rate for the Northeast region. If Vermont’s RE generation is excluded,

the annual growth rate increases slightly, but remains at 13%.

EPA applies the region-specific, annual growth rate to each state’s RE generation in 2012 to

estimate annual RE generation for each state from 2017 through 2030.30 If a state’s RE use equals

or exceeds its 2030 regional target, the state’s RE use is held constant at the level that matches its

regional target.

The 2012 RE baseline does not include hydroelectric generation.31 According to EPA:

Inclusion of this generation in current and projected levels of performance would distort the

proposed approach by presuming future development potential of large hydroelectric

capacity in other states. Because RPS [renewable portfolio standard] policies were

implemented to stimulate the development of new RE generation, existing hydroelectric

Further details about this methodology are in a technical support document for the proposed rule, GHG Abatement

Measures, Chapter 4, at http://www2.epa.gov/carbon-pollution-standards/clean-power-plan-proposed-rule-technicaldocuments.

According to EPA, “

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State CO2 Emission Rate Goals in EPA’s Proposed Rule for Existing Power Plants

facilities are often excluded from RPS accounting. No states are expected to develop any

new large facilities.32

Although EPA’s determination of regional RE targets does not explicitly account for opportunities

to build new hydroelectric facilities,33 states could use increased hydroelectric power generation

in the future to lower their emission rate.

Table 4 applies EPA’s methodology and depicts the states’ RE levels in 2012, total electricity

generation in 2012, and the percentage of electricity generation from renewable sources in 2012

and 2030. The last column measures the projected RE generation in 2030 against the total

electricity generation in 2012.

EPA’s RE building block 3 methodology yields the following results:

•

About half of the states would not reach their region-specific goals by 2030; the

other half would reach the region-specific goals. Some of these states reached

their goals in the early years. In general, the percentage of electricity generated

from renewable sources in these states was relatively high in the baseline year

(2012);

•

Five states—Iowa, Maine, Minnesota, North Dakota, and South Dakota—

matched or exceeded their regional RE targets in 2012, so the estimated future

RE generation (for the purposes of the emission rate calculations) in these states

actually decreases to match their regional targets. Arguably, this outcome

artificially lowers the emission rate targets for these states and EPA specifically

asks for comment on whether the calculations should include a RE floor based on

2012 generation; and

•

The impact of building block 3 varies considerably by states. Not counting the

states that meet or exceed their targets in 2012, some states increase their

percentages of RE generation by 2%; others increase their percentages by over

18%. These different impacts are reflected in Table 6, which shows the emission

rate change after applying blocks 1-3.

Table 4. Renewable Energy Generation

States Grouped in Their Renewable Energy Regions

State

2012 RE Generation

(MWh)

2012 Total Electricity

Generation (MWh)

Percent of RE

Generation in 2012

Percent of RE

Generation in 2030

Region: East Central – Target 16% – Annual Growth Rate 17%

Delaware

131,051

8,633,694

12%

Maryland

898,152

37,809,744

16%

New Jersey

1,280,715

65,263,408

16%

Ohio

1,738,622

129,745,731

11%

Pennsylvania

4,459,118

223,419,715

16%

EPA, Technical Support Document, Greenhouse Gas Abatement Measures, pp. 4-5.

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State CO2 Emission Rate Goals in EPA’s Proposed Rule for Existing Power Plants

2012 RE Generation

(MWh)

2012 Total Electricity

Generation (MWh)

Percent of RE

Generation in 2012

Percent of RE

Generation in 2030

Virginia

2,358,444

70,739,235

16%

West Virginia

1,296,563

73,413,405

14%

State

Region: North Central –Target 15% – Annual Growth Rate 6%

Illinois

8,372,660

197,565,363

Indiana

3,546,367

114,695,729

Iowa

14,183,424

56,675,404

25%

15%

Michigan

3,785,439

108,166,078

Minnesota

9,453,871

52,193,624

18%

15%

Missouri

1,298,579

91,804,321

North Dakota

5,280,052

36,125,159

15%

South Dakota

2,914,666

12,034,206

24%

15%

Wisconsin

3,223,178

63,742,910

11%

Region: Northeast – Target 25% – Annual Growth Rate 13%

Connecticut

666,525

36,117,544

Maine

4,098,795

14,428,596

28%

25%

Massachusetts

1,843,419

36,198,121

24%

New Hampshire

1,381,285

19,264,435

25%

New York

5,192,427

135,768,251

18%

Rhode Island

101,895

8,309,036

Vermont

465,169

6,569,670

25%

Region: South Central – Target 20% – Annual Growth Rate 8%

Arkansas

1,660,370

65,005,678

Kansas

5,252,653

44,424,691

12%

20%

Louisiana

2,430,042

103,407,706

Nebraska

1,346,762

34,217,293

11%

Oklahoma

8,520,724

77,896,588

11%

20%

Texas

34,016,697

429,812,510

20%

Region: Southeast – Target 10% – Annual Growth Rate 13%

Alabama

2,776,554

152,878,688

Florida

4,523,798

221,096,136

10%

Georgia

3,278,536

122,306,364

10%

Kentucky

332,879

89,949,689

0.4%

Mississippi

1,509,190

54,584,295

10%

North Carolina

2,703,919

116,681,763

10%

South Carolina

2,143,473

96,755,682

10%

836,458

77,724,264

Tennessee

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State CO2 Emission Rate Goals in EPA’s Proposed Rule for Existing Power Plants

State

2012 RE Generation

(MWh)

2012 Total Electricity

Generation (MWh)

Percent of RE

Generation in 2012

Percent of RE

Generation in 2030

Region: West – Target 21% – Annual Growth Rate 6%

Arizona

1,697,652

95,016,925

California

29,966,846

199,518,567

15%

21%

Colorado

6,192,082

52,556,701

12%

21%

Idaho

2,514,502

15,499,089

16%

21%

Montana

1,261,752

27,804,784

10%

Nevada

2,968,630

35,173,263

18%

New Mexico

2,573,851

22,894,524

11%

21%

Oregon

7,207,229

60,932,715

12%

21%

Utah

1,099,724

36,312,527

Washington

8,214,350

116,835,474

15%

Wyoming

4,369,107

49,588,606

19%

Alaska

39,958

6,946,419

Hawaii

924,815

10,469,269

10%

Source: Prepared by CRS; data from EPA, Technical Support Document, Greenhouse Gas Abatement

Measures, which uses data from EIA, “Net Generation by State by Type of Producer by Energy,” at

http://www.eia.gov/electricity/data/state/.

Notes: RE generation includes solar, wind, geothermal, wood and wood-derived fuels, other biomass, but not

hydroelectric power. The “total electricity generation” data include generation from multiple sources, including

both affected and non-affected fossil-fired EGUs, the above renewable energy sources and hydroelectric power.

The column labeled “Percent of RE Generation in 2030” measures the projected RE generation (MWh) in 2030

compared to the total MWh of electricity generated in 2012.

Although Vermont does not have an emission rate goal, EPA included Vermont’s RE generation when the agency

determined the annual growth rate for the Northeast region. If Vermont’s RE generation is excluded, the annual

growth rate increases slightly, but remains at 13%.

Nuclear Energy

The second part of building block 3 involves nuclear power generation. EPA includes both “atrisk” and “under construction” nuclear power in the denominator of the emission rate equation

(see Table 5 at the end of this section). As discussed above, the “at-risk” nuclear power, which

exists in 30 states, was factored into the state 2012 baseline emission rates. Thus, its inclusion in

the emission rate goal equation has no effect on the emission rate compared to the 2012

baseline.34 However, its inclusion in the 2012 baseline equation was unique: it was the only part

of the baseline equation that projected future activity (i.e., loss of nuclear power capacity). Thus,

if states do not maintain their existing nuclear generation, their emission rates will increase (all

else being equal). Including at-risk nuclear generation in the baseline equation denominator was

one of EPA’s “adjustments.” The at-risk nuclear generations lowered the (unadjusted) baselines in

some states by as much as 7%, thus having a stronger impact than building block 1.

The same MWh value is added to the denominator in both equations, having no impact on the emission rate goals.

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State CO2 Emission Rate Goals in EPA’s Proposed Rule for Existing Power Plants

In addition to the “at-risk” nuclear power, EPA added projected electricity generation from

nuclear power units that are currently under construction. EPA identified five under-construction

nuclear units at three facilities in Georgia, South Carolina, and Tennessee. The estimated electric

generation from these units and their percentage contribution to the state’s total electricity

generation in 2012 are listed below:

•

Georgia: approximately 17 million MWh (14% of total electric generation in

2012);

•

South Carolina: approximately 17 million MWh (18% of total electric generation

in 2012); and

•

Tennessee: approximately 9 million MWh (11% of total electric generation in

2012).

Including the estimated generation from these anticipated units in the emission rate equation

substantially lowers the emission rates of these three states (Table 6). If these anticipated units do

not complete construction and enter service, these states would likely have more difficulty

achieving their emission rate goals.

Building Block 4—Energy Efficiency Improvements

The fourth building block reduces state emission rates by including avoided electricity generation

that results from projected energy efficiency (EE) improvements. These EE improvements are

described as “demand-side,” because they would seek to reduce the demand for electricity from

end-users, such as factories, office buildings, and homes. EPA estimated the amount of decreased

electricity generation in each state that would result from EE activities and added the avoided

MWh to the denominator of the emission rate equation (Table 5).

Demand-side EE activities can involve a range of practices in the residential, commercial, and

industrial sectors. According to EPA, “every state has established demand-side energy efficiency

policies.”35 However, these policies cover a wide range of activities, and, as discussed below,

their effectiveness varies. EPA states that the “most prominent and impactful” EE policies in most

states are those that drive the development and funding of EE programs and building codes.36

To estimate the avoided electricity generation, EPA first determined the “best practices”

performance target for all states. Using data from EIA,37 EPA calculated each state’s incremental

EE savings as a percentage of retail electricity sales. According to EPA, “incremental savings

(also known as first-year savings) represent the reduction in electricity use in a given year

associated with new EE activities in that same year.” As Figure 3 illustrates, the states’ 2012

incremental EE savings ranged from 0% to 2.19%.

In addition to the three states—Vermont, Maine, and Arizona—that achieved EE savings greater

than 1.5% (Figure 3), EPA concluded that nine other states are expected to reach this annual level

EPA Proposed Rule, p. 34871.

EPA, Technical Support Document, Greenhouse Gas Abatement Measures.

EPA used data from EIA Form 861, which includes retail electricity sales and incremental electricity savings from

energy efficiency, available at http://www.eia.gov/electricity/data/eia861/index.html.

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State CO2 Emission Rate Goals in EPA’s Proposed Rule for Existing Power Plants

of performance by 2020.38 Based on these observed and expected achievements, EPA determined

that the “best practices” performance target for all states should be 1.5%. Figure 3 depicts this

performance target as a red line. EPA explained:

[The best practices scenario] does not represent an EPA forecast of business-as-usual

impacts of state energy efficiency policies or an EPA estimate of the full potential of end-use

energy efficiency available to the power system, but rather represents a feasible policy

scenario showing the reductions in fossil fuel-fired electricity generation resulting from

accelerated use of energy efficiency policies in all states consistent with a level of

performance that has already been achieved or required by policies (e.g., energy efficiency

resource standards) of the leading states.39

Similar to the RE methodology described above, EPA’s calculations assume that the EE

component of the rate equation begins in 2017, and states would start that year at the EE

incremental saving levels achieved in 2012 (Figure 3). EPA points out that EE improvements

made between 2012 and 2017 would count toward achieving a state’s emission rate target.

However, if a state were to decrease its actual EE performance prior to 2017, the state would face

a more difficult effort (all else being equal) in achieving its emission rate goal, as its 2017 EE

starting point would be based on its (higher) 2012 EE performance level.

EPA, Technical Support Document, Greenhouse Gas Abatement Measures.

EPA Proposed Rule, p. 34872.

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State CO2 Emission Rate Goals in EPA’s Proposed Rule for Existing Power Plants

Figure 3. Incremental Energy Efficiency Savings in 2012 by State

Compared to EPA’s Best Practices Level

Vermont

Maine

Arizona

California

Minnesota

Oregon

Pennsylvania

Wisconsin

Iowa

Connecticut

Michigan

Massachusetts

Washington

New York

Illinois

Maryland

Ohio

Colorado

Idaho

Rhode Island

Utah

Montana

New Mexico

Indiana

Nevada

New Hampshire

North Carolina

South Carolina

Tennessee

Nebraska

Florida

Kentucky

Oklahoma

Texas

West Virginia

Georgia

Wyoming

South Dakota

Missouri

Arkansas

Mississippi

North Dakota

Alabama

Hawaii

Virginia

New Jersey

Kansas

Alaska

Louisiana

Delaware

EPA Best

Practices Level

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

Incremental Energy Efficiency Savings as a

Percentage of Electricity Sales

Source: Prepared by CRS; data from EPA, Technical Support Document, Greenhouse Gas Abatement

Measures. EPA used data from EIA Form 861, which includes retail electricity sales and incremental electricity

savings from energy efficiency, available at http://www.eia.gov/electricity/data/eia861/index.html.

Notes: Although Vermont does not have an emission rate goal, EPA included its EE performance in its best

practice analysis.

The next determination made by EPA was the pace at which states, starting in 2017, would

annually increase their EE incremental performance. Based on its analysis of historical EE

performance increases and future requirements for some states, EPA chose an annual increase of

0.2%, which it deemed as a “conservative” value.

EPA assumed that each state would increase its incremental EE performance by 0.2% each year,

starting in 2018, until it reached the best practices, incremental target of 1.5%. EPA projects that a

small number of states would achieve this level in 2017, with the rest of the states reaching this

level by 2025. Once this level is achieved, EPA assumed the states could sustain that incremental

performance level through 2030.

Next, EPA estimated the cumulative savings that each state would achieve through its annual,

incremental EE efforts. In contrast to incremental savings, which measure EE improvements

made in one specific year, cumulative savings include the aggregate impacts of EE improvements

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State CO2 Emission Rate Goals in EPA’s Proposed Rule for Existing Power Plants

made in prior years. This raises the question: how many years are counted in the cumulative

savings tally? For instance, the installation of a high-efficiency appliance may yield EE savings

for the life of the appliance (e.g., 10-15 years), referred to as its “measure life.” Other

improvements (e.g., home insulation, building codes) may provide savings for 20 years or more.

Based on its analysis of various studies, EPA determined the average measure life for an EE

portfolio would be 10 years. However, in its EE methodology, EPA distributed the decline in EE

savings over 20 years, instead of having 10 years of savings and then dropping to zero at year 11.

Both approaches lead to the same overall EE savings, but EPA’s approach spreads the savings

over a longer period of time.

EPA used the above inputs to estimate cumulative EE savings, as a percentage of retail sales, for

each state for each year between 2020 and 2030. This calculation combined the above statespecific inputs with business-as-usual regional estimates of electricity retail sales.40 Based on

EPA’s estimates, the EE improvements would yield cumulative reductions in electricity

generation in the range of 9% to 12% by 2030, depending on the state’s EE starting point.

EPA applied each state’s annual (2020-2029) cumulative reductions (as a percentage of sales) to

the amount of total electricity (including hydropower) sold to in-state consumers in 2012. EPA

adjusted this value to account for states that are net importers or exporters of electricity. Some

states (e.g., Idaho and Delaware) import close to 50% of the electricity sold in their state. Other

states (e.g., North Dakota, Wyoming, and West Virginia) generate more than twice the amount of

electricity they use in-state, exporting the additional electricity to neighboring states.

For net importers, EPA adjusted the cumulative reductions by applying the cumulative reduction

percentage to in-state sales, multiplied by the in-state generation as a percentage of sales. For

example, Delaware’s in-state generation as a percentage of sales equaled 45%, meaning it

imported 55% of its total electricity in 2012. To calculate Delaware’s cumulative EE reductions,

EPA multiplied Delaware’s electricity sales (12 million MWh) by its generation as a percentage

of sales (0.45) by its cumulative EE reduction percentage (9.5% in 2029).

For net exporters, the EE cumulative reduction percentages only apply to in-state electricity sales,

not the total amount of electricity generated. The resulting avoided electricity generation values

for each state are added to the denominator in the emission rate equation (Table 5).

The impacts of applying building block 4 to the emission rate equation vary by state. In general,

the effects appear to be more pronounced in states that generate a large percentage of their

electricity from sources that are not already included in the emission rate equation. This primarily

involves hydroelectric power, and to some extent, nuclear power generation. For example,

building block 4 appears to have a greater effect in Washington (77% of total power generation

from hydropower), Idaho (71% from hydropower), and Oregon (65% from hydropower).

Building block 4 includes hydroelectric power generation as part of the total generation subject to

EE reductions, but this is the only instance in which MWh from hydroelectric power generation

are part of the emission rate equation.

In addition, the EE methodology appears to have a greater effect in states with relatively high

percentages of nuclear power generation, such as South Carolina (53% nuclear power) and New

EPA generated these projections by using the 2012 retail sales data and average annual growth rates for different

regions provided in EIA’s 2013 Annual Energy Outlook.

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State CO2 Emission Rate Goals in EPA’s Proposed Rule for Existing Power Plants

Jersey (51% nuclear power). Although existing nuclear power is captured in the emission rate

equation, it only accounts for the at-risk (5.8%) component.

By comparison, the effects of building block 4 are less pronounced in states that export a

substantial amount of the electricity they generate, such as Wyoming, North Dakota, and West

Virginia. These states generate more than twice as much electricity as they consume. The total

generation from affected EGUs is captured in the equation’s numerator, but only the avoided

generation from in-state sales is captured in the denominator, resulting in a lesser impact from

building block 4.

What do the different effects of the EE building block mean for states? The states that generate a

considerable percentage of electricity from either hydroelectric power or nuclear power may have

more limited options to find emission rate reductions than other states. The inclusion of avoided

generation from all electricity generating sources may compel these states to focus on EE

improvements to reach their emission rate targets. This potential outcome assumes these states

cannot find rate reductions from their existing hydroelectric or nuclear power sources.

Concluding Observations

As Table 6 indicates, the building blocks affect each state’s emission rate baseline in different

ways, depending on each state’s specific electricity generation circumstances. Table 6 presents an

incremental analysis of the impacts of applying the building blocks in a stepwise fashion (or all at

once), ultimately reaching the 2030 emission rate goal.

As another measure of a state-by-state comparison, CRS used EPA’s emission rate methodology

to calculate the impacts of each building block in isolation. The results are listed in Table 7.

These calculations illustrate the relative impacts of the four building blocks for each state. For

example in Idaho, building blocks 1, 2, and 3 (nuclear) have no impact on the 2012 emission rate,

because Idaho has no coal-fired EGUs, no room to improve its NGCC utilization, and no nuclear

generation. Therefore, the only impacts to its 2012 baseline rate are due to the renewable

component of building block 3 and EE improvements from building block 4.

As Table 7 indicates, on average, building block 1 has the smallest impact (4%), decreasing state

emission rate goals (compared to 2012 baselines) by a range of 0% to 6%. The emission rates in

states (e.g., Rhode Island, Maine, and Idaho) without coal-fired, steam EGUs are unaffected by

this block; states that employ coal-fired units to generate a significant percentage of their

electricity (e.g., Kentucky, West Virginia, and Wyoming) see a greater impact to their emission

rates.

Building block 2, on average, generates the largest (tied with block 4 below) incremental impact

(13%), ranging from a 0% to 38% change (compared to baseline). The largest changes are seen in

states that have both coal-fired EGUs and under-utilized NGCC plants. The smallest impacts are

in states without any NGCC and states that already have relatively high NGCC utilization rates.

Although the nuclear component of building block 3 only affects three states, its impacts are

considerable in those states.

The RE component of building block 3, on average, reduces emission rate baselines by 9% (10%

if the negative values are omitted). The impacts from the RE block application range from 2% to

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State CO2 Emission Rate Goals in EPA’s Proposed Rule for Existing Power Plants

33%. Multiple factors explain this range of impacts. For example, this block has a considerable

effect in Washington (33%), because it increases the state’s RE generation by 116% and RE

accounts for a substantial percentage of the state’s total generation (not counting hydroelectric

power): 30% in 2012 and 65% in 2030. Although Kentucky’s RE generation increases by 415%

between 2012 and 2030 (from 0.4% to 2%), the RE block has a relatively small impact, because

RE continues to account for a small percentage of the state’s total generation.

Building block 4 has the largest impact (tied with block 2) on emission rate baselines, reducing

them, on average, by 13%, but the range of impacts is between 4% and 37%. This range is a

result of several factors, including (1) the contribution of in-state electricity generation that comes

from hydroelectric power or nuclear power; and (2) whether the state is a net importer or net

exporter of electricity.

Although the isolated building block application (in Table 7) provides a comparison of the

relative magnitude of potential effects in each state, states have the flexibility to combine the

building blocks (and/or other potential activities) to meet their emission rate targets. EPA’s

building blocks were meant to establish the emission rate goals, not predict a particular outcome

in a state’s electricity generation profile.

Congressional Research Service

Table 5. Equation for CO2 Emission Rate Goals

Building Block (BB) Adjustments

coal

generation

(BB2)

2030

Emission

Rate

Goal

OG generation

(BB2)

coal

emission

rate (BB1)

coal

generation

(BB2)

NGCC generation

(BB2)

OG emission

rate

OG generation

(BB2)

NGCC emission

rate

NGCC generation

(BB2)

“Other”

CO2

emissions

“Other”

generation

“At-risk”

and under

construction

nuclear

generation

(BB3)

Renewable

energy

generation

(BB3)

Avoided

generation

from energy

efficiency

(BB4)

Source: Prepared by CRS; additional information in EPA, Goal Computation Technical Support Document, at http://www2.epa.gov/carbon-pollution-standards/clean-powerplan-proposed-rule-technical-documents.

Notes: OG = oil and gas; NGCC = natural gas combined cycle; “other” generation includes fossil fuel EGUs, such as integrated gasification combined cycle (IGCC) units,

high utilization combustion turbine units, and applicable thermal output at cogeneration units; “at-risk” nuclear includes 5.8% of a state’s nuclear power capacity;

renewable energy includes solar, wind, geothermal, wood and wood-derived fuels, other biomass, but not hydroelectric power.

CRS-20

State CO2 Emission Rate Goals in EPA’s Proposed Rule for Existing Power Plants

Table 6. 2012 State Emission Rate Baselines and Building Block Applications

Emission rate baselines in pounds of CO2 emissions per MWh

2012 Emission

Rate Baseline

Block 1

Blocks 1-2

Blocks 1-3

Blocks 1-4

(2030 Emissions

Rate Goal)

Percent Reduction

from 2012 Baseline

Alabama

1,444

1,385

1,264

1,139

1,059

27%

Alaska

1,351

1,340

1,237

1,191

1,003

26%

Arizona

1,453

1,394

843

814

702

52%

Arkansas

1,634

1,554

1,058

996

910

44%

California

698

697

662

615

537

23%

Colorado

1,714

1,621

1,334

1,222

1,108

35%

Connecticut

765

764

733

643

540

29%

Delaware

1,234

1,211

996

892

841

32%

Florida

1,199

1,169

882

812

740

38%

Georgia

1,500

1,433

1,216

926

834

44%

Hawaii

1,540

1,512

1,485

1,306

15%

Idaho

339

291

228

33%

Illinois

1,894

1,784

1,614

1,476

1,271

33%

Indiana

1,924

1,817

1,772

1,707

1,531

20%

Iowa

1,552

1,461

1,304

1,472

1,301

16%

Kansas

1,940

1,828

1,658

1,499

23%

Kentucky

2,158

2,028

1,978

1,947

1,763

18%

Louisiana

1,455

1,404

1,043

978

883

39%

Maine

437

425

451

378

14%

Maryland

1,870

1,772

1,722

1,394

1,187

37%

925

915

819

661

576

38%

Michigan

1,690

1,603

1,408

1,339

1,161

31%

Minnesota

1,470

1,389

999

1,042

873

41%

Mississippi

1,093

1,071

809

752

692

37%

Missouri

1,963

1,849

1,742

1,711

1,544

21%

Montana

2,246

2,114

1,936

1,771

21%

Nebraska

2,009

1,889

1,803

1,652

1,479

26%

Nevada

988

970

799

720

647

35%

New Hampshire

905

887

710

532

486

46%

New Jersey

928

916

811

616

531

43%

New Mexico

1,586

1,513

1,277

1,163

1,048

34%

New York

978

970

828

652

549

44%

1,647

1,560

1,248

1,125

992

40%

State

Massachusetts

North Carolina

Congressional Research Service

State CO2 Emission Rate Goals in EPA’s Proposed Rule for Existing Power Plants

2012 Emission

Rate Baseline

Block 1

Blocks 1-2

Blocks 1-3

Blocks 1-4

(2030 Emissions

Rate Goal)

Percent Reduction

from 2012 Baseline

North Dakota

1,994

1,875

1,865

1,783

11%

Ohio

1,850

1,751

1,673

1,512

1,338

28%

Oklahoma

1,387

1,334

1,053

964

895

35%

Oregon

717

701

565

452

372

48%

Pennsylvania

1,531

1,458

1,393

1,157

1,052

31%

Rhode Island

907

867

782

14%

South Carolina

1,587

1,506

1,342

866

772

51%

South Dakota

1,135

1,067

732

900

741

35%

Tennessee

1,903

1,797

1,698

1,322

1,163

39%

Texas

1,284

1,235

979

861

791

38%

Utah

1,813

1,713

1,508

1,454

1,322

27%

Virginia

1,302

1,258

1,047

894

810

38%

Washington

756

728

444

298

215

72%

West Virginia

2,019

1,898

1,687

1,620

20%

Wisconsin

1,827

1,728

1,487

1,379

1,203

34%

Wyoming

2,115

1,988

1,957

1,771

1,714

19%

State

Source: Prepared by CRS; data from EPA, Goal Computation Technical Support Document, at

http://www2.epa.gov/carbon-pollution-standards/clean-power-plan-proposed-rule-technical-documents.

Notes: EPA did not establish emission rate goals for Vermont and the District of Columbia because they do not

currently have affected EGUs.

Congressional Research Service

Table 7. Application of EPA’s Building Blocks in Isolation

Block 1

Percent

Reduction

from

Baseline

Block 2

Percent

Reduction

from

Baseline

Block 3

(Nuclear)

Percent

Reduction

from

Baseline

Block 3

(Renewables)

Percent

Reduction

from

Baseline

1,444

1,385

1,311

1,444

1,301

10%

1,332

Alaska

1,351

1,340

1,237

1,351

1,301

1,131

16%

Arizona

1,453

1,394

843

42%

1,453

1,404

1,247

14%

Arkansas

1,634

1,554

1,087

34%

1,634

1,538

1,485

California

698

697

662

698

645

598

14%

Colorado

1,714

1,621

1,394

19%

1,714

1,567

1,538

10%

Connecticut

765

764

733

765

671

12%

629

18%

Delaware

1,234

1,211

999

19%

1,234

1,105

10%

1,156

Florida

1,199

1,169

885

26%

1,199

1,101

1,083

10%

Georgia

1,500

1,433

1,261

16%

1,243

17%

1,355

10%

1,310

13%

Hawaii

1,540

1,512

1,540

1,512

1,350

12%

Idaho

339

291

14%

257

24%

Illinois

1,894

1,784

1,705

10%

1,894

1,732

1,609

15%

Indiana

1,924

1,817

1,874

1,924

1,853

1,719

11%

Iowa

1,552

1,461

1,377

11%

1,552

1,752

-13%

1,390

10%

Kansas

1,940

1,828

1,940

1,759

1,738

10%

Kentucky

2,158

2,028

2,093

2,158

2,123

1,944

10%

Louisiana

1,455

1,404

1,067

27%

1,455

1,364

1,305

10%

Maine

437

424

437

465

-6%

370

16%

Maryland

1,870

1,772

1,815

1,870

1,513

19%

1,538

18%

925

915

819

11%

925

747

19%

781

16%

2012

Emission

Rate Baseline

Alabama

State

Massachusetts

CRS-23

Block 4

Percent

Reduction

from

Baseline

Block 1

Percent

Reduction

from

Baseline

1,690

1,603

Minnesota

1,470

Mississippi

Block 2

Percent

Reduction

from

Baseline

Block 3

(Nuclear)

Percent

Reduction

from

Baseline

Block 3

(Renewables)

Percent

Reduction

from

Baseline

1,476

13%

1,690

1,607

1,456

14%

1,389

1,038

29%

1,470

1,533

-4%

1,239

16%

1,093

1,071

809

28%

1,130

1,040

1,020

10%

Missouri

1,963

1,849

1,844

1,963

1,928

1,769

10%

Montana

2,246

2,114

2,246

2,058

2,038

Nebraska

2,009

1,889

1,910

2,009

1,840

1,781

11%

Nevada

988

970

799

19%

988

890

10%

878

11%

New

Hampshire

905

887

710

22%

905

678

25%

804

11%

New Jersey

928

916

811

13%

928

704

24%

766

17%

New Mexico

1,586

1,513

1,326

16%

1,586

1,444

1,415

11%

New York

978

970

828

15%

978

771

21%

790

19%

North

Carolina

1,647

1,560

1,298

21%

1,647

1,463

11%

1,407

15%

North Dakota

1,994

1,875

1,994

1,984

1,907

Ohio

1,850

1,751

1,763

1,850

1,669

10%

1,613

13%

Oklahoma

1,387

1,334

1,079

22%

1,387

1,269

1,280

Oregon

717

701

565

21%

717

573

20%

565

21%

Pennsylvania

1,531

1,458

1,531

1,272

17%

1,367

11%

Rhode Island

907

867

814

10%

South

Carolina

1,587

1,506

1,406

11%

1,147

28%

1,361

14%

1,335

16%

South Dakota

1,135

1,067

754

34%

1,135

1,395

-23%

965

15%

Tennessee

1,903

1,797

1,794

1,581

17%

1,762

1,618

15%

State

2012

Emission

Rate Baseline

Michigan

CRS-24

Block 4

Percent

Reduction

from

Baseline

Block 1

Percent

Reduction

from

Baseline

1,284

1,235

Utah

1,813

Virginia

Block 2

Percent

Reduction

from

Baseline

Block 3

(Nuclear)

Percent

Reduction

from

Baseline

Block 3

(Renewables)

Percent

Reduction

from

Baseline

1,002

22%

1,284

1,129

12%

1,167

1,713

1,584

13%

1,813

1,748

1,643

1,302

1,258

1,067

18%

1,302

1,076

17%

1,133

13%

Washington

756

728

444

41%

756

506

33%

479

37%

West Virginia

2,019

1,898

2,019

1,794

11%

1,929

Wisconsin

1,827

1,728

1,561

15%

1,827

1,694

1,577

14%

Wyoming

2,115

1,988

2,075

2,115

1,911

10%

2,039

2012

Emission

Rate Baseline

Texas

State

Average

13%

Block 4

Percent

Reduction

from

Baseline

Source: Prepared by CRS; data from EPA, technical support document spreadsheets, at http://www2.epa.gov/carbon-pollution-standards/clean-power-plan-proposedrule-technical-documents.

Notes: Using EPA’s emission rate formula and underlying data (provided in EPA spreadsheets), CRS calculated the impacts that each building block would have on the

emission rate baselines. The building block applications examine their impacts in isolation. For example, the data in the block 2 column do not include the impacts of

applying block one methodology, only the effects of applying block 2.

EPA did not establish emission rate goals for Vermont and the District of Columbia because they do not currently have affected EGUs.

CRS-25

13%

State CO2 Emission Rate Goals in EPA’s Proposed Rule for Existing Power Plants

Author Contact Information

(name redacted)

Specialist in Environmental Policy

[redacted]@crs.loc.gov, 7-....

Congressional Research Service

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