1. EPA Rulemakings to Set GHG Emission Standards for Power Plants National Hydropower Association Webinar Kyle Danish February 14, 2014

2. President’s July 2013 Climate Action Plan ◘Directed EPA to regulate power plants under CAA section 111 Section 111(b) new power plants Section 111(d) existing power plants ◘Timeline Propose rule for new power plants by September 2013 (done) Propose guideline for existing power plants by June 1, 2014 Finalize guideline for existing power plants by June 1, 2015 State plans due for existing power plants by June 30, 2016 Compliance deadline for power plants (??) National Hydropower Association

3. Section 111 of the Clean Air Act ◘Standards of performance for major sources of pollution Emission limitation based on “best system of emission reduction” that has been “adequately demonstrated” taking into account cost ◘Sec. 111(b): standards of performance for new sources EPA sets standard ◘Sec. 111(d): standards of performance for existing sources States set standard subject to EPA approval Legal controversy about EPA authority National Hydropower Association

4. Proposed Rule for New Power Plants ◘Published in Federal Register on Jan. 14 Comment deadline: March 10 ◘Natural gas-fired power plants BSER = natural gas combined cycle power plant 1,050 – 1,100 lbs CO 2 /MWh ◘Coal-fired power plants BSER = partial carbon capture and sequestration 1,100 lbs CO 2 /MWh National Hydropower Association

5. Issues with 111(b) Regulation ◘Is CCS “adequately demonstrated”? Absence of data Effect of Energy Policy Act of 2005 ◘If 111(b) rule for power plants is invalidated does that affect 111(d) authority? National Hydropower Association

6. Section 111(d) Rulemaking ◘EPA issues “emission guideline” to states Proposed rule due June 1, 2014 Final rule due June 1, 2015 ◘States submit plans with standards of performance Plans due June 30, 2016 “Equivalency” requirement ◘EPA approves/disapproves National Hydropower Association

7. 111(d) Federal-State Process National Hydropower Association Benchmark “standard of performance” Compliance schedule Technical guidance for States EPA Guideline Standards of performance Compliance schedule Compliance plan State Plans Approve if “equivalent” to Guideline; or Disapprove and impose EPA plan EPA Review

8. Issues in the 111(d) Rulemaking ◘What is “best system of emission reduction” for existing fossil plants? Inside-the-fence  Efficiency upgrades  Co-firing? Outside-the-fence  Trading among plants?  Additions of renewables?  End-use energy efficiency? ◘What is scope of state discretion to design plans? National Hydropower Association

9. For more information: Kyle Danish 202-298-1876kwd@vnf.com