EPA’s Proposed Clean Power Plan House Committee on Natural Resources and Environment February 12, 2015 Tegan B. Treadaway Assistant Secretary Office of Environmental Services P: (225) Bryan D. Johnston Air Permits Division P: (225)

EPA’s Proposed Clean Power Plan On June 18, 2014, EPA proposed a rule pursuant to its authority under section 111(d) of the Clean Air Act which will require states to regulate CO 2 from existing electric generation units (EGUs).  EPA refers to the proposal as its “Clean Power Plan.”  The Clean Power Plan is one component of President Obama’s Climate Action Plan announced on July 25,  A final rule is anticipated in summer 2015.

EPA’s Proposed Clean Power Plan The rule will require each state to develop a plan to achieve a prescribed state-specific CO 2 “goal.”  States may collaborate with other states.  Plans are due to EPA by June 30, –A 1-year extension may be granted “if justified.” –A 2-year extension is possible if Louisiana was to collaborate with other states.

EPA’s Goals for Louisiana EPA proposed CO 2 goals for Louisiana are: lb CO 2 /MWh 2012 Baseline: Interim Goal: Goal: “Alternate” Goal: 1025  The 2030 goal represents a 40% reduction from the 2012 baseline.

Building Blocks The rule describes 4 “building blocks” that together constitute the “best system of emission reduction,” or BSER, at least as purported by EPA.  A state can meet its goal via the measures that reflects its circumstances and policy objectives. EPA’s BSER is as follows: 1.Increase efficiency of coal-fired power plants by 6%. 2.Increase dispatch of natural gas combined cycle (NGCC) units to 70%, displacing electricity that would have otherwise been generated by coal or less efficient oil- or natural gas-fired boilers.

Building Blocks 3.Increase utilization of or develop additional renewable energy (RE) sources (e.g., wind, solar, biomass). –LA’s goal is based on the increased utilization of RE from about 2 to 7% of annual generation. –Goals are based on regional targets established by averaging the 2020 renewable portfolio standard (RPS) requirements of each state in a region. 4.Increase demand-side energy efficiency, thus reducing demand on power plants.

LDEQ’s Outreach Efforts LDEQ conducted 6 open meetings with stakeholders: June 19, July 3, July 22, August 20, September 11, and October 8. Stakeholders included representatives from the:  Public Service Commission (PSC)  State Energy Office (in Dept. of Natural Resources)  Entergy, Louisiana Generating, Cleco, SWEPCO, and Lafayette Utilities  Midcontinent Independent System Operator (MISO)  Southwest Power Pool (SPP)  American Coalition for Clean Coal Electricity  Louisiana Electric Utility Environmental Group  Governor’s Office

LDEQ’s Comments LDEQ provided initial comments on September 12,  Identified a number of data discrepancies on which Louisiana’s goal was based.  LDEQ asserts that Louisiana’s goals should be set at: lb CO 2 /MWh 2030 Goal: 1131 (not 883) 2030 “Alternate” Goal: 1270 (not 1025) LDEQ submitted more comprehensive comments on December 1, 2014.

LDEQ’s Comments In brief, LDEQ is concerned that:  The proposed rule seeks to regulate entities beyond those authorized by the Act.  There is insufficient NGCC generation and transmission capacity to replace forced reductions in the utilization of coal-fired EGUs.  The renewable energy goals for Louisiana are unrealistic and not cost-effective.  EPA’s strategy unfairly imposes vastly different percent reduction obligations on states.  The proposed rule does not provide enough time for states to develop comprehensive plans.

The Federal Plan On January 7, 2015, EPA announced that it would propose a federal plan in summer  If Louisiana does not submit an approvable state plan, owners and operators of affected EGUs would have to comply with the federal plan implemented by EPA.

Questions? Tegan B. Treadaway Assistant Secretary Office of Environmental Services P: (225) Bryan D. Johnston Air Permits Division P: (225)