California Energy Commission IEPR Lead Commissioner Workshop University of California, Irvine August 17,

Climate Action Plan EPA’s power plant rules are a part of the President’s Climate Action Plan on Energy Accelerate renewable energy permitting on public lands Upgrade and modernize the grid to facilitate clean energy and improve reliability Promulgate rules to address GHG emissions from new and existing power plants 2

New and Reconstructed EGUs 111(b) EPA released final rule for new and reconstructed electric generating units (EGUs) August 3, 2015 Applies to units built/reconstructed after January 8, 2014 For natural gas-fired units, CO2 limits based on operation/usage (i.e. base load vs non-base load) 3

New and Reconstructed EGUs 111(b) 4 Emission limit for base load NG-fired units is 1,000 lbs CO2/MW-hr (gross) Non-base load units must meet a clean fuels input- based standard (e.g. 120 lb CO2/MMBtu for NG-fired units) “Sliding scale” is used to determine if a unit is base load or non-base load (e.g. percent electricity sales based on EGU net efficiency – capped at 50%)

Existing EGUs 111(d) Concurrently with releasing 111(b), EPA released final rule for existing EGUs (Clean Power Plan) Similar to draft proposal with a few marked differences Sets emission rates for existing coal and gas plants, which limits carbon intensity of a state’s existing power plants as a whole Credit given for renewable energy programs Interstate trading of emissions as a compliance pathway is given more focus, compared to draft proposal 5

111(d) Building Blocks Three building blocks to set emissions targets: Coal-fired EGU heat rate improvements (2.1% for Western Interconnect) Generation substitution (Replace higher emitting resources with lower emitting ones) More renewables However, as in the draft rule, states have flexibility to comply using any combination of measures 6

California 111(d) Targets EPA calculated California’s emissions baseline as 963 lbs CO2/MW-hr or 46.1 MM short tons in 2012 California’s final 2030 compliance target is: 828 lbs CO2/MW-hr or 48.4 MM short tons 7

Compliance Schedule Compliance plans (or initial submittals with extension requests) due by September 6, 2016 Progress update for extension requests due by September 6, 2017 Compliance plans for states with extensions due September 6,

Next Steps Staff continue to evaluate EPA’s rules and consider options including the use of Cap-and-Trade to demonstrate compliance Joint state agency workshop tentatively scheduled September - October 2015 Continue to communicate with EPA and other states to evaluate opportunities for regional collaboration 9

Resources U.S. EPA’s Website for New and Reconstructed EGUs standards-new-modified-and-reconstructed-power-plants U.S. EPA’s Clean Power Plan Website existing-power-plants ARB’s Website for 111 Related Updates 10

ARB 111 Team Contacts Tung Le, Manager – Technical 111 Analysis Lead Craig Segall, Senior Counsel – Lead 111 Project Coordinator