1. EPA’s Clean Power Plan: Compliance Options and Engagement Opportunities Vicki Arroyo, Executive Director Gabe Pacyniak, Mitigation Program Manager Lissa Lynch, Institute Associate Georgetown Climate Center June 24, 2015

2. GCC Supports States & Stakeholders

3. Clean Power Plan Summary Clean Power Plan Rule regulates carbon pollution from existing power plants under CAA Sec. 111(d) Projected to achieve 30% reductions by 2030 from 2005 levels Emission guidelines set minimum state emission goals based on “best system of emission reduction” States must develop plans with standards to meet guidelines EPA provides broad flexibility for state plans; states may build on existing state programs, develop multi-state plans

4. NGCC Boiler State Goals Based on 4 Building Blocks Coal Plant Efficiency Increased Use of Natural Gas Plants Renewables & Nuclear Demand-Side Efficiency

5. States Can Comply Through Aggregate Rate or Mass Emission Limit Emissions Generation (MWh) Standard = tons CO 2 Standard = pounds CO 2 per MWh Emissions Emission Rate Limit Emission Mass Limit

6. Rate-Based Power Plant-Only Approach Credits / Adjustments Emissions Generation (MWh) Standard = pounds CO 2 per MWh Renewable energy, energy efficiency, and nuclear contribute to compliance calculation

7. Rate-based Approach: Considerations Rate-based goal allows for load growth – Emissions reductions not guaranteed Requires crediting or adjustment mechanism for EE, RE, and potentially nuclear and some natural gas – Crediting or adjustment mechanism could incentivize EE & RE investment and deployment – Crediting RE and EE consistently can be complex – In states with a high goal, efficient natural gas could receive credits Disparate state goals could lead to competitiveness issues Generally more complex approach

8. Mass-Based Power Plant-Only Approach Generation (MWh) Standard = tons CO 2 Emissions Complementary measures or private sector actions reduce demand for fossil generation

9. Mass-Based Approach: Considerations Mass-based budget places absolute limit on emissions (as proposed) Generally, emissions budget puts pressure to reduce emissions on all fossil-fuel fired sources Allowance allocation/distribution up to each state – In other contexts, auction proceeds have been used to invest directly in EE & RE Simpler in that it does not require crediting of RE or EE Complementary programs may incentivize and/or direct EE & RE investment and deployment

10. Portfolio Approach Renewables, efficiency, or other programs or policies are included in state plan Generation (MWh) Emissions Rate or Mass Standard

11. Portfolio Approach: Considerations RE and EE policies become federally enforceable state plan measures – Obligations on non-EGU responsible parties raise enforceability issues Backstop may be required Generally more complex, in that it combines either mass or rate approach with additional elements

12. Multi-State Options EPA proposed to allow multi-state compliance through joint plans Under proposal, states would show compliance through: – A single average rate – An aggregate mass budget States have expressed interest in single-state plans that allow the option of interstate compliance Considerations: – Expanded universe of reduction opportunities – Extended plan submission deadline

13. CPP Implementation Timeline & Opportunities for Engagement Engagement opportunities: State and regional stakeholder processes One-on-one engagement with state regulators Notice and comment rulemakings Public hearings 201520162017201820192020 Initial State Plans Due Multi-State Plans Due Individual State Plans Due Clean Power Plan Final Rule Compliance Period State Plan Development

14. Thank You For questions or comments, please contact: Gabe Pacyniak 202-661-6673 pacyniak@law.georgetown.edu Lissa Lynch 202-661-6548 lynch@law.georgetown.edu For additional Clean Power Plan resources, please visit: http://www.georgetownclimate.org/clean-energy/clean-power-plan-tool-kit Vicki Arroyo 202-661-6556 arroyo@law.georgetown.edu