MEMORANDUM   

DATE:		September 16, 2014

TO:		Carbon Power Plan for Existing Power Plants; Docket Id: OAR - 2013-0602

FROM:	Gavin Lau, EPA Region 2/CASD-APB

SUBJECT:	August 13, 2014 Meeting Regarding Proposed Carbon Power Plan for Existing Power Plants 
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SUMMARY

      A meeting was held between EPA and the attendees listed below on August 13, 2014 to discuss the proposed Carbon Power Plan for Existing Power Plants. The Carbon Power Plan for Existing Power Plants was proposed on June 2, 2014.
      
ATTENDEES

New York State Department of Environmental Conservation:
 
Mr. Jared Snyder, Assistant Commissioner, Air Resources, Climate Change and Energy
Ms. Lois New, Acting Director, Office of Climate Change
Mr. David Shaw, Director, Division of Air Resources
Mr. Robert Sliwinski, Director, Bureau of Air Quality
Mr. Scott Griffin
Mr. Michael Sheehan


New York State Energy Research and Development Authority:
Mr. John Williams, Director
Mr. David Coup, Assistant Director

New York State Department of Public Service:

Ms. Audrey Zibelman Chair
Mr. Raj Addepalli, 
Mr. James Austin 
Mr. Warren Myers 


Questions Submitted for August 13, 2014 call

Building Block #2: Natural Gas:  New York would like to discuss a number of issues regarding the equity of EPA's approach to this building block, including the following questions:
   * How did EPA take into account limitations of a state's electricity and natural gas distribution systems, the impact on a state's diversity of fuel mix, and other issues regarding technical implementation (e.g., reliability rules and transmission constraints that impact dispatch) when setting a target of 70% natural gas utilization?
   * States with deregulated electricity systems, like New York, have extremely limited ability to regulate the dispatch of power plants.  Did EPA consider the differences between regulated and deregulated systems in determining the potential emission reductions under this building block?  
Building Block #3: Renewables and nuclear:  In addition to discussing how EPA applied this building block, New York would like to discuss alternative approaches to this building block, including the alternative based on technical and market potential.  Specific questions include:
   * The calculation for the northeastern regional renewables target uses a 29% figure for NY's RPS, but that includes existing hydro, but states are not allowed to count existing hydro for compliance purposes.  Instead, NY's renewables target excluding existing hydro is in the vicinity of 10%.  Will EPA correct this apparent inconsistency if it adheres to this approach for setting a renewables target? 
   * Has EPA considered using an energy target (MWh) in lieu of a percentage?  
   * How does EPA propose that states would maintain at-risk nuclear plants, given that the NRC and federal regulatory system could deem such plants no longer safe for operation or otherwise dictate their status?  
   * Discuss how new imported hydropower can be used to meet either a rate-based or mass-based target?
Building Block #4: Energy Efficiency:  The current methodology in the energy efficiency building block is setup to assume that all states reach a point where incremental annual energy efficiency additions are 1.5% of retail sales.  
   * Has EPA considered using a methodology that instead requires all states to get to a cumulative annual energy efficiency level as a percentage of retail sales? Such an approach would allow early acting states like New York to build upon their cumulative 2012 efficiency level (almost 7% of NY retail sales vs. national average of about 4%) while encouraging other states to "pick the low hanging fruit" more rapidly to result in more substantial emissions reductions overall.
Rate to Mass Conversion:  The EPA documents provide an illustrative example of making this conversion and staff have emphasized that this is merely "guidance".  The RGGI states are considering modeling that would help us comment productively on the methodology as well as inform us on what our mass-based limit might look like.  We have three assumptions that we would like to discuss: 
   * Because EPA indicates that states will get credit for all RE/EE measures after the proposal date, and since RE/EE are already included in setting our states' intensity targets, we assume no RE/EE beyond 2014 in establishing our mass-based limit. 
   * We assume the cap is our only enforceable measure (and modeling will show what complementary policies, including RE/EE measures, we expect will help us achieve the cap).  
   * We assume that we can incorporate projections of demand growth due to increased reliance on electric vehicles.

