NODA: Standards of Performance for Greenhouse Gas Emissions From New Stationary Sources: Electric Utility Generating Units

February 26, 2014 - Notice of Data Availability (NODA)

SUMMARY: The EPA is issuing this NODA in support of the proposed rule titled “Standards of Performance for Greenhouse Gas Emissions From New Stationary Sources: Electric Utility Generating Units” that was published on January 8, 2014. Through this NODA and the technical support document it references, the EPA solicits comment on its interpretation of the provisions in the Energy Policy Act of 2005, including the federal tax credits contained in that Act, which limit the EPA’s authority to rely on information from facilities that received assistance under that Act. The EPA believes those provisions do not alter the EPA’s determination in the proposed rule that the best system of emission reduction for new fossil fuel-fired boiler and integrated gasification combined cycle electric utility generating units is partial carbon capture and sequestration.

The entities potentially affected by the determination that is at issue in this NODA are shown in Table 1 below.

Table 1–Potentially Affected Entities

Industry – NAICS code 221112,  Fossil fuel electric power generating units.

Federal Government – NAICS code 221112 (a), Fossil fuel electric power generating units owned by the federal government

State/Local Government – NAICS code 221112 (b),  Fossil fuel electric power generating units owned by municipalities.

Tribal Government – NAICS code 921150, Fossil fuel electric power generating units in Indian Country.

*North American Industry Classification System

(a) Includes NAICS categories for source categories that own and operate electric power generating units (including boilers and stationary combined cycle combustion turbines).

(b) Federal, state or local government-owned and operated establishments are classified according to the activity in which they are engaged.

This table is not intended to be exhaustive but to provide a guide for readers regarding entities likely to be affected by this NODA. To determine whether this NODA affects your facility, company, business, organization, etc., you should examine the applicability criteria in 40 CFR 60.1. If you have questions regarding applicability, consult either the air permitting authority for the entity in question or your EPA regional representative as listed in 40 CFR 60.4 or 40 CFR 63.13 (General Provisions).

What are the background and purpose of this NODA?
On January 8, 2014, the EPA published the proposed rule, ‘‘Standards of Performance for Greenhouse Gas Emissions From New Stationary Sources: Electric Utility Generating Units,’’ (79 FR 1430) which was issued pursuant to Clean Air Act (CAA) section 111. In the proposed rule, the EPA explains its rationale for emission standards for new fossil fuelfired boiler and integrated gasification combined cycle(IGCC) electric utility generating units (EGUs). These standards are based on the determination that the best system of emission reduction (BSER) for those sources is partial carbon capture and sequestration (CCS). The EPA today is providing a technical support document (TSD) that addresses the interaction of the determination of BSER in the proposed rule and several provisions in the Energy Policy Act of 2005 (EPAct05), which are described immediately below. Limitations associated with EPAct05.

In providing assistance to fossil fuelfired electricity generating plants and other facilities that employ advanced technology, EPAct05 included several provisions that limit the EPA’s authority to rely on information from those facilities in conducting rulemaking or taking other action under various provisions of the CAA, including section 111. Section 402(i) of the EPAct05, codified at 42 U.S.C. section 15962(i), provides as follows, insofar as is presently relevant, that no technology, or level of emission reduction, solely by reason of the use of the technology, or the achievement of the emission reduction, by one or more facilities receiving assistance under EPAct05, shall be considered to be adequately demonstrated for purposes of section 111 of the Clean Air Act.1 In addition, internal revenue code (IRC) section 48A(g), codified at 26 USC section 48A(g), provides, insofar as is presently relevant, that no use of technology (or level of emission reduction solely by reason of the use of the technology), and no achievement of any emission reduction by the demonstration of any technology or performance level, by or at one or more facilities with respect to which a credit is allowed under this section, shall be considered to indicate that the technology or performance level is adequately demonstrated for purposes of section 111 of the Clean Air Act.

As explained in the TSD, the EPA’s preliminary interpretation of these provisions is that EPA may not rely on information from facilities that have received assistance under EPAct05, including being allowed tax credits under IRC section 48A, as the sole basis for a determination that a particular technology is the best system of emission reduction adequately demonstrated (BSER), but the EPA may rely on information from those facilities in conjunction from other information to support such a determination, or to corroborate an otherwise supported determination. In the TSD, the EPA also explains and solicits comments on other issues of interpretation that arise from the terms of IRC section 48A(g).  2014 Proposal BSER and EPAct05. In the proposed rule, the EPA determined that implementation of partial capture CCS technology is the BSER for new fossil fuel-fired boilers and IGCC units because it fulfills the criteria established under CAA section 111. The EPA’s rationale, insofar as is relevant for present purposes, is that partial capture is technically feasible and can be implemented at a reasonable cost.

In discussing its rationale, the EPA referenced some facilities that have received financial assistance under the EPAct05, including being allocated tax credits pursuant to IRC section 48A. As explained in the TSD, however, the EPA’s rationale does not depend solely upon those projects, and the determination remains adequately supported without any information from facilities that have been allocated the IRC section 48A tax credit.  Thus, the EPA’s proposed standards, which are based on its determination that partial capture CCS represents the best system of emission reduction adequately demonstrated, are not beyond the scope of its legal authority. As indicated in the TSD, the EPA solicits comment on all aspects of the interpretation of the provisions in EPAct05, including IRC section 48A(g), that limit the EPA’s authority to rely on certain information in rulemaking under CAA section 111.

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