August 8, 2023

The Honorable Michael Regan

Administrator
U.S. Environmental Protection Agency
1200 Pennsylvania Ave, N.W.
Washington, DC 20460

Re: EPA’s Proposed Clean Air Act Section 111 Rules for Power Plants.
Docket No. EPA-HQ-OAR-2023-0072.

Dear Administrator Regan:

The Edison Electric Institute (EEI) appreciates the opportunity to comment on the U.S.
Environmental Protection Agency’s (EPA’s or Agency’s) proposed rules for regulating
greenhouse gas (GHG) emissions for the power sector under the Clean Air Act (CAA), New
Source Performance Standards for Greenhouse Gas Emissions From New, Modified, and
Reconstructed Fossil Fuel-Fired Electric Generating Units; Emission Guidelines for
Greenhouse Gas Emissions from Existing Fossil Fuel-Fired Electric Generating Units; and
Repeal of the Affordable Clean Energy Rule (Proposed 111 Rules). 88 Fed. Reg. 33,240 (May
23, 2023). The Proposed 111 Rules would directly regulate GHG emissions from new natural
gas-based units while also setting guidelines for the states to address emissions from existing
coal- and natural gas-based units.

EEI members are united in their commitment to get the energy they provide as clean as they can
as fast as they can, while keeping reliability and affordability front and center, as always, for the
customers and communities they serve. Across the nation, EEI members are leading a clean
energy transformation, making significant progress to reduce GHG emissions, while also
creating good-paying jobs and an equitable clean energy future.

EEI appreciates the opportunity to continue to actively and constructively engage with EPA on
the agency’s full suite of climate and environmental regulations for power plants. We look
forward to engaging with you and your team on these issues as the Agency works to finalize the
Proposed 111 Rules. Please contact Alex Bond at [email protected] (202-508-5523) if you have
any questions regarding EEI’s comments.

Sincerely,

Emily Sanford Fisher

Executive Vice President, Clean Energy
General Counsel & Corporate Secretary
 Table of Contents

I. Introduc�on and Summary of Comments ............................................................................................ 7

A. EPA Should Finalize Key Elements of the Proposed 111 Rules and Consider Other Changes That
Would Help Electric Companies Comply ................................................................................................... 9
B. EEI’s Member Companies Con�nue to Lead the Clean Energy Transi�on ...................................... 10
C. Best System of Emission Reduc�on Technologies Must Be Adequately Demonstrated in Order for
Standards to Be Achievable .................................................................................................................... 15
D. Organiza�on of EEI’s Comments ..................................................................................................... 16
II. EPA’s Use Of Subcategories Is Well Supported And Should Be Strengthened And Expanded ............ 18
A. EPA’s Use of Subcategories is Well-Supported ................................................................................ 19
1. EPA has clear authority to subcategorize on a plain reading of sec�on 111 .............................. 19
2. EPA has u�lized re�rement-based approaches in other CAA programs ..................................... 24
3. EPA has used re�rement subcategories in other environmental rulemakings for the power
sector .................................................................................................................................................. 25
4. EPA should also conclude in the alterna�ve that its re�rement subcategories are op�onal
compliance approaches that are equivalent to or more stringent than its CCS-based BSER
determina�on ..................................................................................................................................... 27
B. Subcategories Are Essen�al to Finalizing a Workable Rule for Exis�ng Coal-Based Units and the
Proposed Subcategories Must Be Retained in Any Final Rule................................................................. 29
1. EPA’s use of re�rement subcategories for exis�ng coal-based units is broadly consistent with
the power sector’s ongoing transforma�on and EPA should finalize this approach .......................... 30
2. EPA’s proposed re�rement dates for applicability of the various subcategories are appropriate
and broadly consistent with system reliability needs; EPA should not accelerate the dates by which
units must re�re to access the subcategories..................................................................................... 31
3. EPA can propose presump�vely approvable re�rement subcategories for exis�ng units, but
states have the authority to alter the closure deadlines for specific units based on each’s remaining
useful life ............................................................................................................................................. 34
4. EPA should align the subcategories in the proposal with the subcategories included in other
rulemakings to help align decision making ......................................................................................... 35
5. The proposed near-term subcategory is inconsistent with the other re�rement subcategories
and should be designed to permit more flexible opera�on in the later years of a unit’s opera�ng life
38
6. The Agency should authorize states to consider access to natural gas when establishing
standards for medium-term units ....................................................................................................... 40

1
 C. EPA’s Proposed Approach to Exis�ng Natural Gas-Based Turbines is Not Supported by Sufficient
Analysis; EPA Should Either Repropose These Guidelines or Significantly Supplement Them, Providing
Addi�onal and Comparable Compliance Flexibility as That Provided to Exis�ng Coal-Based Genera�on
41
D. There are Significant Procedural Considera�ons EPA Must Account for when Finalizing These
Rules ........................................................................................................................................................ 47
III. EPA Has Not Shown That Either CCS Or Hydrogen Blending Are Adequately Demonstrated And
That The Proposed Standards Are Achievable Across All Regulated Units ................................................. 49
A. EPA’s Determina�on That CCS and Hydrogen Blending Are Adequately Demonstrated is Legally
Insufficient............................................................................................................................................... 50
1. EPA’s CCS and hydrogen blending adequate demonstra�on analysis does not address the
necessary integra�on of the cons�tuent elements of these technologies now ................................. 54
2. EPA does not have the authority under CAA sec�on 111 to develop “phased” future standards
for either new or exis�ng units based on projec�ons of technology development ........................... 59
B. CCS Technology is an Important Emerging Technology but All Cons�tuent Elements of the
Technology Have Not Been Adequately Demonstrated in an Integrated Way, Making the Proposed
Emissions Rates Unachievable ................................................................................................................ 69
1. EPA cannot show that a 90 percent capture rate has been demonstrated such that units could
comply with the proposed emissions limits........................................................................................ 72
2. EPA’s Asser�ons about the Costs of CCS Are Not Reliable .......................................................... 75
3. EPA’s determina�on that CCS is adequately demonstrated for new natural gas-based units is
unsupported by the record ................................................................................................................. 80
4. EPA’s determina�on that CCS is adequately demonstrated for exis�ng natural gas-based units is
even less supported by the record than EPA’s new source determina�on ......................................... 83
5. Without the capture and storage elements, EPA’s proposed CCS-based standards are not
achievable ........................................................................................................................................... 85
ii. EPA’s analysis ignores challenges related to permi�ng new storage facili�es, including
advocacy group opposi�on. ................................................................................................................ 88
6. Adequate demonstra�on determina�ons that result in standards that are not achievable can
harm broader efforts to develop and demonstrate key technologies needed to reduce GHG
emissions............................................................................................................................................. 90
7. EPA should consider alterna�ve approaches .............................................................................. 91
C. Hydrogen Blending is a Promising Approach For Reducing Emissions From The Power Sector But is
Not Adequately Demonstrated Today ..................................................................................................... 93
1. EPA’s reliance on pilot projects and poten�al future awards to set up suppor�ve infrastructure
is insufficient to determine hydrogen blending is adequately demonstrated as BSER under CAA
sec�on 111 .......................................................................................................................................... 96

2
 2. EPA’s proposed conclusions regarding power sector use of low-GHG hydrogen are based on an
insufficient record that does not support its proposed that the technology is adequately
demonstrated.................................................................................................................................... 100
3. EPA’s proposal to define low-GHG hydrogen in the Proposed 111 Rules is arbitrary and EPA
should instead propose separate rules for hydrogen producers ...................................................... 156
4. Conclusion ................................................................................................................................. 164
IV. EPA’s Proposed Phase One Standards for New Natural-Gas Based Units Are Appropriate But Several
Key Technical Changes Are Required To Ensure These Standards Are Achievable ................................... 165
A. EPA Must Adjust the Phase One Standards for Base Load Units to Account for Unit Opera�ons and
Consistent With EPA’s Own Compliance Demonstra�on Requirements............................................... 168
B. EPA Should Clarify Requirements for Intermediate-Load Units .................................................... 178
C. In defining Low-U�liza�on Units, EPA Should Finalize a Higher Capacity Factor to Account for
Reliability Considera�ons ...................................................................................................................... 179
V. Compliance Flexibili�es Are Essen�al To A Workable Final Rule; EPA Should Both Finalize And
Expand Proposed Flexibili�es And Provide Addi�onal Op�ons To States And Units ................................ 181
A. Mass-Based Approaches Should be Explicitly Authorized in the Final Guidelines and in the Final
Rule for New Sources ............................................................................................................................ 183
1. EPA should explicitly authorize mass-based approaches for exis�ng sources to allow for
straigh�orward compliance .............................................................................................................. 183
2. EPA should explicitly authorize states to use mass-based compliance for new sources .......... 184
B. Trading and Averaging Must Be Included in Any Final Guidelines and Should Be Encouraged as a
Compliance Pathway ............................................................................................................................. 185
C. Dual Path Op�ons Should be Available for All Exis�ng Sources and EPA Should Further Develop
This Approach ....................................................................................................................................... 189
D. EPA Should Alter Its Proposed Approach to Increments of Progress to be Consistent with
Providing Appropriate Flexibility to States and Units ........................................................................... 191
E. EPA Should Provide Addi�onal Guidance Regarding Se�ng Unit-Specific Baselines ................... 193
F. EPA Should Provide More Flexibility in Implemen�ng Its Proposed Remaining Useful Life and
Other Factors (RULOF) Provisions When Assessing State Plans............................................................ 196
1. EPA must provide more flexibility to states to consider RULOF when se�ng standards for
exis�ng units ..................................................................................................................................... 197
2. EPA should provide addi�onal guidance to states on poten�ally approvable RULOF approaches
200
3. EPA’s proposed addi�onal requirements for sources invoking RULOF are appropriate ........... 202
G. Gas-Steam Units Require Addi�onal Flexibili�es .......................................................................... 203
H. Allowing States Addi�onal Time to Submit Plans, and the Ability to Revise Plans A�er Submital
and During the Compliance Period, Is Essen�al.................................................................................... 204

3
 I. EPA Should Seek to Approve Exis�ng State Programs as Much as Possible.................................. 206
J. EPA Should Provide Clarity Regarding the Defini�on of System Emergency ................................ 208
VI. EPA Should Clarify Applicability Requirements Across All Three Rulemakings ............................. 210
A. EPA Must Clarify Applicability for Exis�ng Coal-Based EGUs ........................................................ 210
B. EPA Must Clarify Applicability for New and Exis�ng Natural Gas-Based Turbines ........................ 211
VII. Conclusion ..................................................................................................................................... 213

4
 COMMENTS FROM THE EDISON ELECTRIC INSTITUTE
ON THE ENVIRONMENTAL PROTECTION AGENCY’S
PROPOSED RULE NEW SOURCE PERFORMANCE STANDARDS FOR
GREENHOUSE GAS EMISSIONS FROM NEW, MODIFIED, AND RECONSTRUCTED
FOSSIL FUEL-FIRED ELECTRIC GENERATING UNITS;
EMISSION GUIDELINES FOR GREENHOUSE GAS EMISSIONS FROM EXISTING
FOSSIL-FUEL FIRED ELECTRIC GENERATING UNITS;
AND REPEAL OF THE AFFORDABLE CLEAN ENERGY RULE

Docket No. EPA-HQ-OAR-2023-0072

August 8, 2023

The Edison Electric Institute (EEI) appreciates the opportunity to comment on the U.S.

Environmental Protection Agency’s (EPA’s or Agency’s) proposed rules for regulating

greenhouse gas (GHG) emissions for the power sector under the Clean Air Act (CAA), New

Source Performance Standards for Greenhouse Gas Emissions From New, Modified, and

Reconstructed Fossil Fuel-Fired Electric Generating Units; Emission Guidelines for Greenhouse

Gas Emissions from Existing Fossil Fuel-Fired Electric Generating Units; and Repeal of the

Affordable Clean Energy Rule (Proposed 111 Rules). 88 Fed. Reg. 33,240 (May 23, 2023). The

Proposed 111 Rules would directly regulate GHG emissions from new natural gas-based units

while also setting guidelines for the states to address emissions from existing coal- and natural

gas-based units.

EEI is the association that represents all U.S. investor-owned electric companies. EEI’s member

companies provide electricity for nearly 250 million Americans and operate in all 50 states and

the District of Columbia. The electric power industry supports more than 7 million jobs in

communities across the United States. EEI’s member companies invest more than $140 billion

each year, on average, to make the energy grid smarter, cleaner, more dynamic, more flexible,

5
and more secure; to diversify the nation’s energy mix; and to integrate new technologies that

benefit both customers and the environment.

EEI’s member companies are leading a profound, long-term transformation in how electricity is

generated, transmitted, and used. This clean energy transition already has resulted in significant

GHG emissions reductions, as EPA has recognized, and more than 40 percent of our nation’s

electricity now comes from clean, carbon-free sources.

EEI’s member companies are committed to getting the energy they provide as clean as they can

as fast as they can, while keeping customer reliability and affordability front and center. Across

the industry, electric companies are investing in a broad range of carbon-free technologies and

approaches, with the goal of demonstrating these technologies so that they can help further

reduce power sector emissions when they satisfy industry performance requirements and are

affordable for customers.

Electric companies and EPA agree on the long-term clean energy vision for the sector that is

embodied in the Proposed 111 Rules: electric companies have reduced and will continue to

reduce GHG emissions and will use emerging technologies to reduce emissions from new and

existing fossil-based generation. Importantly, there are portions of EPA’s rulemaking that provide

a positive framework for this continued progress.

6
While there are challenges presented by the Proposed 111 Rules, these challenges are technical in

nature. EEI and our member companies share EPA’s goals of continuing to reduce emissions

from the power sector and of achieving an economy-wide clean energy transition.

As we outline in these comments, electric companies are not confident that the new technologies

EPA has designated to serve as the basis for proposed standards for new and existing fossil-based

generation will satisfy performance and cost requirements on the timelines that EPA projects.

This will impact electric companies’ efforts to deliver affordable and reliable electricity to

customers. These comments seek to provide perspectives on the Proposed 111 Rules such that

any final rules provide durable regulatory frameworks that allow electric companies to continue

to provide customers with the resilient clean energy they need and deserve, without

compromising affordability.

I. Introduction and Summary of Comments.

As many EEI member companies are owners and operators of the new and existing fossil-based

electric generating units (EGUs or units) that will be regulated by any final rules, they are

uniquely qualified to provide feedback on EPA’s proposals. EEI and its member companies

actively have engaged with EPA on the full suite of climate and environmental regulations for

power plants, including by filing extensive comments in the non-regulatory docket that preceded

this rulemaking and by responding to proposals across the suite of environmental regulations, as

well as through numerous meetings with EPA at all levels. EEI’s member companies look

forward to continuing to engage productively with EPA as the Agency works to finalize the

Proposed 111 Rules.

7
EEI’s member companies also are committed to developing and deploying emerging

technologies, such as carbon capture and storage (CCS), hydrogen blending, small modular

nuclear reactors, advanced renewables, energy storage, long-duration energy storage, and

renewable natural gas, among other technologies. The successful development and deployment

of these 24/7 technologies, along with the continued deployment of wind and solar generation

and the operation of the existing nuclear fleet, will be necessary to achieve continued emissions

reductions across the power sector and individual electric company commitments to reduce

emissions to zero or net zero. They also will contribute to the reliability and resilience of an

energy grid that is increasingly dependent on variable renewable generation.

The programs, funding, and tax incentives for new, clean technologies recently provided by

Congress will be instrumental in driving the research, development, and demonstration necessary

to make deployment of these technologies a reality. EEI’s member companies already are

working with the U.S. Department of Energy (DOE) and other agencies to move forward with

critical demonstration projects and have received some of the project funding awards that DOE

has given to date.

Consistent with electric companies’ engagement with EPA and technology demonstration efforts,

these comments are aimed at ensuring final standards are aligned with other regulations and their

compliance timelines; afford states maximum flexibility so that they can work with unit owners

and operators on affordable, reliable compliance options for all existing units; and provide a

regulatory framework that supports continued industry investment in the clean energy transition.

This will allow electric companies to make fully informed decisions about retiring older assets,

8
bringing on more new, cleaner sources of generation, and building the infrastructure to support

the transformation to a resilient clean energy future for all customers.

The Proposed 111 Rules are an important piece of the regulatory framework that could support

the power sector’s continuing clean energy transformation, including the deployment of new

clean technologies. These comments identify where the Proposed 111 Rules support the

transition, how they could be better structured to support affordability and reliability for

customers, and where compliance flexibilities and other tools will be needed, especially if EPA

chooses to finalize the proposed standards without modification. To the extent possible, these

comments propose solutions that EPA should adopt in any final 111 Rules.

A. EPA Should Finalize Key Elements of the Proposed 111 Rules and Consider
Other Changes That Would Help Electric Companies Comply.

These comments identify technical and legal issues raised by EPA’s proposals. Regardless of

how EPA chooses to address these issues, EPA must design final standards for all regulated units

that allow for compliance. Key design elements that EPA incorporated into the Proposed 111

Rules—which include the use of subcategories and significant compliance flexibility for states

and units—should be finalized consistent with the technical, legal, and policy recommendations

set forth in these comments. EPA also should consider expanding the proposed design and

compliance flexibilities and making other important changes to the proposed standards to support

compliance.

Final 111 Rules should:

• Set achievable, efficiency-based standards for new natural gas-based units, consistent
with EEI’s February 2023 recommendation to the Agency that these units be “capable” of

9
 future retrofit to install CCS or blend hydrogen when those technologies are
demonstrated and available at costs that are affordable for customers;

• Allow states to recognize changes to how existing units will be operated in the future and
the emissions benefits of retiring existing units through appropriate subcategories—for
both existing coal- and natural gas-based EGUs;

• Affirmatively allow states to adopt mass-based compliance approaches for both new and
existing units;

• Provide states additional flexibility on the timing for state plan development and
submittal to EPA; and,

• Provide units with dual-pathway approaches, which recognize that planning for new
technologies during the short window for state plan development will be challenging, and
provide a less prescriptive approach to the increments of progress to support these more
flexible approaches.

These key program design elements and compliance flexibilities, along with the others discussed

in these comments, will enable states and electric companies to implement final standards that

are achievable, reliable, and affordable. In addition, EPA should be clear that the Agency will

exercise considerable enforcement discretion for units that may install (or attempt to install) and

use new technologies—like CCS or hydrogen blending—if those do not perform as expected or

are not available on the timelines EPA predicts.

B. EEI’s Member Companies Continue to Lead the Clean Energy Transition.

EEI’s member companies are leading a profound, long-term transformation in how electricity is

generated, transmitted, and used. This transformation is being driven by a wide range of factors,

including relatively lower prices for natural gas, particularly as compared to historic high prices;

increased deployment of renewable energy resources, energy efficiency measures, and demand-

side management; technological improvements; changing customer, investor, and owner

expectations; federal and state regulations and policies; legislation, including the Infrastructure

10
Investment and Jobs Act 1 (IIJA) and Inflation Reduction Act of 2022 2 (IRA); and the increasing

use of distributed energy resources. Across the industry, electric companies are investing in a

broad range of affordable, carbon-free technologies and approaches with the goal of finding the

most cost-effective ways to deliver resilient clean energy.

The mix of resources used to generate electricity in the United States has changed dramatically

over the last decade and is increasingly clean. 3 In 2022, for the first time, renewable energy

sources 4 surpassed coal as a generation resource: 22.6 percent of total generation at utility-scale

facilities in the United States came from renewable sources compared to 19 percent from coal-

based generation. 5 In total, more than 40 percent of America’s electricity came from clean

carbon-free resources in 2022, including nuclear energy, hydropower, solar, and wind, 6 putting

1
Pub. L. No. 117-58.
2
Pub. L. No. 117-169.
3
See U.S. Energy Information Administration (EIA), Today in Energy: Renewable generation
surpassed coal and nuclear in the U.S. electric power sector in 2022 (Mar. 27, 2023),
https://www.eia.gov/todayinenergy/detail.php?id=55960&src=email; See also EIA, Electric
Power Monthly: Data for February 2023—Table 1.1 Net Generation by Energy Source: Total
(All Sectors), 2013-February 2023 (Mar. 24, 2023),
https://www.eia.gov/electricity/monthly/xls/table_1_01.xlsx; and EIA, Electric Power Monthly:
Data for February 2023—Table 1.1.A. Net Generation from Renewable Sources: Total (All
Sectors) (Mar. 24, 2023), https://www.eia.gov/electricity/monthly/xls/table_1_01_a.xlsx.
4
Renewables here include wood, black liquor, other wood waste, biogenic municipal solid
waste, landfill gas, sludge waste, agriculture byproducts, other biomass, geothermal,
hydroelectric conventional, solar thermal, photovoltaic energy, solar, and wind. See EIA, Electric
Power Monthly, Table 1.1, supra, n.3.
5
See id.
6
See id.

11
clean resources at parity with natural gas generation, which provided approximately 40 percent

of the country’s total electricity generation in 2022.

As part of the move toward resilient clean energy, electric companies are deploying more energy

storage, which is a key asset that helps integrate increasing amounts of renewables into the

energy grid while also enhancing resilience and reliability. Electric companies are the largest

users and operators of the approximately 32 gigawatts (GW) of operational storage in the

country—representing 93 percent of active energy storage projects. 7

Going forward, renewable and clean energy technology deployments will continue. EIA predicts

that declining capital costs for solar panels, wind turbines, and battery storage, along with

government support such as that provided through the IRA, will make these technologies

increasingly cost-effective compared to the alternatives when building new power generating

capacity. 8 EIA projects that renewable generation in the United States will more than triple by

2050, with both wind and solar responsible for most of the growth. 9

7
Compiled from the following proprietary sources: Wood Mackenzie Power &
Renewables/American Clean Power Association, U.S. Energy Storage Monitor (2022); Dep’t of
Energy, Energy Storage Database (2022); Hitachi Energy, The Velocity Suite Database (2022).
8
See EIA, Annual Energy Outlook 2023 (AEO 2023) 9 (Mar. 16, 2023),
https://www.eia.gov/outlooks/aeo/pdf/AEO2023_Narrative.pdf.
9
See AEO 2023—Table 16. Renewable Energy Generating Capacity and Generation: Electric
Power Sector: Generation: Total (Mar. 16, 2023),
https://www.eia.gov/outlooks/aeo/data/browser/#/?id=16-AEO2023&region=0-
0&cases=ref2023&start=2021&end=2050&f=A&linechart=ref2023-d020623a.25-16-
AEO2023~&ctype=linechart&sid=ref2023-d020623a.25-16-AEO2023~ref2023-d020623a.64-
16-AEO2023&sourcekey=0.

12
The changes in the mix of resources used to generate electricity have profoundly decreased the

sector’s carbon dioxide (CO2) emissions, the primary GHG emissions associated with electricity

production. EIA’s preliminary full-year estimates for 2022 find that electric power sector CO2

emissions were 36 percent below 2005 levels, as low as they were almost 40 years ago. 10 These

reductions will continue. 11 Further, 50 EEI member companies have announced voluntary,

forward-looking carbon reductions goals, 41 of which include a net-zero by 2050 or earlier

equivalent goal, and member companies routinely increase the ambition or speed of their goals

or altogether transform them into net-zero goals to reflect changing expectations about the cost

and availability of renewable generation and other clean energy resources.

In addition, the electric power industry has significantly reduced emissions of traditional air

pollutants, such as mercury, HAPs, sulfur dioxide (SO2), and nitrogen oxides (NOx). As of 2022,

SO2 and NOx emissions have declined 95 and 88 percent, respectively, since 1990. 12 In addition,

mercury emissions have declined by 95 percent since 2010, 13 and total HAPs—including all acid

gas emissions—declined by 96 percent between 2010 to 2017. 14

10
See EIA, Monthly Energy Review, Environment, Table 11.6—Electric Power Sector (Mar.
2023), https://www.eia.gov/totalenergy/data/monthly/pdf/mer.pdf.
11
See AEO 2023 at 4.
12
See EPA, Power Plant Emissions Trends (Feb. 2023), https://www.epa.gov/power-
sector/power-plant-emission-trends.
13
See EPA, Regulatory Impact Analysis for the Final Mercury and Air Toxics Standards, page 2-
7 (Dec. 2011), https://www.epa.gov/sites/default/files/2015-11/documents/matsriafinal.pdf.

14
See 84 Fed. Reg. 2,670, 2,689 (Feb. 7, 2019).
13
EEI’s member companies see a clear path to continued emissions reductions over the next decade

using current technologies, including nuclear energy, natural gas-based generation, energy

demand efficiency, energy storage, and deployment of new renewable energy—especially wind

and solar 15—as older coal-based and less-efficient natural gas-based generating units retire. 16

These technologies will continue to enable significant, cost-effective carbon reductions.

In the long term, reaching net-zero carbon emissions also will require the deployment of next-

generation, carbon-free, 24/7, dispatchable technologies not currently available commercially.

Supported by the clean energy tax incentives included in the IRA and the grant funding available

via the IIJA, electric companies are partnering with technology developers, academic

institutions, investors, philanthropists, each other, and other stakeholders to develop,

demonstrate, and deploy these new clean energy technologies. These include long-duration

energy storage, CCS, advanced nuclear and renewable generation, and clean fuels (like

hydrogen, renewable natural gas, and ammonia). Developing and deploying a broad range of

advanced clean energy technologies will further expedite the transition of the electric power

sector to one that is low- or non-emitting while keeping electricity affordable and reliable for

customers.

15
Once built and when the resource is available, wind and solar are the least cost resources to
operate to meet electricity demand because they have zero fuel costs. Over time, the combined
investment and operating cost advantage increases the share of zero-carbon electricity
generation. See AEO 2023 at 5.
16
EIA notes that coal-based generation capacity will decline sharply by 2030 to about 50 percent
of current levels (from about 200 GW to 100 GW) with a more gradual decline thereafter. See
AEO 2023 at 13.
14
 C. Best System of Emission Reduction Technologies Must Be Adequately
Demonstrated in Order for Standards to Be Achievable.

EPA proposes to determine that the best system of emission reduction (BSER) is CCS for

existing coal-based units and either CCS or hydrogen blending for new and existing natural gas-

based turbines. In making these BSER determinations, EPA asserts that CCS and hydrogen

blending are adequately demonstrated, that these technologies are affordable for customers, and

that the resulting standards are achievable across the entire industry. Given the status of these

technologies today and the uncertainty inherent in EPA’s future projections—especially

regarding the ability to deploy the needed infrastructure that complements these technologies

across the industry in a timely fashion—EPA’s assessments are not legally or technically sound

based on the record before the Agency.

As discussed in these comments, EPA’s rulemaking record simultaneously downplays the various

infrastructure challenges to deploying these technologies, while overplaying the current state of

deployment and demonstration of each technology. Given these realities, neither CCS nor

hydrogen blending are adequately demonstrated today as they are not deployable, available, or

affordable across the entirety of the industry, and the attendant supporting infrastructure will take

more time than EPA predicts to deploy. This assessment factors in the timelines that EPA

proposes for standards that may not be applicable until several years in the future. Accordingly,

unit owners and operators have significant concerns about the achievability of the proposed

standards.

EEI’s member companies are working to demonstrate these critical technologies and intend to

use them when they satisfy customer cost and industry performance requirements. In the interim,

15
and even with emissions standards in place, it is not at all certain that state utility commissions

will approve plans, which would need to be made well before compliance deadlines, to allocate

capital—and impose risk and cost-recovery burdens on customers—for unproven technologies. It

is similarly uncertain that electric companies will be able to obtain private financing for

technologies that do not have a clear ability to meet regulatory standards, particularly given the

possibility of CAA enforcement penalties. As a result, standards that require these technologies

for compliance are not likely to drive the deployment necessary to improve performance and

bring down costs, but instead could slow down key projects as EEI’s member companies work to

deploy demonstration projects and related infrastructure over the next decade and beyond.

Similarly, unachievable standards could delay deployment of new generation, particularly new

natural gas generation, that will be needed to serve customers reliably and affordably this decade.

EPA should not finalize the phased standards that are based on CCS or hydrogen blending as

BSER given these concerns. If EPA moves forward with the standards as proposed, however, the

Agency should provide electric companies and states as much compliance flexibility as possible

to address achievability concerns. EPA also should commit to providing significant enforcement

discretion should these technologies not perform reliably or be available on the Agency’s

projected timeframes.

D. Organization of EEI’s Comments.

EEI appreciates the opportunity to continue to actively and constructively engage with EPA on

the Agency’s full suite of climate and environmental regulations for power plants. EEI has

provided significant feedback in the form of whitepapers addressing the waterfront of potential

programmatic elements of what became the Proposed 111 Rules. Those whitepapers are attached

16
to these comments as Appendices A, B, and C. Several of the recommendations EEI made in

those whitepapers, aimed at helping EPA to develop workable final standards, are reflected in

parts of EPA’s Proposed 111 Rules. EEI also outlined some concerns and anticipated technical

challenges expected in the Proposed 111 Rules in those whitepapers. Some of those concerns

remain and are addressed below.

Section II of these comments addresses the proposed retirement subcategories, noting that these

approaches are consistent with many of the trends in the sector regarding already planned unit

retirements and will be beneficial for many companies and their customers. This section also

provides suggested improvements to the design of these subcategories and additional policy and

legal rationales for EPA’s approach. It identifies potential unintended consequences that flow

from the proposed approach to existing natural gas-based units and seeks additional, tailored

flexibilities for these units and the states that will regulate them. Section III addresses concerns

regarding EPA’s determination that CCS technology is adequately demonstrated as BSER,

focusing on the Agency’s technical judgments and record. Section IV does the same for EPA’s

determination that hydrogen blending is BSER for both new and existing natural gas-based units.

Section V provides feedback on EPA’s proposed efficiency standards and subcategories for new

natural gas-based units with a focus on achievability and compliance flexibility for these units.

Section VI addresses numerous suggested state plan flexibilities that can help the states submit,

and EPA approve, compliance plans that allow companies to reduce emissions in a reliable and

affordable manner. Section VII addresses certain applicability concerns raised by EPA’s proposal.

17
 II. EPA’s Use Of Subcategories Is Well Supported And Should Be Strengthened
And Expanded.

EPA proposes to utilize numerous subcategories for both new natural-gas based units and,

crucially, for existing coal-based units. Three of the proposed subcategories for coal-based units

include retirement options tied to specific retirement deadlines. Units that opt into these

subcategories agree to a shutdown commitment, which becomes federally enforceable once it is

included in a state’s compliance plan, in exchange for less stringent emissions limitations prior to

closure. See 88 Fed. Reg. at 33,341. For new natural gas-based units, EPA divides those units

into three subcategories based on utilization: base load, intermediate load, and low load. See id.

at 33,277.

EPA has clear authority to utilize subcategories, and the approach to subcategories in the

Proposed 111 Rules is well-founded. EPA should, however, include in any final rules the

alternative rationale that the subcategories for existing coal-based units also are a permissible use

of a state’s ability to utilize the statutory authority under the CAA’s remaining useful life and

other factors (RULOF) provisions. EPA’s proposed subcategories, therefore, also represent a

presumptively approvable approach for states’ exercise of their statutory authority to consider

RULOF when setting standards for existing units. Further, EPA should make several additional

changes to the proposed subcategories in order to allow for additional flexibility and ensure that

states and units can continue to plan for the operation of an affordable and reliable energy grid in

transition. EPA also must provide similar subcategorization approaches for existing natural gas-

based units, since these units are similarly situated to coal-based units in the value they provide

to the system, and the Agency should treat them as such. Failure to do so would be arbitrary.

18
 A. EPA’s Use of Subcategories is Well-Supported.

While EPA included performance standards in the Proposed 111 Rules for fossil fuel types other

than coal (i.e., natural gas- and oil-fired steam generating units), the largest category regulated

will be coal-fired steam generating units. EPA proposed to “divide the subcategory for coal-fired

units into additional subcategories based on operating horizon (i.e., dates for electing to

permanently cease operation) and, for one of those subcategories, load level (i.e., annual capacity

factor), with a separate BSER and degree of emission limitation corresponding to each

subcategory.” 88 Fed. Reg. at 33,341. The Proposed 111 Rules acknowledge that many existing

coal plants may retire within coming years, such that the cost-effectiveness of installing pollution

controls will depend on a power plant’s operating horizon. 17 Thus, EPA proposes an emission

limit based on 90 percent CCS for coal-fired units that plan to continue operating past January

2040, with less stringent standards for units that commit to an earlier, enforceable retirement

date. 18

1. EPA has clear authority to subcategorize on a plain reading of section

111.

17
In general, EPA’s assessment that many coal-based units will retire between now and 2040
tracks general trends in the industry; however, each individual facility and company faces unique
circumstances and individual unit retirement decisions are complex undertakings given the
unique value each plant can provide to the operation of the grid.
18
As discussed, infra, while EPA has the authority under section 111 to subcategorize based on
retirement horizon (for existing sources) and load level (for both new and existing sources), for
both new and existing sources EPA only has authority under section 111 to select a BSER that
has been adequately demonstrated now. That the statute provides EPA some authority to allow
existing sources time to implement BSER following promulgation of final rules does not change
that, since that authority is there to ensure that the absence of emission control while the control
technology is installed (which may itself take years) does not put the source in a state of
noncompliance. EPA cannot “project” that a control technology will be available at some future
point.
19
For existing coal-based units, EPA proposed to align BSER with the planned retirement dates of

the units pursuant to state plans. See 88 Fed. Reg. at 33,341. EPA has wide discretion under

CAA section 111(b)(2) to “distinguish among classes, types, and sizes within categories of new

sources for the purpose of establishing [new source] standards,” which is referred to as

“subcategorizing.” See 42 U.S.C. § 7411(b)(2); see also Lignite Energy Council v. EPA, 198

F.3d 930, 933 (D.C. Cir. 1999) (per curiam); Sierra Club v. Costle, 657 F.2d 298, 318-19 (D.C.

Cir. 1981). CAA section 111(d)(1) provides a similarly broad grant of authority to EPA,

directing it to “prescribe regulations which shall establish a procedure…under which each State

shall submit to the Administrator a plan [with standards of performance for existing sources.]” 19

The subcategorization authority given EPA in CAA section 111(b)(2) has been interpreted to

apply as well to section 111(d) and allows EPA to place existing sources into subcategories when

these sources have characteristics that are relevant to the controls that EPA may determine to be

the BSER that has been adequately demonstrated. 20

Further buttressing the notion that EPA has authority to subcategorize existing sources under

section 111(d) is the language governing the plans that EPA is required to promulgate to regulate

19
Regardless of whether EPA subcategorizes within a source category for purposes of
determining the BSER and the emission performance level for the emission guideline, a State
retains certain flexibility in assigning standards of performance to its affected EGUs.
20
Conversely, subcategorization is not appropriate for a set of sources where the qualities in
common are not relevant for determining what controls are appropriate to reduce emissions. EPA
finds this view is consistent with the D.C. Circuit’s interpretation of CAA section 112(d)(1),
which is a subcategorization provision that is substantially similar to CAA section 111(b)(2).
See NRDC v. EPA, 489 F.3d 1,364, 1,375–76 (D.C. Cir. 2007) (upholding EPA’s decision under
CAA section 112(d)(1) not to subcategorize sources subject to control requirements under CAA
section 112(d)(3), known as the maximum achievable control technology (MACT) floor, on the
basis of costs because the EPA was not authorized to consider costs in setting the MACT floor).

20
existing sources within a State should a State fail to submit its own plan. CAA section 111(d)(2)

provides that, in promulgating such a plan, EPA “shall take into consideration, among other

factors, remaining useful lives of the sources in the category to which such standard applies

[emphasis added].” Thus, Congress has expressly contemplated that existing sources might be

subcategorized, by EPA, under section 111(d) based on the anticipated length of their continued

operation.

Since the 1970s, EPA has developed subcategories in several rulemakings under CAA section

111. These rulemakings include subcategories on the basis of unit characteristics, including: the

size of the sources; 21 the types of fuel combusted; 22 types of equipment used to produce

products; 23 types of manufacturing processes used to produce product; 24 levels of utilization of

21
See 40 C.F.R. § 60.40b(b)(1)-(2) (subcategorizing certain coal-fired steam generating units on
the basis of heat input capacity).
22
See Sierra Club v. EPA, 657 F.2d 298, 318-19 (D.C. Cir. 1981) (upholding a rulemaking that
established different NSPS “for utility plants that burn coal of varying sulfur content”); see also
2015 NSPS, 80 Fed. Reg. 64,510, 64602 (table 15) (Oct. 23, 2015) (subdividing new combustion
turbines on the basis of type of fuel combusted).
23
See 81 Fed. Reg. 35,824 (June 3, 2016) (promulgating separate NSPS for many types of oil
and gas sources, such as centrifugal compressors, pneumatic controllers, and well sites).
24
See 42 Fed. Reg. 12,022 (Mar. 1, 1977) (announcing availability of final guideline document
for control of atmospheric fluoride emissions from existing phosphate fertilizer plants); see also
“Final Guideline Document: Control of Fluoride Emissions From Existing Phosphate Fertilizer
Plants, EPA-450/2-77-005 1-7 to 1-9, including table 1-2 (applying different control
requirements for different manufacturing operations for phosphate fertilizer).

21
the sources; 25 the activity level of the sources; 26 and geographic location of the sources. 27 EPA’s

proposed subcategorization based on length of period of continued operation is similar to two

other instances for subcategorization on which EPA has relied in prior rules regarding load level

and fuel type.

First, in the 2015 New Source Performance Standard (NSPS), EPA subcategorized new natural

gas-fired combustion turbines into subcategories of base load and non-base load. See 80 Fed.

Reg. at 64,602. In that instance, EPA determined the control technologies were “best” because

consideration of feasibility and cost-reasonableness depended on how much the unit operated.

The load level, which relates to the amount of product produced on a yearly or other basis, is

similar to the limits on a period of continued operation in the Proposed 111 Rules, which

concerns the amount of time remaining to produce the product. Further, in both instances, certain

technologies may not be cost-reasonable because of the capacity to produce product.

Second, also in the 2015 NSPS, EPA divided new combustion turbines into subcategories based

on fuel type combusted. See id. There, the Agency determined that the cost-reasonableness of the

25
See 2015 NSPS, 80 Fed. Reg. 64,510, 64,602 (table 15) (Oct. 23, 2015) (dividing new natural
gas-fired combustion turbines into the subcategories of base load and non-base load).
26
See 81 Fed. Reg. 59,276, 59,278-79 (Aug. 29, 2016) (dividing municipal solid waste landfills
into the subcategories of active and closed landfills).
27
See 71 Fed. Reg. 38,482 (July 6, 2006) (SO2 NSPS for stationary combustion turbines
subcategorizes turbines on the basis of whether they are located in, for example, a continental
area, a non-continental area, the part of Alaska north of the Arctic Circle, and the rest of Alaska);
see also Costle, 657 F.2d at 330 (stating that the EPA could create different subcategories for
new sources in the Eastern and Western U.S. for requirements that depend on water-intensive
controls).
22
control depended on the type of fuel combusted. This is similar to the Proposal’s

subcategorization on the basis of length of period of continued operation because, in both cases,

the subcategory is based upon the reasonableness of controls. Subcategorizing based on the

duration of continued operation also depends on the span of time in which the fuel will continue

to be combusted, because the cost-reasonableness of this approach depends on the length of that

timeframe. See 88 Fed. Reg. at 33,345, explaining that prior EPA rules for coal-fired sources

explicitly link length of time for continued operation and fuel type combusted by codifying

retirement dates by which the sources must “cease burning coal,” citing 79 Fed. Reg. 5,032,

5,192 (Jan. 30, 2014).

EPA’s authority to consider cost likewise supports its authority to subcategorize based on

retirement date. EPA’s longstanding implementing regulations explicitly recognize that

subcategorization may be appropriate for sources based on “costs of control.” See 40 C.F.R. §§

60.22(b)(5), 60.22a(b)(5). EPA maintains that its authority to subcategorize on the basis of

federally enforceable dates for permanently ceasing operations “is consistent with a central

characteristic of the coal-fired power industry that is relevant for determining the cost

reasonableness of control requirements.” 88 Fed. Reg. at 33,345. Since many EEI’s member

companies can choose to retire these units and cease operations in response to this rulemaking

and other factors, that implicates EPA’s determination as to what controls are “best” for different

subcategories. EPA’s Proposal correctly reflects that cost of controls and length of operation are

inextricably intertwined in evaluating BSER for existing sources, because whether costs are

reasonable depends in part on the period of time which the affected sources can amortize those

23
costs. EPA’s Proposal to reflect retirement date in the subcategorization for existing source BSER

thus is reasonable.

2. EPA has utilized retirement-based approaches in other CAA programs.

In another CAA example, the regional haze program, EPA has utilized its discretion to allow

units that are retiring to forgo installation of control technology that would otherwise be required

under an analysis of Best Available Retrofit Technology (BART) or the necessary level of control

to ensure reasonable progress toward the long-term goal of the regional haze program. The CAA

requires each regional haze plan to “contain such emission limits, schedules of compliance and

other measures as may be necessary to make reasonable progress” toward the statutory goal of

eliminating manmade visibility impairment in Class I Federal areas. 28 When determining what

measures amount to “reasonable progress” a State must consider four criteria: (1) the costs of

compliance; (2) the time necessary for compliance; (3) the energy and nonair quality

environmental impacts of compliance; and (4) the remaining useful life of any existing source

subject to such requirements. 29

28
See 42 U.S.C. § 7491(b)(2).
29
Id. at 42 U.S.C. § 7491(g)(1). To ensure states achieve “reasonable progress,” every plan must
require certain large-scale, stationary sources of air pollutants to implement controls known as
BART, or adopt a BART alternative. Id. at § 7491(b)(2)(A); 40 C.F.R. § 51.308. The CAA
defines BART as being based on a source-specific evaluation of five factors. See Oklahoma v.
EPA, 723 F.3d 1201, 1208 (10th Cir. 2013). These “BART factors” are:
(1) The costs of compliance;
(2) The energy and non-air quality environmental impacts of compliance;
(3) Any existing pollution control technology in use at the source;
(4) The remaining useful life of the source; and,
(5) The degree of visibility improvement which may reasonably be anticipated from
the use of BART.
42 U.S.C. § 7491(g)(2).

24
While the regional haze program focuses on source-specific evaluations of the BART factors

during the first planning period, it is notable that EPA and states have concluded, in numerous

different contexts, that an evaluation of all of the factors listed above leads to the imposition of

no further controls given the pending retirement of the source in question. This has primarily

been the result of an analysis of the remaining useful life of the source when weighed against the

other four BART factors—specifically, that the installation of pollution control technology can

impose significant costs for some environmental gains, but that those costs and environmental

benefits do not outweigh the environmental and economic benefits of simply retiring the

source. 30

3. EPA has used retirement subcategories in other environmental

rulemakings for the power sector.

Courts have long recognized that EPA has broad discretion in determining how to evaluate and

weigh these factors. See, e.g., Texas Oil & Gas Ass’n v. EPA, 161 F.3d 923, 928 (5th Cir. 1998)

(“The EPA nonetheless has considerable discretion in evaluating the relevant factors and

determining the weight to be accorded to each in reaching its ultimate BAT determination. EPA’s

authority under the CWA to subcategorize is analogous to that of the CAA. For example, EPA

has ample legal authority to establish (or revise) retirement subcategories when promulgating

30
EPA has endorsed such an approach in its approval of Arkansas’ Regional Haze State
Implementation Plan and withdrawal of a Federal Implementation Plan wherein the Agency
determined that there was no need to install pollution control technology on BART eligible units
given that those units had an enforceable order to switch the type of coal used and then to cease
use off coal by the end of 2028. See Approval and Promulgation of Implementation Plans;
Arkansas; Approval of Regional Haze State Implementation Plan Revision for Electric
Generating Units in Arkansas, 84 Fed. Reg. 51,033 (Sept. 27, 2019). Specifically, EPA
concluded that Arkansas satisfied the requirements of the CAA by “fully considering the five
statutory factors…Taking into account the remaining useful life of White Bluff Units 1 and 2
(based on Entergy’s enforceable Administrative Order to cease coal combustion by December
31, 2028), and the resulting cost-effectiveness of controls, as well as the anticipated visibility
improvement of the SO2 control options and the other BART factors.” Id. at 51,036.
25
effluent limitation guidelines (ELGs). In developing best available technology (BAT) limits, EPA

must consider “the age of equipment and facilities involved, the process employed, the

engineering aspects of the application of various types of control techniques, process changes,

the cost of achieving such effluent reduction, non-water quality environmental impact (including

energy requirements), and such other factors as the Administrator deems appropriate.” 33 U.S.C.

§ 1314(b)(2)(B). Thus, the EPA has significant leeway in determining how the BAT standard will

be incorporated into final ELGs.”); NRDC v. EPA, 863 F.2d 1420, 1426 (9th Cir. 1988) (“EPA

has considerable discretion in weighing the costs of BAT.”); Weyerhaeuser Co. v. Costle, 599

F.2d 1011, 1046 (D.C. Cir. 1978) (“[T]he listing of factors seems aimed at noting all of the

matters that Congress considered worthy of study before making limitation decisions, without

preventing EPA from identifying other factors that it considers worthy of study. So long as EPA

pays some attention to the congressionally specified factors, the section on its face lets EPA

relate the various factors as it deems necessary.”).

The same statutory factors that EPA must account for when developing BAT limits are relevant

to the question of whether to subcategorize within a category of point sources. 31 Accordingly, it

is unsurprising that courts have upheld EPA determinations to promulgate different limits for

31
See 67 Fed. Reg. 42,644, 42,656 (June 24, 2002) (“The CWA requires EPA, in developing
effluent limitation guidelines and pretreatment standards, to consider a number of different
factors, which are also relevant for subcategorization.”); see also 64 Fed. Reg. 2,280, 2,300-01
(Jan. 13, 1999) (“One way in which the Agency has taken some of these factors into account is
by breaking down categories of industries into separate classes of similar characteristics. This
recognizes the major differences among companies within an industry that may reflect, for
example, different manufacturing processes, economies of scale, or other factors. One result of
subdividing an industry by subcategories is to safeguard against overzealous regulatory
standards, increase the confidence that the regulations are practicable, and diminish the need to
address variations between facilities through a variance process.”).

26
different subcategories or classes of sources within a particular point source category based on

EPA’s consideration of the statutory factors in CWA section 304(b). 32

Of particular relevance here, the importance of evaluating the statutory age and cost factors, and

how they affect economic achievability, cannot be overstated. EPA is required to “consider age as

it might pertain to the cost or feasibility of retrofitting plants with new pollution control

technology.” Am. Iron & Steel Inst. v. EPA, 568 F.2d 284, 299 (3d Cir. 1977) (referencing the

holding in Am. Iron & Steel Inst. v. EPA, 526 F.2d 1027, 1048 (3d Cir. 1975)). This may entail

accounting for “the fact that all the plants within [a particular] subcategory were built long

before plants in another subcategory [which can] present special problems in installing anti-

pollution devices.” 526 F.2d at 1048. “Similarly, in a subcategory where there is considerable

variation in age, the fact that the processes are similar may mean that the same type of control

technology can be installed, but it does not necessarily mean that the ease with which that

technology can be installed, or the ability to comply with effluent limitations once it has been

installed, is not affected by age.” Id. Thus, EPA’s approach on both ELGs here for existing

sources is sound.

4. EPA should also conclude in the alternative that its retirement

subcategories are optional compliance approaches that are equivalent to
or more stringent than its CCS-based BSER determination.

In the Proposed 111 Rules for existing coal-based units, EPA proposes that each subcategory—

imminent-, near-, medium- and long-term operating units—has its own specific BSER based on

32
See e.g., Texas Oil & Gas Ass’n, 161 F.3d at 939 (upholding EPA decision “to set more lenient
effluent limits for Cook Inlet facilities than for other members of the Coastal Subcategory”); BP
Exploration & Oil, Inc. v. EPA, 66 F.3d 784, 802 (6th Cir. 1995) (upholding EPA’s rejection of
zero discharge of drilling wastes in Alaska based on consideration of various factors, such as
infeasibility of reinjection technology).
27
the characteristics of the units included. As discussed immediately supra, EPA is well justified in

doing so. However, EPA should also conclude in the alternative that the retirement-based

subcategories (imminent-, near-, and medium-term) are optional, compliance-based

subcategorizations that are at a minimum equivalent if not more stringent in the aggregate than

EPA’s BSER determination for long-term units.

Such a determination would be consistent with EPA’s ability to subcategorize under CAA section

111 and would also legally ensure that EPA’s principal BSER determination was technological in

nature since EPA’s BSER determination would be singular and the subcategories would be

optional, compliance options to comply with EPA’s proposal. This would allow for retirement

subcategories to be squarely within EPA’s discretion from a compliance perspective. Under such

an approach, EPA would not need to analyze all of the BSER factors described above to justify

each subcategory individually, as the Agency’s determination that the subcategory would result

in equivalent or greater reductions would provide justification for each subcategory.

Such an approach also would be grounded in the statute, specifically CAA section 111(d)(1)(B),

which allows the Administrator to take into consideration, among other factors, the “remaining

useful life” of the existing source to which any standard applies. EPA should note that each

retirement-based subcategory specifically relies on the language in section 111(d)(1)(B) as part

of the Agency’s ability to offer each subcategory. Such a conclusion flows logically from the

statute. Each subcategory is already designed to take into account the remaining useful life of

sources that are in each subcategory—to be eligible for the imminent-, near- or medium-term

subcategory, a unit must have an enforceable shutdown commitment, and would have a standard

28
different from the one applied to long-term units (in the case of the current proposal, this would

be CCS technology for existing coal-based units).

As noted, supra, this approach would be consistent both with EPA’s approach to regional haze,

and the ELG rulemaking under the CWA. This approach would also comport with EPA’s

proposed Section 111(d) implementing regulations for state plans, which EPA states are intended

to “improve flexibility and efficiency in the submission, review, approval, revision, and

implementation of state plans.” 87 Fed. Reg. 79,176 (Dec. 23, 2022). Importantly, this

compliance flexibility also reflects the “core principle of cooperative federalism” embedded in

the CAA. Miss. Comm’n on Envt’l. Quality v. EPA, 790 F.3d 138, 156 (D.C. Cir. 2015); Am.

Lung Ass’n, 985 F.3d at 420 (reiterating “the importance of allowing States maneuvering room

under the cooperative federalism scheme”). Further, given the D.C. Circuit’s decision in

American Lung Association noting that EPA could offer significant compliance flexibility to

states and units and was not required to have sources implement the specific BSER prescribed by

EPA, the Agency would be well served to make this argument as an alternative basis for its

proposal. 985 F.3d at 942-43, 963.

B. Subcategories Are Essential to Finalizing a Workable Rule for Existing Coal-

Based Units and the Proposed Subcategories Must Be Retained in Any Final
Rule.

For existing coal-based units, EPA proposes several subcategories. See 88 Fed. Reg. at 33,341.

Three of the proposed subcategories are based on operating horizon and are tied to specific

retirement deadlines, intended to reflect many of the already-announced retirements of coal-

based EGUs. Units that opt into these subcategories agree to a shutdown commitment, which

becomes federally enforceable once it is included in a state’s compliance plan, in exchange for

29
lesser, and in some cases, effectively no, emissions limitations before closure. As proposed,

facilities would be required to commit to a particular subcategory at the time that the relevant

state submits its compliance plan to EPA. See id. at 33,344. These retirement subcategories

recognize that the long-term emissions benefits of announced unit closures could be undermined

by standards that would require owners/operators to invest in control technologies that could

extend the lives of the units to ensure cost recovery. See id. at 33,341.

EPA’s proposed retirement subcategories support ongoing power sector efforts to achieve

significant and permanent emissions reductions, are well-founded, and should be included in any

final rule. However, the proposed subcategories should be adjusted to address issues identified in

these comments. The Agency should finalize this subcategory-based approach, with the changes

suggested here.

1. EPA’s use of retirement subcategories for existing coal-based units is

broadly consistent with the power sector’s ongoing transformation and
EPA should finalize this approach.

The proposed retirement subcategories, as a general matter, track the ongoing clean energy

transformation under way in the industry and allow companies to align retirements and

investments in a way that balances reliability and affordability for customers should those

decisions lead to a decision to retire a unit or units. Many of EEI’s member companies are in the

process of decommissioning or repowering existing coal-based EGUs, which will result in

significant pollution reductions through avoided future emissions. Fifty of EEI’s member

companies have announced voluntary, forward-looking carbon reductions goals, 41 of which

include a net-zero by 2050 or earlier equivalent goal, and members routinely increase the

ambition or speed of their goals or altogether transform them into net-zero goals to reflect

30
changing expectations about the cost and availability of renewable generation and other clean

energy resources.

As discussed above, EPA has created targeted subcategories for unit closures in other contexts,

most notably the cessation of coal subcategory in the Proposed ELG Rule. See 85 Fed. Reg.

64,650 (Oct. 13, 2020); 88 Fed. Reg. 18,824 (Mar. 29, 2023). The subcategories allow for

decommissioning/repowering of units, recognizing that standards requiring investments in new

control equipment could extend the lives of these units to support cost recovery, and that unit

retirements provide long-term environmental benefits through permanent closure and cessation

of related emissions. Critically, retirement-based subcategories result in significant avoided

future emissions, leading to greater overall reductions than those that could be expected from any

existing source guidelines and/or state plans that only provide emissions limits for these units.

EPA’s proposed approach to these subcategories, therefore, is well-founded in terms of

environmental benefits, and the Agency should include them in any final rule. 33

2. EPA’s proposed retirement dates for applicability of the various

subcategories are appropriate and broadly consistent with system
reliability needs; EPA should not accelerate the dates by which units
must retire to access the subcategories.

EPA has proposed that the various retirement subcategories extend out until 2040 to track the

industry’s ongoing clean energy trends and announced retirement schedules of several EEI’s

member companies. See 88 Fed. Reg. at 33,343. Indeed, EPA says as much in the Proposed 111

Rules, noting that industry stakeholders—including EEI—recommended “that EPA allow

33
As discussed, supra, EPA has clear authority to subcategorize units both in the setting of
standards and for determining compliance. Importantly, retirement subcategories also are
squarely consistent with states’ authority to consider the remaining useful life when setting
standards for existing units based on EPA’s emissions guidelines.
31
existing sources that are on a path to near term retirement to continue on that path without having

to install additional control equipment. The proposed emission guidelines are aligned with this

recommendation…and [retirement plans] are part of utilities with commitments to net zero

power by certain dates, or are in States or localities with commitments to net zero power by

certain dates.” Id. EPA notes further that over one-third of existing coal-based steam generating

capacity has planned to cease operation by 2032, and approximately half of the capacity has

planned to cease operations by 2040. See id.

The closure dates reflected in the proposed retirement subcategories broadly reflect the ongoing

fleet transition writ large; electric company commitments, costs, and the other factors driving

clean energy deployment are all playing a significant role in transforming the sector and reducing

emissions. Crucially, the retirement dates for the subcategories chosen by EPA also generally

align with the overall ability of the electric sector to retire these units in a manner consistent with

reliable and affordable system operations; the time provided by EPA allows for coal-based

capacity to remain available on the system in a manner that helps address changing system

conditions given the integration of clean energy resources and increasing demand due to

electrification. System operators across the country and the North American Electric Reliability

Corporation (NERC), the designated electric reliability organization under the Federal Power

Act, have assessed the potential for capacity shortfalls for the rest of this decade as the energy

system continues the clean energy transformation. One cause of these capacity shortfalls is the

difficulty of interconnecting new resources to the grid as a result of the growing number of new

32
sources seeking such interconnection and the increasing retirement of existing units. 34 In short,

capacity additions (the vast majority of which are intermittent resources with lesser accredited

capacity) are not keeping pace with capacity retirements. This presents significant near-term

risks to system reliability, particularly during extreme events. 35 Allowing coal-based EGUs to be

available throughout the rest of this decade and into the 2030s, therefore, is crucial to preparing

for these events and for maintaining overall grid reliability. 36 On a more localized-level, many of

the planned retirements that EPA notes in the proposed subcategories already are factored into

company’s long-term plans. The dates selected reflect their assessments by which these units can

be reliably retired and correspond with the availability of other capacity or transmission solutions

to replace that which is being lost. However, some of the dates EPA has proposed do not

currently match the filed plans and projected availability of replacement capacity; as discussed,

infra, EPA should note that states can alter the presumptive dates in the subcategories to take

specific circumstances into account.

34
See, e.g., NERC, 2023 Summer Reliability Assessment (May 17, 2023)(warning that two-
thirds of North America would be at risk of energy shortfalls this summer in the event of
widespread heatwaves),
https://www.nerc.com/pa/RAPA/ra/Reliability%20Assessments%20DL/NERC_SRA_2023.pdf.
35
See NERC, 2023 State of Reliability Technical Assessment, Technical Assessment of the 2022
Bulk Power System (June 2023),
https://www.nerc.com/pa/RAPA/PA/Performance%20Analysis%20DL/NERC_SOR_2023_Tech
nical_Assessment.pdf
36
For example, last year several units in Wisconsin last year delayed imminent planned closures
for 18 months to ensure sufficient accredited capacity in MISO over the summer to prepare for
peak demand. These delays promoted reliability and were still consistent with the
owners’/operators’ long-term clean energy goals. See Iulia Gheorghiu, Alliant, We Energies
Walk back Wisconsin Coal Retirement Plans in Light of MISO’s Expected Capacity Shortfalls,
UTILITY DIVE (June 24, 2022), https://www.utilitydive.com/news/wisconsin-utilities-coal-
retirement-miso-delay/626005/. Due to improved accreditation procedures and the
interconnection of new generating resources, among other factors, MISO North’s capacity
situation was improved for the summer of 2023. The extended availability of these coal EGUs,
therefore, provided an appropriate buffer while MISO implemented other reliability solutions.
33
Any movement of these dates forward in time (especially if EPA decides to limit post-2030

retirement options) would undermine significant time and investment in companies’ clean energy

transformation plans, which also factor in customer costs and which, in many instances, have

already been approved by state regulators. Accordingly, in any final rule, EPA should not move

these dates forward in time. The Agency’s rationale for including these dates is that they closely

track the industry’s ongoing plans for unit closure and fleet transition and is a reasonable

exercise of the Agency’s discretion to subcategorize, as discussed in more detail supra. EPA’s

rationale is generally correct, and such an approach can help to support system reliability by

ensuring that critical capacity is available over the next decade.

3. EPA can propose presumptively approvable retirement subcategories for

existing units, but states have the authority to alter the closure deadlines
for specific units based on each’s remaining useful life.

EPA can provide presumptively approvable retirement subcategories for states to use in the CAA

section 11 implementation plans. This is consistent with EPA’s statutory obligations to provide

states with emissions guidelines to use in setting standards for existing units under CAA section

111(d). See 42 U.S.C. § 7411(d). EPA recognizes both its role and the role of the states in setting

standards for existing units throughout the Proposed 111 Rules, including a recognition of the

fact that states retain discretion in applying presumptive standards to any individual unit. See,

e.g., 88 Fed. Reg. at 33,276. Despite this, in proposing the retirement subcategories for existing

coal-based EGUs, EPA does not appropriately recognize that states can alter the deadlines for

particular units to retire, based on the states assessment of a range of relevant factors, including

the remaining useful life of the unit. See 42 U.S.C. § 7411(d)(1). Accordingly, EPA must make

clear that states can exercise their statutory discretion to alter the presumptive retirement

34
subcategories for existing units, provided such decisions are well supported in a state’s

implementation plan and result in appropriate emissions reductions. In addition to the express

statutory authority to consider remaining useful life, states also can take into consideration other

factors. These factors could include state-specific laws and regulations that could require units

retire by certain dates that are later than those proposed by EPA.

In any final rule, therefore, EPA should affirmatively recognize that states have the ability to alter

the applicability of the presumptively approvable subcategories to account for a range of factors,

as required by the CAA. Moreover, EPA should make clear that it will evaluate any state

proposals fully and not dismiss them for applying a standard other than the presumptively

approvable subcategories proposed by the agency. This approach not only is grounded in the text

of CAA section 111(d), but also will have environmental benefits as having units retire—even on

a different schedule or with modified emissions limitations that apply in the period before

retirement—results in significant emissions reductions in the aggregate. EPA should note that it

is open to consideration of state plans that make modifications to the presumptively approvable

subcategories, as long as those approaches are well-justified and track the ongoing fleet

transition plans within those states.

4. EPA should align the subcategories in the proposal with the subcategories
included in other rulemakings to help align decision making.

EPA has proposed retirement subcategories in other proposed rules for EGUs. Without

explanation, and contrary to the Administrator’s stated goal of a holistic approach to the suite of

rules impacting the power sector, these retirement subcategories do not align. This significantly

undercuts the benefits that could be achieved by these subcategories and frustrates

owners’/operators’ compliance planning. Accordingly, EPA should ensure that any final rule

35
adjusts the retirement deadlines so that they are consistent across rulemakings, as described

below.

EPA’s Proposed ELG Rule also includes a subcategory for coal-based units that will soon cease

combustion of coal. See 88 Fed. Reg. at 18,824. Along with the subcategory in the Proposed

ELG Rule, EPA issued a direct final rule—which went into effect May 30, 2023—extending the

deadline to enter the subcategory for coal-based units that will soon cease combustion of coal

that was part of the 2020 ELG Rule, codified at 40 C.F.R. § 423.19(f). See 88 Fed. Reg. at

18,440. While EPA has announced the goal of achieving a “holistic” approach to the various

regulations for the power sector, the closure subcategories for the Proposed 111 Rule and the

Proposed ELG rule do not align in several ways.

The subcategory in the Proposed ELG Rule is available to “early adopters,” defined as those

units that, as of March 24, 2023, 37 have installed technologies to comply with the requirements

in the 2020 ELG Rule or the 2015 ELG Rule. 38 See 88 Fed. Reg. at 18,896 (to be codified at 40

C.F.R. § 423.11(x)). As proposed, “early adopters” entering this subcategory would not be

required to install new technologies for flue gas desulfurization (FGD) wastewater and bottom

ash transport water (BATW) prior to ceasing combustion of coal by December 31, 2032.

“Ceasing combustion of coal” includes both plant retirement and repowering to a cleaner fuel

source, such as natural gas. The deadline for submitting a Notice of Planned Participation

37
The March 24, 2023, deadline corresponds to the publication of the Proposed ELG Rule in the
Federal Register.
38
See EPA, Effluent Limitations Guidelines and Standards for the Steam Electric Power
Generating Point Source Category, 80 Fed. Reg. 67,838 (Nov. 3, 2015).
36
(NOPP) to enter this subcategory is one year after publication of the final rule. As a preliminary

matter, the proposed ELG subcategories allow for repowering as well as retirement because once

coal ceases to be combusted, the regulated waste streams, FGD wastewater and BATW, are no

longer generated. However, as noted, the retirement subcategories in the Proposed 111 Rule do

not appear to envision repowering. EPA should consider allowing for units in the imminent or

near-term retirement subcategory to repower to become gas-steam units to better align with the

requirements of the Proposed ELG Rule.

In addition, there is a misalignment with the subcategory timelines across both proposed rules.

For example, as proposed, the “early adopter” subcategory in the Proposed ELG rule requires

retirement by December 31, 2032. See 88 Fed. Reg. at 18,1896. However, the imminent-term

retirement subcategory in the Proposed 111 Rules is December 31, 2031. See 88 Fed. Reg. at

33,361. EPA should align the Proposed ELG subcategory timelines and deadlines with the

Proposed 111 Rules to the maximum extent practicable in order to allow for integrated and

holistic decision making by EEI’s member companies that are making retirement and investment

decisions surrounding these units. EPA should finalize in both the Proposed ELG Rule and also

the Proposed 111 Rules a deadline of December 31, 2032, for these subcategories. To the extent

that EPA also considers creation of any additional subcategories in the Proposed ELG Rule

beyond 2032, EPA should also ensure alignment of any new or extended ELG subcategory with

the Proposed 111 Rule’s near-term subcategory deadline, with a common deadline of December

31, 2035. Aligning these rules would support cost-effective and fully informed

investment/retirement decision making, as well as provide EEI’s member companies with

significant certainty regarding avoiding investment in units that would otherwise retire.

37
 5. The proposed near-term subcategory is inconsistent with the other
retirement subcategories and should be designed to permit more flexible
operation in the latter years of a unit’s operating life.

The Agency also should consider changes to the proposed subcategory for near-term retiring

units, which are those units slated to retire by December 31, 2034. As currently constituted,

EPA’s near-term subcategory unnecessarily and inconsistently limits operating flexibility for

these units, resulting in more stringent standards for these units than for other coal-based units.

EPA should consider a different presumptive standard for these units that accommodates a more

gradual decrease in capacity factors for these units as they move toward retirement. EPA should

also acknowledge that, consistent with EEI’s other comments on these subcategories, that states

can modify the parameters of these subcategories to address state-specific concerns.

EPA’s proposed imposition of a strict capacity factor limitation of 20 percent beginning in 2030

and applicable until the date of unit retirement or December 31, 2034, under this subcategory is

arbitrary and is central to the issues owners/operators have identified with respect to EPA’s

approach to these units. This appears to result in the application of an emissions limitation that is

more stringent than EPA’s requirements for medium-term retiring coal-based units, which are

required to reduce their emissions rate by 16 percent, based on a BSER of co-firing with natural

gas. See 88 Fed. Reg. at 33,377. While not explicit in the Proposed 111 Rules, it appears that

EPA intended to ensure an increasing level of stringency in the standards that applied to existing

coal-based units the longer that these units operate, with the most stringent standards applicable

to those units that operate after 2040. The one exception to this pattern of increasing stringency is

the capacity factor-based operating limitations proposed as the presumptive standard for those

units that would retire no later than 2035. This capacity factor limitation for near-term retiring

38
units is an outlier. Further, a 20 percent-capacity factor restriction might be difficult to translate

into a unit-specific emissions rate; or, at least, EPA has not provided any guidance on how states

might make such a conversion. 39 EPA might accept a capacity factor restriction in lieu of an

emissions rate limitation, although this is not clear from the Proposed 111 Rule. EPA should

clarify this in any final rule if it retains a capacity-factor approach to units that retire no later than

2035. 40

There are several options that the Agency could take that may offer additional flexibility and

improved workability for this subcategory. EPA should consider adopting a “stair step” approach

to establishing limitations for near-term retiring units, which would both allow units in the near-

term subcategory to provide needed capacity in the early 2030s, while also better tracking the

utilization of units that are slated to retire—e.g., units facing a retirement tend to operate less as

they approach their final in-service date. To that end, the Agency could continue to utilize a

capacity factor restriction approach and reduce the allowed capacity factor over the period from

2030 until 2035. For example: 40 percent in 2030, 35 percent in 2031, 30 percent in 2032, 25

percent in 2033, 20 percent in 2034, and retirement or refuel/retrofit/repower in 2035. The levels

themselves could also be subject to state specific circumstances.

EPA could also consider that capacity factor restrictions, instead of beginning in 2030 as

proposed, could begin after 2032, allowing units in this subcategory to utilize existing methods

of operation and maintenance for the years immediately after 2030, as is proposed for the

39
Neither has EPA explained how states could convert this into a unit-specific mass-based
emissions cap, which would provide more operational flexibility.
40
States might find this guidance useful for other units as well.
39
imminent-term subcategory. EPA could consider such a phased approach for increasing standard

stringency across the entirety of its program as opposed to a beginning compliance in 2030 for

all subcategories, which would track ongoing operational flexibility considerations.

This could provide operational flexibility to ensure that these units can continue to support

reliability while also addressing the arbitrary increased stringency of the proposed presumptive

standards for these units. EPA should consider adopting such an approach that would allow for

these units to gradually operate less before retirement. At minimum, EPA should confirm in any

final rule that states could choose to employ alternative approaches for particular units as part of

exercising their RULOF authority, as discussed supra.

6. The Agency should authorize states to consider access to natural gas

when establishing standards for medium-term units.

EPA also should consider changes to the presumptively approvable standards in the medium-

term retiring unit subcategory in order to consider lower levels of natural gas cofiring based on

state or regional specific circumstances. Not all regions of the country will have access to natural

gas pipeline capacity to allow for co-firing up to 40 percent natural gas at units in this

subcategory. Although not all units will be medium-term retiring units or actively will consider

co-firing with natural gas as a control strategy, some regions might be more constrained than

others, especially given existing pipeline capacity. Other states may, for reliability or other

reasons, choose to have medium-term retiring units co-fire with more than 40 percent natural gas

to address specific circumstances and situations, such as the existence of transmission

constrained load pockets.

40
Given these concerns, EPA should allow states to adjust the requirements for medium-term

retiring units to reflect regional and situationally specific circumstances. At minimum, EPA

should note that it is open to consideration of state plans that make modifications to the medium-

term retirement subcategory as a result of these scenarios.

C. EPA’s Proposed Approach to Existing Natural Gas-Based Turbines is Not

Supported by Sufficient Analysis; EPA Should Either Repropose These
Guidelines or Significantly Supplement Them, Providing Additional and
Comparable Compliance Flexibility as That Provided to Existing Coal-Based
Generation.

EPA proposes existing source guidelines for states to regulate a subset of existing natural gas-

based turbines, which are applicable to combined cycle units that have a nameplate capacity

equal to or greater than 300 MW and operate at a capacity factor of greater than 50 percent. See

88 Fed. Reg. at 33,245. As noted, supra, EPA proposes a multi-phased BSER that tracks the

requirements for new natural gas-based turbines, including the ability to opt into a hydrogen

blending- or CCS-based compliance pathway that would become applicable in the 2030s.

Notably, EPA does not propose any subcategories for affected existing natural gas-based turbines

as part of the proposed guidelines.

EPA’s inflexible, rate-based approach to regulating existing natural gas-based turbines presents

significant challenges and is likely to result in perverse outcomes that are inconsistent with EPA’s

larger emissions reductions goals. EPA’s failure to offer similar compliance flexibilities to

existing natural gas-based turbines as those offered to states for existing coal-based units is

fundamentally arbitrary. If EPA moves to finalize the proposed emissions guidelines for existing

natural gas-based units, EPA must provide comparable compliance flexibilities for states to use

when setting emissions limits for these turbines.

41
Existing natural gas-based units also are retiring as part of the industry’s ongoing transition and

provide many of the same reliability services that coal-based units do, including acting as a

capacity resource and providing inertia and voltage support. In addition, many of these units also

can provide fast ramping support that can be essential to the reliable integration of variable

renewable resources. The same rationales that support the retirement categories that EPA

proposes to allow states to use for existing coal-based units also support providing similar

compliance flexibilities for these units. EPA should develop and provide the full range of

flexibilities for existing natural gas-based units, including the development of retirement-based

subcategories, the use of averaging and trading, mass-based compliance demonstration

approaches, alternative fuel flexibilities, dual path options, and more (as discussed elsewhere in

these comments), and these flexibilities should be tailored to the existing natural gas-based

turbine fleet and its circumstances. Not to do so is arbitrary given that existing natural gas units

are similarly situated to existing coal-based units in terms of how they operate and the role that

they play in the reliability of the grid.

Further, the Agency’s choice to have the proposal apply only to “larger” units that operate at

capacity factors of 50 percent or greater could have significant unintended consequences for

reliability, affordability, and emissions from the sector. The reliability requirements of the

sector—handling increasing load due to electrification, providing reliable service in a resilient

manner responding to storms, all while advancing clean energy deployment to meet the

incentives provided by Congress—will continue to grow regardless of what resources are

available to meet those needs.

42
Principally, EPA’s approach—requiring units take either a capacity factor restriction or engage in

a costly, capital intensive rebuild/retrofit to either blend with hydrogen or install CCS technology

in the 2030s—has two potential likely outcomes: first, electric companies either will invest in

costly retrofits or conversions to attempt to achieve EPA’s proposed standards, deploying capital

in a manner that requires long payback periods; or, second, the large and highly efficient units

subject to the proposal will take a capacity factor restriction, effectively exempting themselves

from EPA’s requirements (on EPA’s own terms) and limiting their usefulness in responding to

larger grid reliability and resilience needs. Given expectations around increasing load as a result

of increased electrification through the 2030s (which is already manifesting), once these large

and efficient units near their capacity factor limits, electric companies will be forced to use other

sources—including smaller, less efficient and older natural gas-based units, reciprocal internal

combustion engine (RICE) units that operate primarily on diesel fuel, build additional

renewables and storage, or extend the life of coal-based units that would have otherwise retired

in the imminent or near-term category into either the medium or long-term based subcategory. 41

Under several plausible scenarios, this could result in an aggregate increase in emissions during

the 2030s, at the expense of reliability. This is an outcome that should be avoided by the Agency.

Finally, EPA’s entire existing natural gas-based turbine proposal needs significant additional

analysis to support any final rule providing emissions guidelines for these units. The vast

41
Earlier this summer in New England, dual fuel natural gas and oil-fired units were dispatched
into the power market to ensure reliable system operations to address capacity shortfalls after a
transmission line issue—indicative of what units are called on when capacity requirements must
be met. See https://isonewswire.com/2023/07/06/iso-ne-successfully-manages-through-july-5-
capacity-deficiency/.
43
majority of EPA’s analysis to identify units to which to apply the existing source guidelines

appears to be a single chart focusing on a subset of identified units that have historically been

dispatched at capacity factors of 50 percent or greater. See 88 Fed. Reg. at 33,363. Since then,

EPA has released additional modeling and docket materials to try and buttress this approach

given its limited nature. EPA then selects a BSER identical to the new source requirements,

mostly upon an assertion that existing and new sources are “similar,” and then states that these

units are not able to access the same type of flexibilities that are offered coal-based existing

units. Id. This adequate demonstration analysis and EPA’s approach to applicability for existing

natural gas-based turbines are arbitrary and insufficient. One of the most glaring omissions is

EPA’s complete failure to grapple with the significant role that existing natural gas-based

generation plays in overall system reliability and the challenges associated with retrofitting

existing natural gas-based units.

As the fleet continues to transition, natural gas-based turbines will continue to play a critical and

evolving role in integrating increasing amounts of renewable generation and providing essential

reliability services to allow for the ongoing retirement of the coal-based generation fleet while

preserving customer affordability. Natural gas-based turbines are significantly more flexible than

coal-based units given their ability to ramp quickly, especially as compared to other dispatchable

units, including nuclear units and coal-based EGUs—e.g., they are able to come online quickly

and provide power to the grid much faster while also being able to ramp down as needed. This

fast-ramping ability both minimizes emissions related to start up and shut down and also helps to

avoid emissions by supporting the integration of variable renewable generating resources.

44
Some units may operate at significant capacity factors—greater than 80 percent—for long

periods of time to respond to system considerations, resulting in highly efficient generation from

an emissions rate perspective. 42 Other units might instead respond to intermittent system needs,

operating at capacity factors of less than 15 percent while still providing essential reliability

services and helping to reduce overall system emissions. Further complicating matters, units that

operate at high or low (or even in between) capacity factors for long stretches are not guaranteed

to remain in that mode while demand for their energy and other services changes continuously in

response to system needs. Units are obligated to respond when called upon based on these

system needs, which will change further in coming years as the generation mix of the grid

continues to evolve.

One consequence is that these units likely will be required operate differently. 43 These changes

will have a significant impact on the emissions and emissions rates associated with these units.

This includes the potential for: units switching between operational modes (e.g., simple v.

combined cycle) to respond to voltage demands; units in specific locations running more or less

often to respond to generation intermittency, transmission congestion or new transmission

coming online changing the dynamics of the operating grid; and the aging of the existing gas

fleet, which will continue as the fleet transition continues. Each of these scenarios will result in a

significant impact on the efficiency rates and the CO2 profile of existing gas-based units and the

42
In general, the emissions rate of an individual unit is more efficient (resultingly, lower) when it
run at higher capacity factors. Units that operate at lower capacity factors have concomitantly
higher, less efficient emissions rates despite having fewer mass emissions of CO2.
43
See, e.g., Eric Larson, et al., Net-Zero America: Potential Pathways, Infrastructure, and
Impacts, Final report (Princeton University, Oct. 2021), https://netzeroamerica.princeton.edu/the-
report.
45
associated efficiency rates for those units. Consequently, the sheer diversity of the types of units

and the range of possible operating characteristics of the existing turbine fleet makes determining

an implementable BSER for these units extremely difficult, as EEI noted to the Agency in April

2023 comments to the non-regulatory docket that are attached as Appendix C. EPA addresses

none of these salient issues in its analysis of the feasibility of the proposed standards, which

would be effective far into the future.

Taken together—the lack of compliance flexibility, the potential unintended emissions

consequences of EPA’s approach, and the Agency’s insufficient analysis regarding the changes

and variability in how these units operate—are significant flaws with the proposed emissions

guidelines for existing natural gas-based units. They likely render the Proposed 111 Rules

arbitrary, capricious, and unsupported on the record for existing gas-based units.

The Agency, therefore, should repropose or significantly supplement its existing source

emissions guidelines for existing natural gas-based turbines to address these concerns. In the

context of the analysis that will be necessary to support any re-proposal or supplemental

rulemaking, EPA should focus on crafting an approach that includes subcategories that reflect the

vast array of types and categories of units, including those that reflect more nuances with respect

to operational modes; the ability to convert rate-based standards into mass-based compliance

options; multiple different averaging forms; and the ability of states to leverage existing

programs, among many other approaches. EPA should adopt options that could allow units to

choose among multiple paths to comply with EPA’s BSER, helping to facilitate diverse unit

owner/operator approaches that also consider customer affordability and grid reliability. If EPA

46
opts not to repropose the emissions guidelines for existing natural gas-based EGUs, the Agency

must provide comparable compliance flexibility, including retirement-based subcategories

tailored to the circumstances of the natural gas turbine fleet, to these units as that provided to

existing coal-based units.

D. There are Significant Procedural Considerations EPA Must Account for

when Finalizing These Rules.

Agencies are not bound to finalize rules exactly as they were proposed. However, final rules

must be a “logical outgrowth” of the proposal. See, e.g., Nat’l Mining Ass’n v. Mine Safety &

Health Admin., 512 F.3d 696, 699 (D.C. Cir. 2008). “The key question is whether commenters

‘should have anticipated’” that the agency might take the course of action it ultimately chose.

City of Waukesha v. EPA, 320 F.3d 228, 245 (D.C. Cir. 2003) (citation omitted). Under this

standard, “incremental changes are permissible.” Sierra Club v. Costle, 657 F.2d 298, 352 (D.C.

Cir. 1981).

Final standards or guidelines should be an expectable result of the rulemaking process based on

the proposal and the feedback received to avoid subjecting EPA to additional scrutiny. “One

logical outgrowth of a proposal is surely … to refrain from taking the proposed step.” New York

v. EPA, 413 F.3d 3, 44 (D.C. Cir. 2005) (citation omitted); Ariz. Pub. Serv. Co. v. EPA, 211 F.3d

1280, 1299–1300 (D.C. Cir. 2000). However, what is not permissible is finalizing a rule that,

instead of declining to adopt a rule as proposed, adopts a wholly new interpretation of the statute

without additional notice and opportunity for comment. Envt’l Integrity Proj. v. EPA, 425 F.3d

992, 997 (D.C. Cir. 2005); id. at 998 (“Whatever a ‘logical outgrowth’ of [an agency’s] proposal

may include, it certainly does not include the Agency’s decision to repudiate its proposed

[position] and adopt its inverse.”). For such changes to be lawful, EPA must first have “alerted

47
interested parties to the possibility of the agency’s adopting a rule different than the one

proposed.” Kooritzky v. Reich, 17 F.3d 1509, 1513 (D.C. Cir. 1994).

EPA faces a particular challenge with rulemaking under section 111—because EPA’s rule will

apply to all new facilities constructed following the date of proposal, the reliance interests

engendered by the proposal are heightened. Cf. Smiley v. Citibank (S.D.), N.A., 517 U.S. 735,

742 (1996) (a change in position “that does not take account of legitimate reliance on” the prior

position may be arbitrary and capricious); MediNatura, Inc. v. Food & Drug Admin., 998 F.3d

931, 940 (D.C. Cir. 2021) (reiterating need to evaluate reliance interests “[w]hen an agency

changes policy” (cleaned up)). So too, therefore, are the consequences of failing to provide

notice and an opportunity to comment on any unanticipated changes in the final rule. Section

111(b) rules, in this way, are fundamentally unlike the typical rule, which is finalized and only

sometime thereafter becomes effective. Under section 111(b), regulated entities have to begin

preparing immediately to comply with whatever rule EPA decides to make final. This fact must

result in a narrowing of the range of potentially logical outgrowths of the proposal, with a

corresponding widening of situations in which a new proposal or revision with an additional

comment period becomes necessary.

This is especially pertinent for EPA’s rulemakings here; should EPA significantly overhaul and

accelerate its timelines—or provide the additional flexibilities for existing natural gas units these

comments recommend—the Agency likely will need to address logical outgrowth issues. As a

result, as the Agency moves forward, it should take care not to completely overhaul its proposals

48
without providing stakeholders the opportunity to comment specifically on the range of

approaches EPA is considering.

Ultimately, to help continue the successful and ongoing clean energy transition of the power

sector, EPA must design standards for both new and existing units that achieve emissions

reductions goals, are consistent with electric company clean energy commitments, and support

affordable and reliable electricity. Commenters must have the ability to provide substantive

feedback on EPA’s specific proposals to ensure that they are achievable and not inconsistent with

the rest of EPA’s rulemaking agenda for the sector. Providing additional opportunities for

comment and feedback will only assist the Agency in this task—and it is EPA’s obligation to do

so as well.

The time afforded for comment on the Proposed 111 Rules was comparatively short. EEI will

continue to consider options to improve the Proposed Rules, particularly those for natural gas-

based generation, even after these comments are filed and will share any developments with EPA

and other stakeholders. In addition, the Federal Energy Regulatory Commission has announced

that the 2023 Annual Reliability Technical Conference will address policy issues related to the

reliability and security of the bulk power system, as well as the Proposed 111 Rules. EPA should

consider the outcomes of these efforts as it works to finalize standards for new and existing

fossil-based generation.

III. EPA Has Not Shown That Either CCS Or Hydrogen Blending Are Adequately
Demonstrated And That The Proposed Standards Are Achievable Across All
Regulated Units.

49
EPA has failed to show that either CCS or the hydrogen blending requirements are adequately

demonstrated and can be BSER. As a result, the proposed standards based on the application of

these BSERs may not be achievable across all regulated units.

While EPA asserts that individual constituent elements of each technology are adequately

demonstrated, EPA does not address that these disparate pieces must function as a whole if the

standards are to be achievable. EPA’s statutory obligations are clear: to select as BSER a

technology that is adequately demonstrated and then set emissions limits are achievable across

the entire sector (or provide guidelines for the statues to set achievable emissions limits). By not

ensuring that the component pieces of each technology are demonstrated as one, integrated

whole, EPA falls short of its statutory obligations and the Agency’s expansive reading of CAA

section 111 and the related caselaw do not overcome this failure.

A. EPA’s Determination That CCS and Hydrogen Blending Are Adequately

Demonstrated is Legally Insufficient.

For the purposes of section 111, a “standard of performance” is currently defined as:

a standard for emissions of air pollutants which reflects the degree of

emission limitation achievable through the application of the best system of
emission reduction which (taking into account the cost of achieving such
reduction and any non-air quality health and environmental impact and
energy requirements) the Administrator determines has been adequately
demonstrated.

See 42 U.S.C. § 7411(a)(1) (emphasis added). In promulgating CAA section 111(b) standards for

new and modified sources, EPA has typically used a straightforward process to: (a) identify what

emission reduction technology/systems exist for a source category; (b) assess related costs and

secondary air benefits (or disbenefits) from associated energy requirements; and (c) examine any

50
non-air quality impacts of employing those technologies or systems. 44 Following this analysis,

EPA promulgates a standard of performance, usually in the form of a numeric emission limit

based on installation and operation of the identified technologies or systems—that is, the “best

system of emission reduction,” or BSER.

Section 111(d) provides that EPA must establish procedures under which each State must submit

a plan that establishes standards of performance for any existing source within its borders for any

pollutant “to which a standard of performance … would apply if such existing source were a new

source.” 45 The statute further provides that regulations promulgated under section 111(d) shall

allow States in “applying a standard of performance to any particular source [under a state plan

submitted to EPA] to take into consideration, among other factors, the remaining useful life of

the existing source to which such standard applies.” 46

Although in the first instance section 111(d) authorizes the individual states, and not EPA, to set

standards of performance for and to apply those standards to existing sources, EPA promulgated

section 111(d) implementing regulations in 1975 that require the Agency to both identify the

BSER and develop “guidelines” reflecting emission reductions that can be achieved by existing

44
See, e.g., Env’t Prot. Agency, Background on Establishing New Source Performance
Standards (NSPS) Under the Clean Air Act,
https://archive.epa.gov/epa/sites/production/files/2013-09/documents/111background.pdf.
45
42 U.S.C. § 7411(d)(1). Section 111(d) authority is, as an initial matter, contingent on the
existence of a corresponding 111(b) rule (i.e., it exists only where a “standard of performance
under this section would apply if such existing source were a new source”).

46
42 U.S.C. § 7411(d)(1) (emphasis added). If a State fails to submit a satisfactory plan, EPA
must develop and implement a federal plan for that state that meets the requirements of the
section. Id. at § 7411(d)(2).

51
sources through the application of the selected BSER. See 40 C.F.R. sections 60.22(b)(2) and

(b)(5). EPA’s guidelines must provide information for the development of state plans that:

• Reflect application of the BSER (considering the cost of such reduction) that has
been adequately demonstrated;

• Address “the time within which compliance with emissions standards of

equivalent stringency can be achieved”; and

• Specify “different emission guidelines or compliance times or both for different

sizes, types, and classes of designated facilities when costs of control, physical
limitations, geographic location, or similar factors make subcategorization
appropriate.”

Id. (emphasis added). EPA’s section 111(d) implementing regulations further provide that, where

a designated pollutant has been determined to endanger public health, standards of performance

developed as part of a state implementation plan must be at least as stringent as those established

by EPA’s section 111(d) guidelines and compliance achieved “as expeditiously as practicable.”

See 40 C.F.R. section 60.24(c). Thus, how EPA defines BSER in its guidelines, in general, drives

the minimum stringency of state standards of performance for existing sources. At the same time,

however, states have considerable flexibility in applying BSER to affected sources on a case-by-

case basis.

Per the express language of section 111(b)(1)(B), a standard of performance “become[s] effective

upon promulgation,” and under section 111(a)(2) is applicable to any “new source”—defined as

any source “the construction or modification of which is commenced after the publication of [an

applicable NSPS] (or, if earlier, proposed regulations).” 42 U.S.C. § 7411(b)(1)(B), (a)(2). For

new sources, two things are apparent from this: first, any New Source Performance Standard

(NSPS) is effective immediately upon finalization; second, to ensure that sources do not rush

commencement of construction during the pre-finalization notice-and-comment period, all

52
sources that are built after the NSPS’s proposal date are covered. Because of this, the statute

expressly requires that Administrator determine that the BSER upon which the standards are

based “has been adequately demonstrated”—in the past tense—and not that EPA projects that it

might at some future date be adequately demonstrated.

EPA must therefore select a “best system of emission reduction” that is presently adequately

demonstrated, and it must set a standard of performance that is achievable—these are two

separate requirements. See 42 U.S.C. § 111(a)(1). As the D.C. Circuit has explained, “it is the

system which must be adequately demonstrated and the standard which must be achievable.”

Essex Chem. Corp. v. Ruckelshaus, 486 F.2d 427, 433 (D.C. Cir. 1973); see also Nat’l Asphalt

Pavement Ass’n v. Train, 539 F.2d 775, 785 (D.C. Circ. 1976) (quoting same). With regard to

whether the technology underlying an NSPS “has been adequately demonstrated,” the D.C.

Circuit has opined that “section 111 most reasonably seems to require that EPA identify the

emission levels that are ‘achievable’ with ‘adequately demonstrated technology’ … which

represents the best balance of economic, environmental, and energy considerations.” Sierra Club

v. Costle, 657 F.2d 298, 330 (D.C. Cir. 1981). Moreover, “[s]ince the standards here put into

effect [that is, under section 111(b)] will control new plants immediately, as opposed to one or

two years in the future, the latitude of projection is correspondingly narrowed.” Portland

Cement Ass’n v. Ruckelshaus, 486 F.2d 375, 392 (D.C. Cir. 1973) (emphasis added).

For both new and existing sources, an adequately demonstrated system is “one which has been

shown to be reasonably reliable, reasonably efficient, and which can reasonably be expected to

serve the interests of pollution control without becoming exorbitantly costly in an economic or

53
environmental way.” Essex Chem. Corp. v. Ruckelshaus, 486 F.2d 427, 433 (D.C. Cir. 1973)

(emphases added). EPA is not limited to what may currently be the “state of the art” in a sector

but may instead “look[] toward what may fairly be projected for the regulated future.” Portland

Cement, 486 F.2d at at 392. EPA may also rely on projections that a technology will become

available, but it is not permitted to engage in a “crystal ball inquiry.” Portland Cement, 486 F.2d

at 391-92 (citing Int’l Harvester v. Ruckelshaus, 478 F.2d 615, 629 (D.C. Cir. 1973)). See also

Essex Chem. Corp., 486 F.2d at 433 (“An achievable standard is one which is within the realm of

the adequately demonstrated system’s efficiency and which, while not at a level that is purely

theoretical or experimental, need not necessarily be routinely achieved within the industry prior

to its adoption.”). As with adequate demonstration, EPA’s determination of a standard’s

achievability cannot rest on “mere speculation or conjecture.” Lignite Energy Council v. EPA,

198 F.3d 930, 934 (D.C. Cir. 1999) (per curiam).

Further, for both new and existing sources EPA also is required under CAA section 111 to show

that standards must be achievable by sources across a wide range of operating conditions. “A

uniform standard must be capable of being met under most adverse conditions which can

reasonably be expected to recur and which are not or cannot be taken into account in determining

the ‘costs’ of compliance.” Nat’l Lime Ass’n v. EPA, 627 F.2d 416, 431-33, n.46 (D.C. Cir. 1980).

EPA has fallen short of these requirements in the Proposed 111 Rules.

1. EPA’s CCS and hydrogen blending adequate demonstration analysis

does not address the necessary integration of the constituent elements of
these technologies now.

54
EPA has not legally supported its conclusion that CCS or hydrogen blending are BSER. The

record lacks substantial evidence showing that these technologies are currently demonstrated at

scale, or could be demonstrated at scale in a commercial setting. 47 Most critically, while EPA

cites individual components of both CCS and hydrogen blending—e.g., a functioning capture

amine system, the existence of a CO2 pipeline, hydrogen blending pilots—it never shows in its

record that these components are integrated at scale across the industry and are available for

sources to use to meet the resulting emissions limitations.

The statute expressly requires that EPA identify a BSER that “has been adequately

demonstrated.” By its very terms, that phrase connotes something that is available now for

existing units to employ because it has already been demonstrated. That is not the case for CCS

or hydrogen blending. EPA enjoys a certain amount of latitude in its predictive judgments, “[o]ne

must distinguish between prediction and prophecy.” Int’l Harvester, 478 F.2d at 642 (citation

omitted). But when predicting future conditions, the Agency must provide “a reasoned

presentation of the reliability of [the] prediction and the methodology that is relied upon ….” Id.

at 648. Neither may EPA rely on prototypes, nor leave unanswered critical questions about the

practical aspects of a system such as waste disposal. See Costle, 657 F.2d at 341, n. 157, Essex

Chem., 486 F.2d at 435, n.19, 438.

EPA recognizes that any standard relying on “improved design and operational advances” must

be grounded in “substantial evidence that such improvements are feasible,” but misses the mark

47
See Appendix A, Chapter 2 – New Technologies Will be Essential to Achieving the Clean
Energy Transformation, and EPA’s Regulatory Structure Can Help Advance Those
Technologies.
55
with its determination that CCS and hydrogen blending are BSER. No “substantial evidence”

regarding the present feasibility of CCS or hydrogen blending as BSER for a nationwide

standard exists in the record. See 88 Fed. Reg. at 33,272. As discussed later in this section, there

are real, practical constraints on the ability of CCS to be widely available in the timeframe

posited—much less “immediately,” as required by the Portland Cement decision—and with

sufficient ability to achieve the proposed standards of performance. See Portland Cement, 486

F.2d at 391-92. This is critically also problematic, as discussed infra in this section as well, for

EPA’s determination that hydrogen blending is likewise feasible and available across the industry

today. These include insufficient pipeline infrastructure and the absence of any federal regime for

pipeline permitting or eminent domain authority for those pipelines. For CCS, permitting of the

other elements of infrastructure and storage, not to mention concerns regarding long-term

liabilities associated with storage, must also be resolved before this technology can be said to be

adequately demonstrated for and available to the power industry nationwide. For hydrogen

blending, these projects are at most at pilot stage and have not been utilized at load, at scale, or

cross different grid scenarios, not to mention the lack of hydrogen related infrastructure to

produce, transport and utilize hydrogen in the power sector.

EPA has not shown how those issues can be overcome by the time this Rule is finalized, and it is

therefore impossible to see how EPA can lawfully conclude that either CCS or hydrogen

blending are adequately demonstrated now. As of now and with the record in this proposal, EPA

cannot claim with any measure of certainty that CCS or hydrogen blending is or “has been

adequately demonstrated” or that it will be available at a date certain in the near future.

56
Moreover, EPA acknowledges that a standard is only achievable if the technology to be used

“can reasonably be projected to be available to an individual source at the time it is constructed

that will allow it to meet the standard.” See 88 Fed. Reg. 33,275, citing Sierra Club v. Costle,

657 F.2d at 364 n.276 (emphasis added). That is not what EPA has proposed. EPA expressly

recognizes that “building the infrastructure required to support widespread use of CCS and low-

GHG hydrogen in the power sector will take place on a multi-year time scale.” 88 Fed. Reg. at

33,283. EPA provides no assurance (and cannot provide assurance) that such infrastructure will

in fact be in place by 2038, much less by 2032. Given the lack of that infrastructure, EPA cannot

determine that either technology is adequately demonstrated, since on its own terms EPA cannot

prove that the individual components of each technology can work together across the industry

and be available—as EPA itself acknowledges.

EPA attempts to address concerns about adequate demonstration by conceding that these

technologies are not yet widely available and thus will not be truly adequately demonstrated until

some date in the future but contends that CCS actually is adequately demonstrated now on a unit

basis. However, EPA lacks substantial evidence to support this lesser conclusion. For existing

sources, EPA’s proposal to include retrofitting CCS for existing coal- and natural gas-based

facilities misses the mark. Retrofitting is prohibitively difficult, given the likely space constraints

and other associated technical challenges. And EPA is not even certain there will be sufficient

geologic space to sequester the carbon. The Agency, for example, expressly acknowledges the

complications of permitting geologic sequestration on federal land. See 88 Fed. Reg. at 33,297.

EPA implies there are numerous extant examples of CCS currently in operation, but in truth can

point to only one facility, in Canada, that is approaching the levels of CCS capture that EPA

57
would require in this proposal. See id. at 33,368. As discussed infra, this is not enough to show

that CCS is adequately demonstrated for deployment on a nationwide scale, without regard to

location, geology, and other constraints on plant design. For hydrogen blending, EPA attempts to

note that numerous pilot studies and federal efforts to establish infrastructure is proof positive of

achievability on a unit basis. As discussed in these comments, EPA has not grappled with an

array of issues regarding these assertions.

Aside from the substantive concerns underlying EPA’s lack of record-based support for its

adequate demonstration determination, there are both a procedural and a structural issue that are

central to why EPA must show that the BSER it selects is achievable and demonstrated not just in

component pieces but as an integrated whole: What happens if EPA’s projections are wrong? Any

challenge to EPA’s final rule brought at the time that it is clear that EPA’s projections were not

correct—that is, in 2030, 2032, 2035, or 2038 when compliance obligations are incumbent on

states and units—will be years too late under the CAA’s judicial review provision, which

requires that challenges to regulations be brought within 60 days of their finalization. See 42

U.S.C. § 7607(b). The Act’s structure—both the substantive provisions of section 111, which

require immediate application of an NSPS, and the procedural provisions of section 307, which

require immediate judicial review—leads to the conclusion that EPA must demonstrate that its

chosen BSER is adequately demonstrated and available to the regulated industry now.

Another issue with EPA’s reasoning is the Agency’s lack of acknowledgment that, in

promulgating a phased BSER with multiple compliance “pathways,” those pathways—however

distinct—must operate as an integrated whole, i.e., a “system” of emission regulation. Thus, EPA

58
must determine that it has been adequately demonstrated that, no matter which pathway a new

unit chooses, those units will be able to work together throughout their respective electrical grids.

Similarly, any BSER discussion that does not address whether all elements of EPA’s chosen

technology system can be integrated at commercial scale by sources across the country is

inherently lacking. This is particularly important in this source category, because it is the only

source category with a public service obligation to operate, and because the entities making up

that category face penalties for failing to provide reliable electricity to their customers. The full

operability of all elements of a technology system is vital for EGUs, given the power sector’s

unique obligation to be available and on call to provide power whenever it is needed. As a result,

for example, a demonstration of the integration of hydrogen, including all system elements, with

EGUs is critical in order to make a finding on adequate demonstration: the nation’s electricity

customers must be assured not only that the technology works, but also that it allows generators

to meet their capacity and reliability obligations at the same time.

While EPA recognizes in the abstract that it “may assess whether controls it is considering would

create risks to the reliability of the electricity system in a particular area or nationwide,” 88 Fed.

Reg. at 33,274, EPA has ignored the very real possibility of this concern materializing in this

very rule, rendering the BSER determination inadequate.

Given these very real concerns, EPA’s ultimate determination that CCS and hydrogen blending

constitute BSER is insufficient legally.

2. EPA does not have the authority under CAA section 111 to develop
“phased” future standards for either new or existing units based on
projections of technology development.

59
For natural gas-based units, EPA proposes that BSER for new stationary combustion turbines,

depending upon the pathway chosen, is 90 percent CCS by 2035 or 96 percent low-GHG

hydrogen blending by 2038, coupled with an interim milestone of 30 percent low-GHG hydrogen

blending by 2032. For existing natural gas-based combustion turbines, EPA has likewise

proposed CCS or low-GHG hydrogen as the BSER, while BSER for existing coal-based steam

generating plants will be a combination of routine operation and maintenance/no increase in

emission rate, natural gas use, and CCS.

As a general matter, EPA’s approach to the near-term requirements—“phase one” for new units,

and routine operation and maintenance/emission rate stasis for existing units—appears to meet

the requirements of the statute despite some technical questions regarding EPA’s determinations

about the ability to comply with the rate chosen by the Agency, which are addressed in these

comments infra. 48 EPA’s proposed requirements for CCS and low-GHG hydrogen in subsequent

phases, however, are not legally supportable. For low-GHG hydrogen blending, EPA is not

actually suggesting that this technology is adequately demonstrated now; rather, EPA merely

projects that it will be adequately demonstrated in and through the 2030s. Similarly, for CCS,

while EPA contends that the technology is adequately demonstrated now on a unit basis, the

Agency concedes that CCS is not yet able to be implemented nationwide due to geologic,

infrastructure, and other present constraints.

48
To be clear, EEI’s concerns—detailed infra—have to do with the proposed emission rate, not
the use of an efficiency-based standard.

60
Concluding now that these technologies are BSER is therefore an unsustainably expansive

reading of EPA’s authority under the statute. As noted above, section 111 requires that standards

of performance be “achievable” through a BSER that “has been adequately demonstrated.” 49

This makes sense, because by section 111’s express terms, all new sources the construction or

modification of which commences after the date a new NSPS is proposed must incorporate or

meet the level of emission reductions achieved by that new system of emission reduction. As the

D.C. Circuit noted in Portland Cement, an NSPS is effectively immediately, and EPA’s ability to

project the availability of technologies at some future date is correspondingly narrowly cabined.

Portland Cement, 486 F.2d at 391-92. EPA’s approach does not accord with the text of the

statute, which requires EPA to base BSER on a technology that “has been adequately

demonstrated”—not one that “will be” (or, more accurately here, might be) demonstrated by

some “future date certain.” 50

a. EPA’s assertion that “lead time” allows for the development of

phased standards is mistaken.

Instead of locating support in the statute, EPA relies inappropriately on just one decades-old case

stating that the courts will evaluate EPA’s conclusions regarding availability of a technology in

conjunction with the “lead time” afforded before the technology is required to be deployed. See

88 Fed. Reg. at 33,289, citing Portland Cement, 486 F.2d at 391. Put simply, it is one thing for a

technology to be adequately demonstrated today but to require some “lead time” for

implementation; it is another for EPA to project a date some years in the future when an

49
42 U.S.C. § 7411(a)(1).
50
Compare 42 U.S.C. § 7411(a)(1) (using past tense to refer to a BSER that “has been
adequately demonstrated”), with 88 Fed. Reg. at 33,273 (“EPA may determine a ‘system of
emission reduction’ to be ‘adequately demonstrated’ if the EPA reasonably projects that it will
be available by a future date certain”).
61
emerging technology might be adequately demonstrated and available for use. The former might

pass muster under the Act; the latter does not. See Am. Fuel & Petrochem. Mfrs. v. EPA, 3 F.4th

373, 383 (D.C. Cir. 2021) (allowing specific statutory percentage to be read to include a margin

for compliance but not an entirely different percentage altogether).

NSPS are to be “effective upon promulgation,” and a “new source” to which the NSPS is

applicable is one “the construction or modification of which is commenced after the publication

of regulations (or, if earlier, proposed regulations).” See 42 U.S.C. §§ 7411(b)(1)(B) and

7411(a)(2) (emphasis added). A system of emission reduction that does not yet exist—that is, one

that is not yet adequately demonstrated—cannot be made “effective upon promulgation” and

cannot be implemented by a source constructed immediately after the date of the NSPS’s

proposal.

Likewise, setting a BSER that is not predicted to be adequately demonstrated until more than a

decade in the future undermines Congress’ requirement that EPA consider NSPS revisions on an

eight-year cycle. See 42 U.S.C. § 7411(b)(1)(B). Congress anticipated that technologies would

develop sufficiently quickly that what might be state-of-the-art one year may be overtaken by

superior technologies in relatively short order—and determined that EPA should regularly

consider and, if appropriate, require sources built after that statutorily-required reexamination to

implement those new technologies. EPA’s determination in the proposed rule that critical

elements of its BSER are not presently adequately demonstrated—thus proposing to delay their

implementation until some future time a decade or more away, but nonetheless applying the rule

62
to all sources built after the date on which this proposed NSPS is published in the Federal

Register—runs contrary to Congress’s carefully-constructed statutory framework.

Further, EPA has identified no limiting principle to its “lead time” construct. Taken to its logical

conclusion, EPA’s interpretation as allowing the Agency to predict the availability of future

technologies and apply them to sources built now would mean that the Agency could promulgate

an NSPS with a BSER that isn’t projected to be available for decades, as long as the Agency

promises not to enforce the requirement until a “future date certain.” 51 Critically, Congress did

not provide EPA with such authority.

EPA relies on Portland Cement to support its assertion of authority to require a phased BSER

spread over more than a decade. See 88 Fed. Reg. at 33,275. Such reliance is misplaced. As an

initial matter, there, unlike here, the court was not presented with a phased NSPS. 52 True, the

court in that case described “lead time” as “the time in which the technology will have to be

available.” See Portland Cement, 486 F.2d at 391. Crucially, though, that is not all the court said.

In the immediately preceding sentence, the court stated explicitly that any projections about the

51
See, e.g., 88 Fed. Reg. at 33,275, among many (reflecting an essentially limitless ability to
project requirements applicable “at a future time”). Query, though, what happens if the
technology does not develop as EPA predicts. Sources built after the date of the NSPS’s proposal
would still be required to meet the BSER at that future time, even though it would be impossible
for them to do so. And the time for challenging the rule—limited to 60 days from its
finalization—would long since have run.
52
For the Portland Cement plants at issue in Portland Cement, there was no substantive dispute
about the availability of the PM control technologies at issue; they had been deployed and used
by a notable subset of the industry. The dispute was regarding costs and level of the standard,
knowing that the technology itself was in fact available and demonstrated as a technical matter
across operating conditions. That is a markedly different scenario than is presented here, and one
that does not inure to EPA’s benefit.
63
future availability or performance of a system of emission reduction for the source category are

“subject to the restraints of reasonableness and cannot be based on ‘crystal ball’ inquiry” or

“mere speculation or conjecture.” Id. The court also explained that in the context of section

111(b), where “the standards … will control new plants immediately, as opposed to one or two

years in the future, the latitude of projection is correspondingly narrowed.” Id. at 391-92

(emphasis added). EPA simply ignores this express judicial caveat in its proposal. 53

b. EPA has no other regulatory precedents for proposing phased

standards.

EPA offers no regulatory precedent for promulgating a BSER that is reliant on a technology that

is not available now but that the Agency projects will be adequately demonstrated sometime in

the future. The examples upon which EPA relies do not support EPA’s current proposals. Rather,

those rules merely demonstrate that the Agency may accommodate logistical and other

impediments to deployment of an already existing technology. 54 In cases such as this, where an

53
Moreover, EPA ignores that Portland Cement’s discussion of lead time hearkened back to
International Harvester Co. v. Ruckelshaus, a case involving the mobile source provisions of the
Act.53 In those provisions, the concept of “lead time” not only makes eminent sense given the
implementation timeframes required to design and roll out millions of new motor vehicles, but
also (and in stark contrast to section 111) finds support directly in the statute itself. Instead of
being “effective upon promulgation” and applicable to sources built after the date an NSPS is
proposed, mobile source standards “shall take effect after such period as the Administrator finds
necessary to permit the development and application of the requisite technology.” Indeed, in the
case of mobile source-related air toxics, EPA is to promulgate requirements reflecting “the
greatest degree of emission reduction achievable through the application of technology which
will be available….” Congress understands verb tense, understands the concept of lead time, and
knows when and how to allow EPA to plan for future availability of a technology. While it
plainly did so for mobile sources, Congress very clearly chose not to do that for stationary
sources in the statute’s NSPS provision.
54
See, e.g., 81 Fed. Reg. 59,332 (Aug. 29, 2016) (establishing NSPS for municipal solid waste
landfills with 30-month compliance timeframe for installation of control device, with interim
milestones); 80 Fed. Reg. 13,672 (Mar. 16, 2015) (establishing wood heaters NSPS with stepped
compliance approach to permit manufacturers lead time to develop, test, field evaluate and
certify current technologies to meet Step 2 emission limits that were already being met by
64
agency uncovers new authority where none was thought to exist previously, courts may at

minimum apply additional scrutiny to this new claim. See Utility Air Regul. Grp. V. EPA, 573

U.S. 302, 324 (2014).

Congress provided for review and, as appropriate, revision of each NSPS every eight years. It

stands to reason, then, that what is reasonable “lead time”—even for implementation, not

technology development—cannot extend beyond the next round of NSPS review, at which time a

once-new source ceases to be a statutory “new source.” 55 As the D.C. Circuit recognized in

Sierra Club v. Costle, “[a]lthough it is conceivable that a particular control technique could be

considered both an emerging technology and an adequately demonstrated technology, there is

inherent tension between the two concepts….” Costle, 657 F.2d at 341, n.157. Instead of

grappling with and attempting to reconcile this tension, EPA does not address it.

c. EPA has no statutory basis for a phased approach.

An additional and important constraint on EPA’s legal authority concerns when section 111

requires compliance. As noted, section 111(b)(1)(A) specifies that an NSPS “shall become

effective upon promulgation,” and section 111(a)(2) specifies that it applies to any source

constructed after the NSPS is proposed. See 42 U.S.C. §§ 7411(b)(1)(A) and 7411(a)(2),

respectively. The D.C. Circuit has stated that NSPS “control new plants immediately” and

existing sources); 78 Fed. Reg. 58,416 (Sept. 23, 2013) (revising oil and gas NSPS to establish
phase-in period to permit sufficient time for production of necessary supply of control devices
and for trained personnel to perform installation).
55
As the statute makes clear, for purposes of section 111, a “new source” is one “the
construction or modification of which is commenced after the publication of regulations (or, if
earlier, proposed regulations) prescribing a standard of performance under this section which will
be applicable to such source.” 42 U.S.C. § 7411(a)(2). Stated another way, once EPA conducts
its eight-year review and promulgates a new NSPS for a source category, a “new source” is one
to which that new NSPS applies.
65
therefore that EPA’s discretion to project the future availability of technology is “correspondingly

narrowed.” Portland Cement, 486 F.2d at 391-92. Section 111(b) also provides that “[a]fter the

effective date of standards of performance promulgated under this section, it shall be unlawful

for any owner or operator of any new source to operate such source in violation of any standard

of performance applicable to such source.” These three provisions, when read together, mean

that all requirements contained in an NSPS must apply to all affected sources as of the date of

promulgation, at the very latest. This in turn means that the BSER must be adequately

demonstrated at the time the rule is proposed.

While EPA claims that phase two standards will be “effective upon promulgation,” that is plainly

not the case. EPA adopts a strained reading of the statute under which phase two standards are

“effective upon promulgation” simply by virtue of the fact that it appears in the NSPS, even

though no source will be held to it (or indeed could be held to it) for many years to come. See 88

Fed. Reg. at 33,289. EPA appears to read the term “effective” as allowing an NSPS to apply in a

partial fashion both initially and in the future—as the Agency states, “upon promulgation,

affected sources become subject to a standard of performance that limits their emissions

immediately, … and they also become subject to more stringent standards beginning in 2032 or

later.” Id. (emphasis added). The Agency, however, cites nothing in the statute that allows this

broad and counterintuitive reading of section 111, nor any case law supporting such a reading. If

the Agency believes more stringent standards will be justifiable in the future, it may promulgate

a new NSPS at that time.

66
Indeed, this appears to get to the heart of why EPA advances such a strained reading of the

statute. As EPA admits, applying the statute according to its plain terms would cede its ability to

proactively regulate later-built sources pursuant to the more stringent low-GHG hydrogen and

enhanced CCS technology requirements:

It should be noted that the multi-phased implementation of the standards of

performance that the EPA is proposing in this rule … is distinct from the
promulgation of revised standards of performance under the 8-year review
provision of CAA section 111(b)(1)(B)…[T]he EPA has determined that the
proposed BSER—highly efficient generation and use of CCS or highly
efficient generation and co-firing low-GHG hydrogen—meet all of the
statutory criteria and are adequately demonstrated for the compliance
timeframes being proposed. Thus, the second and third phases of the
standard of performance, if finalized, would apply to affected facilities that
commence construction after the date of this proposal. In contrast, when the
EPA later reviews and (if appropriate) revises a standard of performance
under the 8-year review provision, then affected sources that commence
construction after the date of that proposal of the revised standard of
performance would be subject to that standard, but not sources that
commenced construction earlier.

88 Fed. Reg. at 33,289 (emphasis added). Those policy goals, however laudable, do not give EPA

the authority to rewrite the express language of the statute.

As discussed, the judicial review provisions of the Act also provide additional support for these

concerns since any challenger has only 60 days to petition for review of an NSPS following its

publication in the Federal Register. Any regulated entity intending to start construction during

the period of applicability of these rules will have no way to challenge the requirements for

2032, 2035, or 2038 in the future in the event EPA has predicted their availability incorrectly.

This is yet another reason why the Agency is limited to assigning a BSER that “has been

adequately demonstrated”—that is, one that is available now.

d. EPA’s phased approach conflates new and existing sources,

contravening the structure of the Act.

67
EPA’s assertion of authority to promulgate a phased NSPS fails for yet another reason—it is

inconsistent with the Act’s distinction between new and existing sources, and the different

requirements for and standards applicable to each. The structure of section 111 directs EPA first

to promulgate standards for “new sources” in a category, and then to promulgate guidelines for

existing sources that could not be regulated as new sources. The existing source standard does

not apply to statutory new sources, because new sources are already required to be built to the

state-of-the-art BSER. EPA has turned this process on its head.

A statutory “new source” is one the construction or modification of which takes place after

publication of a proposed or final NSPS. 42 U.S.C. § 7411(a)(2). An “existing source,” by

contrast, is “any stationary source other than a new source.” 42 U.S.C. § 7411(a)(6). But under

EPA’s proposed rule, a “new source” would have to continue to be a statutory “new source” until

at least 2038 in order to allow the 2023 standards to continue to apply to the source. This would

also need to be true if, as EPA recognizes, the Agency subsequently proposes a new NSPS after

2023 but prior to 2038. In that situation, there would effectively be two different “sets” of new

sources—those subject to the 2023 standards and those subject to the new NSPS proposed after

2023. The above-quoted excerpt from the Proposed 111 Rules makes this abundantly clear:

“[T]he second and third phases of the standard of performance, if finalized, would apply to

affected facilities that commence construction after the date of this proposal,” notwithstanding

EPA’s promulgation of any subsequent NSPS. 88 Fed. Reg. at 33,289. However, this would

mean that a new source beginning construction in 2023 would be both a section 111(b) “new

source” and a section 111(d) “existing source” at the same time.

68
The statute does not allow for such a situation, as the two are mutually exclusive categories.

Because EPA retains continuing authority under section 111(b) to promulgate a new NSPS (and

thus to create a new class of statutory “new sources”) at least every eight years, EPA may act to

require CCS and low-GHG hydrogen as part of BSER for new sources at the time CCS and low-

GHG hydrogen are actually adequately demonstrated. But what EPA may not do is shoehorn a

decades-spanning rule into a statutory eight-year cycle based on its “projection” that

technologies will be adequately demonstrated many years into the future.

e. Given these concerns, EPA should not finalize a phased approach.

EPA lacks a sufficient legal basis to propose phased standards for natural gas-based units. And,

given the lack of record evidence supporting its assertions—discussed in detail infra in these

comments—the duplication of those requirements for existing sources is likewise invalid. EPA

should repropose or significantly supplement its proposed guidelines for existing natural gas-

based turbines to ensure that these rules are workable and achievable across the industry. For

new units, and as EEI proposed to the Agency in its February 2023 whitepaper to the Agency’s

non-regulatory docket, the Agency should adopt an approach that incorporates efficiency-based

standards for these units today, while setting “capable” requirements that enable future retrofits

of these technologies when they become available in the future. 56 Such an approach would better

within EPA’s statutory and regulatory authorities and be consistent with existing case law.

B. CCS Technology is an Important Emerging Technology but All Constituent

Elements of the Technology Have Not Been Adequately Demonstrated in an
Integrated Way, Making the Proposed Emissions Rates Unachievable.

EPA proposes to determine that CCS is adequately demonstrated for existing coal-based units as

well as for new and existing natural gas-based units. For coal-based units, EPA proposes that

56
See Appendix B.
69
units that plan to operate after 2040 in the long-term subcategory, achieve a unit-specific

emissions limitation reflecting a 90 percent capture rate be required by 2030. See 88 Fed. Reg. at

33,341. For natural gas-based units, the Agency proposes as a second phase of BSER for both

new base load and existing units that opt for the CCS-based pathway that BSER would lead to a

unit specific emissions limitation representing the installation of CCS at a 90 percent capture rate

by 2035. See id. at 33,283.

Electric companies have long recognized the importance of carbon capture and storage

technologies in addressing emissions from fossil-based EGUs. Many EEI member companies

have been working for over a decade—and continue to work toward developing and improving

CCS technologies—with the goal that these will be able to meet industry performance and

customer cost requirements in the future. Continued research, development, demonstration, and

deployment (RDD&D) is critical for the long-term success of CCS. EPA and other federal

government agencies, including the DOE, should continue to collaborate on these RDD&D

efforts. 57

However, despite EPA’s assertions in the Proposed 111 Rule, CCS is not adequately

demonstrated, commercially viable, nor cost effective even when the new tax incentives for

existing coal-, new natural gas-, or existing natural gas-based units using CCS are taken into

57
These RDD&D efforts are important beyond the power sector. CCS will be needed not only to
reduce emissions from fossil-based electricity generation, but from other commercial and
industrial processes, both in the U.S. and around the world, and this essential detail has been
recognized by policymakers for at least a decade. See International Energy Agency, Technology
Roadmap – Carbon Capture and Storage (2013), https://webstore.iea.org/technology-roadmap-
carbon-capture-and-storage-2013.

70
consideration. The efforts by EEI member companies as well as universities, DOE, and

international organizations and governments have not yet resulted in CCS systems that perform

at the levels that EPA would require for compliance. The various CCS studies and demonstration

projects that EPA cites with respect to existing coal-based power plants highlight that the

technology remains in the development and demonstration phase, not the commercialization and

deployment phase, and that the capture levels proposed are not yet achievable.

Moreover, even if EPA is correct that some level of capture may have been demonstrated, CO2

pipelines exist, and some small pilot storage projects have gone forward, EPA’s record does not

support the adequate demonstration conclusion that the Agency proposed to draw. This is

because EPA’s assessment of the adequate demonstration of CCS is purposefully myopic,

focusing only on whether each constituent element of CCS has been demonstrated, without

addressing whether all three elements of the system of CCS that would be needed for compliance

have been demonstrated or could be permitted and constructed in time to allow for compliance

on the timeline that EPA has projected. Further, EPA has not addressed the significant legal,

regulatory, and insurance issues that must be resolved before CCS could be deployed across the

industry for compliance. These issues include the development of workable legal and regulatory

regimes to address liability for long-term storage of CO2.

A technology determined to be BSER may not need to be in wide commercial operation, but EPA

must show that the standards that result from the application of BSER are achievable. No one has

integrated all three of these elements of CCS such that the Agency can demonstrate that it

possible to achieve the CCS-based emissions rates that EPA proposes for both existing coal-

71
based units and new and existing natural gas-based units. EPA’s assertions about the need for

“lead time” highlight that the proposed emissions limits are unworkable unless all three elements

can be stitched together. EPA cannot point to anything in the record that would support the

Agency’s assessment that this system of emissions reduction, as a system, has been adequately

demonstrated or that the resulting emissions limits are achievable. Without the integration of all

three constituent elements of CCS and assurances that these elements can be developed and

deployed along the timelines that EPA asserts are feasible, EPA is hazarding guesses about the

achievability of the standards on the required timelines.

1. EPA cannot show that a 90 percent capture rate has been demonstrated
such that units could comply with the proposed emissions limits.

EPA principally relies on the experience of the Petra Nova and SASK Power facilities to

determine that capture at a 90 percent rate is adequately demonstrated for coal-based units.

However, EPA’s reliance on these projects is misplaced as neither is (or was) capable of

consistently capturing 90 percent of the total CO2 emissions from the facility. 58

The Petra Nova capture system was designed to capture 90 percent of 37 percent of the flue gas

produced by a single EGU that was part of the larger facility—amounting to a total capture of 33

percent of the total CO2 emissions. 59 This means that the facility, which is now closed, was

capable of capturing carbon from a large slip stream, not the entire flue gas, as would be required

by EPA’s proposed emissions limits.

58
EPA should consider the experiences of all CCS demonstration projects in assessing the
adequate demonstration of this critical technology. For example, EEI member AEP is providing
significant information about its Mountaineer project via comments filed in this docket.
59
EIA, Today in Energy, Petra Nova is One of Two Carbon Capture and Sequestration Power
Plants in the World (Oct. 17, 2017), https://www.eia.gov/todayinenergy/detail.php?id=33552.
72
Even for that slip stream, high rates of capture were not achieved regularly while the unit was in

operation. According to one report, based on EPA emissions data, the capture rate for the CO2 in

the Petra Nova slip stream may have been as low as 65-70 percent, not the 90 percent for which

the system had been designed. 60 The GeoEngineering Monitor reported that the Petra Nova

capture facility experienced more than 360 downtime days between 2017 and 2019 due to

technical problems—nearly one third of days of operation. 61 This level of inconsistency in

operations would not meet industry performance requirements for generating units, nor would it

allow a unit to demonstrate compliance with EPA’s proposed emissions limits using the metrics

that EPA proposes to use, which would require more consistent operation of the capture

equipment. This would place units at risk of not being able to comply, despite best efforts.

EPA also relies on SASK Power’s Boundary Dam Unit 3 to prove adequate demonstration of

CCS for coal-based units and the proposed 90 percent capture rate. See 88 Fed. Reg. at 33,346.

While the facility has been in operation since 2014, SASK Power also has struggled to keep the

CCS facility operational and to achieve sustained high levels of performance of the capture

system. Only recently, after nine years of operation, has the facility been able to more

consistently operate at levels nearing design rates, but has mostly operated around a 70 or 75

60
See S. Mattei and D. Schlissel, Institute for Energy Economics and Financial Analysis, The Ill-
Fated Petra Nova CCS Project: NRG Energy Throws in the Towel (Oct. 5, 20220,
https://ieefa.org/resources/ill-fated-petra-nova-ccs-project-nrg-energy-throws-towel.
61
Anja Chalmin, The Current State of CCS in the U.S.-- Résumé after 100 Years of CO2 Capture
and 25 Years of Extensive Federal Funding, Geoengineering Monitor (Dec. 2, 2022),
https://www.geoengineeringmonitor.org/2022/12/the-current-state-of-ccs-in-the-u-s-resume-
after-100-years-of-co2-capture-and-25-years-of-extensive-federal-funding/.

73
percent capture rate. 62 But, the facility has only intermittently been able to capture the designed

90 percent capture rate, despite significant efforts and major outages to address issues with the

operation of the capture system. 63 And, in 2021, even after improvements were made, Boundary

Dam was only able to achieve less than a 37 percent capture rate. 64 Accordingly, this project does

not support EPA’s determination that CCS is BSER, nor that the proposed resulting emissions

limitations, based on continuously achieving a 90-percent capture rate, is achievable.

Moreover, while EPA may hope that time will address operational concerns with capture

systems, SASK Power’s efforts reveal that much more time than EPA anticipates may be

necessary. If a consistently high rate of capture cannot be sustained after nine years of operation

at Boundary Dam, it is not clear how EPA has determined that a 90-percent capture rate will be

possible consistently by 2030 or that a 96-percent capture rate will be demonstrated in 2038. EPA

does not address any of these issues in its assessment of either facility.

Neither Petra Nova nor Boundary Dam can consistently capture 90 percent of the CO2 from

those facilities. EPA, therefore, cannot show that this level of capture is adequately demonstrated

for purposes of the Proposed 111 Rules. While EPA may not have to show that the proposed

62
See Dominika Janowczyk, et al., Derates and Outages Analysis - A Diagnostic Tool for
Performance Monitoring of SaskPower’s Boundary Dam Unit 3 Carbon Capture Facility, 15th
International Conference on Greenhouse Gas Control Technologies GHGT-15 (Apr. 6, 2021),
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3820207.
63
See id.
64
S&P Global Market Intelligence, Only Still-Operating Carbon Capture Project Battled
Technical Difficulties in 2021 (Jan. 6, 2022),
https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/only-still-
operating-carbon-capture-project-battled-technical-issues-in-2021-68302671. Frequent capture
system outages also undermine EPA’s assertions about the costs of CCS.

74
BSER is already deployed broadly, it must at least have some evidence that the technology can

do what EPA would require an affected source to accomplish via application of that technology. 65

While some aspects of carbon capture technology are mature, consistent performance is not yet

assured. Throughout the Proposed 111 Rules when describing carbon capture technologies, EPA

correctly refers to the ongoing research and activities as “emerging,” “possibility,” “expected,”

and “in development,” and noting “intentions” to undertake efforts that will continue efforts to

develop and demonstrate capture. Each of these terms correctly describes capture as a technology

that is still under development.

2. EPA’s Assertions about the Costs of CCS Are Not Reliable.

EPA also asserts incorrectly that the costs of CCS for existing coal-based units have been and

will continue to decrease such that these costs are reasonable not an impediment to determining

that CCS is BSER. See 88 Fed. Reg. at 33,367. However, the experience of EEI’s member

companies is that the numerous examples of planned and delayed or abandoned projects are

proof of the opposite. Moreover, most projects to date have received significant federal and other

governmental funding, which highlights that the costs of the technology to the industry—and

customers—is not yet acceptable. Finally, EPA is not correct that the recently passed 45Q tax

incentives will ameliorate these costs concerns. The tax incentives will help address cost

concerns, but that help will be limited.

65
EPA does not address whether the Agency would be willing to exercise enforcement discretion
if capture facilities do not operate at levels, or as consistently, as would be required for
compliance with final standards. If EPA finalizes the CCS-based standards as proposed, the
Agency should be clear that it would exercise such enforcement discretion. This does not
insulate units from citizen enforcement suits but would send strong signals to courts about
whether enforcement was appropriate.
75
 a. EPA’s estimates assume CCS is a mature technology and are
inconsistent with best practices for assessing costs for new
technologies.

Because there is only one operating coal-based CCS project operating today, EPA’s cost data in

support of its BSER determination is based on modeling and other studies and not real-world

costs. EPA relies heavily on an analysis conducted by Sargent & Lundy, LLC, in which the

authors explicitly recognize that “[d]ue to the limited availability of actual as-spent costs for CO2

capture projects, the cost estimation tool could not be benchmarked against recently executed

projects to confirm how accurately it reflects current market conditions.” 66 Despite this

limitation with the report prepared for this rulemaking, EPA asserts that CCS costs will decrease

in the near term. There are several issues, however, that undermine the validity of the analysis

used to support this conclusion.

As a preliminary matter, EPA’s assertion that near-term costs for CCS will decrease is not

supported by the reality of planned projects that have been put on hold or abandoned. 67 While it

is true that deployment reduces costs, CCS deployment has not occurred at levels to demonstrate

that EPA can rely on these decreases or that the Agency can accurately predict the timing and

magnitude of such decreases.

66
Sargent & Lundy LLC, IPM Model—Updates to Cost and Performance for APC Technologies
CO2 Reduction Retrofit Cost Development Methodology, Project 13527-002 (March 2023) at 1
(emphasis added).
67
The Agency’s assertion also does not recognize updated NETL guidance, which states that
“[t]he Chemical Engineering Plant Cost Index indicates relatively high volatility for capital and
labor costs, with the cost index rising by 30% between December 2018 and March 2022. As
these fluctuations are not captured by the reported cost uncertainty, the reader should adjust the
reported costs if required by the end use of the data.” NETL, Cost and Performance Baseline for
Fossil Energy Plants Volume 1: Bituminous Coal and Natural Gas to Electricity (Oct. 14, 2022)
at p. 4, n.b (emphasis added).
76
The Sargent & Lundy analysis assumes that carbon capture technology is a mature technology

for purposes of its work, without a basis in fact for that assumption. Further, this EPA-sponsored

analysis assumes that there have been Nth-of-a-kind (NOAK) CCS plants; there are, however, no

NOAK plants. Presently, there is one operating in North America, and two other projects have

been idled or operate as a traditional natural gas-based unit without any capture technology.

Because the Sargent & Lundy analysis treats CCS as mature, it then draws on various National

Technology Energy Laboratory (NETL) models to assess costs. However, given the emerging

nature of the technology and the few existing projects, reliance on these cost frameworks is

misplaced. As recent new guidelines for assessing CCS costs have asserted, efforts to estimate

NOAK costs for emerging technologies must first be grounded in the costs of FOAK (first-of-a-

kind) facilities and retrofit assessments are particularly fraught because of the unit-specific

nature of these costs. 68

b. CCS projects to date have received significant federal funding,

which does not support a determination that the technology’s costs
are reasonable.

EPA’s assessment of the costs of CSS as reasonable does not adequately address the significant

amount of federal funding that the two projects relied on received. For example, Boundary Dam

68
Simon Roussanaly, et al., Towards Improved Guidelines for Cost Evaluation for Carbon
Capture and Storage, White Paper (Mar. 2021), https://www.osti.gov/servlets/purl/1779820.
These guidelines assert that a better approach is a hybrid costing method that combines a bottom-
up analysis of FOAK commercial cost of an advanced technology with an empirical model
employing experience curves to project its future cost. They also recommend extensive analysis
related to the uncertainties of such future cost estimates. These guidelines also address the
intricacies of assessing costs for retrofits, which are inherently unit-specific, and which the
authors note have not been well addressed to date. They call for particular attention to be paid to
the following aspects: economic impact of potentially required plant production stoppages,
impacts on the main output product quality and plant operation, flue gas treatment requirements,
spatial constraints in plant sites, and flue gas interconnection, among others.
77
received CA $240 million in support from the Canadian government, as well as support from the

provincial government. The project also was supported not only by the sale of electricity, but by

the sale of the captured CO2, which was used in enhanced oil recovery, as well as the sale of

sulfuric acid and fly ash. 69 This combination of support indicates that the project was not

economic on its own, which undermines EPA’s assertions that costs are reasonable.

Similarly, the Petra Nova facility also received significant federal funding, without which it

would not have been built. According to DOE, it entered into a cost sharing agreement with the

project in 2010 to provide $190 million in total cost share with $167 million in financial

assistance through the original Clean Coal Power Initiative (CCPI) Round 3, which included

funding from the Recovery Act, and additional $23 million in February 2016 under the Section

313 of the FY2016 Consolidated Appropriations Act. Ultimately, Petra Nova received around 15

percent of the $160 million based on project recipient cost share under the Section 313 of the

FY2016 Consolidated Appropriations Act mandated reallocation of funds. 70

Federal funding support will be necessary to drive continued RDD&D of this technology and

should continue, but it is difficult to say that the costs of a technology are not an impediment to a

BSER determination when projects would not be built without such support.

c. Tax incentives will not fully offset CCS costs and may not offset
costs very much at all.

69
See Massachusetts Institute of Technology, Carbon Capture & Sequestration Database,
Boundary Dam Fact Sheet: Carbon Dioxide Capture and Storage Project. Due to the decreased
capture rate, Boundary Dam had to pay penalties to the CO2 offtaker in 2014.
70
DOE, Office of Fossil Energy & Carbon Management, Petra Nova—W.A. Parish Project,
https://www.energy.gov/fecm/petra-nova-wa-parish-project.
78
EPA also points to the 45Q tax incentives, which were extended and increased under the IRA, as

support for the reasonableness of the costs of CCS. EPA assumes that unit owners/operators will

be able to utilize the recently passed tax incentive for CO2 storage for the full 12 years that the

tax incentive will be available. See 88 Fed. Reg. at 33,346. While important for addressing some

CCS project costs, is not clear that these tax incentives will meaningfully offset the increased

costs associated with adding CCS to a facility.

As a preliminary matter, the IRS has not finalized the rules for 45Q for carbon capture, which

means that an entity conducting a near-term carbon capture project might not be able to claim a

tax incentive depending on the final rules. Moreover, the basic requirements, as per the statute,

include that the credit is only available once a CCS facility is operational, and the CO2 has been

stored with some type of proof that such storage is secure. Because the tax credits are only

available for ten years, or until 2032, it is not clear that projects using CCS to comply with the

proposed standards would be able to access the tax credits for more than a few years. Based on

EPA’s own BSER determination that CCS technology for coal-based units will not be fully

implementable by these units until 2030, when compliance with the proposed guidelines would

be required, access to the any tax incentives for these units will be significantly limited. For

natural gas-based units, CCS technology will not be implementable by EPA’s estimates until

2035, which is notably later than 2032. As a result, these units will not benefit from the tax

incentives at all. For existing natural gas-based turbines, EPA’s cost assessments cannot include

the tax incentives.

79
Further, given the cost analysis included in EPA’s TSDs, EPA assumes that a facility will be able

to capture 90 percent of the CO2 coming off a stack and take full advantage of the tax credit

offered from the moment that it commences operation, which assumes near perfect deployment

of a technology that has yet to consistently reach the capture levels EPA asserts are BSER, as

already discussed. While it is correct that the tax incentives are likely to encourage some CCS

deployment, including potentially some retrofits, the startup and operation most likely will be in

fits and starts, as evidenced by the experiences of the Boundary Dam facility, and therefore may

not allow an entity to earn the full tax incentive. EPA’s cost assumptions based on the existence

of the tax incentives are thus aspirational and inconsistent with how the credits are structured and

how new technologies are likely to perform.

3. EPA’s determination that CCS is adequately demonstrated for new

natural gas-based units is unsupported by the record.

The Agency proposes that CCS is the BSER for phase two standards for base load natural gas-

based units, requiring that these units meet a standard equivalent to capturing 90 percent of CO2

by 2035. See 88 Fed. Reg. at 33,283. EPA asserts that the individual component pieces of CCS

for natural gas-based generation are themselves demonstrated separately, with a focus on the

“capture element” at the unit itself being demonstrated “based on the demonstration of the

technology at existing coal-fired steam generating units and industrial sources and combustion

turbines.” Id. at 33,291.

EPA cites one dismantled project in Massachusetts that captured CO2 from a 40 MW “slip”

stream at a natural gas-based unit via an amine system, and then piped that product directly to a

food and beverage industry facility that was located adjacent to the plant for use in food

products. The Agency also downplays several relevant facts this facility. This project did not

80
capture 90 percent of the flue gas. In addition, the CO2 did not have to be transported via a

pipeline and it did not need to be stored underground. In short, EPA relies on a facility that

operated a relatively small (e.g., less than 10 percent of facility output) slip stream project to

capture CO2 for use at an adjacent facility, and which was entirely dismantled 18 years before the

current proposal as its principal example for demonstration within the industry. This is not

sufficient to conclude that 90 percent capture at natural gas-based units is adequately

demonstrated.

While EPA tries to make up for its lack of actual, existing, on the ground examples in the power

sector by detailing current capture RDD&D, this discussion mostly serves to point out that CCS

technology is clearly still in an RDD&D phase. EPA points to numerous Front End Engineering

Designs (FEED) studies for natural gas fired turbines that are using DOE funding. FEED studies,

however, are just studies. They are not guaranteed to result in actual projects. To date, none of

the six FEED studies that have been concluded have resulted in actual construction or permitting

of a facility utilizing CCS. See 88 Fed. Reg. at 33,293-94.

EPA also points to recent grants and awards from DOE to begin work or study the impacts of

potential deployment of CCS projects. See id. However, the body of evidence EPA cites—

funding for studies to begin work on attempting to better understand and advance the still

nascent technology with respect to natural gas-based units—serves to underscore the lack of

adequate demonstration of CCS technology, rather than support EPA’s conclusions that it is

adequately demonstrated and part of BSER at this time.

81
EPA also references work being done by NETL, which conducted computer simulations of CCS

on NGCC units and gathered potential cost data for specific generic facilities to be built on a

greenfield. However, these are simulations, which are not real in any practical sense and have

also not resulted in any activity to install, permit, or build CCS technology on NGCC units.

EPA strays beyond power sector studies and examines some demonstrations at coal-based steam

generating units and other industrial processes, but that the experience is not comparable or

applicable to natural gas-based units given the different engineering between coal powered steam

turbines and natural gas combined cycle units. Moreover, as discussed above, EPA’s adequate

demonstration conclusion for coal-based EGUs is itself insufficient. The Agency also cites a

number of small slip stream carbon capture operations and anticipated larger projects that it

assumes will be able to meet the proposed same capture levels. See 88 Fed. Reg. at 33,292. EPA

fails to address that capturing 90 percent of a five or ten percent slip stream of flue gas is a

significantly different task than capturing 90 percent of 100 percent of the flue gas on a fully

commercially operational EGU. In addition, as noted, unbuilt projects cannot serve as evidence

that a technology can achieve the standards that EPA proposes. Again, EPA’s examples only

serve to underscore the lack of demonstration projects for the technology it is asserting is

demonstrated.

The record in this proposal does not support EPA’s determination that CCS is adequately

demonstrated for new natural gas-based units. As a result, the Agency should not move forward

with standards based on CCS for these units.

82
 4. EPA’s determination that CCS is adequately demonstrated for existing
natural gas-based units is even less supported by the record than EPA’s
new source determination.

While EPA’s determination that CCS is BSER for new natural gas-based units is not supported

by the record, the Agency’s determination that CCS is BSER for certain existing natural gas-

based turbines is even less supported. See 88 Fed. Reg. at 33,633. EPA’s BSER determination for

existing natural gas-based units is identical to the Agency’s proposed BSER, along with identical

proposed emissions limits that would require that affected sources either install CCS with a 90

percent capture rate by 2035 or blend hydrogen at 40 percent and 96 percent in 2032 and 2038,

respectively. See id.

The Agency notes that it relies on the same body of evidence for its BSER determination for

existing natural gas-based sources as it did for the new source determination. This slim analysis

consists of almost an identical set of assertions as EPA made for new units—the existence of

FEED studies, modeling assumptions, tax credits to address costs, and that some efforts in

unrelated industries with intentions to deploy CCS in their operations—only with less tangible

evidence. See id. at 33,366-68.

EPA also focuses on the fact that a limited number of existing units would be required to comply

with the CCS-based standards—those larger than 300 MW and operating at capacity factors of

50 percent or greater. Based on a cursory, spreadsheet-based analysis of the existing fleet, EPA

notes that the CCS retrofit requirements would only cover about 35 GW of potential CCS

capacity across the existing natural gas-based fleet. As a result, EPA asserts that the proposed

CCS BSER determination is “reasonable” since “there will be significant time to deploy the

83
needed infrastructure, a total of eleven years from the likely finalization of these guidelines…in

addition, it is unlikely that all of the units that EPA projects would be affected in 2035 would

choose to install CCS; some would likely choose to co-fire low-GHG hydrogen…for these

reasons, the EPA believes that there will be adequate capability to build enough CCS for the

existing combustion turbine EGUs subject to a CCS BSER at a capacity threshold of 300 MW,

given the amount of time provided.” Id. at 33,367. This does not meaningfully address the

challenges related to retrofitting CCS on existing units, which are not merely a function of time.

As has been noted, these also are a function of the current design of the unit and the availability

of existing space for large capture equipment. 71 EPA does not address these real issues regarding

the feasibility of retrofits and how they are different from new builds.

In fact, EPA makes no mention of the fundamental difference between new and existing sources:

that new sources can be designed to adopt and deploy new technologies, to the extent they are

demonstrated, as part of their initial design. Existing sources, by their very definition, would be

required to retrofit—a process that would involve significant capital outlay, and presents

numerous potential impossibilities—including inability for sources to be redesigned to

accommodate new and potentially sizeable capture technology, a lack of available unit space or

water, the need for units to be down and non-operative to accommodate significant retrofit time,

or the need to make potentially significant permitting modifications to already existing permits

and conditions.

71
See Roussanaly, supra, n.68.
84
Despite these real differences between employing CCS at new and existing units, EPA proposes

that existing sources comply with standards based on CCS technology on the same exact timeline

as new sources. Even assuming that CCS is adequately demonstrated, it is readily apparent that

existing sources will face greater challenges and significant additional hurdles related to

retrofitting. At minimum, this should be reflected in a different compliance timeline; but, as

noted, time can only address some of the challenges of retrofits.

5. Without the capture and storage elements, EPA’s proposed CCS-based

standards are not achievable.

Capturing CO2 from the flue gas of fossil-based generation would not enable compliance with

the proposed standards as EPA conditions compliance on demonstrations that the CO2 was stored

in ways that EPA deems acceptable. See, e.g., proposed 40 C.F.R. § 60.5555a(f). Accordingly,

EPA recognizes that the transport and storage of CO2 are necessary constituent elements of CCS

as the proposed BSER.

However, while recognizing that transport and storage are integral to the successful

environmental performance of CCS, EPA does not appropriately consider how these could

impact EPA’s BSER determination or the selection of the resulting emissions limitations or

guidelines, focusing on whether they are demonstrated themselves and not on what they could

mean for the achievability of the proposed standards.

i. EPA does not address the numerous supporting infrastructure

challenges regarding transportation of captured CO2.

EPA makes significant assumptions regarding the availability and ease of operation of CO2

pipelines to transport the captured carbon that would likely result from any unit installing CCS as

part of compliance with EPA’s BSER determination. EPA assumes that CO2 pipelines will be

85
available to transport the captured CO2 from all of the facilities required to install CCS by 2030

or 2035 for coal-based and natural gas-based units, respectively, yet admits that there are only

CO2 pipelines in 11 states today. The Agency lists a number of CO2 pipelines that have been

announced, noting that they are “likely to be developed” and have been in the planning stage for

in some cases four years. See 88 Fed. Reg. at 33,366. However, “likely to be developed” does not

mean “has been developed” or “will be developed,” and does not provide assurances to the

EGUs that there will be CO2 transportation available when needed. Critically, these pipelines are

outside the purview of EGU owner/operators and EEI member companies would need to depend

on other parties to develop the infrastructure and build it successfully inside the next decade.

The status of the CO2 pipelines cited by the Agency follows:

• Midwest Carbon Express: According to Summit Carbon Solutions’ website, the entity
developing the 2,067-mile Midwest Carbon Express CO2 pipeline, they have reached
agreements with over 2,700 72 landowners with an undisclosed number that still remain.
Summit announced in 2021 that they are building the Midwest Carbon Express with the
goal of completing the pipeline in 2024. Given that not all the land-lease rights have been
approved, the timing of completion is uncertain. 73

• Heartland Greenway Phase 1A +1B: the 1,302-mile pipeline announced its first permit
filing in Iowa 2022, it too crosses several states (NE, IA, SD, MN, and IL) whereby each
state, county and landholder will require approvals or agreements and hopes to have the
initial system commissioning in 2025.

• Mt. Simon Hub: According to the developer—Wolf Carbon Solutions—the 280 mile
Iowa-centric pipeline began community outreach efforts in the first quarter of 2022 with a
projected in-service date is 2025. 74 However, Wolf Carbon Solutions does not have all of

72
Summit Carbon Solutions, https://summitcarbonfacts.com/.
73
Adam Willis, Massive Midwest pipeline, a test for North Dakota’s carbon capture goals, hits
landowner snags, AgWeek Business (Dec. 4, 2021), https://www.agweek.com/business/massive-
midwest-pipeline-a-test-for-north-dakotas-carbon-capture-goals-hits-landowner-snags.
74
See Wolf Carbon Solutions, https://wolfcarbonsolutions.com/mt-simon-hub/.

86
 its easements in Iowa and plans to try and get voluntary easements from landowners
whereas both Midwest Carbon Express and Heartland Greenway are resorting to eminent
domain which falls under each states’ jurisdiction. 75 Wolf Carbon Solutions filed a permit
application with the Illinois Commerce Commission in June 2023. The pipeline is
projected to be operational also in 2025 but has not started construction.

EPA tries to counter these obvious concerns by noting in the Greenhouse Gas Mitigation

Measures for Steam Generating Units Technical Support Document (TSD) by listing “planned or

announced” pipelines to try and support that CO2 pipelines will be available and are expanding.

While they may be expanding, CO2 transportation is not yet widely available, and the regulatory

hurdles to increased deployment are significant. 76 It should be noted that each of the announced

or planned pipelines requires years to obtain permits and get financing. Moreover, they will not

be available for any new CCS projects that would be motivated by compliance with EPA’s

standards and instead will be dedicated for the use of specific facilities/customers. In particular,

these pipelines, therefore, do not necessarily represent available capacity for coal-based EGUs

that EPA is proposing that they must install CCS by 2030.

Moreover, given the absence of federal authority, siting and economic regulation of CO2

pipelines generally falls to the states. As a result, eminent domain authority for CO2 pipeline

projects depends on and varies by the states. This is a time-consuming process. Where states do

not provide eminent domain authority, pipeline developers must depend on reaching agreements

with each landowner to obtain rights-of-way. In addition, in some states, project developers must

75
See Jared Strong,Wolf proceeds with voluntary pipeline approach despite neighbors’ growing
blockade, Iowa Capital Dispatch (Apr. 7, 2023),
https://iowacapitaldispatch.com/2023/04/07/wolf-proceeds-with-voluntary-pipeline-approach-
despite-neighbors-growing-blockade/.
76
See J. Garofalo and M. Lewis, Sources to Sinks: Expanding A National CO2 Pipeline Network,
Environmental Law Institute (Jan. 1, 2020).
87
go county by county to seek approval from each jurisdiction. The diffuse nature of the regulatory

regime for CO2 pipelines creates multiple opportunities for opponents to slow or stop project

development, which infuses uncertainty into the process and can be a significant barrier to

getting investor interest in CO2 pipeline projects and to getting this necessary infrastructure

ultimately built. These regulatory delays and the potential lack of community acceptance for the

CO2 pipelines are one more challenge for any EGU to demonstrate compliance with the proposed

standards. Moreover, EPA has not provided any evidence that its assumptions about how quickly

new pipelines could be built—in some instances in 3.5 years—are grounded in actual experience

permitting and siting these transmission facilities. It certainly is not consistent with the recent

experiences siting and permitting new natural gas or oil pipeline.

ii. EPA’s analysis ignores challenges related to permitting new storage

facilities, including advocacy group opposition.

EPA acknowledges that not all EGUs have equal access to appropriate geologic storage.

However, even if these access challenges could be addressed via pipeline deployment, EPA still

have not addressed the challenges related to permitting new storage facilities. While regulations

exist to permit storage facilities under the Safe Drinking Water Act’s Underground Injection

Control Program, EPA has issued one such permit to date. 77 As a result, a significant number of

new storage facilities would need to be permitted in order to allow for EGUs to comply with the

proposed CCS-based emissions limits. EPA has not addressed whether it has the resources to

undertake this expansion in permitting needs.

77
See EPA, Class VI Wells Permitted by EPA, Table, https://www.epa.gov/uic/class-vi-wells-
permitted-epa#table. The Table lists several pending permit applications, but provides no
information about when those were filed or how long they have been under consideration by
EPA.

88
States could elect to issue these permits to address the potential future demand for new storage

sites, but, at this time, only North Dakota and Wyoming have been granted primacy to do so. 78

The challenge for states seeking primacy is significant. For example, Louisiana currently is

seeking primacy, but EPA has moved slowly to act on the state’s application. In addition, many

of the same groups that advocate for EPA to determine that CCS is adequately demonstrated

actively oppose Louisiana’s quest for primacy. The concerns that they have raised in their

comments on the application indicate that they are likely to oppose other states’ future primacy

efforts (and future CCS projects generally) because they do not want the technology deployed.

For example, in urging EPA not to accept Louisiana’s application for primacy, the Sierra Club

both proposed a list of additional, unrelated requirements designed to make Class VI

unobtainable (e.g., requiring that all other, non-CO2 wells be plugged first) and asserted that

“[c]arbon capture and sequestration is not a step in the direction of a clean energy economy. It is

an unproven technology, a false solution, and far too expensive.” See Sierra Club letter,

Appendix D. Similarly, the Center for Biological Diversity (CBD) opposed primacy, stating that

“[a]s a foundational matter, we reject the premise that CCS is a necessary—or even

appropriate—approach to addressing the climate crisis and pollution burdens borne by frontline

and fenceline communities. After billions of dollars of investment and decades of development,

deployment of CCS has consistently proven to be ineffective, uneconomic, and unwise.” See

CBD letter, Appendix E. Given this level of opposition to a state having permitting authority for

CO2 injection wells, it seems clear that these groups also will oppose applications for actual

78
See EPA, Primary Enforcement Authority for the Underground Injection Control Program,
https://www.epa.gov/uic/primary-enforcement-authority-underground-injection-control-
program-0.
89
storage facilities, as well as the other constituent elements of CCS. At minimum, this level of

opposition should be factored into EPA’s timelines.

6. Adequate demonstration determinations that result in standards that are

not achievable can harm broader efforts to develop and demonstrate key
technologies needed to reduce GHG emissions.

Ironically, EPA’s proposed standards, if finalized, could have the unintended consequence of

dissuading companies from moving forward with projects that would help address the concerns

with CCS performance and costs identified in these comments. It is one thing to test a new

technology to learn more about its costs and operation, but it is another to subject that test project

to the CAA’s enforcement regime. If the potential owners and operators of these projects are not

confident that they can demonstrate compliance with the proposed standards, which would

require consistent performance of not only the capture systems, but also the related pipeline

infrastructure and storage facilities, they may choose not to move forward to avoid compliance

penalties. Rather than face non-compliance, project advocates and their investors may prefer to

take less risk—and not build or retrofit facilities. In this way, stringent standards can slow down

RDD&D efforts.

Section 111 already acknowledges that new technologies may not operate as expected and that

some relief from strict compliance with standards might be necessary to encourage deployment

of new technologies. Specifically, section 111(j) provides for innovative technology waivers in

the event that the owner or operator of a new unit would like to employ an emerging technology.

See 42 U.S.C. § 7411(j)(1)(A). These innovative technology waivers are not available, however,

if a technology is adequately demonstrated, so they could not be sought if EPA determines in any

final rules that CCS is adequately demonstrated. These waivers also likely will not be available

90
to address concerns about consistent performance of capture systems as they are intended to

provide some regulatory relief only to systems of continuous emissions reduction. See id. at §§

7411(j)(1)(A)(i) and (ii). Regardless, the existence of section 111(j) highlights that the Act

contemplates that strict regulatory regimes can serve to discourage deployment of emerging

technologies that could ultimately result in better environmental performance.

One way to address concerns that stringent standards and inflexible compliance demonstration

requirements may harm RDDD&D efforts is via enforcement discretion. As noted, EPA has not

indicated that it is willing to exercise any enforcement discretion if CCS does not perform as

expected. At minimum, EPA should be clear that it would consider exercising enforcement

discretion to support RDD&D efforts.

7. EPA should consider alternative approaches.

Ultimately, the Agency’s proposed determination that CCS is the BSER for all affected sources

across its three proposals falls short for separate reasons for each rulemaking. As a result, and in

order to finalize rulemakings that are durable and will continue to drive progress across the

electric sector, EPA should consider not finalizing the proposed determination that CCS is BSER

for existing coal-based units, new natural gas-based units, or existing natural gas-based units. For

existing coal-based units, there are a variety of other options that EPA could consider as BSER—

several of which the Agency has determined on an individual basis are BSER for certain other

subcategories of sources. The Agency should consider using these approaches instead.

For new natural-gas based units—and as noted infra—EPA should focus on ensuring continued

emissions progress through the use of efficiency-based approaches, like the Agency has proposed

91
in its phase one approaches and should set additional requirements that these units be capable of

CCS (or hydrogen) retrofits/conversions in future years once the technology matures and is

adequately demonstrated. At present there are limited options for reducing emissions other than

improved efficiency. In the future, however, new natural gas units may be able to blend hydrogen

or use carbon capture technology to reduce emissions in ways that satisfy industry performance

and customer cost requirements—in addition to or instead of efficiency measures. EPA can set a

hydrogen or carbon capture “capable” standard now in conjunction with this traditional

emissions rate-based efficiency approach. This would ensure that any new generation not only

would use the most efficient technologies available—as regulated by the lb CO2/MWh emissions

limitation or through a mass-based compliance option in terms of tons of CO2—but also could

enable future emissions reductions once hydrogen or carbon capture technologies are

demonstrated and cost effective for the power sector, while supporting reduced outage times

associated with retrofits. 79 It would send clear signals that owners and operators should be

thinking about the future operation of these units.

For existing natural-gas based units, EPA should repropose or significantly supplement its

insufficient proposal and instead focus on conducting significant more analysis to propose a

workable set of guidelines for these sources, one that is both justified technically and also—as

79
“Capable” standards—sometimes referred to as “ready” or “capable-to-ready” standards—are
not self-executing. Any future emissions limitations for then-existing units based on hydrogen
co-firing or CCS technology would have to be the result of a future rulemaking under CAA
section 111(d) in which EPA would analyze whether such technologies had been adequately
demonstrated considering all the statutory factors. The statutory text of CAA section 111 itself
supports a flexibility-centered approach to both standard setting and compliance, but not
automatic increases in the stringency of standards.
92
discussed supra and infra—works in conjunction with the other proposed rules and the

Administrator’s announced holistic approach.

C. Hydrogen Blending is a Promising Approach For Reducing Emissions From

The Power Sector But is Not Adequately Demonstrated Today.

EPA’s interest in hydrogen as a technology to reduce power sector emissions is well-founded and

is shared by EEI’s member companies. EEI and its members believe in and are working to make

clean hydrogen commercially available at scale. We are engaged in pilot and demonstration

projects across the clean hydrogen value chain, including participating in approximately half of

the Regional Clean Hydrogen Hub (H2Hubs) proposals that were encouraged by the U.S.

Department of Energy (DOE) to submit full applications; we are working with agencies and the

National Laboratories to help advance clean hydrogen technology, delivery, and safety; and we

are designing the power generation facilities of the future to be hydrogen capable.

This potential tool holds promise and should be maintained as a compliance option regardless of

whether EPA finalizes the Proposed 111 Rules. However, electric companies also recognize that

the United States is in the nascent stages of development of the clean hydrogen fuel that will be

necessary to support hydrogen blending across the economy and throughout the U.S. power

sector in a manner that preserves reliability and affordability. This is evident from the various

government and industry efforts underway across the hydrogen value chain—including and in

addition to EEI member companies’ efforts—on pilot and demonstration projects, to scale up

electrolyzer manufacturing and bring down costs, to shore up necessary infrastructure, and to

create the regulatory certainty needed to secure the financing and long-term offtake that

ultimately will drive deployment. As discussed below, these areas of development and scale-up,

many of which are detailed in DOE’s Pathways to Commercial Liftoff: Clean Hydrogen (Clean

93
Hydrogen Liftoff Report), 80 still must be realized to ensure development of a U.S. clean

hydrogen market at scale.

As discussed infra, not only is hydrogen blending in the power sector not adequately

demonstrated at present, but to progress from the current hydrogen market at the necessary scale

that will be needed to support reliable hydrogen blending in the power sector, a number of

barriers must be overcome. These include cost barriers, technical concerns, regulatory hurdles,

feasibility questions, and availability issues. These challenges permeate the core elements of the

hydrogen system that are necessary to enable its potential use in the power sector. Although the

current industry currently has some components of the value chain that will be needed to support

achievability of hydrogen blending throughout the power sector, nearly every component faces

these barriers and it has yet to put all of the pieces together and confirm that they operate as a

cohesive whole. This work is no less than critical for the entities regulated under the Proposed

111 Rules—this is the only source category with a public service obligation to operate and the

entities making up this category face penalties for failing to provide reliable electricity to their

customers. While EEI and its members believe these challenges are surmountable and efforts are

underway to resolve them, it is unclear when, how, and to what extent these challenges will be

overcome and what the impact will be on the timing and scale of deploying clean hydrogen.

80
U.S. Dep’t of Energy, Pathways to Commercial Liftoff: Clean Hydrogen (Mar. 2023),
https://liftoff.energy.gov/clean-hydrogen/. Furthermore, it has been observed that DOE’s recently
issued U.S. National Clean Hydrogen Strategy and Roadmap “includes 110 ‘actions’ that the
U.S. government plans to take by 2025, 2029 and 2035, although most of these might be better
be described as ‘aims’ or ‘goals’, and many are already under way.” L. Collins,, U.S. unveils
national clean hydrogen strategy and roadmap based around three key priorities,
Hydrogeninsight (June 6, 2023), https://www.hydrogeninsight.com/policy/us-unveils-national-
clean-hydrogen-strategy-and-roadmap-based-around-three-key-priorities/2-1-1462445.
94
As noted, DOE recently released the Clean Hydrogen Liftoff Report, which explores and

discusses current opportunities and barriers to achieving commercial liftoff for clean hydrogen in

the United States. This detailed report was “developed through extensive stakeholder

engagement and a combination of system-level modeling and project-level financial modeling” 81

and draws on several dozen current articles, papers, and studies. As such, this report provides

useful insight into the areas of developmental need that must be met to catalyze a U.S. clean

hydrogen market at scale, efforts and strategies to overcome these gaps, and the potential impacts

on liftoff. 82 In recognition of the fact that we are in the early stages and much remains unsettled,

DOE explicitly cautions readers that “just as in any rapidly evolving industry, figures and

numbers in this report will evolve based on additional learnings from researchers and industry,

points of regulatory clarity (as released), and more. As such, this report should be viewed as a

living, work-in-progress document that will be updated at a regular cadence.” 83

While EPA mentions some of the challenges noted in the Clean Hydrogen Liftoff Report and

discussed below, it does not thoroughly or substantively grapple with these challenges in

reaching its proposed adequate demonstration determinations. This is evident from EPA’s

proposed determinations regarding power sector access to low-GHG hydrogen, the infrastructure

needed to support power sector access to low-GHG hydrogen, and the cost-effectiveness of low-

81
U.S. Dep’t of Energy, The Pathway To: Clean Hydrogen Commercial Liftoff,
https://liftoff.energy.gov/clean-hydrogen/.
82
The issuance of this report is itself evidence of the fact that there are challenges that must be
overcome.
83
Clean Hydrogen Liftoff Report at 7.
95
GHG hydrogen. The current reality of where the United States is and the required work ahead

stand in stark contrast to the conclusory statements that underlie EPA’s proposed adequate

demonstration determinations. EPA’s Proposed 111 Rules risk placing additional pressure on the

current challenges that government and industry are working to overcome and could imperil,

rather than support, the realization of a U.S. clean hydrogen economy at scale. While EEI and its

members are working towards and hope that EPA’s vision becomes a reality, the very fact that

these are projections runs counter to the CAA’s explicit language and the line of D.C. Circuit

cases considering it, as discussed infra.

Moreover, throughout the preamble to the proposed standards, EPA overstates, uses incorrectly,

or omits facts relevant to the current state of the hydrogen market and the availability of

hydrogen blending today and in the near future. These include statements regarding the current

use of hydrogen in the power sector, as well as multiple projections related to power sector

access to low-GHG hydrogen under the timelines provided in the Proposed 111 Rules. As a

consequence of EPA’s failure to develop an adequate record and appropriately analyze the

current state and the well-documented challenges to growth of the hydrogen sector, the Proposed

111 Rules are insufficient. Moreover, the Agency’s improperly analyzed record has led it to the

incorrect conclusion that, at present, low-GHG hydrogen blending for the power sector has been

adequately demonstrated under the CAA.

1. EPA’s reliance on pilot projects and potential future awards to set up

supportive infrastructure is insufficient to determine hydrogen blending
is adequately demonstrated as BSER under CAA section 111.

As discussed supra, in order to establish a standard of performance under section 111 that has

been adequately demonstrated, EPA must determine that: (1) the system of emissions reduction

96
upon which the emission limitation is based is “adequately demonstrated,” and (2) the emission

limitation is “achievable.” 84 In general, courts have determined that, in order for a technology to

be adequately demonstrated, EPA needs to show that both (1) the technolog is deployed in

commercial-scale operations, as well as (2) the emission limitation is achievable throughout the

industry.

More specifically, existing precedent consistently supports the fact that, in order to be adequately

demonstrated under section 111, a system must at least be in commercial-scale use in the relevant

source category or by a source of comparable design and function. In Essex Chemical Corp. v.

Ruckelshaus, the D.C. Circuit examined EPA’s standards for sulfuric acid plants based on dual

absorption systems. Essex Chem. Corp. v. Ruckelshaus, 486 F.2d 427 (D.C. Cir. 1973). Such

systems were in operational use in a U.S. elemental sulfur burning plant at the time that EPA

conducted its testing for the standards. Id. at 435-36. As such there was no dispute about EPA’s

conclusion that dual absorption systems were adequately demonstrated for elemental sulfur

burning plants. Id. However, the court noted that “there is nothing in the record to indicate any

basis for the conclusion that the dual absorption process can perform efficiently in a recycle, or

spent acid, plant. As such, dual absorption simply has not been ‘adequately demonstrated’ within

84
In setting the requirement that a system be adequately demonstrated, Congress “stated three
other key criteria – cost, non-air quality health and environmental impact, and energy
requirements – as factors the EPA must take into account.” Am. Lung Ass’n v. EPA, 985 F.3d
914, 952 (D.C. Cir. 2021) (citing 42 U.S.C. § 7411(a)(1)). The D.C. Circuit has further explained
that “[a]n adequately demonstrated system is one which has been shown to be reasonably
reliable, reasonably efficient, and which can reasonably be expected to serve the interests of
pollution control without becoming exorbitantly costly in an economic or environmental way.”
Essex Chem. Corp. v. Ruckelshaus, 158 U.S. App. D.C. 360, 486 F.2d 427, 433 (1973). See also
Am. Lung, 985 F.2d at 962; and Portland Cement Ass’n v. Ruckelshaus, 486 F.2d 375, 391 (D.C.
Cir. 1973) (whether a system is adequately demonstrated “cannot be based on ‘crystal ball’
inquiry”) (citation omitted). These principles are discussed more fulsomely supra in this section.
97
the meaning of § 111(a)(1) of the Clean Air Act . . . for use with other than elemental sulfur

feedstock plants.” Id. at 435 n.19 (emphasis added).

The existing case law also supports the idea that, while an essential step along the road to

adequately demonstrating a technology, pilot scale data alone is insufficient for adequate

demonstration purposes. In Sierra Club v. Costle, the D.C. Circuit considered emissions control

technology for coal-based EGUs. Sierra Club v. Costle, 657 F.2d 298 (D.C. Cir. 1981). While

the discussion focused on the standards set employing wet scrubbing technology as the BSER,

which was widely used at the time and was considered BSER, the court clarified that it did “not

hold that dry scrubbing is adequately demonstrated technology” despite some extrapolated pilot

scale data at the time in the record. Id. at 341 n.157. In that instance, EPA itself had recognized

that “‘the major uncertainty which exists with dry SO2 removal technology is the absence of

experience at large-scale facilities.’” Id. (citation omitted). The court therefore determined that

“it would be premature to conclude that dry scrubbing is adequately demonstrated technology.”

Id. While today dry scrubbing technology is widely utilized across the industry, at the time of

Costle in 1981, that was notably not the case.

In addition to being in commercial-scale use in the relevant source category or by a source of

comparable design and function, D.C. Circuit precedent makes clear that Congress intended

section 111 standards to be valid only if achievable “throughout the industry.” See, e.g., Costle,

657 F.2d at 341 n.157 (“We see no basis on this record which would justify extrapolating from

the pilot scale data to the conclusion that dry scrubbing is adequately demonstrated for full scale

plants throughout the industry.” (emphasis added)). This requirement is well illustrated by

98
National Lime Association v. EPA, where the D.C. Circuit concluded that the section 111

standards were unsubstantiated because “the record d[id] not support the ‘achievability’ of the

promulgated standards for the industry as a whole.” Nat’l Lime Ass’n v. EPA, 627 F.2d 416, 431

(D.C. Cir. 1980) (emphasis added). The Court reiterated that holding throughout the case, and

further indicated that EPA itself has long recognized this fundamental rule. Id. at 433 (“EPA

itself acknowledged in this case that ‘standards of performance . . . must . . . [assure achievability

of the standard for the industry as a whole] for all variations of operating conditions being

considered anywhere in the country.” (emphasis in the original)).

The court in Portland Cement Association v. EPA reaffirmed this basic principle. There, the D.C.

Circuit considered industry claims that EPA failed to consider the impact on Portland cement

kilns of older design that, if modified, could become subject to section 111 standards. Portland

Cement Ass’n v. EPA, 665 F.3d 177, 190 (D.C. Cir. 2011). The Court upheld EPA, finding that

“EPA demonstrated how all regulated kilns could meet [the] standards. EPA based its

[particulate matter (PM)] and [SO2] limits ‘on control technologies that can be applied in any

kiln type and achieve the same control levels that would be expected with a new kiln at similar

costs.’” Id.

EPA’s existing precedent supports setting standards that are based on commercially deployed

technologies that can be achieved throughout the industry, requiring EPA to stay abreast of and

mirror existing technological trends in the power sector. It does not allow the Agency—as it has

done here—to point towards some limited number of current pilot projects and determine that

they are sufficient evidence of adequate demonstration of the technology and further conclude

99
hydrogen blending is BSER for the entire power sector today. Such an approach is directly

contradictory to the Agency’s statutory obligations and existing case law—and is notable since,

as discussed supra, EPA has not demonstrated that these technologies have been integrated and

demonstrated holistically across the industry. As discussed at length infra, EPA’s reliance on

prospective supportive infrastructure without hard record evidence is problematic and

counterfactual. Combined with an overreliance on pilot projects, EPA’s determination that

hydrogen blending is adequately demonstrated as BSER is therefore insufficient.

2. EPA’s proposed conclusions regarding power sector use of low-GHG

hydrogen are based on an insufficient record that does not support its
proposed that the technology is adequately demonstrated.

EPA’s Proposed 111 Rules include critical overstatements about current power sector use of

hydrogen blending. For example, EPA states that “a range of cost-effective technologies and

approaches to reduce GHG emissions from these sources are available to the power sector, and

multiple projects are in various stages of operation and development – including . . . co-firing

with lower-GHG fuels.” 88 Fed. Reg. at 33,242. The Agency similarly notes that “recently, utility

combustion turbines in the power sector have begun to co-fire hydrogen as a fuel to generate

electricity.” 88 Fed. Reg. at 33,254-545. These statements suggest a more mature level of

development than is reflected in reality.

EPA also myopically focuses on the state of combustion turbine technology to support its

proposed adequate demonstration determinations. However, combustion turbine technology to

blend low-GHG hydrogen is still advancing and, critically, is only one component of the

infrastructure necessary for the power sector to reliably and affordably obtain and blend low-

GHG hydrogen. As such, the state of combustion turbine technology alone, regardless of its level

100
of advancement, is insufficient to support EPA’s proposed adequate demonstration

determinations.

a. Despite EPA’s statements, hydrogen blending in the power sector is

nascent at present and any conclusions about when it will be
adequately demonstrated are premature.

As discussed below, the current use of hydrogen blending in the power sector remains at the pilot

stage. In fact, EPA does not cite a single U.S. power sector hydrogen blending project that is in

commercial operation, and it does not since there are none to cite despite the significant

government and industry efforts to overcome existing barriers. 85 Current hydrogen blending

projects do not include critical components of the larger value chain that will be needed to

support low-GHG hydrogen availability throughout the power sector. As discussed supra, the

pilot and demonstration projects that EPA cites are insufficient under D.C. Circuit caselaw to

satisfy the requirements for adequate demonstration, as are companies’ “plans” and

“expectations” for future hydrogen blending.

i. EPA overstates the current state of power sector hydrogen

blending projects, as the current state of projects do not support
EPA’s proposed determination that it has been adequately
demonstrated.

EPA’s characterization and analysis of the state of hydrogen blending in the power sector are

overstated, as evidenced by the Agency’s own descriptions of actual current projects as “plans,”

“pilots,” “demonstrations,” and “test-burns.” See, e.g., 88 Fed. Reg. at 33,255. Use of this

language is not limited to a few examples but permeates EPA’s recitation of the specific facts for

each of the current U.S. projects that the Agency discusses.

85
The United States is not alone in this early phase of development—with the exception of a
single, 320-kW project in Japan that is not comparable in size to the facilities subject to the
Proposed 111 Rules, every project that EPA cites is in the testing stages.

101
Specifically, EPA: (1) describes the Long Ridge Energy Generation Project’s (Long Ridge

Energy Terminal) hydrogen blending as the successful completion of “a test burn of 5 percent

(by volume);” 86 (2) explains the Intermountain Power Agency’s plan to “replace an existing

coal-fired EGU with a Mitsubishi 840-MW combustion turbine that will have the capability to

co-fire 30 percent by volume low-GHG hydrogen in 2025 and 100 percent electrolytic hydrogen

by 2045,” 88 Fed. Reg. at Hydrogen TSD at 8 (emphasis added); see also id. at 33,255, 33,305,

33,308, 33,312, and 33,365 (all describing the “plans” and “expectations” for this project); (3)

notes the Los Angeles Department of Water and Power’s plan for the Scattergood Generating

Station, which “would be ready to co-fire a minimum of 30 percent low-GHG hydrogen . . .

when the unit becomes operational by December 30, 2029,” Id. at Hydrogen TSD at 8 (emphasis

added); see also id. at 33,255 and 33,308 (describing the “plans” for the project); (4) explains

that the Lincoln Land Energy Center Project “will be ready to co-fire up to 30 percent by volume

hydrogen upon initial operation,” Id. at Hydrogen TSD at 8-9 (emphasis added); (5) notes that El

Paso Electric “is seeking to convert its Newman Power Station to co-fire 30 percent by volume

86
88 Fed. Reg. at Hydrogen in Combustion Turbine Electric Generating Units: Technical
Support Document, at 8 (emphasis added) (hereinafter “Hydrogen TSD”). EPA also cites to
sources that explain that this project was a demonstration. See 88 Fed. Reg. at nn.74 and 377-78.
For example, one of the sources explains that the Long Ridge Energy Terminal “conducted a
successful [5 percent] hydrogen-blending demonstration on March 30, 2022.” Clark, K., GE-
Powered Gas-Fired Plant in Ohio Now Burning Hydrogen, Power Engineering (Apr. 22, 2022),
https://www.power-eng.com/hydrogen/ge-powered-gas-fired-plant-in-ohio-now-burning-
hydrogen/. Another source that EPA cites notes that “[t]esting will continue through next year at
the 5% baseline.” Defrank, R., Cleaner Future in Sight: Long Ridge Energy Terminal in Monroe
County Begins Blending Hydrogen, The Intelligencer (Apr. 25, 2022),
https://www.theintelligencer.net/news/community/2022/04/cleaner-future-in-sight-long-ridge-
energy-terminal-in-monroe-county-begins-blending-hydrogen/. EPA itself also notes that “The
Long Ridge Energy Terminal tested 5 percent hydrogen co-firing at the 485–MW combined
cycle plant on a GE HA-class (GE 7HA.02) in 2022.” 88 Fed. Reg. at 33,364.
102
hydrogen,” Id. at 9 (emphasis added); (6) notes that Entergy’s Orange County Advanced Power

Station “will be ready to co-fire 30 percent hydrogen by volume at initial operation,” Id.

(emphasis added) despite the fact that the fuel itself may not actually be available; (7) explains

that the Magnolia Power Plant “is expected to begin operations in 2025 with a GE 7HA.03

combustion turbine . . . [that] will be hydrogen-ready with the ability to co-fire up to 50 percent

hydrogen by volume as the fuel becomes available,” 88 Fed. Reg. at Hydrogen TSD at 9

(emphasis added); (8) lists Georgia Power’s hydrogen blend test run at its McDonough Atkinson

plant among “demonstrations of existing units co-firing hydrogen;” 88 Fed. Reg. at Hydrogen

TSD at 9 (emphasis added); (9) describes the New York Power Authority’s work at the

Brentwood power plant as having “successfully demonstrated the ability to co-fire 44 percent

‘carbon-free’ hydrogen,” Id. at 10 (emphasis added); (10) explains that the Cricket Valley Energy

Center “is planning to demonstrate co-firing a 5 percent blend of hydrogen at a combined cycle

facility.” Id. (emphasis added). In addition, these projects generally are running anywhere from a

few hours to a few days at the maximum, and none are in continuous commercial operation. 87

87
See, e.g., Chemnick, J., EPA extends comment period on landmark power plant rules, E&E
GreenWire (June 15, 2023) (“Standards are based on carbon capture and storage and hydrogen
co-firing at gas plants, technologies not currently deployed at commercial power plants in the
U.S.”), https://subscriber.politicopro.com/article/eenews/2023/06/15/epa-extends-comment-
period-on-landmark-power-plant-rules-00102152. EPA also overstates projects’ hydrogen
blending goals. For example, in the Hydrogen TSD, EPA states that the Lincoln Land Energy
Center Project will have “the capability to utilize 100 percent low-GHG hydrogen by 2045.” 88
Fed. Reg. at Hydrogen TSD at 9. However, it is unclear how EPA arrived at 2045. The website
that EPA cites references the project’s blend “subsequently ris[ing] to 100% throughout the
lifetime of the facility.” Cukia, M., Proposed 1.1GW Lincoln Land Energy Center Project in
Illinois Approved, Constructionreview (Aug. 15, 2022),
https://constructionreviewonline.com/news/proposed-1-1gw-lincoln-land-energy-center-project-
in-illinois-approved/. EmberClear, the project developer, is even more ambiguous about the
timing of reaching 100 percent hydrogen firing and explains that the facility “will incorporate the
ability to use . . . up to 100% within the lifespan of this project.” EmberClear, Lincoln Land:
Discover What the Lincoln-Land Project is About, https://emberclear.com/lincoln-land/.

103
A closer look further proves that power sector hydrogen blending is in the pilot and

demonstration phase and that these projects are insufficient to support EPA’s proposed adequate

demonstration determination. For example, the Long Ridge Energy Terminal is testing a 5

percent hydrogen blend in phase one and plans to scale up to a 20 percent hydrogen blend in

phase two. The project has explained that operating data from phase one would “validate the

design and operating parameters” and allow the developers to “gather information that can be

used in the next phases of the hydrogen blending program at Long Ridge and, in GE’s case,

elsewhere in the engine fleet.” 88 This project does not currently serve customers and is seeking to

“use successful testing as proof of concept to attract commercial customer(s) for this power.” 89

Similarly, in its discussion of the demonstration project at the Brentwood power plant, the

Electric Power Research Institute (EPRI) noted several key findings and operational lessons

learned. A review of these key findings and operational lessons learned demonstrates the early

phase of hydrogen co-firing in the U.S. power sector. This is underscored by the “next steps”

noted in the report, which provide “[l]essons learned during the design and execution of the

project are documented in this report, along with recommendations for future LM6000 hydrogen

cofiring investigations. Researchers will take this information into account in building a

foundational knowledge base and exploring future hydrogen blending pilot projects as part of the

88
First Amendment to Construction Certificate Letter of Notification, Long Ridge Energy
Generation Project, Ohio Power Siting Bd., 21-0789-EL-BLN, at 6 (July 23, 2021).
89
Id.

104
clean energy transition.” 90 These statements show that this project is in the early stages of testing

hydrogen blending and is not sufficient to support a determination that hydrogen blending in the

power sector is adequately demonstrated given where it stands in that phase of development.

Further to that point, the team also has noted that “[t]ransitioning to higher concentrations of

hydrogen may ‘bring a new set of unknowns.’” 91

ii. Current power sector hydrogen blending projects do not include

components of the overall value chain that will be critical to the
availability of low-GHG hydrogen blending throughout the power
sector.

Current pilot projects also cannot demonstrate the adequacy of the overall value chain that will

be necessary for low-GHG hydrogen blending to be available throughout the power sector. More

specifically, based on publicly available information, current U.S. projects are either producing

hydrogen onsite or trucking the hydrogen to the site. 92 However, onsite production will not be

feasible for all end-users, particularly where there are emissions limitations on the hydrogen

90
Elec. Power Res. Inst., Executive Summary: Hydrogen Cofiring Demonstration at New York
Power Authority’s Brentwood Site: FE LM6000 Gas Turbine, at 5,
https://www.epri.com/research/products/000000003002025166 (emphasis added).
91
Patel, S., Harnessing an H-Class for Hydrogen: Long Ridge Energy Terminal, POWER Mag.
(Oct. 2, 2022), https://www.powermag.com/harnessing-an-h-class-for-hydrogen-long-ridge-
energy-terminal/.
92
For example, the hydrogen supply for phase one of the Long Ridge Energy Terminal’s testing
was planned through “a continuous process with approximately four to five trailers on site at any
time: two trailers connected to the offloading manifold, two staged in waiting, and the fifth
trailer in transit nearby.” OPSB Staff Report of Investigation, Ohio Power Siting Bd., 21-0789-
EL-BLN, at 2 (Aug. 13, 2021). Each hydrogen tube trailer would provide approximately 40
minutes to one hour of operational supply. Id. at 2. For phase two, the project plans to
“transition[] to an on-site, third-party sponsored technology for hydrogen supply, [and that the]
hydrogen will be delivered to the Project at a flange connection to be located near the proposed
trailer offloading connection and transferred to the fuel blending skid(s) via underground
piping.” First Amendment to Construction Certificate Letter of Notification, Long Ridge Energy
Generation Project, Ohio Power Siting Bd., 21-0789-EL-BLN, at 8 (July 23, 2021).

105
production pathway as the resources necessary for production (e.g., water and qualifying

renewable electricity) are not abundant, available, or feasible in all regions. 93 Where onsite

production is not possible, midstream transportation will be necessary.

As discussed below, current projects’ onsite production and hydrogen trucking are evidence of

the specific lack of midstream infrastructure. Onsite production and trucking are not expected to

be feasible for growing sectors. As DOE explains “[i]nitial large-scale deployments of clean

hydrogen are expected to target industries with established supply chains and economies of scale,

such as ammonia production and the petrochemical industry. These deployments will be

supplemented with smaller-scale deployments in new applications and growing sectors as the

infrastructure develops.” 94 It is also not clear whether the trucked hydrogen would meet EPA’s

“low-GHG” requirements, either.

Consequently, while current hydrogen blending projects and plans in the power sector are

promising, these projects are only in the early stages of development and are too premature to

93
It also has been noted that the Long Ridge Energy Terminal is extremely well-situated. Mike
Jacoby, President of Ohio Southeast Economic Development recently explained that “Long
Ridge Energy Terminal has a unique site with amazing transportation infrastructure and a supply
of reliable, competitively priced electricity.” Press Release, Long Ridge Energy Terminal
Developing Data Center Campus in Hannibal, Ohio, Ohio Southeast Economic Development
(Sept. 15, 2021), https://ohiose.com/news/long-ridge-energy-terminal-developing-data-center-
campus-in-hannibal-ohio/. Jacoby also notes that the project is located in an Opportunity Zone,
which is an area that may be eligible for preferential tax treatment. See Internal Revenue Serv.,
Opportunity Zones Frequently Asked Questions, https://www.irs.gov/credits-
deductions/opportunity-zones-frequently-asked-questions.
94
DOE, U.S. Clean Hydrogen Strategy and Roadmap at 21 (June 2023),
https://www.hydrogen.energy.gov/clean-hydrogen-strategy-roadmap.html (emphasis added). See
also midstream infrastructure discussion infra.
106
support a determination that low-GHG hydrogen co-firing is the BSER. In addition, these

projects do not include the midstream infrastructure that will be necessary to ensure low-GHG

hydrogen is available throughout the industry. Accordingly, while these projects may mature to

the deployment phase and ultimately serve as useful data points for future EPA rulemaking, at

present they are insufficient to satisfy section 111’s requirements.

b. Current turbine technology to blend hydrogen in the power sector

alone is insufficient to support EPA’s proposed adequately
demonstrated determinations.

EPA notes that turbines have demonstrated a 20-30 percent hydrogen blend with natural gas and

that turbine manufacturers are working towards 100 percent hydrogen firing by 2030. 88 Fed.

Reg. at 33,255 and 33,305. As discussed above, power sector hydrogen blending projects are in

the pilot stage and have not been deployed in commercial operation. While turbine capability is

advancing, and both turbine manufacturers and EEI’s member companies are actively working to

deploy these technologies, turbines are only one piece of the puzzle for demonstrating hydrogen

blending. As discussed above, power sector hydrogen blending projects are in the pilot stage and

have not been deployed in commercial operation. As noted, the power sector is the only source

category with a public service obligation to operate. Combined cycle and combustion turbines

play an essential role in continuing the clean energy transition by providing 24/7 and quick start

power, which allows for increased renewable integration and reliable power at affordable rates

for customers. As a result, the full operability of all elements of the technology system is vital for

EGUs, given the power sector’s unique obligation to be available and on call to provide power

whenever it is needed. However, various elements of the overall value chain that will be needed

to support reliable commercial deployment of hydrogen blending across the power sector are still

developing.

107
For example, while GE’s 7HA.02 combustion turbine is “‘innately capable’ of burning 15% to

20% hydrogen by volume . . . [c]rucial to this effort . . . are aligning the differences in the

combustion properties of hydrogen and natural gas, as well as impacts to all gas turbine systems,

and to the overall balance of plant.” 95 Speaking about the Long Ridge Energy Terminal, Director

of Emergent Technologies at GE Gas Power’s Decarbonization Division, Jeff Goldmeer, further

explained that “[t]he 7HA.02 at Long Ridge has not been modified for hydrogen. When we talk

about going to 50% or 100% hydrogen, then we’ll start needing to see changes in the combustion

system, primarily on the gas turbine, and changes in the balance of plant to handle much more

hydrogen.” 96 In discussing the transition to 100 percent hydrogen by volume, Goldmeer

explained that the timing will be driven by several factors—“[t]here are three pieces there,

there’s the technology readiness, the supply chain component, and then, when it makes sense for

the customer to do so.” 97

Moreover, among its operational lessons learned for the Brentwood project, EPRI notes the

importance of maintaining a stable supply of hydrogen, “which is critical to transitions of the

hydrogen ratio and load of the turbine” and because “[i]nstability of the hydrogen supply could

95
Patel, S., First Hydrogen Burn at Long Ridge HA-Class Gas Turbine Marks Triumph for GE,
POWER Mag. (Apr. 22, 2022) (quoting Jeff Goldmeer, Director of Emergent Technologies at
GE Gas Power’s Decarbonization Division), https://www.powermag.com/first-hydrogen-burn-at-
long-ridge-ha-class-gas-turbine-marks-triumph-for-ge/.
96
Id.
97
Id.

108
cause the hydrogen system to trip off.” 98 Ensuring a stable supply will require either onsite

hydrogen production and storage or hydrogen transportation and storage. As noted and further

discussed below, co-locating hydrogen production with electric generation, particularly for low-

GHG hydrogen production, likely will not be feasible for all entities. This is due to both potential

physical space constraints, as well as the lack of access to the resources necessary to produce

hydrogen onsite across the power sector. In addition, there are barriers at present to scaling up

low-GHG hydrogen production, water availability, pipeline transportation, and storage, and

potential cost barriers to hydrogen trucking.

While government and industry are working to overcome these challenges, it is unclear when

and to what extent they will be surmounted and what the impact will be on the development of a

U.S. clean hydrogen economy that could support reliable and affordable hydrogen co-firing in

the power sector. As a result, while EEI and its members are hopeful that the U.S. clean

hydrogen economy develops in line with the picture that EPA paints and are actively working to

develop it, the Agency’s analysis of the demonstrated nature of the technology is overstated and

insufficient to support its proposed determinations, and not supported by existing case law.

c. EPA’s proposed low-GHG hydrogen production conclusions are

based on an insufficient record and low-GHG hydrogen production
faces challenges that could limit achievability throughout the
industry.

EPA proposes to conclude that the power sector is “likely to have ample access to low-GHG

hydrogen and [that it will be] in sufficient quantities to support 30 percent co-firing by 2032 and

98
Elec. Power Res. Inst., Executive Summary: Hydrogen Cofiring Demonstration at New York
Power Authority’s Brentwood Site: FE LM6000 Gas Turbine, at 3,
https://www.epri.com/research/products/000000003002025166.

109
96 percent by 2038.” 88 Fed. Reg. at 33,309. However, as discussed below, EPA’s proposed

conclusion and the record it has compiled contains errors, overgeneralizations, and a failure to

recognize key facts about low-GHG hydrogen production. In addition, section 111 requires EPA

to take cost and other factors into consideration in reaching an adequate demonstration

determination. However, in the Proposed 111 Rules, the Agency fails to consider how market

dynamics and the contours of the U.S. Department of Treasury’s (Treasury’s) forthcoming

guidance on the hydrogen production tax credit (PTC) in the Inflation Reduction Act (IRA) could

impact low-GHG hydrogen production and its proposed adequate demonstration determinations.

Moreover, the Proposed 111 Rules and the record compiled by EPA also include several

contradictory statements. For example, EPA states that “[w]hether there will be sufficient

volumes of low-GHG hydrogen for new sources to co-fire [in line with EPA’s proposal] will

depend on the deployment of additional low-GHG electric generation sources, the growth of

electrolyzer capacity, and market demand.” Id. EPA also “recogniz[es] that there are likely limits

to the clean hydrogen supply in the mid-term.” 88 Fed. Reg. at 33,362. EPA does not attempt to

square these statements with its proposed determination.

For these reasons, EPA’s proposed determination is not the product of reasoned decision making

as its record casts doubt on The Agency’s conclusions, and also lacks key information. When

included, the information that EPA fails to analyze shows the Agency’s proposed determinations

are unsupported.

110
 i. EPA’s existing record is mischaracterized and overgeneralized,
and closer investigation reveals the record does not support the
proposed adequate demonstration determinations.

EPA’s discussion includes overgeneralizations and misstatements that it significantly relies upon

for its proposed determinations. For example, EPA notes that “[p]rograms from the IIJA and IRA

have been successful in promoting the development of new low-GHG hydrogen projects and

infrastructure. As of August 2022, 374 new projects had been announced that would produce 2.2

megatons (Mt) of low-GHG hydrogen annually, which represents a 21 percent increase over

current output.” 88 Fed. Reg. at 33,312 (citing Energy Futures Initiative, U.S. Hydrogen Demand

Action Plan (Feb. 2023), https://energyfuturesinitiative.org/reports/) (emphasis added). EPA cites

the Energy Futures Initiative’s (EFI’s) U.S. Hydrogen Demand Action Plan to support this

statement. However, EFI’s report actually states that it has “tracked 374 distinct clean hydrogen

project announcements . . . [and a] review of publicly announced projects shows 2.2 million

metric tons (megatons [Mt]) of potential clean hydrogen supply, or roughly 21 percent of the

current U.S. hydrogen industry’s output.” 99

EFI’s use of the term “clean hydrogen” encompasses multiple production pathways—namely,

blue hydrogen (produced from methane reformation with carbon capture), green hydrogen

(produced from water using renewable electricity), turquoise hydrogen (produced through

methane pyrolysis), and pink hydrogen (produced from water using nuclear electricity). 100 By

99
Energy Futures Initiative, U.S. Hydrogen Demand Action Plan, at 12 (Feb. 2023),
https://energyfuturesinitiative.org/reports/ (emphasis added).
100
See, e.g., Energy Futures Initiative, U.S. Hydrogen Demand Action Plan, at Figure 4 (Feb.
2023), https://energyfuturesinitiative.org/reports/.

111
contrast, EPA’s proposed definition of low-GHG hydrogen would, at a minimum, not include

hydrogen produced from methane reformation with carbon capture. EPA explains that whether

methane pyrolysis qualifies as low-GHG hydrogen depends on “the source of the energy used to

decompose the methane.” 88 Fed. Reg. at n.397. Further, depending on the contours of

Treasury’s hydrogen PTC guidance and the extent to which EPA’s final rule aligns with that

guidance, EPA’s definition of low-GHG hydrogen also may not include hydrogen produced using

nuclear electricity, as discussed infra. If methane pyrolysis and production using nuclear power

are included, less than 0.2 MMT of the 2.2 MMT of clean hydrogen production projects noted in

EFI’s report would qualify as low-GHG hydrogen production under EPA’s proposed definition—

without these two pathways, the total is less than 0.15 MMT of the 2.2 MMT projects that EFI

discusses and that EPA attempts to attribute to low-GHG hydrogen. 101 Stated differently, at

maximum, less than 10 percent of the announced clean hydrogen production projects noted in

EFI’s report would qualify as low-GHG hydrogen production under EPA’s proposal.

Importantly, EFI also explains that while “around 70 percent of the recently announced projects

involve green hydrogen,” this interest “may not be immediately effective for scaling regional

clean hydrogen markets.” 102 Moreover, “[d]espite representing a relatively small share of the

total, blue hydrogen projects account for nearly 95 percent of the capacity of announced

projects.” 103 The difference between EPA’s own proposed definition and EFI’s use of the term

101
See id.
102
See id., at 29 (Feb. 2023), https://energyfuturesinitiative.org/reports/.
103
Id.

112
clean hydrogen is significant but the Agency does not discuss EFI’s actual findings with respect

to low-GHG hydrogen production and their implications for EPA’s proposed determinations.

ii. Low-GHG hydrogen production faces challenges that could limit

achievability throughout the industry.

At present, the United States produces approximately 10 MMT per year of hydrogen, the

majority of which is produced from natural gas or coal without carbon capture technology. DOE

estimates that “[c]lean hydrogen production for domestic demand has the potential to scale from

< 1 million metric tons per year (MMTpa) to ~10 MMTpa in 2030.” 104 It is important to note

that DOE’s estimates are of “clean” hydrogen, which DOE defines as having a carbon intensity

of less than 4 kg CO2e/kg of hydrogen on a lifecycle basis measured from well-to-gate. 105 This is

in contrast to EPA’s “low-GHG” hydrogen, which it proposes to define as having a carbon

intensity less than or equal to 0.45 kg CO2e/kg of hydrogen on a lifecycle basis measured from

well-to-gate. 88 Fed. Reg. at 33,304. As noted above, the most salient production pathway to

qualify under EPA’s definition is through electrolysis powered by renewable electricity. 106

104
Clean Hydrogen Liftoff Report at 1.
105
U.S. Dep’t of Energy Clean Hydrogen Production Standard (CHPS) Guidance,
https://www.hydrogen.energy.gov/pdfs/clean-hydrogen-production-standard-guidance.pdf; and
Clean Hydrogen Liftoff Report at n.1.
106
In light of EPA’s proposal to require the use of low-GHG hydrogen, the discussion below
focuses on electrolytic hydrogen produced using clean electricity. However, other production
pathways, which may be necessary to support the level of deployment that would be required to
comply with the Proposed 111 Rules, similarly face barriers to scaling up. As noted, while
entities across government agencies and industry are working to overcome these challenges, it is
unclear at this point when, how, and to what extent and what the impacts will be on availability
of low-GHG hydrogen.

113
There are several challenges to scaling production of EPA’s low-GHG hydrogen, including the

need to increase electrolyzer manufacturing and resolve related supply chain challenges, as well

as access to clean electricity. As DOE explains in the Clean Hydrogen Liftoff Report,

“[e]lectrolysis will be challenged by supply-chain constraints in both raw materials and

equipment manufacturing capacity during a critical scale-up period through 2025 in addition to

challenges with renewables build-out and sourcing a domestic workforce.” 107 Importantly, DOE

further notes that “[i]f electrolysis fails to scale during the PTC time horizon, it may not achieve

sufficient cost downs prior to PTC expiration.” 108 While EPA makes mention of some of the

issues discussed below, the Proposed 111 Rules do not include adequate discussion or analysis of

these issues and it does not appear that EPA has taken them into account in reaching its proposed

determinations.

1. EPA does not adequately analyze the need for domestic

electrolyzer manufacturing capacity to scale up exponentially,
which could impact low-GHG hydrogen production and limit
achievability throughout the industry.

It is well-recognized that increased electrolyzer manufacturing will be a necessary component to

development of a hydrogen market at scale. In a 2022 report, the International Energy Agency

explained that Europe and China account for 80 percent of global manufacturing capacity. 109 As

countries around the world, including the United States, look to significantly increase hydrogen

production to help meet their climate goals, there is a corresponding need to ramp up electrolyzer

manufacturing capacity.

107
Clean Hydrogen Liftoff Report at 45.
108
Clean Hydrogen Liftoff Report at 45.
109
Int’l Energy Agency, Electrolyzers (Sept. 2022), https://www.iea.org/reports/electrolysers.

114
In the United States, there are “only a few small-scale electrolyzer manufacturers.” 110 Meeting

DOE’s projected demand, which EPA repeatedly references, and avoiding “an electrolyzer

bottleneck” will require a “rapid and significant ramp-up in capacity.” 111 DOE explains that

[t]o enable deployment of ~100 GW of operational electrolyzers by

2030, domestic production would need to scale from 4 GW of
publicly announced capacity with target commercial operation dates
(CODs) to as much as ~20–25 GW p.a. by 2030. In some instances,
hydrogen producers today are already being quoted lead times of 2
to 3 years when they order electrolyzers. If the size of U.S.
production facilities increases to match EU facility sizes, the U.S.
could require as much as ~12–14 additional electrolyzer production
facilities by 2030. 112

The scope of the challenge of achieving this goal also is evident from the inclusion of

electrolyzers in President Biden’s June 6, 2022, presidential determinations under the Defense

Production Act. 113

Despite this significant and well-known potential barrier, the Proposed 111 Rules do not

substantively address the need for “growth of electrolyzer capacity” and only include a high-

level description of three electrolyzer factories that are “under development” in the United

States. 88 Fed. Reg. at 33,309 and Hydrogen TSD at 23. Adequate access to electrolyzers is

110
Clean Hydrogen Liftoff Report at 87.
111
Id. at 87.
112
Id. at 46.
113
Memorandum on Presidential Determination Pursuant to Section 303 of the Defense
Production Act of 1950, as amended, on Electrolyzers, Fuel Cells, and Platinum Group Metals
(June 6, 2022), https://www.whitehouse.gov/briefing-room/presidential-
actions/2022/06/06/memorandum-on-presidential-determination-pursuant-to-section-303-of-the-
defense-production-act-of-1950-as-amended-on-electrolyzers-fuel-cells-and-platinum-group-
metals/.

115
critical to scaling the U.S. clean hydrogen economy and to the power sector’s ability to deploy

hydrogen blending. EPA’s failure to analyze the potential barriers that electrolyzer manufacturing

faces are a significant flaw in its record and undermine its proposed adequate demonstration

determination. Critically, these are flaws that providing significant “lead time” alone cannot heal

since the underlying issues must be actively resolved and not passively solved through the lapse

of time.

2. EPA does not adequately analyze supply constraints for the

raw materials required for electrolyzer production that could
impact low-GHG hydrogen production and limit achievability
throughout the industry.

Even if the United States is able to scale up its electrolyzer manufacturing capacity, access to the

raw materials required to manufacture electrolyzers are anticipated to become constrained. DOE

explains that “[w]hile global raw material shortages are not currently an issue, the global

abundance of certain materials, particularly platinum group metals (PGMs), may be stressed by

electrolyzer production in 2030 and beyond.” 114 This concern also is underscored by the

inclusion of PGMs in President Biden’s June 6, 2022, presidential determinations under the

Defense Production Act. 115

114
Clean Hydrogen Liftoff Report at 88.
115
Memorandum on Presidential Determination Pursuant to Section 303 of the Defense
Production Act of 1950, as amended, on Electrolyzers, Fuel Cells, and Platinum Group Metals
(June 6, 2022), https://www.whitehouse.gov/briefing-room/presidential-
actions/2022/06/06/memorandum-on-presidential-determination-pursuant-to-section-303-of-the-
defense-production-act-of-1950-as-amended-on-electrolyzers-fuel-cells-and-platinum-group-
metals/.

116
Although several types of electrolyzers technologies are being explored and developed, the two

technologies that are beyond the laboratory phase and at the commercial stage of maturity are

alkaline water electrolysis and proton exchange membranes (PEM). 116 Alkaline electrolyzers are

the dominant technology at present. These electrolyzers require nickel, which, in scaling up

“may face higher costs from material constraints [as it is] widely used in other expanding

industries.” 117

Alkaline electrolyzers are not highly flexible and are large. As a result, there has been significant

interest in PEM electrolyzers, which have “a fast response ramp-up and ramp-down capability, as

well as a wide dynamic operating range of 0-100%.” 118 However, PEM electrolyzers also face a

potential raw materials challenge as they require iridium, for which there is no significant

domestic source. 119 In the Clean Hydrogen Liftoff Report, DOE explains that by 2030, U.S.

demand for PEM electrolyzers could require approximately 15-30 percent of the global

production of iridium raw material. 120 DOE also notes that its forecast for iridium demand

assumes that PEM electrolyzers will have a 25 percent market share and that this “likely

represents a conservative assumption” as other analyses show an approximately 30 percent

116
Clean Hydrogen Liftoff Report at Figure 3. See also Int’l Energy Agency, Hydrogen Supply
(Sept. 2022), https://www.iea.org/reports/hydrogen-supply.
117
Clean Hydrogen Liftoff Report at 59.
118
Cockerill, R., Electrolyser Technologies: PEM vs Alkaline Electrolysis, H2VIEW (Nov. 2020),
https://nelhydrogen.com/wp-content/uploads/2021/07/Alk-vs-PEM.pdf.
119
Clean Hydrogen Liftoff Report at 59. See also id. at 46 (explaining that “[o]ver 80% of
iridium supply comes from South Africa, with almost no opportunity for domestic production”).
120
Id. at 45.

117
global market share. 121 DOE notes that “[n]onetheless, the quantity of iridium required is

significant.” 122 Requirements to satisfy projected PEM electrolyzer production could, in fact,

exceed the quantity of iridium that is economically feasible to mine, 123 as “iridium deposits are

limited and only mined on a small scale.” 124

DOE also explains that U.S. electrolyzer manufacturers will need graphite, yttrium, platinum,

and strontium, “most of which cannot be found domestically in sufficient quantities [and]

reliance on foreign suppliers could hinder growth of U.S. based electrolyzer manufacturing.” 125

As noted supra, EPA does not discuss these potential supply chain concerns in the Proposed 111

Rules and does not appear to have taken these issues into consideration in its analysis, which the

Agency must do as part of determining BSER. EPA’s failure to analyze the potential barriers that

electrolyzer manufacturing faces is a significant flaw in its record and undermine its proposed

determination that hydrogen blending is adequately demonstrated.

3. EPA does not adequately analyze the need to significantly

increase clean electricity production and accessibility that
could impact low-GHG hydrogen production and achievability
throughout the industry.

121
Id. at 87.
122
Id.
123
Id. at 59.
124
Id. at 87.
125
Id. at 88.

118
In addition to the criticality of scaling up electrolyzer manufacturing and production, access to

clean electricity is key to low-GHG hydrogen production. 126 As noted, EPA proposes to require

that the hydrogen co-firing pathway utilize low-GHG hydrogen, which will require the use of

clean electricity, like wind and solar. In the Clean Hydrogen Liftoff Report, DOE explains that

“[f]or water electrolysis, availability of clean electricity . . . will play a critical role in the pace of

growth.” 127 DOE further projects that, by 2030, electrolytic hydrogen production could require

up to 200 gigawatts (GW) of additional renewables. In addition to potential siting and permitting

challenges, this scale of build-out implicates non-air impacts associated with land-use, as

discussed below.

Further, while the share of wind and solar generation is increasing, 128 demand for clean

electricity also is accelerating. This presents “a challenge across many clean energy technologies

126
Electrolysis is inherently reliant on access to water. DOE estimates that “10 MMT [of]
hydrogen produced from water electrolysis would require 29 billion gallons of water.” Clean
Hydrogen Liftoff Report at endnote viii. However, access and the legal rights to use water vary
in the United States. For example, in many states in the West where water is constrained, the
governing legal regimes generally are restrictive and require water rights or permits for most
uses. See, e.g., Water Resource Considerations for the Hydrogen Economy, K&L Gates LLP
(Dec. 16, 2020), https://www.klgates.com/Water-Resource-Considerations-for-the-Hydrogen-
Economy-12-16-2020. These regimes often also include senior and junior water rights based on
when the rights were obtained. During droughts, senior right holders take precedence over junior
holders. These access issues may create challenges for low-GHG hydrogen production in certain
regions of the United States. EPA does not discuss these potential supply issues in the Proposed
111 Rules and does not appear to have taken these issues into consideration in its analysis.
127
Clean Hydrogen Liftoff Report at 3.
128
The mix of resources used to generate electricity in the United States has changed
dramatically over the last decade and is increasingly cleaner. See U.S. Energy Information
Administration (EIA), Today in Energy: Renewable generation surpassed coal and nuclear in the
U.S. electric power sector in 2022 (Mar. 27, 2023),
https://www.eia.gov/todayinenergy/detail.php?id=55960&src=email; See also EIA, Electric
Power Monthly: Data for February 2023—Table 1.1 Net Generation by Energy Source: Total
(All Sectors), 2013-February 2023 (Mar. 24, 2023),
119
as new electricity demand (e.g., for electrolysis, direct air capture) develops in parallel to

electrification of buildings and transport.” 129 Critically for the purposes of EPA’s proposed

determination, constraints in renewables development could impact how hydrogen production

develops. 130

DOE notes that using nuclear power to produce hydrogen could relieve some of this pressure. 131

However, it is not clear whether electricity from nuclear generation will qualify under EPA’s

definition of low-GHG hydrogen. More specifically, EPA proposes to align its definition of low-

GHG hydrogen with Treasury’s forthcoming hydrogen PTC guidance. 88 Fed. Reg. at 33,330.

The contours of this Treasury guidance have been hotly debated, including whether Treasury

should impose additionality requirements. See, e.g., id. at 33,330-31. Such requirements could

disqualify electricity from existing nuclear generation. If Treasury imposes an additionality

requirement that would disqualify existing nuclear and EPA incorporates this principle into the

https://www.eia.gov/electricity/monthly/xls/table_1_01.xlsx; and EIA, Electric Power Monthly:

Data for February 2023—Table 1.1.A. Net Generation from Renewable Sources: Total (All
Sectors) (Mar. 24, 2023), https://www.eia.gov/electricity/monthly/xls/table_1_01_a.xlsx. In
2022, for the first time, renewable energy sources surpassed coal as a fuel: 22.6 percent of total
generation at utility scale facilities in the United States came from renewable sources compared
to 19 percent from coal-based generation. See EIA, Electric Power Monthly, Table 1.1. In total,
more than 40 percent of America’s electricity came from clean carbon-free resources in 2022,
including nuclear energy, hydropower, solar, and wind, putting clean resources at parity with
natural gas generation, which provided approximately 40 percent of the country’s total electricity
generation at utility scale facilities in 2022. See id.
129
Clean Hydrogen Liftoff Report at 59.
130
See, e.g., id. at 37 (“If clean electricity deployment is constrained by challenges such as land
use restrictions or siting/permitting bottlenecks, modeling results show reformation with CCS
will dominate.”).
131
Id. at 59.

120
final rule, the challenges in accessing sufficient clean electricity to meet power sector demands

under the Proposed 111 Rules, noted above, will likely be exacerbated.

The transmission grid itself also is in the midst of significant change. It is estimated that the

capacity of the existing grid must increase by as much as 60 percent by 2030, and it may need to

triple in size by 2050 to meet the growing demand for clean electricity to support a carbon-free

economy. 132 Transmission is a key enabling technology for the clean energy transition because it

allows interconnection of new resources and better utilization of both new and existing

resources, including reduced curtailment of wind and solar energy. Large-scale regional and

interregional transmission can enhance reliability by expanding electricity imports and exports

and by improving coordination across wider geographies. Expanding the grid will require siting

and construction of additional transmission infrastructure.

At present, there are several ongoing regulatory reform efforts in areas central to grid function.

For example, the Federal Energy Regulatory Commission (FERC) recently issued a proposed

rulemaking regarding Applications for Permits to Site Interstate Electric Transmission Facilities

(commonly referred to as FERC’s “backstop authority”), 133 and solicited comments in response

to a Staff-led workshop regarding the possibility of a minimum requirement for Interregional

132
See Eric Larson et al., Net-Zero America by 2050: Potential Pathways, Infrastructure, and
Impacts, Final Report Summary, at 76 (Princeton University, Oct. 29 2021),
https://netzeroamerica.princeton.edu/img/Princeton%20NZA%20FINAL%20REPORT%20SUM
MARY%20(29Oct2021).pdf.
133
Applications for Permits to Site Interstate Electric Transmission Facilities, 181 FERC ¶
61,205 (2022).

121
Transfer Capability for public utility transmission providers in transmission planning and cost

allocation processes. 134 Furthermore, as a result of the current significant backlog in the queue of

projects waiting to connect to the grid concerns, 135 FERC recently issued an order seeking to

resolve the interconnection backlog. 136 As of the time of this filing, the opportunity to request

rehearing on that order remains open and it appears likely that such requests will be filed, which

could result in modification of FERC’s order. The outcome of these proceedings could

significantly change the pace of development of the grid and access to clean electricity.

As discussed above, EPA does not discuss these potential supply issues—issues principally out

of the control of the owner/operators of the affected sources regulated by EPA—in the Proposed

111 Rules and does not appear to have taken these issues into consideration in its analysis.

Access to clean electricity—and also the water resources needed for electrolysis—is critical to

scaling the U.S. clean hydrogen economy and to the power sector’s ability to deploy hydrogen

blending. EPA’s failure to analyze the potential barriers to scaling clean electricity generation and

access are a significant flaw in its record and undermine its proposed adequate demonstration

determination.

134
Notice Requesting Post-Workshop Comment, Docket No. AD23-3-000 (filed Feb. 28, 2023).
135
DOE has reported more than 930 gigawatts (GW) of solar, wind, hydropower, geothermal,
and nuclear capacity currently are in interconnection queues seeking transmission access, as are
more than 420 GW of energy storage. U.S. Dep’t of Energy, Queued Up…But in Need of
Transmission: Unleashing the Benefits of Clean Power with Grid Infrastructure (Apr. 2022),
https://www.energy.gov/sites/default/files/2022-
04/Queued%20Up%E2%80%A6But%20in%20Need%20of%20Transmission.pdf. FERC has
noted that “interconnection queue backlogs and study delays afflicting generator interconnection
service nationwide hinder the timely development of new generation.” Improvements to
Generator Interconnection Procedures and Agreements, 179 FERC ¶ 61,194, P 22 (2022).
136
Improvements to Generator Interconnection Procedures and Agreements, 184 FERC ¶ 61,054
(2023).
122
 iii. EPA does not adequately analyze critical market dynamics that
could impact low-GHG hydrogen production and achievability
throughout the industry.
As noted, section 111 requires EPA to take cost into consideration in its BSER determinations. In

the Clean Hydrogen Liftoff Report, DOE notes several potential challenges related to market

dynamics that could impact the availability of low-GHG hydrogen on the timelines that EPA

projects and which EPA does not recognize or adequately analyze. These include the potential

that, in the period while the challenges facing hydrogen liftoff are being resolved, there will be

high perceived credit risk for hydrogen projects that will “delay[] timelines for low-cost capital

providers to enter the market.” 137 In addition, “[s]ome offtakers worry that, until hydrogen

production scales nationally, hydrogen supplies will be insufficient and/or too variable to meet

high uptime use cases. For example, if stock-outs such as those that have been experienced at

refueling stations in California were to become widespread, the industry would face additional

headwinds to wider adoption.” 138

It is also unclear how many of the currently announced projects will reach final investment

decision (FID). In the Clean Hydrogen Liftoff Report, DOE emphasizes the current lack of long-

term offtake agreements, which likely is a function of the other barriers discussed herein. These

agreements are a necessary component for many projects to reach FID. While there are currently

over 100 clean hydrogen production projects that, if built, would meet DOE’s 2030 clean

hydrogen demand projections, “[o]nly ~1.5 MMT of this announced capacity has reach final

137
Clean Hydrogen Liftoff Report at 3.
138
Id. at 57.

123
investment decision.” 139 Importantly for EPA’s low-GHG hydrogen proposal, of the announced

projects “43% are electrolytic and 56% are reformation based.” 140 DOE notes that “[p]roject

trackers vary the way in which they log announced capacity,” and explains EFI’s findings, noted

above. More specifically, DOE cites EFI’s statement that while green hydrogen production

projects account for around 70 percent of recently announced projects, “blue hydrogen projects

account for nearly 95 percent of the capacity of the announced projects” and green hydrogen

projects are “a relatively small share” by contrast. 141 Consequently, while there is reason to be

optimistic about the scale up of U.S. clean hydrogen production capacity, the contours, timing,

and size of this capacity are evolving and remain unsettled at present despite the significant

efforts by DOE and industry to attempt to make this scaling up a reality.

In addition, EPA correctly notes that DOE’s estimate of the potential for 10 MMT of clean

hydrogen production capacity by 2030 (1) includes a wider range of hydrogen production

pathways than would qualify under EPA’s definition because DOE defines “clean” hydrogen to

be less than 4 kg CO2e/kg of hydrogen—as discussed in greater detail infra, EPA should adopt an

inclusive definition of qualifying hydrogen than its current proposal to enable scale up of the

U.S. clean hydrogen market and to reflect the variability of production resources across the

country and electric sector; and (2) does not include significant anticipated power sector demand.

While EPA may be correct that the Proposed 111 Rules will increase demand for low-GHG

hydrogen beyond DOE’s projections, given midstream barriers, such demand increases not only

139
Id. at 23.
140
Id. at n.67.
141
Id. at 23 (citing Energy Futures Initiative, U.S. Hydrogen Demand Action Plan (Feb. 2023),
https://energyfuturesinitiative.org/reports/).
124
do not necessarily result in corresponding access to low-GHG hydrogen but also have the

potential to exacerbate the challenges facing the scale up of low-GHG hydrogen production

discussed above. 88 Fed. Reg. at 33,309 (“The EPA’s hydrogen co-firing BSER proposal, if

finalized, would create a significant additional demand driver for electrolytic hydrogen not

considered in the DOE’s hydrogen production goals of 10 MMT by 2030 and 20 MMT by

2040.”). As a result, despite EPA’s optimism around the potential impacts of the proposed rule,

the actual outcome of its determination that hydrogen blending is BSER may be

counterproductive to the development of the U.S. clean hydrogen economy that will be needed to

support reliable and affordable hydrogen co-firing in the power sector despite the significant

efforts underway to develop this economy by DOE and industry. The level of uncertainty alone

shows that EPA’s proposed determinations are not consistent with a conclusion that low-GHG

hydrogen blending in the power sector has been adequately demonstrated.

iv. EPA fails to adequately analyze how Treasury guidance on the

hydrogen PTC could impact low-GHG hydrogen production and
achievability throughout the industry.
EPA states that the hydrogen PTC has the potential to drive great volumes of electrolytic

hydrogen demand. Id. However, as DOE notes,

[i]mplementation details for the hydrogen PTC are forthcoming

from IRS and Treasury. Until there is additional clarity, there will be
uncertainty about which projects will qualify and what prices
producers will have to charge to break-even. The inability to project
future revenues can be a hurdle to securing financing for low carbon
intensity hydrogen production projects while 45V implementation
policy remains under development. 142

In addition, as noted above, the details of Treasury’s guidance may constrict the resources that

project developers can use to qualify for the PTC, potentially exacerbating and elongating the

142
Id. at 57.
125
timeline to resolve existing challenges. Further, while the production tax credits under the IRA

are designed to ease the challenges currently facing scale up of a U.S. clean hydrogen economy,

EPA cannot use the existence of these credits to support a conclusion that the “low-GHG”

hydrogen production pathway is the BSER. EPA does not discuss these issues or appear to have

taken them into account in its proposed determinations. It should do so in any final rulemaking.

d. EPA’s proposed midstream infrastructure conclusions are based on

an insufficient record as the Agency fails to consider challenges that
could limit achievability throughout the industry.

EPA states that “[g]iven the growth in the hydrogen sector and Federal funding for the H2Hubs,

which will explicitly explore and incentivize hydrogen distribution, the EPA therefore believes

that hydrogen distribution and storage infrastructure will not present a barrier to access for new

combustion turbines opting to co-fire with 30 percent low-GHG hydrogen by volume in 2032

and to co-fire with 96 percent low-GHG hydrogen by volume in 2038.” 88 Fed. Reg. at 33,309.

In reaching this conclusion, EPA discounts the need for midstream infrastructure and fails to

adequately consider technical challenges and open regulatory questions facing midstream

infrastructure buildout that could limit achievability of low-GHG hydrogen blending throughout

the power sector.

i. Despite EPA’s assertions, additional midstream infrastructure will

be needed to enable the scaling of the U.S. clean hydrogen
economy and support achievability throughout the industry.

EPA suggests in its discussion of low-GHG hydrogen costs that significant additional midstream

infrastructure will not be needed to support low-GHG hydrogen blending in the power sector.

More specifically, EPA notes that the “majority of announced combustion turbine EGU projects

proposing to co-fire hydrogen are located close the source of hydrogen. Therefore, the fuel

delivery systems (i.e., pipes) for new combustion turbines can be designed to transport hydrogen

126
without additional costs.” Id. at 33,314. The fact that most announced projects do not require

significant midstream investment does not support EPA’s conclusion since many announced

projects plan to co-locate with hydrogen production 143 because of the current lack of midstream

infrastructure. 144 In fact, co-location is a function of the need to build-out this critical component

of the value chain rather than proof that it will not be required. This need is even more

pronounced for retrofits, which cannot be collocated with new greenfield production since they

already exist elsewhere.

Indeed, development of the U.S. clean hydrogen markets, which will be necessary to support

reliable and affordable low-GHG hydrogen blending in the power sector, will require midstream

infrastructure. 145 In fact, midstream infrastructure is one of the main challenges to deployment at

scale discussed in DOE’s Clean Hydrogen Liftoff Report. DOE explains that

[p]ipelines and geologic storage are costly upfront to develop, but at

high hydrogen volumes provide critical economies of scale.
Dedicated hydrogen pipelines and low-cost geologic storage are
expected to anchor hydrogen infrastructure in the long-term (post-
2035). . .As described throughout this report, in the near-term limited

143
See, e.g., U.S. Dep’t of Energy, U.S. Clean Hydrogen Strategy and Roadmap at 12 (June
2023), https://www.hydrogen.energy.gov/clean-hydrogen-strategy-roadmap.html, (“These initial
use-cases are also frequently co-located, meaning they can capitalize on low-cost hydrogen
production without incurring midstream distribution/storage costs.”).
144
Clean Hydrogen Liftoff Report at 24 (“Due to limited midstream infrastructure, announced
hydrogen production projects to date have focused on offtakers that can be co-located with
production as well as offtakes that already use carbon-intensive hydrogen.”)(emphasis added).
145
EPA itself appears to recognize this and states in the TSD that “[a] viable hydrogen
infrastructure requires that hydrogen be able to be delivered from where it is produced to the
point of end use, such as [a] . . . power generator. That infrastructure also must be able to
delivered hydrogen to the point of use at the times needed, requiring storage infrastructure.” 88
Fed. Reg. at Hydrogen TSD at 24. However, it is unclear how this statement squares with EPA’s
proposed determination noted above.

127
 availability of midstream infrastructure is a constraint for scaling
clean hydrogen where co-located production and offtake is not
feasible, representing a key challenge that must be addressed. 146

Moreover, DOE notes that “[t]he absence of affordable midstream infrastructure risks slowing

the hydrogen economy.” 147

EPA’s suggestion that significant midstream infrastructure will not be required is incorrect in and

of itself and also off base about how the U.S. clean hydrogen economy is expected to evolve.

ii. EPA fails to adequately analyze critical pipeline-related issues that

could impact achievability throughout the industry.

In contrast to the nearly three million miles of interstate and intrastate natural gas pipelines in the

United States, 148 there are only approximately 1,600 miles of hydrogen pipe. 149 There are two

potential methods for transporting hydrogen by pipeline: in existing non-hydrogen pipelines,

which will require retrofits; and in new, dedicated hydrogen pipelines. As discussed in greater

detail below, each method presents potential challenges that government agencies and industry

are working to overcome. These include technical challenges, particularly for existing non-

hydrogen pipelines, as well as critical open regulatory questions for interstate transportation of

hydrogen by pipeline. Due in part to these issues, it is unclear how quickly pipeline

transportation of hydrogen will emerge in the United States.

146
Clean Hydrogen Liftoff Report at 14.
147
Id. at 57.
148
U.S. Energy Info. Admin., Natural Gas Explained: Natural Gas Pipelines, (Dec. 3, 2020),
https://www.eia.gov/energyexplained/natural-gas/natural-gas-pipelines.php.
149
U.S. Dep’t of Energy, Hydrogen Pipelines, https://www.energy.gov/eere/fuelcells/hydrogen-
pipelines.
128
EPA discusses several of these challenges in the Hydrogen TSD. However, the Agency does not

explain how these challenges impact its proposed determination that midstream “infrastructure

will not present a barrier” to power sector low-GHG hydrogen blending under the Proposed 111

Rules. 88 Fed. Reg. at 33,314.

1. EPA fails to adequately analyze technical challenges that could

impact achievability throughout the industry.
The ability to leverage our nation’s existing natural gas pipeline system to transport hydrogen

blended with natural gas presents a significant opportunity. While demonstration and pilot

projects to test the effects of hydrogen blending in distribution systems have been announced, are

underway, or have been recently completed, 150 “blending still faces several technical [ ]

barriers.” 151

For example, blending may be limited by physical constraints, including the potential for steel

150
For example, Dominion Energy’s ThermH2 pilot project at its Training Academy in Utah will
blend 5 percent hydrogen in a test gas distribution system to gather information for potential
blending into its larger system. Hydrogen: The Next Frontier of Clean Energy, Dominion
Energy, https://www.dominionenergy.com/projects-and-facilities/hydrogen. Southern California
Gas and San Diego Gas and Electric announced the creation of the Hydrogen Blending
Demonstration Program in November 2020 to “provide an understanding of how to safely
incorporate hydrogen, a zero-emission fuel, into the gas grid.” Press Release, SoCalGas and
SDG&E Announce Groundbreaking Hydrogen Blending Demonstration Program to Help
Reduce Carbon Emissions, Southern California Gas (Nov. 23, 2020),
https://newsroom.socalgas.com/press-release/socalgas-and-sdge-announce-groundbreaking-
hydrogen-blending-demonstration-program-to.
151
Int’l Energy Agency, Global Hydrogen Review 2021, at 145 (Oct. 2021)
https://www.iea.org/reports/global-hydrogen-review-2021. The International Energy Agency
further explains that “[p]arameters related to natural gas quality (composition, calorific value and
Wobbe index) – as regulated in different countries – can limit (or completely prevent) injection
of hydrogen into gas grids. The hydrogen purity requirements of certain end users, including
industrial clients, can further constrain blending. In addition, resulting changes in the physical
characteristics of the gas can affect certain operations, such as metering.” Id.

129
embrittlement. In the United States, steel pipe comprises more than a quarter-million miles of the

natural gas transmission system. 152 The International Energy Agency explains that “[d]ue to its

chemical properties . . . [hydrogen] can cause embrittlement of steel pipelines, i.e. reactions

between hydrogen and steel can create fissures in pipelines.” 153 As DOE explains, “hydrogen

embrittlement (permeation of hydrogen into steel) can crack steel pipes, leading to leakage or

combustion.” 154

EPA makes only passing reference to this in the Proposed 111 Rules. For example, in the

Hydrogen TSD, EPA states that “[a] limitation on greater volumes of hydrogen being safely

mixed with natural gas in existing natural gas pipelines is the potential embrittlement and

weakening of pipes that leads to leakage.” 88 Fed. Reg. at Hydrogen TSD at 28. In its single

reference to embrittlement issues in the preamble, EPA explains that “the material used to

construct the piping could need to be specifically designed to be able to handle higher

concentrations of hydrogen that would prevent embrittlement and leaks.” 88 Fed. Reg. at 33,313-

14. However, rather than address potential issues for blending in existing pipelines, EPA simply

notes that “[t]hese risks can be mitigated through deployment of new pipeline infrastructure

designed for compatibility with hydrogen in support of a new combustion turbine installation,”

152
See Clean Hydrogen Liftoff Report at n.122.
153
Int’l Energy Agency, Global Hydrogen Review 2021, at 145 (Oct. 2021),
https://www.iea.org/reports/global-hydrogen-review-2021. See also U.S. Dep’t of Energy,
Hydrogen Pipelines, https://www.energy.gov/eere/fuelcells/hydrogen-pipelines. The
International Energy Agency’s Global Hydrogen Review 2021 also points that that “considering
that hydrogen has a higher leakage rate and an ignition range about seven times wider than that
of methane, it may be necessary to upgrade leak detection and flow control systems.” Int’l
Energy Agency, Global Hydrogen Review 2021, at 147 (Oct. 2021),
https://www.iea.org/reports/global-hydrogen-review-2021.
154
Clean Hydrogen Liftoff Report at n.122.
130
88 Fed. Reg. at 33,314. But see id. at Hydrogen TSD at 25-26 (“The capital costs of new pipeline

construction constitute a barrier to expanding hydrogen pipeline delivery infrastructure.”), and

that “[h]ydrogen blending into existing natural gas pipelines presents another mode of transport

and distribution that is actively in use in Hawaii and under exploration in other areas of the

country.” Id. at 33,309. However, EPA fails to account for the challenges to building new

pipeline infrastructure, discussed below, as well as distinctions between and across pipeline

systems. Moreover, the fact that it might be feasible is insufficient to support a BSER

determination, as discussed supra.

EPA briefly mentions several analyses of potential blend limits in the Hydrogen TSD and

correctly notes that “[b]lend limits depend on the design and condition of current pipeline

materials (e.g., integrity, dimensions, materials of construction) [and] design and condition of

pipeline infrastructure equipment (e.g., compressor stations).” 88 Fed. Reg. at Hydrogen TSD at

26. However, EPA also notes “that the concerns relating to natural gas pipeline embrittlement

from hydrogen transportation have been disputed,” citing to a German paper about pipelines in

Germany. Id. (citing Wasserstofftransport, Nationaler Wasserstoffrat (2021),

https://wasserstoffwirtschaft.sh/file/nwr_wasserstofftransport_web-bf.pdf (In German).)

However, this paper explains that “[i]t is known that, under certain conditions, hydrogen can lead

to embrittlement of the steel materials commonly used in gas pipelines” and that fracture

mechanics analyses, carried out in accordance with ASME B31.126 “have shown that the steels

used in the field of natural gas pipelines and plants are in principle suitable for use with

hydrogen and that the dimensioning and design of the pipeline for use with hydrogen can be

131
confirmed.” 155 As noted above, differences between and across pipeline systems are highly

relevant to blend limits and the mere fact that blending in pipelines in Germany does not create

embrittlement issues “in principle” is insufficient to justify a conclusion that the same is true

throughout the U.S. pipeline system.

EPA also notes that the use of fiber reinforced polymer (FRP) may be a way to protect pipelines

from embrittlement. However, EPA explains that “FRP is not authorized by Pipeline and

Hazardous Materials Safety Administration (PHMSA) regulations without a special permit” and

that throughput capacity in FRPs can be limited because these pipelines “generally have a

maximum nominal outer width of 6 inches.” 88 Fed. Reg. at Hydrogen TSD at 26-27. Permitting

challenges aside, it is unclear how this is a reasonable solution given that U.S. transmission

pipelines “can range in size from several inches to several feet in diameter,” 156 and “normally

[are] between 30 and 36 [inches] in diameter.” 157

The importance of this issue in the United States is evident from the numerous federal efforts

currently underway to examine and explore the physical, engineering, and safety issues

associated with transporting hydrogen blends in existing natural gas pipelines. 158 For example, in

155
Wasserstofftransport at 2 (translated using MS Word Translation).
156
U.S. Dep’t of Trans., Fact Sheet: Transmission Pipelines,
https://primis.phmsa.dot.gov/comm/FactSheets/FSTransmissionPipelines.htm.
157
Argonne N’tl Labs., Natural Gas Pipeline Technology Overview (Nov. 2007),
https://corridoreis.anl.gov/documents/docs/technical/apt_61034_evs_tm_08_5.pdf.
158
ClearPath also has noted that “[r]esearch shows small proportions of hydrogen can be directly
blended into our existing natural gas network. Blending larger ratios requires more research
because natural gas pipelines were not designed with hydrogen in mind.” ClearPath, Hydrogen
101, https://clearpath.org/tech-101/hydrogen-101/.
132
early 2021, DOE launched its HyBlend initiative, which includes over 20 partners and 6 national

labs and $15 million in R&D portfolio projects that are anticipated to run from 2021 through

2023. 159 HyBlend “aims to address technical barriers to blending hydrogen in natural gas

pipelines. Key aspects of HyBlend include materials compatibility R&D, technoeconomic

analysis, and environmental life cycle analysis that will inform the development of publicly

accessible tools that characterize the opportunities, costs, and risks of blending.” 160 Importantly,

DOE also recognizes that blend limits for pipelines can vary greatly depending on the design and

condition of current materials, infrastructure equipment, and applications that currently use

natural gas. 161

Furthermore, PHMSA hosted a three-day public meeting November 30 through December 2,

2021, to provide “an opportunity for pipeline stakeholders to discuss research gaps and

challenges in pipeline safety and emerging fuels, including hydrogen transportation.” 162 The

topics for workgroup discussion included hydrogen network components and utilization of

inspection tools on hydrogen pipelines, including pipelines carrying hydrogen and natural gas

159
U.S. Dep’t of Energy, HyBlend: Opportunities for Hydrogen Blending in Natural Gas
Pipelines, at 1 (June 2021), https://www.energy.gov/sites/default/files/2021-08/hyblend-tech-
summary.pdf.
160
Id.
161
Id.
162
Pipeline Safety: Pipeline Transportation; Hydrogen and Emerging Fuels Research and
Development (R&D) Public Meeting and Forum, 86 Fed. Reg. 58,389, 58,389 (Oct. 21, 2021).

133
blends. 163 PHMSA’s agenda explains that “[t]o advance the safe transportation of hydrogen gas

and/or hydrogen gas blended with natural gas (hydrogen/blends) through the Nation’s pipeline

network, additional research is necessary.” 164 This includes the effects of hydrogen on various

pipeline materials 165 “to determine the suitability of the materials for transporting hydrogen and

hydrogen/blends in distribution networks,” as well as the impacts of hydrogen at varying levels

on facilities that are critical to the transmission and distribution network, such as compressor

station equipment and meter stations. 166 Discussion during this meeting resulted in the

identification of multiple, specific R&D gaps in areas including the integrity of underground

hydrogen storage, utilization of inspection tools on hydrogen pipelines, and hydrogen network

components.

PHMSA currently is engaged in multiple research projects on point, including projects (1) to

identify integrity threats specific to hydrogen transportation by pipeline and potential changes to

the America Society of Mechanical Engineers codes; 167 (2) focused on practical methods to

163
Pipeline and Hazardous Materials Safety Admin., Meetings and Documents, Pipeline
Transportation: Hydrogen and Emerging Fuels R&D Public Meeting and Forum,
https://primis.phmsa.dot.gov/meetings/MtgHome.mtg?mtg=153.
164
Id.
165
These include polyethylene, polyvinyl chloride, and steel pipes. Id.
166
Id.
167
See Pipeline and Hazardous Materials Safety Admin., Review of Integrity Threat
Characterization Resulting from Hydrogen Gas Pipeline Service,
https://primis.phmsa.dot.gov/matrix/PrjHome.rdm?prj=985.

134
optimize and repurpose existing pipeline infrastructure to safely transport hydrogen; 168 (3) to

advance hydrogen leak detection and quantification technologies compatible with hydrogen

blends; 169 (4) focused on the development of compatibility assessment models for existing

pipelines for handling hydrogen-containing natural gas; 170 (5) to develop a holistic risk

assessment, mitigation measures, and decision support platforms to accelerate the transition

towards sustainable, precise, and reliable hydrogen infrastructure; 171 and (6) to determine steel

weld qualification and performance for hydrogen pipelines. 172 PHMSA’s, other agencies’, and

industry’s work on these issues is a critical precursor to our ability to safely and reliably transport

hydrogen in existing U.S. pipelines.

Research and development of advanced sensor equipment capable of accurately detecting

hydrogen emissions also are underway. For example, DOE recently issued an $8-11 million labs

call that includes a request for “proposals involving lab-developed technologies for development

and commercialization of technologies that can quantify leakage of H2 during its production,

168
See Pipeline and Hazardous Materials Safety Admin., Determining the Required
Modifications to Safely Repurpose Existing Pipelines to Transport Pure Hydrogen and
Hydrogen-Blends, https://primis.phmsa.dot.gov/matrix/PrjHome.rdm?prj=978.
169
See Pipeline and Hazardous Materials Safety Admin., Advancing Hydrogen Leak Detection
and Quantification Technologies Compatible with Hydrogen Blends,
https://primis.phmsa.dot.gov/matrix/PrjHome.rdm?prj=979.
170
See Pipeline and Hazardous Materials Safety Admin., Procedures for Retrofitting Indoor Gas
Service Regulators, https://primis.phmsa.dot.gov/matrix/PrjHome.rdm?prj=916.
171
Id.
172
See Pipeline and Hazardous Materials Safety Admin., Determining Steel Weld Qualification
and Performance for Hydrogen Pipelines,
https://primis.phmsa.dot.gov/matrix/PrjHome.rdm?prj=976.

135
distribution, storage, and use, with detection capabilities in ambient air at the ppm or ppb (more

desirable) level.” 173 Moreover, while blending can move significant volumes of hydrogen,

“separating and purifying the hydrogen from natural gas is difficult.” 174

These challenges present real questions about the timing and scale of a U.S. clean hydrogen

economy that EPA must address in its analysis that hydrogen blending is adequately

demonstrated. Hydrogen blending will not be achievable throughout the power sector without

appropriate and timely scale up of midstream infrastructure. Moreover, in some regions, there

may not be pipeline capacity to blend additional hydrogen, or other end users might not be able

to utilize hydrogen blends. These issues are significant and unaddressed by EPA and, as a

consequence, its proposed adequate demonstration determinations are insufficient.

2. EPA does not adequately analyze critical regulatory issues for

interstate pipelines that could impact achievability throughout
the industry.

Interstate pipelines provide an economy of scale that can promote efficient and cost-effective

transportation, but modifications to our existing interstate pipeline system will be required to

accommodate hydrogen. This includes building new and/or modifying existing physical

infrastructure, as well as adding and/or updating statutory authority and regulations related to the

use of the pipeline capacity. Currently, questions remain as to which federal agency, if any,

would have jurisdiction over these areas and what level of authority the relevant agency would

173
U.S. Dep’t of Energy, National Laboratory Call for Proposals: Fossil Energy and Carbon
Management Program-Led Topics, DE-LC-000L101 (FY 2023),
https://www.energy.gov/fecm/lab-call-technology-commercialization-
fund?utm_medium=email&utm_source=govdelivery.
174
Clean Hydrogen Liftoff Report at 16.

136
have. Federal legislative efforts to resolve these questions presently are pending. 175 In the

absence of federal siting and permitting authority, pipeline project developers must apply to

states, which have varying requirements and approval timelines.

Even where federal siting and permitting authority exists for pipelines, as is the case for

interstate natural gas pipeline facilities, the various permitting requirements and potential appeals

can significantly slow down the process. This is evidenced by several recent interstate pipeline

projects, including the Mountain Valley Pipeline project, which submitted its request to

commence the FERC pre-filing process in 2014 176 and received FERC authorization in 2017. 177

Over the last six years, the project has faced challenges to several permits required for

construction and operation. 178 Recent federal legislation expressly “ratifies and approves” all

authorizations required for construction and initial operation of the Mountain Valley Pipeline, 179

175
See, e.g., Building American Energy Security Act of 2023, S.1399, 118th Cong. (2023)
(proposing to add hydrogen to the Natural Gas Act).
176
Pre-Filing Request, Mountain Valley Pipeline, FERC Dkt. No. PF15-3-000 (Oct. 27, 2014)
(Accession number 20141027-5136).
177
Mountain Valley Pipeline, 161 FERC ¶ 61,043 (2017).
178
See, e.g., Sierra Club v. FERC, 68 F.4th 630, 636 (D.C. Cir. 2023); Sierra Club v. W. Virginia
Dep’t of Env’t Prot., 64 F.4th 487, 496 (4th Cir. 2023); Sierra Club v. State Water Control Bd.,
64 F.4th 187, 191 (4th Cir. 2023); Sierra Club v. FERC, 38 F.4th 220, 226 (D.C. Cir. 2022);
Appalachian Voices v. United States Dep’t of Interior, 25 F.4th 259, 265 (4th Cir. 2022); Wild
Virginia v. United States Forest Serv., 24 F.4th 915, 920 (4th Cir. 2022); Mountain Valley
Pipeline, LLC v. N.C. Dep’t of Env’t Quality, 990 F.3d 818, 823 (4th Cir. 2021); Sierra Club v.
United States Army Corps of Eng’rs, 981 F.3d 251, 260 (4th Cir. 2020); Appalachian Voices v.
FERC, 2019 WL 847199, at *1 (D.C. Cir. Feb. 19, 2019); Sierra Club v. United States Army
Corps of Eng’rs, 909 F.3d 635, 639-643 (4th Cir. 2018); Sierra Club, Inc. v. U.S. Forest Serv.,
897 F.3d 582 (4th Cir. 2018).
179
Fiscal Responsibility Act of 2023, Pub. L. No. 118-5, § 324, 137 Stat. 10, 47-48 (2023).

137
yet the project still faces hurdles to completing construction. More specifically, in response to

requests from petitioners in three pending cases, the U.S. Court of Appeals for the Fourth Circuit

issued stays on July 10 and 11, 2023, 180 halting construction. Mountain Valley Pipeline filed an

emergency application with the U.S. Supreme Court on July 14, 2023, seeking relief from the

Fourth Circuit’s decision. 181 In an unsigned order on July 27, 2023, the Supreme Court granted

Mountain Valley’s request to vacate the Fourth Circuit’s stays, but did not grant the pipeline’s

request to dismiss the underlying actions entirely. Despite EPA’s efforts to project future pipeline

construction, it is impossible to predict how quickly pipelines will be permitted and built. 182 As a

result, EPA’s assertions are speculative.

As noted, midstream transportation will be necessary for hydrogen projects that cannot

accommodate onsite production, either because they lack the necessary resources or because they

have insufficient space. 183 For interstate pipelines, hydrogen likely will be transported in a blend

180
Order, The Wilderness Society v. U.S. Forest Service, No. 23-1592 (4th Cir. July 10, 2023);
Order, The Wilderness Society v. U.S. Forest Service, No. 23-1594 (4th Cir. July 10, 2023); and
Order, Appalachian Voices v. United States Department of the Interior, No. 23-1384 (4th Cir.
July 11, 2023).
181
Emergency Application to Chief Justice John G. Roberts, Jr. to Vacate the Stays of Agency
Authorizations Pending Adjudication of the Petitions for Review, Mountain Valley Pipeline,
LLC v. Wilderness Soc'y, et al., Nos. 23-1592, 23-1594, & 23-1384 (4th Cir. June 2, 2023).
182
Beyond permitting issues, pipeline projects also can face weather-related construction
challenges. Mountain Valley Pipeline notes in its petition before the U.S. Supreme Court that, as
of July 14, 2023, it “has only approximately three months to complete the Pipeline before winter
weather sets in and precludes significant construction tasks until the spring of 2024.” Id. at 7.
183
For example, one EEI member has calculated that it would require 7.5 square miles to
accommodate the solar array necessary to reach a 30 percent blend at one facility site (Facility 1)
and we need double that amount of land for the array necessary to reach this blend level at a
second facility site (Facility 2). To reach a 96 percent blend, the member has calculated that it
would need approximately 52.4 square miles for the necessary solar array for Facility 1 and
138
with natural gas, as well as by itself in dedicated pipelines. It is possible that there will be

attempts to regulate these methods of transportation under different statutory/regulatory

frameworks. In fact, this may currently be the case as the FERC—at least under its immediately

prior chairman—expressed confidence in FERC’s authority to regulate pipelines carrying a

hydrogen and natural gas blend under the NGA; 184 and, the Surface Transportation Board (STB)

previously has exercised economic (rate-related) jurisdiction over dedicated interstate hydrogen

pipelines, albeit more in a passive manner in order to resolve a dispute raised by a formal

complaint. While this provides an idea of what regulation of interstate transportation of hydrogen

by pipeline could look like, neither agency has explicitly confirmed its jurisdiction and some

level of congressional action likely would be required to vest authority with either agency. 185

Importantly, these two regulatory regimes provide the agencies with very different levels of

authority. FERC has certificate authority over interstate natural gas pipelines 186 and serves as the

lead National Environmental Policy Act agency for new and expansion pipeline development. In

recent years, the FERC process has been lengthy, and potential changes to the scope of FERC’s

double that for Facility 2. These significant land requirements make it infeasible to co-locate
low-GHG hydrogen production with use at Facilities 1 and 2.
184
In response to questions from Senator Heinrich, then FERC Chairman Glick indicated that
“the Commission has authority under the Natural Gas Act over hydrogen blending with natural
gas on interstate pipelines” and that “[t]he Commission would maintain its jurisdiction over an
interstate natural gas pipeline if that pipeline were to blend some amount of hydrogen into the
gas stream.” Letter from Richard Glick, FERC Chairman to Sen. Martin Heinrich, FERC
Accession No. 20211027-4000, at 2 (Oct. 26, 2021).
185
See, e.g., Building American Energy Security Act of 2023, S.1399, 118th Cong. (2023)
(proposing to add hydrogen to the NGA).
186
15 U.S.C. § 717f.

139
approach toward pipeline certification and review of greenhouse gas emissions in the

environmental review for pipeline projects are pending, which could add complexity to the

process. 187 However, rather than apply to each state, interstate natural gas pipeline developers

only have to obtain a certificate of public convenience and necessity (CPCN) from FERC.

FERC also provides certificate holders with federal eminent domain authority 188 and preempts

state and local regulations that “interfere” with FERC’s certificate authority. 189

By contrast, STB’s jurisdiction does not include federal siting authority or provide federal

eminent domain authority. Instead, pipelines regulated by STB must obtain a CPCN from each of

the states that they enter. The requirements for obtaining a CPCN vary by state. Additionally,

each state has the ability to impact the overall pipeline process and each state’s authorization is

susceptible to separate challenge in court.

187
In early 2022, FERC issued a Draft Updated Pipeline Certificate Policy Statement modifying
its 1999 policy statement on the certification of new interstate natural gas facilities under Section
7(c) of the NGA to provide a more comprehensive analytical framework. Consideration of New
Interstate Natural Gas Facilities, 178 FERC ¶ 61,107 (2022). The Commission also issued a
Draft Interim GHG Policy Statement seeking to explain how the Commission will assess the
impacts of natural gas infrastructure projects on climate change in its reviews under NEPA and
Sections 3 and 7 of the NGA. Consideration of Greenhouse Gas Emissions in Natural Gas
Infrastructure Project Reviews, 178 FERC ¶ 61,108 (2022). Final versions of these policy
statements remain pending.
188
15 U.S.C. § 717f.
189
See, e.g., Schneidewind v. ANR Pipeline Co., 485 U.S. 293, 310 (1988) (state regulation that
interferes with FERC’s regulatory authority over the transportation of natural gas is preempted);
and Dominion Transmission, Inc. v. Summers, 723 F.3d 238, 245 (D.C. Cir. 2013) (noting that
state and local regulation is preempted by the NGA to the extent it conflicts with federal
regulation, or would delay the construction and operation of facilities approved by the
Commission).
140
These significant process differences can yield different timelines for permitting, siting, and

constructing new pipelines. The duration of the permitting and construction process is expected

to impact development of midstream infrastructure. DOE explains that “[n]ew, dedicated

hydrogen pipelines will take time to break ground, in part due to the nascency of the hydrogen

economy combined with long construction and permitting timelines.” 190 It further explains that

“[t]hrough 2030, new hydrogen pipeline use will likely remain limited, as . . . pipeline permitting

and construction is a multi-year process; new pipelines are unlikely to be operational until at

least the late 2020s.” 191

Additional regulatory questions also remain regarding the economic regulation of interstate

hydrogen transportation by pipeline. For blended pipelines, these questions include the quantities

of hydrogen that could be transported on existing pipelines and allocation of the costs of

upgrades that may be needed to allow hydrogen to be carried in existing pipelines. 192 For both

blended and dedicated hydrogen pipelines, there are also open questions around the extent to

which transportation rates will be regulated and how pipeline capacity will be structured.

190
Clean Hydrogen Liftoff Report at 50.
191
Id. at n.124 (emphasis added).
192
As former FERC Chairman Glick explained in a 2021 letter to U.S. Senator Heinrich, for
interstate natural as pipelines, this would require that a “pipeline follow the Commission’s Policy
Statement on Gas Quality and Interchangeability,” which includes stakeholder participation and
coordination between and among shippers and the pipeline. Letter from FERC Responding to
Sen. Heinrich, Oct. 26, 2021 (FERC accession number 20211027-4000) (citing Policy Statement
on Provisions Governing Natural Gas Quality and Interchangeability in Interstate Natural Gas
Pipeline Company Tariffs, 115 FERC ¶ 61,325 (2006)).
141
Resolving these regulatory issues will take time and the uncertainty that they create could delay

investment in this sector. EPA does not discuss or appear to have considered these issues in

reaching its proposed adequate demonstration determinations. Adequate access to midstream

infrastructure is critical to scaling the U.S. clean hydrogen economy and to the power sector’s

ability to deploy hydrogen blending. EPA’s failure to analyze these regulatory gaps and their

impact is a significant flaw in its record and undermines its proposed adequate demonstration

determination.

3. EPA does not adequately analyze the investment gap for new
infrastructure, which could impact achievability throughout
the industry.

In addition to the open regulatory questions noted above, new pipeline construction is capital

intensive. EPA recognizes this challenge in the Hydrogen TSD, noting that “[t]he capital costs of

new pipeline construction constitute a barrier to expanding hydrogen pipeline delivery

infrastructure.” 88 Fed. Reg. at Hydrogen TSD at 26. However, the Agency does not include

significant discussion of this challenge or appear to have taken it into consideration in its

proposed determinations.

While there has been investment in hydrogen production, driven by the hydrogen PTC,

“[m]idstream and end-use infrastructure investments face a more acute financing gap.” 193 More

specifically, DOE explains as much as half of the “$85-215B of cumulative investment [that] is

required to scale the domestic hydrogen economy through 2030” will be for midstream and end-

use infrastructure. 194 At present, while almost all of the investment requirements for 2030

193
Clean Hydrogen Liftoff Report at 42.
194
Id.
142
production would be covered if production projects secure financing, “project announcements

only cover . . . ~5% of distribution and storage infrastructure needs.” 195

EPA notes that the funding that H2Hubs will provide for infrastructure. While the H2Hubs are

anticipated to help support infrastructure development, infrastructure that is part of these projects

may not be in full operation until the early- to mid-2030s despite the best efforts of both DOE

and industry at getting the hubs operational. 196 In addition, the H2Hubs are intended to be

regionally focused at first and eventually to provide connective tissue to support a national clean

hydrogen economy. As a result, it is unclear whether the H2Hubs will provide sufficient

midstream infrastructure to support clean hydrogen deployment at scale early in their operation

and EPA’s reliance on this program alone is insufficient evidence to support its proposed

adequate demonstration determinations.

195
Id. at 43.
196
H2Hub awards are anticipated in Fall 2023. DOE plans to execute H2Hubs funding over four
phases that could range from 8-12 years. Under DOE’s plan, the construction is not anticipated
to begin for three to five years after the award and could take an additional two to four years to
complete, with ramp-up to full operation occurring over the subsequent two to four years. U.S.
Dep’t of Energy, Funding Opportunity Announcement: Regional Clean Hydrogen Hubs, at 19-22
(Jan. 26, 2023), https://oced-exchange.energy.gov/. Assuming awards are made on the
anticipated timeline, H2Hub project construction would begin in late 2026 on the early end and
late 2028 on the later end. For projects that begin construction in late 2026, construction could be
complete between late 2028 and late 2030 and operations would ramp up between 2030 and
2034. For projects that begin construction in late 2028, it could be complete between late 2030
and late 2032 with operations ramping up between 2032 and 2036. These timelines are based on
DOE’s projections for the H2Hubs and could be elongated by factors including permitting
delays, supply chain challenges, and workforce shortages.

143
 iii. EPA does not adequately analyze storage-related challenges that
could impact achievability throughout the industry.

As noted above, EPA explains that it “believes hydrogen distribution and storage infrastructure

will not present a barrier to access for” combustion turbines opting for low-GHG hydrogen

blending under the Proposed 111 Rules. See, e.g., 88 Fed. Reg. at 33,309. However, EPA does

not discuss several technical challenges associated with hydrogen storage and bases its

conclusions on H2Hubs funding, which, as discussed above, may not be in full operation until

the early- to mid- 2030s.

Hydrogen can be stored in above ground or underground facilities and can be stored as a

pressurized gas or as a cryogenic liquid. DOE explains “[h]ydrogen storage is a key enabling

technology for the advancement of hydrogen and fuel cell technologies in applications including

stationary power,” but given hydrogen’s properties, “[it] require[es] the development of

advanced storage methods that have potential for higher energy density.” 197 This is particularly

the case for underground storage, which is anticipated to be critical for scaling up hydrogen

deployment beyond the current levels. As discussed below, underground hydrogen storage

presently faces several challenges and technical barriers.

From a safety perspective, in addition to the pipeline-related topics noted above, PHMSA

explored several topics related to hydrogen storage during its three-day meeting. This included

“expand[ing] its research portfolio in the safe underground storage of hydrogen gas and/or

197
U.S. Dep’t of Energy, Hydrogen Storage, https://www.energy.gov/eere/fuelcells/hydrogen-
storage.

144
hydrogen blended with natural gas.” 198 With respect to integrity of underground storage systems,

PHMSA plans to explore a “wide array of topics” including reducing leaks from underground

storage facilities and new technologies to mitigate leaks, the degree and consequences of mixing

hydrogen with cushion gas, and the compatibility of hydrogen with underground storage

environments. 199 Utilization of geologic storage also would be limited by geography.

Furthermore, the International Energy Agency recently explained that “[w]hile there is no

practical experience in repurposing methane caverns for hydrogen service, it is estimated that

such an approach would require about the same amount of time as developing a new salt

cavern.” 200

It has also been noted that while underground storage would be useful for storing the large

quantities of hydrogen required for applications like power generation, it presents a number of

challenges. These include: “1) assessment of the risks of corrosion of storage vessels and

development of mitigation strategies, 2) determination of the effects of soil pressure on the tank,

[and] 3) assessment of the effects of tank leakage on the surroundings.” 201 Where hydrogen is

stored in a liquid (cryogenic state), ground freezing is a potential challenge and the potential for

198
Pipeline and Hazardous Materials Safety Admin., Meetings and Documents, Pipeline
Transportation: Hydrogen and Emerging Fuels R&D Public Meeting and Forum,
https://primis.phmsa.dot.gov/meetings/MtgHome.mtg?mtg=153.
199
Id.
200
Int’l Energy Agency, Global Hydrogen Review 2021, p 151 (Oct. 2021)
https://www.iea.org/reports/global-hydrogen-review-2021.
201
U.S. DRIVE Partnership, Hydrogen Delivery Technical Team Roadmap, at 20 (July 2017),
https://www.energy.gov/sites/prod/files/2017/08/f36/hdtt_roadmap_July2017.pdf.

145
seismic activity and resulting effects on storage need to be determined. 202 In addition, advances

in materials, including those for aboveground storage, may be needed. For example, materials to

store hydrogen must be resistant to embrittlement and fatigue and be capable of maintaining

structural integrity at cryogenic temperatures. 203 This may require the use of novel construction

materials. 204

As noted, EPA points to the H2Hubs to support its conclusion that storage infrastructure will not

present a barrier to reliable and affordable low-GHG hydrogen blending in compliance with the

Proposed 111 Rules. However, EPA proposes that combustion turbines blend 30 percent low-

GHG hydrogen by 2032. As discussed in the preceding section, DOE’s plan for the H2Hubs

includes four phases and the project funding is expected to span 8-12 years. With award

announcements anticipated in Fall 2023, the H2Hubs projects may not be operational until the

early- to mid-2030s, potentially after 2032 even despite the best efforts of DOE and industry to

make the hubs a reality. As such, the H2Hubs may not be ready in time to provide the support

that EPA assumes and EPA’s reliance on this program alone is insufficient to support its proposed

adequate demonstration determinations.

e. EPA’s proposed conclusions are based on an insufficient record as the

Agency fails to consider factors that could impact low-GHG
hydrogen’s cost-effectiveness and achievability throughout the
industry.
EPA states that low-GHG hydrogen, as proposed, will be cost-effective, see, e.g., 88 Fed. Reg. at

33,242-43, and proposes to conclude that “the increase in operating costs from a BSER based on

202
Id.
203
Id.
204
Id.
146
low-GHG hydrogen is reasonable.” Id. at 33,314. However, as the starting point for its cost

analysis, EPA relies on DOE’s Hydrogen Earthshot, which aims to reduce electrolytic hydrogen

production costs to $1/kg by 2030. Critically, this represents an 80 percent reduction in the cost

of clean hydrogen 205 and DOE itself explains that the Hydrogen Earthshot “sets an ambitious . . .

target based on stretch R&D goals” 206 and that it “create[es] bold, ambitious goals to galvanize

domestic and global industry.” 207 While industry and government will continue to aim to meet

this target, it is not a reasonable basis for EPA’s cost analysis, particularly for a technology that

faces the multiple hurdles set forth in these comments, which EPA also fails to analyze. As

discussed below, EPA does not take into account a number of factors that could impact costs,

including electrolyzer availability, clean electricity costs, transportation costs, water cost and

availability, and the contours of the pending hydrogen PTC guidance that will inform entities’

ability to use the credit. This failure is a significant flaw in the record and undermines EPA’s

proposed adequate demonstration determinations.

i. EPA does not adequately analyze electrolyzer availability and

clean electricity costs that could impact low-GHG hydrogen’s cost-
effectiveness achievability throughout the industry.

Two significant components of the cost of low-GHG hydrogen are electrolyzer availability and

clean electricity costs. Current areas of development and related challenges that government and

industry are working to overcome for each are discussed above. Importantly, the timing and

205
See U.S. Dep’t of Energy, Hydrogen Shot, https://www.energy.gov/eere/fuelcells/hydrogen-
shot.
206
Clean Hydrogen Liftoff Report at 2.
207
U.S. Dep’t of Energy, U.S. Clean Hydrogen Strategy and Roadmap, at 39 (June 2023),
https://www.hydrogen.energy.gov/clean-hydrogen-strategy-roadmap.html.
147
scope of scale up for these two components, which currently are unknown, could impact the cost

of low-GHG hydrogen.

For example, DOE explains in the Clean Hydrogen Liftoff Report that reducing the capex for

electrolyzer manufacturing “will be the largest driver of near-term electrolysis cost reductions

(through 2030).” 208 The scale of cost reductions needed is not insignificant—“[e]lectrolyzers

need to see 50–80% cost declines by 2030 to follow the growth pathway detailed in [the Clean

Hydrogen Liftoff] report. While standardization, design to value and manufacturing scale-up will

represent a significant portion of the cost-down, technological innovation is also needed.” 209

DOE also notes that industry forecasts for electrolyzer capex cost-downs “do not yet reach the

Hydrogen Fuel Cell Technology Office (HFTO) targets of ~$100 - $250/kW (late 2020s to early

2030s) motivating the need for additional R&D funding to bridge the gap.” 210

The cost of clean electricity is similarly a significant factor in the overall cost of low-GHG

hydrogen production. For example, DOE explains that “a 15% increase in electricity costs can

reduce returns 3-5%. Constrained clean power build out can also limit the deployment of

electrolyzers.” 211 As discussed above, competition for clean electricity is anticipated to be

significant, particularly as multiple sectors simultaneously seek to use increasing quantities of

clean electricity and as challenges to its scale up remain.

208
Id. at 13.
209
Id. at 66.
210
Id. at 13.
211
Id. at 35.
148
Moreover, the levelized capex costs for electrolyzers are inversely proportional to their

utilization (capacity factor). As a result, “[r]enewable capacity factors will impact hydrogen

production costs.” 212 While energy storage can improve the capacity factors associated with wind

and solar, energy storage technologies are experiencing their own scale up and related

challenges. 213 DOE also notes that “using hydro and nuclear power can run at high-capacity

factors (>90%) allowing for lower levelized capex costs.” 214 However, as noted above, it is

unclear whether and to what extent existing energy resources, such as hydropower and nuclear,

will qualify under the hydrogen PTC. Similarly, while power purchase agreements can be used to

contract for non-dedicated clean electricity, “[a]dditional regulatory clarity for producers seeking

to capture the PTC would help accelerate further private upstream investment.” 215 Moreover,

while using electricity from the grid enhances electrolyzer utilization, it also is unclear whether

and to what extent this pathway could take advantage of the hydrogen PTC.

As noted, EPA does not discuss these factors or take them into account in its analysis. Not doing

so is a significant gap in EPA’s record and undermines EPA’s proposed adequate demonstration

determinations.

212
Id. at 12.
213
See U.S. Dep’t of Energy, Pathways to Commercial Liftoff: Long Duration Energy Storage
(Mar 2023), https://liftoff.energy.gov/wp-content/uploads/2023/03/20230320-Liftoff-LDES-
vPUB.pdf.
214
Clean Hydrogen Liftoff Report at 12.
215
Id. at 12.
149
 ii. EPA does not adequately analyze midstream costs that could
impact low-GHG hydrogen’s cost-effectiveness and achievability
throughout the industry.

The delivered cost of low-GHG hydrogen also will depend significantly on the cost of

transportation and storage. As DOE explains, “[d]istribution and storage can more than double

the delivered cost of hydrogen. Near-term use cases where hydrogen supply and demand are not

co-located will be significantly affected by the high cost of hydrogen distribution, with the

exception of regions with existing, scaled hydrogen pipeline networks.” 216 These costs will vary,

but some stakeholders have reported current distribution and storage costs of up to $10/kg,

depending on the storage and transportation methods used. 217

EPA also cites DOE’s estimate that, with a potential electrolytic production cost of $0.40/kg by

2030 (inclusive of the hydrogen PTC), the delivered cost of hydrogen could be approximately

$0.70/kg to $1.15/kg. 88 Fed. Reg. at 33,309. Critically, DOE notes that these estimates

“assume[ ] lowest-cost clean hydrogen production in 2030 as well as a range of distribution /

storage options (compression to pipeline, pipeline, and storage fee associated with pipeline

storage).” 218 As discussed above, the extent of development of pipelines capable of carrying

hydrogen remains unclear and government and industry are working to overcome the hurdles

necessary to support a U.S. clean hydrogen market at scale.

216
Id. at 57.
217
Id. at n.133.
218
Id. at n.65.

150
Where pipelines are not available, hydrogen trucking is anticipated to be the main mode of

transportation. However, the costs alone for delivering hydrogen by truck could exceed EPA’s

anticipated delivered cost of hydrogen noted above. More specifically, DOE estimates that in

2030, 219 midstream transportation costs could be $0.2-0.4/kg for compression for trucking plus

$0.7-1.5/kg for gas phase trucking service, for a total of $0.9-1.9/kg for compressed hydrogen by

truck—for liquid hydrogen delivery by truck, which EPA notes will be required for longer

distances, 88 Fed. Reg. at Hydrogen TSD at 29, DOE estimates $2.7/kg for liquefaction and

$0.2-0.3/kg for liquid hydrogen trucking service, for a total delivered transportation cost of $2.9-

3.0/kg. By comparison, DOE’s estimated 2030 costs for pipeline delivery are $0.1/kg for

compression and $0.1/kg for pipeline transportation, for a total delivered cost of $0.2/kg.

The Proposed 111 Rules do not analyze these potential costs and their impact on EPA’s proposed

determination beyond mentioning that gas phase and liquid trucking are distribution options, 88

Fed. Reg. at 33,309; see also id. at Hydrogen TSD at 25 and 28, and a cursory mention of related

costs. Id. at Hydrogen TSD at 29. This failure is a significant gap in EPA’s rulemaking record and

undermines EPA’s proposed adequate demonstration determinations.

iii. EPA does not adequately analyze how the potential contours of the
IRA hydrogen PTC could impact low-GHG hydrogen’s cost-
effectiveness and achievability throughout the industry.

As discussed above, Treasury guidance on the hydrogen PTC remains outstanding and has the

potential to help or hinder low-GHG hydrogen costs and, in turn, demand. For example, as

discussed above, it is anticipated that Treasury may include additionality requirements in its

guidance. Depending on the terms of these requirements, hydrogen producers seeking to use

219
Id. at 4.
151
electricity from existing hydropower and nuclear facilities may not qualify for the full hydrogen

PTC.

Treasury also is considering the timeframe over which the lifecycle greenhouse gas emissions for

hydrogen production must be measured and discussion has centered around either annual

matching or hourly matching. As EEI explained in its comments to Treasury, 220 hourly matching

is estimated to increase the cost of green hydrogen production by 70-170 percent 221 versus

annual matching, eliminating the ability of the PTC to make low-GHG hydrogen cost

competitive with other forms of hydrogen. This is because hourly matching would require a low-

GHG hydrogen project to buy time-correlated renewables during periods of under-generation,

which corresponds to higher market price periods, increasing the overall cost of green hydrogen.

If time-correlated renewables are not available, the low-GHG hydrogen project may curtail its

electrolyzer, leading to long idle times. Hydrogen production equipment remains expensive and

requires high utilization to make hydrogen production facilities economic. If a low-GHG

hydrogen production facility can only produce during hours when wind and solar are available,

the low utilization rate will dramatically increase the price of the hydrogen produced.

Furthermore, applications requiring an uninterrupted flow of hydrogen represent substantially all

existing hydrogen uses, and thus, requiring hourly matching would severely limit the adoption of

low-GHG hydrogen.

220
Comments of the Edison Electric Institute, U.S. Dep’t of Treasury Request for Comments on
Credits for Clean Hydrogen and Clean Fuel Production (Notice 2022-58), (Dec. 6, 2022),
https://www.regulations.gov/comment/IRS-2022-0029-0072.
221
Assumes 95 percent electrolyzer capacity for annual matching and 70 percent, 60 percent, and
50 percent capacity for hourly matching at high, mid, and low renewable resource, respectively.
152
As with the factors discussed above, EPA does not discuss these issues or appear to take them

into account in its analysis. This failure is a gap in the rulemaking record and undermines EPA’s

proposed adequate demonstration determinations.

f. EPA’s proposed conclusions are based on an insufficient record as the

Agency fails to consider several other issues that could impact
achievability throughout the industry.

In addition to those noted above, there are several other areas of developmental need that must

be met to ensure development of the U.S. clean hydrogen market that will be necessary to

support reliable and affordable low-GHG hydrogen blending in the power sector. These include

the need to scale up and train the workforce that will underpin this hydrogen market and the need

to resolve accounting-related questions.

i. EPA fails to adequately analyze workforce challenges that could

impact achievability throughout the industry.

Although well-recognized, EPA does not mention workforce-related challenges. In the Clean

Hydrogen Liftoff Report, DOE explains that expansion of a skilled workforce will be critical to

near-term expansion. 222 For example, DOE notes that “[e]lectrolysis will be challenged by

supply-chain constraints in both raw materials and equipment manufacturing capacity during a

critical scale-up period through 2025 in addition to challenges with renewables build-out and

sourcing a domestic workforce.” 223 In terms of scope, in 2030, DOE estimates that

222
See, e.g., Clean Hydrogen Liftoff Report at 3.
223
Id. at 45 (emphasis added).

153
approximately 200,000 workers across direct and indirect jobs would be needed to support the

deployment of clean hydrogen at scale. 224 In addition,

[Engineering procurement, and construction (EPC)] providers will

need specialized experience, sufficient workforce, and established
contract structures for hydrogen production and refueling projects.
The U.S. does not currently have a sufficient, appropriately skilled
workforce to manufacture, construct, or operate the volume of
hydrogen infrastructure required to meet projected demand, so
scaling this workforce presents both a challenge and an
opportunity. 225

New skills that would be required include “electrolyzer and electrolyzer component

manufacturing, fuel cell expertise, and electrolysis facility engineering, procurement, and

construction (EPC) expertise.” 226 Moreover, “accelerated clean energy deployment is likely to

further constrain EPC capacity.” 227

As noted, EPA does not discuss these issues or appear to have taken them into consideration in

its proposed determinations. This failure is a significant flaw in the record and undermines EPA’s

proposed adequate demonstration determinations.

ii. EPA fails adequately analyze the impact of other sectors’ use of
hydrogen on achievability of low-GHG blending throughout the
power sector.

Building the U.S. clean hydrogen market will require a thoughtful approach that recognizes that

scale up in certain sectors, like the power sector, will rely heavily on other sectors’ clean

hydrogen deployment. DOE’s H2Hubs program is a good example of such an approach. As

224
Id. at 58.
225
Id. at 48.
226
Id. at 58.
227
Id. at 58.
154
explained above, DOE intends to engage in a four-phased process with awardees and to initially

focus on regional and local market development. The ultimate hope is to connect the H2Hubs to

form a nationwide clean hydrogen market economy. While such a market would support

achievability of hydrogen blending throughout the power sector, we must first build up local and

regional markets. These markets will be critical to enabling development of the economies of

scale necessary to reduce cost and increase both supply and demand and will form the necessary

foundation for the deployment of clean hydrogen at scale.

Moreover, as DOE explains based on its analysis of the various current barriers facing hydrogen

liftoff, “[b]y 2030, most demand for low carbon hydrogen is likely to be as a drop-in replacement

for carbon-intensive hydrogen currently used in ammonia and oil refining. Sectors where

hydrogen is not an incumbent technology, such as other industrial sectors (steel, chemicals),

transportation, heat, and power, will take more time to uptake clean hydrogen.” 228 Furthermore,

“[i]nitial deployments using clean hydrogen are expected to leverage regional energy resources

and target industries that currently rely on conventional natural gas to hydrogen technologies

(without CCS).” 229 This expectation is logical as these sectors already have the infrastructure in

place to support clean hydrogen use. These sectors will be key to scaling up clean hydrogen

production, reducing cost, and, critically, supporting the buildout of the midstream

infrastructure, 230 all of which will be needed to support achievability of hydrogen blending

228
Id. at 9 (emphasis added).
229
U.S. Dep’t of Energy, U.S. Clean Hydrogen Strategy and Roadmap, at 12 (June 2023),
https://www.hydrogen.energy.gov/clean-hydrogen-strategy-roadmap.html.
230
See, e.g., Clean Hydrogen Liftoff Report at 16 (“Pipelines also require a stable, credit-worthy
offtakers who will demand significant volumes of hydrogen sufficient to justify dedicated
infrastructure build-out.”). See also id. at 57 (“Near-term use cases where hydrogen supply and
155
throughout the power sector.

Whether and to what extent these sectors will adopt clean hydrogen remains to be seen,

particularly given the challenges noted above. EPA does not analyze how other sectors’ adoption

of clean hydrogen will impact access to low-GHG hydrogen and, ultimately, achievability of

hydrogen blending throughout the power sector.

iii. EPA fails to adequately analyze accounting-related gaps and their

impact on achievability throughout the industry.

Given that hydrogen is a fungible molecule once produced, any emissions requirements for

hydrogen production will require standardized accounting and traceability. EPA recognizes this

fact and seeks comment on “what forms of acceptable mechanisms and documentary evidence

should be required for EGUs to demonstrate compliance with the obligation to blend low-GHG

hydrogen, including proof of production pathway, overall emissions calculations or modeling

results and input, purchasing agreements, contracts, and energy attribute certificates.” 88 Fed.

Reg. 33,240, at 33,328. Efforts are underway to establish these mechanisms, but they are nascent

at present. The absence of these mechanisms further demonstrates the current early stage of

development of a clean hydrogen market, the important open questions that entities are working

to resolve, and the premature nature of EPA’s proposal. Furthermore, how these questions are

resolved could impact development of the U.S. clean hydrogen market—if cumbersome

accounting regimes emerge, they could have a chilling effect on market growth.

3. EPA’s proposal to define low-GHG hydrogen in the Proposed 111 Rules

is arbitrary and EPA should instead propose separate rules for hydrogen
producers.

demand are not co-located will be significantly affected by the high cost of hydrogen
distribution, with the exception of regions with existing, scaled hydrogen pipeline networks.”).
156
There are several issues that stem from EPA’s proposal to mandate the use of “low-GHG”

hydrogen for units that opt for the blending pathway and to include emissions reductions

requirements for hydrogen production as part of that mandate. As a preliminary matter, the

regulation of hydrogen production is beyond the scope of proposed rule; if EPA seeks to regulate

emissions from hydrogen production, it must do so through a process that satisfies the section

111 requirements for that separate source category and does not impede development of this

nascent, but important resource.

a. EPA’s “low-GHG” hydrogen requirement is beyond its authority and

the Agency should utilize a separate 111 process to set any production
standard.

EPA’s proposal to define “low-GHG” hydrogen effectively seeks to establish an emissions

limitation for hydrogen production. Setting novel, upstream requirements for hydrogen as part of

this CAA section 111 proposal is beyond the appropriate scope of the proposed rule.

EPA has set upstream emissions limitations for other fuels used in EGUs—namely, natural gas.

Notably, EPA’s emissions limitations for natural gas production have been set through

rulemakings regulating natural gas production, transportation, and storage, not the power sector

as one of the consumers of natural gas. 231 Such an approach tailors EPA’s regulations to the

sector and facilities that own and operate the affected facilities. EPA’s regulation of source

categories under section 111 should be focused on the facilities with emissions. For the power

sector, those source categories, therefore, appropriately focus on the emissions stack. Fuel

production, like natural gas and hydrogen, occurs outside of the stack—in some instances,

231
See, e.g., Standards of Performance for New, Reconstructed, and Modified Sources and
Emissions Guidelines for Existing Sources: Oil and Natural Gas Sector Climate Review, 87 Fed.
Reg. 74,702 (Dec. 6, 2022).
157
hundreds or even thousands of miles away. Accordingly, it is not part of the relevant source

categories and should not be included in a rule that addresses power sector stack emissions.

If EPA wishes to regulate emissions associated with hydrogen production industry, it should do

so in a separate section 111 process focused on the hydrogen industry. To do otherwise would be

arbitrary as it would treat differently the two fuels that would be used in EGUs—hydrogen and

natural gas—without viable rationale for doing so. Further, as EPA notes, hydrogen combustion

in EGUs has no carbon emissions. This is the case regardless of how the hydrogen is produced

because, once produced, hydrogen molecules effectively are fungible. As a result, emissions at

an EGU, which are the focus of the proposed rule, are not impacted by the hydrogen production

pathway.

Moreover, while some electric companies may produce hydrogen, electric companies are not the

only entities who will produce hydrogen for use in EGUs or otherwise. Given its focus on the

power sector, the attempt to regulate hydrogen producers through the proposed rule is

inappropriate.

Additionally, given that hydrogen is a fungible molecule once produced, any emissions

requirements for hydrogen production will require standardized accounting and traceability. As

noted supra, EPA recognizes this fact and seeks comment on “what forms of acceptable

mechanisms and documentary evidence should be required for EGUs to demonstrate compliance

with the obligation to co-fire low-GHG hydrogen, including proof of production pathway,

overall emissions calculations or modeling results and input, purchasing agreements, contracts,

158
and energy attribute certificates.” 88 Fed. Reg. 33,240, at 33,328. Efforts are underway to

establish these mechanisms, but they are nascent at present.

The challenges with accounting and traceability run counter to EPA’s traditional methods of

compliance for the power sector. The power sector complies at the stack—not at the input of

fuel. This fact is further reason why EPA should issue a separate standard for hydrogen

production emissions and why it is inappropriate to include production emissions reductions

requirements in the proposed rule.

Consequently, regulation of hydrogen production is outside of the scope of EPA’s authority to

regulate at the unit and therefore beyond the scope of the proposed rule. EPA should propose any

such standards in a separate rulemaking.

b. EPA should address hydrogen production challenges in a separate

rulemaking.

In seeking to set hydrogen production requirements, EPA notably eschews setting a separate

standard for hydrogen production, although it notes it has the authority to set hydrogen

production standards. Indeed, as noted, EPA has set section 111 standards for natural gas

production and it could, and should, do so for hydrogen production as well, particularly if it

seeks to use “Low-GHG” hydrogen as part of the BSER for EGUs. However, there are several

important factors that any hydrogen production standard must take into account, including that

EPA must adhere to the section 111 process in setting a hydrogen production emissions standard.

In addition, EPA must also consider that setting a hydrogen production standard for the power

sector will have de facto impacts on development of the hydrogen economy more broadly, which

159
is critical to hydrogen’s ability to overcome the challenges that will be necessary to enable its use

in EGUs. This includes:

• Achievability Challenges EPA Needs to Address: For “low-GHG” hydrogen production,

the elements of the system include renewable electricity, water, and electrolyzers—and,

as discussed above, each faces challenges. Taken together, these demonstrate that EPA’s

assumptions that there will be sufficient “low-GHG” hydrogen to support “achievability

throughout the industry” is simply unsubstantiated and is not addressed by EPA in

attempting to set an upstream hydrogen production standard in the proposal. 232

• Cost Barriers: As discussed above, it is well-recognized that there currently are cost

barriers to electrolytic hydrogen production. For example, DOE is highly focused on

reducing the cost of hydrogen to assist in providing a foundation for development of

hydrogen at scale. As noted in 2021, DOE launched the Hydrogen Earthshot, aimed at

reducing the cost of electrolytic hydrogen from $5/kg to $1/kg by 2030. 233 In addition,

the IIJA includes a $1 billion investment in Clean Hydrogen Electrolysis Program. 234 The

purpose of this program is to establish a research, development, demonstration,

commercialization, and deployment program for purposes of commercialization to

232
DOE also notes several other challenges to development of a hydrogen economy at scale,
including the absence of standard contract structures, which are delaying project financing;
hesitancy to commit to long-term, scaled offtake for several potential reasons, including limited
price discovery or price certainty, unavailability and reliability of supply, near-term policy
implementation uncertainty, and long-term political uncertainty; limited cost-effective midstream
infrastructure, which negatively impacts market development beyond production centers; limited
availability of specialized hydrogen workforce; credit risk that is constraining widespread debt-
financing; scale-up challenges for specific end-uses; and various challenges impacting long-term
growth. Clean Hydrogen Liftoff Report at 56-62.
233
U.S. Dep’t of Energy, Hydrogen Shot, https://www.energy.gov/eere/fuelcells/hydrogen-shot.
234
IIJA at § 816(b).

160
 improve the efficiency, increase the durability, and reduce the cost of producing clean

hydrogen using electrolyzers. 235

• Non-Air Quality Health and Environmental Impacts: In addition, producing electrolytic

hydrogen using renewable energy may implicate non-air quality health and

environmental impacts. For example, it is anticipated that hydrogen may drive significant

demand for new renewable energy projects—particularly if Treasury’s 45V guidance

includes hourly matching and additionality requirements, as discussed further below. The

International Renewable Energy Agency has projected that renewable electricity demand

for hydrogen will range from 30-120 exajoules by 2050. 236 In addition, the Hydrogen

Council has noted that “gigawatt-scale projects can be a significant local water consumer.

In regions prone to water supply stress, sea water desalination is required.” 237

235
See U.S. Dep’t of Energy, Clean Hydrogen Electrolysis Program,
https://www.energy.gov/bil/clean-hydrogen-electrolysis-program.
236
Int’l Renewable Energy Agency, Hydrogen: A Renewable Energy Perspective, p 22 (Sept.
2019), https://www.irena.org/publications/2019/Sep/Hydrogen-A-renewable-energy-perspective.
Columbia University SIPA’s Center on Global Energy Policy recently noted that “[g]rowing
demand of green hydrogen will require enormous investment and construction of electricity
transmission, distribution and storage networks, and much larger volumes of zero-carbon power
generation, as well as electrolyzer production systems, some hydrogen pipelines, and hydrogen
fueling systems. An 88 million tons per annum (Mtpa) green hydrogen production by 2030,
corresponding to the Stated Policies Scenario from the International Energy Agency (IEA) for
that year, could cost $2.4 trillion and require 1,238 gigawatts (GW) of additional zero-carbon
power generation capacity.” Columbia Univ. SIPA: Ctr. on Global Energy Policy, Green
Hydrogen in a Circular Carbon Economy: Opportunities and Limits, pp 8-9 (Aug. 2021),
https://www.energypolicy.columbia.edu/research/report/green-hydrogen-circular-carbon-
economy-opportunities-and-limits.
237
Hydrogen Council, Hydrogen Decarbonization Pathways: A Lifecycle Assessment, p 8 (Jan.
2021), https://hydrogencouncil.com/wp-content/uploads/2021/01/Hydrogen-Council-
Report_Decarbonization-Pathways_Part-1-Lifecycle-Assessment.pdf.

161
 • Reliance on Tax Credits: As discussed above, electrolytic hydrogen production faces

several cost barriers at present. Treasury is in the process of developing guidance for

implementation of these tax credits. This guidance will dictate entities’ ability to utilize

the credit and, in turn, whether the tax credit actually enables “low-GHG” hydrogen to

overcome its current cost barriers. Without the Treasury guidance and market reaction, it

is unclear whether the 45V tax credits will be successful. The potential for either outcome

increases the uncertainty around whether and how successful the 45V tax credits will be

in enabling “low-GHG” hydrogen to overcome current cost barriers. Moreover, even if

the IRA tax credits remain in place and are funded, they are set to expire December 31,

2032. Development of the hydrogen economy is anticipated to take place over several

decades and it is unclear how expiration of the 45V tax credits in the early stages of

hydrogen deployment will impact future development. It is possible, given the various

other challenges to be overcome, that “low-GHG” hydrogen will not be cost-effective

relative to other energy resources by December 31, 2032. 238

• Requiring “Low-GHG” Hydrogen for the power sector will have impacts on other

sectors: In setting a requirement that the power sector only utilize “Low-GHG”

hydrogen, EPA should bear in mind that its standard will have impacts on the

development of the hydrogen economy more broadly. The power sector is one of many

sectors exploring the potential to use hydrogen as a tool to continue to reduce emissions

and meet climate goals. Any production standard that EPA sets for the power sector will

238
Clean Hydrogen Liftoff Report at 3 (“If electrolysis projects fail to scale during the IRA
credit period, electrolysis may not achieve the necessary learning curves to remain competitive in
the absence of tax credits.”).

162
 flow through to commercial agreements and has the potential to influence how other

sectors define “low-GHG” hydrogen in their operations, which should be done in a

separate rulemaking for addressing emissions from hydrogen production.

While it is anticipated that these issues will be surmounted in the near term, at present these

issues have yet to be overcome and create challenges for “low-GHG” hydrogen production.

c. EPA should take the lead in setting a hydrogen production emissions

standard.

EPA defers significantly to Treasury in the proposed rule in setting the emissions requirements

for hydrogen production—both in defining “low-GHG” hydrogen to align with the most

stringent emissions level for the hydrogen production tax credit under the IRA and in proposing

to adopt Treasury’s ultimate guidance on point, including potentially adopting temporal

matching, geographic limitation, and additionality requirements. However, authority to regulate

air emissions under the CAA rests with EPA, not with Treasury. Moreover, as noted above, EPA

is bound by CAA section 111 when it sets emissions limitations. While it may defer to other

agencies as appropriate, it cannot use such deference to avoid satisfaction of these process

requirements. As part of that rulemaking process, EPA should fulsomely consider the impact of

hydrogen production and focus on emissions standards that can be achieved across the spectrum

while taking into account the statutory factors described above. To that end, EPA should

consider allowing a wider array of hydrogen production sources to qualify as “low-GHG”

hydrogen than is contemplated under the current definition, including hydrogen produced using

CCS and other sources beyond renewable energy. As noted, availability of resources to produce

hydrogen varies across the United States and the infrastructure required to cost-effectively

transport hydrogen, faces several challenges to development. These factors weigh strongly in

favor of a more inclusive standard to promote development of the U.S. clean hydrogen economy

163
at scale and to enable availability of hydrogen blending throughout the power sector. EPA should

also consider whether it has the ability to require these resources to be additional, as well, given

the structure and set up of CAA section 111’s regulation of both new and existing sources.

Moreover, as discussed supra, some of the principles Treasury is considering as part of its 45V

guidance would hinder the near-term hydrogen development that will be critical to ensuring a

robust hydrogen economy that ultimately could support the use of hydrogen in EGUs. These

principles include Treasury’s consideration of an hourly matching requirement.

Hydrogen production equipment remains expensive and requires high utilization to make

hydrogen production facilities economic. If a green hydrogen production facility can only

produce during hours when wind and solar are available, the low utilization rate will

dramatically increase the price of the hydrogen produced. Furthermore, applications requiring an

uninterrupted flow of hydrogen represent substantially all existing hydrogen uses, and thus,

requiring hourly matching would severely limit the adoption of green hydrogen. Such limitation

ultimately would undermine the ability to meet EPA’s proposed standards for EGUs.

4. Conclusion.

EPA states that it is “confident that these proposed NSPS and emission guidelines – with the

extensive lead time and compliance flexibilities they provide – can be successfully implemented

in a manner that preservers the ability of power companies and grid operators to maintain the

reliability of the nation’s electric power system.” 88 Fed. Reg. at 33,246. However, as set forth

above, EPA does not analyze or appear to take into account the various, significant, interrelated

areas of development and scale ups that must occur to achieve the hydrogen economy that will

164
be needed to support its Proposed 111 Rules, the infrastructure necessary to deliver the low-GHG

hydrogen to EGUs across the industry, or the market necessary to support low-GHG hydrogen

cost effectiveness. While efforts across government and industry are underway to overcome

these well-recognized challenges, they create uncertainties about how and when the U.S. clean

hydrogen economy that will be needed to support reliable and affordable hydrogen blending in

the power sector will emerge.

IV. EPA’s Proposed Phase One Standards for New Natural-Gas Based Units Are
Appropriate But Several Key Technical Changes Are Required To Ensure These
Standards Are Achievable.

For new units, the CAA requires that EPA make a BSER determination for the source category

and then define the resulting emissions limitations that will be applicable to all units in that

source category. See 42 U.S.C. § 7411(b). EPA proposes three subcategories for new natural gas

turbines regulated under 40 C.F.R. part TTTT, which includes both NGCCs and CTs, each with

its own proposed BSER and resulting emissions limits: a low load, intermediate load, and base

load units. See 88 Fed. Reg. at 33,277. 239 The phase one requirements for each subcategory are

detailed below:

• Low load units: For units with capacity factors less than 20 percent, the proposed BSER
is the use of lower emitting fuel. EPA proposes that the use of natural gas, Nos. 1 and 2
fuel oils, and low-GHG hydrogen qualify as lower emitting fuels. EPA is proposing an
emission standard of between 120 and 160 lb CO2/MMBtu.

• Intermediate load units: A new combustion turbine NGCC qualifies as an intermediate

unit if it has a capacity factor less than 45-55 percent; a new CT qualifies if it has a
capacity factor less than 33-40 percent. For these units, EPA proposes efficient operations
as the phase one BSER, with an emissions limit of 1,150 lb CO2/MWh.

239
EPA proposes these revised standards in light of the Agency’s decision to revisit these
existing standards for subpart TTTT units as part of the statutorily required eight-year review.
See 88 Fed. Reg. at 33,277; see also id. at 33,279.

165
 • Base load units: An combustion turbine with a capacity factor greater than 45-55 percent
qualifies as a baseload unit. EPA is proposing efficient operations as the phase one BSER,
with an emissions limitation of 770 lb CO2/MWh for units with nameplate heat inputs
greater than 2,000 MMBtu/hr; for smaller units, the proposed emissions limitation is
between 770 and 900 lb CO2/MWh depending on the specific base load rating of the
combustion. 240

Id. 241 EPA also proposes phase two standards for base load and intermediate load units and—for

base load hydrogen units—phase three standards. See id. Legal and technical issues raised by

EPA’s proposed phase two and three standards are discussed supra.

EPA is correct that the BSER for the proposed phase one standards for new baseload and

intermediate natural gas units is the most efficient generation. Because these phase one standards

are applicable upon proposal, see 42 U.S.C. § 7411(a)(2)(defining a new source as one that

commences construction or modification after the publication of proposed regulations), efficient

generation is the only adequately demonstrated technology that could serve as BSER for

immediately applicable standards. EPA acknowledges this indirectly by proposing a phased

240
Actual capacity factor and utilization data that determine membership in a particular
subcategory will be a unit-specific inquiry that also considers a unit’s design efficiency.
Confusingly, EPA proposes that units undertake this analysis annually, meaning that units could
move between subcategories every year, often due to factors outside of their control (e.g., system
needs). See proposed 40 C.F.R. § 60.5580a. This poses significant challenges for compliance
planning, as discussed herein.
241
The phase one standards also require that affected units be operated and maintained
efficiently. See 88 Fed. Reg. at 33,283; see also proposed 40 C.F.R. § 60.5525a(b). Efficient—or
as the proposed regulatory text states—operations and maintenance (O&M) consistent with
safety and good air pollution control and using “consistent operations and maintenance
procedures” is an appropriate requirement. EPA states that good practices include but are not
limited to minimizing energy losses uses insulation and blowdown heat recovery. See 88 Fed.
Reg. at 33,287. In any final rule, EPA should provide more details about what else the Agency
considers good O&M practices and how the Agency will evaluate compliance with such
requirements. EPA also clearly should state that the Agency will not second guess operations,
particularly those that are in response to grid emergencies.
166
approach to BSER, implicitly recognizing that the control technologies that it asserts are BSER

for later phases have not been adequately demonstrated at this time. See 88 Fed. Reg. at 33,283.

Further, as EPA notes, efficient generation quantifies as BSER because it also can be

implemented at reasonable cost and does not have adverse environmental or energy impacts. See

id. at 33,288. For similar reasons, EPA is correct that clean fuels are BSER for low load units.

EPA should, however, make several key technical changes to the proposed standards that result

from these BSER determinations. EPA must show that these standards are achievable, as required

by CAA section 111(a). See 42 U.S.C. § 7411(a)(1). In order for the standards to be achievable,

EPA must account for the future operations of these units in an evolving and cleaner grid that is

actively integrating increasing amounts of more intermittent, renewable resources. EPA also must

demonstrate that the proposed emission rate limit is achievable over a 12-month rolling average

period, which is how affected units are required to demonstrate compliance.

EPA should set achievable, efficiency-based standards for new natural gas-based units, consistent

with EEI’s February 2023 recommendation to the Agency that these units be “capable” of future

retrofit to install CCS or blend hydrogen when those technologies are demonstrated and available

at costs that are affordable for customers. Further, EPA should adopt a modified approach to

intermediate load units to account for the differences between combined cycle units and CTs and

should increase the capacity factor limitation for low load units to allow these units to play the

reliability critical role for which they usually are deployed. Finally, EPA should make clear that

new units are able to take a mass-based approach to compliance, which will offer necessary and

significant operational flexibility.

167
 A. EPA Must Adjust the Phase One Standards for Base Load Units to Account
for Unit Operations and Consistent With EPA’s Own Compliance
Demonstration Requirements.

EPA is correct that the phase 1 BSER for new “base load” natural gas NGCC units is the most

efficient generation. See 88 Fed. Reg. at 33,277. Using this BSER, EPA proposes to establish an

emissions rate standard of 770 lb CO2/MWh for NGCCs with nameplate heat inputs greater than

2,000 MMBtu/hr. See id. at 33,322. However, EPA has not demonstrated that this proposed

emissions rate is achievable across the industry and across a full range of likely operating

conditions. Principally, EPA does not take into consideration how these units actually operate to

support variable renewable resources, nor does it consider how emissions performance degrades

over time. EPA should increase the emissions rate to account for these realities and finalize an

emissions rate that is more supported by recently permitted new units than EPA’s proposed

standard. 242 EPA also should provide for mass-based compliance options with the phase 1

standards. EPA also should provide full weight to the comments of turbine manufacturers and

EEI’s member companies that are working to build and deploy these NGCC units, since the

potential for cycling and the ability of these manufacturers to guarantee the phase one

performance limits is essential for ensuring that EPA’s initial, efficiency-based approaches are

done appropriately and supported by the record and are technically achievable.

1. The phase one standards for new base load NGCCs does not
take into consideration expected unit operations that will result
in higher emissions rates.

242
EPA is seeking comment on a range of potential standards, from 730 to 800 lb CO2/MWh.
See 88 Fed. Reg. at 33,332. EPA should not lower the standard. The reasons cited in these
comments for increasing the standard also militate that the standard not be lowered further than
the proposed 770 lb CO2/MWh level.
168
EPA’s proposed phase 1 standard does not appropriately consider the variability in the operating

modes of new “base load” NGCCs. Even those units that operate at higher relative capacity

factors, when measured on an annual basis, are unlikely to maintain high capacity factors at all

times. EPA, without discussion, assumes that all units that operate at higher annual capacity

factors are serving as “base load” generation at all times and that intermediate load units are load

following and provide dispatchable backup power to support variable renewable generating

sources. See id. at 33,278. But this is overly simplistic and ignores the changes in the generating

fleet that EPA acknowledges elsewhere in the Proposed 111 Rules. Because of the increase in

generation from variable renewable energy resources—which are dispatched first when

available—even higher capacity NGCC units will have to adjust their generation to meet

generation needs on an hourly or daily basis. EPA provides no data to support this assumption

that units operate in only one way—at high capacity factors—at all times. While this convention

(higher capacity factors are baseload units and lower capacity factors are load following units)

might be useful for subcategorizing units for the purposes of standards development, it can bear

little relationship to actual unit operations, which presents compliance and operational

challenges. EPA is obligated to ensure achievability of these standards, which means that the

Agency must account for these operational realities when setting NSPS.

The generation profile of the industry is changing dramatically, including greater deployment of

renewable generation, and this trend will continue. 243 As a result, the manner in which baseload

NGCCs will operate in the future will result in the frequent cycling of these units—and, indeed,

243
See, e.g., AEO 2023, Release Presentation at 11-14 (Mar. 16, 2023),
https://www.eia.gov/outlooks/aeo/pdf/AEO2023_Release_Presentation.pdf.

169
higher levels of cycling (resulting in lower capacity factors) already are required of many

currently operating newer NGCCs in areas with significant renewable deployments. 244

Renewable energy sources provide variable generation by their nature; combined cycle, simple

cycle and quick start natural gas-fired units are essential elements to integrating this variable

generation and are increasingly being called upon to ramp up and down in response to these

often quick and unpredictable changes. 245 As EEI noted in its 2014 and 2018 comments,

combined cycle and combustion turbines play an essential role in continuing the clean energy

transition by providing 24/7 and quick start power, which allows for increased renewable

integration and reliable power at affordable rates for customers.

The practical effect of this is that new natural gas-based units will likely cycle more often in

future years, and thus not operate at steady state operations for extended periods of time, which

will have an impact on the unit’s ability to meet the proposed standard of 770 lb CO2/MWh.

More frequent starts and stops means that a unit is operating in periods with reduced efficiency

and a higher emission rate. This increased cycling puts the achievability of EPA’s proposed 770

lb CO2/MWh in question for even the most advanced turbines.

244
See, e.g., EIA, Natural Gas Combined-Cycle Plant Use Varies by Region and Age (May 20,
2021)(, https://www.eia.gov/todayinenergy/detail.php?id=48036.
245
EPA acknowledges this in a roundabout way in the Efficient Generation: Combustion Turbine
Electric Generation Units Technical Support Document, Docket ID No. EPA-HQ-OAR-2023-
0072 (May 2023), which states that “combined cycle EGUs [are] a more dependable power
source for load-following supply.”

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Second, as a unit cycles more frequently, the degradation in performance of that unit happens

more rapidly. 246 In proposing the current standard of 770 lb CO2/MWh, EPA asserts that the

proposed rate fully accounts for degradation of the unit, see 88 Fed. Reg. at 33,323, but as

discussed in more detail below, EPA does not provide any data to support this claim. As

proposed, the current emission rate does not provide sufficient flexibility to account for any

increases in degradation that will result from the more frequent cycling, i.e., starting and

stopping of a unit, and provides no support for the assertion that the proposed emissions rate

fully accounts for degradation in light of how units are anticipated to operate.

Examining the most recently issued permits issued for NGCC units is instructive. While EPA

does cite a number of units operating at an annual basis at or below 770 lb CO2/MWh, there are

several caveats EPA does not address. First, these units are all very recently constructed, and are

operating before significant degradation and/or wear and tear have impacted unit performance.

And, as new units, these facilities are operating at higher capacity factors because they are the

most efficient units available for dispatch, meaning that they are dispatched first. 247 However,

these units are not permitted at the rates EPA asserts they are performing at on an annual basis,

with many permitted near or above 800 lb CO2/MWh. Take, for example, the Orange County

Advanced Power Station (OCAPS) in Texas, which commenced construction this spring and is

246
See, e.g., Intertek, Update of Reliability and Cost Impacts of Flexible Generation on Fossil-
Fueled Generators for Western Electricity Coordinating Council, Report No. AIM 191210726-
2-1 (May 20, 2020),
https://www.wecc.org/Reliability/1r10726%20WECC%20Update%20of%20Reliability%20and
%20Cost%20Impacts%20of%20Flexible%20Generation%20on%20Fossil.pdf.
247
When all units are similarly highly efficient, they all would not be able to run at the highest
possible capacity factors, rendering reliance on these units even less apt.

171
being built by EEI member Entergy. 248 OCAPS is a 1,215 MW facility utilizing two Mitsubishi

M501JAC enhanced air-cooled gas turbines in a 2x1 configuration with a heat recovery steam

generator (HRSG) and advanced control system. OCAPS is also a hydrogen-capable facility, that

will be initially capable of 30 percent hydrogen blending by volume and is poised to blend

hydrogen in future years when it is available, with some retrofits. 249 Critically, OCAPS’

Prevention of Significant Deterioration (PSD) permit requires that OCAPS meet a limit of 814.7

lb CO2/MWh gross on a 12-month rolling average basis. See Texas Council on Environmental

Quality PSD Permit, Special Condition 30.

OCAPS represents a very advanced combined cycle facility that includes a HRSG, which EPA

deems essential to achieving high levels of efficiency, and the permitted level is notably above

EPA’s proposed emissions standard of 770 lb CO2/MWh. This is practical and logical: the

permitted level for new facilities—facilities that will operate for decades in the future and must

be in compliance with their permitted rate at all times—must take into account long term unit

operations, degradation, and other relevant factors that can impact unit performance, providing

for flexibility and operational head room across a range of potential to probable operating

conditions.

Also instructive is EPA’s own admission that “nearly half of recently constructed combined cycle

EGUs have maintained an emissions rate of 800 lb CO2/MWh.” 88 Fed. Reg. at 33,324. In light

248
See Entergy, About the Project, https://www.entergy.com/entergypowerstexas/project/.
249
this represents the capability of the turbine and not necessarily an expectation that sufficient
hydrogen supplies (much less low-GHG hydrogen supplies) will exist to enable this level of co-
firing to be sustained.
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of this, EPA seeks comment on whether the Agency should instead adopt this higher emissions

rate on the grounds that it "would increase flexibility and reduce costs to the regulated

community by allowing more available designs to operate as base load combustion turbines.” Id.

The answer to the Agency’s question is yes, EPA should consider setting a higher emissions

standard than proposed since such an approach would be in line with the approach that EPA took

in the final rule setting standards that are applicable to new NGCCs built after January 8, 2014.

In that rulemaking, EPA selected 1,000 lb CO2/MWh as the achievable emissions rate derived

from the same BSER 250—efficient generation—because it provided for operational flexibility,

considered actual operating parameters and potential future degradation, as well as unit-specific

design. See Standards of Performance for Greenhouse Gas Emissions From New, Modified, and

Reconstructed Stationary Sources: Electric Utility Generating Units; Final Rule, 80 Fed Reg.

64,510, 64,620 (2015 NSPS). 251 EPA should continue to adopt this approach in any final NSPS

for base load NGCCs, since considering a range of factors when determining whether an

emissions rate is achievable is both defensible and reasonable.

However, EPA has deviated from the approach it took in the Agency’s 2015. More importantly,

EPA is conflating its obligation to determine the BSER with its statutory obligation to ensure that

the emissions limits based on BSER that are applied to new units are achievable. “Best” is a

modifier for “system of emission reduction” in CAA section 111(a)(1); it is not a term used to

250
EPA selected 1000 lb CO2/MWh as the achievable emissions rate despite the fact that the
“lowest emitters in the CAMD database” at that time had emissions rates of closer to 800 lb
CO2/MWh. See 80 Fed. Reg. at 64,618. EPA selected this emissions rate despite the fact that it
anticipated that most new units likely would have better performance.
251
It should be noted that whether the standard for new base load NGCCs is 770 lb CO2/MWh or
800 lb CO2/MWh, this would represent a significant emissions performance over the current
standard.
173
describe the resulting emissions standard. EPA is not required by the CAA section 111(a)(1) to

select the lowest or from among the lowest emissions rates that could be produced by the

application of BSER, but instead is required to establish a standard that is achievable. See 42

U.S.C. § 7411(a)(1). While an achievable emissions standard is not required to be meetable by

every single unit, as per the relevant case law, EPA has an obligation to demonstrate achievability

“under the most adverse conditions that might be expected to occur” and which cannot be taken

into account via an assessment of costs. See Nat’l Lime Ass’n v. EPA, 627 F.2d 416, 433, n.46

(D.C. Cir. 1980). 252

Here, EPA is not being asked to take into consideration the most adverse conditions, but merely

the most likely conditions, as it did in 2015, which include increased cycling and the resulting

degradation. Therefore, given the increased cycling and the attendant degradation as these units

continue to adapt to changing grid conditions that EPA has not addressed and EPA’s own

observations about the achievability of a higher emissions standard, EPA should take these

obvious likely conditions into account and select a higher standard that would provide more

operational flexibility and compliance margin to account for these reasonably anticipated unit

impacts. A higher standard is more appropriate, as it would account for the manner in which

baseload units will be operating in the future to account for a great increase in intermittent

generation resources and the increase in cycling of units.

252
See also Sierra Club v. Costle, 657 F.2d 298, 377 (D.C. Cir. 1981)(To show that a standard is
achievable, the EPA must ‘‘(1) identify variable conditions that might contribute to the amount
of expected emissions, and (2) establish that the test data relied on by the agency are
representative of potential industrywide performance, given the range of variables that affect the
achievability of the standard.’’).
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 2. EPA has not demonstrated that new NGCC units can achieve
the proposed emissions rate using the required compliance
demonstration metrics.

EPA asserts that the proposed 770 lb CO2/MWh emissions rate for new base load NGCCs has

been demonstrated, but EPA has not provided underlying data that is supportive of this assertion.

Further, EPA appears to be using a different metric for its demonstration that this rate is

achievable than the one that EPA would require units to use when proving compliance.

Accordingly, this provides a separate basis for determining that EPA has not shown that that the

proposed rate is achievable, contrary to the requirements of the CAA, and therefore cannot be

finalized.

In the proposed Section 111 Rules, EPA states that “[a]n emissions rates of 770 lb CO2/Mwh-

gross has been demonstrated by 14 percent of the recently constructed combined cycle EGUs.”

88 Fed. Reg. at 33,323. However, while EPA provides a chart that summarizes what EPA refers

to as “the maximum 12-operating month base load emissions rate” for the “best performing”

combustion turbines in an appendix to the Technical Support Document (TSD) Efficient

Generation: Combustion Turbine Electric Generating Units that was included in this docket, see

id. at 33,324, EPA provides insufficient information in the TSD about how the “12-operating

month” rates were calculated, including information about the number of startups and

shutdowns, capacity factors, total MWh generated, or other details that would help stakeholders,

including the owners and operators of potential new affected NGCCs units, understand how EPA

arrived at this conclusion and how the units compare to their own recently constructed NGCCs.

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At minimum, EPA should provide such data and more information about how it calculated these

“maximum 12-operating month rates.” In addition, EPA asserts that these units cited as the best

performers “have long-term emissions data that fully account for potential degradation in

efficiency.” Id. at 33,323. However, EPA does not provide that data in either this proposal or the

docket to support this claim or to allow comments opportunity to review it. As noted, this

approach is markedly different from the significant and detailed analysis of achievability,

including degradation and other factors, undertaken by the Agency in establishing an achievable

emissions limit for new NGCCs in the 2015 NSPS. EPA should provide this additional data or

reconsider its approach.

EPA also appears to be using a different metric for computing the “12-operating month baseload

emissions rate” than the metric that unit owners and operators would be required to use to

demonstrate compliance, which can be problematic. EPA does not define what it means by a 12-

operating month emissions rate, although it appears to be an annual average emissions rate. It is

not clear how EPA’s assertion that this rate demonstrates that the proposed emissions limit of 770

lb CO2/MWh can be achieved when the proposed subpart TTTTa would require compliance be

demonstrated using a 12-operating month rolling average. See proposed 40 C.F.R. at

60.5525a(a)(1). 253 EPA is correct that annual averages could provide operational flexibility, but

this could be eroded if the averaging period is rolling or if EPA intends that 12-operating month

rolling average is similar to a 12-month rolling average, which is the way that compliance is

253
Assuming that the mandate “You must be in compliance with the emission standards in this
subpart that apply to your affected EGU at all times” does not override any effort to provide
compliance flexibility via longer averaging periods than are provided under subpart TTTT
normally. See proposed 40 C.F.R. § 60.5525a(A).
176
currently demonstrated under subpart TTTT. Given this mismatch, EPA has not shown that the

standard it has selected can be achieved using the appropriate compliance metric it requires. At

minimum, EPA must make such a showing before asserting that a standard is achievable.

3. EPA can help units achieve compliance with the proposed

emissions rate standards by authorizing mass-based
compliance.

EPA also should affirmatively allow for mass-based compliance options for new units. While

NSPS are traditionally set on an efficiency rate basis, allowing companies to translate the rate-

based standard into a mass-based tonnage limitation would provide significant operational

flexibility for units that cycle frequently—e.g., that ramp “up and down,” operate at various

loads, or have frequent startups and shutdowns to meet grid demands, as discussed here. Instead

of having units meet a continuously applicable rate, which limits their ability to integrate newer

and cleaner resources, allowing companies to translate the BSER rate into a mass-based tonnage

limit would provide for environmental integrity, offer more straightforward compliance options,

allow for more efficient operations, and support utility planning based on known unit constraints

via tonnage limits. While such approaches could provide “less” environmental protection in the

context of traditional air pollutants, these potential impacts are actively managed by state

permitting agencies through the PSD permitting process, and such concerns are not relevant for

GHGs, which are well mixed in the atmosphere once emitted, minimizing localized pollution

concerns. EPA should affirmatively provide a mass-based compliance option for new units.

Providing this flexibility does not ameliorate EPA’s failure to demonstrate that the proposed

emissions limit for new base load NGCC units is achievable, but, when coupled with an increase

in the standard, would address many of the concerns regarding compliance raises in these

comments.

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 B. EPA Should Clarify Requirements for Intermediate-Load Units.

The proposed intermediate subcategory applies to NGCCs that have a capacity factor less than

approximately 45-55 percent and CTs that have a capacity factor less than approximately 33-40

percent. See 88 Fed. Reg. at 33,277. EPA proposed as its phase 1 emission limit for these units a

rate of 1,150 lb CO2/MWh. See id. at 33,319. Units that would be classified as intermediate-load

units serve a key role in the ongoing transition of the electric sector by assisting with renewables

integration and providing essential reliability services at smaller sizes and lower capacity factors

than base load units. However, the application of a capacity factor restriction to these units, in

addition to an emission rate limitation, unnecessarily constrain the ability of these units to

operate in a way that supports both the transition of the sector to carbon free resources, but also

grid reliability.

EEI raised similar concerns in the past about capacity factors limiting the use of efficient turbines

—units opted to curtail operations rather than be subject to more stringent standards—resulting

in less efficient and more carbon intensive units be called upon to support grid reliability. These

same concerns are valid here with respect to the intermediate subcategory being subject to both a

capacity factor and emission rate limitations. In effect, having both a rate limitation and a

capacity factor limitation that limits the efficient operations of those units at load—despite the

potential utilization of multi-year averaging—constrains the ability of units to operate and be in

compliance by having both restrictions fundamentally work against one another.

To encourage the construction and use of these efficient units, EPA should remove the capacity

factor limitation and only restrict units to an emission limit to ensure that the most efficient units,

178
and correspondingly, the most environmentally protective units are operating. By providing both

a capacity factor limitation and an emissions performance standard, EPA will unnecessarily limit

operations while simultaneously attempting to drive for the more efficient operations, despite the

fact that those efficiencies tend to only occur at higher capacity factors. If EPA nonetheless

believes that lower emissions rates and limited operations can be simultaneously achieved, EPA

must provide significantly more analysis showing that units that operate under a 50 percent

capacity factor can also achieve the phase one standards EPA proposes—for both combined cycle

turbines and CTs.

In the alternative, EPA should also consider setting a separate, capacity factor or emissions rate

limit that would apply only to new CT units. This would allow EPA to have a base load and

intermediate-load category approach for NGCC units, while also working to set up a parallel

structure for CTs that could allow for greater flexibility for units that can help with renewables

integration. Ultimately, EPA should choose between approaches—a capacity factor restriction, or

an emissions rate limitation, and not both at once.

C. In defining Low-Utilization Units, EPA Should Finalize a Higher Capacity

Factor to Account for Reliability Considerations.

EPA also proposes a low-load subcategory for units that operate at capacity factors less than 20

percent but is soliciting feedback on a range between 15-25 percent. See 88 Fed Reg. at 33,321.

EPA acknowledges that these low load units provide critical services in support of grid reliability,

including ramping capabilities during periods of peak electric demand. See id. at 33,320. EPA

reaches this conclusion on the basis that one-third of recently constructed units operate under this

capacity factor, while 80 percent of recently constructed units have operated at a capacity factor

of 25 or less. See id.

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Grid reliability is and will continue to be a top priority for EEI’s member companies. With an

increase in extreme weather events, including high heat events, extreme winter storms, wildfires,

hurricanes, and other threats to the electric grid, in addition efforts to electrify many segments,

including the transportation and industrial sectors, of the economy, the industry will require to

use of all available resources at times of peak demand, which will likely become even more

frequent.

As a result, many of the units that would be classified as low load units will be called upon to

support grid reliability with more frequency in the future but would be unable to meet more

stringent emission limitations of the intermediate subcategory because of the manner in which

they are called upon to operate. This could result units operating until they reach their 20 percent

capacity factor, and then shutting down to not be subject to stricter limits, resulting in a gap in

generation or the generation being supplied by less efficient and more carbon intensive units

such as diesel reciprocating internal combustion engine units.

EPA should therefore increase the capacity factor limitation for low load units to at least 25

percent. This will allow these low load units to operate to support grid reliability in an

environmentally protective manner compared to alternatives. EEI’s member companies view

these low-load turbines as essential to preserving system reliability while integrating ever higher

penetration of renewable resources onto the grid. Finalizing a higher capacity factor will allow

for members to build fewer of these units while also allowing them to be available when needed

for grid reliability situations. EEI’s member companies are filing individual comments in support

180
of EPA finalizing this higher threshold for the low-load category; EPA should full take those

comments and concerns into account and finalize the 25 percent capacity factor limitation as a

result.

V. Compliance Flexibilities Are Essential To A Workable Final Rule; EPA Should

Both Finalize And Expand Proposed Flexibilities And Provide Additional
Options To States And Units.

EPA has the ability to provide a range of flexibilities, both in the standard setting process and in

defining compliance options. This is grounded in the text of CAA section 111 and, broadly, in

EPA’s decades-long implementation of the CAA. In general, regulatory—e.g., standard setting—

and compliance flexibilities are a practical and longstanding method of helping affected sources

comply with environmental regulations in efficient, cost-effective, and commonsense ways. The

electric sector has long experience implementing emissions trading regimes, averaging

provisions, and permit-specific terms in ways that achieve cost effective and efficient

compliance. These flexibilities have contributed to the broad and continued success of the CAA

in reducing pollution and promoting public health and are common features of environmental

statutes: EPA generally is authorized to set standards and then provided compliance pathways

that enhance the options available to industry and states—instead of limiting the methods and

manners that sources can use to meet those same standards.

A recent EPA report acknowledges this important feature of environmental regulation: Since the

1990 CAA amendments, the many flexible compliance regimes promulgated by the Agency have

resulted in significant emissions reductions and a marked reduction in unhealthy air quality days,

181
all at lower than predicted costs to industry and customers. 254 Many of the regulatory programs

enacted by EPA to attain and maintain the NAAQS in the past three decades have contained

significant regulatory flexibilities—from market-based trading, 255 to wide ranging averaging

provisions, 256 to creative permit terms, 257 to innovative methods of estimating reductions from

new industry activities. 258 In summary, EPA has set standards and targets, and American

industries have worked to engineer the least cost and most effective way to meet these via

supportive and flexible regulatory frameworks from their states and EPA.

In this rulemaking, EPA has the opportunity and authority under CAA section 111 to incorporate

compliance flexibilities and mechanisms to help EGUs reduce GHG emissions. EPA has

included several important and well-founded compliance flexibilities in the Proposed Section 111

Rules. In any final rule, EPA should both retain and expand the proposed compliance flexibilities

and explicitly authorize mass-based approaches to demonstrating compliance, encourage state-

254
EPA, Our Nation’s Air, https://gispub.epa.gov/air/trendsreport/2019/#naaqs.
255
See, e.g., Finding of Significant Contribution and Rulemaking for Certain States in the Ozone
Transport Assessment Group Region for Purposes of Reducing Regional Transport of Ozone, 63
Fed. Reg. 57356 (Oct. 27, 1998); the Clean Air Interstate Rule, 70 Fed. Reg. 25,161 (May 12,
2005); the Cross-State Air Pollution Rule (CSAPR), 76 Fed. Reg. 48,208 (Aug. 8, 2011); the
CSAPR Update Rule, 81 Fed. Reg. 74,504 (Oct. 26, 2016); and the Revised CSAPR Update
Rule, 86 Fed. Reg. 23,054 (Apr. 30, 2021).
256
See Florida State Implementation Plan Approval for Hillsborough County, 82 Fed. Reg.
30,749 (July 3, 2017).
257
See Prevention of Significant Deterioration/Title V Greenhouse Gas Tailoring Rule, 75 Fed.
Reg. 31,513 (June 3, 2010).
258
See EPA, Roadmap for Incorporating Energy Efficiency/Renewable Energy Policies and
Programs into State and Tribal Implementation Plans (July 2012),
https://www.epa.gov/sites/production/files/2016-05/documents/eeremanual_0.pdf.
182
driven trading programs, allow units to use averaging to demonstrate compliance, and allow for

these flexibilities to apply to both existing coal- and natural gas-based units. These flexibilities

will be essential for compliance, particularly if EPA chooses to finalize emissions standards for

new and existing sources similar to those proposed.

A. Mass-Based Approaches Should be Explicitly Authorized in the Final

Guidelines and in the Final Rule for New Sources.

EPA proposes that units would demonstrate compliance with the presumptive rate-based

standards annually based on the lb CO2/MWh emission rate derived by dividing the total

reported CO2 mass emissions by the total reported electric generation for an affected EGU during

the compliance year, which is consistent with the expression of the degree of emission limitation

proposed for each subcategory. See 88 Fed. Reg. 33,375. EPA also separately takes comment on,

and notes that states could implement, mass-based emissions approaches, including mass-based

trading. Id. at 33,393.

1. EPA should explicitly authorize mass-based approaches for existing

sources to allow for straightforward compliance.

Given that EPA references the D.C. Circuit’s decision in American Lung Association finding that

states and units are not required to implement EPA’s proposed BSER in order to comply with

CAA section 111 standards, and that a mass-based input is required for compliance with a rate-

based approach, states seemingly could choose to propose mass-based compliance approaches

for existing units. American Lung Association, 985 F.3d 914, 957. EPA should be explicit in any

final rule that it will approve mass-based compliance demonstrations included in state plans. This

would enable straightforward compliance with an annual emissions tonnage limit instead of the

annual emissions rate and provide a more direct route to implementing any trading program. As

discussed in detail in a whitepaper that EEI filed in the non-regulatory docket that preceded this

183
proposal, mass-based compliance also provides significant operational flexibility. 259 This allows

units to operate within a mass-based limitation and ensure availability to cycle, incorporate

variable resources, and respond to grid conditions without having the limitations regarding rate-

based approaches that struggle to account for startup and shutdown emissions and conditions.

Mass-based approaches will help states utilize other flexibility tools, like averaging, trading, and

using lower-GHG fuels in a more straightforward and least-cost way. This will allow for

numerous other flexibilities to be utilized as well, including the ability to link existing state-

based programs, as discussed infra in these comments, as well as straightforward incorporation

of mass-based limitations into unit-specific permits. Mass-based approaches will allow

consistency and seamless integration with existing state programs that measure compliance

based on mass emissions, while still achieving the program goals of net reductions in greenhouse

gas emissions. EPA should explicitly authorize mass-based approaches to accommodate these

additional flexibilities.

2. EPA should explicitly authorize states to use mass-based compliance for

new sources.

EPA also should affirmatively allow for mass-based compliance options for new units. NSPS are

traditionally set on an efficiency rate basis; for EGU GHG standards, these are expressed in

pounds of CO2 per hour. Allowing companies to translate the rate-based standard into a mass-

based tonnage limitation would provide significant operational flexibility for units that cycle

frequently—e.g., that ramp “up and down,” operate at various loads, or have frequent startups

and shutdowns to meet grid demands—which are becoming more essential and more common as

259
See EEI Whitepaper, attached as Appendix B.
184
greater amounts of variable renewable resources interconnect to the grid. Further, cycling

degrades individual unit efficiency since units operate more efficiently at higher load profiles

when compared to continued cycling. Instead of requiring units to meet a continuously

applicable rate, which limits their ability to integrate newer and cleaner resources, allowing

companies to translate the BSER rate into a mass-based tonnage limit would provide for

environmental integrity, offer more straightforward compliance options, and support utility

planning based on known unit constraints via carbon dioxide tonnage limits. While such

approaches would provide less environmental protection in the context of traditional air

pollutants, such concerns are not relevant for GHGs, which are well-mixed in the atmosphere

once emitted. 260

EPA should also consider that operating efficiency is also correlated to a combined cycle CTs

ambient conditions. Highly efficient operations are not available under all ambient conditions

and vary based on the location of a CT. EPA should also consider degradation of efficiency over

time. An additional benefit would be ease of incorporating these units into state-based trading

schemes, as discussed supra, to the extent states would like to utilize such an approach.

B. Trading and Averaging Must Be Included in Any Final Guidelines and

Should Be Encouraged as a Compliance Pathway.

EPA proposes to allow states to include an array of compliance flexibilities in compliance plans,

including mass- and rate-based approaches, along with ability for states to use trading and

averaging for compliance. Specifically, EPA notes that states can consider using mass- and rate-

based trading programs in a way that “preserves the stringency of” the emissions limits that are

260
See EEI’s November, 2022 submission to EPA’s non-regulatory docket. States routinely use
mass-based limits when permitting new NGCCs under the PSD Program.
185
based on the identified BSER, and that these approaches should be consistent with other EPA

trading programs, like the NOx Budget Trading Program, the Good Neighbor Rule, and others.

See 88 Fed. Reg. at 33,393.

EPA notes that states should consider ways to ensure that any emissions budget does not

overestimate the required budgets, including via a dynamic budgeting mechanism. See id. The

Agency also notes that states could consider banking and/or averaging, as appropriate, which

could help to incentivize unit retirements in advance of certain retirement deadlines. EPA

proactively takes comment on whether to allow trading and averaging approaches as part of these

guidelines. See id. at 33,395-96.

EPA should note in any final rule that trading and averaging are proven, well-understood

approaches to compliance with environmental requirements and should affirmatively allow for

these approaches to be included in state compliance plans. Allowing states to adopt a mass-based

approach would also dovetail with the ability to utilize trading programs, and EPA should

affirmatively note that both approaches are authorized. EPA should also consider developing a

model trading program for states without the resources to develop their own plans or provide

guidance to states about factors to consider when developing trading and averaging schemes as

part of state plan development. Additional guidance or a model rule that states could adopt will

assist with states developing plans in the two-year window provided for the state plan

development process, and EPA should strive to release that guidance in conjunction with—or

shortly after—any final rule. At a minimum, EPA should convene technical workshops with

186
interested stakeholders regarding the development of any trading regimes by states, to allow for

increased coordination and collaboration through the development of state plans.

EPA has ample authority to permit states to use these approaches. Trading is not inconsistent

with the recent Supreme Court decision in West Virginia. In that case, the Supreme Court

suggested that if an overall cap (as defined by BSER) is based on “the application of particular

controls and sources could have complied by installing them,” emissions credit trading may be

permissible as a compliance measure. West Virginia, Slip Op. at 21-22.

This also would be consistent with positions that EPA has taken in previous rules, in which the

Agency has argued for significant compliance flexibility as a legal matter. The Agency’s 1995

rule promulgating municipal waste combustor (MWC) emissions guidelines which allowed state

plans the option to average emissions from units within a large MWC plant and to trade

emissions credits between MWC plants. 261 In doing so, however, EPA set emission limits for

averaging that were about 10 percent lower than if these limits applied to an individual plant.

In 2005, EPA issued the Clean Air Mercury Rule (CAMR) under CAA section 111(d), capping

mercury emissions from coal-fired power plants. There, EPA first determined that technological

systems were available to control mercury, but that it would take multiple years to install such

controls across the existing fleet. CAMR’s cap-and-trade system (allowing at least some affected

sources to avoid installing technological controls) was based on EPA’s determinations that such a

261
See Standards of Performance for New Stationary Sources and Emission Guidelines for
Existing Sources; Municipal Waste Combustors, 60 Fed. Reg. 65,387 (Dec. 19, 1995).
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system would: (a) constitute a “standard”; (b) reflect the degree of emissions limitation

achievable; and (c) for coal-based EGUs, constitute BSER. See 70 Fed. Reg. at 28,616-17. Under

CAMR, states had the option of adopting “substantially similar” regulations, but if they adopted

other standards, EPA indicated that it would review the state plans pursuant to the 40 C.F.R.

60.24(h)(2)-(5). 262

Further, as part of the briefing surrounding both the CPP and the ACE Rule, the D.C. Circuit’s

2021 decision in American Lung Association found that EPA’s limitation in the ACE Rule on the

compliance measures that sources could use to comply with the states’ standards of performance

was arbitrary. American Lung Association, 985 F.3d 914, 957. EPA had categorically excluded

two specific measures from the states’ consideration: averaging and trading, and biomass co-

firing. The Agency’s concern was that compliance measures that are not source-specific could

result in “asymmetrical regulation[,]” meaning the stringency of standards could vary across

sources. 263 The D.C. Circuit found these concerns unpersuasive.

Because the court held that the EPA erred by concluding that CAA section 111(d)

unambiguously required that BSER be source specific, the court noted that it must “necessarily

reject the ACE Rule’s exclusion … of compliance measures it characterizes as non-source-

262
This criterion was subsequently deleted from the C.F.R. following vacatur of CAMR. The D.C.
Circuit in New Jersey v. EPA, 517 F. 3d 574 (D.C. Cir. 2008), however, did not reach the merits
of EPA’s interpretation of its CAA section 111(d) authority; rather, the court determined that EPA
had improperly “de-listed” the source category from CAA section 112, thus invalidating EPA’s
attempt to regulate under section 111.
263
See Repeal of the Clean Power Plan; Emission Guidelines for Greenhouse Gas Emissions
from Existing Electric Utility Generating units; Revisions to Emission Guidelines Implementing
Regulations, 84 Fed. Reg. at 32,520 (July 8, 2019) at 32,556.
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specific.” Id. at 957. The court also noted that even if EPA might reasonably limit compliance

measures in specific situations based on its determination of the best system for reducing

particular types of emissions with localized consequences, the statute imposes no requirement

that such limitations be uniform across the regulation of different pollutants—in effect, there is

no requirement for “symmetry” in regulation between standard setting and compliance.

“Regardless of any policy-based reasons the EPA offers for limiting compliance measures, then,

its decision to exclude averaging and trading and biomass co-firing is foreclosed by its legally

erroneous starting point.” Id.

None of these provisions were addressed directly by the Supreme Court’s West Virginia

decision, which focused exclusively on the major questions doctrine and focused mostly on the

authority underlying the BSER determination made by the agency in the Clean Power Plan. As a

result, that decision does not limit EPA’s authority to offer states and affected sources broad

compliance flexibility within an existing unit context. EPA should affirmatively and proactively

offer states the ability to utilize trading and averaging approaches and should provide states with

latitude to implement those approaches in a manner consistent with the need for both reliable

system operations and the overall emissions reductions expected from a state plan under the final

existing source guidelines.

C. Dual Path Options Should be Available for All Existing Sources and EPA
Should Further Develop This Approach.

EPA explains, and as discussed above in section II of these comments, under the emissions

guidelines for existing coal-based steam generating units in the Proposed 111 Rule states would

place affected coal-based EGUs into one of four subcategories based on the time horizons over

which those EGUs elect to operate. See 88 Fed. Reg. at 33,403. The Agency explains further that

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these subcategories are static—that is, affected EGUs would not be able move between

subcategories absent a plan revision. See id. 264 However, EPA does solicit comment on a dual-

path approach for existing coal-based EGUs. Under such an approach, if included in any final

rule, existing coal-based EGUs could submit two different standards of performance to EPA to be

included in its compliance plan. See id. at 33,405. For example, for an affected coal-based steam

unit that wants the option to be part of either the long-term or imminent-term subcategory, the

state plan would include an enforceable standard of performance based on implementation of

CCS and associated requirements, including increments of progress; as well as an enforceable

requirement to permanently cease operations before January 1, 2032, and a standard of

performance based on routine operation and maintenance. Id.

EPA should, at a minimum, further develop this dual-path approach and include it in any final

rule, which would allow for states and sources to take full advantage of EPA’s proposed

subcategories. Compliance and operations decisions regarding EGUs are complex and involve

multiple steps over which owners and operators may have varying levels of control, including

integrated requirements to decommission a unit, procure replacement generation, meet capacity

requirements, and—in the event of a unit working to comply with several of the compliance

pathways chosen by EPA, including potentially the installation of CCS—procurement, design,

and installation of control technology, including the need to permit and test any new technology.

A proposed path may seem viable during the state plan development phase, but soon after can

become unworkable or infeasible. A dual-path approach would allow owners/operators and states

As discussed further infra, EPA should consider providing greater flexibility for units to move
264

between subcategories during the compliance period based on a variety of factors.

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additional time to make these difficult and complex decisions, while also providing additional

flexibility to account for potential changes in circumstances, including delays in procuring, or

more expedited arrival of, replacement generation, or reliability considerations. Accordingly,

EPA should include dual-path optionality in the final rule.

The Agency also should allow existing coal-based EGUs the opportunity to select a dual-path

approach for units that might retire as part of one of the proposed subcategories, but also should

permit these units the option to convert completely to steam-gas units that comply with the

steam-gas rate limitations proposed by EPA. This would allow units to either retire or convert,

resulting in significant emission reductions under either approach, consistent with EPA’s

rationale for providing dual-path approaches.

D. EPA Should Alter Its Proposed Approach to Increments of Progress to be

Consistent with Providing Appropriate Flexibility to States and Units.

EPA is proposing to adopt emission guideline-specific implementation of the five generic

increments specified in the CAA section 111(d) implementing regulations. These five increments

of progress are: (1) Submittal of a final control plan for the designated facility to the appropriate

air pollution control agency; (2) Awarding of contracts for emission control systems or for

process modifications, or issuance of orders for the purchase of component parts to accomplish

emission control or process modification; (3) Initiation of on-site construction or installation of

emission control equipment or process change; (4) Completion of on-site construction or

installation of emission control equipment or process change; and (5) Final compliance. 88 Fed.

Reg. 33,388. EPA also proposes that state plans must include specified enforceable increments of

progress as required elements for coal-based EGUs that use natural gas co-firing to meet the

standard of performance for the medium-term existing coal-based steam generating subcategory

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and for natural gas-based combustion turbine EGUs that use hydrogen blending to meet the

standard of performance. Id.

EPA has clear authority to require increments of progress under the statute and its own

regulations; however, EPA should not be overly prescriptive in setting those increments of

progress so that the only method of implementing or complying with those increments for the

medium-term coal-based subcategory or hydrogen pathway for combustion turbines is how units

must comply with EPA’s specific BSER. As noted supra, the D.C. Circuit’s decision in

American Lung Association notes that EPA could offer significant compliance flexibility to states

and units and was not required to have sources implement the specific BSER prescribed by EPA.

American Lung Association 985 F.3d at 942-43, 96. As proposed, the increments of progress—

especially (3) Initiation of on-site construction or installation of emission control equipment or

process change, and (4) Completion of on-sites construction or installation of emission control

equipment or process change—seem to denote that sources in these subcategories must

implement EPA’s BSER to comply with the increments. EPA should note that sources do not

have to meet every single increment of progress, especially if those sources are part of a broader

mass-based, trading, averaging, or other compliance approach that does result in an emission

limitation being placed on an individual unit. Such an approach would be consistent with

offering additional flexibility to sates and units, as well as American Lung.

The Agency also notes that it is not proposing increments of progress for either the imminent- or

near-term subcategories for coal-fired steam generating units, or for oil- or natural gas-fired

steam generating units. The proposed BSERs for these affected EGUs are routine operation and

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maintenance. See 88 Fed. Reg. 33,388. Given that these units are utilizing routine operation and

maintenance as BSER, such an approach is warranted and valid. EPA should finalize this

approach.

E. EPA Should Provide Additional Guidance Regarding Setting Unit-Specific

Baselines.

In Section XII(D)(1)(a) of the preamble to the Proposed 111 Rules, EPA describes its proposed

method for states to determine the baseline emissions performance, which is a critical step in

determining the presumptive standards for existing EGUs. See 88 Fed. Reg. 33,240, 33,375 (May

23, 2023). Once a state determines a unit-specific baseline, it will then “apply” the BSER to that

unit based on which BSER is applicable to that unit, resulting in a unit-specific emissions rate.

While states have the obligation to set unit-specific emissions limitations for each existing

affected fossil-based generator, EPA proposes presumptive methods for establishing emissions

limitations for certain subcategories of these units, and state plans that opt to use this

methodology to calculate emissions rates would be presumptively approvable. The proposed

methodologies both account for historic unit-specific operations—on the assumption that past

performance is indicative of future performance—and EPA’s proposed BSER for the relevant

subcategory. After identifying the affected EGUs in the state, EPA proposes that the state would

then use the corresponding methodology for the given subcategory to calculate and then apply

the presumptively approvable standard of performance for each affected EGU. The Agency notes

that the proposed approach would provide a “uniform” way to determine unit-specific standards

while allowing unit owners and operators to be able to reasonably approximate the emissions

limitations that would apply to units prior to the development of state plans. See 88 Fed. Reg.

33,358.

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EPA’s proposed methodology is that a state will use the CO2 mass emissions and corresponding

electricity generation data for a given affected unit from any continuous eight-quarter period,

from 40 C.F.R. part 75 reporting, within the five years immediately prior to the date the final rule

is published in the Federal Register. EPA expects states to utilize the most representative eight-

quarter period of data from those five years. See id. EPA will evaluate the choice states’

determination of what constitutes representative data when reviewing state plan submissions.

However, the Agency notes that it intends to defer to a state’s reasonable exercise of discretion as

to which 8 quarter period is representative. See id. at 33,375. For example, a state establishing

baseline emission performance in the year 2023 would start by evaluating the CO2 emissions and

electricity generation data for each of its affected EGUs from 2018 through 2023. The state

would choose a continuous eight-quarter period that it deems to be the best representation of the

operation for each affected EGU. See id.

Using these eight quarters of data, the state would then divide the total CO2 emissions (in the

form of pounds) from that continuous time period by the total gross electricity generation (in the

form of MWh) over that same time period. This result is baseline CO2 emission performance in

lb CO2 per MWh. See id. States would then multiply that baseline rate by the emissions

reductions EPA has determined is achievable via the application of the BSER for the relevant

subcategory to determine the presumptively approvable emissions limit for that unit. See id. For

example, if an existing natural gas combined cycle unit had a baseline emissions rate of 1000 lb

CO2/MWh, the resulting emissions limitation (effective starting in 2035) would be 110 lb

CO2/MWh, reflecting EPA’s determination that carbon capture and sequestration (CCS) at a 90

194
percent capture rate would result in an 89 percent reduction in emissions (1000 x .11 = 110).

These are baseline calculations and are not necessarily the way compliance is demonstrated. 265

EPA also notes that, consistent with CAA section 111(d), states retain the ability to deviate from

EPA’s proposed methodology to apply more stringent standards. See id. However, EPA believes

that the instances in which a state may need to use an alternate baseline-setting methodology will

be limited to anticipated changes in operation, such as circumstances in which historical

emissions performance is not representative of future emissions performance. 266 Where such

changes result in a less stringent standard of performance, states must use the remaining useful

life (RULOF) mechanism to determine the appropriate emissions limitation, which is discussed

at length infra in these comments. 267 See 88 Fed. Reg. at 33,381.

The flexibilities EPA provides around setting unit specific baselines are well founded. The

latitude provided by EPA both for states to determine which eight quarters are best representative

and to use another methodology if they choose will allow for more accurate baseline

determinations for EGUs. However, to simplify how the methodology is administered and ensure

265
EPA proposes that: coal or gas units applying CCS at a 90 percent capture rate results in
approximately an 89 percent reduction in emissions rate; coal units that are co-firing with 40
percent natural gas results in an 18 percent reduction in emissions rate; gas units blending
hydrogen at 30percent by volume results in a 12% reduction in emissions rate; gas units blending
hydrogen at 96 percent by volume results in an 89 percent reduction in emissions rate. EPA does
not delineate the expected emissions rate reduction from a 20 percent capacity factor restriction
for coal units.
266
For example: a state decides that an EGU in the medium-term coal-fired subcategory should
co-fire 50 percent natural gas instead of 40 percent.
267
RULOF is discussed in more detail in Section VI(H), infra, and also supra in Section II
regarding EPA’s authority to utilize retirement-abased subcategories.
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consistency and predictability for state and unit owners/operators, in the final rule or through

guidance, EPA should provide several examples states can use as templates for making these

determinations. Some of these are included in the Proposed Rule, but additional examples and

variations should be included in any final rule. This will ensure that unit owners and operators

have a better sense of the manner in which states may exercise their discretion in making these

determinations.

Further, EPA should provide additional clarity surrounding how to address baseline calculations

for coal-based units that are already co-firing with natural gas or have existing capacity factor

restrictions as these units do not fit perfectly into the proposed methodology, which assumes that

units have not implemented any restrictions that impact their emissions profile. EPA should

provide additional clarity and specific guidance for how to address and account for these

variations from EPA’s assumed baseline methodology.

F. EPA Should Provide More Flexibility in Implementing Its Proposed

Remaining Useful Life and Other Factors (RULOF) Provisions When
Assessing State Plans.

EPA’s approach to states’ ability to engage in RULOF analyses as part of their obligation to set

standards for existing units is inflexible and does not comport with the role afforded states under

section 111(d)(2). 268 EPA is obligated, therefore, to provide more flexibility for states to consider

268
As discussed in section II, EPA should cite section 111(d)(2)’s authorization for states to
consider remaining useful life and other factors as an alternative rationale to support the legality
of the proposed retirement subcategories for existing coal-based units, which would be in line
with a more flexible and expansive approach to the RULOF requirements in the statute. These
proposed subcategories are an appropriate exercise of EPA’s statutory authorization to
distinguish between classes, types, and sizes of units when setting standards; but, they also
represent a presumptively approvable approach to a state’s exercise of its discretion to consider
remaining useful life and other factors when setting standards for these existing units. EPA
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using RULOF to modify the presumptive standards for an affected facility. EPA can assess the

validity of the RULOF analysis and resulting standard when determining whether to approve a

state implementation plan. To ensure that states can consider RULOF when setting standards for

existing units, EPA should clarify in any final guidelines that states are not limited in the ways

that EPA proposes, but instead are free to make such demonstrations as appropriate. In addition,

EPA also should provide guidance on how states could rely on cost assumptions and source-

specific considerations that may differ from approaches EPA has taken.

1. EPA must provide more flexibility to states to consider RULOF when

setting standards for existing units.

EPA proposes that a state’s invocation of RULOF when setting a standard for any existing unit

would be required to be based on one or more of three circumstances—(1) unreasonable cost of

control resulting from plant age, location, or basic process design; (2) physical impossibility or

technical infeasibility of installing necessary control equipment; and (3) other facility-specific

circumstances that are fundamentally different from the information considered in determining

the BSER—and that there must be “fundamental differences” between the EPA’s determined

BSER and the circumstance of affected EGU. See 88 Fed. Reg. at 33,382.

While these criteria are generally reasonable, their proposed application is both unreasonably

stringent and requires further guidance. EPA may “not anticipate that states would be likely to

demonstrate the need to invoke RULOF based on a particular coal-fired EGU’s remaining useful

life,” and may believe that the circumstances for properly invoking RULOF “will be rare,” but

should adopt this approach and also adopt a more expansive individual-unit RULOF approach as
well.
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EPA must consider a wide range of approaches for a state’s proposed use of RULOF. Id. at

33,383-84.

EPA also proposes that states wanting to invoke RULOF must also consider cost in terms $/ton

of CO2 reduced and $/MWh electricity generated. See 88 Fed. Reg. at 33,382. EPA should be less

prescriptive. While EPA may have considered $/ton of CO2 reduced and $/MWh electricity

generated in determining BSER, an identical requirement for states in crafting plans is not

justified or necessary since states can consider the unique circumstances of each unit and the

attendant costs, as long as each state plan provides a justification of the costs it considers as part

of invoking RULOF for a specific source. Instead, EPA can note that such costs metrics can be

helpful in supporting a standard that is based on a state’s RULOF assessment, but EPA cannot

deem that any deviation from this cost metric is fatal for the resulting standard. 269 Ultimately,

EPA should examine a state’s invocation of RULOF in a more holistic sense and consider why

the state is proposing a different standard than those deemed presumptively approvable by EPA

for an affected EGU.

If a state relies on “unreasonable cost of controls” in support of invoking RULOF, EPA proposes

to require that states must demonstrate the facility cannot reasonably apply the BSER to achieve

269
Moreover, EPA’s reliance on the cost of carbon abatement is not a relevant or appropriate
metric for determining BSER, nor is it relevant for a RULOF determination. Owners/operators of
affected units, and states, need to consider the cost of the potential controls relative to the
remaining useful life in determining whether it is reasonable to apply the BSER in determining a
standard of performance or to invoke RULOF. The cost of carbon abatement is not an
appropriate substitute for the actual cost impacts on a per unit basis. It can be useful for
comparative analysis, but it bears little relationship to the costs that companies and their
customers may have to bear to achieve compliance.
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the emissions limitation determined by EPA, including that there must be a “fundamental

difference” between EPA’s BSER and the circumstance of affected EGU. EPA seeks comment on

whether it should provide further guidance for determining when costs are “fundamentally

different” from EPA’s BSER determination. See id. EPA outlines some of the considerations

taken into account in determining the BSER, including the physical possibility and technical

feasibility of applying that system, the costs of a system of emission reduction, the non-air

quality health and environmental impacts and energy requirements associated with a system of

emission reduction and the extent of emission reductions from a system. See id. EPA further

notes that “many of the factors [it] considers in its BSER determination,” which would be the

same or similar to the factors a state would consider in invoking RULOF, “are reflected in the

cost considerations” for determining the standards of performance. EPA also provides examples

of costs, including for CCS and natural gas co-firing for coal-based EGUs, that it evaluated in

determining the proposed standards of performance. See id.

While this guidance generally may be helpful to states, it is nonetheless incomplete and largely

provides examples of how difficult EPA believes it should be to demonstrate the required

fundamental difference in cost. EPA should provide additional guidance on how states can show

that the costs of controls is unreasonable, including examples of what would be considered an

adequate demonstration of different costs from EPA’s BSER determination for an affected EGU.

EPA should also eliminate the modifier “fundamental,” as it is not defined and is intended to

limit states’ exercise of RULOF to set different standards for certain existing units. EPA can

assess the sufficiency of any cost differences demonstration based on the record before it in any

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proposed state implementation plan. EPA should avoid prejudging the outcome of its own

assessment in this way.

The other two circumstances EPA cites under which invocation of RULOF could be based—

physical impossibility or technical infeasibility of installing necessary control equipment, and

other facility-specific circumstances that are fundamentally different from the information

considered in determining the BSER—are reasonable and applied logically. For example,

“facility-specific” circumstances could include the situation where replacement generation is not

available in time for the affected facility to retire as scheduled. EPA provides helpful examples

of how these circumstances could be applied to an affected EGU in considering the use of CCS,

or to an affected combustion turbine in considering the amortization period for controls when

deciding to cease operations and make that closure enforceable. See id. at 33,383. EPA also

correctly proposes to allow states to use RULOF to provide a different compliance deadline for

sources that can meet the standard of performance but not by the final compliance date under

these guidelines. As discussed elsewhere in these comments, states should be able to use RULOF

to adjust compliance deadlines, including the compliance deadlines included in EPA’s

presumptively approvable proposed retirement subcategories.

2. EPA should provide additional guidance to states on potentially

approvable RULOF approaches.

EPA provides additional guidance as to potential specific invocations of RULOF by states when

setting standards of existing units. EPA proposes that states invoking RULOF for affected coal-

based units in the long-term coal-based retirement subcategory be required to evaluate natural

gas co-firing as a potential source-specific BSER. States invoking RULOF for affected long-term

(and medium-term) coal-based EGUs must evaluate different levels of natural gas co-firing

200
unless they have demonstrated that natural gas co-firing at any level is physically impossible or

technically infeasible at the source. See 88 Fed. Reg. 33,384. Additionally, if an EGU in this

subcategory can implement CCS but cannot achieve the degree of emission limitation prescribed

by the BSER, EPA proposes that the state evaluate CCS with a source-specific degree of

emission limitation. See id. For natural gas-based units choosing the CCS or hydrogen blending

pathways, states would first have to demonstrate that the affected EGU cannot reasonably

participate in the other pathway and meet that pathway’s presumptive standard. “If a unit can

comply it must do so.” Id. at 33,385. For natural gas-based units opting for the CCS compliance

pathway, EPA proposes that if a unit cannot reasonably comply with either of the performance

standards—unless a state has demonstrated that it is physically impossible or technically

infeasible for a unit to implement CCS—that the state must evaluate CCS with lower rates of

carbon capture as a potential BSER. If CCS with lower rates of capture is not the BSER, then

states would be required to consider comprehensive turbine upgrades, and finally smaller scale

efficiency improvements. See id. For natural gas-based units in the hydrogen pathway that

cannot reasonably comply with the performance standards for either category, EPA would

require that states first analyze lower percentages of hydrogen co-firing, followed by

comprehensive turbine upgrades and, lastly, smaller scale efficiency improvements. See id.

While these requirements for specific instances in which a state might invoke RULOF, the

Agency should also allow states more flexibility for determining source-specific BSER and

calculating a standard of performance for affected EGUs.

Rather than limiting states’ ability to invoke RULOF in these scenarios, EPA instead should

characterize these as presumptively approvable approaches. This will provide states with greater

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flexibility in developing state plans and evaluating the invocation of RULOF for affected EGUs

while ensuring that states take the necessary steps for determining an applicable standard of

performance for affected EGUs.

This flexibility is consistent with other aspects of EPA’s proposed approach to RULOP. For

example, EPA proposes that states invoking RULOF for affected long-term and medium-term

coal-based units must evaluate different levels of natural gas co-firing if an affected EGU cannot

reasonably co-fire 40 percent natural gas unless the state has demonstrated that natural gas co-

firing at any level is physically impossible or technically infeasible at the source. Similarly, states

seeking to invoke RULOF for affected CTs must evaluate CCS with lower rates of carbon

capture or hydrogen co-firing as a potential BSER. See 88 Fed. Reg. at 33,385. Such an approach

to applying RULOF is reasonable, and EPA should allow states to take a flexible approach in

evaluating what might be an appropriate level of co-firing.

3. EPA’s proposed additional requirements for sources invoking RULOF

are appropriate.

EPA also proposes three additional provisions for states seeking to apply less stringent standards

of performance pursuant to RULOF. One requires state plans to consider the potential pollution

impacts, and benefits of control, to communities most affected by and vulnerable to emissions

from the affected EGU. In addition, state plans that include a less stringent standard of

performance pursuant to RULOF must meet all other applicable requirements of subpart Ba and

the proposed guidelines, including the use of site- and source-specific information when

possible. The proposed rule would also allow states to adopt and enforce standards of

performance more stringent than required by an applicable emissions guideline. See id. at

33,386-87. EPA’s proposed implementation of the other three provisions for invoking RULOF

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are reasonable and are in line with the Administration’s Justice40 and related environmental

justice initiatives.

G. Gas-Steam Units Require Additional Flexibilities.

EPA’s proposed BSER for existing natural gas-fired steam generating units is “routine methods

of operation and maintenance” and its proposed emissions limitation for these units is “no

increase in emission rate (lb CO2/MWh-gross),” presumptive unit limitations of either 1,300 lb

CO2/MWh, or 1,500 lb CO2/MWh based on unit capacity factor. For low load existing natural

gas-fired steam generating units, EPA neither proposes BSER nor emissions limitations. These

standards are well founded and should be finalized; allowing these units to continue to serve

their vital grid function while retaining the emissions benefit of prior conversion to utilizing

natural gas from coal is critical for system reliability and affordability. EPA’s approach on gas-

steam units is the correct one.

EPA should also provide additional clarity to make the standards for gas-steam units maximally

useful for states and members. EPA can provide additional clarity on applicability between

categories for units based on utilization. EPA should also clarify that units can utilize the

presumptive unit limitations in lieu of the no increase in emission rate approach. The Agency

should state that it is either the presumptive or the no increase in emission rate unit-specific

standard. This flexibility is well-grounded in EPA’s traditional approaches discussed supra in this

section and should be included.

Further, as described in these comments supra, the electric industry is in the process of a clean

energy transformation. EPA recognizes this reality in the Proposed Rule by offering

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subcategories for retiring coal-based units. As part of the clean energy transformation, EEI’s

member companies also are continuing to retire certain natural gas-based units. EPA should

develop and finalize retirement-based subcategories for these existing natural gas steam units,

similar to those for coal-based units, in any final rule.

EPA should also be explicit in any final rule that coal-based units in retirement subcategories that

later choose not to retire, but rather, completely convert to utilizing natural gas may transition to

the standards for natural gas-based units. Unforeseen future circumstances—including potential

reliability needs—may require that coal-based units slated for retirement instead convert to using

natural gas rather than completely retire. EPA should account for these potential situations in any

final rule by providing gas-steam units additional flexibilities.

H. Allowing States Additional Time to Submit Plans, and the Ability to Revise
Plans After Submittal and During the Compliance Period, Is Essential.

In the preamble to the Proposed Rule, EPA notes that it expects to finalize the proposed standards

for exiting units by June 2024. States will have 24 months to develop plans and will be required

to submit these plans no later than June 2026. See 88 Fed. Reg. 33,401. EPA notes that it will

adjust this deadline to reflect the actual date that standards are finalized; regardless of that date,

states will have 24 months to develop and submit plans. States will have to meet a number of

requirements as they develop plans, including requirements for public hearings, provide

supporting documentation, and other completeness requirements. EPA notes that this is an

increase in time from the current regulatory requirement for states to submit plans within 9

months of a final existing source guideline, and the Agency’s December 2022 proposal to allow

for up to 15 months for states to submit plans under proposed changes to the section 111

implementing regulations. See id.

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EPA also acknowledges that, despite states’ best efforts to accurately reflect the plans of

owners/operators regarding affected EGUs at the time of state plan submission, such plans may

subsequently change. See 88 Fed. Reg. 33,403. The Agency, therefore, reiterates that states have

the authority and discretion to submit revised state plans to EPA for approval under 40 C.F.R.

60.23(a)(2), 60.28(a). See id.

EPA is justified in providing states with additional time to develop and submit plans to EPA

beyond the nine months allowed by the generic section 111 implementing regulations and the 15

months in the proposed updates to those implementing regulations. The Agency should allow for

at least the 24 months proposed for states to develop and submit plans given all the required

steps—some of which are described above—to apply individual, unit-specific emissions rates to

the vast number of sources covered by the proposed existing source guidelines in the Proposed

111 Rules. However, it is unclear if this is enough time for all states to develop and submit plans

given the tremendous workload successful plan development requires, and EPA should either

provide more time for initial plan development or provide significant mechanisms to extend the

submission deadline for state plans. To the extent that states are unable to fully submit a plan to

EPA for approval within those 24 months—but are working to develop and submit a plan to

EPA—the Agency should develop and finalize a mechanism to provide an additional 12 months

to finalize and submit a plan, and such a mechanism should be based on concrete steps that can

be triggered automatically through specific, easy to understand and demonstrate criteria. EPA

should explicitly consider what milestones will be required for states that need this additional

time, which could include plans being out for comment, or state legislative changes that must be

205
completed, and/or other tangible, specific events or requirements. This is appropriate given the

potentially large number of existing coal- and natural gas-based units in some states.

Continuing to allow states the flexibility to revise plans after initial submittal, as already

provided in the regulations, will help states and owners/operators of EGUs address new and

unforeseen circumstances, including reliability, load growth, and technology deployment. At a

minimum, and to ensure efficient and effective processes, EPA should commit to reviewing and

making decisions on revised state plans expeditiously. EPA also should consider allowing states

to reclassify units based on new and emerging events or circumstances without needing to go

through a formal or total plan revision. This would increase the efficiency and efficacy of state

plans but would also have another practical effect: namely the state plan revision and EPA

approval process, even done as expeditiously as possible, is time consuming. Implementing some

of the choices that will be included in state plans, especially given the lead times for permitting

changes or installation of control technology, or natural gas co-firing capabilities, will require

significant lead times. As decisions and circumstances change throughout the period after plans

are filed, responding to potentially changing circumstances without the burden of additional

regulatory time through a plan revision will benefit states, units, and EPA by avoiding time

consuming and resource-intensive processes.

I. EPA Should Seek to Approve Existing State Programs as Much as Possible.

In the preamble to the Proposed 111 Rules, EPA explains that many states have adopted binding

policies and programs under their own authorities that have significantly reduced, and will

continue to reduce, CO2 emissions from EGUs. See 88 Fed. Reg. at 33,396. These programs

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include multi-state and regional programs, such as the Regional Greenhouse Gas Initiative

(RGGI). 270

The scope and approach of EPA’s Proposed 111 Rules can differ significantly from the range of

policies and programs employed by states to reduce power sector CO2 emissions, notably

applying to a narrower subset of EGUs within the broader electric power sector. However, there

still may be significant cross-over between the Proposed Rule and myriad state programs. In any

final rule, EPA should signal it intends to approve appropriate existing state programs in a

manner that avoids potential regulatory duplication. This would increase efficiency, reduce

duplicative and/or potentially conflicting regulations between the state and federal level, and

improve cost-effectiveness for owners/operators and customers. To the extent that existing state

programs, even if they are set up differently and utilize alternative mechanisms for compliance

and enforceability, can achieve equivalent reductions as those that would be achieved by unit-

specific standards, satisfying the broader emissions reductions goals of CAA section 111, EPA

should seek to approve those programs. This includes states that use a variety of other low-GHG

“drop in” or replacement fuels in turbines, including biogas, renewable natural gas, ammonia,

and other types of low-GHG fuels that provide significant life cycle carbon benefits while

allowing companies to continue to utilize existing and new turbines to provide grid services.

States should be able to utilize them as part of state plans since several states utilize these fuels

as part of their existing frameworks.

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RGGI, https://RGGI.org (2023).
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At a minimum, EPA should clarify which elements of existing state plans may be presumptively

approvable, or what additional analysis and justification states would need to provide in order to

have EPA approve a state plan including such programs. EPA also can provide additional

avenues for existing programs to be approvable by providing additional compliance flexibilities

more generally—including explicitly authorizing the use of mass-based approaches, trading,

averaging, and others—to the states as discussed supra.

J. EPA Should Provide Clarity Regarding the Definition of System Emergency.

EPA proposes to amend the definition of system emergency in 40 C.F.R part 60, subpart TTTT

and the proposed 40 CFR part 60, subpart TTTTa. That definition includes a provision that

electricity sold during hours of operation when a unit is called upon to operate due to a system

emergency is not counted toward the percentage electric sales subcategorization threshold. See

88 Fed. Reg. at 33,333. In the past, EPA concluded that an exclusion was necessary to provide

flexibility, to maintain system reliability, and to minimize overall costs to the sector. See 80 Fed.

Reg. 64,612. EPA notes that the intent of that the local grid operator would determine which

EGUs are essential to maintain grid reliability, and it solicits comment on whether to amend the

definition of system emergency to clarify how the intent of the grid operator standard would be

implemented. See id.

The current regulatory definition of system emergency is that any “abnormal system condition”

that the RTO/ISO or control area administrator determines requires immediate automatic or

manual action to “prevent or limit loss of transmission facilities or generators that could

adversely affect the reliability of the power system” and therefore call for maximum generation

resources to operate in the affected area, or for the specific affected EGU to operate to avert loss

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of load. The emissions from units that are called on during these “abnormal system condition”

would not count towards the compliance calculation for any individual unit, per EPA. 88 Fed.

Reg. 33,333-34.

EPA should keep this provision and provide additional specificity as to what constitutes an

“abnormal system condition.” EPA should consider using an emergency alert level 2, which is

when an RTO/ISO or local balancing authority requests emergency energy from all resources and

has activated its emergency demand response program. During an emergency alert level 2,

consumers are urged to conserve energy to help preserve grid reliability. This level precedes alert

levels 3 and 4, which occur when a grid operator is unable to meet minimum reliability reserve

requirements and then rotating power outages begin occurring to preserve grid reliability

broadly, respectively. All units operating when an emergency alert level 2 is declared are

working to prevent the abnormal system condition included in EPA’s definition, and EPA should

affirmatively note that those emissions should not negatively impact a unit’s compliance.

Further, since emergency alert levels impact the entire grid, EPA should allow this definition for

all existing coal- and natural gas-based units; when a grid operator or balancing authority calls

on units under an emergency alert level 2, it does not discriminate on which units will be called

on; as a result, EPA should ensure that all types of units, not just Subpart TTTT or Subpart

TTTTa units have the ability to access this provision in the regulations. Such an approach would

help allow units and system operators additional certainty in responding to any reliability events

or issues.

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 VI. EPA Should Clarify Applicability Requirements Across All Three Rulemakings.

EPA should clarify applicability across all three substantive rulemakings to provide specific

direction regarding which set of standards could apply to units. The requested clarifications are

discussed below.

A. EPA Must Clarify Applicability for Existing Coal-Based EGUs.

For existing coal-based units, EPA appears to allow states and unit owners/operators choose

among the various retirement subcategories. However, once a selection is made, and the

retirement comments are made federally enforceable via its inclusion in an approved state plan, it

is not clear how changes to the planned retirement date could be effectuated. EPA should clarify

how units might move between categories to address changing conditions to accommodate both

earlier and later retirements.

As a corollary, and as discussed supra, EPA should simplify the increments of progress

requirements to maximize the potential for units to move between subcategories. There is the

possibility that the increments of progress and/or milestone requirements, as proposed, could

limit the ability to change subcategory classification.

EPA also proposes an applicability definition of “coal-fired steam generating unit” in proposed

section 60.5880b holding that the existing source guidelines apply to any unit that meets the

definition of “fossil fuel-fired” and that burns coal for more than 10.0 percent of the average

annual heat input during the three calendar years prior to January 1, 2030, or for more than 15.0

percent of the annual heat input during any one of those calendar years, or that retains the

capability to fire coal after December 31, 2029. This look back provision for units to be “coal-

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fired steam generating units” based on their heat input in years 2027- 2029 may be overly

restrictive, as units that could convert to steam-gas units or utilize alternative fuels might be able

to do so prior to 2030. EPA’s proposed definition, however, essentially mandates that those

conversions occur by 2027 (or maybe 2028, depending on unit operations) to avoid being

classified as a coal-fired steam generating units. This may impede units from reducing emissions

by switching fuels and could act as an incentive to continue the use of coal as opposed to

investing in the development of other fuels, like natural gas or biomass. EPA should make it clear

that this applicability element does not apply to any unit that makes such a conversation prior to

2030.

B. EPA Must Clarify Applicability for New and Existing Natural Gas-Based
Turbines.

The Agency also should clarify applicability requirements for new natural-gas based units,

particularly between intermediate and low-load units, but also across all three standards phases.

As discussed, supra, the capacity factor restriction requirements in the Agency’s proposed NSPS

for gas-based units is a complex, unit-specific inquiry based on heating value and overall

capacity factor. Given the widely varying requirements in terms of emissions rates and

potentially phased standards for new gas-based units, EPA needs to provide clarity around how

units are determined to be low load, intermediate load or base load. In particular, the Agency

should provide clarity regarding the demarcation between the low and intermediate load natural

gas-based units, since intermediate-load units would be subject to potential phased standards

including hydrogen blending while the low-load units would not have the same requirements.

See 88 Fed. Reg. 33,244. As currently proposed, it is not clear how applicability of sources

would function as a practical matter with compliance—e.g., applicability for each subcategory is

determined on an annual basis on a unit-by-unit analysis, while compliance with EPA’s standard

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for new units is measured on a 12-month rolling average. EPA should address this discrepancy

and provide clarity regarding how applicability and compliance can be synchronized in order for

sources to practically comply with EPA’s standards. 271

Finally, EPA should clarify to which existing natural gas-based units the Agency’s proposal

applies. EPA proposes that the existing source guidelines would apply to “large (i.e., greater than

300 MW), frequently operated (i.e., with a capacity factor of greater than 50 percent), existing …

stationary combustion turbines.” Id. at 33,245. EPA should state that the determination of

whether a unit is subject to regulation under the proposed standards is based on actual utilization

greater than 50 percent capacity factor, and not a unit’s ability to operate at capacity factors of at

least 50 percent. If applicability is based on ability to operate at capacity factors of at least 50

percent, the proposed standards would apply to a much larger subset of units as ability to operate

is much greater than actual operations. EPA’s intent appears to have been to take a more limited

approach to applicability and should thus make the requested clarification as it is consistent with

EPA’s approach.

More importantly, EPA must specify whether the determination of the applicable subcategory for

an existing natural gas-based turbine is a one-time test or whether there would there be an

ongoing obligation to evaluate the annual capacity factor and potentially reclassify a unit if the

capacity factor changes such that a different subcategory would apply. Constant re-evaluation

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EPA also proposes to exempt EGUs “not capable of combusting natural gas (e.g., not
connected to a natural gas pipeline)” as part of its proposal at 40 C.F.R. section 60.5509(b)(8).
This exemption is well founded and warranted, especially for EEI members that cannot be
connected to a natural gas system, like those in isolated or island locations. EPA should retain
and finalize this provision.
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would be labor intensive for unit owners/operators and the state air quality regulators who would

be required to make such assessments. It also would provide little operating certainty.

Accordingly, EPA should take the approach that applicability determinations are final once made

or, at minimum, should leave such determination up to the discretion of the state regulator.

VII. Conclusion.

EEI Looks forward to working with EPA to finalize a defensible and implementable set of

section 111 rulemakings. The Proposed 111 Rules are an important piece of the regulatory

framework that can either support or hinder the power sector’s continuing clean energy

transformation. EPA must ensure that the Proposed 111 Rules work on their own, work with each

other, work with the rest of EPA’s holistic approach to regulation, and—critically—work within

the entire regulatory, legislative and economic context within which the power sector operates at

the federal and state levels. EEI appreciates the engagement with EPA staff regarding this

rulemaking. Questions on these comments may be directed to Alex Bond (202-508-5523).

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