Agenda Item II-1_PowerPoint_GHG EGU EG

Department of Environmental Quality
Emission Guidelines for Control of Greenhouse Gas Emissions from Power Plants (565)
Air Quality Committee Meeting –July 10, 2024
Acronyms/Initialisms
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Department of Environmental Quality
Abbr.Term Abbr.Term
40 CFR Title 40 of the Code of Federal Regulations EG Emission Guidelines
ACE Affordable Clean Energy Rule EGU Electricity generating unit
AQC Air Quality Committee EMC Environmental Management Commission
BSER Best System of Emission Reduction EPA United States Environmental Protection Agency
CAA Clean Air Act FR Federal Register
CCS Carbon capture and sequestration/storage GHG Greenhouse Gases
CO2 Carbon dioxide HRI Heat Rate Improvement
CPIRP Carbon Plan Integrated Resource Plan NCUC North Carolina Utilities Commission
CPP Clean Power Plan RIA Regulatory Impact Analysis
DAQ Division of Air Quality RULOF remaining useful life and other factors
DEC Duke Energy Carolinas NSPS New Source Performance Standards
DEP Duke Energy Progress
BackgroundHistory of Electric Utility Generating Unit Part 60 Standards
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Department of Environmental Quality
•In 2015, the EPA promulgated New Source Performance Standards (NSPS) for Electric Utility
Generating Units (EGUs) in 40 CFR Part 60, Subpart TTTT for the control of greenhouse gases
(GHG) from affected facilities.
•Established CO2 emission standards for new, modified, and reconstructed steam
generating units and stationary combustion turbines.
•EPA identified the Best System of Emission Reduction (BSER) as partial carbon capture
and storage.
•In the same action, the EPA promulgated Emission Guidelines (EGs) for existing EGUs in 40
CFR Part 60, Subpart UUUU for the control of GHGs from designated facilities, which was
known as the Clean Power Plan (CPP).
•Established guidelines for States to develop standards of performance for existing steam
generating units and stationary combustion turbines.
•EPA identified BSER as state-specific goals for reducing CO2 emissions, and required
States to develop a plan, including necessary rules, to meet those goals.
The CPP was stayed by the Court in 2016.
BackgroundHistory of Electric Utility Generating Unit Part 60 Standards
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Department of Environmental Quality
In 2019, the EPA finalized the following:
•Repeal of the CPP;
•Revisions to the Emission Guidelines Implementing Regulations under 40 CFR Part 60,
Subpart Ba.
•New EG for GHGs from existing EGUs under 40 CFR Part 60, Subpart UUUUa, known as
the Affordable Clean Energy (ACE) Rule.
•In the ACE Rule, the EPA identified BSER as heat rate improvement (HRI) through
application of seven specific HRI candidate technologies.
•The ACE Rule was stayed by the Court in January 2021.
BackgroundHistory of Electric Utility Generating Unit Part 60 Standards
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Department of Environmental Quality
•On May 23, 2023, the EPA proposed five separate actions for GHG emissions from
fossil-fired EGUs.
•Repeal of the ACE Rule
•NSPS for new stationary combustion turbines and NSPS for fossil fuel-fired steam
generating units undertaking large modification.
•New EG for existing coal-fired and oil/gas-fired steam generating units and EG for existing
large combustion turbines.
•On May 9, 2024, the EPA finalized four of the proposed five actions.
•Repeal of the ACE Rule.
•Finalized the NSPS for new stationary combustion turbines.
•Finalized the NSPS for coal-fired steam generating units undertaking large modification.
•Finalized the EG for existing coal-fired and oil/gas-fired steam generating units.
The EPA intends to take final action on existing combustion turbines at a later time.
Emission Guidelines for Existing Coal Steam Generating EGUs
EPA finalized three subcategories (based on the operating horizon of unit)
1.Near-term – EGUs that plan to permanently cease operations prior to
January 1, 2032
•No emission control obligations under the rule
2.Medium-term - EGUs that plan to operate beyond January 1, 2032,
and permanently cease operations prior to January 1, 2039
•BSER: meet CO2 emission limit equivalent to 40% co-firing with
natural gas by Jan. 1, 2030
3.Long-term – EGUs that plan to operate past January 1, 2039
•BSER: meet CO2 emission limit equivalent to 90% carbon capture
and sequestration/storage (CCS) by Jan. 1, 2032
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Department of Environmental Quality
Final Emission Guidelines for Existing Steam Generating Units
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Department of Environmental Quality
Coal-
Fired
Natural Gas
and Oil-Fired
Long-Term Units
Operating on or after
Jan. 1, 2039
Medium-Term Units
Operating on or after
Jan. 1, 2032 and plan
to permanently cease
operation before
Jan. 1, 2039
BSER: Co-firing 40% natural
gas by Jan. 1, 2030
equivalent emission
limitation of 16% reduction
in CO2 emission rate
2030 2032
BSER: CCS with 90% capture
by Jan. 1, 2032
equivalent emission limitation
of 88.4% reduction in CO2
emission rate
BSER: Routine methods of
operation and maintenance,
and no increase in emission
rate by Jan. 1, 2030
Compliance DateSubcategory
North Carolina HB 951/Carbon PlanOverview
•HB 951 requires the North Carolina Utilities Commission (NCUC) to take “all
reasonable steps” to achieve 70% carbon emission reductions from 2005 levels by
2030 and achieve carbon neutrality by 2050.
•The Carbon Plan Statute directs the NCUC to review the plan every two years after
the adoption of the Initial Carbon Plan and evaluate the portfolios against four
objectives: 1) CO2 Reduction, 2) Affordability, 3) Reliability, and 4) Executability.
•On August 17, 2023, Duke Energy filed its proposed 2023 Carbon Plan and
Integrated Resource Plan (CPIRP), which included three core portfolios, thirteen
portfolio variants, and ten sensitivity analysis portfolios.
•On January 17, 2024, Duke Energy revised the CPIRP based on their updated 2023
fall load forecast.
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Department of Environmental Quality
CPIRP Coal Unit Retirement Schedule
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Department of Environmental Quality
CPIRP Retirement Dates
Category by Pathway (based on January 2024 update)
Operator Power Plant Unit
ID
Nameplate
Capacity
(MW)
Pathway 1 Pathway 2 Pathway 3
Near-
Term
Medium-
Term
Long-
Term
Near-
Term
Medium-
Term
Long-
Term
Near-
Term
Medium-
Term
Long-
Term
DEC G.G. Allen 1 163.2 2025 2025 2025
5 272.0 2025 2025 2025
DEC Belews Creek 1 1,245.6 2030 2036 2036
2 1,245.6 2030 2036 2036
DEC Complex (Cliffside)
5 621.0 2029 2031 2031
6 909.5 2049 2049 2049
DEC Marshall
1 348.5 2029 2029 2029
2 348.5 2029 2029 2029
3 711.0 2034 2032 2032
4 711.0 2034 2032 2032
DEP Mayo 1 763.2 2031 2031 2031
DEP Roxboro
1 410.8 2029 2029 2029
2 657.0 2029 2029 2034
3 745.2 2033 2033 2034
4 745.2 2033 2033 2029
# Units 10 4 1 10 4 1 10 4 1
What are North Carolina’s CAA obligations?
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Department of Environmental Quality
•NSPS promulgated under CAA Section 111(b) are directly applicable to facilities and automatically
incorporated via Rule 02D .0524; but
•EGs promulgated under CAA Section 111(d) are not directly applicable to facilities; instead, EGs
specify requirements for States, Locals, and Tribal Air Agencies to develop standards that apply to
designated facilities within their jurisdiction.
•The final EG gives states two years after the effective date of the rule to develop and submit
their plans to EPA for reducing GHG from existing sources (i.e., “State Plans”).
•May take into account remaining useful life and other factors (RULOF) when applying standards
of performance to individual existing sources.
•States must follow requirements of the State Plan Implementing Regulations codified at 40 CFR
Part 60, Subpart Ba, which were revised on November 17, 2023.
Emission Guidelines Procedures
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Department of Environmental Quality
Three steps:
1)EPA identifies the BSER for existing sources within source category;
2)States establish standards of performance for designated facilities within their jurisdiction based on application of BSER;
•NC codifies the standards in State Rule(s); and
•DAQ will incorporate the State Rule(s) into a State Plan for submittal to EPA.
3)Regulated sources comply with the standards using either BSER or non-BSER methods.
The State Plan must demonstrate that the state’s standards of performance meet the equivalency criteria specified in the EG (40 CFR § 60.5775b(a)(1) – (6)) when compared to the presumptive standards of performance in EG UUUUb.
Meaningful Engagement
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Department of Environmental Quality
•Under 40 CFR § 60.23a(i), the State Plan must include documentation of
meaningful engagement, including a list of identified pertinent stakeholders
and/or their representatives, a summary of the engagement conducted, and a
summary of stakeholder input and how it was considered in the development
of the plan.
•Stakeholders include, but are not limited to, industry, small business, and
communities most affected by and/or vulnerable to the impacts of the state
plan.
•DAQ is holding discussions with the DEQ Public Affairs Office on outreach
recommendations.
Current Status and Next Steps
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Department of Environmental Quality
Currently, DAQ is:
•Reviewing the final EG and State Plan implementing regulations;
•Determining data needs to begin analysis; and
•Planning outreach and meaningful engagement.
Next Steps:
•Draft rule(s) and fiscal note/regulatory impact analysis (RIA); and
•Conduct outreach to stakeholders affected by the rulemaking.
Department of Environmental Quality
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EGU GHG Emission Guidelines
Tentative Rulemaking Timeline (Subject to Change)

July 2024 Concept to Air Quality Committee (AQC)
November 2024 Draft Rules to AQC
January 2025 Request to Environmental Management Commission (EMC) to Proceed to Comment and Hearing
February 2025 - April 2025 Public Comment Period and Hearing
July 2025 Adoption by EMC
August 2025 Rules Review Commission Approval
September 2025 Tentatively Effective
Contact
Department of Environmental Quality
Bradley Nelson
Rule Development Branch
NC Division of Air Quality
919 707 8705 office
[e-mail]
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Katie Quinlan, EIT
Rule Development Branch Supervisor
NC Division of Air Quality
919 707 8702 office
[e-mail]
Randy Strait
Planning Section Chief
NC Division of Air Quality
919 707 8721 office
[e-mail]
Department of Environmental Quality
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