SC Energy Stakeholder Group

1. SC Energy Stakeholder Group January 7, 2014

2. Timeline Comparison for Carbon Pollution Rules Carbon Pollution Rules for New Power Plants: 111(b) 03/27/12 04/13/12 06/25/13 09/20/13 ? ? _____________________________________________________________________________________________________________________EPA Proposed EPA Issued President EPA withdraws Publication in Comment 111(b) for 111(b) Proposal announces 111(b) previous Federal Register Period new power --2.5 million carbon plan proposal & issues plants comments new 111(b) proposal for comment after publication in FR Carbon Pollution Rules for Existing Power Plants: 111(d) 06/25/13 Fall 2013 12/2013 06/01/14 06/1/15 06/01/2016 _____________________________________________________________________________________________________________________President EPA holds EPA to begin Target date Target date EPA to include announces listening sessions drafting 111(d) for EPA to issue for EPA to issue requirement for carbon plan with states & other guidance proposed carbon final carbon 111(d) in states’ SIP stakeholders pollution standards pollution standards submittals & guidelines & guidelines

3. No Shortage of Comments and Suggestions for 111(d) Guidance to EPA June 25, 2013- President Obama issued memorandum to EPA for the purpose of addressing carbon pollution for modified, reconstructed, and existing power plants July 2013- Resources for the Future (RFF): Technology Flexibility and Stringency for Greenhouse Gas Regulations October 22, 2013- Greenhouse Gas Policy Implications for Kentucky under Section 111(d) of the Clean Air Act November 2013- Resources for the Future (RFF): State and Fuel-Specific Benchmarks for Greenhouse Gas Performance Standards November 5, 2013- ECOS Joint Letter November 5, 2013- South Carolina Listening Session with EPA Representatives November 15, 2013- Congress of the United States, House of Representatives, Committee on Energy and Commerce (Letter to The Honorable Gina McCarthy) November 21, 2013- Environmental Defense Fund (EDF) Voices: People on the Planet--Setting the record straight: EPA has ample authority to protect us from carbon pollution December 2,2013- RGGI Comment Letter, “Emission Standards Under Clean Air Act Section 111(d)” Sent to Administrator McCarthy December 16, 2013- States’ §111(d) Implementation Group Input to EPA on Carbon Pollution Standards for Existing Power Plants.

4. 15 States’ Section 111(d) Implementation Group Input to EPA States that would have further to go to meet the carbon intensity target could have longer compliance times to meet the common goal (Glide Path). EPA should provide for a mass-based emission budget compliance option, either by articulating the standard as a mass-based emission budget, or providing a mechanism for translating from a rate-based standard to a mass-based emission budget. Programs that include averaging and trading inherently take into account remaining useful life, as they allow market participants to make decisions about operations based on market prices. EPA should ensure that its federal framework provides states with the option of incorporating their current programs with minimal change or burden as long as they achieve equivalent reductions. EPA should help develop model State Plans in collaboration with states or making clear that model State Plans developed by states are approvable. EPA’s guidelines should recognize the regional nature of electrical grids by allowing participating states to demonstrate compliance with Section 111(d) guidelines on a regional basis. EPA should recognize a state’s portfolio plan may demonstrate that its collection of programs can collectively achieve the emissions reductions required by EPA’s Section 111(d) guidelines.

5. What are your thoughts? • Flexibility • Rate based with option for mass • Base Year Date or option for Glideslope • Trading Program

6. Questions for EPA • EPA “private” meetings with industry? • NACAA 111(b) and 111(d) comments? • In FR yet?

7. SC Principles & Next Steps • Consensus of Points • Share with EPA • Meet with Environmental Group and Community Groups Stakeholders

8. 1) Ensure a common sense approach in the development of federal rules by continuing to be engaged in federal rulemaking, and when possible, enable stakeholders to have a ‘seat at the table’ in developing national policy.   2) Provide maximum flexibility in its approach to the development and implementation of federal GHG rules at the state level. 3) Eliminate regulatory barriers in the implementation of federal rules that might hamper the development of a statewide policy. For example, the power industry does not need the GHG rule to mandate its dispatch processes. 4) Promote the most cost-effective, sensible, and best state-specific system of emission reductions and approaches to federal rules and requirements. 5) Focus on a program/strategy that relies on meaningful and cost-effective, system-wide GHG emission reductions compared to a relative baseline year. 6) Ensure that the GHG reduction goals set are based on a state’s actual system-wide emission reduction efforts. 7) Identify resources and tools to enable states to determine and implement the best strategies to meet the needs of its power generation, economy, and citizens. 8) Provide clear criteria for approval of state plans and re-assess the timeframe to allow for the adequate development of state plans (under CAA Section 111(d)) to include state rulemaking laws and federal requirements for public notice and comment.   9) Recognize that South Carolina is ranked high among states for clean energy use (5th) and Leadership in Energy and Environmental Design (LEED) for building space per capita (top 10). Credit should be available in the Emissions Guidance for existing state initiatives achieving quantifiable reductions through, for example, energy efficiency, demand response, pollution controls, lower emitting fuels, and clean energy investments, specifically nuclear capacity. 10) Understand South Carolina’s unique economic challenges. For example, South Carolinians are 50% more likely to live below the poverty line. In some months, many state residents can spend 60-80% of income on energy and South Carolina ranks 7th in cooling degree days per year. While ensuring a safe, secure, and predictable energy future, EPA should recognize individual state characteristics and not place undue economic hardships on its citizens, businesses, manufacturing or industrial sectors.

9. Questions