On June 2, 2014, EPA proposed performance standards for CO2 emissions from modified and reconstructed fossil-fired and natural gas-fired power plants pursuant to § 111(b) of the Clean Air Act. The proposal is designed to work in conjunction with EPA’s proposed CO2 emission guidelines for existing power plants. However, the proposed rule would not apply to sources constructed for the purpose of supplying one-third or less of their potential output and 219,000 MWh or less to the grid per year.

EPA has proposed that the best system of emission reduction (“BSER”) for modified fossil-fired utility boilers and integrated gasification combined cycle (“IGCC”) units is each unit’s own best potential performance based on a combination of best operating practices and equipment upgrades. EPA proposed two alternative standards for such units: (1) a unit-specific emission limit based on the source’s best demonstrated historical performance (in the years from 2002 to the time of the modification), plus 2% emission reduction, or (2) a unit-specific numeric emission standard dependent on the timing of the modification relative to the adoption of a § 111(d) plan that covers the source. Under the second alternative, sources that modify prior to becoming subject to a § 111(d) plan would be required to meet the same standard described in the first alternative, while sources that modify after becoming subject to a § 111(d) plan would be required to meet a unit-specific emission limit that would be determined by the § 111(d) implementing authority from the results of an energy efficiency improvement audit, along with the requirements of the § 111(d) plan.

EPA has proposed efficient natural gas combined cycle (“NGCC”) technology as BSER for modified and reconstructed natural-gas fired units. The emission limits proposed for both types of sources are 1,000 lb CO2/MWh-gross for sources with heat input ratings greater than 850 MMBtu/hr, and 1,100 lb CO2/MWh-gross for sources with heat input ratings of 850 MMBtu/hr or less. In addition, the source must continue to meet the requirements of any § 111(d) plan approved prior to the modification or reconstruction.

For reconstructed fossil-fired utility boilers and IGCC units, EPA proposed as BSER the most efficient generating technology at the affected source. The proposed emission limits are 1,900 lb CO2/MWh-net for sources with a heat input rating of greater than 2,000 MMBtu/hr, or 2,100 lb CO2/MWh-net for sources with a heat input rating of 2,000 MMBtu/hr or less. A reconstructed source subject to an approved § 111(d) plan would remain subject to those requirements after the reconstruction.

EPA will accept comment on this proposal for 120 days after publication in the Federal Register and will hold four public hearings on the proposed standards for modified and reconstructed sources during the week of July 28th in Denver, Atlanta, Washington, D.C., and Pittsburgh.