As  required or authorized by these laws, EPA recently proposed or finalized  four key regulations that will affect coal-fueled units. In addition to these four regulations, on June 2, 2014, EPA proposed new  regulations to reduce carbon dioxide emissions from existing fossil-fueled  generating units that, if finalized, will impact the electricity industry,  including coal-fueled generating units, aiming for overall reductions  equivalent to 30 percent from 2005 emissions levels by 2030. DOE, EPA, and FERC Are Coordinating Efforts to Monitor Industry’s Response to Key EPA Regulations in Response to GAO’s Recommendation

DOE, EPA, and FERC have taken initial steps to implement the  recommendation we made in our July 2012 report that these agencies  develop and document a formal, joint process to monitor industry  progress in responding to the four EPA regulations. As such, we recommended that these  agencies develop and document a formal, joint process to monitor  industry progress in responding to EPA regulations. We concluded that  such a process was needed until at least 2017 to monitor the complexity  of implementation and extent of potential effects on price and reliability. Since that time, DOE, EPA, and FERC have taken initial steps collectively  to monitor industry progress responding to EPA regulations including  jointly conducting regular meetings with key industry stakeholders. Currently, these monitoring efforts are primarily focused on industry  implementation in regions with a large amount of capacity that must  comply with the MATS regulation—the only one of the four regulations  that has taken effect. Agency officials and  stakeholders told us that state agencies are generally providing the 1- year extension for generating units—providing these units a total of 4  years to comply. Recent and Pending Actions on Regulations May Require Additional Efforts to Monitor Industry’s Progress

Recent and pending actions on the four existing regulations, as well as  EPA’s recently proposed regulations to reduce carbon dioxide emissions  from existing generating units, may require additional agency effort to  monitor industry’s progress in responding to the regulations and any  potential impacts on reliability. DOE, EPA, and FERC officials told us that,  in light of these changes, their coordination efforts may need to be  revisited. Power Companies Plan to Retire More Generating Capacity and Retrofit Less Generating Capacity Than Initial Estimates

According to our analysis, power companies plan to retire a greater  percentage of coal-fueled net summer generating capacity and retrofit  less capacity with environmental controls than the estimates we reported  in July 2012. Specifically, our analysis indicates that power companies  retired or plan to retire about 13 percent of coal-fueled net summer  generating capacity (42,192 MW) from 2012 through 2025, which  exceeds the estimates of 2 to 12 percent of capacity we reported in 2012. In addition, power companies have planned or completed some type of  retrofit on about 70,000 MW of net summer generating capacity to reduce  SO, NO, or particulate matter from 2012 through 2025, which is less  than estimates we reported in 2012. 1). In addition, we found that many of the units that  companies have retired or plan to retire are those that are not used  extensively and are geographically concentrated, with some exceptions. Smaller. However, some larger generating units are also planned  for retirement. More polluting. 2). Specifically, about 38 percent of the net summer  generating capacity that power companies retired or plan to retire  from 2012 through 2025 is located in four states—Ohio (14 percent),  Pennsylvania (11 percent), Kentucky (7 percent), and West Virginia (6  percent). Agency Comments and Our Evaluation

We are not making new recommendations in this report. We continue to believe it is important that these agencies jointly  monitor industry’s progress in responding to the EPA regulations and fully  document these steps as we recommended in 2012.
Why GAO Did This Study

EPA recently proposed or finalized four regulations affecting coal-fueled electricity generating units, which provide about 37 percent of the nation's electricity supply. These regulations are the: (1) Cross-State Air Pollution Rule; (2) Mercury and Air Toxics Standards; (3) Cooling Water Intake Structures regulation; and (4) Disposal of Coal Combustion Residuals regulation. In 2012, GAO reported that, in response to these regulations and other factors such as low natural gas prices, companies might retire or retrofit some units. GAO reported that these actions may increase electricity prices and, according to some stakeholders, may affect reliability–the ability to meet consumers' demand—in some regions. In 2012, GAO recommended that DOE, EPA, and FERC develop and document a formal, joint process to monitor industry's progress responding to these regulations. In June 2014, EPA proposed new regulations to reduce carbon dioxide emissions that will also affect these units.
GAO was asked to update its 2012 report. This report examines (1) agencies' efforts to respond to GAO's recommendation and (2) what is known about planned retirements and retrofits. GAO reviewed documents, analyzed data, and interviewed agency officials and stakeholders.

What GAO Found

The Department of Energy (DOE), the Environmental Protection Agency (EPA), and the Federal Energy Regulatory Commission (FERC) have taken initial steps to implement a recommendation GAO made in 2012 that these agencies develop and document a joint process to monitor industry's progress in responding to four proposed or finalized EPA regulations affecting coal-fueled generating units. GAO concluded that such a process was needed until at least 2017 to monitor the complexity of implementation and extent of potential effects on price and reliability. Since that time, DOE, EPA, and FERC have taken initial steps to monitor industry progress responding to EPA regulations including jointly conducting regular meetings with key industry stakeholders. Currently, these monitoring efforts are primarily focused on industry's implementation of one of four EPA regulations—the Mercury and Air Toxics Standards—and the regions with a large amount of capacity that must comply with that regulation. Agency officials told GAO that in light of EPA's recent and pending actions on regulations including those to reduce carbon dioxide emissions from existing generating units, these coordination efforts may need to be revisited.
According to GAO's analysis of public data, power companies now plan to retire a greater percentage of coal-fueled generating capacity and retrofit less capacity with environmental controls than the estimates GAO reported in July 2012. About 13 percent of coal-fueled generating capacity—42,192 megawatts (MW)—has either been retired since 2012 or is planned for retirement by 2025, which exceeds the estimates of 2 to 12 percent of capacity that GAO reported in 2012 (see fig.). The units that power companies have retired or plan to retire are generally older, smaller, more polluting and not used extensively, with some exceptions. For example, some larger generating units are also planned for retirement. In addition, the capacity is geographically concentrated in four states: Ohio (14 percent), Pennsylvania (11 percent), Kentucky (7 percent), and West Virginia (6 percent). GAO's analysis identified about 70,000 MW of generating capacity that has either completed some type of retrofit to reduce sulfur dioxide, nitrogen oxides, or particulate matter since 2012 or plan to complete one by 2025, which is less than the estimate of 102,000 MW GAO reported in 2012.

What GAO Recommends

GAO is not making new recommendations but believes it is important that these agencies jointly monitor industry progress and fully document these steps as GAO recommended in 2012. The agencies concurred with GAO's findings.