	Introduction

In June 2014, the Environmental Protection Agency (EPA) published a proposed rule that would require states to address carbon dioxide (CO 2 ) emissions from existing fossil fuel-fired electric generating units. The proposal creates CO 2 emission rate goals—measured in pounds of CO 2 emissions per megawatt-hour (MWh) of electricity generation—for each state to achieve by 2030 and an interim goal in 2029, based on the average of a state's emission rates between 2020 and 2029. A state might consider using a mass-based target for a variety of reasons, including the opportunity to link with existing mass-based programs (e.g., the Regional Greenhouse Gas Initiative) or to continue existing, state emission reduction goals. This report indicates that the mass-based reduction requirements may be less stringent in some states than the emission rate requirements. Conversion to Mass-Based Targets

EPA's November 2014 support document describes two approaches states could use to convert their emission rate targets to mass-based targets. With each approach, EPA prepared state-specific mass-based targets, which, according to EPA, "could be considered equivalent to the proposed rate-based goals." To convert a rate target to a mass-based target, a state would need an annual estimate of its electricity generation in future years (i.e., 2020-2029). Approach 1: Existing Sources

EPA's first mass-based conversion approach uses (1) the 2012 baseline data—emissions and electricity generation—for each state's fossil fuel fleet and (2) specific results from parts of the emission rate building blocks to calculate future electricity generation. The example provided below demonstrates how EPA projected the state-specific electricity generation levels for 2029.
i. EPA determined the electricity generation from "affected electric generating units" in 2012; in general, an "affected EGU" is a fossil fuel-fired unit that was in operation or had commenced construction as of January 8, 2014, has a generating capacity above a certain threshold, and sells a certain amount of its electricity generation to the grid; this value serves as the electricity generation baseline; EPA used the same data that were provided with the emission rate methodology supporting materials;
ii. Approach 2: Existing and New Sources

EPA's second mass-based conversion approach is based on both historical emissions from existing sources (i.e., approach 1) and projected emissions from certain new, fossil fuel-fired electricity generation sources, particularly NGCC units. As with the emission rate reduction requirements, the mass-based reduction targets (calculated by EPA) vary by state. Emission Rate Targets

For the vast majority of states, the percentage reductions (between the 2012 baseline and 2030 targets) required by the emission rates match those required by the mass-based targets EPA created using approach 1 (existing sources). However, in some cases the percentage reductions differ. The reason for the percentage differences in these states relates to EPA's treatment of NGCC units that are under construction. In EPA's mass-based conversion methodology, the agency includes under-construction NGCC units in the 2012 fossil fuel-fired generation baseline. However, in the emission rate methodology the generation from these units is not included in the 2012 baseline. All of the states have lower percentage reduction requirements than those in approach 1 (existing sources only), because approach 2 includes projected increases of electricity generation. However, the range of percentage reduction requirements varies considerably. Several factors help explain the range of percentage reduction requirements that result from approach 2. First, as discussed above, the methodology in this approach uses a regional growth factor to project electricity demand in future years. These growth factors vary significantly—from 0.29% in the Northeast region to 1.31% in the Southwest region. Second, EPA uses electricity sales data in 2012 to calculate future electricity demand. The 2012 sales data include electricity generation from all sources, including hydroelectricity. The different accounting mechanisms appear to have an impact in states that generate a significant percentage of electricity generation from hydropower (e.g., Idaho, Washington, Oregon).
The Environmental Protection Agency (EPA) proposed a rule in June 2014 that would require states to address carbon dioxide (CO2) emissions from existing fossil fuel-fired electric generating units. The proposal would create CO2 emission rate goals—measured in pounds of CO2 emissions per megawatt-hour (MWh) of electricity generation—for each state to achieve by 2030 and an interim goal in 2029, based on the average of a state's emission rates between 2020 and 2029.
EPA's proposal would allow a state to establish its emission reduction requirements by converting the interim (2029) and final (2030) emission rate targets to mass-based targets—measured in metric tons of CO2. A state might consider using a mass-based target for a variety of reasons, including the opportunity to link with existing mass-based programs or to continue existing, state emission reduction goals. In addition, this report indicates that the mass-based reduction requirements may be less stringent in some states than the emission rate requirements.
In November 2014, EPA provided technical information to help states with this conversion process. Converting to a mass-based target requires an estimate of electricity generation in future years (i.e., 2020-2029). EPA's November 2014 support document provides two possible approaches for creating such estimates. With each approach, EPA prepared state-specific mass-based targets, which, according to EPA, "could be considered equivalent to the proposed rate-based goals."
The first approach uses (1) 2012 baseline data—emissions and electricity generation—for each state's fossil fuel fleet and (2) specific results from parts of the emission rate methodology to calculate future electricity generation. The second approach is based on both historical emissions from existing sources and projected emissions from new, fossil fuel-fired electricity generation sources. To project emissions from new sources, EPA applied specific regional growth factors prepared by the Energy Information Administration.
This report compares the required percentage reductions (between the 2012 baseline and 2030 targets) using the emission rate targets to the percentage reductions using the mass-based targets (approach 1). As with the emission rate reduction requirements, the mass-based reduction targets vary by state. For the majority of states, the percentage reductions required by the emission rates match those required by the mass-based approach. However, the required reductions differ in some cases.
This report examines the reasons for these differences. For example, in nine states the differences relate to EPA's treatment of natural gas combined cycle (NGCC) units that are under construction. In EPA's mass-based conversion methodology, the agency includes under-construction NGCC units in the 2012 fossil fuel-fired generation baseline. However, in the emission rate methodology the generation from these units is not included in the 2012 baseline. This leads to different percentage reduction requirements. In four other states, the differences are related to EPA's treatment of renewable energy in its emission rate methodology.
In addition, this report compares the percentage reduction requirements resulting from mass-based approaches 1 and 2. As one might expect, all of the states have lower percentage reduction requirements in approach 2 than in approach 1, because approach 2 includes projected increases in electricity generation. However, the range of requirements varies considerably. Several factors may explain this outcome. For instance, the regional growth factors used to project electricity demand in future years vary significantly—from 0.29% in the Northeast region to 1.31% in the Southwest region. In addition, EPA uses electricity sales data in 2012 to calculate future electricity demand, and the sales data contain electricity generation from all sources, including hydroelectric power. Including hydroelectric power appears to have a substantial impact in states that use it to generate a significant percentage of their electricity.