To enact section 3704.20 of the Revised Code to require the Director of Environmental Protection to adopt rules establishing standards of performance for carbon dioxide emissions from existing coal-fired and natural gas-fired electric generating units and to specify factors on which the standards must be based.

Section 1. That section 3704.20 of the Revised Code be enacted to read as follows:

Sec. 3704.20.  (A) If the United States environmental protection agency adopts regulations or issues guidelines for reducing carbon dioxide emissions from existing coal-fired or natural gas-fired electric generating units under section 111(d) of the federal Clean Air Act, the director of environmental protection, in accordance with Chapter 119. of the Revised Code, shall adopt rules establishing standards of performance for carbon dioxide emissions from existing coal-fired electric generating units in compliance with division (B) of this section and from existing natural gas-fired electric generating units in compliance with division (C) of this section to the maximum extent permissible under the United States environmental protection agency regulations or guidelines.

(B) Except as provided in division (D) of this section, standards of performance for existing coal-fired electric generating units shall be based on all of the following:

(1) The best system of emission reduction that, taking into account the cost of achieving that reduction and any non-air quality health and environmental impact and energy requirements, has been adequately demonstrated for coal-fired electric generating units that are subject to the standards of performance;

(2) Reductions in emissions of carbon dioxide that can reasonably be achieved through measures undertaken at each coal-fired electric generating unit;

(3) Efficiency and other measures that can be undertaken at each coal-fired electric generating unit to reduce carbon dioxide emissions from the unit without changing from coal to other lower-carbon fuels, co-firing other fuels with coal, or limiting the economic utilization of the unit.

(C) Except as provided in division (D) of this section, standards of performance for existing natural gas-fired electric generating units shall be based on all of the following:

(1) The best system of emission reduction that, taking into account the cost of achieving that reduction and any non-air quality health and environmental impact and energy requirements, has been adequately demonstrated for natural gas-fired electric generating units that are subject to the standards of performance;

(2) Reductions in emissions of carbon dioxide that can reasonably be achieved through measures undertaken at each natural gas-fired electric generating unit;

(3) Efficiency and other measures that can be undertaken at each natural gas-fired electric generating unit to reduce carbon dioxide emissions from the unit without changing from natural gas to other lower-carbon fuels or limiting the economic utilization of the unit.

(D) In establishing a standard of performance for an existing coal-fired or natural gas-fired electric generating unit, the director shall consider whether to adopt less stringent standards or longer compliance schedules than those established in applicable federal regulations or guidelines based on all of the following:

(1) Consumer impacts, including any disproportionate impacts of energy price increases on lower income populations;

(2) Unreasonable costs of reducing emissions resulting from plant age, location, or basic process design;

(3) Physical difficulties with or the impossibility of implementing emission reduction measures;

(4) The absolute cost of applying the performance standard to the unit;

(5) The expected remaining useful life of the unit;

(6) Impacts of closing the unit, including economic impacts such as expected job losses, if the unit is unable to comply with the performance standard;

(7) Impacts on the reliability of the state's electrical grid;

(8) All actual reductions in carbon dioxide emissions beginning January 1, 2005;

(9) Any other factors specific to the unit that make application of a less stringent standard or longer compliance schedule more reasonable.

(E) The director may implement, to the maximum extent permissible, the standards of performance established in rules adopted under this section through mechanisms that provide flexibility in complying with the standards.

(F) Any plan establishing standards of performance for existing coal-fired or natural gas-fired electric generating units developed under this section shall be prepared in consultation with the public utilities commission of Ohio created in Chapter 4901. of the Revised Code, the Ohio air quality development authority created in Chapter 3706. of the Revised Code, and any other relevant agency to ensure that the plan does not threaten the affordability of electric power to all classes of electricity consumers, takes full advantage of the federal Clean Air Act to minimize impacts to the cost and reliability of electricity, and minimizes the impacts on current and future industrial, commercial, and residential consumers.

(G) The director shall consider the provisions of this section, to the extent practicable, in the development of a plan to be submitted to the United States environmental protection agency under section 111(d) of the federal Clean Air Act.

(H) Any plan establishing standards of performance for existing coal-fired or natural gas-fired electric generating units developed under this section ceases to operate if applicable regulations adopted or guidelines issued by the United States environmental protection agency under section 111(d) of the federal Clean Air Act are withdrawn by the agency or invalidated by a court.