|Public Service of New Hampshire's Schiller Station, in Portsmouth, NH, can burn coal, oil, and wood chips.|
EPA proposed the carbon rule pursuant to its authority under Section 111(d) of the Clean Air Act. As with other Section 111(d) regulations, the Clean Power Plan relies on a combination of federal emission limits and state implementation plans. First, EPA proposed state-specific carbon dioxide emission goals, stated as an emission rate of pounds of CO2 emitted per net megawatt-hour of electricity generated. Second, EPA offered states guidelines for how to develop, submit, and implement their own plans to reach those emission goals.
At the federal level, EPA set a carbon emissions rate limit for each state based on the agency's evaluation of how much the state could feasibly reduce emissions by adopting the "best system of emission reduction", or BSER. Effectively, EPA considered each state's portfolio of electricity generating resources as well as how hard it would be to reduce its carbon intensity.
At the state level, EPA expects each state to propose a plan based on a combination of four "building blocks" or types of measures:
- Reducing the carbon intensity of generation at individual affected fossil-fired electric generating units (or EGUs) through heat rate improvements
- Reducing emissions from the most carbon-intensive affected EGUs by substituting generation at those EGUs with generation from natural gas combined cycle power plants and other less carbon-intensive fossil-fired units
- Reducing emissions from affected EGUs by substituting generation at those EGUs with expanded low- or zero-carbon generation
- Reducing emissions from affected EGUs through demand-side energy efficiency measures
EPA is now taking public comment on its proposed Clean Power Plan rule for 120 days, and will hold public hearings on the proposal in July and August. EPA projects that it would issue its final Clean Power Plan rule in June 2015.