US Clean Power Plan adopted

Monday, August 3, 2015

President Obama will formally unveil the Clean Power Plan today, a set of regulations by the U.S. Environmental Protection Agency (EPA) to reduce carbon emissions associated with the electric power industry.  A blog post by EPA Administrator Gina McCarthy emphasizes the Clean Power Plan's protection of health and the environment, states' rights to choose their own implementation paths, reduction of future energy costs, and leadership on climate issues.  But some politicians, utilities and states have expressed concern about the regulations' impact, and could launch legal challenges -- or states might refuse to comply.  What's in store for the Clean Power Plan?

It has been just over a year since EPA first released its draft Clean Power Plan in June 2014.  These regulations under Section 111(d) of the Clean Air Act are designed to reduce the carbon intensity of the U.S. electric power sector -- essentially, how many pounds of carbon are emitted per megawatt-hour of electric energy produced.  Under the draft Clean Power Plan, EPA sets carbon intensity limits for each state, collectively designed to reduce carbon emissions by 30% below 2005 levels.  Each state then designs its own compliance plan using any combination of "building blocks": types of measures like improving the efficiency of fossil fuel power plants, switching out coal- and oil-fired power plants in favor of natural gas, and increasing low- and zero-carbon generation.

While the final Clean Power Plan's basic structure remains much the same, EPA has made some modifications in reaction to concerns about the greenhouse gas regulations' costs and impacts to grid reliability.

Changes from the 2014 draft include:
  • Two extra years (until 2022) for states to meet their targets, and greater flexibility for states to form regional pacts to facilitate emissions-cutting projects across state lines, such as the Regional Greenhouse Gas Initiative.
  • A new “safety valve” feature, to let states appeal for extensions and other relief if complying with the regulations causes disruptions to power supply.
  • Increased social justice incentives for utilities to construct renewable energy projects in poorer neighborhoods, reducing pollution-related illness and eventually lowering electricity rates.
  • Energy efficiency is still encouraged, but has been eliminated as one of the rule’s "building blocks” for states to use in building their own carbon-reduction plans.
How will the Clean Power Plan story continue to play out?  Will it be challenged in court?  Will states comply?  What impacts will it have on the U.S. electric power industry?

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