US EPA adopts ACE carbon rule

On June 19, 2019, the U.S. Environmental Protection Agency finalized its Affordable Clean Energy rule, designed as a replacement for the Obama administration's Clean Power Plan.

The rule, also known as the ACE rule, gives states 3 years to submit plans to limit carbon dioxide emissions from their coal-fired power plants, and sets guidelines for states to use when developing these plans. It identifies heat rate improvements at individual facilities as the best system of emission reduction (BSER) for reducing carbon emissions from coal-fired power plants. States will establish unit-specific “standards of performance” that reflect the emission limitation achievable through application of the BSER technologies.

EPA initially proposed a draft ACE rule in August 2018, and developed the final rule following public comment. It followed the Clean Power Plan, finalized in 2015 but stayed by the U.S. Supreme Court in 2016. Separately, but through the same public notice as the final ACE rule, EPA has formally repealed the Clean Power Plan.

According to EPA, the final ACE rule will reduce CO2 emissions by 11 million short tons in 2030, and will result in annual net benefits of $120 million to $730 million, including costs, domestic climate benefits, and health co-benefits. EPA says that with the ACE rule, along with additional expected emissions reductions based on long-term industry trends, it expects to see CO2 emissions from the electric sector fall by as much as 35% below 2005 levels in 2030.