US EPA proposes Affordable Clean Energy rule

The U.S. Environmental Protection Agency has proposed a new rule addressing greenhouse gas emissions from existing coal-fired electric utility generating units and power plants. EPA's proposed "Affordable Clean Energy Rule" is designed to replace the Clean Power Plan regulations adopted in 2015.

On August 21, 2018, EPA announced the Affordable Clean Energy or ACE Rule. As described by the agency, the rule encompasses four main actions to reduce greenhouse gas emissions:

• Defining the “best system of emission reduction” (BSER) for existing power plants as on-site, heat-rate efficiency improvements;
• Providing states a list of “candidate technologies” that can be used to establish standards of performance and be incorporated into their state plans;
• Updating the New Source Review (NSR) permitting program to further encourage efficiency improvements at existing power plants; and
• Aligning regulations under Clean Air Act section 111(d) to give states adequate time and flexibility to develop their state plans. 

According to EPA's regulatory impact analysis, replacing the Clean Power Plan with the ACE Rule would reduce CO2 emissions from their current level, and "could provide $400 million in annual net benefits," largely in the form of reduced compliance burden on covered power plants. While EPA adopted the Clean Power Plan in 2015, in 2016 the Supreme Court granted opponents stay of the regulations, and they never took full effect.

EPA will take comment on the ACE Rule proposal for 60 days after publication in the Federal Register and will hold a public hearing.