EPA Clean Power Plan

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After much anticipation, EPA Administrator Gina McCarthy announced the roll out of the new “Clean Power Plan” today (speech can be seen here). The draft Rule regulates greenhouse gas emissions from existing sources under § 111(d) of the Clean Air Act. It will take some time to digest the complexities of the Rule (after all, it’s 645 pages long), but here are the highlights of what we know at this point:

  • Target: The Rule attempts to reduce nation-wide carbon emissions 30% from 2005 levels by 2030;
  • Flexibility: The Rule sets individualized targets for each state which can be met using a combination of methods, including EPA’s “Building Blocks.” The Building Blocks break down into four categories or EPA’s “Best System of Emission Reduction” (BSER):
    1. Improve efficiency of fossil fuel power plants;
    2.  Increase energy production from renewable energy sources
    3. Increase energy production from low to zero carbon emitting facilities such as nuclear or natural gas; and
    4. Reduce overall energy use through energy efficiency programs (demand-side).
  • State Target: The reduction target for each state is determined by the analysis of its current power generating fleet. It’s important to note that the targets are not requirements for individual generators but rather set state wide caps.  Here are the reduction targets for nearby states:
State2012 Carbon Emission Rate
2030 Target
New Hampshire90548646%
Rhode Island90778214%
  • Collaboration: States can develop plans individually or through a multi-state effort (i.e. programs similar to RGGI).
  • Notice and Comment: EPA will accept comments for 120 days after publication in the Federal Register.  Four public hearings will be held around the country.
  • In Sum: This Rule has the potential for significant impact. Some states may opt to design plans that require large energy users to reduce consumption. States may also opt to incentive renewable sources for power production. Much more to come on this rule in the near future.