The Environmental Protection Agency has issued a final rule for its Clean Power Plan, a set of new regulations for limiting emissions of carbon dioxide from existing commercial-scale electricity generation plants. But for the time being the agency has exempted the two non-contiguous states of Alaska and Hawaii from the need to set emissions targets because of, the agency says, a lack of sufficient information or analytical tools for measuring in these states the means whereby emission targets may be achieved. The territories of Guam and Puerto Rico have also been exempted for the same reason.
The EPA plan comes as part of a drive by the Obama administration to reduce U.S. greenhouse gas emissions through government regulation under the terms of the Clean Air Act. EPA originally released its proposed plan for public comment in June 2014. At that time the plan aimed to reduce emissions of carbon dioxide from power plants by 30 percent of 2005 levels by 2030, with each state set a target reduction level as a component of that overall reduction target. States, either individually or in combination, would be required to submit plans for achieving their required emission reductions. And, as a “best system of emissions reduction” for determining emission reduction goals, EPA proposed four strategies or building blocks.
Changes to plan
In the agency’s final rule the overall plan is broadly similar to the original proposed plan, but with some significant changes in response to public comments, including the exclusion of Alaska from the regulations. In particular, the building blocks for emission reductions have changed, and there have been some significant changes in the parameters relating to state plans and goals. The plan has increased the overall target for emissions reduction from 30 percent to 32 percent.
The new plan has reduced the four building blocks for emissions reduction to three by dropping a block that envisaged emissions savings through improved efficiency in electricity use. EPA said that the regulation of energy efficiency does not fall within the traditional interpretation of the Clean Air Act. The three building blocks in the final rule consist of improving the efficiency of existing coal-fired power plants; substituting the use of high-efficiency combined-cycle natural gas fired power plants for the use of steam turbines, a technology primarily used in conjunction with coal or oil; and increasing the use of renewable energy sources such as wind and solar.
The alterations to the original specifications to the building blocks exclude nuclear generation as a means of achieving emissions reductions and take into account the falling cost and continuing deployment of renewable energy sources, EPA says.
However, states can retain flexibility in the methods they can use to achieve the emissions targets that EPA has set.
In response to some of the comments that the agency received, EPA is allowing states a level of flexibility in the measurements used to specify their carbon dioxide emissions goals. Goals can be expressed either in terms of the rate of carbon dioxide emissions or as the mass of the emissions. States can also choose between two types of plan for achieving their goals: plans based on emissions standards for all affected power plants within a state, and plans that use measures such as renewable energy standards that a state has adopted. But a plan must include specifications for how the state will demonstrate progress towards meeting its 2030 emissions target, the EPA rule says.
Each state must submit a plan by Sept. 6, 2016, unless the state files an initial submittal with an extension request. Final, complete plans are due by Sept. 6, 2018.
Interconnected grids
In setting emission reduction targets for each state, EPA has now taken into account the interconnected nature of regional power grids by evaluating carbon dioxide emissions from different types of power stations within three major regions of the contiguous states. The agency then applied these regional rates to the mix of power generation facilities within each state, to develop individual state emissions reduction goals.
Also, recognizing the interconnected nature of the Lower 48 power supply infrastructure, EPA is allowing emissions trading, an arrangement in which power plants can meet emissions targets by trading emissions credits or allowances with plants that are relatively efficient.
EPA says that its final rule recognizes the importance of the reliability of power supplies by allowing some flexibility in the manner in which the rule is implemented, by requiring states to demonstrate that they have considered reliability issues, and by allowing a state to revise its plan in the event of an unanticipated reliability challenge.
As in the original version of the Clean Power Plan, the EPA is setting each state an interim carbon dioxide emissions target that must be met several years prior to a final state target that will contribute to the overall U.S. emissions reduction of 32 percent. But the agency has relaxed the timing requirement for the interim targets, moving the deadline for meeting these targets from 2020 to 2022.
Mixed response
The issue of the Clean Power Plan triggered a flood of comments from different sectors of U.S. society, with responses ranging from strong support to vehement opposition. The final rule will presumably face challenges through the courts. EPA predicts climate benefits of $20 billion and health benefits of up to $34 billion if the plan is implemented.
“The Clean Power Plan is the most significant single action any president has ever taken to tackle the most serious threat to the health of our families: the climate crisis,” said Sierra Club Executive Director Michael Brune. “Today marks the end of an era for dirty power plants that have spewed dangerous pollution into our air without limits for too long.”
“Consumer Energy Alliance is disappointed that the White House failed to give significant consideration to the impacts to energy consumers in its final version of the Environmental Protection Agency’s ‘Clean Power Plan’ released today,” said David Holt, president of the Consumer Energy Alliance. “Study after study has shown that these rules will raise both electricity and natural gas prices for all American consumers, threaten grid reliability and security, and take an amount of electricity equal to the total electricity demand of New England offline with no plan to replace the lost production.”
“America is leading the world in reducing emissions thanks to a revolution in the production and use of natural gas,” said Howard J. Feldman, American Petroleum Institute senior director of regulatory and scientific affairs. “We can continue that progress without costly new regulations that could hurt consumers and stifle economic growth.”
Alaska officials expressed satisfaction that EPA had taken Alaska’s concerns into account and exempted the state from regulated carbon emissions targets.
“Alaska has over 200 small utilities across the state, and a very limited power grid on the Railbelt. Requiring our state to abide by ‘one-size-fits-all’ standards could potentially increase our energy costs, which are already the highest in the nation,” said Gov. Bill Walker. “I am pleased that the EPA has recognized the unique circumstances Alaska is facing, and I look forward to working with the agency officials to come up with appropriate goals for the state in the near future.”
“This is by far the best possible outcome for our state and therefore a significant victory,” said Sen. Lisa Murkowski. “I appreciate the EPA’s recognition of the facts - that Alaska has unique needs, limited options for cost-effective compliance, and is not interconnected. We simply should not be bound by this sweeping regulation.”
