On June 2, 2014, the United States Environmental Protection Agency (USEPA) released the most sweeping component of President Obama’s Climate Change Action Plan.  USEPA’s 650-page proposed Clean Power Plan states that carbon dioxide (CO2) emissions from the combustion of fossil fuels at existing power plants is the single largest category of stationary source Greenhouse Gas (GHG) Emissions in the United States, accounting for about one-third of all GHGs emitted.

The Clean Power Plan does not require GHG emission cuts from specific power plants.  Instead, the Plan sets a target of a 30% reduction in CO2 emissions from the power sector, nationally, from 2005 levels by the year 2030, with declining targets in the years 2020 through 2029.  To achieve this goal, USEPA’s proposal is described as setting forth a flexible approach.

Leading up to this proposal, states have already taken a variety of approaches to address GHG emissions and climate change.  Some states have proposed and implemented their own GHG reduction programs.  Many states have set statewide goals by passing renewable portfolio standards.  Still others have introduced legislative resolutions asking USEPA to allow less stringent standards or longer compliance deadlines, recognizing that coal-fired EGUs in their state have recently invested in pollution control technology to meet mercury regulations.  Both the presence of state action and the desire of many states to control how GHG emission reductions will be achieved indicate a need for flexibility in any national program addressing GHG reductions.

Although many states may claim that the proposed rule presents a host of challenges, USEPA believes it has addressed these challenges with this rule.  The USEPA is proposing four “building blocks” from which each state may develop its reduction plan.  The building blocks are:

  • Reductions from existing fossil-fuel fired electric generating units;
  • Greater use of existing natural gas units;
  • Greater use of low- or zero-emission generation units;
  • Demand-side energy efficiency demonstrations.

According to USEPA, the Clean Power Plan considers each state’s fuel mix, its electricity market, and other unique factors.  USEPA also claims it will allow states already implementing CO2 reduction programs to continue to rely on and expand those programs.  States can also choose to pursue a multi-state approach that may reflect current regional electricity operating systems.

The claim of flexibility aside, there is no question that this proposed rule will force national and state energy policy debates and certainly will continue to fuel whether such an important energy and economic policy debate should be occurring through a USEPA rulemaking process.

The Clean Power Plan requires each state to develop a State Implementation Plan to meet a state-specific reduction target.  The state-specific formula is found in the “Goal Computation Technical Support Document” and proposed goals are in the appendices of that document: http://www2.epa.gov/sites/production/files/2014-05/documents/20140602tsd-goal-computation.pdf.

A 120-day public comment period begins on the date of publication in the Federal Register (which will occur in the coming weeks).  Nationwide, public hearings will take place during the week of July 28, 2014.  USEPA expects to finalize the Clean Power Plan rule by June 2, 2015.  States will submit their initial State Implementation Plans by June 30, 2016.  Upon reasonable explanation of state legislation hurdles, one- or two-year extensions of the date for complete State Implementation Plans submission will be granted.

Further information can be found on USEPA’s website at: http://www2.epa.gov/carbon-pollution-standards/clean-power-plan-proposed-rule.  In addition to technical support documents, USEPA has posted a legal memorandum on which it seeks comments to support the proposed plan: http://www2.epa.gov/sites/production/files/2014-05/documents/20140602tsd-legal-memorandum.pdf.

Please check back to Schiff Hardin’s blog on Wednesday, June 4, 2014, for a Q&A format posting reviewing specific issues related to the Proposed Plan in greater depth.  In the meantime, as always, please feel free to contact a member of Schiff Hardin’s Environmental Group with any questions or concerns related to the proposed Clean Power Plan.