The Environmental Protection Agency (EPA) has just issued rules that repeal and replace one of the Obama-era EPA’s signature efforts to reduce greenhouse gas (GHG) emissions. Effective September 6, EPA’s new “Affordable Clean Energy Rule” (ACE) will replace the “Clean Power Plan” adopted in 2015 but stayed by litigation (I wrote about the proposed CPP here). As anyone who has compared the Obama and Trump Administrations' approaches to climate change would expect, the new rule reduces the old rule’s requirements. It softens the mandates in the earlier rule, and offers states more flexibility to design their own efforts to control GHG emissions from existing fossil fuel-fired electricity generating units (EGUs) by eliminating CPP requirements that states consider operational changes “outside the fenceline” of the regulated EGUs.
The new rules do the following:
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Formally repeal the CPP (based on a narrower interpretation of Clean Air Act (CAA) section 111)
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Adopt the ACE
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Promulgate general rules for EPA and state implementation of ACE and future rules issued under CAA section 111.
What Would the Clean Power Plan Have Done?
As adopted in October 2015, CPP would have provided interim and final carbon dioxide (CO2) emission performance rates for two subcategories of fossil fuel-fired EGUs: coal- and oil-fired power plants; and natural gas-fired combined cycle generating units. The rates were based on EPA’s assessment of the best system of emissions reduction (BSER) for each type – which the agency developed by assessing opportunities to improve EGU efficiency, to substitute gas-fired units for other fossil fuel units, and to substitute renewables such as solar and wind for fossil fuel EGUs – and then aggregated to create statewide rates for each state with any of these units. EPA also developed a menu of policy options that states could apply to meet the statewide rates, including inter-source trading systems. EPA then assigned states to develop plans to ensure that subject EGUs within their boundaries would meet the interim standards during 2022-2029, and the final rates beginning in 2030. EPA gave states one year (until 9/16) to prepare and submit draft plans, and a total of 3 years (until 9/18) to prepare and submit final plans.
At the time, EPA argued that this evidence-based state-level approach provided greater flexibility and opportunities for cost efficiencies than traditional source-by-source regulation. Opponents argued that this expanded scope exceeded EPA’s CAA authority. States and utilities sued, and in February 2016 the US Supreme Court stayed the rule pending further litigation in the District of Columbia Circuit (West Virginia v. EPA). The stay remained in force during further procedural wrangling until President Trump took office in January 2017.
What Will the Affordable Clean Energy Rule Do?
EPA spent two years reviewing the Clean Power Plan, and has now adopted significantly different requirements entitled the ACE rule:
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Heat rate improvement (HRI; or efficiency improvement) is the BSER for CO2 from coal-fired EGUs – focusing on alternatives available at each EGU (i.e., “inside the fence-line”), based on operations and maintenance (O&M) improvements and the following “candidate technologies:”
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Neural Network/Intelligent Sootblowers
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Boiler Feed Pumps
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Air Heater and Duct Leakage Control
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Variable Frequency Drives
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Blade Path Upgrade (Steam Turbine)
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Redesign/Replace Economizer
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Improved Operating and Maintenance Practices
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ACE does not establish a BSER for natural gas-fired EGUs; instead co-firing or replacement with natural gas-fire provide ways that coal-fired facilities might comply with ACE.
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States finalize and submit state implementation plans by 7/8/22 (three year).
EPA asserts that these narrower approaches are more consistent with its CAA authority, and that they minimize the extent that non-market-based improvements and considerations may affect the continued operations of coal-fired EGUs. In doing so, EPA acknowledges that coal-fired electricity production is declining in the face of lower costs for natural gas and renewables, and expects this trend to continue.
Now What?
The CPP rule becomes final on September 6. I have no doubt that further litigation will ensue.
In the same Federal Register notice, EPA states that it continues to work on standards for other fossil fuels, on possible additional technologies. EPA also continues to work on New Source Review (NSR) standards for emission source categories, to clarify the range of on-site physical and operational modifications that EGUs will be able to without being a “major modifications” that trigger NSR and its more extensive upgrade and permitting requirements. EPA has not set itself any deadlines for these additional related actions.
Self-Assessment Checklist
Does the organization own or operate any facility with any existing EGU? and if so:
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Do any of the EGUs burn coal to generate electricity?
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Do any of the EGUs burn natural gas to generate electricity?
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Do any of the EGUs use renewables (solar, wind, etc.)?
Does the organization have any facilities that purchase electricity from an electric utility that operates fossil fuel-fired EGUs, and if so has it evaluated trends in purchased electricity costs?
Where can I go for more information?
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EPA’s ACE rule webpage
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ACE Rule (7/8/19 Federal Register)
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EPA’s CPP rule webpage (archived)
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CPP rules (10/23/15 Federal Register)
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Specialty Technical Publishers (STP) provides a variety of single-law and multi-law services, intended to facilitate clients’ understanding of and compliance with requirements.
About the Author
Jon Elliott is President of Touchstone Environmental and has been a major contributor to STP’s product range for over 25 years.
Mr. Elliott has a diverse educational background. In addition to his Juris Doctor (University of California, Boalt Hall School of Law, 1981), he holds a Master of Public Policy (Goldman School of Public Policy [GSPP], UC Berkeley, 1980), and a Bachelor of Science in Mechanical Engineering (Princeton University, 1977).
Mr. Elliott is active in professional and community organizations. In addition, he is a past chairman of the Board of Directors of the GSPP Alumni Association, and past member of the Executive Committee of the State Bar of California's Environmental Law Section (including past chair of its Legislative Committee).
You may contact Mr. Elliott directly at: tei@ix.netcom.com