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June 09, 2014
EPA's Clean Power Plan--Part 4

Part 4—State plans

The EPA is working hard to emphasize the “flexibility” that will be provided to the states in assembling the plans they will submit to achieve the greenhouse gas (GHG) reduction goals for electric generating units (EGUs) at fossil-fuel power plants proposed in the Agency’s Clean Power Plan.  But this should not distract us from the considerable power the EPA will continue to hold and, if necessary, exercise over the way the plans are written and enforced.  Primarily, the fundamental authority in the proposal rests in the CO2 emissions goals for power plant EGUs.  Even though those goals are state-specific, it is the EPA that will be setting them. 

While protesting the need and legality of the Clean Power Plan itself, states and, certainly, energy companies with affected facilities will also argue that those limits are unachievable without dreadful impacts on jobs and electric reliability.  How much additional flexibility will the Agency provide by loosening those limits?  There is also the distinct possibility that environmental groups that have already significantly influenced the contents of the proposal will appeal for even more stringent limits.  The EPA will have no choice but to assign considerable weight to such comments.

Balance of authorities

Here are aspects of the proposed state-plan provisions that demonstrate the power the EPA is providing to the states and the power the EPA will retain.

  • Enforceability.  States will have broad latitude in assembling the performance measures in their plans to achieve the emissions goals.  Moreover, the plans must include assurances that the emissions limits are quantifiable, verifiable, straightforward, calculated over as short a term as reasonable, and enforceable by the states.  In the proposal, the EPA says it also has the authority to take enforcement actions against noncompliant entities should a state fail to do so.  The EPA is not proposing to exercise enforcement authority over state plan measures covering renewable energy and energy efficiency. 
  • Timing.  States must achieve interim goals by 2020 and final goals by 2030.  For the 2020 to 2029 period, states would be required to achieve the interim goal on a 10-year average.  However, to ensure that a state is making steady progress toward achieving the required minimum level of emissions performance, the EPA is proposing that certain types of state plans be required to have program implementation milestones to ensure interim progress, as well as periodic checks on overall emissions performance leading to corrective measures, if necessary.  For other types of plans that are “self-correcting,” mainly through automatic enforcement against EGUs not meeting emissions requirements, the EPA would not require interim milestones.
  • Reporting.  All state plans must specify a process for annual reporting to the EPA of overall plan performance and implementation (including compliance of affected entities with applicable emissions standards) during the plan performance periods.  State plans must also include a process and schedule for implementing corrective measures if reporting shows that the plan is not achieving the projected level of emissions.  If the plan’s corrective measures fail to meet the federal goals in 18 months, the EPA would have the authority to issue and require the state to comply with a federal plan. 
  • Permanent.  The final goal must be maintained.  The EPA says it believes Congress intended emissions performance improvements required under Clean Air Act (CAA) Section 111(d)—the statutory authority on which the Agency is basing its proposal—to be permanent. Accordingly, the state plan must identify requirements that continue to apply after 2030 and that are likely to ensure that affected EGUs will continue to meet the final goal.  However, quantitative projections of emissions performance beyond 2030 would not be required. 
  • Trading.  A state plan could authorize emissions averaging and trading as part of the emissions standards for affected sources.  Under these circumstances, if an affected source’s emissions level was higher than the standard the state established for it, the source could achieve the standard by purchasing additional emissions rights through the trading program.  Trading of CO2 emissions credits among energy companies is already occurring in the Northeast’s Regional Greenhouse Gas Initiative (RGGI) and under California’s Global Warming Solutions Act.  As demonstrated with the RGGI, a multistate approach to CO2 reductions provides companies with more opportunities to obtain the credits needed to achieve compliance.  Accordingly, the EPA has included several provisions in the proposal, including a more flexible schedule for plan submissions, to encourage states to take the multistate approach.  However, there is no flexibility in the emissions goals for states, whether they act individually or under a multistate plan. 

The proposed EPA regulations would not affect Vermont and Washington, D.C., neither of which have fossil-fuel power plants.  Also, the Agency is not at this time proposing goals for the four affected sources in Indian country.  The Agency says it will work with the tribes in those areas to develop CAA plans.

The proposed Clean Power Plan

Part 1-Introduction

Part 2-State specific goals

Part 3-BSER

Part 5-Reactions

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