EPA's Clean Power Plan: Understanding and Evaluating the Proposed Federal Plan and Model Rules

Date01 December 2015
Author
12-2015 NEWS & ANALYSIS 45 ELR 11155
EPA’s Clean
Power Plan:
Understanding
and Evaluating
the Proposed
Federal Plan and
Model Rules
by Julie DeMeester & Sarah Adair
Julie DeMeester is a Policy Assocaite, and Sarah Adair is
a Senior Policy Associate, with the Nicholas Institute for
Environmental Policy Solutions at Duke University.
Summary
e U.S. Environmental Protection Agency’s (EPA’s)
Clean Power Plan was accompanied by model rules for
states that provide both a mass-based and a rate-based
approach. e model rules, once nalized, will give
states a streamlined but customizable template that is
trading ready. EPA also provided proposed mass- and
rate-based federal plans that would be implemented
absent state-promulgated plans. ey are similar to
the proposed model rules, but they exclude certain
compliance options, such as demand-side energy e-
ciency under the rate-based approach. is Article
explores the details and important aspects of these
various compliance approaches.
I. Introduction
On August 3, 2015, the U.S. Environmental Protection
Agency (EPA) nalized carbon dioxide (CO2) emission
guidelines for t wo categories of existing power plants
under section 111(d) of the Clean A ir Act.1 e nal rule,
referred to as t he Clean Power Plan, requires each state to
develop its own plan that applies equivalent standards of
performance to aected units.2 If a state fa ils to submit
an adequate plan, the Clean Air Act authorizes the EPA
to develop and implement a federal plan for the state.3 In
a separate action, the EPA proposed ma ss- and rate-based
versions of a federal plan as well as mass- and rate-based
model rules, which states could choose to adopt or to
adapt by substituting their own provisions subject to EPA
approval.4 e proposed model rules are similar to but
more exible than the federal plan proposals. is policy
brief summarizes the nal Clean Power Plan rule, describes
the mass- and rate-based proposed federal plans, identies
areas in which the model rules dier, highlights key issues
for states and other sta keholders as they evaluate the trad-
eos between plan pathways, and discusses the EPA’s time-
line for nalizing the federal plan and model rules.
II. Overview of the Final Clean Power
Plan Rule
e nal Clean Power Plan establishes rate-based emis-
sions guidelines for two subcategories of existing electric
generating units (EGUs)—steam electric generating units
(mostly coal) and stationary combustion turbines (natu-
ral gas combined cycle) (Table 1).5 e rule also estab-
1. Carbon Pollution Emission Guidelines for Existing Stationary Sources:
Electric Utility Generating Units (Unpublished Final Rule) (August 3,
2015) [hereinafter “Final CPP Rule”]. For an overview of Section 111(d),
see Tarr, Jeremy, “e Clean Air Act and Power Sector Carbon Standards:
Basics of Section 111(d),” Nicholas Institute Policy Brief 13-03 (2013),
https://nicholasinstitute.duke.edu/ climate/clean-air-act-and-power-sector-
carbon-standards-basics-section-111d#.VemLF3i0KJU.
2. Final CPP Rule, supra note 1.
3. 42 U.S.C. § 7411(d)(2).
4. Federal Plan Requirements for Greenhouse Gas Emissions from Electric
Utility Generating Units Constructed on or Before January 8, 2014; Mod-
el Trading Rules; Amendments to Framework Regulations (unp ublished
proposal) (Aug. 3, 2015) [herei nafter “Proposed Federal Plan and Model
Rules”]. e proposal was published in the Federal Register on October 23,
2015, 80 Fed. Reg. 64965, as this Article was going to press. Page numbers
in this Article refer to the unpublished proposal, available at http://www3.
epa.gov/airquality/cpp/cpp-proposed-federal-plan.pdf.
5. Final CPP Rule, supra note 1, at 775.
Authors' Note: e authors thank David Hoppock, Jonas Monast,
Brian Murray, Christina Reichert, and Hannah Girardeau at the
Nicholas Institute for Environmental Policy Solutions for edits and
ideas. e authors also thank Franz Litz, program consultant for the
Great Plains Institute and principal of Litz Energy Strategies LLC,
for help with analysis of the federal proposal.
Copyright © 2015 Environmental Law Institute®, Washington, DC. Reprinted with permission from ELR®, http://www.eli.org, 1-800-433-5120.

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