• Questions about EPA Regulation of Power Plant Carbon Emissions
  • December 26, 2014
  • Law Firm: Preti Flaherty Beliveau Pachios LLP - Portland Office
  • This week the U.S. Environmental Protection Agency issued a public notice relating to its Clean Power Plan, the agency's proposed rule to reduce carbon emissions from the nation's existing power plants. The notice reiterates questions raised by commenters about issues including the redispatch from coal- to natural gas-fired generation and near-term carbon reductions through 2029.

    The Clean Power Plan imposes a federal carbon emissions rate (stated in pounds of carbon emitted per megawatt-hour of electric energy generated) for each state. The rule is designed to offer states flexibility in developing plans to achieve that level of carbon intensity, and features four proposed "building block" elements that states may choose to include in their program design: increased coal plant efficiency, increased utilization of natural gas plants, increased renewable energy, and increased energy efficiency. Collectively, EPA projects that by 2030 the Clean Power Plan's implementation will reduce power plant carbon emissions 30 percent below 2005 levels.

    Since EPA published its proposal on June 18, 2014, the agency has held at least eight days of public hearings in four cities, attended by over 2,700 people, of whom nearly half spoke or otherwise weighed in. The draft Clean Power Plan was originally scheduled for public comment through October 16, but EPA extended the comment period by 45 days (until December 1, 2014) in response to both the volume of comments and numerous requests for additional time.

    On October 28, EPA issued a notice of data availability related to the proposed Clean Power Plan. EPA routinely issues such a notice, or NODA, to provide the public with a targeted opportunity to consider and comment on emerging technical issues and data related to an ongoing rulemaking. EPA's Notice of Data Availability Related to the Proposed Clean Power Plan (PDF) provides additional information on several topics raised by stakeholders and solicits comment on the information presented. The three topics covered in the notice are the emission reduction compliance trajectories created by the interim goal for 2020 to 2029, certain aspects of the building block methodology, and the way state-specific carbon dioxide goals are calculated.

    EPA's interim goals govern emission reductions over the 2020-2029 period, as states transition to energy resources with lower carbon intensity. Some stakeholders have expressed concern that, as proposed, the interim goals do not provide enough flexibility for some states which may be forced to rely heavily on re-dispatch from fossil steam generation (e.g., coal- , oil-, or gas-fired boilers) to natural gas combined cycle units to achieve the required reductions, and that this effect of the interim goals severely limits the opportunity to fully take advantage of the remaining asset value of existing coal-fired generation -- particularly challenging with the threat of a "polar vortex" or other disruptive weather event. EPA requests comment on these interim goals and whether they afford suitable flexibility.

    Stakeholders have also raised questions about the building blocks available to states as they design compliance programs. In particular, building block 2 focuses on shifting utilization from coal- and other fossil-fired steam power plants to more carbon-efficient natural gas combined cycle plants. Building block 3 focuses on renewable energy and nuclear power. In response, EPA requests comment on ways that building block 2 could be expanded to include new natural gas combined cycle units and natural gas co-firing in existing coal-fired boilers and ways that state-level renewable energy targets could be set based on regional potential for renewable energy.

    Stakeholders have also noted concerns with the way the state-specific carbon dioxide goals are calculated. These include concerns that the numeric formula for calculating each state's goal is not consistent in its application of the best system of emission reduction (BSER) for each building block, and concerns with the use of data for the single year 2012.

    EPA's Clean Power Plan is now open for public comment through December 1, 2014.