EPA Proposes Affordable Clean Energy Rule to Replace the Clean Power Plan

On August 21, the EPA announced its plans to propose an affordable clean energy rule (ACE). This rule is designed to replace the Obama Era Clean Power Plan (CPP), which was criticized by many Republicans as being overly restrictive and burdensome. The CPP was the target of lawsuits by several different industries and states who opposed its limitations on carbon pollution emanating from power plants. It was also seen by some as an overreach of EPA powers under the Clean Air Act.

According to acting director of the EPA Andrew Wheeler, “ACE would restore the rule of law and empower states to reduce greenhouse gas emissions and provide modern, reliable, and affordable energy for all Americans.” The ACE focuses on providing emissions guidelines for states to use in developing plans to limit greenhouse gas emissions (GHG) from power plants within their borders. The EPA outlined that the rule would work to reduce GHG emissions in four different ways. First, ACE would define the “best system of emission reduction” (BESR) for existing power plants as on-site, heat-rate efficiency improvements. Second, it would provide states with a list of candidate technologies that could be used to establish performance standards and be included in state plans. Third, ACE would update the New Source Review (NSR) permitting program to encourage improvements in efficiency at existing power plants. Finally, ACE would organize regulations under Clean Air Act section 111(d) to give states time and flexibility to formulate their state plans.

According to EPA regulatory impact analysis (RIA), the proposal could provide $400 million in annual net benefits over the CPP. ACE is estimated to reduce carbon dioxide emissions in 2030 by up to 1.5% from projected levels without the CPP. One element not highlighted in the EPA announcement is the uncertainty related to the health impacts from changes in particulate matter. The new rules could lead to as many as 1400 premature deaths annually by 2030 due to an increase in fine particulate matter.

A look at the EPA’s comparison between ACE and CPP seems to show that the President’s focus on coal power has greatly influenced the new rule. The CPP is characterized as shutting down coal, promoting disinvestment in coal, and investing in alternative fuels. However, ACE keeps coal plants open and promotes investment in coal to make it more efficient and clean.



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