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EPA Proposes Regulation of Existing Power Plant Carbon Emissions

Beveridge & Diamond, P.C., June 3, 2014

Click here for a PDF of this news alert.

In the latest step in President Obama’s ambitious “Climate Action Plan” to address climate change, on June 2, 2014, the U.S. Environmental Protection Agency (“EPA”) released a draft proposed rule that seeks to cut carbon emissions by 30% by 2030 compared to 2005 levels.  Issued pursuant to Clean Air Act Section 111(d), the proposal includes emission guidelines for states to follow in developing plans to reduce greenhouse gas emissions from existing fossil fuel-fired electric generating units (“EGUs”). 

EPA’s highly anticipated proposal applies only to existing fossil fuel-fired power plants and will take effect in two years.  Each state will develop a carbon-cutting plan tailored to its specific needs.  The proposed rule identifies four “building blocks” from which states can draw to formulate the plans they submit to EPA for approval.  The building blocks include:

  • Reducing carbon emissions at individual EGUs through heat rate improvements,
  • Reducing carbon emissions by substituting generation at affected EGUs with generation from lesser-emitting EGUs,
  • Reducing carbon emissions by substituting generation at affected EGUs with renewable energy generation, and
  • Reducing carbon emissions by utilizing demand-side energy efficiency that reduces the amount of generation required.

As proposed, the building blocks will allow EGUs to employ “beyond the fence-line” methods to meet their carbon reduction goals, meaning that they will not be confined to measures implemented only at the source.

In statements supporting the proposal, President Obama and EPA Administrator Gina McCarthy have emphasized that the rule will have health and economic benefits in addition to addressing climate change.  "Climate change, fueled by carbon pollution, supercharges risks to our health, our economy, and our way of life. EPA is delivering on a vital piece of President Obama's Climate Action Plan by proposing a Clean Power Plan that will cut harmful carbon pollution from our largest source--power plants," said McCarthy.  "By leveraging cleaner energy sources and cutting energy waste, this plan will clean the air we breathe while helping slow climate change so we can leave a safe and healthy future for our kids.  We don't have to choose between a healthy economy and a healthy environment--our action will sharpen America’s competitive edge, spur innovation, and create jobs."

Comments on the proposed rule will be due 120 days after it is published in the Federal Register.  Additional information about the proposal and other aspects of President Obama’s Climate Action Plan is available at www.whitehouse.gov/share/climate-action-plan.

Beveridge & Diamond helps companies nationwide and in a variety of industrial sectors, including in the power sector, understand and comply with the requirements of the Clean Air Act.  In addition to strategic regulatory counsel, we support permitting and project expansion, enforcement actions and compliance reviews, and litigation matters (including potential criminal prosecutions).  For additional information on the Clean Power Plant Rule, please contact David Friedland at dfriedland@bdlaw.com or Laura LaValle at llavalle@bdlaw.com.